SCHEDULE 14A
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INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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LIGHTBRIDGE, INC.
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(Name of Registrant as Specified inIn Its Charter)
Not Applicable
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[LOGO]
LIGHTBRIDGE, INC.
67 SOUTH BEDFORD STREET
BURLINGTON, MASSACHUSETTS 01803
NOTICE OF SPECIAL MEETING IN LIEU OF 19992000 ANNUAL MEETING OF STOCKHOLDERS
Dear Stockholder:
We invite you to attend our Special Meeting in Lieu of 19992000 Annual Meeting
of Stockholders, which is being held as follows:
DATE: Wednesday, June 9, 1999Thursday, May 25, 2000
TIME: 10:00 a.m.
LOCATION: Foley, Hoag & Eliot LLP
One Post Office Square
Sixteenth Floor
Boston, Massachusetts 02109
At the Meeting, we will ask you and our other stockholders to:
- elect two directorsone director to a three-year terms;term;
- approve an increase in the number of shares of common stock issuable under
our 1996 Incentive and Non-Qualified Option Plan;
- approve an increase in the number of shares of common stock issuable under
our 1996 Employee Stock Purchase Plan; and
- consider any other business properly presented at the Meeting.
You may vote on these matters in person or by proxy. Whether you plan to
attend the Meeting or not, we ask that you complete and return the enclosed
proxy card promptly in the enclosed addressed, stampedpostage-paid envelope, so that
your shares will be represented and voted at the Meeting in accordance with your
wishes. If you attend the Meeting, you may withdraw your proxy and vote your
shares in person. Only stockholders of record at the close of business on
May 3,
1999March 27, 2000 may vote at the Meeting.
By order of the Board of Directors,
/s/ Alexander H. Pyle
Alexander H. Pyle
SECRETARY
May 7, 1999April 10, 2000
PROXY STATEMENT
FOR THE
LIGHTBRIDGE, INC.
SPECIAL MEETING IN LIEU OF
19992000 ANNUAL MEETING OF STOCKHOLDERS
TABLE OF CONTENTS
PAGE
-------------
INFORMATION ABOUT THE MEETING
This Proxy Solicitation....................................................................................Solicitation..................................... 2
How to Vote................................................................................................Vote................................................. 2
Quorum Required to Transact Business.......................................................................Business........................ 3
Availability of Auditors...................................................................................Auditors.................................... 3
DISCUSSION OF PROPOSALPROPOSALS
Proposal 1: Proposal to Elect Two Directors............................................................................One Director.................. 4
Other Matters.............................................................................................. 5
Stockholder Proposals for 2000 Annual Meeting.............................................................. 5Proposal 2: Amendment of Our 1996 Incentive and Nonqualified
Stock Option Plan......................................... 4
Proposal 3: Amendment of Our 1996 Employee Stock Purchase
Plan...................................................... 8
INFORMATION ABOUT DIRECTORS
Background Information About Directors Continuing in
Office................................................ 6Office.................................................... 11
Meetings of the Board of Directors......................................................................... 6Directors.......................... 11
Committees of the Board of Directors....................................................................... 6Directors........................ 11
Compensation Committee Interlocks and Insider
Participation................................................ 7Participation............................................. 12
Compensation of Directors.................................................................................. 7Directors................................... 12
INFORMATION ABOUT EXECUTIVE OFFICERS
Background Information About Executive Officers............................................................ 8Officers............. 13
Compensation of Executive Officers:
Summary Compensation Table for 1996, 1997 and 1998....................................................... 10
Option Grants in 1998.................................................................................... 11
Aggregated Option Exercises in 1998 and Option Values at December 31, 1998............................... 12
Report of the Compensation Committee on Repricing of Options in 1998..................................... 12
Option Repricings from 1989 to 1998...................................................................... 13
Report of the Compensation Committee on Executive Compensation for 1998.................................. 13Officers.......................... 14
Related Party Transactions................................................................................. 15Transaction................................... 17
INFORMATION ABOUT COMMON STOCK OWNERSHIP AND PERFORMANCE
Stock Owned by Directors, Executive Officers and
Greater-than-5% Stockholders.............................. 1618
Compliance with Reporting Requirements..................................................................... 18Requirements...................... 20
Performance Graph.......................................................................................... 18Graph........................................... 20
OTHER MATTERS
Other Business.............................................. 21
Stockholder Proposals for 2001 Annual Meeting............... 21
INFORMATION ABOUT THE MEETING
THIS PROXY SOLICITATION
We have sent you this proxy statement and the enclosed proxy card because
our Board of Directors is soliciting your proxy to vote at the Meeting
(including any adjournment or postponement of the Meeting).
- THIS PROXY STATEMENT summarizes information about the proposals to be
considered at the Meeting and other information you may find useful in
determining how to vote.
- THE PROXY CARD is the means by which you actually authorize another person
to vote your shares in accordance with your instructions.
We will pay the cost of soliciting these proxies. Our directors, officers
and employees may solicit proxies in person or by mail, telephone or facsimile.
We will reimburse brokers and other nominee holders of shares for expenses they
incur in forwarding proxy materials to the beneficial owners of those shares. We
haveAt
present, we do not retainedplan to retain the services of any proxy solicitation firm to
assist us in this solicitation.
We are mailing this proxy statement and the enclosed proxy card to
stockholders for the first time on or about May 7, 1999.April 10, 2000. In this mailing, we
are including a copy of our 19981999 Annual Report to Stockholders. We will send you,
without charge, a copy ofStockholders and our Annual
Report on Form 10-K for the year ended December 31, 19981999 (excluding exhibits),
as filed with the Securities and Exchange Commission, if you request it in writing. Requests may be sent to
Joseph S. Tibbetts, Jr., Senior Vice President, Finance & Administration and
Chief Financial Officer, at our address set forth on the Notice appearing on the
cover of this Proxy Statement.Commission.
HOW TO VOTE
You are entitled to one vote at the Meeting for each share of common stock
registered in your name at the close of business on May 3, 1999.March 27, 2000.
You may vote your shares at the Meeting in person or by proxy.
- TO VOTE IN PERSON, you must attend the Meeting, and then complete and
submit the ballot provided at the Meeting.
- TO VOTE BY PROXY, you must complete and return the enclosed proxy card.
Your proxy will be valid only if you sign, date and return it before
the Meeting. By completing and returning the proxy card, you will
direct the designated persons to vote your shares at the Meeting in the
manner youyour specify in the proxy card. If you complete all of the proxy
card except the voting instructions, then the designated persons will
vote your shares for each of the election of nominated directors.three proposals described in this
proxy statement. If any other business properly comes before the
Meeting, then the designated persons will have the discretion to vote
in any manner.
If you complete and return a proxy, you may revoke it at any time before it
is exercised by taking one of the following actions:
- send written notice to Alexander H. Pyle, our Secretary, at our address
set forth on the Notice appearing on the cover of this proxy statement;
- send us another signed proxy with a later date; or
- attend the Meeting, notify our Secretary that you are present, and then
vote in person.
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QUORUM REQUIRED TO TRANSACT BUSINESS
At the close of business on April 20, 1999, 16,141,514March 27, 2000, 16,663,579 shares of common
stock were outstanding. Our by-laws require that a majority of our common stock
be represented, in person or by proxy, at the
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Meeting in order to constitute the quorum we need to transact business. We will
count abstentions and broker non-votes in determining whether a quorum exists.
AVAILABILITY OF AUDITORS
Deloitte & Touche LLP has been selected by our Board of Directors as the
independent public accountants to audit our financial statements for the year
ending December 31, 1999.2000. Deloitte & Touche LLP also served as our auditors in
1998.1999. We expect that representatives of Deloitte & Touche LLP will attend the
Meeting, will have an opportunity to make a statement if they desire to do so,
and will be available to respond to appropriate questions.
3
DISCUSSION OF PROPOSALS
PROPOSAL 1: PROPOSAL TO ELECT TWO DIRECTORSONE DIRECTOR
The onlyfirst proposal on the agenda for the Meeting is the election of two
personsone
person to serve as a Class III directorsI director for a three-year termsterm beginning at the
Meeting and ending at the 20022003 Annual Meeting of Stockholders. Our Board of
Directors currently has fivefour members and is divided into three classes, two of
which have two membersone member and one of which has one member.two members. Each class of directors
serves a three-year term. We stagger these terms so that the term of only one
class expires each year.
Our Board of Directors has nominated Torrence C. Harder and Pamela D.A.
ReeveDebora J. Wilson for re-election as a
Class I director. A brief biography of Ms. Wilson, as of March 15, 2000,
follows. You will find information about Ms. Wilson's holdings of common stock
on page 18.
DEBORA J. WILSON............................. Ms. Wilson has served as one of our directors
CLASS I DIRECTOR since May 1998. Ms. Wilson is currently
President and Chief Executive Officer of
weather.com, a position she has held since
September 1999. From May 1998 to September
1999 she was Executive Vice President and
General Manager of The Weather Channel. From
August 1994 to May 1998, Ms. Wilson held
other senior-level positions at The Weather
Channel, including President, U.S. Products
and Distribution and Senior Vice
President--New Media. Prior to August 1994,
Ms. Wilson held various product development,
marketing and operations positions at Bell
Atlantic. Ms. Wilson is 42 years old.
If for any reason Ms. Wilson becomes unavailable for election, the persons
designated in the proxy card may vote the proxy for the election of a
substitute. Ms. Wilson has consented to serve as director if elected, and our
Board of Directors has no reason to believe that she will become unavailable for
election.
The nominee receiving the greatest number of votes cast will be elected as a
director. We will not count abstentions or broker non-votes when we tabulate
votes cast for the election of a director.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF
MS. WILSON.
PROPOSAL 2: AMENDMENT OF OUR 1996 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN
On March 10, 2000, our Board of Directors amended our 1996 Incentive and
Nonqualified Stock Option Plan to increase the number of shares available for
the grant of options under the plan from 1,000,000 to 2,350,000, subject to
adjustment in the event of stock splits, stock dividends, recapitalizations and
the like. Our Board of Directors is submitting this amendment to the 1996 Stock
Option Plan to our stockholders for approval. If our stockholders do not approve
Proposal 2, the total number of shares that may be issued pursuant to options
granted under the plan will remain at 1,000,000.
Options constitute a significant portion of the overall compensation of our
employees, including our executive officers. Options issued under the 1996 Stock
Option Plan also represent a significant form of compensation that we pay to
non-employee directors. Our Board of Directors, including the members of the
Compensation Committee, believes that we will derive substantial benefits from
increasing the aggregate number of options that we can issue under the 1996
Stock Option Plan. Our
4
Board of Directors believes that the proposed amendment, by enabling us to issue
additional options under the plan, will enable us to further align the interests
of our current directors, executive officers and other employees with the
interests of our stockholders. The Board also believes that the proposed
amendment will assist us to attract and retain key executives by enabling us to
offer competitive compensation packages.
In order to pass, this proposal must receive a majority of the votes cast
with respect to this matter. We will count abstentions but not broker non-votes
when we tabulate votes cast.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL TO APPROVE
THE AMENDMENT OF THE 1996 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN.
BACKGROUND
Our 1996 Stock Option Plan became effective in September 1996. From that
time to March 27, 2000, we granted options to purchase an aggregate of 956,534
shares of common stock (excluding options that have been cancelled) and at
March 27, 2000 we had only 43,466 shares of common stock available for the grant
of options under the plan. We also have a 1998 Non-Statutory Stock Option Plan,
which only permits us to grant options that do not qualify as incentive stock
options under the Internal Revenue Code. After examining our overall employee
compensation, our Board of Directors concluded that it was in our best interests
to make additional shares of common stock available for the grant of options
under the 1996 Stock Option Plan. On March 10, 2000, the Board adopted an
amendment to the 1996 Stock Option Plan to increase the total number of shares
of common stock that may be issued pursuant to options granted under the plan to
2,350,000. Under the terms of the plan, this amendment will not be effective
unless our stockholders approve the amendment within 12 months of its adoption.
PLAN ADMINISTRATION
Unless otherwise determined by the Board of Directors, the 1996 Stock Option
Plan must be administered by a plan committee consisting of at least two
"outside directors," who may be members of the Compensation Committee. For
purposes of the plan, an "outside director" is a person who
- is not an employee of Lightbridge or any affiliate
- is not a former employee of Lightbridge or any affiliate who is receiving
compensation for prior services during the taxable year of Lightbridge or
any affiliate
- has not been an officer of Lightbridge or any affiliate, and
- does not receive remuneration from Lightbridge or any affiliate in any
capacity other than as a director.
Our Board of Directors has appointed the Compensation Committee, which consists
of Mr. Harder and Ms. Wilson, as the plan committee. Mr. Harder and Ms. Wilson
are "non-employee directors" as that term is defined in the rules of the
Securities and Exchange Commission.
The plan committee selects the directors, officers and other employees who
will receive options and determines the option exercise price and other terms of
each option, subject to the provisions of the plan. The plan committee also has
the power to make changes to outstanding options under the plan, including the
power to reduce the exercise price, accelerate the vesting schedule and extend
the expiration date of any option. As a matter of policy, the plan committee
does not intend to exercise its power to reduce the exercise price of
outstanding options in the future.
The 1996 Stock Option Plan authorizes the grant of options to purchase
common stock intended to qualify as incentive stock options, as defined in
Section 422 of the Internal Revenue Code, and
5
options that do not so qualify. Options may be granted under the plan to our
directors, officers, other employees, and consultants and those of any of our
subsidiaries. As of March 22, 2000, approximately 450 such individuals were
eligible to participate in the plan, of which approximately 318 individuals had
received options under the plan.
The exercise price of incentive options granted under the 1996 Stock Option
Plan must equal or exceed the fair market value of the common stock on the date
of grant. The exercise price of incentive options granted under the plan to a
person who owns more than 10% of the combined voting power of all classes of our
outstanding capital stock or the outstanding capital stock of any of our
subsidiaries must equal or exceed 110% of the fair market value of the common
stock on the date of grant. The exercise price of nonqualified options granted
under the plan must equal or exceed the fair market value of our common stock on
the date of grant.
Each option expires no later than ten years after the date of grant or, in
the case of an option granted to a greater-than-ten-percent stockholder, five
years after the date of grant. The aggregate fair market value (at the time of
grant) of shares issuable pursuant to incentive options that are exercisable for
the first time in any calendar year may not exceed $100,000, unless a greater
amount is permitted by law. No person may be granted options under the plan to
purchase more than 500,000 shares of common stock in any calendar year,
including options that are subsequently forfeited, canceled or otherwise
terminated. For this purpose, the repricing of any option is deemed the grant of
a new option.
Options are not transferable except by will or by the laws of descent and
distribution, and during the holder's lifetime are exercisable only by the
holder. Options generally may not be exercised after the earliest of
- the expiration of the option,
- the employee's termination for cause,
- thirty days after termination of the holder's employment without cause,
and
- one year after the holder's death or permanent and total disability, if
the holder's death or permanent and total disability occurs before the
termination of the holder's employment.
The holder of an option may pay the purchase price for the shares subject to
the option with cash or a check or shares of our common stock or by cashless
exercise through a broker. In addition, if so permitted by the instrument
evidencing the option, a holder may pay the purchase price with a promissory
note. With the consent of the plan committee, a holder may also pay the purchase
price using any combination of the foregoing.
We intend, to file, as soon as practicable, a registration statement
covering the additional 1,350,000 shares of common stock that will be issuable
under the 1996 Stock Option Plan if Proposal 2 is approved by our stockholders.
Except in the case of shares issued to our affiliates, the shares of common
stock issued under the 1996 Stock Option Plan will be freely eligible for resale
in the public market if they are issued while a registration statement is
effective.
The 1996 Stock Option Plan terminates in October 2006, subject to earlier
termination by our Board of Directors or the earlier issuance of all shares
issuable under the plan. After the termination of the plan, we may not grant
options under the plan but options that are outstanding on the date of
termination are not affected by the termination.
NEW PLAN BENEFITS
Because the grant of options under the plan is discretionary, we are unable
to determine the dollar value and number of options that we will grant as a
result of the proposed amendment to any person,
6
including any executive officer, director or director-nominee, or any associate
of any executive officer, director or director-nominee. If the proposed
amendment had been in effect during 1999, it would not have affected the
determination of the number of options received by or allocated to participants
in 1999.
To date, grants of options under the 1996 Stock Option Plan to our
employees, officers and directors (excluding options that have been cancelled)
have been as follows:
TOTAL NUMBER
NAME OF OPTIONS GRANTED
- ---- ------------------
Pamela D. A. Reeve......................................... 24,000
Richard H. Antell.......................................... --
Douglas E. Blackwell....................................... 25,000
Brian P. Connolly.......................................... 44,000
Michael Adam Perfit........................................ --
All non-employee directors as a group...................... 40,000
All executive officers as a group.......................... 213,000
All non-executive officer employees as a group............. 703,534
As of March 27, 2000, 780,261 shares of common stock were subject to
outstanding options granted under the 1996 Stock Option Plan, 176,273 shares of
common stock had been purchased upon exercise of options granted thereunder and
43,466 shares of common stock remained available for future grants. As of
March 27, 2000, option prices and expiration dates for outstanding options
granted under the 1996 Stock Option Plan ranged from $3.72 to $28.13 per share
and from October 2, 2006 to December 15, 2009, respectively.
AMENDMENT OF 1996 STOCK OPTION PLAN
Our Board of Directors may amend or terminate the 1996 Stock Option Plan at
any time and from time to time. If an amendment would increase the number of
shares of common stock that may be issued under the plan or would change the
provisions regarding eligibility to participate in the plan, the amendment will
not be effective unless approved by our stockholders within 12 months before or
after the adoption of the amendment.
FEDERAL INCOME TAX INFORMATION WITH RESPECT TO THE 1996 STOCK OPTION PLAN
The holder of a nonqualified option recognizes no income for federal income
tax purposes on the grant of the option. On the exercise of a nonqualified
option, the difference between the fair market value of the underlying shares of
common stock on the exercise date and the option exercise price is treated as
compensation to the holder of the option taxable as ordinary income in the year
of exercise. Such fair market value becomes the basis for the underlying shares
which will be used in computing any capital gain or loss upon disposition of
such shares.
The holder of an incentive option recognizes no income for federal income
tax purposes on the grant of the option. Except as provided below with respect
to the alternative minimum tax, there is no tax upon exercise of an incentive
option. If the holder does not dispose of the shares acquired upon exercise of
the incentive option within two years from the date of the grant of the
incentive option or within one year after exercise of the incentive option, any
gain realized by the option holder on the subsequent sale of those shares will
be treated for federal income tax purposes as long-term capital gain if the
shares were held for more than 12 months. If the holder sells the shares before
the expiration of such two-year and one-year periods (a "disqualifying
disposition"), the difference between the lesser of the value of the shares at
the date of exercise or at the date of sale and the exercise price of the
incentive option will be treated as compensation to the option holder taxable as
ordinary income
7
and the excess gain, if any, will be treated as capital gain. That capital gain
will be long-term capital gain if the shares were held for more than 12 months.
The excess of the fair market value of the underlying shares of common stock
over the exercise price at the time of exercise of an incentive option will
constitute an item of tax preference for purposes of the alternative minimum
tax. Taxpayers who incur the alternative minimum tax will be allowed a credit
which may be carried forward indefinitely to be used as a credit against the
taxpayer's regular tax liability in a later year; however, the alternative
minimum tax credit can not reduce the regular tax below the alternative minimum
tax for that carryover year.
Generally, subject to certain limitations, we may deduct on our corporate
income tax returns, in the year in which an option holder recognizes ordinary
income upon the exercise of a nonqualified option or a disqualifying disposition
of an incentive option, an amount equal to the amount recognized by the option
holder as ordinary income upon the occurrence of such exercise or disqualifying
disposition.
The 1996 Stock Option Plan is not subject to the provisions of the Employee
Retirement Income Security Act of 1974, nor is the plan qualified under
Section 401(a) of the Internal Revenue Code.
PROPOSAL 3: AMENDMENT OF OUR 1996 EMPLOYEE STOCK PURCHASE PLAN
On March 10, 2000, our Board of Directors amended our 1996 Employee Stock
Purchase Plan to increase the number of shares available for purchase under the
plan from 100,000 to 200,000 shares, subject to adjustments in event of stock
splits, stock dividends, recapitalization and the like. Our Board of Directors
is submitting this amendment to the Stock Purchase Plan to our stockholders for
approval. If our stockholders do not approve Proposal 3, the total number of
shares that may be purchased under the plan will remain at 100,000.
The purpose of the Stock Purchase Plan is to provide a method whereby
employees of Lightbridge will have an opportunity to acquire an ownership
interest (or increase an existing ownership interest) in Lightbridge through the
purchase of shares of common stock. The Board of Directors believes that
providing employees with a direct stake in our welfare assures a closer
identification of the interests of participants in the Stock Purchase Plan with
those of our stockholders, thereby stimulating the participants' efforts on our
behalf and strengthening their desire to remain with us.
In order to pass, this proposal must receive a majority of the votes cast
with respect to this matter. We will count abstentions but not broker non-votes
when we tabulate votes cast
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL TO APPROVE
THE AMENDMENT OF THE 1996 EMPLOYEE STOCK PURCHASE PLAN.
DESCRIPTION OF THE 1996 EMPLOYEE STOCK PURCHASE PLAN
In June 1996, our Board of Directors adopted the Stock Purchase Plan. The
Stock Purchase Plan is administered by the Compensation Committee of the Board
of Directors. The right to purchase stock under the Stock Purchase Plan is made
available by a series of six-month offerings to eligible employees. The
Compensation Committee determines the applicable date of commencement and date
of termination of each offering under the Stock Purchase Plan.
All of our employees are eligible to participate in the Stock Purchase Plan
on the first offering commencement date following the commencement of employment
if
- the employee has completed six months of continuous service with us,
- immediately after the grant of an option to participate the employee would
not own stock, including outstanding options to purchase stock, possessing
5% or more of the total combined
8
voting power or value of all classes of our stock or the stock of any
parent or subsidiary company,
- the grant of an option to participate in the Stock Purchase Plan would not
cause his or her rights to purchase stock under all of our employee stock
purchase plans and the stock purchase plans of any subsidiary company to
exceed $25,000 in fair market value (determined at the time such option is
granted) for each calendar year in which the option is outstanding, and
- the employee is not one of our officers who is a "highly compensated
employee" as defined in Section 414(q) of the Internal Revenue Code.
Participation in the Stock Purchase Plan is voluntary and participation in any
one or more of the offerings under the Stock Purchase Plan neither limits nor
requires participation in any other offering.
At the time a participant files his authorization for a payroll deduction,
the participant may elect to have deductions made from his or her pay on each
payday at any integral rate up to 6% of the employee's base pay on the offering
commencement date. Payroll deductions for a participant commence on the
applicable offering commencement date and end on the applicable offering
termination date unless terminated sooner by the participant in accordance with
the terms of the Stock Purchase Plan. All payroll deductions made for a
participant are credited to the participant's account under the Stock Purchase
Plan. No separate cash payments may be made into the account by the employee. No
interest is paid or allowed on any money paid into the Stock Purchase Plan or
credited to the account of any participant. An employee may terminate
participation in the Stock Purchase Plan at any time. During the offering, the
participant may not change the percentage of compensation which is to be
deducted.
On the applicable offering commencement date, a participating employee is
deemed to have been granted an option to purchase a maximum number of shares of
our common stock equal to an amount determined as follows: 85% of the per share
market value of our common stock on such offering commencement date is divided
into the percentage of the employee's compensation which he or she has elected
to have withheld (but no more than 6%), multiplied by two. The per share
purchase price of the common stock purchased under the Stock Purchase Plan is
the lower of (a) 85% of the closing price per share of the common stock on the
offering commencement date and (b) 85% of the closing price per share of the
common stock on the offering termination date.
Unless a participant first gives written notice of withdrawal from
participation in the applicable offering, the participant's option for the
purchase of common stock with payroll deductions made during any offering is
exercised automatically on the applicable offering termination date. The number
of full shares of common stock so purchased is equal to the accumulated payroll
deductions in the participant's account at that time divided by the applicable
option price (but not in excess of the number of shares for which options have
been granted to the participant), and any excess in his account at that time
(other than amounts relating to fractional shares, as discussed in the following
sentence) is automatically returned to the participant. Fractional shares are
not be issued under the Stock Purchase Plan and any accumulated payroll
deductions which would have been used to purchase fractional shares are
automatically carried forward to the next offering unless the participant
chooses to have the excess funds returned.
An employee's participation under the Stock Purchase Plan terminates upon
voluntary withdrawal from the Stock Purchase Plan at any time prior to the
offering termination date for an offering, or when such employee ceases
employment because of retirement, resignation, lay-off or discharge, except that
if an employee's employment terminates due to death, his beneficiary has the
right to withdraw all of the payroll deductions or to exercise the option.
We intend to file, as soon as practicable, a registration statement covering
the additional 100,000 shares of common stock that will be issuable under the
Stock Purchase Plan if Proposal 3 is approved
9
by our stockholders. Except in the case of shares issued to our affiliates, as
defined in the Securities Act of 1933, the shares of common stock issued under
the Stock Purchase Plan will be freely eligible for resale in the public market
if they are issued while a registration statement is effective.
NEW PLAN BENEFITS
We are unable to determine the dollar value and number of options or amounts
that will be received by or allocated to any our executive officers, our current
executive officers as a group, our current directors who are not executive
officers as a group, or our employees who are not executive officers as a group,
as a result of the increase in the number of shares subject to purchase under
the Stock Purchase Plan. If the proposed amendment had been in effect during
1999, it would not have affected the the number of options received by or
allocated to participants in 1999.
AMENDMENT OF THE STOCK PURCHASE PLAN
Our Board of Directors may, in its discretion, at any time, terminate or
amend the Stock Purchase Plan, except that no such termination may affect
options previously granted, nor may any amendment make a change in any option
previously granted which would adversely affect the rights of an option holder
under the plan.
FEDERAL INCOME TAX INFORMATION WITH RESPECT TO THE STOCK PURCHASE PLAN.
If an employee acquires shares of common stock pursuant to the Stock
Purchase Plan and does not dispose of them within two years after the
commencement of the offering period pursuant to which the shares were acquired,
nor within one year after the date on which the shares were acquired, any gain
realized upon subsequent disposition is treated, for federal income tax
purposes, as long-term capital gain, except that the portion of the gain equal
to the lesser of
- the excess of the fair market value of the shares on the date of
disposition over the amount paid to us upon purchase of the shares, or
- the excess of the fair market value of the shares on the offering
commencement date over the amount paid upon purchase of the shares,
is taxable as ordinary income. We do not receive a corresponding deduction,
however. If the employee disposes of the shares at a price less than the price
at which he or she acquired the shares, the employee realizes no ordinary income
and has a capital loss measured by the difference between the purchase price and
the selling price.
If the employee disposes of shares acquired pursuant to the Stock Purchase
Plan within two years after the offering commencement date of the offering
pursuant to which the shares were acquired, or within one year after the date on
which the shares were acquired, the difference between the purchase price and
the fair market value of the shares at the time of purchase is taxable to the
participant as ordinary income in the year of disposition. In this event, we may
deduct from our gross income an amount equal to the amount treated as ordinary
income to the employee. Any excess of the selling price over the fair market
value at the time the employee purchased the shares is taxable as long-term
capital gain if the shares were held for more than 12 months and short-term
capital gain if the shares were held for 12 months or less. If the participant
disposes of any shares within either the two-year or one-year period at a price
less than the fair market value at the time of purchase, the participant
realizes the same amount of ordinary income (that is, the difference between the
purchase price and the fair market value of the shares at the time of purchase),
and the participant recognizes a capital loss equal to the difference between
the fair market value of the shares at the time of purchase and the selling
price.
If a participating employee dies while owning shares acquired under the
Stock Purchase Plan, ordinary income may be reportable on his final income tax
return.
The Stock Purchase Plan is not subject to the provisions of the Employee
Retirement Income Security Act of 1974, nor is the plan qualified under
Section 401(a) of the Internal Revenue Code.
10
INFORMATION ABOUT DIRECTORS
BACKGROUND INFORMATION ABOUT DIRECTORS CONTINUING IN OFFICE
The Class II and Class III directors.directors will continue in office following the
Meeting, and their terms will expire in 2001 (Class II) or 2002 (Class III).
Brief biographies of the nominees,these directors, as of April 20, 1999,March 15, 2000, follow. You will
find information about the nominees'their holdings of common stock on page 16.18.
D. QUINN MILLS................ Dr. Mills has served as one of our directors since June
CLASS II DIRECTOR 1990. Since 1976, Dr. Mills has served as the Albert J.
Weatherhead, Jr. Professor of Business Administration at the
Harvard Business School. Dr. Mills is 58 years old.
TORRENCE C. HARDER...............HARDER............ One of our founders, Mr. Harder has served as one of our
CLASS III DIRECTOR directors since June 1989 and currently serves as a
member of the Compensation Committee.1989. Mr. Harder has been the President
and a director of Harder Management Company, a registered
investment advisory firm, since its establishment in 1971.
He has also been the President and a director of
Entrepreneurial Ventures, Inc., a venture capital investment
firm, since 1987 and currently serves as a director of
MicroFinancial, Inc., a microticket leasing firm. Mr. Harder
is 5556 years old.
PAMELA D.A. REEVE................REEVE............. Ms. Reeve has served as our President and as one of our
CLASS III DIRECTOR directors since November 1989, and our Chief Executive
Officer since September 1993
and as one of our directors since November 1989.1993. From November 1989 to
September 1993, Ms. Reeve also served as our Chief Operating
Officer. Prior to joining us, Ms. Reeve was employed by The
Boston Consulting Group. Ms. Reeve served as President of
the Massachusetts Software Council from January 1996 to
January 1998. She currently serves as a director of PageMartWebLink
Wireless, Inc., a provider of wireless messaging services,
and Natural MicroSystems Corp., a provider of hardware and
software technology for developers of high-value
telecommunications solutions. Ms. Reeve is 49 years old.
If for any reason either Mr. Harder or Ms. Reeve becomes unavailable for
election, the persons designated in the proxy card may vote the proxy for the
election of a substitute. Mr. Harder and Ms. Reeve both have consented to serve
as directors if elected, and our Board of Directors has no reason to believe
that either nominee will become unavailable for election.
The two nominees receiving the greatest number of votes cast will be elected
as directors. We will not count abstentions or broker non-votes when we tabulate
votes cast for the election of directors.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF MR.
HARDER AND MS. REEVE.
4
OTHER MATTERS
Neither we nor our Board of Directors intends to propose any matters at the
Meeting other than the election of two directors. Neither we nor our Board knows
of any matters to be proposed by others at the Meeting.
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
A stockholder who intends to present a proposal at the 2000 Annual Meeting
of Stockholders for inclusion in our 2000 proxy statement must submit the
proposal by January 7, 2000. In order for the proposal to be included in the
proxy statement, the stockholder submitting the proposal must meet certain
eligibility standards and must comply with certain procedures established by the
Securities and Exchange Commission, and the proposal must comply with the
requirements as to form and substance established by applicable laws and
regulations. The proposal must be mailed to our Secretary at our address set
forth on the Notice appearing on the cover of this proxy statement.
In addition, in accordance with our By-Laws, a stockholder wishing to bring
an item of business before the 2000 Annual Meeting of Stockholders must deliver
notice of the item of business to us at our offices no later than March 25,
2000, even if the item is not to be included in our proxy statement.
5
INFORMATION ABOUT DIRECTORS
BACKGROUND INFORMATION ABOUT DIRECTORS CONTINUING IN OFFICE
The Class I and Class II directors will continue in office following the
Meeting, and their terms will expire in 2000 (Class 1) or 2001 (Class II). Brief
biographies of these directors, as of April 20, 1999, follow. You will find
information about their holdings of common stock on page 16.
Andrew I. Fillat............. Mr. Fillat has served as one of our directors since April
CLASS II DIRECTOR 1996. Since July 1995, Mr. Fillat has served as Senior Vice
President of Advent International Corporation, a venture
capital investment firm. From April 1989 to June 1995, Mr.
Fillat served as Vice President of Advent International
Corporation. Mr. Fillat also serves as a director of
Advanced Radio Telecom Corp., a provider of broadband data
services; Interlink Computer Sciences Inc., a supplier of
solutions of products and services for enterprise networked
systems management; Safety 1st, Inc., a developer, marketer
and distributor of juvenile products; and Voxware, Inc., a
developer of speech and audio technologies. Mr. Fillat is 50
years old.
D. Quinn Mills............... Dr. Mills has served as one of our directors since June
CLASS II DIRECTOR 1990. Since 1976, Dr. Mills has served as the Albert J.
Weatherhead, Jr. Professor of Economics at the Harvard
Business School. Dr. Mills is 57 years old.
Debora J. Wilson............. Ms. Wilson has served as one of our directors since May
CLASS I DIRECTOR 1998. Ms. Wilson is currently Executive Vice President and
General Manager at The Weather Channel, a position she has
held since May 1998. From August 1994 to May 1998, Ms.
Wilson held other positions at The Weather Channel,
including President, U.S. Products and Distribution and
Senior Vice President--New Media. Prior to August 1994, Ms.
Wilson served as Director--Marketing and Product Development
of Bell Atlantic Video Services. Ms. Wilson is 41 years old.
MEETINGS OF THE BOARD OF DIRECTORS
Our Board of Directors held teneight meetings and acted by unanimous written
consent three timesonce during the year ended December 31, 1998.1999. All directors attended at least 75%all
of the meetings of our Board.Board held in 1999.
COMMITTEES OF THE BOARD OF DIRECTORS
Our Board of Directors has appointed an Audit Committee and a Compensation
Committee. Our Board of Directors does not have a Nominating Committee.
The Audit Committee met twicefour times during the year ended December 31, 1998.1999.
The Audit Committee:
- reviews the scope and results of the annual audit of our consolidated
financial statements conducted by our independent accountants;
6
accounts;
- reviews the scope of other services provided by our independent accountants;accounts;
- reviews proposed changes in our financial and accounting standards and
principles and in our policies and procedures for our internal accounting,
auditing and financial controls; and
11
- makes recommendations to our Board of Directors on the engagement of the
independent accountants.
The Audit Committeecommittee consists of Andrew FillatDebora Wilson and Quinn Mills, each of whom
attended bothall of the meetings of the Audit Committee held in the year ended
December 31, 1998.1999.
The Compensation Committee met one time and acted by unanimous written
consent eleven times duringonce the year ended December 31, 1998.1999 and
acted by written consent twelve times. The Compensation Committee provides
recommendations concerning salaries and incentive compensation for our employees
and consultants. In addition, the Compensation Committee administers our
compensation programs, including our 1990 Incentive and Nonqualified Stock
Option Plan, 1996 Incentive and Non-QualifiedNonqualified Stock Option Plan, 1996 Employee
Stock Purchase Plan and 1998 Non-Statutory Stock Option Plan. The Compensation
Committee also performs other duties that our Board of Directors periodically
assigns to it. The Compensation Committee consists of Andrew FillatTorrence Harder and Torrence Harder,Debora
Wilson, each of whom attended the meeting of the Compensation Committee held in
the year ended December 31, 1998.1999.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Andrew FillatTorrence Harder and Torrence Harder,Debora Wilson,
neither of whom has ever been one of our employees. None of our executive
officers serves as a member of the boardBoard of directorsDirectors or compensation committeeCompensation Committee
of any entity that has one or more executive officers serving as members of our
Board of Directors or Compensation Committee.
COMPENSATION OF DIRECTORS
Directors who are not our employees receive $1,000 for each Board meeting
they attend and $500 for each meeting they attend of a committee of the Board on
which they serve.
Directors who are not our employees also receive stock option grants under
our 1998 Non-Statutory Stock Option Plan. Upon election to the Board of
Directors, each non-employee director automatically receives an option to
purchase 20,000 shares of common stock, which vests in three equal annual
installments. In addition, immediately following each annual meeting of
stockholders (or special meeting in lieu of an annual meeting)thereof), each non-employee director
re-elected to or remaining on the Board is automatically granted a fully vested
option to purchase 4,000 shares of common stock, PROVIDED that:
- any prior automatic grants held by the director have fully vested; or
- at least two annual meetings of stockholders (or special meetings in lieu
of annual meetings)thereof) have elapsed between any prior automatic grant made to the
director and the meeting upon which the subsequent automatic grant would
occur.
The exercise price per share of each automatic option grant is equal to the
closing price of our common stock on the date of such grant, as reported by the
Nasdaq National Market. Directors who are our employees are not entitled to
receive any separate compensation for serving as directors.
712
INFORMATION ABOUT EXECUTIVE OFFICERS
BACKGROUND INFORMATION ABOUT EXECUTIVE OFFICERS
Brief biographies of our executive officers follow. The ages of the
executive officers are given as of April 20, 1999.March 15, 2000 follow. You
will find information about their holdings of common stock on page 16.18.
Pamela D.A. Reeve............. You will find background information about Ms. Reeve on page
PRESIDENT AND CHIEF 4.11. Ms. Reeve is 4950 years old.
EXECUTIVE OFFICER
Joseph S. Tibbetts, Jr........ Mr. Tibbetts joined us in May 1998 as our Senior Vice
SENIOR VICE PRESIDENT, President, Finance & Administration, Chief Financial Officer
FINANCE & ADMINISTRATION AND and Treasurer. Mr. Tibbetts served as Vice President,
CHIEF FINANCIAL OFFICER Finance and Administration, Chief Financial Officer and
Treasurer of SeaChange International, Inc. from June 1996 to
March 1998. Prior to June 1996, Mr. Tibbetts was employed as
a certified public accountant by Price Waterhouse LLP, most
recently as a partner and National Director of its Software
Services Group. Mr. Tibbetts currently serves as a director
of Great Plains Software, Inc., a provider of business
management software solutions. Mr. Tibbetts is 46 years old.
William G. Brown.............. Mr. Brown has been our Executive Vice President, Development
EXECUTIVE VICE PRESIDENT, since May 1998. Previously, Mr. Brown served as our Chief
DEVELOPMENT Financial Officer, Vice President of Finance and
Administration and Treasurer from June 1989 to May 1998.
Prior to joining us, Mr. Brown was Manager of Financial
Reporting and Analysis for Bolt, Beranek and Newman, Inc.
and was employed at Deloitte, Haskins and Sells. Mr. Brown
is 38 years old.
Brian P. Connolly............. Mr. Connolly has been our Senior Vice President, Sales and
SENIOR VICE PRESIDENT, SALES Marketing since May 1998. Prior to joining us, Mr. Connolly
AND MARKETING was employed by Computer Sciences Corporation's Intellicom
Division, most recently as its as Vice President and Chief
Operating Officer. Mr. Connolly is 4950 years old.
Michael A. Perfit............. Mr. Perfit, one of our founders, has served as our Senior
SENIOR VICE PRESIDENT OF Vice President of Technology since June 1991. From June 1989
TECHNOLOGY to May 1991, Mr. Perfit served as our Vice President of
Engineering. Prior to joining us, Mr. Perfit was Vice
President of Appex, Inc. and held engineering and technical
support positions at Interactive Management Systems. Mr.
Perfit is 4344 years old.
Richard H. Antell............. Mr. Antell has served as our Vice President, Software
VICE PRESIDENT, SOFTWARE Development since February 1996. From June 1991 to January
DEVELOPMENT 1996, Mr. Antell was our Vice President of Engineering.
Prior to joining us, Mr. Antell served as Vice President of
Application Development of Applied Expert Systems, Inc. and
Project Leader of Index Systems, Inc. Mr. Antell is 5152 years
old.
8
Douglas E. Blackwell.......... Mr. Blackwell has served as our Vice President, Service
VICE PRESIDENT, SERVICE Delivery since November 1995. From October 1994 to October
SERVICE
DELIVERY 1995, Mr. Blackwell served as our Vice President of
Operations. From February 1991 to September 1994, Mr.
Blackwell was employed as Vice President of Operations of Thomson
Financial Services, Inc., an on-line financial transaction
and information services firm. Prior to February 1991, Mr.
Blackwell was employed at Nolan, Norton and Co., an
affiliate of KPMG/Peat Marwick. Mr. Blackwell is 4243 years
old.
Carla J. Marcinowski.......... Ms. Marcinowski has been our Vice President, Consulting
VICE PRESIDENT, CONSULTING Services since February 1998. Prior to joining us as an
CONSULTING
SERVICES employee, Ms. Marcinowski provided services to us as an
independent consultant from October 1997 to January 1998.
Ms. Marcinowski was a founder and Vice President, Business
Development of The Net Collaborative from July 1996 to
August 1997, and prior to March 1996 was employed by Lotus
Development Corporation in various positions, including
International Managing Director, Consulting Services,
Managing Director, Worldwide Services Group and Services
Lead, Lotus/IBM Transition Team. Ms. Marcinowski is 4142 years
old.
913
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE FOR 1996,1999, 1998 AND 1997 AND 1998
The following table summarizes certain information with respect to the
annual and long-term compensation that we paid for the past three fiscal years
to the following persons (the "Named Officers"):
- Pamela D.A. Reeve, our president and chief executive officer throughout
1998;1999; and
- Richard H. Antell, William G. Brown, Douglas E. Blackwell, Brian P. Connolly and Michael A.
Perfit, our four most highly compensated executive officers (other than
Ms. Reeve) in the year ended December 31, 1998.
1999.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS------------
ANNUAL -----------AWARDS
COMPENSATION SECURITIES ALL OTHER
--------------------------------------------- UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION(S) YEAR SALARY($) BONUS($)(1) OPTIONS(#) ($)(2)
- ------------------------------------ --------------------------------------- -------- --------- ----------- ----------- ------------------------- ------------
Pamela D.A. Reeve................... 1998 $ 235,000 $ 96,500 300,000 $ 6,256Reeve....................... 1999 $282,500 $220,800 -- $6,455
PRESIDENT AND CHIEF EXECUTIVE OFFICER 1998 235,000 96,500 300,000 6,256
1997 200,000 91,700 --
4,405
OFFICER 1996 165,000 60,000 -- 2,814
Richard H. Antell...................Antell....................... 1999 172,615 145,330 -- 2,202
VICE PRESIDENT, SOFTWARE DEVELOPMENT 1998 165,000 63,200 -- 7,367
VICE PRESIDENT,3,074
1997 130,000 50,400 --
1,893
SOFTWARE DEVELOPMENT 1996 105,000 40,000 90,000 485
William G. Brown.................... 1998 150,000 63,200Douglas E. Blackwell.................... 1999 163,846 135,430 -- 3,419
EXECUTIVE1,015
VICE PRESIDENT, 1997 130,000 50,000 -- 1,891
DEVELOPMENT 1996 108,462 65,000 70,000 166
Douglas E. Blackwell................SERVICE DELIVERY 1998 150,000 63,200 25,000(3) 3,589
VICE PRESIDENT, 1997 130,000 37,100 25,000
1,351
SERVICE DELIVERY 1996 105,000 40,000 90,000 252Brian P. Connolly (4)................... 1999 209,231 85,400 20,000 3,500
SENIOR VICE PRESIDENT, SALES AND 1998 132,289 -- 100,000 --
MARKETING
Michael A. Perfit...................Perfit....................... 1999 159,923 130,330 -- 3,455
SENIOR VICE PRESIDENT OF TECHNOLOGY 1998 135,000 57,200 -- 4,235
SENIOR VICE PRESIDENT OF TECHNOLOGY 1997 109,900 29,600 -- 1,536
1996 92,700 20,000 -- 223
- ------------------------
(1) Represents the aggregate amount of bonus installments we paid in the
applicable year with respect to bonuses earned in prior years. See "Report
of the Compensation Committee on Executive Compensation for 1998.1999."
(2)Represents matching contributions we made pursuant to our 401(k) Plan and
payments of term life and long-term disability insurance premiums.
(3)Represents an option we issued in connection with the repricing of a
previously granted stock option.
10
(4) Mr. Connolly joined Lightbridge in May 1998.
OPTION GRANTS IN 19981999
The following table sets forth certain information regarding the options
that we granted to the Named Officers during the year ended December 31, 1998.
1999.
14
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------------------------------------ VALUE AT ASSUMED
NUMBER OF PERCENT OF TOTAL ANNUAL RATE OF STOCK
SECURITIES PERCENT OF TOTALOPTIONS PRICE APPRECIATION FOR
UNDERLYING OPTIONS GRANTED EXERCISE FOR OPTION TERM(3)
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION -------------------------------------------------
NAME GRANTED(#) FISCAL YEAR(1) ($/SH)(2) DATE 5%($) 10%($)
- ------------------------------------- ----------- ----------------------- ---------- ---------------- --------- ----------- ------------ ---------------------- ---------- ----------
Pamela D.A. Reeve.................... 300,000(4) 14.4% $ 12.125 5/22/08 $ 2,287,587 $ 5,797,229
Douglas E. Blackwell................. 25,000(5) 1.2 7.625 7/31/08 119,882 303,807Brian P. Connolly................... 20,000(4) 5.93% $9.813 6/14/2009 $139,411 $363,693
- ------------------------
(1) Percentages are calculated based on a total of 2,084,349337,450 options granted in
the year ended December 31, 1998, including 843,100 options granted in
connection with the repricing of certain stock options.1999.
(2)All options were granted at fair market value, which was determined by the
Compensation Committee to be the closing price of our common stock on the
date of grant, as reported by the Nasdaq National Market.
(3)The amounts shown represent hypothetical values that could be achieved for
the respective options if exercised at the end of their option terms. These
gains are based on assumed rates of stock appreciation of five percent and
ten percent, compounded annually from the date the respective options were
granted to the date of their expiration. The gains shown are net of the
option price, but do not include deductions for taxes or other expenses that
may be associated with the exercise. Actual gains, if any, on stock option
exercises will depend on future performance of the common stock, the
optionholders' continued employment through the option period, and the date
on which the options are exercised.
(4)The option is exercisable as to 8.34%10% of the shares subject thereto upon the
date of grant. During the first year following the date of grant, with an
additional 8.34%3.75% of the shares vestingvest at the end of each of each three-month
period thereafter.
(5)Representsperiod. Thereafter, an option issued in connection with the repricing of a previously
granted stock option. The option is exercisable as to 20%additional 6.25% of the shares subject thereto upon the date of grant, with an additional 5% of the shares
vestingvest at the end of
each three-monththree month period thereafter.
11
until the option is fully vested.
AGGREGATED OPTION EXERCISES IN 19981999 AND OPTION VALUES AT DECEMBER 31, 19981999
The following table sets forth information as to options exercised during
the year ended December 31, 1998,1999, and unexercised options held at the end of
1998,such fiscal year, by the Named Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED VALUE OPTIONS AT FISCAL YEAR-ENDIN-THE-MONEY OPTIONS AT FISCAL
ACQUIRED VALUE YEAR-END YEAR-END($)(2)
ON REALIZED -------------------------- ----------------------------------------------------------- ---------------------------------
NAME EXERCISE(#) ($)(1) EXERCISABLE(#) UNEXERCISABLE(#) EXERCISABLE($) UNEXERCISABLE($)
- ----------------------------------------------- ----------- --------- ----------- ------------- ----------- --------------------- -------------- ---------------- -------------- ----------------
Pamela D.A. Reeve...... 135,000 $1,031,500 335,109 284,891 $1,622,000 $ 51,200Reeve....... -- -- 470,000 150,000 $11,136,950 $2,343,750
Richard H. Antell...... 29,000 215,365 111,400 81,000 360,448 211,000
William G. Brown....... 55,000 665,123 40,000 75,000 23,750 190,000Antell....... 50,200 $908,580 95,200 47,000 2,183,508 1,098,750
Douglas E. Blackwell...Blackwell.... -- -- 93,250 69,750 308,500 170,500116,250 46,750 2,897,657 1,094,969
Brian P. Connolly....... 20,000 426,260 28,500 71,500 565,904 1,402,836
Michael A. Perfit......Perfit....... -- -- -- -- -- --
- ------------------------
(1) The values in this column are based on the last reported sale prices of the
common stock on the respective dates of exercise as reported by the Nasdaq
National Market, less the respective option exercise prices.
15
(2)The closing sale price for the common stock as reported by the Nasdaq
National Market on December 31, 19981999 was $5.50.$27.75. Value is calculated on the
basis of the difference between the option exercise price and $5.50,$27.75,
multiplied by the number of shares of common stock underlying the option.
REPORT OF THE COMPENSATION COMMITTEE ON REPRICING OF OPTIONS IN 1998
THE FOLLOWING IS A REPORT OF THE COMPENSATION COMMITTEE DESCRIBING THE
REPRICING OF SOME OF THE STOCK OPTIONS HELD BY OUR EXECUTIVE OFFICERS IN 1998
AND THE REASONS FOR THE REPRICING.
On July 31, 1998, the Board of Directors determined that, because certain
stock options held by employees had exercise prices significantly higher than
the fair market value of the common stock, those stock options were not
providing the desired incentive to employees. Accordingly, the Board provided
employees with an opportunity to receive new options in replacement of any
existing options that had exercise prices of more than $7.625 per share (the
closing sale price for the common stock as reported by the Nasdaq National
Market on July 31, 1998). All Lightbridge officers and employees other than Ms.
Reeve, the President and Chief Executive Officer, were eligible to participate
in the stock option repricing, but options granted to Lightbridge's directors
were not eligible for repricing. The new options are exercisable for the same
number of shares as the options they replace, but they each have an exercise
price of $7.625 per share and a new vesting schedule that commenced as of July
31, 1998. As a result of the repricing, new options were granted to purchase
843,100 shares of common stock, and the average exercise price of the repriced
options was reduced from $12.44 per share to $7.625 per share.
The Board determined that it would include in the repricing out-of-the-money
options granted to Lightbridge's executive officers, other than Ms. Reeve,
because those options were principally held by executives who had recently
joined Lightbridge and held no other stock options. In particular, Joseph
Tibbetts, the Chief Financial Officer and Senior Vice President, Finance and
Administration, and Brian Connolly, the Senior Vice President of Sales and
Marketing, had joined Lightbridge less than three months
12
before the repricing, and Carla Marcinowski, the Vice President, Consulting
Services, had joined Lightbridge less than six months before the repricing. The
Board believed that the goal of retaining and incenting these new executive
officers would be significantly impaired if they were not included in the
repricing program. In addition, the Board concluded that the decline in the
price of the common stock that occurred during the first seven months of 1998
could in no way be attributed to these new executives. One option granted to
Douglas Blackwell was also included in the repricing to provide an extra
incentive for him.
The Board decided not to include Ms. Reeve in the repricing because,
although she had recently been granted options that were out of the money, she
held a substantial number of options that were in the money. Additionally,
unlike most of the officers who were included in the repricing, she was a
long-time employee. The Board also felt that it would be appropriate to exclude
Ms. Reeve, as President and Chief Executive Officer, from the repricing.
Andrew I. Fillat
Torrence C. Harder
OPTION REPRICINGS FROM 1989 TO 1998
The following table sets forth information as to all repricings of stock
options held by any executive officer from 1989 to 1998.
10-YEAR OPTION REPRICINGS
LENGTH OF
NUMBER OF ORIGINAL
SECURITIES MARKET PRICE OF EXERCISE OPTION TERM
UNDERLYING STOCK AT TIME PRICE AT NEW REMAINING AT
OPTIONS OF TIME OF EXERCISE DATE OF
NAME DATE REPRICED(#) REPRICING ($) REPRICING($) PRICE($) REPRICING
- ------------------------------ --------- ----------- --------------- ----------- ----------- --------------
Douglas E. Blackwell.......... 7/31/98 25,000 $ 7.625 $ 10.25 $ 7.625 8 years,
VICE PRESIDENT, 6 months
SERVICE DELIVERY
Joseph S. Tibbetts, Jr........ 7/31/98 250,000 7.625 12.00 7.625 9 years,
SENIOR VICE PRESIDENT, 10 months
FINANCE & ADMINISTRATION AND
CHIEF FINANCIAL OFFICER
Brian P. Connolly............. 7/31/98 100,000 7.625 12.125 7.625 9 years,
SENIOR VICE PRESIDENT, 10 months
SALES AND MARKETING
Carla J. Marcinowski.......... 7/31/98 100,000 7.625 14.063 7.625 9 years,
VICE PRESIDENT, 6 months
CONSULTING SERVICES
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION FOR 19981999
THE FOLLOWING IS A REPORT OF THE COMPENSATION COMMITTEE DESCRIBING THE
COMPENSATION POLICIES AND RATIONALES THAT THE COMPENSATION COMMITTEE USED TO
DETERMINE THE COMPENSATION PAID TO OUR EXECUTIVE OFFICERS FOR THE YEAR ENDED
DECEMBER 31, 1998.
13
1999.
The Compensation Committee is responsible for establishing Lightbridge's
executive compensation policies and practices, which includes making specific
recommendations to the Board of Directors concerning compensation for executive
officers.
The Compensation Committee seeks to achieve three broad goals in connection
with Lightbridge's executive compensation programs and decisions regarding
individual compensation:
- structuring executive compensation programs in a manner that will enable
Lightbridge to attract and retain key executives;
- rewarding executives for Lightbridge's achievement of net income goals, in
order to create a performance-oriented environment for Lightbridge's
executives; and
- providing executives with an equity interest in Lightbridge so as to link
a portion of the compensation of Lightbridge's executives with the
performance of the common stock.
Lightbridge's executive compensation program generally consists of three
elements: base salary, annual cash bonus, and a stock-based equity incentive in
the form of participation in Lightbridge's stock option plans. The executive
officers are also eligible to participate in other employee benefit plans,
including health and life insurance plans and a 401(k) retirement plan and a stock
purchase plan, on
substantially the same terms as other employees who meet applicable eligibility
criteria, subject to any legal limitations on the amounts that may be
contributed or on the benefits that may be payable under these plans. In
establishing base salaries for executives, the Compensation Committee monitors
salaries at other companies, particularly those companies in the same industry
and companies located in the same geographic area as Lightbridge. In addition,
for each executive the Compensation Committee considers historic salary levels,
work responsibilities and base salary relative to other executives at
Lightbridge. To the extent determined to be appropriate, the Compensation
Committee also considers general economic conditions, Lightbridge's financial
performance and each individual's performance.
Lightbridge's approach to the Chief Executive Officer's compensation package
in fiscal 19981999 was to be competitive with other high growth companies in the
software industry and to tie a large percentage of the Chief Executive Officer's
total compensation package to Lightbridge's performance. Ms. Reeve is a party to
a multi-year employment agreement with Lightbridge that establishes her annual
base salary during the term of the agreement, subject to increase (but not
decrease) at the discretion of the Board of Directors. Ms. Reeve's base salary
was designed to give her assurance of a base level of compensation, commensurate
with her position and duration of employment with Lightbridge. Ms. Reeve
received a base salary of $285,500 in 1999, $235,000 in 1998 and $200,000 in
1997 and $165,000 in
1996.1997.
Executive bonuses generally are considered and granted on an annual basis,
with each bonus being paid in three equal annual installments. Payment of each
bonus installment is subject to the continued employment of the bonus recipient.
Lightbridge typically adopts a target bonus plan for officers and other key employees inat
or before the beginning of each year, with targets typically based on net income
for the year. After Lightbridge's financial results for the year immediately preceding the year for which bonuses are to be granted. In the
year immediately following the year for which bonuses are to be granted,available,
the Compensation Committee evaluates the performances of the officers and other
key employees and determines the extent to which
16
bonuses are to be paid from the target bonus plan. In general, Lightbridge must
achieve at least 80% of its target net income in order for bonuses to be paid.
In accordance with these procedures, in late 1997early 1999 Lightbridge adopted its 19981999
target bonus plan and in early 19992000 the Compensation Committee will considerdetermined the
extent to which bonuses if any, willwould be paid out of the 19981999 target bonus plan, as
compensation for the performance of the officers and other key employees.
14
Generally, Lightbridge's policy with respect to option grants to executive
officers is to create a performance incentive for such officers by providing
them the ability to acquire or increase a proprietary interest in Lightbridge
and its success. In determining the size of each stock option grant, the
Compensation Committee emphasized the seniority, responsibilities and
performance of the executive. In 1998,1999, the Compensation Committee granted
options to purchase 300,00020,000 shares each to Mr. Connolly and Ms. Reeve,Marcinowski, with
an exercise price of $12.125$9.813 per share. The Compensation Committee granted these
options becausein recognition of the strong performance demonstrated by Mr. Connolly
and Ms. Reeve's other stock options were fully or substantially vested,Marcinowski, and the
Compensation Committee desired to create a continuing incentive for Ms. Reevethem to act on
behalf of Lightbridge. As described above under "Report of the
Compensation Committee on Repricing of Options in 1998," however, the options
granted to Ms. Reeve were not included in the general option repricing
authorized by the Board in 1998. The Compensation Committee also granted options
to the executive officers who joined Lightbridge in 1998: Joseph Tibbetts, Brian
Connolly and Carla Marcinowski. During 1999,2000, the Compensation Committee intends to
consider increasing the proportion of overall compensation of certain executive
officers consisting of stock options and other equity-based incentives.
Section 162(m) of the Internal Revenue Code of 1986 generally disallows a
tax deduction to public companies for compensation over $1,000,000 paid to its
chief executive officer and its four other most highly compensated executive
officers. Qualifying performance-based compensation will not be subject to the
deduction limit if certain requirements are met. In this regard, Lightbridge has
limited the number of shares subject to stock options that may be granted to
Lightbridge employees in a manner that complies with the performance-based
requirements of Section 162(m), but has not sought stockholder approval of the
1998 Non-Statutory Stock Option Plan in order to qualify options granted
thereunder as qualifying performance-based compensation. Based on the
compensation awarded to Lightbridge's executive officers, it does not appear
that the Section 162(m) limitation will have a significant impact on Lightbridge
in the near term. While the Compensation Committee does not currently intend to
qualify its executive bonus awards as a performance-based plan, it will continue
to monitor the impact of Section 162(m) on Lightbridge.
Andrew I. Fillat
Torrence C. Harder
Debora J. Wilson
RELATED PARTY TRANSACTIONS
In April 1997 we made a loan to Douglas Blackwell, our Vice President,
Service Delivery, in the form of a promissory note in the principal amount of
$75,000. The promissory note currently bears interest at an annual rate of 7.0%
and will accrue interest at such rate until we demand payment or until Mr.
Blackwell's employment with us terminates for any reason. At such time, the
promissory note will bear interest at an annual rate of the prime rate plus one
percent. As of March 31, 1999, the remaining balance under the promissory note
was $20,000.TRANSACTION
In August 1996 we executed an employment agreement with Pamela D.A. Reeve.
We agreed to employ Ms. Reeve as our President and Chief Executive Officer at an
initial base salary of $165,000 per year, which base salary may be increased but
not decreased. The employment agreement is terminable at will by either party,
but if we terminate Ms. Reeve's employment for any reason, other than death or
disability, within one year after a change of control of Lightbridge or if we
terminate her employment at any time without cause, we will be required to
continue to pay her salary for a period of twelve months after such termination.
1517
INFORMATION ABOUT COMMON STOCK OWNERSHIP AND PERFORMANCE
STOCK OWNED BY DIRECTORS, EXECUTIVE OFFICERS AND GREATER-THAN-5% STOCKHOLDERS
The following table sets forth certain information as of April 20, 1999,March 27, 2000,
with respect to the beneficial ownership of the common stock by (i) each person
that we know owns of record or beneficially more than 5% of the outstanding
common stock, (ii) the Named Officers, (iii) each director, including each
nominee for re-election, and (iv) all current executive officers and directors
as a group. As of April 20, 1999,March 27, 2000, there were 16,141,51416,663,579 shares of common stock
outstanding.
NUMBER OF
SHARES RIGHT TO
NAMES AND ADDRESSES OF BENEFICIAL HOLDERS(1) OWNED(2) ACQUIRE(3) PERCENT
- --------------------------------------------------------------------------------------------------------------------------- --------- ---------- ---------- -------------------
Advent International Investors II Limited Partnership
Advent Partners Limited Partnership
Global Private Equity II Limited Partnership(4)................................ 2,000,000 -- 12.4%
101 Federal Street
Boston, Massachusetts 02110
Kopp Investment Advisors, Inc.
Kopp Holding Company
LeRoy C. Kopp(5)............................................................... 1,643,098Kopp(4)............................................ 2,259,550 -- 10.213.6%
7701 France Avenue South, Suite 500
Edina, Minnesota 55435
Torrence C. Harder(5)....................................... 1,199,054 24,000 7.2
Massachusetts Financial Services Company(6).................................... 1,519,321Company (6)................ 1,108,958 -- 9.46.7
500 Boylston Street
Boston, Massachusetts 02116
Torrence C. Harder(7).......................................................... 1,379,634 13,333 8.6
Massachusetts Capital Resource Company(8)...................................... 809,958 500,000 7.9Company(7)................... 733,958 375,000 6.5
420 Boylston Street
Boston, Massachusetts 02116
Pamela D.A. Reeve(9)........................................................... 493,144 345,109 5.1Reeve(8)........................................ 484,614 526,875 5.9
Michael A. Perfit(9)........................................ 235,194 4,688 1.3
D. Quinn Mills(10)............................................................. 381,451 13,333 2.4
Michael A. Perfit(11).......................................................... 283,194 4,000 1.8.......................................... 185,507 24,000 1.1
Richard H. Antell.............................................................. 16,000 123,400 *
William G. Brown(12)........................................................... 87,200 57,000Antell........................................... 21,200 112,075 *
Douglas E. Blackwell(13)....................................................... 8,300 111,750Blackwell........................................ -- 120,437 *
Andrew I. Fillat(14)........................................................... 5,500 13,333Brian P. Connolly........................................... 1,000 42,000 *
Debora J. Wilson...............................................................Wilson............................................ -- 6,66613,333 *
All directors and executive officers as a group (12(9
persons)(15)............... 2,654,423 757,924 20.2(11)................................................ 2,126,569 928,033 17.4
- ------------------------
* Less than one percent.
16
(1) The address of our executive officers and directors is in care of us at 67
South Bedford Street, Burlington, Massachusetts 01803.
(2) Unless otherwise noted, each person or group identified possesses sole
voting and investment power with respect to the shares listed, subject to
community property laws where applicable. Excludes shares that may be
acquired through stock option or warrant exercises.
(3) Represents shares that can be acquired through stock option or warrant
exercises through June 19, 1999.May 26, 2000.
18
(4) Consists of 1,668 shares held by Advent International Investors II Limited
Partnership, 93,332 shares held by Advent Partners Limited Partnership and
1,905,000 shares held by Global Private Equity II Limited Partnership.
Advent International Corporation is the general partner of Advent
International Investors II Limited Partnership, Advent Partners Limited
Partnership and Advent International Limited Partnership. Advent
International Limited Partnership is the general partner of Global Private
Equity II Limited Partnership. Because Advent International Corporation is
controlled by a group of 4 persons, none of whom may act independently and a
majority of whom must act in concert to exercise voting or investment power
over the holdings of such entity, individually, no individual in this group
is deemed to share such voting or investment power.
(5) The "Number of Shares Owned" is based on information contained in an
amendment to a report on Schedule 13G, filed with the Securities and
Exchange Commission on February 9, 1999.4, 2000. The amended report states that:
- Kopp Investment Advisors, Inc. has sole voting power with respect to
684,000882,500 shares, sole dispositive power with respect to 412,500610,000 shares
and shared dispositive power with respect to 1,081,5981,394,550 shares;
- Kopp Holding Company has beneficial ownership of 1,494,098 shares; and
- LeRoy C. Kopp has sole voting and dispositive power with respect to
130,000255,000 shares and beneficially owns 1,634,0982,259,550 shares.
(6) The "Number of Shares Owned" is based on information contained in a report
on Schedule 13G, filed with the Securities and Exchange Commission on
February 11, 1999.
(7)(5) Includes 861,176698,676 shares owned by a trust of which Mr. Harder is the trustee
and beneficiary, 280,000 shares owned by a trust for the benefit of
Mr. Harder's children, 236,683188,603 shares held by Entrepreneurial
Ventures, Inc., 19,500 shares held by the Torrence C. Harder Cultural
Foundation, 5,400 shares beneficially owned by Mr. Harder's wife and
children and 1,554 shares held by Entrepreneurial, Inc. Mr. Harder is the
President of both Entrepreneurial, Inc. and Entrepreneurial Ventures, Inc.
(8)(6) The "Number of Shares Owned" is based on information contained in a report
on Schedule 13G, filed with the Securities and Exchange Commission on
February 4, 2000.
(7) The "Number of Shares Owned" is based on information contained in a report
on Schedule 13G, filed with the Securities and Exchange Commission on
February 4, 2000. William J. Torpey, Jr. is the president and Joan C.
McArdle is the vice president of Massachusetts Capital Resource Company, so
that Mr. Torpey and Ms. McArdle may be deemed to be the beneficial owners of
the shares held by Massachusetts Capital Resource Company.
(9)(8) Includes 25,50017,000 shares held by trusts for the benefit of certain of
Ms. Reeve's children.
(10) Consists of 381,451 shares owned by a profit sharing plan for the benefit
of Dr. Mills.
(11)(9) Includes 267,194219,194 shares and a warrant to purchase 3,000 shares held by a
trust for the benefit of Mr. Perfit.
(12) Includes 12,000 shares held by trusts for the children(10) Consists of Mr. Brown.
(13) Includes 300185,507 shares owned by Mr. Blackwell's wife.
(14) Includes 5,500 shares held by Advent Partners Limited Partnership. Mr.
Fillat holds a limited partnership interest in Advent Partners Limited
Partnership representing beneficial ownershipprofit sharing plan for the benefit
of 5,500 shares. He disclaims
beneficial ownership of the remaining 1,994,500 shares described in Note 4.
(15)Dr. Mills.
(11) Includes the shares described in Notes 7,5, 8, 9 10, 11, 12, 13 and 14.10.
19
COMPLIANCE WITH REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our executive officers and directors, and persons who own more than ten percent
of a registered class of our equity securities, to report changes in ownership
by filing Form 4 or 5 with the Securities and Exchange Commission. These
executive officers, directors and ten-percent stockholders are also required by
Securities and Exchange Commission rules to furnish us with copies of all
Section 16(a) reports they file. Based solely on our review of the copies of
these forms, we believe that all Section 16(a) reports applicable to our
executive officers, directors and ten-percent shareholders with respect to
reportable transactions during the fiscal year ended December 31, 19981999 were
filed on a timely basis.basis except that Dr. Mills failed to file on a timely basis
one report with respect to the sale of 80,000 shares of common stock, and
Mr. Harder failed to file one report with respect to the distribution of 48,080
shares of common stock by a corporation he controls.
PERFORMANCE GRAPH
The following graph compares the cumulative total return to stockholders of
our common stock, for the period from September 27, 1996 (the effective date of
the registration of our common stock under the Securities Exchange Act of 1934)
to December 31, 1998,1999, to the cumulative total return of the Nasdaq Stock Market
Index and the Nasdaq Computer & Data Processing Services Index for the same
period.
COMPARISON OF TWENTY-SEVENTHIRTY-NINE MONTH CUMULATIVE TOTAL RETURN*
AMONG LIGHTBRIDGE, INC., THE NASDAQ STOCK MARKET INDEX AND THE
NASDAQ COMPUTER & DATA PROCESSING SERVICES INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
NASDAQ STOCK MARKET NASDAQ COMPUTER & DATA PROCESSING SERVICES STOCKS LIGHTBRIDGE, INC.
Nasdaq & Data Processing
Lightbridge,
Stock Market Services Stocks Inc.
Sep-96 100.00 100.00 100.00
Oct-96 98.49 98.32 102.84
Nov-96 104.58 105.37 95.38
Dec-96 104.49 104.07 85.36
Jan-97 111.91 113.51 91.02
Feb-97 105.72 104.31 100.92
Mar-97 98.82 96.60 74.63
Apr-97 101.91 109.20 69.01
May-97 113.46 121.21 82.47
Jun-97 116.93 123.86 78.78
Jul-97 129.27 136.73 113.13
Aug-97 129.08 133.09 125.95
Sep-97 136.71 135.46 153.81
Oct-97 129.63 132.66 165.73
Nov-97 130.28 136.01 144.77
Dec-97 128.19 127.84 156.65
Jan-98 134.25 139.82 173.42132.23 137.47 178.34
Feb-98 138.31 148.14 159.62144.65 156.10 152.24
Mar-98 143.55 162.28 180.47149.99 168.88 154.05
Apr-98 136.30 150.05 159.30170.33 145.00
May-98 136.36 151.95 119.26144.16 158.49 120.36
Jun-98 156.18 194.03 130.90154.33 187.42 97.69
Jul-98 149.84 166.13 111.01152.70 181.42 76.61
Aug-98 108.20 122.01 93.65147.89 77.23
Sep-98 119.49 142.63 65.06139.72 176.67 51.25
Oct-98 112.49 125.45 41.29145.43 171.53 46.71
Nov-98 123.77 148.85 39.45159.75 198.10 49.69
Dec-98 131.82 168.89 29.05180.20 228.78 44.67
Jan-99 206.85 276.38 92.65
Feb-99 188.31 244.87 57.63
Mar-99 202.01 274.56 49.97
Apr-99 207.69 260.75 63.69
May-99 202.90 254.24 85.82
Jun-99 221.02 285.69 104.90
Jul-99 217.80 270.30 141.54
Aug-99 226.43 283.41 145.46
Sep-99 226.06 295.10 159.29
Oct-99 242.49 311.26 212.89
Nov-99 268.36 355.35 174.59
Dec-99 326.25 482.44 270.51
17
* $100 invested on September 27, 1996 in stock or index, including
reinvestment of dividends. Fiscal year ends December 31.
1820
--------------------------------
WHEN PROXY IS OKAY PLEASE SIGN &
DATE IT ABOVEOTHER MATTERS
OTHER BUSINESS
Neither we nor our Board of Directors intends to propose any matters of
business at the Annual Meeting other than those described in this proxy
statement. Neither we nor our Board knows of any matters to be proposed by
others at the Meeting.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
A stockholder who intends to present a proposal at the 2001 Annual Meeting
of Stockholders for inclusion in our 2001 proxy statement must submit the
proposal by January 27, 2001. In order for the proposal to be included in the
proxy statement, the stockholder submitting the proposal must meet certain
eligibility standards and must comply with certain procedures established by the
Securities and Exchange Commission, and the proposal must comply with the
requirements as to form and substance established by applicable laws and
regulations. The proposal must be mailed to our Secretary at our address set
forth on the Notice appearing on the cover of this proxy statement.
In addition, in accordance with our By-Laws, a stockholder wishing to bring
an item of business before the 2000 Annual Meeting of Stockholders must deliver
notice of the item of business to us at our offices no later than March 27,
2001, even if the item is not to be included in our proxy statement.
21
LIGHTBRIDGE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SPECIAL MEETING IN LIEU OF 19992000 ANNUAL MEETING OF STOCKHOLDERS
- JUNE 9, 1999MAY 25, 2000
The undersigned stockholder of Lightbridge, Inc. (the "Company") hereby
appoints Pamela D.A. Reeve and Joseph S. Tibbetts, Jr. and Alexander H. PyleA. Pignato and each or any of them,
proxies, with full power of substitution to each and to each substitute
appointed pursuant to such power, of the undersigned to vote all shares of
common stock of the Company that the undersigned may be entitled to vote at
the Special Meeting in Lieu of 19992000 Annual Meeting of Stockholders of the
Company to be held on Wednesday, June 9, 1999,Thursday, May 25, 2000, and at any and all adjournments
thereof (the "Meeting"), with all powers the undersigned would possess if
personally present. The proxies are authorized to vote as indicated on the
reverse side upon the matter set forth on the reverse side and in their
discretion upon all other matters that may properly come before the Meeting.
The undersigned hereby acknowledges receipt of a copy of the accompanying
Notice of Special Meeting in Lieu of 19992000 Annual Meeting of Stockholders and
Proxy Statement for the Meeting and hereby revokes all proxies, if any,
heretofore given by the undersigned to others for said Meetings.Meeting.
(IMPORTANT - TO BE SIGNED AND DATED ON REVERSE SIDE)
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
SPECIAL MEETING IN LIEU OF 19992000 ANNUAL MEETING OF STOCKHOLDERS
LIGHTBRIDGE, INC.
JUNE 9, 1999MAY 25, 2000
Please Detach and Mail in the Envelope Provided
A /X/ Please mark your vote
as in this example.
For all nominees WITHHOLD
(except as indicated AUTHORITY to vote
to the contrary at right) for all nominees
PROPOSAL 1. / / / / Nominees:
ELECTION OF Torrence C. Harder If this proxy, is properly executed and returned, the
DIRECTORS Pamela D.A. Reeve shares represented thereby will be voted. If a choice
is specified with respect to the matter to be acted
upon, the shares will be voted upon this matter in
accordance with the specifications made. IN THE
ABSENCE OF ANY SPECIFICATION, THE SHARES REPRESENTED
BY THIS PROXY WILL BE VOTED FOR PROPOSAL 1.
---
------------------------------------------------------
(INSTRUCTION: To withhold authority to PLEASE MARK, SIGN, DATE AND RETURN CARD PROMPTLY
vote for any individual nominee, strike USING THE ENCLOSED ENVELOPE.
a line through that nominee's name in ------------------------------------------------------
the list at right.)
Signature Date , 1999 Signature Dated: , 1999
---------------- ------- ------------------- --------- -------------------------------------------------------------------------------
PLEASE MARK YOUR
/X/ VOTES AS IN
THIS EXAMPLE.
WITHHOLD
AUTHORITY
to vote for the
FOR the nominee nominee
PROPOSAL 1. Nominee: Debora J. Wilson
ELECTION OF / / / /
DIRECTOR:
FOR AGAINST ABSTAIN
PROPOSAL 2. INCREASE IN NUMBER OF
SHARES ISSUABLE UNDER THE 1996 / / / / / /
INCENTIVE AND NONQUALIFIED STOCK
OPTION PLAN.
FOR AGAINST ABSTAIN
PROPOSAL 3. INCREASE IN NUMBER OF
SHARES ISSUABLE UNDER THE 1996 / / / / / /
EMPLOYEE STOCK PURCHASE PLAN
IF THIS PROXY IS PROPERLY EXECUTED AND RETURNED, THE SHARES REPRESENTED
THEREBY WILL BE VOTED. IF A CHOICE IS SPECIFIED WITH RESPECT TO THE MATTERS
TO BE ACTED UPON, THE SHARES WILL BE VOTED UPON THE MATTERS IN ACCORDANCE
WITH THE SPECIFICATIONS MADE. IN THE ABSENCE OF ANY SPECIFICATION, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
PLEASE MARK, SIGN, DATE AND RETURN CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
Signature: _________ Date: _______,2000 Signature: _________ Date: ______,2000
Note: Please date, sign exactly as name appears hereon and return promptly.
If the shares are registered in the name of two or more persons, each
should sign. Executors, trustees, guardians, custodians, administrators,
attorneys and corporate officers should add their titles.