SCHEDULE 14-A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Comtex News Network, Inc.
-------------------------
(Name of Registrant as Specified In Its Charter)
Not Applicable
--------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
.......................................................................
2) Aggregate number of securities to which transaction applies:
.......................................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
.......................................................................
4) Proposed maximum aggregate value of transaction:
.......................................................................
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed: October 28, 2003
Comtex News Network
625 N. Washington Street, Suite 301
Alexandria, Virginia 22314
October 28, 2003
Dear Fellow Stockholders:
You are cordially invited to attend Comtex News Network, Inc.'s Annual
Meeting of Stockholders to be held on December 4, 2003 at 11:00 a.m. local time
at the Sheraton Suites Old Town, 801 North St. Asaph Street, Alexandria,
Virginia.
At this meeting, you will be asked to vote, in person or by proxy, on the
following matters: (i) the election of a director to the Company's Board of
Directors; (ii) adoption of the Company's 2003 Incentive Stock Plan for the
purpose of obtaining incentive stock option treatment under Section 422 of the
Internal Revenue Code of 1986, as amended, for options granted to employees;
(iii) ratification of the appointment of Goldstein Golub Kessler, LLP as the
Company's independent auditors; and (iv) any other business as may properly come
before the meeting. In addition, we will be pleased to report on the business of
the Company and a discussion period will be provided for questions and comments
of general interest to stockholders.
Whether or not you are able to attend, it is important that your shares be
represented and voted at this meeting. Accordingly, please complete, sign and
date the enclosed proxy and mail it in the envelope provided at your earliest
convenience. Your prompt response is important and would be appreciated.
Sincerely,
/s/ Stephen W. Ellis
Stephen W. Ellis
Chairman and Chief Executive Officer
/s/ Laurence F. Schwartz
Laurence F. Schwartz
President
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
Even if you plan to attend the meeting, please complete, sign, and return
promptly the enclosed proxy in the envelope provided to ensure that your vote
will be counted. You may vote in person if you so desire even if you have
previously sent in your proxy.
If your shares are held in the name of a bank, brokerage firm or other
nominee, please contact the party responsible for your account and direct him or
her to vote your shares on the enclosed card.
- --------------------------------------------------------------------------------
Comtex News Network, Inc.
Notice of Annual Meeting of Stockholders
December 4, 2003
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Comtex
News Network, Inc., a Delaware corporation (the "Company" or "Comtex"), is
scheduled to be held on December 4, 2003 at 11:00 a.m., local time, at the
Sheraton Suites Old Town, 801 North St. Asaph Street, Alexandria, Virginia for
the following purposes:
1. To elect one director to serve for the term of office specified in the
accompanying proxy statement and until his successor is duly elected
and qualified;
2. To approve the Comtex News Network, Inc. 2003 Incentive Stock Plan for
the purpose of obtaining incentive stock option treatment under
Section 422 of the Internal Revenue Code of 1986, as amended, for
options granted to employees;
3. To ratify the selection of Goldstein Golub Kessler, LLP as independent
auditors for the Company for fiscal year 2004; and
4. To transact such other business as may properly come before the
meeting and any adjournment thereof.
Only stockholders of record at the close of business on October 24, 2003
are entitled to notice of and to vote at the Annual Meeting and any adjournment
thereof. All stockholders are cordially invited to attend the Annual Meeting in
person. However, to assure your representation at the meeting, you are urged to
complete, sign and date the enclosed form of proxy and return it promptly in the
envelope provided. Stockholders attending the meeting may revoke their proxy and
vote in person.
FOR THE BOARD OF DIRECTORS
/s/ S. Amber Gordon
S. Amber Gordon
Corporate Secretary
Alexandria, Virginia
October 28, 2003
Comtex News Network, Inc.
PROXY STATEMENT
GENERAL INFORMATION
Proxy Solicitation
This Proxy Statement is furnished to the holders of Common Stock, par value
$.01 per share, of Comtex News Network, Inc. (the "Company") in connection with
the solicitation by the Board of Directors of the Company of proxies for the
Annual Meeting of Stockholders to be held on December 4, 2003 at 11:00 a.m.
local time at the Sheraton Suites Old Town, 801 North St. Asaph Street,
Alexandria, Virginia, or at any adjournment thereof, pursuant to the
accompanying Notice of Annual Meeting of Stockholders. The purposes of the
Annual Meeting and the matters to be acted upon are set forth in the
accompanying Notice of Annual Meeting of Stockholders. The Board of Directors is
not currently aware of any other matters that will come before the meeting.
Proxies for use at the Annual Meeting are being solicited by the Board of
Directors of the Company. These proxy solicitation materials are first being
mailed on or about November 4, 2003 to all stockholders entitled to vote at the
Annual Meeting. Proxies will be solicited chiefly by mail. The Company will make
arrangements with brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy material to the beneficial owners of
shares and will reimburse them for their expenses in so doing. Should it appear
desirable to do so in order to ensure adequate representation of shares at the
Annual Meeting, officers, agents and employees of the Company may communicate
with stockholders, banks, brokerage houses and others by telephone, facsimile or
in person to request that proxies be furnished. All expenses incurred in
connection with this solicitation will be borne by the Company.
Revocability and Voting of Proxy
A form of proxy for use at the Annual Meeting and a return envelope for the
proxy are enclosed. Stockholders may revoke the authority granted by their
execution of proxies at any time before their effective exercise by filing with
the Secretary of the Company a written notice of revocation or a duly executed
proxy bearing a later date, or by voting in person at the Annual Meeting. Shares
of the Company's Common Stock represented by executed and unrevoked proxies will
be voted in accordance with the choice or instructions specified thereon. If no
specifications are given, the proxies intend to vote the shares represented
thereby in favor of the nominee for director listed under Election of Director
below, and to approve Proposals No. 2 and 3 as set forth in the accompanying
Notice of Annual Meeting of Stockholders and, in accordance with their best
judgment, on any other matters which may properly come before the Annual
Meeting.
Record Date and Voting Rights
Only stockholders of record at the close of business on October 24, 2003
are entitled to notice of and to vote at the Annual Meeting. As of October 24,
2003, 13,582,903 shares of Common Stock were issued and outstanding. This is the
only class of shares authorized by the Company for which stock is outstanding.
Each Common Stock share is entitled to a single non-cumulative vote on all
matters that may properly come before the annual meeting. The holders of a
majority of the votes of shares entitled to vote at the annual meeting will
constitute a quorum at the Annual Meeting.
Under Delaware law, (i) a plurality of the votes cast at the Annual Meeting
is necessary to elect directors; (ii) the affirmative vote of a majority of the
votes cast is required to approve the specified provisions of the Company's 2003
Incentive Stock Plan relating to the tax treatment thereunder; and (iii) the
affirmative vote of a majority of the votes cast is required to ratify the
appointment of Goldstein Golub Kessler, LLP as the Company's independent
auditors for the fiscal year 2004. Broker "non-votes" and the shares as to which
a stockholder abstains from voting are included for the purposes of determining
whether a quorum of shares is present at the Annual Meeting. A broker "non-vote"
occurs when a nominee holding shares for a beneficial owner does not have
discretionary voting power with respect to that item and has not received voting
instructions from the beneficial owner.
Votes at the Annual Meeting will be tabulated by Inspectors of Election
appointed by the Company.
STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company that are intended to be presented
at the Company's 2004 Annual Meeting of Stockholders must be received by the
Company no later than July 10, 2004 in order that they may be included in the
proxy statement and form of proxy relating to that meeting.
STOCKHOLDER LIST
A list of stockholders entitled to vote at the Annual Meeting will be
available at the Company's offices, 625 N. Washington Street, Suite 301,
Alexandria, Virginia 22314, for a period of ten (10) days prior to the Annual
Meeting for examination by any stockholder, and at the Annual Meeting itself.
2
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information as of October 24, 2003 regarding
the beneficial ownership of shares of the Company's common stock, par value $.01
per share (the "Common Stock"), of (i) each person known to the Company to be
the beneficial owner, within the meaning of Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), of more than 5% of the
outstanding shares of Common Stock, (ii) each director of the Company, (iii)
each executive officer of the Company named in the Summary Compensation Table
(see "Executive Compensation") and (iv) all executive officers and directors of
the Company as a group. Unless otherwise indicated, the address of each named
beneficial owner is c/o Comtex News Network, Inc., 625 N. Washington Street,
Suite 301, Alexandria, Virginia 22314. Except to the extent indicated in the
footnotes, each of the beneficial owners named below has sole voting and
investment power with respect to the shares of Common Stock listed.
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership (1) Percentage of Class
- ------------------------------------- ------------------------ -------------------
AMASYS Corporation 2,867,565 (2) 20.1%
625 N. Washington St., Ste. 301
Alexandria, VA 22314
Stephen W. Ellis, Chairman and Chief 1,378,300 (3) 9.4%
Executive Officer
Laurence F. Schwartz, President 375,000 (4) 2.7%
Charles W. Terry 764,408 (5) 5.6%
Raymond P. Capece -- (6) *
C.W. Gilluly, Ed.D., Director 2,170,806 (7) 15.9%
Erik Hendricks, Director 74,900 (8) *
William J. Howard, Director 3,300 (9) *
Robert J. Lynch, Jr., Director 3,300 (9) *
Robin Y. Deal, Vice President, 86,141 (10) *
Finance & Accounting
Deirdre D. McGonagle, Vice President, 62,533 (11) *
Publisher Relations
All Directors and executive officers 4,154,280 (12) 27.1%
as a group (9 Persons)
_____________________________
<FN>
* Less than 1%.
(1) Beneficial ownership is direct unless otherwise indicated.
(2) Includes 714,128 shares that may be acquired upon the conversion of a
Convertible Note held by AMASYS. The principal balance of $856,954 as of
September 30, 2003 is convertible at $1.20 per share. (See "Note Payable to
AMASYS.")
(3) Includes 828,300 shares of Common Stock that may be acquired upon the
exercise of vested options granted under the Comtex News Network, Inc. 1995
Stock Option Plan and 250,000 shares of Common Stock that may be acquired
upon the exercise of vested options granted under the Comtex News Network,
Inc. 2003 Incentive Stock Plan.
(4) Includes 125,000 shares of Common Stock that may be acquired upon the
exercise of vested options granted under the Comtex News Network, Inc. 1995
Stock Option Plan and 250,000 shares of Common Stock that may be acquired
upon the exercise of vested options granted under the Comtex News Network,
Inc. 2003 Incentive Stock Plan.
(5) On April 24, 2003, Mr. Terry resigned as President and CEO and entered into
a Separation and Release Agreement with the Company. (See "Executive
Compensation" section.)
3
(6) On July 22, 2003, Mr. Capece resigned as President and CEO and entered into
a Separation and Release Agreement with the Company. (See "Executive
Compensation" section.)
(7) Includes 103,300 shares of Common Stock that may be acquired upon the
exercise of vested options granted under the Comtex News Network, Inc. 1995
Stock Option Plan, and 2,067,506 shares of Common Stock held jointly by Dr.
Gilluly and his spouse.
(8) Includes 59,900 shares of Common Stock that may be acquired upon the
exercise of vested options granted under the Comtex News Network, Inc. 1995
Stock Option Plan.
(9) Includes 3,300 shares of Common Stock that may be acquired upon the
exercise of vested options granted under the Comtex News Network, Inc. 1995
Stock Option Plan.
(10) Includes 71,500 shares of Common Stock that may be acquired upon the
exercise of vested options granted under the Comtex News Network, Inc. 1995
Stock Option Plan.
(11) Includes 39,883 shares of Common Stock that may be acquired upon the
exercise of vested options granted under the Comtex News Network, Inc. 1995
Stock Option Plan.
(12) Includes 1,234,483 shares of Common Stock that may be acquired upon the
exercise of vested options granted under the Comtex News Network, Inc. 1995
Stock Option Plan and 500,000 shares of Common Stock that may be acquired
upon the exercise of vested options granted under the Comtex News Network,
Inc. 2003 Incentive Stock Plan.
</FN>
4
PROPOSAL NO. 1
ELECTION OF DIRECTOR
Pursuant to the Company's Certificate of Incorporation in the State of
Delaware, effective on December 20, 2003, each member of the Board of Directors
serves for a three-year term. In order to initialize this process, a schedule
for the expiration dates of current director terms was established. In
accordance with this schedule, Mr. Hendricks is the director nominated by the
Board for election this year. The remaining terms of the current members of the
Board of Directors are as follows: Expiring in 2004 will be Dr. Gilluly and Mr.
Howard and expiring in 2005 will be Messrs. Ellis and Lynch. In the event Mr.
Hendricks shall be unable to serve as a director, the shares represented by the
proxy will be voted for the person, if any, who is designated by the Board of
Directors to replace the nominee. Mr. Hendricks has consented to be named and
has indicated his intent to serve, if elected.
The names of the nominee, the remaining members of the Board and certain
other information about them are set forth below:
Name Age Office Held with Company
- -------------------------- ------------------------- ------------------------------------
Nominee:
Erik Hendricks 59 Director
Current Directors:
Stephen W. Ellis 53 Chairman and Chief Executive Officer
C.W. Gilluly, Ed.D. 57 Director
William J. Howard 56 Director
Robert J. Lynch, Jr. 70 Director
ERIK HENDRICKS has served as a director of the Company since 1991. Since
1979 he has served as the Executive Director and Chief Operating Officer of the
Pennsylvania Society for the Prevention of Cruelty to Animals, a non-profit
humane society.
STEPHEN W. ELLIS was appointed Chief Executive Officer in July 2003. Mr.
Ellis became a director of the Company in October 2002 and was subsequently
elected Chairman of the Board. He is a private investor specializing in
information technology, financial services, and electronic market data firms. In
addition to his investment activities, he has frequently served as an interim
senior executive for developing companies in these same industries. He most
recently served as Executive Vice President and Chief Financial Officer of GFI
Group, Inc., one of the world's leading credit, equity, energy and foreign
exchange derivatives brokerage firms, where in 2001 he launched their largest
successful private equity financing to date. Previously, Mr. Ellis was Executive
Vice President, Chief Financial Officer and a director of HotJobs.com, directing
its 1999 initial public stock offering and follow-on offerings. He also served
as Senior Vice President of Finance and Operations at Biztravel.com and Vice
President and Chief Financial Officer of Metromedia Fiber Network, Inc. Mr.
Ellis also serves as President of Tournament Systems Ltd. and its parent
company, Bolenka Games Online LLC, which develop and operate online and wireless
versions of branded games, such as Trivial Pursuit(R). Mr. Ellis graduated from
the Massachusetts Institute of Technology with a BS and a BSEE, and received his
MBA from Stanford Graduate School of Business. He is also a certified public
accountant.
C.W. GILLULY, Ed.D. has served as a director of the Company since 1992. He
served as President from June 1992 until September 1997, as Chairman of the
Board from June 1992 until December 2002, and as Vice-Chairman from December
2002 through June 2003. Dr. Gilluly has served as Chairman of the Board and
President of AMASYS and its predecessor, Infotechnology, Inc., since June 1992.
Dr. Gilluly also served as a director of Analex Corporation until March 2003, an
engineering services firm primarily involved with homeland security and
bio-defense.
WILLIAM J. HOWARD has served as a director of the Company since January
2003. Mr. Howard has extensive experience in journalism and is currently
5
President of Discovery Tours LLC, a firm providing the tourism industry with
documentaries on historical communities in the mid-Atlantic and southern United
States. He concurrently serves as Chief Financial Officer of Expo Television
Network LLC, a firm providing the hotel industry with coverage of major
conventions. Mr. Howard has also participated in real estate development and the
restoration of historical sites. In Maryland, he has received Governor's
Citations from three different governors for his community service work,
particularly in Talbot County.
ROBERT J. LYNCH, JR. has served as a director of the Company since January
2003. Mr. Lynch has been President of American & Foreign Enterprises, Inc.
("AFE"), an investment firm, for more than 20 years. Among its many enterprises,
AFE is partnered with Hochtief, A.G., Germany's largest engineering/construction
group. AFE has worked with international investment banks such as Goldman Sachs
& Co., BV Bank of Munich and Citibank. Mr. Lynch has been a director of many
public companies in various industries, including Dames & Moore
(environmental/geotechnical engineering), Data Broadcasting Corporation
(real-time financial market data) and Turner Construction Company.
Executive Officers
The following table contains information as of October 24, 2003 as to the
executive officers of the Company who are not also directors of the Company:
Name Age Office Held With Company
---- --- ------------------------
Laurence F. Schwartz 43 President
Stephen K. Brosnihan 39 Vice President, Sales and Business Development
Robin Y. Deal 39 Vice President, Finance & Accounting
Deirdre D. McGonagle 39 Vice President, Publisher Relations
LAURENCE F. SCHWARTZ was appointed President of the Company in July 2003.
Mr. Schwartz has guided numerous entertainment and new media ventures from
start-up through various phases of growth, development and maturity, the most
recent of which include Bolenka Games Online (Trivial Pursuit(R)Online), GFI
Group (financial), Wizard World (publishing) and Patron Technology (technology).
During the last five years, Mr. Schwartz has built New Net Companies, Inc.
(NewNetCo) into a successful e-business solution provider. During 1997-1999, Mr.
Schwartz was President and CEO of Auctions.com , which he co-created with the
Times Mirror Co. and other partners, and then guided through a sale to
Classified Ventures, Inc. Co-owners included Gannett Company, Inc.,
Knight-Ridder, Inc., The New York Times Company, the Times Mirror Co., Tribune
Company, and The Washington Post Company. Previously, Mr. Schwartz founded and
was President of ArtSoft, Inc. and Entertainment Express, Inc., which became the
leading electronic ticketing software suppliers to the entertainment industry.
Mr. Schwartz continues to serve as President of NewNetCo, and is currently
Chairman of the Board of Directors of Bolenka Games Online LLC and Patron
Technology LLC. Mr. Schwartz serves on the board of the Stamford Center for the
Arts, in Stamford, Connecticut, and is a frequent speaker on the topics of
market-driven product development, business start-ups and turnarounds.
STEPHEN K. BROSNIHAN was appointed Vice President, Sales and Business
Development in September 2003. Mr. Brosnihan came to Comtex from NewsEdge
Corporation (now part of the Thomson Corporation) where he held several senior
sales management positions during the past eight years, most recently as
Director of Northeast Sales. Prior to NewsEdge, Mr. Brosnihan held sales and
marketing management positions with several firms, including Borland
International, a leading software company; ACI US, a database company; and Lotus
Development Corporation. Mr. Brosnihan holds a B.A. from the University of
Massachusetts at Amherst and resides in the New York area.
ROBIN Y. DEAL was appointed Vice President, Finance & Accounting in January
2001. Ms. Deal is responsible for all of the Company's financial matters. Ms.
6
Deal began her tenure with the Company in 1996 as Controller. Ms. Deal holds a
B.S. from the University of Maryland and is a certified public accountant.
DEIRDRE D. MCGONAGLE has been an employee of the Company since October 1995
and was appointed Vice President, Publisher Relations in March 2003. Ms.
McGonagle is responsible for content acquisition and manages Comtex's
partnerships with news agencies.
There are no family relationships among the directors or executive officers
of the Company.
Meetings of the Board of Directors
The Board of Directors held a total of 8 meetings during the Company's
fiscal year ended June 30, 2003. Each director attended in person or
telephonically 100% of the meetings held.
Committees of the Board of Directors
The Audit Committee
The Audit Committee, which held 4 meetings during fiscal year 2003, is
comprised of Messrs. Lynch, Hendricks and Howard.
Report of the Audit Committee of the Board of Directors
The Audit Committee has issued a report that states as follows:
- We have reviewed and discussed with management the Company's audited
consolidated financial statements for the fiscal year ended June 30,
2003;
- We have discussed with the independent auditors the matters required
to be discussed by Statement on Auditing Standards No. 61; and
- We have received the written disclosures and the letter from the
independent accountants required by Independence Standards Board
Standard No. 1, "Independence Discussions with Audit Committees," and
have discussed with the independent accountants their independence.
- Based on the review and discussions referred to above, we recommend to
the Board of Directors that the audited consolidated financial
statements be included in the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 2003.
Submitted by the Audit Committee
Robert J. Lynch, Jr., Chairman
Erik Hendricks
William J. Howard
The Compensation Committee
The Compensation Committee of the Board of Directors, which held 5 meetings
during fiscal year 2003, is comprised of Messrs. Howard, Hendricks and Lynch.
The Compensation Committee evaluates management's recommendations and makes its
own recommendations to the Board of Directors concerning the compensation of the
Company's executive officers. It is also responsible for the formulation of the
Company's executive compensation policy and the research, analysis and
subsequent recommendation regarding the administration of the Company's 1995
Stock Option Plan and 2003 Stock Incentive Plan. (Also see section below
including the "Report of the Compensation Committee of the Board of Directors.")
7
The Executive Committee
The Executive Committee of the Board of Directors, which held 3 meetings
during fiscal year 2003, is comprised of Messrs. Ellis, Hendricks and Lynch. The
Executive Committee is chartered to act in place of the full Board between Board
meetings, if actions are required, and to fulfill the function of reviewing any
initial merger and acquisition and/or partnering proposals.
The Board of Directors does not have a Nominating Committee.
The Board of Directors recommends a Vote FOR
---
the election of the Director named on the enclosed Proxy.
8
PROPOSAL NO. 2
ADOPTION OF COMTEX NEWS NETWORK, INC. 2003 INCENTIVE STOCK PLAN
FOR THE PURPOSE OF GRANTING INCENTIVE STOCK OPTIONS
On July 17, 2003, the Board of Directors ratified the Comtex News Network,
Inc. 2003 Incentive Stock Plan (the "Plan"), which had been adopted by the
Compensation Committee and was effective as of July 1, 2003. The Board of
Directors seeks stockholder approval of the Plan in order to qualify the options
awarded to employees for incentive treatment under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code"). If shareholders
fail to approve the Plan, no options awarded under the Plan will be incentive
stock options. The Board of Directors believes that approval of the Plan will
serve the best interests of the Company and its stockholders by permitting the
Company to utilize stock options as a means to attract qualified and experienced
personnel to the Company and its affiliates. The full text of the Plan is set
forth in Appendix A to this Proxy Statement and the following summary is
qualified in its entirety by reference thereto.
Description of the 2003 Incentive Stock Plan
Introduction
The Plan provides for the issuance of incentive stock options within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), non-statutory options, and stock awards to purchase an
aggregate of up to one million (1,000,000) shares of common stock. The Plan
permits the grant of options and awards to qualified personnel, consultants and
directors of the Company.
Administration
The Plan shall be administered by administrators designated by the Board of
Directors of the Company and consisting of not fewer than two members of the
Board of Directors. Pursuant to Rule 16b-3 of the Securities Exchange Act of
1934, as amended ("Exchange Act"), no director shall serve as an administrator
unless he is a "disinterested person" within the meaning of said Rule 16b-3.
Eligibility
Persons eligible to participate in the Plan as a recipient of an option
shall include only key employees, directors and consultants of the Company or
its affiliates at the time the option is granted. An employee or consultant who
has been granted an option hereunder may be granted additional options if the
Administrators shall so determine.
Shares of Stock Subject to the Plan
One Million (1,000,000) shares of common stock of the Company ("Common
Stock") in the aggregate are reserved for issuance under the Plan. This number
increases automatically on the first day of each calendar year, commencing
January 1, 2004, by the lesser of (i) One Hundred Thousand (100,000) shares,
(ii) five percent (5%) of the then outstanding number of shares of common stock
as of the end of the immediately preceding calendar year, or (iii) such amount
as may be determined by the Board of Directors, which shares shall be available
for issuance (subject to adjustment as provided in Section 6) pursuant to the
exercise of Stock Options, granted under Sections 7(a) and 7(c) of the Plan, or
Stock Awards, under Section 7(d) of the Plan. The maximum number of Stock
Options that may be granted to any one employee of the Company is 250,000.
Any shares issued under the Plan may consist in whole or in part, of
authorized and unissued shares, treasury shares or shares purchased by the Plan.
No fractional shares shall be issued under the Plan. Cash may be paid in lieu of
any fractional shares in settlement of awards under the Plan.
9
Restrictions on Transfer
All awards under the Plan, other than Non-Statutory Stock Options, will be
nontransferable and shall not be assignable, alienable, saleable or otherwise
transferable by the participant other than by will or the laws of descent and
distribution, except pursuant to a domestic relations order entered by a court
of competent jurisdiction or as otherwise determined by the Administrators.
If so permitted by the Administrators, a participant may designate a
beneficiary or beneficiaries to exercise his rights under any Stock Option he
would be entitled to and receive any distributions under the Plan upon the
participant's death. However, in the case of participants who are subject to
Section 16 of the Exchange Act, any contrary requirements of Rule 16b-3 under
the Exchange Act, or any successor rule, shall prevail over the provisions of
this section.
Awards
The Administrators may determine the type and terms and conditions of
awards under the Plan. Awards may be granted in the form of non-statutory
options, incentive stock options and stock awards. Such awards may have terms
providing that the settlement or payment of one type of award automatically
reduces or cancels the remaining award.
Stock Options. A stock option gives the recipient the right to purchase
shares of common stock at a specified price for a specified period of time. For
purposes of the 2003 Incentive Stock Plan, the exercise price of each option
will be the fair market value of the common stock on the date of grant. Fair
market value of a share of common stock on a particular date means the average
of the reported high and low bid prices of the common stock for the preceding
ten days. Stock options are either "incentive" stock options or "non-qualified"
stock options. Incentive stock options have certain tax advantages and must
comply with the requirements of Section 422 of the Internal Revenue Code. Only
employees are eligible to receive incentive stock options. A stock option may be
exercised in whole or in installments, which may be cumulative. Shares of common
stock purchased upon the exercise of a stock option must be paid for in full at
the time of exercise either in cash or such other methods as determined by the
Administrators, including tendering (either actually or by attestation) common
stock at fair market value on the date of surrender, or any combination thereof.
Stock options are subject to vesting conditions and restrictions as determined
by the Administrators.
Stock Awards. Stock awards are awards made in stock or denominated in stock
units. Stock awards will be subject to conditions established by the
Administrators which are set forth in the award agreement, and may include
vesting, continuous service with the Company, achievement of specific business
objectives and other measurements of performance.
Duration and Termination
Awards granted pursuant to the Plan may be exercisable pursuant to a
vesting schedule as determined by the Administrators. The Administrators may, in
their sole discretion, accelerate or extend the time during which any Stock
Option may be exercised, or any Stock Award may vest, in whole or in part,
provided, however, that with respect to an Incentive Stock Option, it must be
consistent with the terms of Section 422 of the Internal Revenue Code in order
to continue to qualify as an Incentive Stock Option. Notwithstanding the above,
in the event of death, retirement, disability or change in control, all awards
shall immediately vest.
Tax Withholding
The Company may deduct from any settlement of an award made under the Plan,
including the delivery or vesting of shares, an amount sufficient to cover the
minimum withholding required by law for any federal, state or local taxes, or
take such other action as may be necessary to satisfy any such withholding
obligations. The Administrators may permit shares to be used to satisfy the
minimum required tax withholding.
10
The Board of Directors recommends a vote FOR approval of the
Comtex News Network, Inc. 2003 Incentive Stock Plan for the Purposes of
Granting Incentive Treatment under Section 422 of the Internal Revenue Code
for Options Granted to Employees.
11
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed the firm of Goldstein Golub Kessler,
LLP as the Company's independent auditors for the fiscal year ending June 30,
2004. The Board of Directors believes it is appropriate to seek stockholder
ratification of this appointment in light of the critical role played by
independent auditors in maintaining the integrity of the Company's financial
controls and reporting. Ernst & Young were the Company's independent auditors
for the prior fiscal year.
A representative of Goldstein Golub Kessler, LLP is expected to attend the
Annual Meeting. The representative will have the opportunity to make a
statement, if he or she so desires, and will be available to respond to
appropriate questions from stockholders.
The following table sets forth the aggregate fees billed or to be billed by
Ernst & Young LLP for the following services during fiscal 2003:
----------------------------------------------------- --------------------
Description of Services Fees
----------------------- ----
----------------------------------------------------- --------------------
----------------------------------------------------- --------------------
Audit fees (1) $ 77,439
----------------------------------------------------- --------------------
All other fees (2) $ 7,700
----------------------------------------------------- --------------------
Total $ 85,139
----------------------------------------------------- --------------------
<FN>
(1) Audit Fees: represents the aggregate fees billed or to be billed for
professional services rendered for the audit of our fiscal year 2003 annual
financial statements and for the review of the financial statements
included in our quarterly reports during such period.
(2) Other Fees: review and consent regarding inclusion of financial statements
in various SEC filings.
</FN>
Vote Not Required; Recommendation of the Board of Directors
Although not required to be submitted to stockholders for approval, the
Board of Directors has conditioned its appointment of the independent auditors
upon receiving the affirmative vote of a majority of the shares represented, in
person or by proxy at the Annual Meeting. In the event the stockholders do not
approve the selection of Goldstein Golub Kessler, LLP, the Board of Directors
will reconsider the appointment of the independent auditors.
The Board of Directors recommends a vote FOR ratification of
---
Goldstein Golub Kessler, LLP as Independent Auditors for the Company for
Fiscal Year 2004.
12
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information concerning all compensation paid
or accrued by the Company to its Chief Executive Officer, President and the
other executive officers of the Company who earned total salary and bonus in
excess of $100,000 during the fiscal year ended June 30, 2003 (collectively, the
"Named Executive Officers"):
- -----------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
Awards
- -----------------------------------------------------------------------------------------------------------------------------
Name and Fiscal Shares Underlying All Other
Principal Position Year Salary Bonus Options Compensation
- -----------------------------------------------------------------------------------------------------------------------------
Stephen W. Ellis (1) 2003 $ 36,346 - 710,000 (5) -
Chairman and
Chief Executive Officer
- -----------------------------------------------------------------------------------------------------------------------------
Laurence F. Schwartz (2) 2003 - - - -
President
- -----------------------------------------------------------------------------------------------------------------------------
Charles W. Terry (3) 2003 $ 178,500 $ 17,413 - 43,637
2002 $ 198,600 $ 52,216 - -
2001 $ 194,492 $ 32,777 - -
- -----------------------------------------------------------------------------------------------------------------------------
Raymond P. Capece (4) 2003 $ 24,231 $ 10,000
- -----------------------------------------------------------------------------------------------------------------------------
Robin Y. Deal 2003 $ 110,000 - 35,600 (5) -
Vice President, Finance 2002 $ 106,369 $ 9,180 75,000 (5) -
& Accounting 2001 $ 93,484 $ 12,500 50,000 (5) -
- -----------------------------------------------------------------------------------------------------------------------------
-
Deirdre D. McGonagle 2003 $ 103,204 - 35,600 (5) -
Vice President, 2002 $ 100,500 $ 6,030 35,000 (5) -
Publisher Relations 2001 $ 98,727 $ 16,500 60,000 (5)
- -----------------------------------------------------------------------------------------------------------------------------
________________________
<FN>
(1) Mr. Ellis was appointed Chairman of the Board in December 2002. He was
appointed Chief Executive Officer in July 2003.
(2) Mr. Schwartz was appointed President of the Company in July 2003.
(3) Mr. Terry served as President from August 1994 and Chief Executive Officer
from September 1997 until April 2003. On April 24, 2003, Mr. Terry resigned
as President and CEO, and entered into a Separation and Release Agreement
with the Company, whereby he agreed to provide consulting services for a
limited time and not to compete with the Company for a period of 12 months,
and receives certain separation payments scheduled to continue through
February 2004.
(4) Mr. Capece served as President from April 2003 until July 2003. Mr. Capece
resigned as President and CEO in July 2003 and entered into a Separation
and Release Agreement whereby he continued to render consulting services to
the Company through October 2003 and agreed to mutual releases with the
Company from the other terms of his employment agreement.
(5) Granted pursuant to the Company's 1995 Stock Option Plan. See "Executive
Compensation - Stock Option Grants."
</FN>
13
Stock Option Grants
The following table provides details regarding all stock options granted to
the Named Executive Officers during the fiscal year ended June 30, 2003:
Option Grants in Fiscal Year 2003
- -----------------------------------------------------------------------------------------------------------------------------------
Potential
Number of % of Total Options Realizable Value at Assumed
Shares Underlying Granted Exercise Expiration Annual Rates of Stock Price
Name Options Granted in Fiscal Year Price Date Appreciation for Option Term (5)
- ---- --------------- -------------- ----- ---- --------------------------------
5% 10%
--- ---
- -----------------------------------------------------------------------------------------------------------------------------------
10,000 (1) 0.59% $0.19 10/23/12 $ 1,195 $ 3,028
Stephen W. Ellis 700,000 (2) 41.51% $0.14 12/20/12 $ 61,632 $ 156,187
- -----------------------------------------------------------------------------------------------------------------------------------
Laurence F. Schwartz - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Charles W. Terry - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Raymond P. Capece 600,000 (3) 35.58% $0.17 04/25/2013 $ 64,147 $ 162,562
- -----------------------------------------------------------------------------------------------------------------------------------
Robin Y. Deal 35,600 (4) 2.11% $0.18 03/12/2013 $ 4,029 $ 10,213
- -----------------------------------------------------------------------------------------------------------------------------------
Deirdre D. McGonagle 35,600 (4) 2.11% $0.18 03/12/2013 $ 4,029 $ 10,213
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
__________________
(1) Options vest one-third upon the date of grant, and one-third each on the
first and second anniversaries of the date of grant, and expire 10 years
after the grant date. The option exercise price is 100% of the fair market
value on the date of grant. Options are exercisable for a period of 90 days
after termination of directorship to the extent vested at that time.
(2) Options vest 350,000 immediately, 350,000 no later than 120 days (April 19,
2003) from the grant date, subject to submission/acceptance of a Business
Plan. The option exercise price is 100% of the fair market value on the
date of grant. Options are exercisable for a period of 90 days after
termination of employment to the extent vested at that time.
(3) Options granted to Mr. Capece did not vest during his tenure.
(4) Options vest one-third each upon the first, second and third anniversaries
of the date of grant, and expire 10 years after the grant date. The option
exercise price is 100% of the fair market value on the date of grant.
Options are exercisable for a period of 90 days after termination of
employment to the extent vested at that time.
(5) Amounts represent hypothetical gains that could be achieved, if exercised
at the end of the option term. The dollar amounts under these columns
assume 5% and 10% compounded annual appreciation in the Common Stock from
the date the respective options were granted. These calculations and
assumed realizable values are required to be disclosed under Securities and
Exchange Commission rules and, therefore, are not intended to forecast
possible future appreciation of common stock or amounts that may be
ultimately realized upon exercise. The Company does not believe this method
accurately illustrates the potential value of a stock option.
</FN>
14
Set forth below is certain information as of June 30, 2003 regarding equity
compensation plans for directors and executive officers of the Company that have
been approved by stockholders.
- ------------------------------------------------------------------------------------------------------
Weighted
Number of securities to be issued average Number of securities
Equity compensation plans upon exercise of outstanding exercise remaining available for
approved by stockholders options and rights price issuance under plan
- ------------------------------------------------------------------------------------------------------
1995 Stock Option Plan 2,872,858 $0.43 542,597
- ------------------------------------------------------------------------------------------------------
Options Exercised and Year-End Option Values
The following table sets forth certain information regarding the value of
exercised and unexercised options held by the Named Executive Officers as of
June 30, 2003.
Fiscal Year-End Option Values
- --------------------------------------------------------------------------------------------------------------------------------
Shares Number of Shares Value of Unexercised
Acquired upon Value Realized Underlying Unexercised In-the-Money Options
Exercise of From Exercise Options at June 30, 2003 at June 30, 2003(2)
Name Options Of Options (1) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------- -------------- ----------- -------------- ----------- -------------
Stephen W. Ellis - $ - 703,300 6,700 $ 70,165 $ 335
- --------------------------------------------------------------------------------------------------------------------------------
Laurence F. Schwartz - $ - - - $ - $ -
- --------------------------------------------------------------------------------------------------------------------------------
Charles W. Terry - $ - 397,733 - $ 47,283 $ -
- --------------------------------------------------------------------------------------------------------------------------------
Raymond P. Capece - $ - - 600,000 $ - $ 42,000
- --------------------------------------------------------------------------------------------------------------------------------
Robin Y. Deal - $ - 116,500 86,100 $ 300 $ 2,136
- --------------------------------------------------------------------------------------------------------------------------------
Deirdre D. McGonagle - $ - 66,783 64,150 $ - $ 2,136
- --------------------------------------------------------------------------------------------------------------------------------
<FN>
____________________
(1) Represents the difference between the exercise price and the market value
price on the date of exercise.
(2) Represents the difference between the exercise price of the outstanding
options and the closing bid price of the common stock on June 30, 2003,
which was $0.24 per share. Options that have an exercise price greater than
the fiscal year-end market value are not included in the value calculation.
</FN>
Stock Option Plan
In October 1995, the Board of Directors approved the Comtex News Network,
Inc. 1995 Stock Option Plan, which was approved by stockholders in December
1995. The Plan provides for the issuance of incentive stock options within the
meaning of Section 422 of the Internal Revenue Code and non-qualified stock
options in order to recruit and retain key employees, consultants and directors.
Compensation of Directors
During fiscal year 2003, the Company's directors were reimbursed for travel
expenses in connection with attendance at Board of Directors' meetings.
Non-employee directors of the Company also received a fee of $1,000 for each
Board of Directors' meeting attended. Employee directors did not receive
additional compensation for Board of Directors' meeting attendance. The
Company's directors did not receive any compensation for committee participation
during fiscal year 2003.
15
Employment Agreements
Employment Agreement with the Company's Chief Executive Officer
The Company has an employment contract with Mr. Ellis, who was appointed
Chief Executive Officer effective July 1, 2003. Under the terms of the Agreement
dated July 1, 2003, Mr. Ellis is employed for a two-year period with the ability
to extend such term for one-year periods. Mr. Ellis's base salary is $150,000,
which shall be increased by at least five percent annually based on a favorable
performance review. In addition to his base salary, Mr. Ellis is entitled to an
annual incentive cash bonus based upon the satisfaction of certain revenue and
earnings goals. The employment agreement requires that if Mr. Ellis is
terminated without cause or resigns for good reason (as defined in his
employment agreement), then Mr. Ellis is entitled to certain severance benefits
and an acceleration of his unvested stock options. If Mr. Ellis is terminated
for cause or resigns without good reason (as defined in his employment
agreement), then he is entitled to have his vested incentive stock options, if
any, converted into non-statutory stock options. The employment agreement
contains certain confidentiality and noncompetition provisions. The Company
granted Mr. Ellis options to acquire 575,000 shares of common stock under the
1995 Stock Option Plan and 250,000 shares of common stock under the 2003
Incentive Stock Plan.
Employment Agreement with the Company's President
The Company has an employment contract with Mr. Schwartz, who was appointed
Chief Executive Officer effective July 1, 2003. Under the terms of the Agreement
dated July 1, 2003, Mr. Schwartz is employed for a two-year period with the
ability to extend such term for one-year periods. Mr. Schwartz's base salary is
$140,000, which shall be increased by at least five percent annually based on a
favorable performance review. In addition to his base salary, Mr. Schwartz is
entitled to an annual incentive cash bonus based upon the satisfaction of
certain revenue and earnings goals. The employment agreement requires that if
Mr. Schwartz is terminated without cause or resigns for good reason (as defined
in his employment agreement) then Mr. Schwartz is entitled to certain severance
benefits and an acceleration of his unvested stock options. If Mr. Schwartz is
terminated for cause or resigns without good reason (as defined in his
employment agreement), then he is entitled to have his vested incentive stock
options, if any, converted into non-statutory stock options. The employment
agreement contains certain confidentiality and noncompetition provisions. The
Company granted Mr. Schwartz options to acquire 575,000 shares of common stock
under the 1995 Stock Option Plan and 250,000 shares of common stock under the
2003 Incentive Stock Plan.
The Company also has severance agreements with Ms. Deal and Ms. McGonagle.
These officers are entitled to receive three months severance pay in the event
the Company terminates their employment as part of an overall reduction in work
force, or six months severance pay in the event their employment is terminated
within the first six calendar months after a change in control of the Company.
The Board of Directors will determine whether a change in control has occurred
for purposes of these agreements.
Report of the Compensation Committee of the Board of Directors
General. The Company believes its compensation policies are designed to
provide competitive levels of compensation that integrate with the Company's
annual and long-term quantitative and qualitative performance factors. The
compensation policies reward above-average corporate performance, recognize
individual initiative and achievements and assist the Company in attracting and
retaining qualified executives.
The Company establishes compensation, including compensation for the Chief
Executive Officer, based on both objective and subjective criteria. Objective
criteria include actual versus target annual operating budget performance and
actual versus target revenue growth, either as to the Company as a whole, or as
to the officer's particular operating unit. Subjective performance criteria
encompass evaluation of each officer's initiative and contribution to overall
corporate performance, the officer's managerial ability, and the officer's
performance in any special projects that the officer may have undertaken. The
Company also endorses the position that stock ownership by management and
16
stock-based performance compensation arrangements are beneficial in aligning
managements' and stockholders' interests in the enhancement of stockholder value
and therefore uses its Stock Option and Stock Purchase Plans to recruit and
retain senior management.
Compliance with Internal Revenue Code Section 162(M)
Section 162(m) of the Internal Revenue Code disallows a tax deduction to
publicly held companies for compensation paid to certain of their executive
officers, to the extent that compensation, whether payable in cash or stock,
exceeds $1 million per covered officer in any fiscal year. The limitation
applies only to compensation that is not considered to be performance-based.
Non-performance-based compensation paid to our executive officers for the 2003
fiscal year did not exceed the $1 million limit per officer, and the
Compensation Committee does not anticipate that any non-performance-based
compensation payable to the executive officers for the 2004 fiscal year will
exceed that limit. Because it is unlikely that the actual compensation payable
to any of our executive officers in the foreseeable future will approach the $1
million limit, the Compensation Committee has decided at this time not to take
any action to limit or restructure the elements of cash compensation payable to
the executive officers. The Compensation Committee shall reconsider this
decision should the individual cash compensation of any executive officer ever
approach the $1 million level.
Submitted by the Compensation Committee
William J. Howard
Erik Hendricks
Robert J. Lynch, Jr.
Board of Directors Interlocks and Insider Participation
General. Dr. Gilluly serves as a Director of the Company. Dr. Gilluly also
serves as Chairman and Chief Executive Officer of AMASYS, which beneficially
owns approximately 20.1% of the Company's Common Stock. (See "Beneficial
Ownership of Common Stock.")
Note Payable to AMASYS
- ----------------------
During August 2001, AMASYS and Comtex signed an amendment to a note payable
to AMASYS, (Second Amendment to Amended, Consolidated and Restated 10% Senior
Subordinated Secured Note) (the "Amended Note") extending the due date of the
note to July 1, 2008. In addition to the extension of the term, the Amended Note
includes a provision for AMASYS to convert all or a portion of the outstanding
principal amount, plus accrued interest, into common stock of Comtex. The
Amended Note is convertible at a price of $1.20 per share as of August 31, 2003,
which price increases by $0.10 upon each anniversary of the amendment.
The Amended note bears interest at a rate of 10% on the principal balance
of $856,954 at June 30, 2003. The Note is collateralized by a continuing
interest in all receivables, all products of such receivables and the proceeds
thereof, all purchase orders, and all patents and technology now or hereafter
held or received by the Company.
Approximately $146,000, $132,000 and $130,000 in principal and interest
were paid to AMASYS during the fiscal years ended June 30, 2003, 2002 and 2001,
respectively.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain relationships and related transactions involving directors of the
Company and certain other entities are described in "Executive Compensation -
Board of Directors Interlocks and Insider Participation."
17
PERFORMANCE GRAPH
The graph below depicts the Company's stock price as an index assuming $100
invested on July 1, 1998 along with the composite prices of companies listed in
the Nasdaq Stock Market (U.S. Companies) Index and a composite of peer group
companies in the Internet Information Providers Index. The Nasdaq Stock Market
Index and Internet Information Providers Index were prepared by Media General, a
source believed to be reliable, although the Company is not responsible for any
errors or omissions in such information.
The Internet Information Providers Index includes the following companies:
A.D.A.M., American OnineLtin Am, Aptimus Inc., Bankrate Inc., Career Worth Inc.,
Chinadotcom Corp, CNET Networks, Inc., Edgar Online, Euniverse Inc., Finity
Holdings Inc., Heathcentral.com, Homeseekers. Com Inc., Homestore Inc., Hoover's
Inc., Ilive Inc., Infospace Incorporated, Internet Gold-Golden, iVillage, Inc.,
Jupitermedia Corp., Knot Inc., Looksmart LTD, Marketwatch.com Inc., Modern MFG
Services Inc., Multex.com Inc., Netlease.com Inc., Onesource Information SV,
Overture Services Inc., QSC AG Adr, Quotesmith.com Inc., Rediff.com India Ltd
Ads, Rstar Corporation, Sales Online Direct, Inc., Salon Media Group Inc.,
Sohu.com Inc., Sportsline.com Inc., Stockscape Technologies, Theglobe.com Inc.,
TheStreet.com, Tucows Inc., US Dataworks Inc., Verticalnet, Inc., World Gaming
Plc Spons, Yahoo! Inc.
The comparisons are required by regulations of the Securities and Exchange
Commission and are not intended to forecast or to be indicative of the possible
future performance of the Company's Common Stock.
- -------------------------------------------------------------------------------------------------------------------
FISCAL YEAR ENDING
- -------------------------------------------------------------------------------------------------------------------
COMPANY / INDEX / MARKET 1998 1998 2000 2001 2002 2003
---- ---- ---- ---- ---- ----
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Comtex News Network, Inc. 100.00 599.91 872.60 194.88 84.35 69.81
- -------------------------------------------------------------------------------------------------------------------
Internet Info. Providers 100.00 276.56 281.55 61.98 33.28 73.43
- -------------------------------------------------------------------------------------------------------------------
Nasdaq Market Index 100.00 140.14 210.86 116.77 79.21 88.08
- -------------------------------------------------------------------------------------------------------------------
[STOCK PERFORMANCE GRAPH OMITTED]
18
The preceding report on executive compensation and the stock performance
graph shall not be deemed incorporated by reference into any of our previous
filings under the Securities Act of 1933 or the Securities Exchange Act of 1934
which might incorporate filings made by us under those acts, nor will such
report or graph be incorporated by reference into any future filings made by us
under those acts, except to the extent that we specifically incorporate this
information by reference.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's officers,
directors and persons who own more than 10% of a registered class of the
Company's equity securities to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
greater than 10% stockholders are required by the regulation to furnish the
Company with copies of the Section 16(a) forms which they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company, and written representations that no other
reports were required during the fiscal year beginning July 1, 2002 and ended
June 30, 2003, all Section 16(a) filing requirements applicable to the Company's
officers, directors and greater than ten percent beneficial owners were complied
with in a timely manner with the exception of a Form 4 filed by Mr. Ellis and a
Form 3 filed by Mr. Schwartz which were not timely filed due to administrative
error.
ANNUAL REPORT
A copy of the Company's Annual Report for the fiscal year ended June 30,
2003, including the financial statements and notes thereto is being mailed to
the stockholders of record along with this Proxy Statement. The Annual Report is
not incorporated by reference in this Proxy Statement and is not considered to
be part of the proxy material.
The Company will furnish any exhibit described in the list accompanying the
2003 Form 10-K upon the payment, in advance, of the specified reasonable fees
related to the Company's furnishing of such exhibit(s). Requests for copies of
such report and/or exhibit(s) should be directed to the Company at its Virginia
office at 625 N. Washington Street, Suite 301, Alexandria, Virginia 22314,
Attention: Corporate Secretary.
OTHER MATTERS
The Board of Directors knows of no other business to be acted upon at the
Annual Meeting other than the matters referred to in this Proxy Statement. If
any other matters properly come before the Annual Meeting, it is the intention
of the persons named in the enclosed proxy to vote the shares they represent as
the Board of Directors may recommend.
By Order of the Board of Directors
/s/ S. Amber Gordon
S. Amber Gordon
Corporate Secretary
Date: October 28, 2003
19
APPENDIX A
Comtex News Network, Inc.
2003 Stock Incentive Plan
APPENDIX A
COMTEX NEWS NETWORK, INC.
2003 INCENTIVE STOCK PLAN
1. PURPOSE. The purpose of the Comtex News Network, Inc. 2003 Incentive
Stock Plan (the "Plan") is to (i) to attract and retain qualified and
experienced personnel to the Company and its affiliates, and (ii) provide
outside directors and key employees of Comtex News Network, Inc. (the "Company")
and its affiliates, with additional incentives to improve the growth and
performance of the Company.
2. TERM. The Plan shall be effective as of July 1, 2003, (the "Effective
Date"), and shall remain in effect for ten years thereafter, unless sooner
terminated by the Company's Board of Directors (the "Board"). After termination
of the Plan, no additional awards may be granted but previously granted awards
shall remain outstanding in accordance with their applicable terms and
conditions and the terms and conditions of the Plan.
3. PLAN ADMINISTRATION.
(a) Administrators. The Plan shall be administered by administrators
(the "Administrators") designated by the Board of Directors of the Company (the
"Board"), and consisting of not fewer than two members of the Board. Pursuant To
Rule 16b-3 of the Securities Exchange Act of 1934, as amended ("Exchange Act"),
no director shall serve as an administrator unless he is a "disinterested
person" within the meaning of said Rule 16b-3.
(b) Administrators' Action. The Administrators shall hold meetings at
such times and places as they may determine. A majority of Administrators shall
constitute a quorum, and all determinations of the Administrators shall be made
by not less than a majority thereof. Any decision or determination reduced to
writing and signed by a majority of the Administrators shall be fully effective
as if it had been made by a majority vote of the Administrators at a meeting
duly called and held. The Administrators may designate the Secretary of the
Company or other Company employees to assist the Administrators in the
administration of the Plan, and may grant authority to such person to execute
award agreements or other documents on behalf of the Administrators and the
Company. Any duly constituted committee of the Board satisfying the
qualifications of this Section 3 may be appointed as the Administrators.
(c) Administrators' Expenses. All expenses and liabilities incurred by
the Administrators in the administration of the Plan shall be borne by the
Company. The Administrators may employ attorneys, consultants, accountants or
other persons.
4. ELIGIBILITY TO PARTICIPATE. The persons eligible to participate in the
Plan as a recipient of options (optionee) shall include only key employees,
directors and consultants of the Company or its affiliates at the time the
option is granted. An employee or consultant who has been granted an option
hereunder may be granted an additional option or options, if the Administrators
shall so determine.
A-1
5. SHARES OF STOCK SUBJECT TO THE PLAN. One Million (1,000,000) shares of
common stock of the Company ("Common Stock") in the aggregate are reserved for
issuance under the Plan, such number to increase automatically on the first
calendar day of each year, commencing January 1, 2004, by the lesser of (i) One
Hundred Thousand (100,000) shares, (ii) five percent (5%) of the then
outstanding number of shares of common stock as of the end of the immediately
preceding calendar year, or (iii) such amount as may be determined by the Board
of Directors, which shares shall be available for issuance (subject to
adjustment as provided in Section 6) pursuant to the exercise of Stock Options,
granted under Sections 7(a) and 7(c) of the Plan, or Stock Awards, under Section
7(d) of the Plan. The maximum number of Stock Options that may be granted to any
one employee of the Company is 250,000.
Any shares issued under the Plan may consist in whole or in part, of
authorized and unissued shares, treasury shares or shares purchased by the Plan.
No fractional shares shall be issued under the Plan. Cash may be paid in lieu of
any fractional shares in settlement of awards under the Plan.
6. ADJUSTMENTS. If the number of outstanding shares of Common Stock is
increased or decreased or the shares of Common Stock are changed into or
exchanged for a different number or kind of shares or other securities of the
Company on account of any recapitalization, reclassification, stock split,
reverse split, combination of shares, exchange of shares, stock dividend or
other distribution payable in capital stock, or other increase or decrease in
such shares effected without receipt of consideration by the Company occurring
after the Effective Date, the number and kinds of shares for which grants of
awards may be made under the Plan shall be adjusted proportionately and
accordingly by the Company. In addition, the number and kind of shares for which
grants are outstanding shall be adjusted proportionately and accordingly so that
the proportionate interest of the grantee immediately following such event
shall, to the extent practicable, be the same as immediately before such event.
Any such adjustment in outstanding Stock Options shall not change the aggregate
Stock Option purchase price payable with respect to shares that are subject to
the unexercised portion of the Stock Option outstanding but shall include a
corresponding proportionate adjustment in the Stock Option purchase price per
share.
Adjustments under this Section 6 relating to shares of Common Stock or
securities of the Company shall be made by the Administrators, whose
determination in that respect shall be final, binding and conclusive. No
fractional shares or other securities shall be issued pursuant to any such
adjustment, and any fractions resulting from any such adjustment shall be
eliminated in each case by rounding downward to the nearest whole share. The
granting of awards pursuant to the Plan shall not affect or limit in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure or to merge,
consolidate, dissolve, or liquidate, or to sell or transfer all or any part of
its business or assets.
7. AWARDS. The Administrators shall determine the type or types of award(s)
to be made to each participant under the Plan and shall approve the terms and
conditions governing these awards in accordance with Section 11. Awards may be
A-2
granted singly, in combination or in tandem so that the settlement or payment of
one automatically reduces or cancels the other. The types of awards that may be
made under the Plan are set forth below.
(a) Stock Option. A Stock Option is a grant of a right to purchase
a specified number of shares of Common Stock under the Plan during a specified
period. A Stock Option may be in the form of a Non-Statutory Option, as defined
in this paragraph, or an Incentive Stock Option, which complies with Section 422
of the Code, as amended (as defined hereinafter), and the regulations thereunder
at the time of grant, provided, however, that Options under this Plan may only
be granted as Incentive Stock Options if the Company obtains shareholder
approval within twelve (12) months before or after the date of adoption of this
Plan. A Non-Statutory Stock Option means an option granted by the Administrators
to (i) an outside director or (ii) to any other participant, and such option is
either (A) not designated by the Administrators as an Incentive Stock Option, or
(B) fails to satisfy the requirements of an Incentive Stock Option as set forth
in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
the regulations thereunder. The exercise price of each Stock Option shall be the
per share Fair Market Value of Common Stock on the date the award is granted.
However, if a key employee owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or its affiliates
(or under Section 424(d) of the Code, is deemed to own stock representing more
than 10% of the total combined voting power of all classes of stock of the
Company or its affiliates by reason of the ownership of such classes of stock,
directly or indirectly, by or for any brother, sister, spouse, ancestor or
lineal descendent of such key employee, or by or for any corporation,
partnership, estate or trust of which such key employee is a shareholder,
partner or beneficiary), the purchase price per share of Common Stock
deliverable upon the exercise of each Incentive Stock Option shall not be less
than 110% of the Fair Market Value of the Company's Common Stock on the date the
Incentive Stock Option is granted. A Stock Option may be exercised in whole or
in installments, which may be cumulative. The price at which shares of Common
Stock may be purchased under a Stock Option shall be paid in full at the time of
the exercise, in either cash or such other methods as provided by the
Administrators at the time of grant or as provided in the form of agreement
approved in accordance herewith, including tendering (either actually or by
attestation) Common Stock at Fair Market Value on the date of surrender, or any
combination thereof.
(b) Stock Award. A Stock Award is an award under the Plan, made in
stock or denominated in units of stock. All or part of any Stock Award may be
subject to conditions established by the Administrators, and set forth in the
award agreement, which may include, but are not limited to, vesting, continuous
service with the Company, achievement of specific business objectives, and other
measurements of individual, business unit or Company performance.
8. DEFERRALS AND SETTLEMENTS. Payments in exercise of a Stock Option Award
may be in the form of Common Stock or cash, or in combinations thereof as the
Administrators determine at the time of grant, and with such restrictions as
they may impose. No Stock Option is to be considered exercised until payment in
full is accepted by the Administrators. The means by which a recipient of an
award may make payment is set forth below.
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(a) Cash Payment. The exercise price may be paid in cash or by
certified check. To the extent permitted by law, the Administrators may permit
all or a portion of the exercise price of a Stock Option to be paid from
borrowed funds.
(b) Cashless Exercise. Subject to vesting requirements, if applicable,
a participant may engage in a "cashless exercise" of the Stock Option. Upon a
cashless exercise, the participant shall give the Company written notice of the
exercise of the Stock Option together with an order to a registered
broker-dealer or equivalent third party, to sell part or all of the Common Stock
subject to the Stock Option and to deliver enough of the proceeds to the Company
to pay the Stock Option exercise price and any applicable withholding taxes. If
the participant does not sell the Common Stock subject to the Stock Option
through a registered broker-dealer or equivalent third party, the participant
may give the Company written notice of the exercise of the Stock Option and the
third-party purchaser of the Common Stock subject to the Stock Option shall pay
the Stock Option exercise price plus applicable withholding taxes to the
Company.
(c) Exchange of Common Stock. The Administrators may permit payment of
the Stock Option exercise price by the tendering of previously acquired shares
of Common Stock. All shares of Common Stock tendered in payment of the exercise
price of a Stock Option shall be valued at the Fair Market Value of the Common
Stock. No tendered shares of Common Stock which were acquired by the participant
upon the prior exercise of a Stock Option or as awards under this or any other
stock award plan sponsored by the Company shall be accepted for exchange unless
the participant has held such shares (without restrictions imposed by said plan
or award) for at least six months prior to the exchange.
9. FAIR MARKET VALUE. For all purposes under the Plan, Fair Market Value of
a share of Common Stock on a particular date shall be equal to the average of
the reported high and low bid prices of the Common Stock for the preceding ten
(10) days. In the event the Common Stock is not actively traded at the time a
determination of its value is required to be made hereunder, the determination
of its Fair Market Value shall be made by the Administrators in such manner as
they deem appropriate.
10. TRANSFERABILITY AND EXERCISABILITY. All awards under the Plan, other
than Non-Statutory Stock Options, will be nontransferable and shall not be
assignable, alienable, saleable or otherwise transferable by the participant
other than by will or the laws of descent and distribution, except pursuant to a
domestic relations order entered by a court of competent jurisdiction or as
otherwise determined by the Administrators.
If so permitted by the Administrators, a participant may designate a
beneficiary or beneficiaries to exercise his rights under any Stock Option he
would be entitled to and receive any distributions under the Plan upon the
participant's death. However, in the case of participants who are subject to
Section 16 of the Securities Exchange Act 1934 (the "1934 Act"), any contrary
requirements of Rule 16b-3 under the 1934 Act, or any successor rule, shall
prevail over the provisions of this Section.
Awards granted pursuant to the Plan may be exercisable pursuant to a
vesting schedule as determined by the Administrators. The Administrators may, in
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their sole discretion, accelerate or extend the time during which any Stock
Option may be exercised, or any Stock Award may vest, in whole or in part,
provided, however, that with respect to an Incentive Stock Option, it must be
consistent with the terms of Section 422 of the Code in order to continue to
qualify as an Incentive Stock Option. Notwithstanding the above, in the event of
death, Retirement or Disability (as defined in Section 23 hereof), all awards
shall immediately vest.
11. AWARD AGREEMENTS. Each award of Stock Options and Stock under the Plan
shall be evidenced by an agreement that is approved by the Administrators. The
agreement must set forth the terms, conditions and limitations to an award and
the provisions applicable in the event the participant's employment terminates,
provided, however, in no event shall the term of any Incentive Stock Option
exceed a period of ten years from the date of its grant. If any key employee, at
the time an Incentive Stock Option is granted to him, owns stock representing
more than 10% of the total combined voting power of all classes of stock of the
Company or its affiliate (or, under Section 424(d) of the Code, is deemed to own
stock representing more than 10% of the total combined voting power of all
classes of stock, by reason of the ownership of such classes of stock, directly
or indirectly, by or for any brother, sister, spouse, ancestor or lineal
descendent of such key employee, or by or for any corporation, partnership,
estate or trust of which such key employee is a shareholder, partner or
beneficiary), the Incentive Stock Option granted to him shall not be exercisable
after the expiration of five years from the date of grant.
In addition, to the extent required by Section 422 of the Code, the
aggregate Fair Market Value (determined at the time the option is granted) of
the Common Stock for which Incentive Stock Options are exercisable for the first
time by a participant during any calendar year (under all plans of the Company
and its affiliates) shall not exceed $100,000. In the event the amount
exercisable shall exceed $100,000, the first $100,000 of Incentive Stock Options
(determined as of the date of grant) shall be exercisable as Incentive Stock
Options and any excess shall be exercisable as Non-Statutory Stock Options.
12. PLAN AMENDMENT. The Board or the Administrators may modify or amend the
Plan as it deems necessary or appropriate or modify or amend an award received
by key employees and/or outside directors. No such amendment shall adversely
affect any outstanding awards under the Plan without the consent of the holders
thereof.
13. TAX WITHHOLDING. The Company may deduct from any settlement of an award
made under the Plan, including the delivery or vesting of shares, an amount
sufficient to cover the minimum withholding required by law for any federal,
state or local taxes or to take such other action as may be necessary to satisfy
any such withholding obligations. The Administrators may permit shares to be
used to satisfy the minimum required tax withholding and such shares shall be
valued at the Fair Market Value as of the settlement date of the applicable
award.
14. OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS. Settlements of awards
received by participants under the Plan shall not be deemed a part of a
participant's regular, recurring compensation for purposes of calculating
payments or benefits from any Company benefit plan, severance program or
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severance pay law of any country, unless otherwise determined by the
Administrators, or unless the contrary is specifically provided in a Company
benefit plan that is exempt from tax under Section 401(a) of the Code.
15. UNFUNDED PLAN. Unless otherwise determined by the Administrators, the
Plan is an unfunded plan. The Plan shall not create (or be construed to create)
a trust or a separate fund or funds. The Plan shall not establish any fiduciary
relationship between the Company and any participant or other person. To the
extent any person holds any rights by virtue of a grant awarded under the Plan,
such right (unless otherwise determined by the Administrators) shall be no
greater than the right of an unsecured general creditor of the Company.
16. FUTURE RIGHTS. No person shall have any claim or right to be granted an
award under the Plan, and no participant shall have any rights by reason of the
grant of any award under the Plan to continued employment by the Company or any
subsidiary of the Company.
17. GENERAL RESTRICTION. Each award shall be subject to the requirement
that, if at any time the Administrators shall determine, in its sole discretion,
that the listing, registration or qualification of any award under the Plan upon
any securities exchange or under any state or federal law, or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such award or the grant or
settlement thereof, such award may not be exercised or settled in whole or in
part unless such listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not acceptable to the
Administrators.
18. GOVERNING LAW. The validity, construction and effect of the Plan and
any actions taken or relating to the Plan shall be determined in accordance with
the laws of the State of New York and applicable federal law.
19. SUCCESSORS AND ASSIGNS. The Plan shall be binding on all successors and
permitted assigns of a participant, including, without limitation, the guardian
or estate of such participant and the executor, administrator or trustee of such
estate, or any receiver or trustee in bankruptcy or representative of the
participant's creditors.
20. RIGHTS AS A SHAREHOLDER. A participant shall have no rights as a
shareholder with respect to awards under the Plan until he or she becomes the
holder of record of shares granted under the Plan.
21. EXTRAORDINARY CORPORATE TRANSACTIONS.
(a) Fundamental Change. Notwithstanding anything to the contrary in
the Plan, if the Company recapitalizes or otherwise changes its capital
structure (a "Fundamental Change"), then thereafter upon any exercise of an
option theretofore granted, the optionee shall be entitled to purchase under
such option, in lieu of the number of shares of Common Stock as to which option
shall then be exercisable, the number and class of shares of stock and
securities to which the optionee would have been entitled pursuant to the terms
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of the Fundamental Change if, immediately prior to such Fundamental Change, the
optionee had been the holder of record of the number of shares of Common Stock
as to which such option is then exercisable.
(b) Change in Control. If (i) the Company shall not be the surviving
entity in any merger or consolidation (or survives only as a subsidiary of
another entity), (ii) the Company sells all or substantially all of its assets
to any other person or entity (other than a wholly-owned subsidiary), (iii) any
person or entity (including a "group" as contemplated by Section 13(d)(3) of the
Exchange Act) acquires or gains ownership or control of (including, without
limitation, power to vote) more than 50% of the outstanding shares of Common
Stock, (iv) the Company is to be dissolved and liquidated, or (v) as a result of
or in connection with a contested election of directors, the persons who were
directors of the Company before such election shall cease to constitute a
majority of the Board, then each of the foregoing shall constitute a "Change in
Control".. In the event of a Change in Control, the Administrators and the Board
of Directors will take one or more of the following actions to be effective as
of the date of such Change in Control:
(1) provide that such Stock Options shall be assumed, or
equivalent stock options shall be substituted ("Substitute Options") by the
acquiring or succeeding corporation (or an affiliate thereof), provided that:
(A) any such Substitute Options exchanged for Incentive Stock Options shall meet
the requirements of Section 424(a) of the Code, and (B) the shares of stock
issuable upon the exercise of such Substitute Options shall be registered in
accordance with the Securities Act of 1933, as amended ("1933 Act") or such
securities shall be exempt from such registration in accordance with Sections
3(a)(2) or 3(a)(5) of the 1933 Act, (collectively, "Registered Securities"), or
in the alternative, if the securities issuable upon the exercise of such
Substitute Options shall not constitute Registered Securities, then the
Participant will receive upon consummation of the Change in Control a cash
payment for each Stock Option surrendered equal to the difference between the
(1) fair market value of the consideration to be received for each share of
Common Stock in the Change in Control times the number of shares of Common Stock
subject to such surrendered Stock Options, and (2) the aggregate exercise price
of all such surrendered Stock Options; or
(2) in the event of a Change in Control transaction whereby the
holders of Common Stock will receive a cash payment (the "Merger Price") for
each share of Common Stock exchanged in the Change in Control transaction, make
or provide for a cash payment to the participants equal to the difference
between (1) the Merger Price times the number of shares of Common Stock subject
to such Stock Options held by each participant (to the extent then exercisable
at prices not in excess of the Merger Price), and (2) the aggregate exercise
price of all such surrendered Stock Options.
22. COMPLIANCE WITH SECTION 16. With respect to persons subject to Section
16 of the 1934 Act, transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under the 1934 Act. To the
extent any provisions of the Plan or actions of the Administrators fail to so
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Administrators.
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23. TERMINATION OF EMPLOYMENT. Unless the Board or the Administrators
specifically designate another schedule in the Stock Option agreement, in
connection with a termination of employment, Stock Options shall continue to be
exercisable in accordance with the following provisions of this paragraph. Upon
the termination of an employee's employment for any reason other than
Disability, Retirement, Change in Control, death or Termination for Cause, the
employee's Stock Options shall be exercisable, but only as to those shares that
were immediately purchasable by, or vested in, such employee at the date of
termination, and such options may be exercised only for a period of three (3)
months following such termination. Upon the termination of an employee's service
because of Disability, Retirement, death, or Change in Control (with such
termination in respect of the latter occurring within 180 days of the effective
date of such Change in Control), the employee's Stock Options shall be
exercisable as to all shares whether or not then exercisable, and the employee's
Stock Awards shall vest as to all shares subject to an outstanding award,
whether or not otherwise immediately vested in such employee at the date of
termination and options may be exercised for a period of five (5) years
following termination. Notwithstanding anything to the contrary herein, in no
event shall the exercise period extend beyond the expiration of the Stock Option
term. In the event of termination of employment or service for Cause (as defined
herein) all rights and awards granted to an employee or director under the Plan
not exercised or vested shall expire upon termination.
No option shall be eligible for treatment as an Incentive Stock Option in
the event such option is exercised more than three (3) months following the date
of the employee's Retirement or termination of employment following a Change in
Control; and provided further, that no option shall be eligible for treatment as
an Incentive Stock Option in the event such option is exercised more than one
year following termination of employment due to Disability and provided further,
in order to obtain Incentive Stock Option treatment for options exercised by
heirs or devisees of an optionee, the optionee's death must have occurred while
employed or within three (3) months of termination of employment.
"Disability" means, with respect to an employee, the permanent and total
inability by reason of mental or physical infirmity or both, of an employee to
perform the work customarily assigned to him. Additionally, a medical doctor
selected or approved by the Board of Directors must advise the Administrators
that it is either not possible to determine when such Disability will terminate
or that it appears probable that such Disability will be permanent during the
remainder of the employee's lifetime.
"Retirement" means, with respect to an employee, retirement on or after the
later of attainment of age sixty-five (65) and five (5) years of service with
the Company or an affiliate, or such other time as determined by written
resolution of the Administrators.
Termination "for Cause" means the termination upon personal dishonesty,
willful misconduct, any breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, or the willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or a
final cease-and-desist order, any of which results in a material loss to the
Company or an affiliate.
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24. TERMINATION OF SERVICE AS A DIRECTOR. Unless the Board or the
Administrators specifically designate another schedule in the Stock Option
agreement, in connection with a termination of service, Stock Options shall
continue to be exercisable in accordance with the following provisions of this
paragraph. Upon the termination of a director's service for any reason other
than Disability, Retirement, Change in Control, death or Termination for Cause,
the director's Stock Options shall be exercisable, but only as to those shares
that were immediately purchasable by, or vested in, such director at the date of
termination, and such options may be exercised for a period of one (1) year
following termination of service, and all of the director's unvested Stock
Awards shall be forfeited. In the event of termination of service for Cause (as
defined above) all rights granted to the director under the Plan not exercised
by or vested in such director shall expire upon termination of service. Upon the
termination of a director's service because of Retirement, Disability, Change in
Control or death, the director's Stock Options shall be exercisable as to all
shares, whether or not then exercisable, and the director's Stock Awards shall
vest as to all shares subject to an outstanding award, whether or not otherwise
immediately vested in such director at the date of termination, and options may
be exercised for a period of five (5) years following such termination. In no
event shall the exercise period extend beyond the expiration of the Stock Option
term.
"Disability" means, with respect to an outside director, the permanent and
total inability by reason of mental or physical infirmity or both, of a director
to carry out the responsibilities of a director of the Company or an affiliate,
as required by applicable state and federal law.
"Retirement" means, with respect to a director, retirement on or after the
later of attainment of age sixty-five (65) or seven (7) years of service at the
Company or an affiliate, or such other time as determined by written resolution
of the Administrators.
"Termination for Cause" has the same meaning as set forth under Paragraph
23 above.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF COMTEX NEWS NETWORK, INC.
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 4, 2003
The undersigned appoints Stephen W. Ellis and S. Amber Gordon, or either of
them, with full power of substitution, to attend the Annual Meeting of
Stockholders of Comtex News Network, Inc. on December 4, 2003, and any
adjournments thereof, and to vote all shares which the undersigned would be
entitled to vote if personally present upon the following matters set forth in
the Notice of Annual Meeting and Proxy Statement:
1. ELECTION OF DIRECTOR
[_] FOR the ONE nominee listed below (except as marked to the contrary below)
[_] WITHHOLD AUTHORITY to vote for the ONE nominee listed below
Erik Hendricks
2. Proposal to approve the Comtex News Network, Inc. 2003 Incentive Stock Plan
for the purpose of granting incentive treatment under Section 422 of the
Internal Revenue Code of 1986, as amended, for options granted to
employees.
[_] FOR this proposal
[_] AGAINST this proposal
[_] ABSTAIN
3. Proposal to ratify the appointment of Goldstein Golub Kessler, LLP as the
Company's independent auditors for the fiscal year 2004.
[_] FOR this proposal
[_] AGAINST this proposal
[_] ABSTAIN
4. In their discretion, upon such other business as may properly come before
the meeting and any adjournments thereof.
This Proxy when properly executed will be voted as directed. If no direction is
indicated, this Proxy will be voted FOR the election of the one named individual
as director, FOR the approval of the Comtex News Network, Inc. 2003 Incentive
Stock Plan for incentive stock option treatment under Section 422, and FOR the
ratification of Goldstein Golub Kessler, LLP as the Company's independent
auditors for the fiscal year 2004.
PLEASE DATE, SIGN AND RETURN
PROXY PROMPTLY
Receipt of Notice of Annual
Meeting and Proxy Statement
is hereby acknowledged
Stockholder's Signature
Joint Holder's Signature (If applicable)
Date: