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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
OneSource Information Services, Inc.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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ONESOURCE INFORMATION SERVICES, INC.
300 BAKER AVENUE
CONCORD, MA 01742
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 24, 2001
To the Stockholders of OneSource Information Services, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of OneSource
Information Services, Inc., a Delaware corporation (the "Company"), will be held
at 10:00 a.m., local time, on Thursday, May 24, 2001, at Testa, Hurwitz &
Thibeault, LLP, 125 High Street, High Street Tower, 22nd Floor, Boston, MA
02110, to consider and act upon the following proposals:
1. To elect four directors to the Company's Board of Directors, each to
serve for a term of one year or until his successor is duly elected and
qualified.
2. To ratify the 1999 Stock Option and Incentive Plan and to approve an
amendment to the plan which includes a proposed increase in the
aggregate number of shares of Common Stock that may be issued pursuant
to the plan by 1,000,000 shares.
3. To approve the adoption of the Company's 2001 Non-Employee Director
Stock Option Plan.
4. To approve an amendment to the Company's Second Amended and Restated
Certificate of Incorporation increasing from 20,000,000 to 35,000,000
the number of authorized shares of Common Stock of the Company.
5. To approve an amendment to the Company's 1999 Employee Stock Purchase
Plan to increase the aggregate number of shares of Common Stock that may
be issued pursuant to said plan by 100,000 shares.
6. To ratify the selection of the firm of PricewaterhouseCoopers LLP,
independent public accountants, as auditors for the fiscal year ending
December 31, 2001.
7. To transact such other business as may properly come before the meeting
or any postponements or adjournments thereof.
Only stockholders of record at the close of business on April 9, 2001 are
entitled to notice of and to vote at the meeting. All stockholders are cordially
invited to attend the meeting in person. TO ENSURE YOUR REPRESENTATION AT THE
MEETING, HOWEVER, YOU ARE URGED TO MARK, SIGN, DATE AND RETURN THE ENCLOSED
PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE. You
may revoke your proxy in the manner described in the accompanying Proxy
Statement at any time before it has been voted at the Annual Meeting. Any
stockholder attending the Annual Meeting may vote in person even if he or she
has returned a proxy.
By Order of the Board of Directors,
ROY D. LANDON
Secretary
Concord, Massachusetts
April 18, 2001
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PROXY STATEMENT
APRIL 18, 2001
This Proxy Statement is being furnished in connection with the solicitation
of proxies BY THE BOARD OF DIRECTORS of OneSource Information Services, Inc., a
Delaware corporation (the "Company"), for use at the Company's Annual Meeting of
Stockholders to be held on Thursday, May 24, 2001 (the "Annual Meeting") at
10:00 a.m., local time, at the offices of Testa, Hurwitz & Thibeault, LLP, 125
High Street, High Street Tower, 22nd Floor, Boston, MA 02110, or at any
adjournments thereof. The Company's Annual Report, which includes financial
statements and Management's Discussion and Analysis of Financial Condition and
Results of Operations for the fiscal year ended December 31, 2000, is being
mailed together with this Proxy Statement to all stockholders entitled to vote
at the Annual Meeting. This Proxy Statement and form of proxy will be mailed to
stockholders on or about April 18, 2001.
Only stockholders of record at the close of business on April 9, 2001 (the
"Record Date") will be entitled to notice of, and to vote at, the Annual Meeting
or any adjournment thereof. As of the Record Date, an aggregate of
shares of Common Stock, $.01 par value per share (the "Common
Stock"), of the Company were issued and outstanding. The holders of Common Stock
are entitled to one vote per share on any proposal presented at the Annual
Meeting. Stockholders may vote in person or by proxy. Execution of a proxy will
not in any way affect a stockholder's right to attend the Annual Meeting and
vote in person. Any proxy may be revoked by the person giving it at any time
before its exercise by (1) filing with the Secretary of the Company, before the
taking of the vote at the Annual Meeting, a written notice of revocation bearing
a later date than the proxy, (2) duly executing a later dated proxy relating to
the same shares and delivering it to the Secretary of the Company before the
taking of the vote at the Annual Meeting or (3) attending the Annual Meeting and
voting in person (although attendance at the Annual Meeting will not in and of
itself constitute a revocation of a proxy). Any written notice of revocation or
subsequent proxy should be sent so as to be delivered to OneSource Information
Services, Inc., 300 Baker Avenue, Concord, MA 01742, Attention: Secretary, at or
before the taking of the vote at the Annual Meeting.
The representation in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to establish a quorum for the transaction of business at the Annual
Meeting. Votes withheld from any nominee for director, abstentions and broker
"non-votes" are counted as present or represented for purposes of determining
the presence or absence of a quorum. A "non-vote" occurs when a broker holding
shares for a beneficial owner votes on one proposal, but does not vote on
another proposal because, in respect of such other proposal, the broker does not
have discretionary voting power and has not received instructions from the
beneficial owner.
In the election of Directors, the four nominees receiving the highest
number of affirmative votes of the shares present or represented and entitled to
vote at the Annual Meeting shall be elected as Directors. For the approval of
proposal four herein, a majority of the Company's outstanding Common Stock is
required. On all other matters being submitted to stockholders, the affirmative
vote of a majority of the shares present, in person or represented by proxy, and
voting on each such matter is required for approval. An automated system
administered by the Company's transfer agent tabulates the votes. The vote on
each matter submitted to stockholders is tabulated separately. Abstentions are
included in the number of shares present or represented and voting on each
matter. Broker "non-votes" are not considered voted for the particular matter
and have the effect of reducing the number of affirmative votes required to
achieve a majority for such matter by reducing the total number of shares from
which the majority is calculated.
The persons named as attorneys-in-fact in the proxies were selected by the
Board of Directors and are officers of the Company. All properly executed
proxies returned in time to be counted at the Annual Meeting will be voted. Any
stockholder giving a proxy has the right to withhold authority to vote for any
individual nominee to the Board of Directors by writing that nominee's name in
the space provided on the proxy. In addition to the election of four Directors,
the stockholders will consider and vote upon proposals to (i) ratify and approve
an amendment to the Company's 1999 Stock Option and Incentive Plan, (ii) approve
the adoption of the 2001 Non-Employee Director Stock Option Plan, (iii) approve
an amendment to the Company's Second Amended and Restated Certificate of
Incorporation, (iv) approve an amendment to the
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Company's 1999 Employee Stock Purchase Plan and (v) ratify the selection of
auditors. ALL SHARES REPRESENTED BY PROXIES WILL BE VOTED IN ACCORDANCE WITH THE
STOCKHOLDERS' INSTRUCTIONS, AND IF NO CHOICE IS SPECIFIED, THE SHARES
REPRESENTED BY PROXIES WILL BE VOTED IN FAVOR OF THE MATTERS SET FORTH IN THE
ACCOMPANYING NOTICE OF ANNUAL MEETING.
The Board of Directors knows of no other matter to be presented at the
Annual Meeting. If any other matter should be presented at the meeting upon
which a vote may properly be taken, shares represented by all proxies received
by the Board of Directors will be voted with respect thereto in accordance with
the judgment of the persons named as attorneys in the proxies.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors is currently fixed at four members. All directors
will hold office until their successors have been duly elected and qualified or
until their earlier resignation or removal.
The Board of Directors has nominated and recommended that Messrs. Martin
Kahn, Daniel J. Schimmel, Carl P. Fisher and Gregg S. Newmark, who all are
currently serving as Directors of the Company, be elected Directors, to hold
office until the next Annual Meeting of Stockholders or until their respective
successors are duly elected and qualified. Shares represented by all proxies
received by the Board of Directors and not so marked as to withhold authority to
vote for the nominees will be voted FOR the election of the four nominees. The
Board of Directors knows of no reason why any nominee should be unable or, for
good cause, unwilling to serve, but if such should be the case, proxies will be
voted for the election of some other person or for fixing the number of
directors at a lesser number.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE "FOR" THE NOMINEES LISTED BELOW
TERM EXPIRES
DIRECTOR'S NAME AND YEAR POSITION(S) WITH AT ANNUAL MEETING
DIRECTOR FIRST BECAME A DIRECTOR THE COMPANY HELD IN
-------------------------------- ---------------- -----------------
NOMINEES:
Martin Kahn.......................... Chairman of the Board of Directors 2001
1993
Daniel J. Schimmel................... President, Chief Executive Officer and 2001
Director
1993
Carl P. Fisher....................... Director 2001
2000
Gregg S. Newmark..................... Director 2001
1993
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OCCUPATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth for each nominee to be elected at the Annual
Meeting and for the executive officers of the Company, their ages and principal
occupations for at least the past five years:
NAME AGE POSITION
- ---- --- --------
Martin Kahn(1)(2).............. 50 Chairman of the Board of Directors
Daniel J. Schimmel............. 41 President, Chief Executive Officer and Director
William G. Schumacher.......... 37 Senior Vice President, Content Development
Philip J. Garlick.............. 38 Senior Vice President, Global Sales
Dileep Hurry................... 47 Senior Vice President, Business Development
Roy D. Landon.................. 45 Senior Vice President, Chief Financial Officer,
Secretary and Treasurer
Michael L. Buzzell............. 46 Senior Vice President, Engineering
Mary F. McCabe................. 39 Senior Vice President, Product Development
Carl P. Fisher(1).............. 59 Director
Gregg S. Newmark(2)............ 42 Director
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(1) Member of compensation committee.
(2) Member of audit committee.
Martin Kahn joined OneSource as Chairman of the Board of Directors in
September 1993. Mr. Kahn has served as managing director of Cadence Information
Associates LLC since 1996. Mr. Kahn was the Chairman of Ovid Technologies, Inc.,
a producer of online, CD-ROM and network medical and scientific information
services, from 1990 to 1998, and he was Chairman of VistaInfo, Inc., a supplier
of geographically-based risk information, from 1992 to 1996. He is also Chairman
of the Board of Directors of Parlo, Inc. Mr. Kahn holds an MBA from the Harvard
Business School and a B.A. from Yale University.
Daniel J. Schimmel joined OneSource as President, Chief Executive Officer
and a Director in 1993. Prior to joining OneSource, Mr. Schimmel served as
general manager of the OneSource Division and held other operating positions at
Lotus. Mr. Schimmel holds an MBA from the Harvard Business School and a B.A.
from Harvard University.
William G. Schumacher originally joined OneSource in 1988, served as
Director of Product Management from 1996 to January 2000 and in January 2000
became Vice President, Product Management. From February to December 2000, Mr.
Schumacher joined MeetU.com as Vice President Product Management and in February
2001, returned to OneSource as Senior Vice President, Content Development. Mr.
Schumacher holds a B.A. in Chemical Engineering from the University of
Pennsylvania and a B.S. in Finance from the Wharton School in Philadelphia, PA.
Philip J. Garlick joined OneSource as Director of Marketing and Product
Development in 1993, served as Vice President and General Manager Europe from
1995 to October 1997, in October 1997 became Vice President, Global Enterprise
Sales and Marketing and in January 2000, became Senior Vice President, Global
Sales. Prior to joining OneSource, Mr. Garlick was a marketing executive at
Lotus UK. Mr. Garlick holds an MA in Economics and a B.A. from Manchester
University.
Dileep Hurry joined OneSource in August 2000 as Senior Vice President,
Business Development. Prior to joining OneSource, Dr. Hurry served as Strategy
Advisor to Lexsite.com from June 1999 to August 2000, was Vice President and
Director of Strategy for Monsanto Co. from 1998 to May 1999, was Principal at
Hagler Bailly Inc. from 1997 to 1998 and from 1994 to 1997 served as Chief
Executive Office for Siemens Information Systems-US Operations. Dr. Hurry holds
an MBA in Finance from the Bajaj Institute in Bombay, India and a Ph.D. in
Corporate Strategy from the Warton School in Philadelphia, PA.
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Roy D. Landon joined OneSource as Director, Finance and Administration in
1993, became Vice President, Finance and Administration in 1997, became Vice
President, Chief Financial Officer in 1999 and Senior Vice President, Chief
Financial Officer in January 2000. Prior to joining OneSource, Mr. Landon was
director of plans and controls for the Consulting and Information Services Group
at Lotus. Mr. Landon holds a B.S. from Babson College.
Michael L. Buzzell joined OneSource in March 2001 as Senior Vice President,
Engineering. Prior to joining OneSource, Mr. Buzzell was Vice President of
Software Development at V-SPAN from December 1999 until January 2000. Prior to
that time, he was Director, Information Technology and Services at Liberty
Mutual from May 1998 until December 1999, was Vice President, Business and
Strategic Development at CASEwise Systems, Inc. from March 1997 until February
1998, was Chief Information Officer of Borden Global Packaging from October 1995
until March 1997, and was Director, Information Technology and Services of
Warner-Lambert from June 1994 until September 1995.
Mary F. McCabe joined OneSource as Senior Platform Product Manager in 1994,
became Director, Platform Project Management in 1996, and became Senior Vice
President, Product Development in January 2000. Ms. McCabe holds a B.S. from the
Boston College School of Management with concentrations in Computer Science and
Marketing.
Carl P. Fisher joined OneSource as a Director in 2000. Since 1982, Mr.
Fisher has served as an independent electronic publishing consultant primarily
for large media, publishing and communications companies. Mr. Fisher has served
as Chief Executive Officer for a number of early stage information ventures and
currently is a member of the board of directors of several private companies.
Gregg S. Newmark joined OneSource as a Director in 1993. Since 1993 Mr.
Newmark has served as a general partner of William Blair Venture Partners, as a
principal of William Blair & Company, L.L.C. and as a Managing Director of
William Blair Capital Partners.
Executive officers of the Company are elected on an annual basis by the
Board of Directors to serve at the pleasure of the Board of Directors and until
their successors have been duly elected and qualified.
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and holders of more than 10% of the Company's Common
Stock (collectively, the "Reporting Persons") to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock of the Company. Such persons are required by
regulations of the Commission to furnish the Company with copies of all such
filings. Based solely on its review of the copies of such filings received by it
with respect to the period ended December 31, 2000, the Company believes that
all Reporting Persons complied with Section 16(a) filing requirements in the
period ended December 31, 2000, except that a Form 4 for Mr. Newmark should have
been filed by May 10, 2000, but was filed on June 28, 2000 and Forms 4 for Mark
VanDine, a former officer, should have been filed on February 10, 2000 and on
March 10, 2000 but were filed on March 21, 2000.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors met five (5) times and acted by unanimous written
consent five (5) times during the fiscal year ended December 31, 2000. The Board
of Directors has a standing Audit Committee and a standing Compensation
Committee. The Audit Committee, which oversees the accounting, financial
functions and regulatory affairs of the Company, met five (5) times during the
fiscal year ended December 31, 2000. Messrs. Kahn and Newmark are the current
members of the Audit Committee. The Compensation Committee of the Company, which
determines the compensation of the Company's senior management and administers
the Company's stock plans, met five (5) times during the fiscal year ended
December 31, 2000. Messrs. Kahn and Fisher are the current members of the
Compensation Committee. During the fiscal year ended December 31, 2000, each of
the Company's directors attended at least 75 percent of the total number of
meetings of the Board of Directors and all committees of the Board of Directors
on which he served.
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SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of the Record Date: (i) the name of each
person who is known by the Company to own beneficially more than 5% of the
outstanding shares of Common Stock; (ii) the name of each nominee for director
of the Company; (iii) the name of each executive officer of the Company named in
the Summary Compensation Table set forth below; and (iv) the number of shares
beneficially owned by each such person and all directors, nominees for director
and executive officers of the Company as a group and the percentage of the
outstanding shares represented thereby.
AMOUNT AND
NATURE
NAME AND ADDRESS OF OWNERSHIP PERCENT OF CLASS
OF BENEFICIAL OWNER(1) (2) (3)
---------------------- ------------ ----------------
PRINCIPAL STOCKHOLDERS:
Information Partners Capital Fund, L.P. and related
funds(4).................................................. 2,439,050 %
William Blair Venture Partners III Limited Partnership(5)... 2,162,561
NAMED EXECUTIVE OFFICERS:
Daniel J. Schimmel(6)....................................... 1,031,250
James A. Becker(7).......................................... 324,870
Philip J. Garlick(8)........................................ 150,462
Mark C. VanDine(9).......................................... 186,533
Mary F. McCabe(10).......................................... 27,485
DIRECTORS:
Martin Kahn(11)............................................. 500,256
Carl P. Fisher.............................................. 1,000
Gregg S. Newmark(5)(12)..................................... 2,170,561
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP(13) (12
persons).................................................. 4,560,829
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* Less than one percent of the outstanding Common Stock.
(1) Unless otherwise indicated, the address for each beneficial owner is c/o
OneSource Information Services, Inc., 300 Baker Avenue, Concord, MA 01742.
(2) The persons named in the table have sole voting and investment power with
respect to all shares shown as beneficially owned by them, except as noted
in the footnotes below.
(3) Applicable percentage ownership as of the Record Date is based upon
shares of Common Stock outstanding as of the Record Date. Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission and includes voting and investment power with respect
to the shares. Shares of Common Stock subject to options currently
exercisable or exercisable within 60 days after the Record Date ("presently
exercisable stock options") are deemed outstanding for computing the
percentage ownership of the person holding such options, but are not deemed
outstanding for computing the percentage ownership of any other person.
(4) According to a Schedule 13G filed on February 14, 2000, the sole general
partner of Information Partners Capital Fund, L.P. is Information Partners.
The general partners of Information Partners that have a beneficial
interest in the shares listed in the table above are David Dominik, a
former director of the Company, Mark Nunnelly, Stephen G. Pagliuca, and
Bain Capital Partners IV, L.P., whose general partner is a corporation
wholly-owned by W. Mitt Romney. Includes 84,210 shares owned by BCIP
Associates and 91,257 shares owned by BCIP Trust Associates, L.P. BCIP
Associates, BCIP Trust Associates, L.P. and Information Partners Capital
Fund, L.P. may be deemed to be a "group" under the Securities Exchange Act
of 1934. The general partners of BCIP Associates with an interest in the
shares listed in the table above are Joshua Bekenstein, Roy Edgar Brakeman,
III, Edward Conard, Dominic
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Ferrante, Jeremy Ferris, Adam W. Kirsch, Michael Krupka, Matthew Levin,
Simon Lonergan, John W. Maki, Geoffrey S. Rehnert, W. Mitt Romney, Paul
Spinale, Samantha Trotman and Mark B. Wolpow. The general partners of BCIP
Trust Associates, L.P. with an interest in the shares listed in the table
above are Prescott Ashe, David Dominik, Paul B. Edgerley, Jonathan Lavine,
Michael D. May, Ronald Mike, Mark Nunnelly, R. David Nurme, Stephen G.
Pagliuca, Joseph Pretlow, Geoffrey S. Rehnert, Paul Spinale, Ann Marie
Viglione, Robert F. White and Robert C. Gray. Certain of the respective
general partners of these entities exercise sole voting and investment
power with respect to the shares owned by such entities. Each of these
persons disclaims beneficial ownership of such shares except to the extent
of his respective proportionate pecuniary interest therein. The address for
each of these entities is Two Copley Place, Boston, Massachusetts 02116.
(5) According to an amended Schedule 13G filed on February 14, 2001, the
general partners of this entity, including Mr. Newmark, exercise sole
voting and investment power with respect to the shares owned by such
entity. The general partner of William Blair Venture Partners III Limited
Partnership is William Blair Venture Management Company whose general
partners are Mr. Newmark, Ellen Carnahan, Samuel Guren and William Blair &
Company, a limited liability company with approximately 150 members. Each
of these persons disclaims beneficial ownership of such shares except to
the extent of his respective proportionate pecuniary interest therein.
(6) Includes 687,966 shares of Common Stock issuable upon exercise of presently
exercisable stock options granted pursuant to the Company's 1993 Stock
Purchase and Option Plan (the "1993 Plan") and 343,284 shares held in the
name of the Daniel J. Schimmel 1999 Family Trust.
(7) Mr. Becker resigned from the Company on February 9, 2001.
(8) Includes 109,937 shares of Common Stock issuable upon exercise of presently
exercisable stock options granted pursuant to the Company's 1999 Stock
Option and Incentive Plan (the "1999 Plan").
(9) Mr. VanDine resigned from the Company on March 2, 2001.
(10) Includes 26,194 shares of Common Stock issuable upon exercise of presently
exercisable stock options granted pursuant to the 1999 Plan.
(11) Includes 272,114 shares of Common Stock issuable upon exercise of presently
exercisable stock options granted pursuant to the 1993 Plan.
(12) Includes 2,162,561 shares of Common Stock held in the name of William Blair
Venture Partners III Limited Partnership and 8,000 shares held directly by
Mr. Newmark.
(13) Includes 1,226,391 shares of Common Stock issuable upon exercise of
presently exercisable stock options granted pursuant to the 1993 Plan and
the 1999 Plan.
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EXECUTIVE COMPENSATION
The following summary compensation table sets forth the annual and
long-term compensation of the Company's Chief Executive Officer and each of the
Company's four other most highly compensated executive officers (collectively,
the "Named Executive Officers") for the fiscal years ended December 31, 2000,
1999 and 1998.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
----------------------------
AWARDS
OTHER SECURITIES ALL
ANNUAL COMPENSATION(1) ANNUAL UNDERLYING OTHER
--------------------------- COMPENSATION OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(2) (# OF SHARES) ($)
- --------------------------- ---- --------- -------- ------------ ------------- ------------
Daniel J. Schimmel.............. 2000 $212,885 $82,599 $ 1,575 -- --
President, Chief Executive 1999 173,913 64,430 1,500 -- --
Officer and Director 1998 164,997 57,749 1,500 -- --
James A. Becker................. 2000 161,953 39,280 2,625 -- --
Senior Vice President 1999 136,550 30,121 2,419 -- --
Content Development(3) 1998 123,748 24,750 2,216 -- --
Philip J. Garlick............... 2000 164,616 52,693 105,062 -- --
Senior Vice President, 1999 153,881 44,144 117,725 -- --
Global Sales 1998 144,000 47,520 145,725 -- --
Mark C. VanDine................. 2000 153,269 37,168 1,312 -- --
Senior Vice President, 1999 130,797 29,235 1,250 -- --
Engineering(4) 1998 115,498 23,100 1,250 -- --
Mary F. McCabe.................. 2000 145,138 35,196 1,312 -- --
Senior Vice President, 1999 100,875 14,626 1,513 -- --
Product Development 1998 99,751 7,900 1,496 -- --
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(1) OneSource did not make any restricted stock awards or grant any stock
appreciation rights during the fiscal years 1998, 1999 and 2000.
(2) Amounts reflect long-term incentive plan payouts. In addition, Mr. Garlick
receives additional compensation in connection with his relocation from the
United Kingdom to Massachusetts, including car and housing allowances,
moving expenses and payment of taxes.
(3) Mr. Becker resigned from the Company effective February 9, 2001 and was
replaced by Mr. Schumacher.
(4) Mr. VanDine resigned from the Company effective March 2, 2001 and was
replaced by Mr. Buzzell.
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The following table provides information with respect to Company stock
option grants to the Named Executive Officers in 2000. The Company did not grant
any stock appreciation rights in 2000.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATE OF
PERCENTAGE OF STOCK PRICE
NUMBER OF TOTAL OPTIONS APPRECIATION FOR
SECURITIES GRANTED TO OPTION TERM
UNDERLYING EMPLOYEES EXERCISE (2)
OPTIONS IN FISCAL PRICE EXPIRATION ---------------------
NAME GRANTED(1) YEAR ($/SHARE) DATE 5% 10%
---- ----------- ------------- --------- ---------- --------- ---------
Daniel J. Schimmel............... -- -- -- -- -- --
James A. Becker.................. -- -- -- -- -- --
Philip J. Garlick................ -- -- -- -- -- --
Mark C. VanDine.................. -- -- -- -- -- --
Mary F. McCabe................... 60,000 8% $8.63 2/9/10 $325,629 $825,224
50,000 6% 9.75 7/18/10 306,574 776,934
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(1) Stock options were granted under the Company's 1999 Stock Option and
Incentive Plan at an exercise price equal to the fair market value of the
Company's Common Stock on the date of grant. The options have a term of ten
years from the date of grant, and become exercisable at a rate of 25% per
year starting on the first anniversary of the date of grant.
(2) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of their
term assuming the specified compounded rates of appreciation (5% and 10%) of
the Company's Common Stock over the term of the options. These numbers are
calculated based on rules promulgated by the Securities and Exchange
Commission and do not reflect the Company's estimate of future stock price
increases. Actual gains, if any, on stock option exercises and Common Stock
holdings are dependent on the timing of such exercise and the future
performance of the Company's Common Stock. There can be no assurance that
the rates of appreciation assumed in this table can be achieved or that the
amounts reflected will be received by the individuals.
The following table sets forth certain information with respect to options
exercised in fiscal 2000 by the Named Executive Officers, the value realized
upon such exercises, and the value of options held by such officers at the
fiscal year end.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED,
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES FISCAL YEAR END FISCAL YEAR END($)(2)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------------- ------------ ------------- ------------ -------------
Daniel J. Schimmel...... 280,692 $2,142,986 750,508 -- $4,486,537 --
James A. Becker......... 265,000 2,274,495 182,700 -- 1,106,601 --
Philip J. Garlick....... 134,775 1,164,071 129,937 61,050 731,614 $364,956
Mark C. VanDine......... 145,240 1,499,681 100,240 -- 557,936 --
Mary F. McCabe.......... -- -- 26,194 105,175 6,501 --
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(1) Amounts are calculated by subtracting the aggregate exercise price of the
options from the market value of the underlying Common Stock on the date of
exercise, and do not reflect amounts actually received by the Named
Executive Officers.
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(2) Amounts are calculated by subtracting the exercise price of the options from
the fair market value of the underlying Common Stock as quoted on The NASDAQ
Stock Market of $7.75 per share on December 29, 2000, multiplied by the
number of shares underlying the options, and do not reflect amounts that
actually may be received by the Named Executive Officers upon exercise of
options.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee during fiscal year 2000 was comprised of Mr.
Kahn and Mr. David Dominik. Mr. Dominik resigned from the Board of Directors and
the Compensation Committee on March 7, 2001 and Mr. Fisher became a member of
the Compensation Committee on March 20, 2001. Messrs. Kahn, Dominik and Fisher
are all non-employee directors. Pursuant to authority delegated by the Board of
Directors, the Compensation Committee is responsible for reviewing and
administering the Company's stock plans and for reviewing and approving
compensation matters concerning the executive officers, employees and
consultants of the Company. Pursuant to the authority delegated by the Board of
Directors, the Compensation Committee each year sets the compensation of the
Chief Executive Officer and reviews and approves the compensation of all other
senior officers, including approval of annual salaries and bonuses as well as
the grant of stock options to officers and employees.
Compensation Philosophy
The goal of the Company is to attract and retain qualified executives in a
competitive industry. To achieve this goal, the Compensation Committee applies
the philosophy that compensation of executive officers, including the
compensation of the Chief Executive Officer and President, should be linked to
revenue growth, operating results and earnings per share performance.
Under the supervision of the Compensation Committee, the Company has
developed and implemented compensation policies. The Compensation Committee's
executive compensation policies are designed to (i) enhance profitability of the
Company and stockholder value, (ii) integrate compensation with the Company's
annual and long-term performance goals, (iii) reward corporate performance, (iv)
recognize individual initiative, achievement and hard work, and (v) assist the
Company in attracting and retaining qualified executive officers. Currently,
compensation under the executive compensation program is comprised of cash
compensation in the form of annual base salary and bonus, and long-term
incentive compensation in the form of stock options.
Base Salary
In setting cash compensation for the Chief Executive Officer and reviewing
and approving the cash compensation for all other officers, the Compensation
Committee reviews salaries annually. The Compensation Committee's policy is to
fix base salaries at levels comparable to the amounts paid to senior executives
with comparable qualifications, experience and responsibilities at other
companies of similar size and engaged in a similar business to that of the
Company. In addition, the base salaries take into account the Company's relative
performance as compared to comparable companies.
The salary compensation for the executive officers is based upon their
qualifications, experience and responsibilities, as well as on the attainment of
planned objectives. The Chief Executive Officer and President makes
recommendations to the Compensation Committee regarding the planned objectives
and executive compensation levels. The overall plans and operating performance
levels upon which management compensation is based are approved by the
Compensation Committee on an annual basis. During 2000, the Chief Executive
Officer and President made recommendations for salary increases for the other
senior officers, and the Compensation Committee approved salary increases
ranging from 7% to 21% to the Company's senior officers. These increases reflect
the impact of promotions as well as incentive changes.
Bonus Compensation
In addition to salary compensation, the Compensation Committee recommended
the continuation of the Company's Bonus Program adopted by the Board of
Directors in 1998, whereby senior executives recom-
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mended by the Chief Executive Officer and approved by the Compensation Committee
for inclusion in the program receive bonus compensation based on a percentage of
base salary. Bonuses paid under this program in 2000 were a percentage of base
salary for calendar year 1999 and were based on attainment of target annualized
contract levels and operating expenses for 1999.
Stock Options
The Compensation Committee relies on incentive compensation in the form of
stock options to retain and motivate executive officers. Incentive compensation
in the form of stock options is designed (i) to provide long-term incentives to
executive officers and other employees, (ii) to encourage the executive officers
and other employees to remain with the Company and (iii) to enable them to
develop and maintain a stock ownership position in the Company's Common Stock.
Each of the Company's 1993 Stock Option Plan and 1999 Stock Option and
Incentive Plan permits the Compensation Committee to administer the granting of
stock options to eligible employees, including executive officers. Options
generally become exercisable based upon a vesting schedule tied to years of
future service to the Company. The value realizable from exercisable options is
dependent upon the extent to which the Company's performance is reflected in the
market price of the Company's Common Stock at any particular point in time.
Equity compensation in the form of stock options is designed to provide
long-term incentives to executive officers and other employees. The Compensation
Committee approves the granting of options in order to motivate these employees
to maximize stockholder value. Generally, options are granted to officers and
employees at fair market value on the date of grant and vest over a four-year
period.
Option grants to employees are based on such factors as initiative,
achievement and performance. In administering grants to executive officers, the
Compensation Committee evaluates each officer's total equity compensation
package. The Compensation Committee generally reviews the option holdings of
each of the executive officers, including their vesting and exercise prices and
the then current value of any unvested options. The Compensation Committee
considers equity compensation to be an integral part of a competitive executive
compensation package and an important mechanism to align the interests of
management with those of the Company's stockholders.
Mr. Schimmel's Compensation
The cash compensation program for the Chief Executive Officer and President
of the Company is designed to reward performance that enhances stockholder
value. Mr. Schimmel's compensation package is comprised of base pay, bonus and
stock options, and is in part based on the Company's revenue growth,
profitability, and growth in earnings per share. In 2000, Mr. Schimmel's cash
compensation was increased to $212,885. The Compensation Committee believes that
Mr. Schimmel's compensation is now comparable to the salary of Chief Executive
Officers in other Web-based business and financial information companies,
considering the size and rate of profitability of those companies.
The Compensation Committee is satisfied that the executive officers of the
Company are dedicated to achieving significant improvements in the long-term
financial performance of the Company and that the compensation policies and
programs implemented and administered have contributed and will continue to
contribute toward achieving this goal.
Deductibility of Executive Compensation. In general, under Section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code"), the Company
cannot deduct, for federal income tax purposes, compensation in excess of
$1,000,000 paid to certain executive officers. This deduction limitation does
not apply, however, to compensation that constitutes "qualified
performance-based compensation" within the meaning of Section 162(m) of the Code
and the regulations promulgated thereunder. The Company has considered the
limitations on deductions imposed by Section 162(m) of the Code, and it is the
Company's present intention that, for so long as it is consistent with its
overall compensation objective, substantially all tax
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deductions attributable to executive compensation will not be subject to the
deduction limitations of Section 162(m) of the Code.
Respectfully Submitted by the
Compensation Committee:
MARTIN KAHN (Chair)
CARL P. FISHER
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No person who served as a member of the Compensation Committee was, during
the fiscal year ended December 31, 2000, an officer or employee of the Company,
was formerly an officer of the Company, or had any relationship requiring
disclosure herein. No executive officer of the Company served as a member of the
compensation committee (or other committee performing equivalent functions or,
in the absence of any such committee, the entire board of directors) of another
entity, one of whose executive officers served as a director of the Company.
COMPENSATION OF DIRECTORS
Beginning in 2001, directors who are not employees of OneSource and who are
not affiliated with principal stockholders (also referred to as "outside
directors"), will receive an annual retainer fee of $12,500 and a $1,000 fee for
attending regular or special meetings of the board of directors and for meetings
of any committees of the board of directors on which they serve, if committee
meetings are held separately. During the fiscal year ended December 31, 2000,
Mr. Kahn received $30,000 for services he provided as Chairman of the Board of
Directors. Currently, Messrs. Kahn and Fisher are the only outside directors.
Outside directors have been eligible to participate in OneSource's 1999 Stock
Option and Incentive Plan and all non-employee directors are now also eligible
to participate in OneSource's 2001 Non-Employee Director Stock Option Plan,
subject to stockholder approval of such plan. All directors are reimbursed for
reasonable out-of-pocket expenses incurred in attending meetings.
AUDIT COMMITTEE REPORT
The Board of Directors has an Audit Committee which oversees the Company's
accounting and financial functions, including matters relating to the
appointment and activities of the Company's independent auditors. The Audit
Committee regularly discusses with management and the outside auditors the
financial information developed by the Company, the Company's systems of
internal controls and its audit process. The Audit Committee recommends to the
Board each fiscal year the appointment of the independent auditors and reviews
periodically the auditors' performance and independence from management. The
Audit Committee met with the independent auditors (both with and without the
presence of the Company's management) to review and discuss the matters required
to be discussed by Statement of Accounting Standards 61 (Codification of
Statements on Auditing Standards), including various matters pertaining to the
audit, including the Company's financial statements, the report of the
independent auditors on the results, scope and terms of their work, and their
recommendations concerning the financial practices, controls, procedures and
policies employed by the Company.
The Board of Directors has adopted a written charter for the Audit
Committee setting out the audit related functions the committee is to perform. A
copy of the charter is attached to this proxy statement as Appendix A. This
year, the Audit Committee reviewed the Company's audited financial statements
and met with both management and PricewaterhouseCoopers LLP, the Company's
independent auditors, to discuss those financial statements. Management has
represented to the Audit Committee that the financial statements were prepared
in accordance with generally accepted accounting principles.
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The Audit Committee has received from and discussed with
PricewaterhouseCoopers the written disclosures and the letter required by
Independence Standards Board Standard No. 1 (Independence Discussions with Audit
Committees). The Audit Committee also discussed with PricewaterhouseCoopers any
matters required to be discussed by SAS No. 61 (Codification of Statements on
Auditing Standards, AU Sec. 380).
Based on these reviews and discussions, the Audit Committee recommended to
the Board of Directors that the Company's audited financial statements be
included in its Annual Report on Form 10-K for the fiscal year ended December
31, 2000 for filing with the Securities and Exchange Commission.
The Audit Committee consists of Messrs. Kahn and Newmark. Mr. Kahn is
"independent" as defined in Rule 4200 of the National Association of Securities
Dealers' listing standards. Because Mr. Newmark is a general partner of William
Blair Venture Management Company, the general partner of William Blair Venture
Partners III Limited Partnership, one of the Company's large stockholders, he
does not meet the "independence" test set forth in Rule 4200. However, because
of Mr. Newmark's experience with technology companies, his financial knowledge
and his knowledge of the Company's business and finances, the Board of Directors
has determined that Mr. Newmark's membership on the Audit Committee is in the
best interest of the Company and its stockholders. The Company intends to add a
third member to the Audit Committee by June 14, 2001, which member will be
"independent" as defined in Rule 4200.
Respectfully Submitted by the
Audit Committee:
MARTIN KAHN (Chair)
GREGG S. NEWMARK
AUDIT FEES
The aggregate fees billed by PricewaterhouseCoopers for professional
services rendered for the audit of the Company's annual financial statements for
the fiscal year ended December 31, 2000 and for the review of the financial
statements included in the Company's Forms 10-Q for the fiscal year ended
December 31, 2000 were $121,100.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The aggregate fees billed by PricewaterhouseCoopers for financial
information systems design and implementation professional services for the
fiscal year ended December 31, 2000 were $0.
ALL OTHER FEES
The aggregate fees billed by PricewaterhouseCoopers for services other than
those described above for the fiscal year ended December 31, 2000 were $177,556.
The Company's Audit Committee has determined that the provision of the
services provided by PricewaterhouseCoopers as set forth herein are compatible
with maintaining PricewaterhouseCoopers' independence.
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STOCK PERFORMANCE GRAPH
The following graph compares the percentage change in the cumulative total
stockholder return on the Company's Common Stock during the period from the
Company's initial public offering on May 19, 1999 through December 31, 2000,
with the cumulative total return of the NASDAQ Composite Index and NASDAQ
Computer Index. The comparison assumes $100.00 was invested in the Company's
Common Stock on May 19, 1999 at the $12.00 initial public offering price and in
each of the foregoing indices and assumes dividends, if any, were reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG ONESOURCE INFORMATION SERVICES,
INC.,
NASDAQ COMPOSITE INDEX AND NASDAQ COMPUTER INDEX(1)(2)(3)
PERFORMANCE GRAPH
ONESOURCE INFORMATION
SERVICES, INC. NASDAQ COMPOSITE INDEX NASDAQ COMPUTER INDEX
--------------------- ---------------------- ---------------------
5/19/99 100.00 100.00 100.00
6/30/99 73.00 104.00 107.00
9/30/99 69.00 107.00 116.00
12/31/99 112.00 158.00 180.00
3/31/00 69.00 177.00 209.00
6/30/00 63.00 154.00 181.00
9/30/00 89.00 143.00 164.00
12/31/00 65.00 96.00 100.00
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(1) Prior to May 19, 1999 the Company's Common Stock was not publicly traded.
Comparative data is provided only for the period since that date. This graph
is not "soliciting material," is not deemed filed with the Securities and
Exchange Commission and is not to be incorporated by reference in any filing
of the Company under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, whether made before or after
the date hereof and irrespective of any general incorporation language in
any such filing.
(2) The stock price information shown on the graph is not necessarily indicative
of future price performance. Information used on the graph was obtained from
William Blair & Company, a source believed to be reliable, but the Company
is not responsible for any errors or omissions in such information.
(3) OneSource has substituted the NASDAQ Computer Index for the Standard & Poors
Small Cap 600 Index used in its performance graph in its last proxy
statement because OneSource believes the NASDAQ Computer Index more
accurately reflects the market sector in which OneSource participates.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 2000, Information Partners Capital and its affiliates subscribed for an
aggregate of $510,875 of services from OneSource.
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PROPOSAL 2
RATIFICATION OF AND APPROVAL OF AN AMENDMENT TO THE
1999 STOCK OPTION AND INCENTIVE PLAN
PROPOSED AMENDMENT
The 1999 Stock Option and Incentive Plan (the "1999 Plan") was adopted by
the Board of Directors in February 1999, and was approved by the Company's
stockholders in April 1999. 1,800,000 shares of Common Stock are currently
reserved for issuance under the 1999 Plan. In March 2001, the Board of Directors
adopted an amendment to the 1999 Plan which, along with ratification of the 1999
Plan, is the subject of this proposal. The Board of Directors has approved and
recommends to the stockholders that they approve an amendment to the 1999 Plan
that will increase the aggregate number of shares authorized for issuance under
the 1999 Plan by 1,000,000 shares.
The Company's management relies on stock options as an essential part of
the compensation packages necessary for the Company to attract and retain
experienced officers and employees. The Board of Directors of the Company
believes that the proposed amendment is essential to permit the Company's
management to continue to provide long-term, equity-based incentives to present
and future employees.
As of December 31, 2000, only 923,656 shares remained available for grant
under the 1999 Plan. If the increase in the number of shares authorized for
issuance under the 1999 Plan is not approved, the Company may become unable to
provide suitable long-term equity-based incentives to present and future
employees. The Company has not at the present time determined who will receive
options to purchase the additional shares of Common Stock that will be
authorized for issuance under the Plan, if the amendment is approved.
DESCRIPTION OF THE 1999 PLAN
The 1999 Plan is intended to provide stock options and other equity
interests in the Company to employees, officers, directors, consultants and
advisors of the Company and its subsidiaries. The text of the 1999 Plan, amended
as proposed above, is attached to this proxy statement as Appendix B. The
following is a summary of the 1999 Plan and should be read together with the
full 1999 Plan text.
All stock options granted pursuant to the 1999 Plan were granted at fair
market value and generally vest over a four year period at a rate of 25% per
year starting on the first anniversary of the vesting start date.
The 1999 Plan is administered by the Board of Directors of the Company and
the Compensation Committee. Subject to the provisions of the 1999 Plan, each of
the Board of Directors and the Compensation Committee has the authority to
select the persons to whom awards are granted and to determine the terms of each
award, including the number of shares of Common Stock subject to the award.
Payment of the exercise price of the award may be made in cash, shares of Common
Stock, a combination of cash and stock, a promissory note or by any other method
approved by the Board or Compensation Committee, consistent with applicable law.
Unless otherwise permitted by the Board of Directors, awards are not assignable
or transferable except by will or the laws of descent and distribution, and,
during the participant's lifetime, may be exercised only by the participant.
The Board of Directors or the Compensation Committee may amend, suspend or
terminate the 1999 Plan or any portion thereof at any time. Option agreements
may be modified, amended or rescinded only by written agreement signed by the
Company and the participant.
The 1999 Plan expires at the end of the day ten years after the date of its
adoption. After that date, no further awards may be granted under the 1999 Plan,
but awards previously granted may extend beyond that date.
As amended, the 1999 Plan would authorize the issuance of up to 2,800,000
shares of Common Stock (subject to adjustment for capital changes) pursuant to
the exercise of options or other awards granted under the 1999 Plan. The maximum
number of shares with respect to which awards may be granted to any recipient
under the 1999 Plan shall not exceed 100,000 shares of Common Stock during any
calendar year.
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FEDERAL INCOME TAX CONSEQUENCES
The following general rules are currently applicable for United States
federal income tax purposes upon the grant and exercise of options to purchase
shares of Common Stock pursuant to the 1999 Plan:
Incentive Stock Options. The following general rules are applicable under
current Federal income tax law to an incentive stock option ("ISO") granted
under the 1999 Plan.
1. In general, no taxable income results to the optionee upon the
grant of an ISO or upon the issuance of shares to him or her upon the
exercise of the ISO, and no corresponding federal tax deduction is allowed
to the Company upon either grant or exercise of an ISO.
2. If shares acquired upon exercise of an ISO are not disposed of
within (i) two years following the date the option was granted or (ii) one
year following the date the shares are issued to the optionee pursuant to
the ISO exercise (the "Holding Periods"), the difference between the amount
realized on any subsequent disposition of the shares and the exercise price
will generally be treated as capital gain or loss to the optionee.
3. If shares acquired upon exercise of an ISO are disposed of before
the Holding Periods are met (a "Disqualifying Disposition"), then in most
cases the lesser of (i) any excess of the fair market value of the shares
at the time of exercise of the ISO over the exercise price or (ii) the
actual gain on disposition will be treated as compensation to the optionee
and will be taxed as ordinary income in the year of such disposition.
4. In any year that an optionee recognizes compensation income as the
result of a Disqualifying Disposition of stock acquired by exercising an
ISO, the Company generally should be entitled to a corresponding deduction
for federal income tax purposes.
5. Any excess of the amount realized by the optionee as the result of
a Disqualifying Disposition over the sum of (i) the exercise price and (ii)
the amount of ordinary income recognized under the above rules will be
treated as capital gain.
6. Capital gain or loss recognized by an optionee upon a disposition
of shares will be long-term capital gain or loss if the optionee's holding
period for the shares exceeds one year.
7. An optionee may be entitled to exercise an ISO by delivering shares
of the Company's Common Stock to the Company in payment of the exercise
price, if the optionee's ISO agreement so provides. If an optionee
exercises an ISO in such fashion, special rules will apply.
8. In addition to the tax consequences described above, the exercise
of an ISO may result in additional tax liability to the optionee under the
alternative minimum tax rules. The Code provides that an alternative
minimum tax (at a maximum rate of 28%) will be applied against a taxable
base which is equal to "alternative minimum taxable income," reduced by a
statutory exemption. In general, the amount by which the value of the
Common Stock received upon exercise of the ISO exceeds the exercise price
is included in the optionee's alternative minimum taxable income. A
taxpayer is required to pay the higher of his or her regular tax liability
or the alternative minimum tax. A taxpayer that pays alternative minimum
tax attributable to the exercise of an ISO may be entitled to a tax credit
against his or her regular tax liability in later years.
9. Special rules apply if the stock acquired is subject to vesting, or
is subject to certain restrictions on resale under Federal securities laws
applicable to directors, officers or 10% stockholders.
Non-Qualified Options. The following general rules are applicable under
current federal income tax law to an option that does not qualify as an ISO (a
"Non-Qualified Option") granted under the 1999 Plan:
1. The optionee generally does not realize any taxable income upon the
grant of a Non-Qualified Option, and the Company is not allowed a federal
income tax deduction by reason of such grant.
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2. The optionee generally will recognize ordinary compensation income
at the time of exercise of a Non-Qualified Option in an amount equal to the
excess, if any, of the fair market value of the shares on the date of
exercise over the exercise price.
3. When the optionee sells the shares acquired pursuant to a
Non-Qualified Option, he or she generally will recognize a capital gain or
loss in an amount equal to the difference between the amount realized upon
the sale of the shares and his or her basis in the shares (generally, the
exercise price plus the amount taxed to the optionee as compensation
income). If the optionee's holding period for the shares exceeds one year,
such gain or loss will be a long-term capital gain or loss.
4. The Company generally should be entitled to a corresponding tax
deduction for federal income tax purposes when the optionee recognizes
compensation income.
5. An optionee may be entitled to exercise a Non-Qualified Option by
delivering shares of the Company's Common Stock to the Company in payment
of the exercise price. If an optionee exercises a Non-Qualified Option in
such fashion, special rules will apply.
6. Special rules apply if the stock acquired is subject to vesting, or
is subject to certain restrictions on resale under Federal securities laws
applicable to directors, officers or 10% stockholders.
Awards and Purchases. The following general rules are applicable under
current federal income tax law to awards of stock ("Awards") or the granting of
opportunities to make direct stock purchases ("Purchases") under the 1999 Plan:
1. Persons receiving common stock pursuant to an Award or Purchase
generally will recognize compensation income equal to the fair market value
of the shares received, reduced by any purchase price paid.
2. The Company generally should be entitled to a corresponding
deduction for Federal income tax purposes when such person recognizes
compensation income. When such Common Stock is sold, the seller generally
will recognize capital gain or loss.
3. Special rules apply if the stock acquired pursuant to an Award or
Purchase is subject to vesting, or is subject to certain restrictions on
resale under Federal securities laws applicable to directors, officers or
10% stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE "FOR" RATIFICATION OF AND APPROVAL OF THE AMENDMENT
TO THE COMPANY'S 1999 PLAN.
PROPOSAL 3
APPROVAL OF THE ADOPTION OF THE 2001
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
In March 2001, the Company's Board of Directors adopted the 2001
Non-Employee Director Stock Option Plan (the "Director Plan"). The complete text
of the Director Plan is attached hereto as Appendix C.
The Director Plan provides for the grant of options to purchase a maximum
of 300,000 shares of Common Stock to Non-Employee Directors (as defined below)
of the Company.
DESCRIPTION OF THE DIRECTOR PLAN
The purpose of the Director Plan is to promote the interests of the Company
by providing an inducement to obtain and retain the services of qualified
persons who are not employees or officers of the Company ("Non-Employee
Directors") to serve as members of its Board of Directors.
The Director Plan is administered by the Compensation Committee of the
Board of Directors of the Company. Options may be granted to Non-Employee
Directors and will generally vest annually at the rate of
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25% per year from the date of grant and become immediately exercisable in full
upon a change in control of OneSource.
The exercise price per share for all options granted under the Director
Plan will be equal to the fair market value per share of the Common Stock on the
date of grant. The term of each option will be for a period of ten years from
the date of grant. Options may not be assigned or transferred except by will or
by the laws of descent and distribution. If an optionee ceases to be a director
of or advisor to the Company other than by reason of death, no further
installments of his options will become exercisable and his options shall
terminate after the passage of three months from the date of termination of his
services to the Company (but not later than on their specified expiration
dates). If an optionee dies, any option of his may be exercised, to the extent
of the number of shares with respect to which he could have exercised it on the
date of his death, by his estate, personal representative or beneficiary who
acquires the option by will or by the laws of descent and distribution, at any
time prior to the earlier of the option's specified expiration date or six
months from the date of the optionee's death. The option shall terminate on the
earlier of such dates. The term of the Director Plan is for a period of ten
years.
Non-Employee Directors granted options under the Director Plan are
protected against dilution in the event of a stock dividend, stock split,
recapitalization, merger or similar transaction. The Board of Directors may from
time to time adopt amendments and may terminate the Director Plan at any time
(although such action shall not affect options previously granted). Any shares
subject to an option which for any reason expires or terminates unexercised may
again be available for future grants under the Director Plan. Executive officers
and employees of the Company are not eligible for grants under the Director
Plan.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes certain federal income tax
considerations for directors receiving options under the Director Plan and
certain tax effects on the Company. However, the summary does not address every
situation that may result in taxation.
1. Options granted under the Director Plan do not qualify as
"Incentive Stock Options" under Section 422 of the Code.
2. A Non-Employee Director generally does not realize any taxable
income upon the grant of an option, and the Company is not allowed a
business expense deduction by reason of the grant.
3. The Non-Employee Director generally will recognize ordinary
compensation income at the time of exercise of an option in an amount equal
to the excess, if any, of the fair market value of the shares on the date
of exercise over the exercise price.
4. When the Non-Employee Director sells the shares, he or she
generally will recognize a capital gain or loss in an amount equal to the
difference between the amount realized upon the sale of the shares and his
or her basis in the shares (generally, the exercise price plus the amount
taxed to the Non-Employee Director as compensation income). If the
optionee's holding period for the shares exceeds one year, such gain or
loss will be a long-term capital gain or loss.
5. The Company generally should be entitled to a corresponding tax
deduction for Federal income tax purposes when compensation income is
recognized by the Non-Employee Director.
6. A Non-Employee Director may be entitled to exercise an option by
delivering shares of the Company's Common Stock to the Company in payment
of the exercise price. In cases of such an exercise, special rules will
apply.
7. Special rules apply if the stock acquired is subject to vesting, or
is subject to certain restrictions on resale under Federal securities laws
applicable to directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
APPROVAL OF THE ADOPTION OF THE 2001 NON-EMPLOYEE
DIRECTOR STOCK OPTION PLAN
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PROPOSAL 4
AMENDMENT OF THE COMPANY'S SECOND AMENDED AND
RESTATED CERTIFICATE OF INCORPORATION
In March 2001, the Board of Directors of the Company recommended to the
stockholders that the Company amend the Company's Second Amended and Restated
Certificate of Incorporation (the "Charter") to increase the number of
authorized shares of Common Stock, par value $.01 per share, from 20,000,000 to
35,000,000 shares. Shares of the Company's Common Stock, including the
additional shares proposed for authorization, do not have preemptive or similar
rights. The full text of the proposed amendment to the Charter is attached to
this Proxy Statement as Appendix D.
As of the Record Date, there were approximately shares issued and
outstanding and approximately shares reserved for future issuance pursuant
to outstanding options granted under the Company's stock plans. Prior to the
amendment to the Charter, the Board of Directors has authority to issue
approximately additional shares of Common Stock without further stockholder
approval. If the amendment to the Charter is approved, the Board of Directors
will have the authority to issue approximately additional shares of Common
Stock without further stockholder approval. Although the Company has not entered
into any agreements or understandings to issue any of the shares resulting from
the amendment of the Charter, the Board of Directors believes the authorized
number of shares of Common Stock should be increased to provide sufficient
shares for such corporate purposes as may be determined by the Board of
Directors to be necessary or desirable. These purposes may include, without
limitation: facilitating broader ownership of the Company's Common Stock by
effecting a stock split or issuing a stock dividend; acquiring other businesses
in exchange for shares of the Company's Common Stock; entering into
collaborative research and development arrangements with other companies in
which Common Stock or the right to acquire Common Stock is part of the
consideration; raising capital through the sale of Common Stock or securities
convertible into Common Stock; and attracting and retaining valuable employees
by the issuance of additional stock options, including additional shares
reserved for future option grants under the Company's existing stock plans. The
Board of Directors considers the authorization of additional shares of Common
Stock advisable to ensure prompt availability of shares for issuance should the
occasion arise. The issuance of additional shares of Common Stock could have the
effect of diluting earnings per share and book value per share, which could
adversely affect the Company's existing stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
APPROVAL OF THE AMENDMENT TO THE COMPANY'S SECOND
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
PROPOSAL 5
AMENDMENT TO THE COMPANY'S 1999 EMPLOYEE STOCK PURCHASE PLAN
PROPOSED AMENDMENT
In March 2001, the Board of Directors adopted an amendment to the 1999
Employee Stock Purchase Plan (the "Purchase Plan") which is the subject of this
proposal. The Board of Directors has approved and recommends to the stockholders
that they approve an amendment to the Purchase Plan that will increase the
aggregate number of shares authorized for issuance under the Purchase Plan by
100,000 shares.
The Company's management relies on stock purchases as an essential part of
the compensation packages necessary for the Company to attract and retain
experienced officers and employees. The Board of Directors of the Company
believes that the proposed amendment is essential to permit the Company's
management to continue to provide long-term, equity-based incentives to present
and future employees.
The Purchase Plan was adopted by the Board of Directors in February 1999
and approved by the Company's stockholders in April 1999. In March 2001, the
Board of Directors adopted the amendment to the Purchase Plan which is the
subject of this proposal. As of February 28, 2001, 41,842 shares remained for
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issuance under the Purchase Plan. If the increase in the number of shares
authorized for issuance under the Purchase Plan is not approved, the Company may
become unable to provide suitable long-term equity-based incentives to present
and future employees.
DESCRIPTION OF THE PURCHASE PLAN
The Purchase Plan is intended to provide an incentive to, and to encourage
stock ownership by, all eligible employees of the Company and its participating
subsidiaries so that they may share in the growth of the Company by acquiring or
increasing their proprietary interest in the Company. The Purchase Plan is
designed to encourage eligible employees to remain in the employ of the Company
and its participating subsidiaries. Under the Purchase Plan, payroll deductions
are used to purchase the Company's Common Stock for eligible participating
employees through the exercise of stock options. The text of the Purchase Plan,
amended as proposed above, is attached to this proxy statement as Appendix E.
The following is a summary of the Purchase Plan and should be read together with
the full Purchase Plan text
The Purchase Plan constitutes an "employee stock purchase plan" within the
meaning of Section 423(b) of the Internal Revenue Code of 1986, as amended (the
"Code").
The Purchase Plan is administered by the Board of Directors of the Company
or a committee which the Board may designate. The Board of Directors, subject to
the provisions of the Purchase Plan, has the power to construe the Purchase
Plan, to determine all questions thereunder, and to adopt and amend such rules
and regulations for administration of the Purchase Plan as it may deem
appropriate. The Board of Directors may from time to time adopt amendments to
the Purchase Plan provided that, without the approval of the Company's
stockholders, no amendment may increase the number of shares that may be issued
under the Purchase Plan, change the class of employees eligible to receive
options under the Purchase Plan if such action would be treated as the adoption
of a new plan for purposes of Section 423(b) of the Code, or cause Rule 16b-3
under the Securities Exchange Act of 1934 to be inapplicable to the Purchase
Plan.
The Purchase Plan may be terminated at any time by the Board of Directors,
provided that such termination will not affect options then outstanding under
the Purchase Plan. If at any time shares of Common Stock reserved for issuance
under the Purchase Plan remain available for purchase, but not in sufficient
number to satisfy all then unfilled purchase requirements, the available shares
will be apportioned among participants in proportion to the amount of payroll
deductions accumulated on behalf of each participant that would otherwise be
used to purchase stock, and the Purchase Plan will terminate. Upon termination
of the Purchase Plan, all payroll deductions not used to purchase Common Stock
will be refunded to Purchase Plan participants without interest.
As amended, the Purchase Plan would authorize the issuance of up to 200,000
shares of Common Stock (subject to adjustment for changes in the Company's
capital stock) pursuant to the exercise of non-transferable options granted to
participating employees. The Common Stock subject to the options under the
Purchase Plan includes shares of the Company's authorized but unissued Common
Stock and shares of Common Stock reacquired by the Company, including shares
purchased in the open market. Option holders are generally protected against
dilution in the event of certain capital changes such as a recapitalization,
stock split, merger, consolidation, reorganization, combination, liquidation,
stock dividend or similar transaction.
An employee electing to participate in the Purchase Plan must authorize an
amount (a whole percentage not less than 1% nor more than 10% of the employee's
cash compensation, including base pay or salary and any overtime, bonuses or
commissions) to be deducted by the Company from the employee's pay and applied
toward the purchase of Common Stock under the Purchase Plan. For the duration of
the Purchase Plan, the Payment Periods are defined as the six month periods
commencing on February 1 and August 1 and ending on July 31 and February 28,
respectively. However, the first Payment Period of the Purchase Plan commenced
on June 1, 1999 and ended on January 31, 2000, the second Payment Period of the
Purchase Plan commenced on February 1, 2000 and ended on July 31, 2000 and the
third Payment Period of the Purchase Plan commenced on August 1, 2000 and ended
on February 28, 2001.
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Employees of the Company (and participating subsidiaries) who have
completed at least three months of service with the Company or any of its
subsidiaries on or before the first day of a particular Payment Period, and
whose customary employment is more than 20 hours per week and for more than five
months in any calendar year are eligible to participate in the Purchase Plan. An
employee may not be granted an option under the Purchase Plan if, after the
granting of the option, such employee would be treated as owning 5% or more of
the total combined voting power or value of all classes of stock of the Company
or its subsidiaries. Directors who are not employees of the Company may not
participate in the Purchase Plan.
On the first business day of each Payment Period, the Company will grant to
each Purchase Plan participant an option to purchase shares of the Common Stock
of the Company. On the last day of the Payment Period, the employee will be
deemed to have exercised this option, at the option price, to the extent of such
employee's accumulated payroll deductions, on the condition that the employee
remains eligible to participate in the Purchase Plan throughout such Payment
Period. In no event, however, may the employee exercise an option granted under
the Purchase Plan for more than 1,000 shares during a Payment Period. If the
amount of the accumulated payroll deductions exceeds the aggregate purchase
price of 1,000 shares, the excess deductions will be promptly refunded to the
employee without interest. Furthermore, no employee may be granted an option
which permits the employee's right to purchase shares of Common Stock under the
Purchase Plan and all other Section 423(b) plans of the Company and any
subsidiary corporations, to accrue at a rate which exceeds $25,000 of fair
market value of such stock (determined on the respective date(s) of grant) for
each calendar year in which the option is outstanding. Any excess accumulation
of payroll deductions will be promptly refunded to the employee without
interest. Under the terms of the Purchase Plan, the option price is an amount
equal to the lesser of (i) 85% of the average market price of the Common Stock
on the first business day of the Payment Period and (ii) 85% of the average
market price of the Common Stock on the last business day of the Payment Period,
in either event rounded up to the nearest cent. The Company will accumulate and
hold for the employee's account the amounts deducted from his or her pay. No
interest will be paid on these amounts.
For purposes of the Purchase Plan, the term "average market price" on any
date means (i) the average (on that date) of the high and low prices of the
Common Stock on the principal national securities exchange on which the Common
Stock is traded, if the Common Stock is then traded on a national securities
exchange; or (ii) the last reported sale price (on that date) of the Common
Stock on the NASDAQ National Market, if the Common Stock is not then traded on a
national securities exchange; or (iii) the average of the closing bid and asked
prices last quoted (on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is not reported on the NASDAQ
National Market; or (iv) if the Common Stock is not publicly traded, the fair
market value of the Common Stock as determined by the Board after taking into
consideration all factors which it deems appropriate, including, without
limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length. An employee may enter the Purchase Plan
by delivering to the Company, at least ten days before the first day of the next
succeeding Payment Period, an authorization stating the initial percentage to be
deducted from the employee's pay and authorizing the purchase of shares of
Common Stock for the employee in each Payment Period in accordance with the
terms of the Purchase Plan.
Unless an employee files a new authorization or withdraws from the Purchase
Plan, the deductions and purchases under the authorization the employee has on
file under the Purchase Plan will continue from the initial Payment Period to
succeeding Payment Periods as long as the Purchase Plan is in effect. Deductions
may be increased or decreased during a Payment Period as set forth above.
An employee may withdraw from the Purchase Plan, in whole but not in part,
at any time prior to the last business day of each Payment Period by delivering
a withdrawal notice to the Company, in which event the Company will refund the
entire balance of the employee's deductions not previously used to purchase
stock under the Purchase Plan.
If an employee is not a participant in the Purchase Plan on the last day of
the Payment Period, the employee generally is not entitled to exercise his or
her option. An employee's rights under the Purchase Plan generally terminate
upon his voluntary withdrawal from the Purchase Plan at any time, or when he
ceases
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employment because of retirement, voluntary or involuntary termination,
resignation, layoff, discharge, death, or for any other reason. An employee's
employment shall be treated as continuing intact which such employee is on
military leave, sick leave or other bona fide leave of absence, for up to 90
days or for so long as the employee's right to re-employment is guaranteed
either by statute or by contract, if longer than 90 days.
An employee's rights under the Purchase Plan are the employee's alone and
may not be transferred to, assigned to, or availed of by, any other person. Any
option granted to an employee may be exercised, during the employee's lifetime,
only by the employee.
The proceeds received by the Company from the sale of Common Stock pursuant
to the Purchase Plan will be used for general corporate purposes. The Company's
obligation to deliver shares of Common Stock is subject to the approval of any
governmental authority required in connection with the sale or issuance of such
shares.
FEDERAL INCOME TAX CONSEQUENCES
The following general rules are currently applicable for United States
federal tax purposes upon the grant and exercise of options to purchase shares
of Common Stock pursuant to the Purchase Plan:
1. The amounts deducted from an employee's pay under the Purchase Plan
will be included in the employee's compensation subject to federal income
tax. In general, no additional income will be recognized by the employee
either at the time options are granted pursuant to the Purchase Plan or at
the time the employee purchases shares pursuant to the Purchase Plan.
2. If the employee disposes of shares of Common Stock more than two
years after the first business day of the Payment Period in which the
employee acquired the shares, then upon such disposition the employee will
recognize compensation income in an amount equal to the lesser of:
(a) the excess, if any, of the fair market value of the shares on
the date of disposition over the amount the employee paid for the
shares, or
(b) approximately 15% of the fair market value of the shares on the
first business day of the Payment Period.
In addition, the employee generally will recognize capital gain or loss in
an amount equal to the difference between the amount realized upon the sale of
shares and the employee's tax basis in the shares (i.e., the amount the employee
paid for the shares plus the amount, if any, taxed as compensation income). If
the employee's holding period for the shares exceeds one year, such gain or loss
will be long-term capital gain or loss.
3. If the employee disposes of shares of Common Stock within two years
after the first business day of the Payment Period in which the employee
acquired the shares, then upon disposition the employee will recognize
compensation income in an amount equal to the excess of the fair market
value of the shares on the last business day of the applicable Payment
Period over the amount the employee paid for the shares.
In addition, the employee generally will recognize capital gain or loss in
an amount equal to the difference between the amount realized upon the sale of
the shares and the employee's tax basis in the shares (generally, the amount the
employee paid for the shares plus the amount, if any, taxed to the employee as
compensation income). If the employee's holding period for the shares is more
than one year, such gain or loss will be long-term capital gain or loss. If the
employee's holding period for the shares exceeds 18 months, the employee may be
entitled to a reduced long-term capital gains rate.
4. If the two-year holding period is satisfied with respect to Common
Stock issued upon exercise of an option, the Company will not be entitled
to a tax deduction with respect to such option or the issuance of shares of
Common Stock upon exercise of such option. If the two-year holding period
is not satisfied with respect to Common Stock issued upon exercise of an
option, the Company generally will be entitled
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to a tax deduction equal to the amount of compensation income taxable to
the employee upon disposition of such Common Stock.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE "FOR" APPROVAL OF THE AMENDMENT
TO THE COMPANY'S 1999 EMPLOYEE STOCK PURCHASE PLAN.
PROPOSAL 6
RATIFICATION OF SELECTION OF AUDITORS
Subject to ratification by the stockholders, the Board of Directors has
selected the firm of PricewaterhouseCoopers LLP, independent certified
accountants, to serve as auditors for the fiscal year ending December 31, 2001.
It is expected that a member of the firm of PricewaterhouseCoopers LLP will be
present at the Annual Meeting with an opportunity to make a statement if so
desired and will be available to respond to appropriate questions from the
Company's stockholders. The ratification of this selection is not required under
the laws of the State of Delaware, where the Company is incorporated, but the
results of this vote will be considered by the Board of Directors in selecting
auditors for future fiscal years.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE "FOR" THE RATIFICATION OF THIS SELECTION
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STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the Annual Meeting of
Stockholders for the fiscal year ended December 31, 2001 must be received no
later than the close of business on December 20, 2001 at the Company's principal
executive offices in order to be included in the Company's proxy statement for
that meeting. In order to curtail controversy as to the date on which a proposal
was received by the Company, it is suggested that proponents submit their
proposals by Certified Mail, Return Receipt Requested to OneSource Information
Services, Inc., 300 Baker Avenue, Concord, Massachusetts 01742, Attention:
Secretary.
Under the Company's by-laws, stockholders who wish to make a proposal at
the Annual Meeting of Stockholders for the fiscal year ended December 31, 2001,
other than one that will be included in the Company's proxy materials, must
notify the Company no earlier than the close of business on November 21, 2001
and no later than December 20, 2001. If a stockholder who wishes to present a
proposal fails to notify the Company by December 20, 2001, the stockholder would
not be entitled to present the proposal at the meeting. If, however,
notwithstanding the requirements of the Company's by-laws, the proposal is
brought before the annual meeting of stockholders, then under the proxy rules of
the Securities and Exchange Commission, the proxies solicited by management with
respect to the next annual meeting of stockholders will confer discretionary
voting authority with respect to the stockholder's proposal on the persons
selected by management to vote the proxies. If a stockholder makes a timely
notification, the persons appointed as proxies may still exercise discretionary
voting authority under circumstances consistent with the Commission's proxy
rules.
INCORPORATION BY REFERENCE
To the extent that this Proxy Statement has been or will be specifically
incorporated by reference into any filing by the Company under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the
sections of the Proxy Statement entitled "Compensation Committee Report on
Executive Compensation", "Audit Committee Report" and "Stock Performance Graph"
shall not be deemed to be so incorporated, unless specifically otherwise
provided in any such filing.
EXPENSES AND SOLICITATION
All costs of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, certain of the Company's directors, officers
and regular employees, without additional remuneration, may solicit proxies in
person or by telephone or telegraph. Brokers, custodians and fiduciaries will be
requested to forward proxy soliciting material to the owners of stock held in
their names, and the Company will reimburse them for their reasonable
out-of-pocket costs. Solicitation by officers and employees of the Company or by
certain outside proxy solicitation services also may be made of some
stockholders in person or by mail, telephone or telegraph following the original
solicitation.
The contents of and the sending of this Proxy Statement have been approved
by the Board of Directors of the Company.
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APPENDIX A
AUDIT COMMITTEE CHARTER
A. PURPOSE AND SCOPE
The primary function of the Audit Committee (the "Committee") is to assist
the Board of Directors in fulfilling its responsibilities by reviewing: (i) the
financial reports provided by the Corporation to the Securities and Exchange
Commission ("SEC"), the Corporation's shareholders or to the general public, and
(ii) the Corporation's internal financial and accounting controls.
B. COMPOSITION
The Committee shall be comprised of a minimum of three directors as
appointed by the Board of Directors, who shall meet the independence and audit
committee composition requirements under any rules or regulations of The NASDAQ
National Market, as in effect from time to time, and shall be free from any
relationship that, in the opinion of the Board of Directors, would interfere
with the exercise of his or her independent judgment as a member of the
Committee.
All members of the Committee shall either (i) be able to read and
understand fundamental financial statements, including a balance sheet, cash
flow statement and income statement, or (ii) be able to do so within a
reasonable period of time after appointment to the Committee. At least one
member of the Committee shall have employment experience in finance or
accounting, requisite professional certification in accounting, or other
comparable experience or background which results in the individual's financial
sophistication, including being or having been a chief executive officer, chief
financial officer or other senior officer with financial oversight
responsibilities.
The Board may appoint one member who does not meet the independence
requirements set forth above and who is not a current employee of the
Corporation or an immediate family member of such employee if the Board, under
exceptional and limited circumstances, determines that membership on the
Committee by the individual is required in the best interests of the Corporation
and its shareholders. The Board shall disclose in the next proxy statement after
such determination the nature of the relationship and the reasons for the
determination.
The members of the Committee shall be elected by the Board of Directors at
the meeting of the Board of Directors following each annual meeting of
stockholders and shall serve until their successors shall be duly elected and
qualified or until their earlier resignation or removal. Unless a Chair is
elected by the full Board of Directors, the members of the Committee may
designate a Chair by majority vote of the full Committee membership.
C. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Committee shall:
DOCUMENT REVIEW
1. Review and assess the adequacy of this Charter periodically as
conditions dictate, but at least annually (and update this Charter if and when
appropriate).
2. Review with representatives of management and representatives of the
independent accounting firm the Corporation's audited annual financial
statements prior to their filing as part of the Annual Report on Form 10-K.
After such review and discussion, the Committee shall recommend to the Board of
Directors whether such audited financial statements should be published in the
Corporation's annual report on Form 10-K. The Committee shall also review the
Corporation's quarterly financial statements prior to their inclusion in the
Corporation's quarterly SEC filings on Form 10-Q.
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3. Take steps designed to ensure that the independent accounting firm
reviews the Corporation's interim financial statements prior to their inclusion
in the Corporation's quarterly reports on Form 10-Q.
INDEPENDENT ACCOUNTING FIRM
4. Recommend to the Board of Directors the selection of the independent
accounting firm, and approve the fees and other compensation to be paid to the
independent accounting firm. The Committee shall have the ultimate authority and
responsibility to select, evaluate and, when warranted, replace such independent
accounting firm (or to recommend such replacement for shareholder approval in
any proxy statement).
5. On an annual basis, receive from the independent accounting firm a
formal written statement identifying all relationships between the independent
accounting firm and the Corporation consistent with Independence Standards Board
("ISB") Standard 1. The Committee shall actively engage in a dialogue with the
independent accounting firm as to any disclosed relationships or services that
may impact its independence. The Committee shall take, or recommend that the
Board of Directors take, appropriate action to oversee the independence of the
independent accounting firm.
6. On an annual basis, discuss with representatives of the independent
accounting firm the matters required to be discussed by Statement on Auditing
Standards ("SAS") 61, as it may be modified or supplemented.
7. Meet with the independent accounting firm prior to the audit to review
the planning and staffing of the audit.
8. Evaluate the performance of the independent accounting firm and
recommend to the Board of Directors any proposed discharge of the independent
accounting firm when circumstances warrant. The independent accounting firm
shall be ultimately accountable to the Board of Directors and the Committee.
FINANCIAL REPORTING PROCESSES
9. In consultation with the independent accounting firm and management,
review annually the adequacy of the Corporation's internal financial and
accounting controls.
COMPLIANCE
10. To the extent deemed necessary by the Committee, it shall have the
authority to engage outside counsel and/or independent accounting consultants to
review any matter under its responsibility.
REPORTING
11. Prepare, in accordance with the rules of the SEC as modified or
supplemented from time to time, a written report of the audit committee to be
included in the Corporation's annual proxy statement for each annual meeting of
stockholders occurring after December 14, 2000.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Corporation's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles.
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APPENDIX B
ONESOURCE INFORMATION SERVICES, INC.
1999 STOCK OPTION AND INCENTIVE PLAN
1. PURPOSE AND ELIGIBILITY
The purpose of this 1999 Stock Option and Incentive Plan (the "Plan") of
OneSource Information Services, Inc. (the "Company") is to provide stock options
and other equity interests in the Company (each an "Award") to employees,
officers, directors, consultants and advisors of the Company and its
Subsidiaries, all of whom are eligible to receive Awards under the Plan. Any
person to whom an Award has been granted under the Plan is called a
"Participant". Additional definitions are contained in Section 8.
2. ADMINISTRATION
a. Administration by Board of Directors. The Plan will be administered by
the Board of Directors of the Company (the "Board"). The Board, in its sole
discretion, shall have the authority to grant and amend Awards, to adopt, amend
and repeal rules relating to the Plan and to interpret and correct the
provisions of the Plan and any Award. All decisions by the Board shall be final
and binding on all interested persons. Neither the Company nor any member of the
Board shall be liable for any action or determination relating to the Plan.
b. Appointment of Committees. To the extent permitted by applicable law,
the Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a "Committee"). All references in the
Plan to the "Board" shall mean such Committee or the Board.
c. Delegation to Executive Officers. To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of the
Company the power to grant Awards and exercise such other powers under the Plan
as the Board may determine, provided that the Board shall fix the maximum number
of Awards to be granted and the maximum number of shares issuable to any one
Participant pursuant to Awards granted by such executive officers.
3. STOCK AVAILABLE FOR AWARDS
a. Number of Shares. Subject to adjustment under Section 3(c), the
aggregate number of shares of Common Stock of the Company (the "Common Stock")
that may be issued pursuant to the Plan is 2,800,000 shares. If any Award
expires, or is terminated, surrendered or forfeited, in whole or in part, the
unissued Common Stock covered by such Award shall again be available for the
grant of Awards under the Plan. If shares of Common Stock issued pursuant to the
Plan are repurchased by, or are surrendered or forfeited to, the Company at no
more than cost, such shares of Common Stock shall again be available for the
grant of Awards under the Plan; provided, however, that the cumulative number of
such shares that may be so reissued under the Plan will not exceed 2,800,000
shares. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.
b. Per-Participant Limit. Subject to adjustment under Section 3(c), no
Participant may be granted Awards during any one fiscal year to purchase more
than 100,000 shares of Common Stock.
c. Adjustment to Common Stock. In the event of any stock split, stock
dividend, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation, spin-off, split-up,
or other similar change in capitalization or event, (i) the number and class of
securities available for Awards under the Plan and the per-Participant share
limit, (ii) the number and class of securities, vesting schedule and exercise
price per share subject to each outstanding Option, (iii) the repurchase price
per security subject to repurchase, and (iv) the terms of each other outstanding
stock-based Award shall be adjusted by the Company (or substituted Awards may be
made) to the extent the Board shall determine, in good faith, that such an
adjustment (or substitution) is appropriate. If Section 7(e)(i) applies for any
event, this Section 3(c) shall not be applicable.
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4. STOCK OPTIONS
a. General. The Board may grant options to purchase Common Stock (each,
an "Option") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option and the Common Stock
issued upon the exercise of each Option, including vesting provisions,
repurchase provisions and restrictions relating to applicable federal or state
securities laws, as it considers advisable.
b. Incentive Stock Options. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall be granted only to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Board and the Company shall have no liability if an Option
or any part thereof that is intended to be an Incentive Stock Option does not
qualify as such. An Option or any part thereof that does not qualify as an
Incentive Stock Option is referred to herein as a "Nonstatutory Stock Option".
c. Exercise Price. The Board shall establish the exercise price (or
determine the method by which the exercise price shall be determined) at the
time each Option is granted and specify it in the applicable option agreement.
d. Duration of Options. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Board may specify in the
applicable option agreement.
e. Exercise of Option. Options may be exercised only by delivery to the
Company of a written notice of exercise signed by the proper person together
with payment in full as specified in Section 4(f) for the number of shares for
which the Option is exercised.
f. Payment Upon Exercise. Common Stock purchased upon the exercise of an
Option shall be paid for by one or any combination of the following forms of
payment:
(i) by check payable to the order of the Company;
(ii) except as otherwise explicitly provided in the applicable option
agreement, and only if the Common Stock is then publicly traded, delivery
of an irrevocable and unconditional undertaking by a creditworthy broker to
deliver promptly to the Company sufficient funds to pay the exercise price,
or delivery by the Participant to the Company of a copy of irrevocable and
unconditional instructions to a creditworthy broker to deliver promptly to
the Company cash or a check sufficient to pay the exercise price; or
(iii) to the extent explicitly provided in the applicable option
agreement, by (x) delivery of shares of Common Stock owned by the
Participant valued at fair market value (as determined by the Board or as
determined pursuant to the applicable option agreement), (y) delivery of a
promissory note of the Participant to the Company (and delivery to the
Company by the Participant of a check in an amount equal to the par value
of the shares purchased), or (z) payment of such other lawful consideration
as the Board may determine.
5. RESTRICTED STOCK
a. Grants. The Board may grant Awards entitling Participants to acquire
shares of Common Stock, subject to (i) delivery to the Company by the
Participant of a check in an amount at least equal to the par value of the
shares purchased, and (ii) the right of the Company to repurchase all or part of
such shares at their issue price or other stated or formula price from the
Participant in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award (each, a
"Restricted Stock Award").
b. Terms and Conditions. The Board shall determine the terms and
conditions of any such Restricted Stock Award. Any stock certificates issued in
respect of a Restricted Stock Award shall be registered in the name of the
Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). After the expiration of the
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applicable restriction periods, the Company (or such designee) shall deliver the
certificates no longer subject to such restrictions to the Participant or, if
the Participant has died, to the beneficiary designated by a Participant, in a
manner determined by the Board, to receive amounts due or exercise rights of the
Participant in the event of the Participant's death (the "Designated
Beneficiary"). In the absence of an effective designation by a Participant,
Designated Beneficiary shall mean the Participant's estate.
6. OTHER STOCK-BASED AWARDS
The Board shall have the right to grant other Awards based upon the Common
Stock having such terms and conditions as the Board may determine, including,
without limitation, the grant of shares based upon certain conditions, the grant
of securities convertible into Common Stock and the grant of stock appreciation
rights, phantom stock awards or stock units.
7. GENERAL PROVISIONS APPLICABLE TO AWARDS
a. Transferability of Awards. Except as the Board may otherwise determine
or provide in an Award, Awards shall not be sold, assigned, transferred, pledged
or otherwise encumbered by the person to whom they are granted, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the life of the Participant, shall be exercisable only
by the Participant. References to a Participant, to the extent relevant in the
context, shall include references to authorized transferees.
b. Documentation. Each Award under the Plan shall be evidenced by a
written instrument in such form as the Board shall determine or as executed by
an officer of the Company pursuant to authority delegated by the Board. Each
Award may contain terms and conditions in addition to those set forth in the
Plan provided that such terms and conditions do not contravene the provisions of
the Plan.
c. Board Discretion. The terms of each type of Award need not be
identical, and the Board need not treat Participants uniformly.
d. Termination of Status. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, or the Participant's legal
representative, conservator, guardian or Designated Beneficiary, may exercise
rights under the Award.
e. Acquisition of the Company
(i) Consequences of an Acquisition.
(A) Acquisition Intended to be Accounted for as a
Pooling-of-Interests. With respect to an Acquisition intended to be
accounted for as a pooling-of-interests: (x) all outstanding Awards
shall remain the obligation of the Company or be assumed by the
surviving or acquiring entity, and there shall be automatically
substituted for the shares of Common Stock then subject to such Awards
the consideration payable with respect to the outstanding shares of
Common Stock in connection with the Acquisition and (y) if a recipient
of an Award is terminated by the surviving or acquiring Company without
Cause (as defined in the applicable option agreement) before the first
anniversary of the consummation of the Acquisition, then upon the
consummation of the Acquisition, (1) all Options then outstanding shall
become immediately exercisable in full and will terminate, to the extent
unexercised, on their scheduled expiration date, and if the shares of
Common Stock subject to such Options are subject to repurchase
provisions, then such repurchase provisions shall immediately lapse; (2)
all Restricted Stock Awards then outstanding shall become free of all
repurchase provisions; and (3) all other stock-based Awards shall become
exercisable, realizable or vested in full, or shall be free of all
repurchase provisions, as the case may be
(B) Acquisition Intended to be Accounted for under the Purchase
Method. Unless otherwise expressly provided in the applicable Option or
Award, upon the occurrence of an Acquisition intended to be accounted
for under the purchase method, the Board or the board of directors of
the surviving or acquiring entity (as used in this Section 7(e)(i)(B),
also the "Board"), shall, as to
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outstanding Awards (on the same basis or on different bases, as the
Board shall specify), make appropriate provision for the continuation of
such Awards by the Company or the assumption of such Awards by the
surviving or acquiring entity and by substituting on an equitable basis
for the shares then subject to such Awards either (a) the consideration
payable with respect to the outstanding shares of Common Stock in
connection with the Acquisition, (b) shares of stock of the surviving or
acquiring corporation or (c) such other securities as the Board deems
appropriate, the fair market value of which (as determined by the Board
in its sole discretion) shall not materially differ from the fair market
value of the shares of Common Stock subject to such Awards immediately
preceding the Acquisition. In addition to or in lieu of the foregoing,
with respect to outstanding Options, the Board may, upon written notice
to the affected optionees, provide that one or more Options must be
exercised, to the extent then exercisable or to be exercisable as a
result of the Acquisition, within a specified number of days of the date
of such notice, at the end of which period such Options shall terminate;
or terminate one or more Options in exchange for a cash payment equal to
the excess of the fair market value (as determined by the Board in its
sole discretion) of the shares subject to such Options (to the extent
then exercisable or to be exercisable as a result of the Acquisition)
over the exercise price thereof.
(C) Acquisition Defined. An "Acquisition" shall mean: (x) any
merger or consolidation after which the voting securities of the Company
outstanding immediately prior thereto represent (either by remaining
outstanding or by being converted into voting securities of the
surviving or acquiring entity) less than 50% of the combined voting
power of the voting securities of the Company or such surviving or
acquiring entity outstanding immediately after such event; or (y) any
sale of all or substantially all of the assets or capital stock of the
Company (other than in a spin-off or similar transaction) or (z) any
other acquisition of the business of the Company, as determined by the
Board.
(ii) Assumption of Options Upon Certain Events. In connection with a
merger or consolidation of an entity with the Company or the acquisition by
the Company of property or stock of an entity, the Board may grant Awards
under the Plan in substitution for stock and stock-based awards issued by
such entity or an affiliate thereof. The substitute Awards shall be granted
on such terms and conditions as the Board considers appropriate in the
circumstances.
(iii) Pooling-of Interests-Accounting. If the Company proposes to
engage in an Acquisition intended to be accounted for as a
pooling-of-interests, and in the event that the provisions of this Plan or
of any Award hereunder, or any actions of the Board taken in connection
with such Acquisition, are determined by the Company's or the acquiring
company's independent public accountants to cause such Acquisition to fail
to be accounted for as a pooling-of-interests, then such provisions or
actions shall be amended or rescinded by the Board, without the consent of
any Participant, to be consistent with pooling-of-interests accounting
treatment for such Acquisition.
(iv) Parachute Awards. Notwithstanding the provisions of Section
7(e)(i)(A), if, in connection with an Acquisition described therein, a tax
under Section 4999 of the Code would be imposed on the Participant (after
taking into account the exceptions set forth in Sections 280G(b)(4) and
280G(b)(5) of the Code), then the number of Awards which shall become
exercisable, realizable or vested as provided in such section shall be
reduced (or delayed), to the minimum extent necessary, so that no such tax
would be imposed on the Participant (the Awards not becoming so
accelerated, realizable or vested, the "Parachute Awards"); provided,
however, that if the "aggregate present value" of the Parachute Awards
would exceed the tax that, but for this sentence, would be imposed on the
Participant under Section 4999 of the Code in connection with the
Acquisition, then the Awards shall become immediately exercisable,
realizable and vested without regard to the provisions of this sentence.
For purposes of the preceding sentence, the "aggregate present value" of an
Award shall be calculated on an after-tax basis (other than taxes imposed
by Section 4999 of the Code) and shall be based on economic principles
rather than the principles set forth under Section 280G of the Code and the
regulations promulgated thereunder. All determinations required to be made
under this Section 7(e)(iv) shall be made by the Company.
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f. Withholding. Each Participant shall pay to the Company, or make
provisions satisfactory to the Company for payment of, any taxes required by law
to be withheld in connection with Awards to such Participant no later than the
date of the event creating the tax liability. The Board may allow Participants
to satisfy such tax obligations in whole or in part by transferring shares of
Common Stock, including shares retained from the Award creating the tax
obligation, valued at their fair market value (as determined by the Board or as
determined pursuant to the applicable option agreement). The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to a Participant.
g. Amendment of Awards. The Board may amend, modify or terminate any
outstanding Award including, but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that, except as otherwise provided in Section 7(e)(iii), the
Participant's consent to such action shall be required unless the Board
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.
h. Conditions on Delivery of Stock. The Company will not be obligated to
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.
i. Acceleration. The Board may at any time provide that any Options shall
become immediately exercisable in full or in part, that any Restricted Stock
Awards shall be free of some or all restrictions, or that any other stock-based
Awards may become exercisable in full or in part or free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be, despite the fact that the foregoing actions may (i) cause the
application of Sections 280G and 4999 of the Code if a change in control of the
Company occurs, or (ii) disqualify all or part of the Option as an Incentive
Stock Option.
8. MISCELLANEOUS
a. Definitions.
(i) "Company," for purposes of eligibility under the Plan, shall
include any present or future subsidiary corporations of OneSource
Information Services, Inc., as defined in Section 424(f) of the Code (a
"Subsidiary"), and any present or future parent corporation of OneSource
Information Services, Inc., as defined in Section 424(e) of the Code. For
purposes of Awards other than Incentive Stock Options, the term "Company"
shall include any other business venture in which the Company has a direct
or indirect significant interest, as determined by the Board in its sole
discretion.
(ii) "Code" means the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder.
(iii) "employee" for purposes of eligibility under the Plan shall
include a person to whom an offer of employment has been extended by the
Company.
b. No Right To Employment or Other Status. No person shall have any claim
or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan.
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c. No Rights As Stockholder. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder thereof.
d. Effective Date and Term of Plan. The Plan shall become effective after
adoption by the Board on a date determined by the Board. No Awards shall be
granted under the Plan after the completion of ten years from the date on which
the Plan was adopted by the Board, but Awards previously granted may extend
beyond that date.
e. Amendment of Plan. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time.
f. Governing Law. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.
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APPENDIX C
ONE SOURCE INFORMATION SERVICES, INC.
2001 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. PURPOSE AND ELIGIBILITY
The purpose of this 2001 Non-Employee Director Stock Option Plan (the
"Plan") of One Source Information Services, Inc. (the "Company") is to provide
stock options and other equity interests in the Company (each an "Award") to
non-employee directors, consultants and advisors of the Company and its
Subsidiaries, all of whom are eligible to receive Awards under the Plan. Any
person to whom an Award has been granted under the Plan is called a
"Participant". Additional definitions are contained in Section 8.
2. ADMINISTRATION
a. Administration by Board of Directors. The Plan will be administered by
the Board of Directors of the Company (the "Board"). The Board, in its sole
discretion, shall have the authority to grant and amend Awards, to adopt, amend
and repeal rules relating to the Plan and to interpret and correct the
provisions of the Plan and any Award. All decisions by the Board shall be final
and binding on all interested persons. Neither the Company nor any member of the
Board shall be liable for any action or determination relating to the Plan.
b. Appointment of Committees. To the extent permitted by applicable law,
the Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a "Committee"). All references in the
Plan to the "Board" shall mean such Committee or the Board.
c. Delegation to Executive Officers. To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of the
Company the power to grant Awards and exercise such other powers under the Plan
as the Board may determine, provided that the Board shall fix the maximum number
of Awards to be granted and the maximum number of shares issuable to any one
Participant pursuant to Awards granted by such executive officers.
3. STOCK AVAILABLE FOR AWARDS
a. Number of Shares. Subject to adjustment under Section 3(c), the
aggregate number of shares of Common Stock of the Company (the "Common Stock")
that may be issued pursuant to the Plan is 300,000 shares. If any Award expires,
or is terminated, surrendered or forfeited, in whole or in part, the unissued
Common Stock covered by such Award shall again be available for the grant of
Awards under the Plan. If shares of Common Stock issued pursuant to the Plan are
repurchased by, or are surrendered or forfeited to, the Company at no more than
cost, such shares of Common Stock shall again be available for the grant of
Awards under the Plan; provided, however, that the cumulative number of such
shares that may be so reissued under the Plan will not exceed 300,000 shares.
Shares issued under the Plan may consist in whole or in part of authorized but
unissued shares or treasury shares.
b. Per-Participant Limit. Subject to adjustment under Section 3(c), no
Participant may be granted Awards during any one fiscal year to purchase more
than 100,000 shares of Common Stock.
c. Adjustment to Common Stock. In the event of any stock split, stock
dividend, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation, spin-off, split-up,
or other similar change in capitalization or event, (i) the number and class of
securities available for Awards under the Plan and the per-Participant share
limit, (ii) the number and class of securities, vesting schedule and exercise
price per share subject to each outstanding Option, (iii) the repurchase price
per security subject to repurchase, and (iv) the terms of each other outstanding
stock-based Award shall be adjusted by the Company (or substituted Awards may be
made) to the extent the Board shall determine, in good faith, that such an
adjustment (or substitution) is appropriate. If Section 7(e)(i) applies for any
event, this Section 3(c) shall not be applicable.
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4. STOCK OPTIONS
a. General. The Board may grant options to purchase Common Stock (each,
an "Option") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option and the Common Stock
issued upon the exercise of each Option, including vesting provisions,
repurchase provisions and restrictions relating to applicable federal or state
securities laws, as it considers advisable.
b. Non-Qualified Stock Options. Only non-qualified stock options, and not
"incentive stock options," may be granted hereunder.
c. Exercise Price. The Board shall establish the exercise price (or
determine the method by which the exercise price shall be determined) at the
time each Option is granted and specify it in the applicable option agreement.
d. Duration of Options. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Board may specify in the
applicable option agreement.
e. Exercise of Option. Options may be exercised only by delivery to the
Company of a written notice of exercise signed by the proper person together
with payment in full as specified in Section 4(f) for the number of shares for
which the Option is exercised.
f. Payment Upon Exercise. Common Stock purchased upon the exercise of an
Option shall be paid for by one or any combination of the following forms of
payment:
(i) by check payable to the order of the Company;
(ii) except as otherwise explicitly provided in the applicable option
agreement, and only if the Common Stock is then publicly traded, delivery
of an irrevocable and unconditional undertaking by a creditworthy broker to
deliver promptly to the Company sufficient funds to pay the exercise price,
or delivery by the Participant to the Company of a copy of irrevocable and
unconditional instructions to a creditworthy broker to deliver promptly to
the Company cash or a check sufficient to pay the exercise price; or
(iii) to the extent explicitly provided in the applicable option
agreement, by (x) delivery of shares of Common Stock owned by the
Participant valued at fair market value (as determined by the Board or as
determined pursuant to the applicable option agreement), (y) delivery of a
promissory note of the Participant to the Company (and delivery to the
Company by the Participant of a check in an amount equal to the par value
of the shares purchased), or (z) payment of such other lawful consideration
as the Board may determine.
5. RESTRICTED STOCK
a. Grants. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to (i) delivery to the Company by the
Participant of a check in an amount at least equal to the par value of the
shares purchased, and (ii) the right of the Company to repurchase all or part of
such shares at their issue price or other stated or formula price from the
Participant in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award (each, a
"Restricted Stock Award").
b. Terms and Conditions. The Board shall determine the terms and
conditions of any such Restricted Stock Award. Any stock certificates issued in
respect of a Restricted Stock Award shall be registered in the name of the
Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). After the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or, if the Participant has died, to the
beneficiary designated by a Participant, in a manner determined by the Board, to
receive amounts due or exercise rights of the Participant
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in the event of the Participant's death (the "Designated Beneficiary"). In the
absence of an effective designation by a Participant, Designated Beneficiary
shall mean the Participant's estate.
6. OTHER STOCK-BASED AWARDS
The Board shall have the right to grant other Awards based upon the Common
Stock having such terms and conditions as the Board may determine, including,
without limitation, the grant of shares based upon certain conditions, the grant
of securities convertible into Common Stock and the grant of stock appreciation
rights, phantom stock awards or stock units.
7. GENERAL PROVISIONS APPLICABLE TO AWARDS
a. Transferability of Awards. Except as the Board may otherwise determine
or provide in an Award, Awards shall not be sold, assigned, transferred, pledged
or otherwise encumbered by the person to whom they are granted, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the life of the Participant, shall be exercisable only
by the Participant. References to a Participant, to the extent relevant in the
context, shall include references to authorized transferees.
b. Documentation. Each Award under the Plan shall be evidenced by a
written instrument in such form as the Board shall determine or as executed by
an officer of the Company pursuant to authority delegated by the Board. Each
Award may contain terms and conditions in addition to those set forth in the
Plan provided that such terms and conditions do not contravene the provisions of
the Plan.
c. Board Discretion. The terms of each type of Award need not be
identical, and the Board need not treat Participants uniformly.
d. Termination of Status. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the directorship of a Participant and the extent to which, and the
period during which, the Participant, or the Participant's legal representative,
conservator, guardian or Designated Beneficiary, may exercise rights under the
Award.
e. Acquisition of the Company
(i) Consequences of an Acquisition. With respect to an Acquisition:
(x) all outstanding Options shall become exercisable in full immediately
prior to the consummation of the Acquisition; if the shares of Common Stock
subject to such Options are subject to repurchase provisions, then such
repurchase restrictions shall lapse upon the consummation of the
Acquisition; and all outstanding Options shall remain the obligation of the
Company or be assumed by the surviving or acquiring entity, and there shall
be automatically substituted for the shares of Common Stock then subject to
such Options the consideration payable with respect to the outstanding
shares of Common Stock in connection with the Acquisition; (y) all
Restricted Stock Awards then outstanding shall become immediately free of
all repurchase provisions upon the consummation of the Acquisition; and (z)
all other stock-based Awards shall become immediately exercisable,
realizable or vested in full, or shall be immediately free of all
repurchase provisions, as the case may be, upon the consummation of the
Acquisition.
Acquisition Defined. An "Acquisition" shall mean: (x) the sale of the
Company by merger in which the shareholders of the Company in their
capacity as such no longer own a majority of the outstanding equity
securities of the Company (or its successor); or (y) any sale of all or
substantially all of the assets or capital stock of the Company (other than
in a spin-off or similar transaction) or (z) any other acquisition of the
business of the Company, as determined by the Board.
(ii) Assumption of Options Upon Certain Events. In connection with a
merger or consolidation of an entity with the Company or the acquisition by
the Company of property or stock of an entity, the Board may grant Awards
under the Plan in substitution for stock and stock-based awards issued by
such entity or an affiliate thereof. The substitute Awards shall be granted
on such terms and conditions as the Board considers appropriate in the
circumstances.
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(iii) Pooling-of Interests-Accounting. If the Company proposes to
engage in an Acquisition intended to be accounted for as a
pooling-of-interests, and in the event that the provisions of this Plan or
of any Award hereunder, or any actions of the Board taken in connection
with such Acquisition, are determined by the Company's or the acquiring
company's independent public accountants to cause such Acquisition to fail
to be accounted for as a pooling-of-interests, then such provisions or
actions shall be amended or rescinded by the Board, without the consent of
any Participant, to be consistent with pooling-of-interests accounting
treatment for such Acquisition.
(iv) Parachute Awards. Notwithstanding the provisions of Section
7(e)(i), if, in connection with an Acquisition described therein, a tax
under Section 4999 of the Code would be imposed on the Participant (after
taking into account the exceptions set forth in Sections 280G(b)(4) and
280G(b)(5) of the Code), then the number of Awards which shall become
exercisable, realizable or vested as provided in such section shall be
reduced (or delayed), to the minimum extent necessary, so that no such tax
would be imposed on the Participant (the Awards not becoming so
accelerated, realizable or vested, the "Parachute Awards"); provided,
however, that if the "aggregate present value" of the Parachute Awards
would exceed the tax that, but for this sentence, would be imposed on the
Participant under Section 4999 of the Code in connection with the
Acquisition, then the Awards shall become immediately exercisable,
realizable and vested without regard to the provisions of this sentence.
For purposes of the preceding sentence, the "aggregate present value" of an
Award shall be calculated on an after-tax basis (other than taxes imposed
by Section 4999 of the Code) and shall be based on economic principles
rather than the principles set forth under Section 280G of the Code and the
regulations promulgated thereunder. All determinations required to be made
under this Section 7(e)(iv) shall be made by the Company.
f. Withholding. Each Participant shall pay to the Company, or make
provisions satisfactory to the Company for payment of, any taxes required by law
to be withheld in connection with Awards to such Participant no later than the
date of the event creating the tax liability. The Board may allow Participants
to satisfy such tax obligations in whole or in part by transferring shares of
Common Stock, including shares retained from the Award creating the tax
obligation, valued at their fair market value (as determined by the Board or as
determined pursuant to the applicable option agreement). The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to a Participant.
g. Amendment of Awards. The Board may amend, modify or terminate any
outstanding Award including, but not limited to, substituting therefor another
Award of the same or a different type, and changing the date of exercise or
realization, provided that, except as otherwise provided in Section 7(e)(iii),
the Participant's consent to such action shall be required unless the Board
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.
h. Conditions on Delivery of Stock. The Company will not be obligated to
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.
i. Acceleration. The Board may at any time provide that any Options shall
become immediately exercisable in full or in part, that any Restricted Stock
Awards shall be free of some or all restrictions, or that any other stock-based
Awards may become exercisable in full or in part or free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be, despite the fact that the foregoing actions may cause the
application of Sections 280G and 4999 of the Code if a change in control of the
Company occurs.
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8. MISCELLANEOUS
a. Definitions.
(i) "Company," for purposes of eligibility under the Plan, shall
include any present or future subsidiary corporations of OneSource
Information Services, Inc. as defined in Section 424(f) of the Code (a
"Subsidiary"), and any present or future parent corporation of XYZ Inc., as
defined in Section 424(e) of the Code. For purposes of Awards other than
Incentive Stock Options, the term "Company" shall include any other
business venture in which the Company has a direct or indirect significant
interest, as determined by the Board in its sole discretion.
(ii) "Code" means the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder.
b. No Right To Continued Directorship or Other Status. No person shall
have any claim or right to be granted an Award, and the grant of an Award shall
not be construed as giving a Participant the right to continued directorship or
any other relationship with the Company. The Company expressly reserves the
right at any time to dismiss or otherwise terminate its relationship with a
Participant free from any liability or claim under the Plan.
c. No Rights As Stockholder. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder thereof.
d. Effective Date and Term of Plan. The Plan shall become effective on
the date on which it is adopted by the Board. No Awards shall be granted under
the Plan after the completion of ten years from the date on which the Plan was
adopted by the Board, but Awards previously granted may extend beyond that date.
e. Amendment of Plan. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time.
f. Governing Law. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
Delaware, without regard to any applicable conflicts of law.
Adopted by the Board of Directors on
March 23, 2001
Approved by the stockholders on
May 24, 2001
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APPENDIX D
CERTIFICATE OF AMENDMENT
OF
SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
ONESOURCE INFORMATION SERVICES, INC.
OneSource Information Services, Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, by written consent
dated March 23, 2001, in accordance with the provisions of Section 141(f) of the
General Corporation Law of the State of Delaware (the "DGCL") and Article
ELEVENTH of the Corporation's Amended and Restated Certificate of Incorporation,
duly adopted the following resolution setting forth a proposed amendment to the
Corporation's Second Amended and Restated Certificate of Incorporation. The
resolution setting forth the proposed amendment is as follows:
RESOLVED: That the following proposed amendment and restatement of the
first paragraph of Article FOURTH of the Corporation's Second Amended and
Restated Certificate of Incorporation, increasing the number of shares of
the Corporation's Common Stock authorized for issuance from 20,000,000
shares to 35,000,000 shares be recommended to the stockholders of the
Corporation for approval at the next Annual Meeting of Stockholders as
being advisable and in the best interests of the Corporation:
"FOURTH. The total number of shares of all classes of capital stock
which the Corporation shall have authority to issue is 36,000,000
shares, consisting of 35,000,000 shares of Common Stock with a par value
of $.01 per share (the "Common Stock") and 1,000,000 shares of Preferred
Stock with a par value of $.01 per share (the "Preferred Stock").
SECOND: That the stockholders of the Corporation duly approved such
amendment at the Annual Meeting of Stockholders held on May 24, 2001 in
accordance with the provisions of Section 211 of the DGCL and with Article I,
Section 1.2 of the Second Amended and Restated By-Laws of the Corporation.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Daniel J. Schimmel, President and Chief Executive Officer, and
attested to by Roy D. Landon, Secretary, this day of , 2001.
ONESOURCE INFORMATION SERVICES, INC.
By:
------------------------------------
Daniel J. Schimmel
President and Chief Executive
Officer
ATTEST:
- --------------------------------------
Roy D. Landon
Secretary
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APPENDIX E
ONESOURCE INFORMATION SERVICES, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE 1
PURPOSE
This 1999 Employee Stock Purchase Plan (the "Plan") is intended to
encourage stock ownership by all eligible employees of OneSource Information
Services, Inc. (the "Company"), a Delaware corporation, and its participating
subsidiaries (as defined in Article 17) so that they may share in the growth of
the Company by acquiring or increasing their proprietary interest in the
Company. The Plan is designed to encourage eligible employees to remain in the
employ of the Company and its participating subsidiaries. The Plan is intended
to constitute an "employee stock purchase plan" within the meaning of Section
423(b) of the Internal Revenue Code of 1986, as amended (the "Code").
ARTICLE 2
ADMINISTRATION OF THE PLAN
The Plan may be administered by a committee appointed by the Board of
Directors of the Company (the "Committee"). The Committee shall consist of not
less than two members of the Company's Board of Directors. The Board of
Directors may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, howsoever caused, shall be filled by the
Board of Directors. The Committee may select one of its members as Chairman, and
shall hold meetings at such times and places as it may determine. Acts by a
majority of the Committee, or acts reduced to or approved in writing by a
majority of the members of the Committee, shall be the valid acts of the
Committee.
The interpretation and construction by the Committee of any provisions of
the Plan or of any option granted under it shall be final, unless otherwise
determined by the Board of Directors. The Committee may from time to time adopt
such rules and regulations for carrying out the Plan as it may deem best,
provided that any such rules and regulations shall be applied on a uniform basis
to all employees under the Plan. No member of the Board of Directors or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted under it.
In the event the Board of Directors fails to appoint or refrains from
appointing a Committee, the Board of Directors shall have all power and
authority to administer the Plan. In such event, the word "Committee" wherever
used herein shall be deemed to mean the Board of Directors.
ARTICLE 3
ELIGIBLE EMPLOYEES
All employees of the Company or any of its participating subsidiaries whose
customary employment is more than 20 hours per week and for more than five
months in any calendar year and who have completed at least three months service
shall be eligible to receive options under the Plan to purchase common stock of
the Company, and all eligible employees shall have the same rights and
privileges hereunder. Persons who are eligible employees on the first business
day of any Payment Period (as defined in Article 5) shall receive their options
as of such day. Persons who become eligible employees after any date on which
options are granted under the Plan shall be granted options on the first day of
the next succeeding Payment Period on which options are granted to eligible
employees under the Plan. In no event, however, may an employee be granted an
option if such employee, immediately after the option was granted, would be
treated as owning stock possessing five percent or more of the total combined
voting power or value of all classes of stock of the Company or of any parent
corporation or subsidiary corporation, as the terms "parent corporation" and
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"subsidiary corporation" are defined in Section 424(e) and (f) of the Code. For
purposes of determining stock ownership under this paragraph, the rules of
Section 424(d) of the Code shall apply, and stock which the employee may
purchase under outstanding options shall be treated as stock owned by the
employee.
ARTICLE 4
STOCK SUBJECT TO THE PLAN
The stock subject to the options under the Plan shall be shares of the
Company's authorized but unissued common stock, par value $.01 par value per
share (the "Common Stock"), or shares of Common Stock reacquired by the Company,
including shares purchased in the open market. The aggregate number of shares
which may be issued pursuant to the Plan is 200,000, subject to adjustment as
provided in Article 12. If any option granted under the Plan shall expire or
terminate for any reason without having been exercised in full or shall cease
for any reason to be exercisable in whole or in part, the unpurchased shares
subject thereto shall again be available under the Plan.
ARTICLE 5
PAYMENT PERIOD AND STOCK OPTIONS
The first Payment Period during which payroll deductions will be
accumulated under the Plan shall commence on June 1, 1999 and shall end on
January 31, 2000. The second Payment Period will commence on February 1, 2000
and shall end on July 31, 2000. The third Payment Period will commence on August
1, 2000 and shall end on February 28, 2001. For the remainder of the duration of
the Plan, Payment Periods shall consist of the six-month periods commencing on
March 1 and September 1 and ending on August 31 and February 28 (or February 29
in the case of a leap year), respectively, of each calendar year.
Twice each year, on the first business day of each Payment Period, the
Company will grant to each eligible employee who is then a participant in the
Plan an option to purchase on the last day of such Payment Period, at the Option
Price hereinafter provided for, a maximum of 1,000 shares, on condition that
such employee remains eligible to participate in the Plan throughout the
remainder of such Payment Period. The participant shall be entitled to exercise
the option so granted only to the extent of the participant's accumulated
payroll deductions on the last day of such Payment Period. If the participant's
accumulated payroll deductions on the last day of the Payment Period would
enable the participant to purchase more than 1,000 shares except for the
1,000-share limitation, the excess of the amount of the accumulated payroll
deductions over the aggregate purchase price of the 1,000 shares shall be
promptly refunded to the participant by the Company, without interest. The
Option Price per share for each Payment Period shall be the lesser of (i) 85% of
the average market price of the Common Stock on the first business day of the
Payment Period and (ii) 85% of the average market price of the Common Stock on
the last business day of the Payment Period, in either event rounded up to the
nearest cent. The foregoing limitation on the number of shares subject to option
and the Option Price shall be subject to adjustment as provided in Article 12.
For purposes of the Plan, the term "average market price" on any date means
(i) the average (on that date) of the high and low prices of the Common Stock on
the principal national securities exchange on which the Common Stock is traded,
if the Common Stock is then traded on a national securities exchange; or (ii)
the last reported sale price (on that date) of the Common Stock on the NASDAQ
National Market, if the Common Stock is not then traded on a national securities
exchange; or (iii) the average of the closing bid and asked prices last quoted
(on that date) by an established quotation service for over-the-counter
securities, if the Common Stock is not reported on the NASDAQ National Market;
or (iv) if the Common Stock is not publicly traded, the fair market value of the
Common Stock as determined by the Committee after taking into consideration all
factors which it deems appropriate, including, without limitation, recent sale
and offer prices of the Common Stock in private transactions negotiated at arm's
length.
For purposes of the Plan, the term "business day" means a day on which
there is trading on the NASDAQ National Market or the aforementioned national
securities exchange, whichever is applicable
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pursuant to the preceding paragraph; and if neither is applicable, a day that is
not a Saturday, Sunday or legal holiday in Massachusetts.
No employee shall be granted an option which permits the employee's right
to purchase stock under the Plan, and under all other Section 423(b) employee
stock purchase plans of the Company and any parent or subsidiary corporations,
to accrue at a rate which exceeds $25,000 of fair market value of such stock
(determined on the date or dates that options on such stock were granted) for
each calendar year in which such option is outstanding at any time. The purpose
of the limitation in the preceding sentence is to comply with Section 423(b)(8)
of the Code. If the participant's accumulated payroll deductions on the last day
of the Payment Period would otherwise enable the participant to purchase Common
Stock in excess of the Section 423(b)(8) limitation described in this paragraph,
the excess of the amount of the accumulated payroll deductions over the
aggregate purchase price of the shares actually purchased shall be promptly
refunded to the participant by the Company, without interest.
ARTICLE 6
EXERCISE OF OPTION
Each eligible employee who continues to be a participant in the Plan on the
last day of a Payment Period shall be deemed to have exercised his or her option
on such date and shall be deemed to have purchased from the Company such number
of full shares of Common Stock reserved for the purpose of the Plan as the
participant's accumulated payroll deductions on such date will pay for at the
Option Price, subject to the 1,000-share limit of the option and the Section
423(b)(8) limitation described in Article 5. If the individual is not a
participant on the last day of a Payment Period, then he or she shall not be
entitled to exercise his or her option. Only full shares of Common Stock may be
purchased under the Plan. Unused payroll deductions remaining in a participant's
account at the end of a Payment Period by reason of the inability to purchase a
fractional share shall be carried forward to the next Payment Period.
ARTICLE 7
AUTHORIZATION FOR ENTERING THE PLAN
An employee may elect to enter the Plan by filling out, signing and
delivering to the Company an authorization:
A. Stating the percentage to be deducted regularly from the employee's
pay;
B. Authorizing the purchase of stock for the employee in each Payment
Period in accordance with the terms of the Plan; and
C. Specifying the exact name or names in which stock purchased for the
employee is to be issued as provided under Article 11 hereof.
Such authorization must be received by the Company at least ten days before the
first day of the next succeeding Payment Period and shall take effect only if
the employee is an eligible employee on the first business day of such Payment
Period.
Unless a participant files a new authorization or withdraws from the Plan,
the deductions and purchases under the authorization the participant has on file
under the Plan will continue from one Payment Period to succeeding Payment
Periods as long as the Plan remains in effect.
The Company will accumulate and hold for each participant's account the
amounts deducted from his or her pay. No interest will be paid on these amounts.
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ARTICLE 8
MAXIMUM AMOUNT OF PAYROLL DEDUCTIONS
An employee may authorize payroll deductions in an amount (expressed as a
whole percentage) not less than one percent (1%) but not more than ten percent
(10%) of the employee's total compensation, including base pay or salary and any
overtime, bonuses or commissions.
ARTICLE 9
CHANGE IN PAYROLL DEDUCTIONS
Deductions may not be increased or decreased during a Payment Period.
However, a participant may withdraw in full from the Plan.
ARTICLE 10
WITHDRAWAL FROM THE PLAN
A participant may withdraw from the Plan (in whole but not in part) at any
time prior to the last day of a Payment Period by delivering a withdrawal notice
to the Company.
To re-enter the Plan, an employee who has previously withdrawn must file a
new authorization at least ten days before the first day of the next Payment
Period in which he or she wishes to participate. The employee's re-entry into
the Plan becomes effective at the beginning of such Payment Period, provided
that he or she is an eligible employee on the first business day of the Payment
Period.
ARTICLE 11
ISSUANCE OF STOCK
Certificates for stock issued to participants shall be delivered as soon as
practicable after each Payment Period by the Company's transfer agent.
Stock purchased under the Plan shall be issued only in the name of the
participant, or if the participant's authorization so specifies, in the name of
the participant and another person of legal age as joint tenants with rights of
survivorship.
ARTICLE 12
ADJUSTMENTS
Upon the happening of any of the following described events, a
participant's rights under options granted under the Plan shall be adjusted as
hereinafter provided:
A. In the event that the shares of Common Stock shall be subdivided or
combined into a greater or smaller number of shares or if, upon a
reorganization, split-up, liquidation, recapitalization or the like of the
Company, the shares of Common Stock shall be exchanged for other securities
of the Company, each participant shall be entitled, subject to the
conditions herein stated, to purchase such number of shares of Common Stock
or amount of other securities of the Company as were exchangeable for the
number of shares of Common Stock that such participant would have been
entitled to purchase except for such action, and appropriate adjustments
shall be made in the purchase price per share to reflect such subdivision,
combination or exchange; and
B. In the event the Company shall issue any of its shares as a stock
dividend upon or with respect to the shares of stock of the class which
shall at the time be subject to option hereunder, each participant upon
exercising such an option shall be entitled to receive (for the purchase
price paid upon such exercise) the shares as to which the participant is
exercising his or her option and, in addition thereto (at
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no additional cost), such number of shares of the class or classes in which
such stock dividend or dividends were declared or paid, and such amount of
cash in lieu of fractional shares, as is equal to the number of shares
thereof and the amount of cash in lieu of fractional shares, respectively,
which the participant would have received if the participant had been the
holder of the shares as to which the participant is exercising his or her
option at all times between the date of the granting of such option and the
date of its exercise.
Upon the happening of any of the foregoing events, the class and aggregate
number of shares set forth in Article 4 hereof which are subject to options
which have been or may be granted under the Plan and the limitations set forth
in the second paragraph of Article 5 shall also be appropriately adjusted to
reflect the events specified in paragraphs A and B above. Notwithstanding the
foregoing, any adjustments made pursuant to paragraphs A or B shall be made only
after the Committee, based on advice of counsel for the Company, determines
whether such adjustments would constitute a "modification" (as that term is
defined in Section 424 of the Code). If the Committee determines that such
adjustments would constitute a modification, it may refrain from making such
adjustments.
If the Company is to be consolidated with or acquired by another entity in
a merger, a sale of all or substantially all of the Company's assets or
otherwise (an "Acquisition"), the Committee or the board of directors of any
entity assuming the obligations of the Company hereunder (the "Successor Board")
shall, with respect to options then outstanding under the Plan, either (i) make
appropriate provision for the continuation of such options by arranging for the
substitution on an equitable basis for the shares then subject to such options
either (a) the consideration payable with respect to the outstanding shares of
the Common Stock in connection with the Acquisition, (b) shares of stock of the
successor corporation, or a parent or subsidiary of such corporation, or (c)
such other securities as the Successor Board deems appropriate, the fair market
value of which shall not materially exceed the fair market value of the shares
of Common Stock subject to such options immediately preceding the Acquisition;
or (ii) terminate each participant's options in exchange for a cash payment
equal to the excess of (a) the fair market value on the date of the Acquisition,
of the number of shares of Common Stock that the participant's accumulated
payroll deductions as of the date of the Acquisition could purchase, at an
option price determined with reference only to the first business day of the
applicable Payment Period and subject to the 1,000-share limit, Code Section
423(b)(8) and fractional-share limitations on the amount of stock a participant
would be entitled to purchase, over (b) the result of multiplying such number of
shares by such option price.
The Committee or Successor Board shall determine the adjustments to be made
under this Article 12, and its determination shall be conclusive.
ARTICLE 13
NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS
An option granted under the Plan may not be transferred or assigned and may
be exercised only by the participant.
ARTICLE 14
TERMINATION OF EMPLOYEE'S RIGHTS
Whenever a participant ceases to be an eligible employee because of
retirement, voluntary or involuntary termination, resignation, layoff,
discharge, death or for any other reason, his or her rights under the Plan shall
immediately terminate, and the Company shall promptly refund, without interest,
the entire balance of his or her payroll deduction account under the Plan.
Notwithstanding the foregoing, eligible employment shall be treated as
continuing intact while a participant is on military leave, sick leave or other
bona fide leave of absence, for up to 90 days, or for so long as the
participant's right to re-employment is guaranteed either by statute or by
contract, if longer than 90 days.
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ARTICLE 15
TERMINATION AND AMENDMENTS TO PLAN
The Plan may be terminated at any time by the Company's Board of Directors
but such termination shall not affect options then outstanding under the Plan.
It will terminate in any case when all or substantially all of the unissued
shares of stock reserved for the purposes of the Plan have been purchased. If at
any time shares of stock reserved for the purpose of the Plan remain available
for purchase but not in sufficient number to satisfy all then unfilled purchase
requirements, the available shares shall be apportioned among participants in
proportion to the amount of payroll deductions accumulated on behalf of each
participant that would otherwise be used to purchase stock, and the Plan shall
terminate. Upon such termination or any other termination of the Plan, all
payroll deductions not used to purchase stock will be refunded, without
interest.
The Committee or the Board of Directors may from time to time adopt
amendments to the Plan provided that, without the approval of the stockholders
of the Company, no amendment may (i) increase the number of shares that may be
issued under the Plan; (ii) change the class of employees eligible to receive
options under the Plan, if such action would be treated as the adoption of a new
plan for purposes of Section 423(b) of the Code; or (iii) cause Rule 16b-3 under
the Securities Exchange Act of 1934 to become inapplicable to the Plan.
ARTICLE 16
LIMITS ON SALE OF STOCK PURCHASED UNDER THE PLAN
The Plan is intended to provide shares of Common Stock for investment and
not for resale. The Company does not, however, intend to restrict or influence
any employee in the conduct of his or her own affairs. An employee may,
therefore, sell stock purchased under the Plan at any time the employee chooses,
subject to compliance with any applicable federal or state securities laws and
subject to any restrictions imposed under Article 21 to ensure that tax
withholding obligations are satisfied. THE EMPLOYEE ASSUMES THE RISK OF ANY
MARKET FLUCTUATIONS IN THE PRICE OF THE STOCK.
ARTICLE 17
PARTICIPATING SUBSIDIARIES
The term "participating subsidiary" shall mean any present or future
subsidiary of the Company, as that term is defined in Section 424(f) of the
Code, which is designated from time to time by the Board of Directors to
participate in the Plan. The Board of Directors shall have the power to make
such designation before or after the Plan is approved by the stockholders.
ARTICLE 18
OPTIONEES NOT STOCKHOLDERS
Neither the granting of an option to an employee nor the deductions from
his or her pay shall constitute such employee a stockholder of the shares
covered by an option until such shares have been actually purchased by the
employee.
ARTICLE 19
APPLICATION OF FUNDS
The proceeds received by the Company from the sale of Common Stock pursuant
to options granted under the Plan will be used for general corporate purposes.
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ARTICLE 20
NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION
By electing to participate in the Plan, each participant agrees to notify
the Company in writing immediately after the participant transfers Common Stock
acquired under the Plan, if such transfer occurs within two years after the
first business day of the Payment Period in which such Common Stock was
acquired. Each participant further agrees to provide any information about such
a transfer as may be requested by the Company or any subsidiary corporation in
order to assist it in complying with the tax laws. Such dispositions generally
are treated as "disqualifying dispositions" under Sections 421 and 424 of the
Code, which have certain tax consequences to participants and to the Company and
its participating subsidiaries.
ARTICLE 21
WITHHOLDING OF ADDITIONAL INCOME TAXES
By electing to participate in the Plan, each participant acknowledges that
the Company and its participating subsidiaries are required to withhold taxes
with respect to the amounts deducted from the participant's compensation and
accumulated for the benefit of the participant under the Plan, and each
participant agrees that the Company and its participating subsidiaries may
deduct additional amounts from the participant's compensation, when amounts are
added to the participant's account, used to purchase Common Stock or refunded,
in order to satisfy such withholding obligations. Each participant further
acknowledges that when Common Stock is purchased under the Plan the Company and
its participating subsidiaries may be required to withhold taxes with respect to
all or a portion of the difference between the fair market value of the Common
Stock purchased and its purchase price, and each participant agrees that such
taxes may be withheld from compensation otherwise payable to such participant.
It is intended that tax withholding will be accomplished in such a manner that
the full amount of payroll deductions elected by the participant under Article 7
will be used to purchase Common Stock. However, if amounts sufficient to satisfy
applicable tax withholding obligations have not been withheld from compensation
otherwise payable to any participant, then, notwithstanding any other provision
of the Plan, the Company may withhold such taxes from the participant's
accumulated payroll deductions and apply the net amount to the purchase of
Common Stock, unless the participant pays to the Company, prior to the exercise
date, an amount sufficient to satisfy such withholding obligations. Each
participant further acknowledges that the Company and its participating
subsidiaries may be required to withhold taxes in connection with the
disposition of stock acquired under the Plan and agrees that the Company or any
participating subsidiary may take whatever action it considers appropriate to
satisfy such withholding requirements, including deducting from compensation
otherwise payable to such participant an amount sufficient to satisfy such
withholding requirements or conditioning any disposition of Common Stock by the
participant upon the payment to the Company or such subsidiary of an amount
sufficient to satisfy such withholding requirements.
ARTICLE 22
GOVERNMENTAL REGULATIONS
The Company's obligation to sell and deliver shares of Common Stock under
the Plan is subject to the approval of any governmental authority required in
connection with the authorization, issuance or sale of such shares.
Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
identify shares of Common Stock issued under the Plan on its stock ownership
records and send tax information statements to employees and former employees
who transfer title to such shares.
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ARTICLE 23
GOVERNING LAW
The validity and construction of the Plan shall be governed by the laws of
Delaware, without giving effect to the principles of conflicts of law thereof.
ARTICLE 24
APPROVAL OF BOARD OF DIRECTORS AND STOCKHOLDERS OF THE COMPANY
The Plan was adopted by the Board of Directors on February 17, 1999 and was
approved by the stockholders of the Company on April 21, 1999.
The Plan was amended by the Board of Directors on April 21, 1999 to change
the Payment Periods as set forth in the second sentence of Article 5.
The Plan was amended by the Board of Directors on July 18, 2000 to replace
the first paragraph in its entirety of Article 5.
The Plan was amended by the Board of Directors on March 23, 2001 to
increase the number of shares issuable pursuant to the plan to 200,000, and such
amendment was approved by the stockholders of the Company on May 24, 2001.
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Proxy
ONESOURCE INFORMATION SERVICES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 24, 2001
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Daniel J. Schimmel and Roy D. Landon, and each
or both of them, proxies, with full power of substitution to vote all shares of
stock of the Company which the undersigned is entitled to vote at the Annual
Meeting of Stockholders of OneSource Information Services, Inc. to be held on
Thursday, May 24, 2001 at 10:00 a.m., at Testa, Hurwitz & Thibeault, LLP, 125
High Street, High Street Tower, 22nd Floor, Boston, Massachusetts 02110, and at
any adjournments thereof, upon matters set forth in the Notice of Annual Meeting
of Stockholders and Proxy Statement, dated on or about April 18, 2001, a copy of
which has been received by the undersigned. The proxies are further authorized
to vote, in their discretion, upon such other business as may properly come
before the meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
(TO BE SIGNED ON REVERSE SIDE)
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
ONESOURCE INFORMATION SERVICES, INC.
MAY 24, 2001
* Please Detach and Mail in the Envelope Provided *
Please mark your
A [X] votes as in this
example.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR THE ELECTION OF ALL THE DIRECTORS AND FOR
THE PROPOSALS IN ITEMS 2, 3, 4, 5 AND 6.
1. To select four directors FOR ALL NOMINEES WITHHOLD AUTHORITY
to the Board of Directors, LISTED AT RIGHT TO VOTE FOR ALL
each to serve for a term (except as marked NOMINEES LISTED
of one year or until his to the contrary AT RIGHT
successor is duly elected below)
and qualified. [ ] [ ]
INSTRUCTIONS: To withhold authority to NOMINEES: Martin Kahn
vote for any individual nominee, strike Daniel J. Schimmel
a line through the nominee's name listed Carl P. Fisher
at right. Gregg S. Newmark
2. To ratify the 1999 Stock Option FOR AGAINST ABSTAIN
and Incentive Plan and approve
an amendment to the plan which [ ] [ ] [ ]
includes a proposed increase in
the aggregate number of shares
of Common Stock that may be
issued pursuant to said plan by
1,000,000 shares.
3. To approve the adoption of the [ ] [ ] [ ]
Company's 2001 Non-Employee
Director Stock Option Plan.
4. To approve an amendment to the [ ] [ ] [ ]
Company's Second Amended and
Restated Certificate of
Incorporation increasing from
20,000,000 to 35,000,000 the
number of authorized shares of
Common Stock of the Company.
5. To approve an amendment to the [ ] [ ] [ ]
Company's 1999 Employee Stock
Purchase Plan to increase the
aggregate number of shares of
Common Stock that may be issued
pursuant to said plan by 100,000
shares.
6. To ratify the selection of the [ ] [ ] [ ]
firm of PricewaterhouseCoopers
LLP, independent public
accountants, as auditors for the
fiscal year ending December 31,
2001.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE PROXIES SHALL VOTE FOR
THE ELECTION OF THE NOMINEES LISTED ABOVE, FOR THE RATIFICATION OF AND
AMENDMENT TO THE 1999 STOCK OPTION AND INCENTIVE PLAN, FOR THE ADOPTION OF THE
2001 NON-EMPLOYEE DIRECTOR PLAN, FOR THE AMENDMENT TO THE SECOND AMENDED AND
RESTATED CERTIFICATE OF INCORPORATION, FOR THE AMENDMENT TO THE 1999 EMPLOYEE
STOCK PURCHASE PLAN AND FOR THE RATIFICATION OF THE APPOINTMENT OF AUDITORS.
Signature Signature, if held jointly DATED 2001
----------- -------------- -----
NOTE: Signatures should be identical with the name typed on the Proxy. Joint
owners should each sign personally. Persons signing as attorney, executor,
administrator, trustee or guardian should give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If partnership, please sign in partnership name by
authorized person.