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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
(Rule 14d-101)
SOLICITATION/RECOMMENDATION STATEMENT UNDER
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
AMENDMENT NO. 1
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MULTEX.COM, INC.
(Name of Subject Company)
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MULTEX.COM, INC.
(Name of Person(s) Filing Statement)
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Common Stock, par value $0.01 per share
(Title of Class of Securities)
625367 10 7
(CUSIP Number of Class of Securities)
Edward C. Fargis, Esq.
Multex.com, Inc.
100 William Street, 7th Floor
New York, New York 10038
212-607-2400
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)
WITH A COPY TO:
Phillip R. Mills, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
(212) 450-4000
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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ITEM 1. SUBJECT COMPANY INFORMATION.
The name of the company that is the subject of this
Solicitation/Recommendation Statement on Schedule 14D-9 is Multex.com, Inc., a
Delaware corporation. The address of its principal executive offices is 100
William Street, 7th Floor, New York, New York 10038 and its telephone number is
212-607-2400.
This document relates to Multex's common stock, par value $0.01 per share.
As of February 10, 2003, there were 32,511,117 shares of common stock
outstanding, and there were approximately 262 holders of record of that common
stock as of that date.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON.
The filing person is the subject company. Multex's name, business address
and business telephone number are set forth in Item 1 above.
This document relates to the tender offer by Proton Acquisition
Corporation, a Delaware corporation and an indirect wholly owned subsidiary of
Reuters Group PLC, a company organized under the laws of England and Wales, to
purchase all outstanding common shares of Multex for $7.35 per common share, net
to each selling stockholder in cash, upon the terms and subject to the
conditions set forth in Reuters' Offer to Purchase dated February 26, 2003, as
amended by Amendment No. 1 to Reuters' Schedule TO filed on March 12, 2003 and
Amendment No. 2 to Reuters' Schedule TO filed on March 19, 2003 (as so amended,
the "Offer to Purchase"), and the related Letter of Transmittal. Reuters has
described its offer in a Tender Offer Statement on Schedule TO (which includes
the information required to be reported by it as a filing person under Rule
13e-3 of the Securities Exchange Act of 1934) that it filed with the Securities
and Exchange Commission on February 26, 2003, as amended by Amendment No. 1 to
Reuters' Schedule TO filed on March 12, 2003 and by Amendment No. 2 to Reuters'
Schedule TO filed on March 19, 2003 (as so amended, the "Schedule TO").
Reuters' merger subsidiary is making this offer pursuant to an Agreement
and Plan of Merger dated as of February 17, 2003 among Multex, Reuters and its
merger subsidiary, as thereafter amended and restated as of February 24, 2003
and further amended by Amendment No. 1 to the amended and restated merger
agreement, dated as of March 17, 2003, among Multex, Reuters and its merger
subsidiary. A copy of the amended and restated merger agreement with Reuters is
filed as Exhibit 2.1 to our Report on Form 8-K filed with the Securities and
Exchange Commission on February 25, 2003 and a copy of Amendment No. 1 to the
amended and restated merger agreement is filed as Exhibit (d)(5) to the Schedule
TO of Reuters. We are incorporating both documents into this document by
reference. Our merger agreement with Reuters provides, among other things, that,
as soon as practicable after the consummation of the tender offer, and in
accordance with the Delaware General Corporation Law, Reuters' merger subsidiary
will be merged with and into Multex, with Multex continuing as the surviving
corporation of the merger and as a wholly-owned subsidiary of Reuters. At the
effective time of the merger, except for common shares held, directly or
indirectly, by Multex, Reuters or its merger subsidiary and common shares held
by Multex stockholders who do not tender into the offer and who comply with all
of the relevant provisions of Section 262 of Delaware General Corporation Law
relating to dissenters' rights of appraisal, each outstanding common share will
be converted into the right to receive $7.35 in cash or any greater amount per
common share paid in the offer by Reuters' merger subsidiary, without interest.
The merger is subject to the satisfaction or waiver of certain conditions, as
described more fully below and in our merger agreement with Reuters.
Acting on the unanimous recommendation of a special committee of our Board
of Directors comprised entirely of independent directors formed to consider the
proposed transaction with Reuters which we have called the Transaction
Committee, our Board of Directors has unanimously (i) determined that each of
the offer by Reuters' merger subsidiary, the subsequent merger of the merger
subsidiary into Multex and our merger agreement with Reuters is advisable, fair
to and in the best interests of Multex and its stockholders, excluding Reuters,
(ii) approved and adopted our merger agreement with Reuters and the transactions
contemplated thereby (including the offer and the merger), and (iii) recommended
that Multex's stockholders tender their common shares in the offer and, if
applicable, approve and adopt our merger agreement with Reuters and the
subsequent merger.
The Schedule TO states that the principal executive offices of Reuters and
its merger subsidiary are located at 85 Fleet Street, 4th Floor, London EC4P
4AJ, United Kingdom and c/o Reuters America Inc., 3 Times Square, 20th Floor,
New York, New York 10036, respectively, and their telephone number is
646-223-4000.
We are also incorporating into this document by reference the Information
Statement that is attached as Annex A to this document, which contains
information relating to Multex's officers and directors.
ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
Except as described or referred to in this Item 3, on the date of this
filing, there is no material agreement, arrangement or understanding and no
actual or potential material conflict of interest between Multex or its
affiliates, on the one hand, and (i) Multex's executive officers, directors or
affiliates, or (ii) Reuters, its merger subsidiary or any of their respective
executive officers, directors or affiliates, on the other hand.
OUR MERGER AGREEMENT WITH REUTERS
The summary of our merger agreement with Reuters and the description of the
conditions to Reuters' offer as contained under "SPECIAL FACTORS -- 9. The
Merger Agreement; The Tender Agreement and The Employment Agreement" and "THE
TENDER OFFER -- 9. Certain Conditions of the Offer" respectively, of the Reuters
Offer to Purchase are incorporated into this document by reference. We qualify
the summary and description of the merger agreement in their entirety by
reference to the merger agreement that is filed as Exhibit (d)(1) to the
Schedule TO of Reuters, and which agreement we incorporate into this document by
reference.
STOCKHOLDER TENDER AND VOTING AGREEMENT
Reuters and its merger subsidiary have entered into a stockholder tender
and voting agreement dated as of February 17, 2003, with Mikhail Akselrod, Gregg
Amonette, Christopher Feeney, Jeffrey Geisenheimer, Isaak Karaev, John Mahoney
and Robert Skea, which provides that those individuals will tender all of their
common shares into the offer by Reuters' merger subsidiary. These individuals
are all employees and/or officers of Multex, and they collectively own 3.7% of
Multex's outstanding common shares.
The following is a summary of the material terms of the stockholder tender
and voting agreement.
Tender of Shares. These individuals have agreed to tender all of
their Multex shares into the offer by Reuters' merger subsidiary.
Agreement to Vote in Favor of the Merger. These individuals are
required to vote their Multex shares in favor of the merger at any
stockholder meeting or in connection with any action to be taken by written
consent. They have further agreed to vote against any action or agreement
that would impede, interfere with, delay, postpone, discourage or adversely
affect the merger or the offer, including, but not limited to, any
agreement or arrangement related to an alternative takeover proposal.
Transfer Restrictions. These individuals are prohibited from,
directly or indirectly, transferring any of their Multex shares to any
person, other than Reuters, subject to two exceptions:
- the restriction on transfer shall terminate on May 17, 2003 with
respect to each individual, except Mr. Isaak Karaev; and
- three months before the expiration of any stock options held by these
individuals to purchase Multex shares, the individual holding that
option may transfer a number of Multex shares in connection with the
exercise (cashless or otherwise) of that option in an amount that is
sufficient to satisfy the payment of any transaction costs and any tax
liability incurred in connection with that exercise.
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Termination. The stockholder tender and voting agreement will
automatically terminate on the earlier to occur of:
- the completion of the merger;
- the termination of the stockholder tender and voting agreement by
written notice from Reuters to the individuals who are party to the
agreement; and
- the termination of the merger agreement in accordance with its terms.
The above summary is qualified by reference to the complete text of the
stockholder tender and voting agreement which is incorporated by reference into
this document and attached as Exhibit (d)(2) to the Schedule TO of Reuters.
On March 11, 2003, Reuters, its merger subsidiary and Mr. Karaev entered
into a letter agreement, pursuant to which Reuters and its merger subsidiary
waived certain provisions of the stockholder tender and voting agreement in
order to permit Mr. Karaev to transfer, pledge or assign up to 20,000 of his
Multex shares; provided that such transfer, pledge or assignment (1) is a (or
more than one) "charitable contribution" as such term is defined in Section 170
of the Internal Revenue Code of 1986, as amended, and (2) is a gift/ donation by
Mr. Karaev for which no consideration is received by him, any member of his
family or any of his affiliates. In addition, Mr. Karaev agreed that, and
Reuters' and its merger subsidiary's waiver shall only be effective if, any
filing made with any court, arbitral tribunal, administrative agency or
commission (including any Statement of Changes in Beneficial Ownership of
Securities on Form 4 filed with the Securities and Exchange Commission) or other
governmental or other regulatory authority or agency, foreign or domestic, in
connection with such transfer, pledge or assignment, shall clearly indicate that
such transfer, pledge or assignment was (1) in its entirety a "charitable
contribution" and (2) a gift/donation made by Mr. Karaev for which no
consideration was received by him, any member of his family or any of his
affiliates.
The above summary of the letter agreement among Reuters, its merger
subsidiary and Mr. Karaev is qualified by reference to the complete text of the
letter agreement which is incorporated by reference into this document and
attached as Exhibit (d)(4) to the Schedule TO of Reuters.
EMPLOYMENT AGREEMENT WITH MR. ISAAK KARAEV
In connection with negotiating the merger agreement with us, after the
parties agreed to proceed with negotiations on the basis of a price of $7.35 per
share and otherwise progressing other significant issues raised by a
transaction, Reuters discussed with us the value of Mr. Karaev and the
management team as important elements of the success of Multex going forward. On
February 17, 2003, as part of Reuters' effort to retain the employment of Mr.
Karaev after the completion of the merger, Reuters America Inc. executed an
employment agreement with Mr. Karaev containing terms and conditions that are
comparable in the aggregate to similarly situated Reuters' executives. Mr.
Karaev has confirmed to Multex that his execution of the employment agreement
was not related to his decision to tender his Multex shares in connection with
the offer by Reuters' merger subsidiary or his decision as a member of our Board
to recommend the tender offer and merger.
The following is a summary of the material terms of Mr. Karaev's employment
agreement with Reuters.
Title and Term. Mr. Karaev will join Reuters as President of the
Investment Banking and Brokerage division. Mr. Karaev's employment with
Reuters is for a period of two years (unless earlier terminated) and
contingent upon Reuters' acquisition of a majority of the outstanding
common shares of Multex.
Base Salary and Annual Bonus Opportunity. Mr. Karaev's base salary
will be $375,000, and his annual bonus opportunity will be 75% of his base
salary.
Equity. If Mr. Karaev remains in the continuous employ of Reuters for
the two-year term of the employment agreement, he will be eligible to
receive 200,000 ordinary shares of Reuters Group PLC.
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Benefits. Mr. Karaev will be eligible to participate in or receive
benefits under Reuters' various employee benefit plans.
Indemnity. For the period of his employment and thereafter, Reuters
will indemnify Mr. Karaev for any and all liabilities incurred by him while
acting in good faith in connection with the performance of his duties as an
officer or employee of Reuters.
Non-Disclosure of Confidential Information. At all times during the
period of Mr. Karaev's employment with Reuters and thereafter, Mr. Karaev
will hold all Reuters "confidential information" in the strictest of
confidence and will not, without prior consent, disclose, divulge, reveal
or communicate to any person whomsoever, or use for any purpose other than
for the exclusive benefit of Reuters, any confidential information
whatsoever, whether contained in Mr. Karaev's memory or embodied in
writing, electronic or other form.
Non-Competition and Non-Solicitation of Customers or Employees. At
all times during the period of Mr. Karaev's employment with Reuters and for
a period of another (a) 12 months if his employment ceases prior to his
first anniversary with Reuters or (b) 6 months if his employment ceases
after his first anniversary with Reuters, Mr. Karaev will not, directly or
indirectly, (i) own, manage, operate, control, be employed by, participate
in, or be connected with, in any manner, any business enterprise listed on
a schedule to the employment agreement or any entity created from, divested
from or merged with any of the scheduled business enterprises, (ii) become
a founder or a 10% or greater stockholder of a new company whose principal
business or businesses compete with any of Reuters' businesses, (iii)
solicit, seek to do business with, or interfere or damage any relationship
with any customer or client, former customer or client or prospective
customer or client of Reuters with whom Mr. Karaev comes into contact or
becomes aware of, or about whom Mr. Karaev obtained confidential
information, while employed by Reuters, or (iv) on behalf of himself or
another person, solicit, lure away, hire or encourage to resign any Reuters
employees with whom Mr. Karaev had contact or about whom Mr. Karaev became
aware or obtained confidential information while employed by Reuters, or
assist or aid in any such activity.
Severance Benefits. If Mr. Karaev is terminated without "cause" by
Reuters or he terminates his employment for "good reason", he will be
entitled to receive:
- in a lump sum payment an amount equal to (i) any accrued but unpaid
salary for services rendered to the date of termination, (ii) any
unused vacation, (iii) in the case of termination without "cause",
three months notice of termination and, if such notice is not
provided, salary for up to three months in lieu of notice, (iv) 48
weeks of base salary, and (v) prorated annual bonus amount; and
- the 200,000 ordinary shares of Reuters Group PLC referenced under the
subheading "Equity" above.
The above summary description of Mr. Karaev's employment agreement with
Reuters America Inc. is qualified in its entirety by reference to a copy of the
employment agreement which is filed as Exhibit (d)(3) to the Schedule TO of
Reuters.
MULTEX STOCK OPTION PLANS
Certain Multex Options to be Cashed Out. Our merger agreement with Reuters
provides that each outstanding option to purchase shares of Multex stock will be
cancelled prior to the effective time of the merger. In exchange for each
cancelled option, except for those cancelled options described in the paragraph
below, the holder of that option will receive from Multex an amount in cash
equal to the result of multiplying the total number of shares of Multex stock
previously subject to that unexercised, cancelled option by the positive
difference, if any, between $7.35 and the per share exercise price of that
option.
Certain Multex Options to be Rolled Over Into Reuters Restricted
Shares. With respect to cancelled options that (i) were previously issued under
the Multex 1999 Stock Option Plan pursuant to the Plan's
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"Discretionary Option Program", (ii) were not fully vested or exercisable
immediately before the effective time of the merger, (iii) had an exercise price
of less than $7.35 and (iv) were scheduled to vest and become exercisable in
2003 or 2004, at the effective time of the merger, Reuters will establish a
restricted share program pursuant to which holders of those options will be
entitled to receive ordinary shares of Reuters (or in the case of U.S. holders,
American Depositary Shares representing those ordinary shares). Under the
Reuters restricted share program, the ordinary shares of Reuters (or related
American Depositary Shares, as applicable) received in respect of those
cancelled Multex options will vest in the same proportion and on the same
vesting dates that those options would have vested had they not been cancelled.
On each such vesting date, the holder of that option will be entitled to receive
a number of ordinary shares of Reuters (or related American Depositary Shares,
as applicable) equal to the number of shares of Multex stock for which the
cancelled option would have become exercisable multiplied by an exchange ratio.
The exchange ratio is equal to a fraction, the numerator of which is the
difference between $7.35 and the per share exercise price of the cancelled
Multex option and the denominator of which is the dollar equivalent (determined
at or about the effective time of the merger) of the trading price of ordinary
shares of Reuters before the effective time of the merger (computed on an
average of the mid-market closing prices over a defined period). In addition, if
the price in dollars per Reuters ordinary share (or related American Depositary
Share, as applicable) on the day before the applicable vesting date multiplied
by the number of ordinary shares to be received by the holder on that vesting
date is less than the difference between $7.35 and the per share exercise price
of the cancelled Multex option multiplied by the number of shares of Multex
stock that would have become exercisable on that vesting date had the option not
been cancelled, Reuters will pay the difference to the holder in cash.
MULTEX EMPLOYEE STOCK PURCHASE PLAN
The terms of our employee stock purchase plan permit suspension of the plan
following the close of a purchase interval thereunder. Accordingly, our merger
agreement with Reuters provides that the plan will be suspended as of the close
of the current purchase interval, and it is expected that this plan will be
terminated upon consummation of the merger. Until the plan is suspended, any
outstanding elections to purchase Multex stock under the plan will be honored,
but no new purchase rights will be granted and participation by any newly
eligible employees under the plan will be prohibited. The plan provides that the
purchase price of Multex stock for participants under the plan during any
purchase interval will be 85% of the lower of (i) the fair market value of
Multex stock on the participant's entry date into the offering period for that
purchase interval or (ii) the fair market value of Multex stock on the last day
of that purchase interval (or, if our merger closes before the end of the
current purchase interval, the fair market value of Multex stock immediately
before the effective date of the merger). As a result of this formula which is
prescribed by the plan, plan participants with outstanding elections to purchase
Multex stock in the current purchase interval will likely acquire Multex stock
for this purchase interval at a significant discount from the Reuters' merger
subsidiary offer price of $7.35 per common share.
CONFIDENTIALITY AND STANDSTILL AGREEMENTS
On December 16, 2002, Multex and Reuters signed a confidentiality agreement
providing that Reuters and its affiliates shall keep confidential certain
non-public information provided by Multex. We have attached a copy of the
confidentiality agreement as Exhibit 99.2 to the Report on Form 8-K filed by
Multex on February 25, 2003 and are incorporating it into this document by
reference.
Thereafter, on January 29, 2003, Multex and Reuters signed a standstill
letter agreement prohibiting Reuters and its affiliates from acquiring Multex
shares without Multex's consent, subject to certain exceptions. We have attached
a copy of that letter agreement as Exhibit 99.3 to the Report on Form 8-K filed
by Multex on February 25, 2003 and are incorporating it into this document by
reference.
INDEMNIFICATION
Pursuant to our merger agreement with Reuters, the parties have agreed that
(i) Multex, as the surviving entity of the merger, will indemnify and hold
harmless the present and former officers and directors of Multex in respect of
acts or omissions occurring at or before the effective time of the merger to the
fullest extent
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permitted by Delaware General Corporation Law and to the same extent and subject
to the same terms as provided under Multex's certificate of incorporation and
bylaws in effect on the date of our merger agreement and under any
indemnification agreement with Multex and (ii) for six years after the effective
time of the merger, Multex, as the surviving entity of the merger, must provide
officers' and directors' liability insurance with respect to acts or omissions
occurring on or before the effective time of the merger covering each such
person currently covered by Multex's officers' and directors' liability
insurance policy on terms with respect to coverage and amount that are no less
favorable than those of that policy in effect on the date of our merger
agreement. The merger agreement further provides that, if Reuters so directs or
if it does not object, Multex will purchase a directors' and officers' insurance
policy shortly before the merger in order to satisfy these obligations, subject
to a limitation on the cost of this policy of $2,000,000.
EXISTING RELATIONSHIP WITH REUTERS
Mr. Devin N. Wenig, President -- Customer Segments of Reuters, has served
on our Board of Directors since February 2000, and other officers of Reuters
have served as directors of Multex in the past. Mr. Wenig joined the Board of
Directors of Reuters as an executive director on February 17, 2003. Reuters does
not have any contractual right to nominate any member of our Board or of any
Board committee, nor does Reuters' 6% equity interest provide it with the
ability to ensure the nomination or re-election of any person to our Board.
Furthermore, Mr. Wenig does not sit on our Board as a deputized representative
of Reuters. Mr. Wenig also does not serve on the Audit or Compensation Committee
of our Board.
Another Multex director, Sir Peter Job, was the Chief Executive Officer of
Reuters until his full retirement on July 31, 2001. Sir Peter does not serve as
a representative of Reuters on our Board and was not nominated to our Board
until April 23, 2002. Sir Peter does not own any shares of Multex Common Stock
or hold any options to acquire shares of Multex Common Stock, nor does he serve
on the Audit or Compensation Committee of our Board. Sir Peter is also a
director of TIBCO Software Inc. ("TSI"), which is 49.9% owned by Reuters through
one of its subsidiaries. Sir Peter was initially nominated to the Board of TSI
while he was CEO of Reuters.
Mr. Wenig and Sir Peter are both directors of Instinet Group Incorporated,
a majority owned and publicly quoted subsidiary of Reuters.
Multex and Reuters have maintained an ongoing business relationship for
several years. As described in greater detail in the Information Statement,
Reuters and Multex have entered into various operating agreements and two joint
ventures.
See also "SPECIAL FACTORS -- 1. Background of the Offer; Contacts with
Multex" in the Reuters Offer to Purchase filed with the Securities and Exchange
Commission on February 26, 2003 which we are also incorporating into this
document by reference.
REGISTRATION RIGHTS AGREEMENTS
Except for the stockholder tender and voting agreement described above and
certain registration rights agreements which remain in existence and are
described in this paragraph, Multex is not a party to any agreement, arrangement
or understanding with any person with respect to any Multex securities. A
registration rights agreement generally grants a stockholder the right to cause
a company to register its securities under applicable law (i.e., a demand
registration) or to participate in a registration being effected by a company on
its own behalf or on behalf of others (i.e., a piggyback registration). The
registration rights agreements to which Multex is a party are the following:
- On January 31, 2000, Multex entered into a Registration Rights Agreement
with Merrill Lynch & Co., Inc. providing for demand registration and
piggyback registration of restricted shares held by Merrill Lynch.
- On March 20, 2000, Multex entered into a Registration Rights Agreement
with Alan J. Cohn, David M. Cohn and Stephen L. Cohn providing for
piggyback registration of common stock of Multex.
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- On July 31, 2000, Multex entered into a Registration Rights Agreement
with the Munder Funds, Inc. providing for piggyback registration of
common stock in Multex held by The Munder Funds.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
RECOMMENDATION OF MULTEX BOARD
Acting on the unanimous recommendation of the Transaction Committee, our
Board of Directors has unanimously (i) determined that each of the tender offer
by Reuters' merger subsidiary, the subsequent merger of the merger subsidiary
into Multex and our merger agreement with Reuters is advisable, fair to and in
the best interests of Multex and its stockholders, excluding Reuters, (ii)
approved and adopted our merger agreement with Reuters and the transactions
contemplated thereby (including the offer and the merger), and (iii) recommended
that Multex's stockholders tender their common shares in the offer and, if
applicable, approve and adopt our merger agreement with Reuters and the
subsequent merger.
Reuters and Multex issued a joint press release on February 18, 2003
announcing the offer and the subsequent merger, which press release is filed
under cover of Schedule 14D-9C by Multex on February 18, 2003 and incorporated
into this document by reference. We have filed a copy of a letter to Multex
stockholders communicating the recommendation of the Board of Directors as
Exhibit 3 to this document and incorporate it into this document by reference.
BACKGROUND
Multex is one of many companies in the business of providing financial
information and technology solutions for the financial services industry. This
is a highly competitive market. Many of the companies that operate in this
industry are substantially larger and have far greater resources than Multex.
Multex has recognized that having strategic and commercial business
relationships with other companies in the industry is important to its future
growth and success. Accordingly, from time to time, Multex has discussed
entering into a variety of business and strategic relationships with other
companies that provide investment information. As a result of these discussions,
over the past several years, Multex has entered into a number of business and
strategic arrangements with various parties, including Reuters. Reuters has also
been an investor in Multex since June 1996.
In addition, over the past several years, Mr. Isaak Karaev, Multex's
Chairman and Chief Executive Officer, and several other representatives of
Multex, have had discussions with their counterparts at Reuters and at several
of our competitors and other related businesses regarding the possibility of a
strategic combination of their respective companies. The representatives of
these potential bidders have indicated that either their companies were not
interested in a business combination with Multex at a price that Multex found
attractive or valued only certain portions of our business. In any event, none
of these expressions of interest or discussions progressed in any meaningful way
because, among other things: (i) the acquisition of Multex was not then a
sufficiently compelling opportunity for Reuters based on Reuters' business
strategy at the time, (ii) Reuters then-current organizational structure would
have made integration of Multex difficult and (iii) in light of the foregoing
and other factors, the parties did not believe they would be able to arrive at a
common view on valuation. Other than as described below, there have been no
negotiations, transactions or material contacts during the past two years
between Multex (or any of its subsidiaries or executive officers and directors)
and any party concerning any merger, consolidation, acquisition, tender offer
for or other acquisition of any class of Multex securities, election of Multex's
directors or sale or other transfer of a material amount of Multex's assets.
In late 2002, during a conversation between Mr. Karaev and Mr. Thomas
Glocer, Chief Executive Officer of Reuters, Mr. Glocer expressed an interest in
entering into discussions regarding Reuters' potential acquisition of Multex.
This renewed interest was due to, among other things: recent and pending
developments in Reuters' organizational structure, which made a quick and full
integration more feasible than in the past, and in Reuters' business strategy,
which placed a renewed emphasis on value-added content such as is offered by
Multex, recent developments and perceived opportunities in the markets for
research such as is offered by Multex, and general market and industry
conditions including Multex's then current stock price.
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On Thursday, December 12, 2002, Mr. Karaev and Mr. Christopher Ahearn,
President -- Corporates & Media of Reuters, met and agreed to work towards a
common view on the valuation at which the respective parties may be prepared to
proceed with a transaction. Mr. Karaev indicated that he believed that a minimum
acceptable price must exceed $7.00 per share.
Thereafter, on Tuesday, December 17, 2002, at a special meeting of the
Board of Directors of Multex, the Board determined that it was advisable to form
a Transaction Committee consisting of Robert Greene, Lennert Leader, Maurice
Miller and John Tugwell. None of these individuals is or has been a director,
officer or employee of Reuters (or any subsidiary of Reuters) or an officer or
employee of Multex or its subsidiaries. The Transaction Committee's
responsibility was to evaluate and review all of Multex's strategic
alternatives, including a possible business combination with Reuters. The
Transaction Committee determined to retain a financial advisor and legal counsel
to assist it in reviewing and evaluating its strategic alternatives.
On the same day, representatives of Reuters and senior Multex executives
met to discuss the process for the two companies in considering and progressing
a possible transaction. At that meeting, the Multex executives agreed to make
high-level financial information regarding Multex available for Reuters' review.
Reuters and Multex entered into a confidentiality agreement on that day (which
agreement was nevertheless dated as of December 16, 2002), and thereafter and
during the following weeks Multex provided Reuters such information concerning
Multex's business, including the 2003 Multex Budget Information (as defined in
"THE TENDER OFFER - 6. Certain Information Concerning Multex" in Reuters' Offer
to Purchase), the Multex Four-Year Forecasts (as defined in "THE TENDER OFFER -
6. Certain Information Concerning Multex" in Reuters' Offer to Purchase) and
certain more detailed revenue information and breakdowns for 2002 and 2003, with
a view towards enabling Reuters to provide Multex with an indication of the
range at which Reuters would consider proposing to acquire Multex.
On Friday, December 20, 2002, the Transaction Committee retained Davis Polk
& Wardwell as its legal counsel. On the following Monday, December 23, 2002,
representatives of Multex's Transaction Committee and management and Davis Polk
& Wardwell interviewed three prospective financial advisors. Thereafter, on
January 8, 2003, Bear, Stearns & Co. Inc. was asked to serve as the Transaction
Committee's financial advisor, and Bear Stearns began assisting Multex in its
review and evaluation of its strategic alternatives.
Over the weekend of January 11-12, 2003, Mr. Ahearn spoke with Mr. Karaev
and communicated that, based on information received and discussions with Multex
management to date, Reuters preliminarily valued Multex at a range not likely to
exceed $6.00 per share. Mr. Ahearn made clear that any indications of value were
subject to satisfactory review of non-public information about Multex and its
business, mutually acceptable definitive documentation, satisfactory employment
arrangements and approval of Reuters' Board of Directors, among other things.
Mr. Ahearn also advised Mr. Karaev that Reuters wished to pursue negotiations
regarding a transaction with Multex on an expedited basis and to structure the
transaction to facilitate the closing of the acquisition of 100% of Multex as
rapidly as possible, and emphasized that Reuters would terminate discussions if
Multex undertook an auction process. Mr. Karaev indicated that Multex's views on
valuation had not changed. The primary basis for the parties' differences
regarding the valuation of Multex was the use of different valuation methods,
different assumptions underlying such methods, different views on the
appropriate range of realizable synergies, and differing views on Multex's
projected stand-alone financial performance.
On Monday, January 13, 2003, Mr. Karaev met with Mr. Ahearn and Mr. Eric
Lint, Executive Vice President -- Business Development of Reuters, to discuss
preliminary valuation. Mr. Karaev and Mr. Ahearn each reiterated their views on
value. Mr. Ahearn indicated that Reuters desired to enter into a transaction by
February 10, 2003 and, to that end, it was important for Reuters to have access
to Multex's business segment heads in order to ask questions of them and further
Reuters' understanding of Multex's businesses. On the following day,
representatives of Reuters and Multex met again to discuss certain high-level
financial information regarding Multex.
On Wednesday, January 15, 2003, at a meeting of the Transaction Committee,
the Transaction Committee formally authorized the engagement of Bear Stearns as
financial advisor to Multex. With the assistance of management, Bear Stearns and
Davis Polk & Wardwell, the Transaction Committee discussed
8
the preliminary indication from Reuters. After considering various strategic and
tactical alternatives, the Transaction Committee determined that stockholder
interests would be best served by pursuing the possibility of a negotiated
transaction with Reuters and directed Bear Stearns to enter into discussions
with Reuters' financial advisor, J.P. Morgan plc.
Following the Transaction Committee meeting, Mr. Karaev told Mr. Ahearn in
a telephone call that he had preliminarily discussed Reuters' proposed offer
range with the Transaction Committee, and that the Transaction Committee was
considering commencing discussions with other companies who might have an
interest in a transaction with Multex. Mr. Ahearn reiterated that Reuters was
unwilling to participate in an auction process. On the same day, Mr. Lint met
with Mr. Karaev. In response to Mr. Lint's request that Multex make more
detailed due diligence information available to Reuters, Mr. Karaev stated that
Multex wanted to keep the information exchanged at a high level and focus on
evaluating operational and strategic synergy issues.
On Thursday, January 16, 2003, representatives of Reuters spoke with
representatives of Multex and separately the companies' financial advisors spoke
with each other. The topic of these conversations was the companies' competing
views regarding value. Neither party indicated any movement towards the other
party's views on valuation during these discussions.
On Friday, January 17, 2003, Multex's and Reuters' financial advisors
engaged in discussions in which Multex's financial advisor indicated that some
additional, non-public information would continue to be made available, but that
Multex would require Reuters to enter into a standstill agreement. Multex's
advisors also indicated that Multex had been approached with an unsolicited,
informal indication of interest. Reuters' financial advisor reiterated Reuters'
unwillingness to participate in an auction, and that Reuters would need access
to Multex's business segment heads to gain a better understanding of Multex's
businesses. Multex's advisors indicated that Multex would be able to make
financial projections available by early the following week.
On Wednesday, January 22, 2003, certain business segment heads of Multex
met with representatives of Reuters for most of the day to discuss financial and
operational issues and possible areas of synergies. Towards the end of the
meeting, Reuters reiterated previous requests to be provided with Multex's
financial projections and more detailed information regarding its business than
previously had been made available by Multex. Multex notified Reuters that it
would not provide financial projections or more detailed non-public information
regarding Multex to Reuters unless Reuters increased its proposed value range
and entered into a standstill agreement.
On Thursday, January 23, 2003, Reuters indicated to Multex that it would
enter into a standstill agreement, but only in satisfactory form and only if
Multex agreed to enter into a one-month exclusivity agreement with Reuters.
Multex refused to consider any exclusivity agreement and reiterated its
requirement that Reuters execute a standstill agreement before receiving
projections or any more detailed information regarding Multex.
On Friday, January 24, 2003, Multex's financial advisor indicated to
Reuters' financial advisor that Reuters needed to make a substantial increase in
its proposal in order to progress the exchange of information and a transaction
more generally. Following a discussion with management of Reuters, Reuters'
financial advisors suggested to Multex's financial advisors that, based on
information received and discussions with Multex management to date, including
regarding possible levels of synergies, Reuters would consider increasing its
proposed offer for Multex by approximately 10%. Reuters' financial advisors
reiterated its interest in further discussions and in receiving more detailed
information regarding Multex's financial performance and business generally, but
Multex again demanded that Reuters enter into a standstill agreement. Multex's
financial advisors also reiterated Multex's view that Reuters would need to
propose a valuation in excess of $7.00 per share to be considered a viable
bidder for Multex.
On Tuesday, January 28, 2003, Mr. Ahearn telephoned Mr. Karaev to inform
him that, based on information received and discussions with Multex management
to date (including regarding synergies) and subject to the previously listed
caveats, Reuters would be willing to consider paying $7.00 per share in cash for
9
all outstanding shares of Multex common stock. Mr. Ahearn indicated that Reuters
had reached the limit of the price that it was willing to offer without
substantial additional positive information, and stated that Reuters desired an
exclusivity agreement before moving forward. Mr. Karaev said Reuters had reached
a value range where Multex considered Reuters a "serious" bidder, but reiterated
that Multex was not willing to enter into an exclusivity agreement. Mr. Karaev
also reiterated that Multex would not move forward without a standstill
agreement, and would not discuss their view of valuation with Reuters further
until Reuters had reviewed Multex's projections after entering into a standstill
agreement. Later that day, Reuters sent Multex a detailed information request
and indicated that it would consider entering into a standstill agreement in
satisfactory form.
On the same day, the Multex Board of Directors held regularly scheduled
Board and committee meetings. At the Board meeting, management presented its
plan and budget for 2003, and Mr. Karaev informed the Multex Board of the status
of discussions with Reuters. Later on the same day, the Transaction Committee
held a meeting, together with its financial and legal advisors and
representatives of management, to consider Reuters' proposal and its strategic
alternatives. Discussion centered on the importance of requiring a standstill
agreement and providing projections and additional information regarding
synergies in order to enable Reuters to offer a full valuation of Multex.
On Thursday, January 30, 2003, Multex announced its financial results for
the fourth quarter ended December 31, 2002. Multex reported a lower net loss for
that period compared with the same period a year earlier, attributed in part to
higher revenues, the elimination of performance-based warrant charges and
improved gross margins.
Also on Thursday, January 30, 2003, Reuters and Multex entered into a
standstill agreement (which was dated as of January 29, 2003) as a precondition
to Multex providing Reuters with additional non-public information that had been
requested by Reuters. On the same day, following execution of the standstill
agreement, Multex provided the Multex Four-Year Forecasts (as defined in "THE
TENDER OFFER--6. Certain Information Concerning Multex" in Reuters' Offer to
Purchase) to Reuters.
On Friday, January 31, 2003 and Sunday, February 2, 2003, the Transaction
Committee held meetings to discuss Reuters' proposal and Multex's strategic
options further, including alternatives involving other possible parties. The
Transaction Committee discussed at length with its financial and legal advisors
a number of considerations, including:
- any regulatory risks that may exist in a business combination with other
possible parties;
- the limited number of parties who would be likely to have an interest in
acquiring Multex;
- the timing constraints associated with Reuters' interest in reaching
agreement before its scheduled Tuesday, February 18, 2003 earnings
announcement;
- the serious risks to Multex's business of discussing a potential deal
with some of their competitors and customers;
- the likelihood of Reuters withdrawing its proposal if a deal was not
reached;
- the strategic value of the deal to Reuters;
- the likelihood that Reuters would become a competitor of Multex if the
acquisition of Multex was unsuccessful; and
- the ability of other possible parties to complete a business combination.
At those meetings, Multex's financial advisor provided the Transaction Committee
with certain financial analysis regarding negotiation tactics and strategy, and,
at the February 2, 2003 meeting, the Transaction Committee instructed its
financial advisor to communicate to Reuters' financial advisor that Multex would
be willing to proceed with a business combination, but only if Reuters increased
its offer price.
Later in the day of Friday, January 31, 2003, Mr. Ahearn spoke with Mr.
Karaev and discussed issues raised at Reuters' Board of Directors meeting and
the desire of both parties to progress discussions. However,
10
Multex's representatives refused to provide more detailed information about its
business until there was a narrowing of views on purchase price.
On Monday, February 3, 2003, representatives of Multex and Reuters and
their financial advisors met to further discuss the proposed business
combination and Multex's financial projections. Later in the day, Multex's
financial advisor communicated to Reuters' financial advisor Multex's
willingness to consider a transaction, but only at a higher price. During the
following days, Reuters' and Multex's financial advisors engaged in negotiations
over the proposed price per share during which time Reuters' financial advisor
reiterated a $7.00 price per share limit based on the information received to
date, and Multex's financial advisor indicated that Multex's Transaction
Committee had only authorized proceeding at a price in excess of $8.00 per
share.
On Tuesday, February 4, 2003, an investment banker representing a
competitor of Multex called Multex's financial advisor to explore whether Multex
would be interested in pursuing a business combination with that competitor.
Prior to this formal communication, representatives of this competitor had made
several informal approaches to certain officers of Multex who were not directly
involved in considering Multex's strategic alternatives. These representatives
directed any such indications of interest to Mr. Karaev and/or Bear Stearns.
Representatives of Bear Stearns also received a call from an employee of that
competitor inquiring about a potential business combination with Multex.
Representatives of Bear Stearns informed that competitor's representative that
any expressions of interest in a potential business combination with Multex
should specifically address valuation, the proposed solutions to certain
completion risks that may be raised by a potential business combination with
that party and the risks to Multex's relationships with its customers and
employees that could arise from a discussion with that competitor. Multex was
advised that it should expect to receive a proposal from that competitor on the
following Friday afternoon or Monday morning.
On Wednesday, February 5, 2003, Mr. Karaev called Mr. Lint and told him
that the Transaction Committee would meet on February 6, 2003. Mr. Lint
reiterated that Reuters would not go above $7.00 per share based on the
information it had been provided to date. On that same day,
PricewaterhouseCoopers LLP began conducting an accounting review of Multex on
behalf of Reuters. Also, Reuters' counsel informed the Transaction Committee's
counsel that Reuters intended to complete the transaction as rapidly as possible
and accordingly required that the transaction be structured as a tender offer
for all outstanding shares followed by a second-step merger in which Reuters
would acquire all the shares of Multex common stock not tendered into the tender
offer, as well as certain other desired key terms of the transaction, including
the Top-Up Option (as defined in "SPECIAL FACTORS - 9. The Merger Agreement; The
Tender Agreement and The Employment Agreement" in Reuters' Offer to Purchase) to
Reuters.
On Thursday, February 6, 2003, the Transaction Committee held a meeting
with its financial and legal advisors and management to discuss the expression
of interest in a business combination by one of Multex's competitors and to
consider certain significant open issues with respect to Reuters' proposal,
including price. Following the meeting, Mr. Karaev indicated to Mr. Ahearn that
the Transaction Committee did not believe that $7.00 per share was a
sufficiently pre-emptive price and that, although they had been in active
discussions with Reuters exclusively in good faith, if Reuters did not increase
its offer, Multex would consider approaching other possible acquirors. Mr.
Karaev also informed Mr. Ahearn that Multex had received an unsolicited
preliminary expression of interest from another party that was a direct
competitor of Multex. Mr. Ahearn indicated that Multex could of course pursue
another opportunity if it chose, but reiterated that the price proposed by
Reuters was a firm price based on the information received and discussions with
management to date, and that if Reuters learned that Multex was in discussions
with another bidder, it would terminate its discussions with Multex.
On Friday, February 7, 2003, Multex's financial advisor was again contacted
by the investment banker who represented a competitor of Multex and was told
that, in light of certain complexities involved in a potential business
combination with Multex, the competitor had decided to forego discussions
concerning a business combination with Multex indefinitely. In a separate
development on that day, Multex's financial advisor called a senior officer of
another Multex competitor. During the course of that conversation, a
representative of Bear Stearns discussed with that senior officer the
possibility of a business combination with
11
Multex. While that competitor had expressed interest in portions of Multex's
business in the past, the senior officer stated that at that time his company
had no intentions to purchase all or part of Multex's business.
During the day of Friday, February 7, 2003, the parties' financial advisors
spoke to discuss the status of the transaction and information regarding Multex.
Multex's financial advisors indicated that they had not been authorized to offer
a price below $8.00 per share, but they inquired whether Reuters would be
willing to increase its proposed price if Multex was willing to decrease its
proposed price. Reuters' financial advisors indicated that they would need to
discuss the matter with representatives of Reuters.
Mr. Glocer and Mr. Karaev subsequently spoke on Friday, February 7, 2003.
During the call, Mr. Glocer suggested Multex consider a price of $7.25 per share
in cash for all outstanding shares of Multex, but that he would need to discuss
that price with Reuters' Board of Directors before he could formally offer it
and that it was subject to detailed due diligence and the other previously
listed caveats. Mr. Karaev indicated that although he was not authorized to
offer it, he would like to discuss whether the parties could settle on a $7.50
per share price. Mr. Glocer also stated that he believed that the other
potentially interested party, which was a direct competitor of Multex, would
likely face an extended review period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and significant risk that a transaction would not be
consummated. Consequently, Mr. Glocer indicated that any expressions of interest
from that party could not be considered comparable to an equal bid by Reuters.
Mr. Glocer and Mr. Karaev agreed that the parties should continue considering
the matter over the weekend and engage in further discussions if warranted. In a
telephone conversation on Saturday, February 8, 2003, Mr. Ahearn reiterated to
Mr. Karaev that Reuters' proposed price per share was $7.25.
On Sunday, February 9, 2003, Mr. Glocer and Mr. Karaev spoke again. In this
discussion, Mr. Glocer stated that Reuters' last and final offer was $7.35 per
share for all outstanding shares of Multex, based on all the information
received and discussions with Multex management to date, including regarding
possible levels of synergies and subject to approval of Reuters' Board of
Directors, the exchange of detailed, non-public information regarding Multex and
the other previously listed caveats. Mr. Karaev indicated that he believed this
might be a sufficient price for the parties to pursue a potential transaction
and that he would discuss it with the Transaction Committee. Mr. Ahearn
confirmed Mr. Glocer's proposal in a telephone conversation with Mr. Karaev on
Monday morning, February 10, 2003, and Mr. Karaev then reported the latest
proposal at a meeting of the Transaction Committee later that morning. The
Transaction Committee discussed the latest proposal with management and the
legal and financial advisors and considered the range of available alternatives.
After that discussion, the Transaction Committee determined that Reuters' latest
proposal constituted a sufficient basis to negotiate a merger agreement with
Reuters and authorized its management and legal and financial advisors to
commence negotiations with Reuters with respect to such an agreement.
Following the Monday, February 10, 2003 Transaction Committee meeting,
legal counsel of Multex and Reuters exchanged draft merger agreements and
initiated discussion of a number of significant issues pertaining to those draft
agreements. On that same day, Reuters and its advisors began reviewing and
assessing detailed legal information through visits to a data room at the
offices of Davis Polk & Wardwell, as well as detailed operational information
through discussions with senior Multex personnel. Negotiations of definitive
documentation and the exchange and analyses of information regarding Multex's
business continued throughout the week. In the course of this week, Multex
provided the Multex 2003 Budget Information (as defined in "THE TENDER OFFER -
6. Certain Information Concerning Multex" in Reuters' Offer to Purchase) to
representatives of PricewaterhouseCoopers, LLP.
On Wednesday, February 12, 2003, Mr. Karaev had a discussion with the chief
executive officer of another potentially interested strategic party on a number
of topics. During the course of this conversation, this executive stated that,
if his firm were interested in Multex, it was only prepared to consider offering
a price in the range of $5 to $6 per share for Multex.
From Friday, February 14, 2003 through Monday, February 17, 2003,
representatives of Reuters and Multex engaged in numerous conference calls and
meetings to negotiate the terms of the merger agreement and the stockholder
tender and voting agreement. As part of negotiating the terms of the merger
agreement, Reuters reiterated its requirement that Multex grant its merger
subsidiary the Top-Up Option (as defined in
12
"SPECIAL FACTORS - 9. The Merger Agreement; The Tender Agreement and The
Employment Agreement" in Reuters' Offer to Purchase) to increase the likelihood
of being able to complete the back-end merger to acquire 100% of Multex shortly
after consummation of the offer. After discussing the purpose of the Top-Up
Option, the parties' desire to increase the likelihood of a prompt closing of
the merger and as part of negotiating all the terms of the transaction, Multex
agreed to grant Reuters' merger subsidiary the Top-Up Option.
On Sunday, February 16, 2003, the Transaction Committee met with its
advisors. Davis Polk & Wardwell again advised the Transaction Committee as to
its legal duties and responsibilities and then outlined the proposed structure
of the transaction, the key terms and conditions of the transaction agreements
and the issues that remained to be negotiated. Bear Stearns presented its
preliminary financial analysis to the Transaction Committee on the fairness of
the consideration to Multex's stockholders, excluding Reuters, from a financial
point of view. Management again presented its views as to why a sale of the
company at the price proposed by Reuters was in the best interests of Multex's
stockholders. After a further discussion regarding the range of other available
alternatives, the Transaction Committee again concluded that proceeding with
Reuters at the price and on the terms under negotiation remains in the best
interests of Multex's stockholders.
On Monday, February 17, 2003, the Transaction Committee again met with its
legal counsel and financial advisors. Davis Polk & Wardwell again advised the
Transaction Committee on its legal duties and responsibilities and described the
structure of the transaction and the key terms and conditions of the transaction
agreements and developments in negotiations from the preceding day. The
Transaction Committee thereafter received a report from Bear Stearns as to the
fairness of the consideration to Multex's stockholders, excluding Reuters, from
a financial point of view. After these presentations and another summary from
management on why a sale of the company at the price proposed by Reuters was in
the best interests of Multex's stockholders, the Transaction Committee
unanimously agreed to recommend the proposed transaction to the Board of
Directors. Immediately following, the Board of Directors convened at which time
the Transaction Committee members and representatives of its legal and financial
advisors reported to the entire Board on the merger agreement with Reuters and
the transactions contemplated thereby, including the tender offer by Reuters'
merger subsidiary and the subsequent merger of its merger subsidiary with and
into Multex. After receiving a description of its fiduciary duties, the
conclusions and recommendations of the Transaction Committee, the fairness
opinion received from Bear Stearns and a summary of the other principal terms of
the transaction, Multex's Board unanimously approved the proposed transaction.
The parties executed the merger agreement as of February 17, 2003 (which
was thereafter amended and restated as of February 24, 2003 to clarify certain
issues and language to reflect the parties' intent more accurately), and the
transaction was publicly announced in both the United Kingdom and the United
States during the early morning of Tuesday, February 18, 2003. A copy of the
joint press release was filed with the Securities and Exchange Commission under
cover of Schedule 14D-9C by Multex on February 18, 2003 and is incorporated into
this document by reference.
REASONS FOR THE RECOMMENDATION OF THE MULTEX BOARD
In (i) determining that each of the tender offer by Reuters' merger
subsidiary, the subsequent merger of the merger subsidiary into Multex and our
merger agreement with Reuters is advisable, fair to and in the best interests of
Multex and its stockholders, excluding Reuters, (ii) approving and adopting our
merger agreement with Reuters and the transactions contemplated thereby
(including the tender offer and the merger) and (iii) recommending that Multex's
stockholders tender their common shares in the tender offer and, if applicable,
approve and adopt our merger agreement with Reuters and the merger, the
Transaction Committee, in making its recommendation, and our Board of Directors,
in giving its approval, considered a number of factors, including the following,
in addition to the factors mentioned in the section entitled "Background" above
in this Item 4.
In the course of reaching its decision to recommend our merger agreement
with Reuters and the transactions contemplated by the merger agreement,
including Reuters' offer and the subsequent merger, the
13
Transaction Committee consulted with its financial and legal advisors and
Multex's management and considered a number of factors in making the
recommendation, including the following:
(1) our business, financial condition, results of operations, assets,
liabilities, business strategy and prospects, as well as various
uncertainties associated with these prospects. Specifically, the
Transaction Committee also considered:
- the historical performance of Multex;
- management's business plan for fiscal year 2003;
- the long-range projections of management;
- the potential impact on Multex's business plan posed by various risks
inherent in achieving management's long-range plan;
- the challenging current economic conditions generally and the economic
pressures facing our customers; and
- the greater financial resources of some of our competitors which could
create competitive disadvantages to us.
(2) the public market for our stock. Specifically, the Transaction
Committee also considered:
- the decline in trading prices for Multex common shares in the period
since its initial public offering and the low probability that these
market values would recover over the short-term;
- the historical and current market prices, earnings before interest,
taxes, depreciation and amortization and other multiples, recent
trading activity and trading range for our common shares, market
indices and the common shares for businesses in the Financial
Information Services Sector provided to the Transaction Committee by
Bear Stearns; and
- the historically low trading volume of our stock, the volatility of
our stock price and the ability of our stockholders to realize
liquidity with respect to their shares in light of that trading volume
and volatility even if Multex were to achieve its business plan.
(3) the potential stockholder value that could be expected to be
generated from the other strategic alternatives to an extraordinary
transaction with Reuters. This included continuing to maintain Multex as an
independent, publicly held corporation and not engaging in any
extraordinary transaction. In considering the independent going concern
value of Multex, the Transaction Committee considered, among other things,
the views of our senior management and the analyses performed by Bear
Stearns summarized under "-- Opinion of Bear, Stearns & Co. Inc." The
Transaction Committee deemed these options less attractive in light of the
risks and uncertainties associated with each of these alternatives and the
timing and the likelihood of accomplishing the goal of these alternatives.
The Transaction Committee also considered other possible strategic
alternatives, including an extraordinary transaction with various
competitors and other potentially interested parties. The Transaction
Committee's determination that it was unlikely that a third party would
offer a more compelling alternative than Reuters included assessments with
respect to a number of considerations including:
- the limited number of other bidders with a realistic possibility of
consummating the transaction or doing so as swiftly as Reuters would
be able to complete a transaction with us;
- the potential harm to our business of engaging with a bidder that did
not present a significant likelihood of achieving a successful
transaction;
- the limited financial abilities of certain other potential bidders;
- past contacts between representatives of Multex and representatives of
certain potentially interested parties indicating that they were not
interested in a business combination with Multex or valued only
certain portions of our business;
14
- the fact that one of the other potential bidders who had expressed an
interest (and had subsequently withdrawn from further consideration)
in acquiring Multex was a direct competitor of Multex and therefore
would likely face an extended review period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and significant
risk that a transaction would not be consummated, which made pursuit
of a business combination with that bidder undesirable. This was
particularly the case relative to the likelihood, based upon the
advice of management after consultation with legal counsel, that the
regulatory approvals necessary to complete an extraordinary
transaction with Reuters could be obtained without delaying the
transaction given that Reuters is not a direct competitor of Multex;
and
- the fact that two of our competitors engaged in a series of
discussions with our financial advisor with respect to a potential
business combination with Multex and, after deliberation, both
competitors declined to pursue the opportunity.
(4) the likelihood that, in the Transaction Committee's view,
conducting an extensive public auction process before selling Multex (a)
would risk the loss of the opportunity to effect an extraordinary
transaction with Reuters or to do so on terms as favorable as those
contemplated by the merger agreement and (b) would be detrimental to Multex
by significantly disrupting our existing operations, including the risks to
our customer base and employee retention that are inherent in approaching
potential bidders with competitive operations.
(5) that, if the Transaction Committee declined to approve Reuters'
proposal at the time, there was no assurance that there would be another
opportunity for our stockholders to receive from Reuters or any other
person as significant a premium as that contemplated by the merger
agreement for their shares, including if Reuters were in the future no
longer interested in an acquisition of Multex due to changes in its own
businesses.
(6) the Transaction Committee's belief that it had obtained the
highest price per share that Reuters is willing to pay after considering,
among other things, the strategic importance of a transaction to Reuters
and the potential value to Reuters of the synergies that a business
combination between Multex and Reuters offered.
(7) the fact that the $7.35 per common share price to be received by
Multex's stockholders in both Reuters' offer and the subsequent merger
represents a premium of approximately 60.5% over the closing price of
Multex stock on February 14, 2003, the business day immediately before the
public announcement by Reuters of the proposed transaction between Multex
and Reuters, (a) a premium of approximately 61.5% over the closing price of
Multex shares on February 7, 2003, one week before the public announcement
of the proposed transaction between Multex and Reuters, (b) a premium of
approximately 54.7% over the closing price of Multex shares on January 14,
2003, one-month before the public announcement of the proposed transaction
between Multex and Reuters, (c) a premium of approximately 158.8% over the
price of the Multex stock on October 17, 2002, the date in the most recent
52-weeks on which the shares of Multex had their lowest price (including
the fact that Multex's stock had not traded at or above $7.35 per share
since July 2001) and (d) a premium of approximately 96.5% over the
enterprise value of Multex on February 14, 2003.
(8) the presentation of Bear Stearns which involved various valuation
analyses of Multex, and the opinion of Bear Stearns that, as of February
17, 2003 and based upon and subject to the matters stated in the opinion,
the consideration to be received by our stockholders pursuant to Reuters'
tender offer and the subsequent merger of its merger subsidiary with and
into Multex is fair, from a financial point of view, to our stockholders,
excluding Reuters. We have included a copy of the Bear Stearns written
opinion that was delivered to the Transaction Committee as Annex B to this
Schedule 14D-9. WE URGE STOCKHOLDERS TO READ THE BEAR STEARNS OPINION IN
ITS ENTIRETY.
(9) the lack of any required approval by Reuters' stockholders to
complete the tender offer and subsequent merger, and the belief that
Reuters has the ability and desire to complete the tender offer and
subsequent merger in a timely manner.
15
(10) that our merger agreement with Reuters was the product of
arm's-length negotiations between us and our advisors, on the one hand, and
Reuters and its advisors, on the other, and that no member of the
Transaction Committee was employed by or affiliated with Multex (except as
a director of Multex) or Reuters.
(11) the fact that the consideration to be received by Multex's
stockholders in the offer and the subsequent merger of Reuters' merger
subsidiary with and into Multex would be payable in cash, and the certainty
of value of that cash consideration compared to any stock consideration
that may be offered by an alternative party.
(12) the fact that the offer by Reuters' merger subsidiary and the
subsequent merger provide for a prompt cash tender offer for all of the
Multex shares to be followed by the merger for the same consideration,
thereby enabling Multex's stockholders to obtain the benefits of the
transaction in exchange for their Multex shares swiftly.
(13) the financial and other terms and conditions of our merger
agreement with Reuters including, but not limited to, the fact that the
terms of our merger agreement (a) do not act to preclude other third
parties from making unsolicited proposals after execution of our merger
agreement, (b) will not prevent the Transaction Committee from determining,
in the exercise of its fiduciary duties under applicable law and subject to
the terms and conditions of our merger agreement, to provide information to
and engage in negotiations with any such third parties and (c) will permit
Multex, subject to payment of a $5.5 million termination fee and the other
conditions set forth in the merger agreement, to enter into a transaction
with any party that makes a proposal that would be more favorable to our
stockholders than the tender offer and the subsequent merger of Reuters'
merger subsidiary with and into Multex, taking into account all relevant
factors.
In view of the wide variety of factors considered in connection with its
evaluation of our merger agreement, the transactions contemplated by our merger
agreement, including the tender offer and subsequent merger, and the complexity
of these matters, the Transaction Committee did not find it practicable to and
did not attempt to quantify, rank or otherwise assign relative weights to the
factors considered in connection with its determination. The Multex Transaction
Committee relied on the experience and expertise of Bear Stearns, its financial
advisor, for quantitative analysis of the financial terms of our merger
agreement and the transactions contemplated by our merger agreement. In
addition, the Multex Transaction Committee did not undertake to make any
specific determination as to whether any particular factor was essential to its
ultimate determination, but rather the Transaction Committee conducted an
overall analysis of the factors described above, including thorough discussions
with its legal and financial advisors. In considering the factors described
above, individual members of the Transaction Committee may have given different
weight to different factors or reached different conclusions as to whether a
specific factor weighed in favor of or against approving our merger agreement
with Reuters and the transactions contemplated by our merger agreement,
including the offer and the subsequent merger.
In addition, the Transaction Committee believes that sufficient procedural
safeguards were and are present to ensure the fairness of our merger agreement
and the transactions contemplated thereby, including the tender offer and the
merger, to Multex's stockholders (other than Reuters) and to permit the
Transaction Committee to represent effectively the interests of Multex's
stockholders (other than Reuters), including the following:
- the Transaction Committee consisted entirely of non-employee independent
directors who are not affiliated with Reuters in any way and who acted to
represent solely the interests of Multex's stockholders (other than
Reuters) and accordingly, the Transaction Committee believes that it is
not necessary to condition the tender offer on a majority of Multex's
stockholders other than Reuters tendering their shares in the offer;
- the Transaction Committee retained and received advice from its
independent legal counsel, Davis Polk & Wardwell; and
16
- the Transaction Committee was advised by and received the opinion of its
financial advisor, Bear Stearns, that we referred to above.
In evaluating the merger agreement with Reuters and the transactions
contemplated by the merger agreement, including the tender offer and the
subsequent merger, the Transaction Committee did not consider the following
factors for the following reasons:
- the book value of our shares because the book value per share of $3.36 as
of December 31, 2002 was at a significant discount to both the price
proposed by Reuters and the current and historical market prices of our
stock and the Transaction Committee does not believe that book value is a
relevant indication of the value of our shares;
- the liquidation value of our shares because the Transaction Committee
believes that the value that could be obtained through a liquidation of
our assets would be significantly less than the value that could be
obtained through a sale of Multex as a going concern and the current and
historical market prices for our stock;
- the purchase prices paid in any purchases of our stock by Reuters during
the past two years because there have not been any such transactions; and
- any other firm offers for Multex during the past two years because there
have not been any such firm offers.
We also incorporate into this document by reference the reasons for the
recommendation set forth under "SPECIAL FACTORS -- 4. Reuters' and Purchaser's
Position Regarding the Fairness of the Offer" in the Reuters Offer to Purchase.
Our Board of Directors consists of seven members, four of whom served on
the Transaction Committee. At the February 17, 2003 meeting of the Board, the
Transaction Committee, with the participation of representatives of its legal
and financial advisors, Davis Polk & Wardwell and Bear Stearns, respectively,
reported to the entire Multex Board on its review of our merger agreement with
Reuters and the transactions contemplated thereby, including the tender offer
and the subsequent merger of Reuters' merger subsidiary with and into Multex. A
copy of the report prepared by Bear Stearns and presented to the Transaction
Committee and the full Multex Board will be transmitted to any interested
stockholder of Multex or a representative who has been designated in writing
upon written request and at the expense of the requesting stockholder. The Board
considered the conclusions and recommendations of the Transaction Committee and
the fact that it received an opinion regarding fairness from Bear Stearns,
together with the other factors enumerated above which were considered by the
Transaction Committee. The Multex Board believes that these factors support its
determinations.
OPINION OF BEAR, STEARNS & CO. INC.
In an engagement letter dated January 17, 2003, the Transaction Committee
of the Board of Directors of Multex engaged Bear Stearns to act as its financial
advisor. Bear Stearns is an internationally recognized investment banking firm
that has substantial experience with business combinations similar to this
transaction. As part of its investment banking business, Bear Stearns is engaged
in the valuation of businesses and securities in connection with mergers and
acquisitions, divestitures, negotiated underwritings, primary and secondary
distributions of listed and unlisted securities and private placements.
At the February 17, 2003 meeting of the Transaction Committee, Bear Stearns
delivered its oral opinion, which was subsequently confirmed in a written
opinion dated as of February 17, 2003, to the effect that the consideration to
be received was fair, from a financial point of view, to the stockholders of
Multex, excluding Reuters, as of that date, and subject to the assumptions,
qualifications and limitations set forth in the opinion.
THE FULL TEXT OF THE BEAR STEARNS WRITTEN OPINION DATED FEBRUARY 17, 2003,
WHICH SETS FORTH, AMONG OTHER THINGS, THE ASSUMPTIONS MADE, SOME OF THE MATTERS
CONSIDERED AND QUALIFICATIONS AND LIMITATIONS ON THE REVIEW UNDERTAKEN BY BEAR
STEARNS IN CONNECTION WITH THE OPINION, IS ATTACHED AS ANNEX B TO THIS DOCUMENT
AND IS INCORPORATED INTO THIS DOCUMENT BY REFERENCE. WE URGE OUR STOCKHOLDERS TO
READ THE OPINION IN ITS
17
ENTIRETY. THE SUMMARY OF THE OPINION SET FORTH IN THIS DOCUMENT IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THAT OPINION.
In reading the discussion of the Bear Stearns' fairness opinion set forth
below, the holders of Multex common stock should be aware that Bear Stearns'
opinion:
- was provided to the Transaction Committee and our full Board of Directors
for their benefit and use in consideration of this transaction;
- did not address Multex's underlying business decision to pursue this
transaction, the relative merits of this transaction as compared to any
alternative business strategies that might exist for Multex or the
effects of any other transaction in which Multex might engage; and
- did not constitute a recommendation to the Transaction Committee, our
full Board of Directors or any of our stockholders as to how to vote in
connection with the transaction or whether to tender their shares in the
offer.
A copy of Bear Stearns' written presentation to the Transaction Committee
is filed as Exhibit (c)(4) to the Schedule TO of Reuters and is incorporated
into this document by reference. A copy of Bear Stearns' written presentation
will also be available for inspection and copying at our principal executive
offices during regular business hours by any interested Multex stockholder or
any representative of the stockholder who has been so designated in writing and
may be inspected and copied at the office of, and obtained by mail from, the
SEC.
Although Bear Stearns evaluated the fairness of the consideration from a
financial point of view to the stockholders of Multex, excluding Reuters, the
consideration itself was determined through negotiations between the Transaction
Committee and Reuters and was approved by the Transaction Committee and our
entire Board of Directors. While Bear Stearns did provide financial advice to
the Transaction Committee during the course of these negotiations, the decision
to recommend this transaction to the Board of Directors of Multex was solely
that of the Transaction Committee. Bear Stearns' opinion was among numerous
factors that the Transaction Committee took into consideration in making its
determination to recommend this transaction and the merger agreement.
In the course of performing its review and analyses for rendering this
opinion, Bear Stearns has:
- reviewed the merger agreement, the tender and voting agreement between
seven senior managers of Multex and Reuters, and the proposed employment
agreement between Mr. Isaak Karaev and Reuters America Inc.;
- reviewed Multex's Annual Reports to Stockholders and Annual Reports on
Form 10-K for the three years ended December 31, 1999 through 2001, its
Quarterly Reports on Form 10-Q for the periods ended March 31, 2002, June
30, 2002 and September 30, 2002, and its press release dated January 30,
2003 setting forth the preliminary results of operations for the quarter
ended and year ended December 31, 2002;
- reviewed certain operating and financial information relating to Multex's
business and prospects, including projections for the four years ended
December 31, 2006, provided to us by management of Multex consisting of a
base case and a sensitivity to the base case, quantifying the effect of
certain risks to the base case, including, among others, new entrants to
Multex's markets;
- met with certain members of Multex's senior management to discuss
Multex's business, operations, historical financial results, the base
case projections and the sensitivity analysis to the base case and future
prospects;
- reviewed the historical prices, trading multiples and trading volume of
Multex common stock;
- reviewed publicly available financial data, stock market performance data
and trading multiples of companies in the financial information services
sector that Bear Stearns believed to be relevant;
18
- reviewed the terms of (i) recent mergers and acquisitions of companies in
the financial information services sector that Bear Stearns believed to
be relevant and (ii) premia paid in acquisitions of a diverse set of
companies of a similar size to Multex and which Bear Stearns believed
relevant to our analysis of the transaction;
- performed discounted cash flow analyses on the base case projections and
on the sensitivity analysis to the base case; and
- conducted such other studies, analyses, inquiries and investigations as
Bear Stearns deemed appropriate.
In preparing its opinion, Bear Stearns relied upon and assumed, without
independent verification, the accuracy and completeness of the financial and
other information, including, but not limited to, the base case projections and
the sensitivity analysis to the base case, provided to Bear Stearns by Multex.
With respect to the base case projections and the sensitivity analysis to the
base case, Bear Stearns relied on representations that they have been reasonably
prepared on bases reflecting the best currently available estimates and
judgments of the senior management of Multex as to the expected future
performance of Multex with and without taking into account the risks described
above. Bear Stearns did not assume any responsibility for the independent
verification of any such information or of the base case projections and the
sensitivity analysis to the base case provided to Bear Stearns, and relied upon
the assurances of Multex's senior management that they are unaware of any facts
that would make the information, the base case projections or the sensitivity
analysis to the base case provided to Bear Stearns, incomplete or misleading.
In arriving at its opinion, Bear Stearns did not perform or obtain any
independent appraisal of the assets or liabilities (contingent or otherwise) of
Multex, nor was it furnished with any such appraisals. During the course of its
engagement, while Bear Stearns was not authorized to seek offers for Multex,
Bear Stearns and Multex's management held preliminary, informal discussions with
other large financial information services companies with respect to a possible
acquisition of Multex, and Bear Stearns considered the results of those
discussions in rendering its opinion. Bear Stearns has assumed that the
transaction will be consummated in a timely manner and in accordance with the
terms of the merger agreement without any amendments or modifications that
collectively would have a material effect on Multex.
Bear Stearns' opinion is necessarily based on economic, market and other
conditions, and the information made available to Bear Stearns, as of the date
of its opinion, and Bear Stearns undertook no obligation to update or revise its
opinion to reflect any developments occurring after that date.
Set forth below is a brief summary of the material valuation, financial and
comparative analyses considered by Bear Stearns in connection with the rendering
of the Bear Stearns opinion. This summary does not purport to be a complete
description of the analyses underlying the Bear Stearns opinion.
19
In performing its analyses, Bear Stearns made numerous assumptions with
respect to industry performance, general business, economic, market and
financial conditions and other matters, many of which are beyond the control of
Bear Stearns, Multex and Reuters. Any estimates contained in the analyses
performed by Bear Stearns are not necessarily indicative of actual values or
future results, which may be significantly more or less favorable than suggested
by these analyses. Additionally, estimates of the value of business or
securities do not purport to be appraisals or to reflect the prices at which
such businesses or securities may actually be sold. Accordingly, these analyses
and estimates are inherently subject to substantial uncertainty.
HISTORICAL STOCK TRADING ANALYSIS
Bear Stearns reviewed the historical stock trading performance of Multex
common stock and observed the following summary trading data as of February 14,
2003:
MULTEX
STOCK PRICE
-----------
February 14, 2003........................................... $4.58
20-Day Average.............................................. $4.61
6-Month Average............................................. $3.66
12-Month Average............................................ $3.84
12-Month High............................................... $5.00
12-Month Low................................................ $2.84
Bear Stearns analyzed the trading volume within certain price ranges of
Multex common stock during the last twelve months and six months ended February
14, 2003 as illustrated by the table below:
$2.50-$3.00 $3.01-$3.50 $3.51-$4.00 $4.01-$4.50 $4.51-$5.00
----------- ----------- ----------- ----------- -----------
% of total volume -- 6
months(1) 3.0% 71.3% 7.3% 8.2% 10.2%
% of total volume -- 12
months(1) 0.9% 27.6% 31.1% 31.3% 9.1%
---------------
(1) As of February 14, 2003.
Bear Stearns noted that Multex common stock predominantly traded between
$3.01 and $3.50 per share during the six-month period ended February 14, 2003.
Bear Stearns also analyzed the average daily trading volume during the
month ended February 14, 2003 as a percentage of the total number of shares
traded and not owned by affiliates or management of Multex (which is sometimes
referred to as the "public float") to various companies in the financial
information services sector, as illustrated by the table below:
DAILY VOLUME/FLOAT(1)
-----------------------------------------------------------------------------------------------------------------------
INTERACTIVE MCGRAW- VALUE
MULTEX D&B DATA HILL MOODY'S REUTERS THOMSON BARRA FACTSET ONESOURCE LINE
------ ---- ----------- ------- ------- ------- ------- ----- ------- --------- -----
0.08%................ 0.49% 0.34% 0.58% 0.46% 1.34% 0.23% 1.54% 1.17% 0.28% 0.35%
---------------
(1) Represents 1-month average daily trading volume.
Bear Stearns noted that Multex average daily volume as a percentage of its
public float was 0.08%, the lowest among the financial information services
companies Bear Stearns believed relevant to its analysis.
20
Bear Stearns compared the stock price performance of Multex to various
indices during the last three years, two years, twelve months and six months
ended February 14, 2003, as illustrated by the table below:
% CHANGE IN STOCK PRICE
----------------------------------------------
3 YEARS(1) 2 YEARS(1) LTM(1) 6 MONTHS(1)
---------- ---------- ------ -----------
Multex.................................... (86%) (78%) (8%) 45%
Peer Index 1(2)........................... 23% 18% (18%) (10%)
Peer Index 2(3)........................... 1% (22%) (24%) 0%
S&P 500................................... (40%) (37%) (25%) (9%)
---------------
Note: Peer Indices based on equal price weighting.
(1) As of February 14, 2003.
(2) Comprised of selected financial information services companies with a market
capitalization greater than $1 billion, including D&B Corp., Interactive
Data Corp., McGraw-Hill Companies Inc., Moody's Corporation, Reuters Group
PLC and The Thomson Corp.
(3) Comprised of selected financial information services companies with a market
capitalization less than $1 billion, including Barra, Inc., FactSet Research
Systems Inc., OneSource Information Services Inc. and Value Line, Inc.
DISCOUNTED CASH FLOW ANALYSIS
Bear Stearns also performed a discounted cash flow analysis of Multex to
estimate the present value of the unlevered after-tax free cash flows that
Multex could generate. The analyses were based on base case financial
projections for the four years ending December 31, 2006 and a sensitivity
analysis to the base case. The base case financial projections assumed a modest
improvement in the financial markets in 2004 and were based on a compounded
annual revenue growth rate of 15.1% for the years 2003 through 2006, a 38.3%
compounded annual growth rate for EBITDA during the same period, and a
significant increase in profitability (i.e., a net loss of $1.0 million in 2003
compared to net income of $33.3 million in 2006). The sensitivity case financial
projections assumed no improvement in the financial markets, the loss of certain
customers, and only modest gains in certain Multex business lines. The
sensitivity case was based on a compounded annual revenue growth rate of 7.7%
for the years 2003 through 2006, an 11.8% compounded annual growth rate for
EBITDA during the same period, and a modest increase in profitability (i.e., a
net loss of $5.3 million in 2003 compared to net income of $8.2 million in
2006). For additional information about the base case and sensitivity case
projections, see Exhibit 14 to this document which is attached as Exhibit (c)(4)
to the Schedule TO.
Ranges of terminal values for the discounted cash flows were estimated
using multiples of terminal year 2006 earnings before interest, taxes,
depreciation and amortization (which is sometimes referred to as "EBITDA") of
7.0x to 11.0x for the base case and 6.0x to 10.0x for the sensitivity to the
base case. These terminal values were based on Multex's growth indicated by the
base case projections and the sensitivity analysis to the base case as well as
EBITDA multiples of publicly traded financial information services companies
that Bear Stearns believed to be relevant. Bear Stearns then discounted to
present value the free cash flow streams and terminal values using discount
rates of 15.0% to 20.0%. Bear Stearns also valued Multex's NOLs carry-forward
using these discount rates. The discount rates reflect Multex's estimated
weighted average cost of capital. This analysis indicated the following per
share equity reference ranges after adjustments for cash, NOLs and
unconsolidated investments:
PER SHARE EQUITY REFERENCE RANGE
--------------------------------
Base case................................................ $7.16 - $10.50
Sensitivity analysis to the base case.................... $4.02 - $ 5.44
21
Bear Stearns noted that, without attribution of the NOL carry-forward, the
range was $6.72 -- $10.07 for the base case and $3.67 -- $5.11 for the
sensitivity analysis to the base case.
PREMIA ANALYSIS
Bear Stearns conducted (1) an analysis of the implied premium to be paid to
Multex common stockholders, (2) an analysis of premia paid in transactions of
financial information services companies and (3) an analysis of premia paid in
all-cash transactions since January 1, 2000 for all U.S. public targets with
transaction values between $150 million and $350 million.
Bear Stearns calculated the implied premia to be paid to Multex common
stockholders based on various prices as of February 14, 2003, one business day
before announcement of the transaction, as illustrated by the table below:
MULTEX PROPOSED
STOCK PRICE TRANSACTION(1) % PREMIUM
----------- -------------- ---------
February 14, 2003................................ $4.58 $7.35 60.5%
20-Day Average................................... $4.61 59.4%
6-Month Average.................................. $3.66 101.0%
12-Month Average................................. $3.84 91.5%
12-Month High.................................... $5.00 47.0%
12-Month Low..................................... $2.84 158.8%
Enterprise Value(2)
February 14, 2003................................ $ 107 $ 210 96.5%
---------------
(1) The transaction was announced on February 18, 2003.
(2) Enterprise valued defined as market value of equity, based on fully diluted
shares outstanding (treasury method), less cash balance of $50.6 million.
Enterprise value in US$ millions.
Bear Stearns also noted the premia paid in mergers and acquisitions of
financial information services companies that it believed relevant for its
analysis, as illustrated by the table below:
PREMIUM PRIOR TO
ANNOUNCEMENT(1)
---------------------------
1 DAY PRIOR 1 MONTH PRIOR
----------- -------------
Average..................................................... 45.2% 48.8%
Median...................................................... 30.9% 42.7%
---------------
(1) Represents premia paid to stock price.
Bear Stearns also conducted an analysis of premia paid in all-cash
transactions since January 1, 2000 for all U.S. public targets with transaction
values between $150 million and $350 million, as illustrated by the table below:
PREMIUM PRIOR TO
ANNOUNCEMENT(1)
---------------------------
1 DAY PRIOR 1 MONTH PRIOR
----------- -------------
Average..................................................... 36.8% 55.8%
Median...................................................... 33.0% 51.0%
---------------
(1) Represents premia paid to stock price in all-cash transactions (100%
acquired).
22
The preparation of a fairness opinion is a complex process and involves
various judgments and determinations as to the most appropriate and relevant
assumptions and financial analysis and the application of these methods to the
particular circumstances involved. Fairness opinions therefore are not readily
susceptible to partial analysis or summary description, and taking portions of
the analyses set out above, without considering the analyses as a whole, would,
in the view of Bear Stearns, create an incomplete and misleading picture of the
processes underlying the analyses considered in rendering its opinion. Bear
Stearns did not form an opinion as to whether any individual analysis or factor
(positive or negative), considered in isolation, supported or failed to support
its opinion. In arriving at its opinion, Bear Stearns considered the results of
its separate analyses and did not attribute particular weight to any one
analysis or factor. The analyses performed by Bear Stearns, particularly those
based on estimates and projections, are not necessarily indicative of actual
values or actual future results, which may be significantly more or less
favorable than suggested by these analyses. These analyses were prepared solely
as part of the Bear Stearns analysis of the fairness, from a financial point of
view, of the consideration to be received by the stockholders of Multex,
excluding Reuters.
Under the terms of its engagement letter dated January 17, 2003 with Bear
Stearns, the Transaction Committee of the Board of Directors of Multex agreed to
pay Bear Stearns (i) an opinion fee equal to $500,000, payable upon delivery of
Bear Stearns' fairness opinion and (ii) a transaction fee of $2,347,000, net of
the opinion fee, payable at the time of the closing of Reuters' offer or any
other offer. Multex also agreed to reimburse Bear Stearns for its reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of legal
counsel and other professional advisors. Multex also agreed to indemnify Bear
Stearns and certain related parties from and against certain liabilities,
including liabilities under the federal securities laws, related to or arising
out of the engagement.
Bear Stearns has not previously rendered investment banking and financial
advisory services to Multex. Bear Stearns may provide financial advisory and
financial services to the combined company and/or its affiliates and may receive
fees for the rendering of these services. In the ordinary course of its
business, Bear Stearns may actively trade the securities of Multex and/or
Reuters for its own account and for the accounts of its customers and,
accordingly, Bear Stearns may at any time hold a long or short position in these
securities.
INTENT TO TENDER
After reasonable inquiry and to the best of our knowledge, we understand
that each director and executive officer of Multex (a) who holds common shares
of record or beneficially owns common shares currently intends to tender common
shares, unless the tender would violate applicable securities laws or require
disgorgement of any profits under Section 16 of the Exchange Act or any such
director or officer elects to sell his or her shares into the market before the
consummation of the offer for financial planning purposes and (b) recommends
that the Multex stockholders tender their common shares in the offer and, if
applicable, approve and adopt our merger agreement with Reuters and the
subsequent merger for the reasons set forth in this document under the heading
"Reasons for the Recommendation of the Multex Board" above.
Additionally, the executive officers named in the section entitled
"Stockholder Tender and Voting Agreement" under Item 3 of this document have
agreed, among other things, to tender their shares into the offer by Reuters'
merger subsidiary, or, as applicable, to vote their shares in favor of a merger
with that subsidiary (as further described in that Section). For a description
of the stockholder tender and voting agreement, see Item 3 of this document. See
also the full text of that agreement which is attached as Exhibit (d)(2) to the
Schedule TO of Reuters which we are incorporating into this document by
reference.
ITEM 5. PERSON/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.
In connection with the consideration of our strategic alternatives, our
Transaction Committee retained Bear Stearns to act as financial advisor to the
Transaction Committee and to undertake an analysis to enable it to render a
written opinion to the Transaction Committee that, as of the date of our merger
agreement with Reuters, the consideration to be received by Multex's
stockholders in the offer and the subsequent merger pursuant to the merger
agreement is fair to those holders, excluding Reuters, from a financial point of
view.
23
Pursuant to an engagement letter dated January 17, 2003 with Bear Stearns,
Multex agreed to pay Bear Stearns the amounts described above, in the
circumstances and on the terms described above, in the section of this document
entitled "Opinion of Bear, Stearns & Co. Inc." Multex also agreed to the
reimbursement and indemnification obligations described in the immediately
preceding section of this document.
Except as described above, neither Multex nor any person acting on its
behalf has employed, retained or compensated any person to make solicitations or
recommendations to stockholders on its behalf concerning the offer and the
merger between Reuters' merger subsidiary and Multex, except for any
solicitations or recommendations that may be made by directors, officers or
employees of Multex, for which they shall receive no additional compensation.
We also incorporate into this document by reference the information
contained under "THE TENDER OFFER -- 11. Fees and Expenses" in the Reuters Offer
to Purchase.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
We are incorporating into this document by reference the table setting
forth information regarding beneficial ownership of Multex common shares by each
director and executive officer of Multex which is contained in the Information
Statement that is attached as Annex A to this document.
Multex has not repurchased any of its common shares on the open market
within the past 60 days.
Other than pursuant to the exercise of options or the purchase of shares
under our Employee Stock Purchase Plan, none of our executive officers,
directors or affiliates have purchased or sold common shares in the last 60
days.
Common shares of Multex are listed and principally traded on The Nasdaq
Stock Market's National Index under the symbol "MLTX." See "THE TENDER
OFFER -- 5. Price Range of Shares of Multex Common Stock" in Reuters' Offer to
Purchase for a table setting forth high and low sales prices for common shares
of Multex for each quarter during the past two years which we incorporate into
this document by reference. To date, Multex has never paid a dividend on its
common shares. During the past three years, Multex has not made an underwritten
public offering of common shares that has been registered under the Securities
Act of 1933 or exempt from registration under Regulation A of the Securities Act
of 1933.
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
For the reasons discussed in Item 4 above, acting upon the unanimous
recommendation of the Transaction Committee and by a unanimous vote of the
directors present and voting at its February 17, 2003 meeting, our Board of
Directors determined that (i) each of the tender offer by Reuters' merger
subsidiary, the subsequent merger of this subsidiary into Multex and our merger
agreement with Reuters is advisable, fair to and in the best interests of Multex
and its stockholders (excluding Reuters), (ii) approved and adopted our merger
agreement with Reuters and the transactions contemplated thereby (including the
tender offer and the subsequent merger) and (iii) recommended that Multex's
stockholders tender their common shares in the offer and, if applicable, approve
and adopt our merger agreement with Reuters and the subsequent merger. Except
for the transactions with Reuters that are contemplated by the merger agreement,
Multex is not now engaged in any negotiations that relate to, or would result
in, one or more of the following occurring: (i) a tender offer for or other
acquisition of Multex securities by Multex, any of its subsidiaries or any other
person, (ii) an extraordinary transaction, such as a merger, reorganization or
liquidation involving Multex or any of its subsidiaries, (iii) a purchase, sale
or transfer of a material amount of assets of Multex or any of its subsidiaries
or (iv) any material change in the present dividend rate or policy, indebtedness
or capitalization of Multex.
Except as disclosed in this document, there is no transaction, board
resolution, agreement in principle or signed contract that has been entered into
in response to Reuters' offer that relates to or would result in the occurrence
of any of the events to which the previous paragraph refers. No provision has
been made in connection with the tender offer by Reuters' merger subsidiary and
subsequent merger to grant any unaffiliated stockholder access to the corporate
files of Multex or to obtain counsel or appraisal services at the expense of
Multex.
24
We also incorporate into this document by reference the information
contained under "SPECIAL FACTORS -- 6. Purpose of the Offer; Plans for Multex"
in the Reuters Offer to Purchase and "SPECIAL FACTORS -- 7. Certain Effects of
the Offer and Merger."
ITEM 8. ADDITIONAL INFORMATION.
INFORMATION STATEMENT
The Information Statement, which is attached as Annex A to this document,
is being furnished to Multex's stockholders in connection with the designation
by Reuters of persons to Multex's Board of Directors, other than at a meeting of
Multex's stockholders. We are incorporating that Information Statement into this
document by reference.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
In general, Section 203 of Delaware General Corporation Law prevents an
"interested stockholder" (generally, a stockholder that owns 15% or more of a
corporation's outstanding voting stock or an affiliate thereof) from engaging in
a "business combination" (defined to include a merger and certain other
transactions as described below) with a Delaware corporation for a period of
three years following the time at which that person became an interested
stockholder, unless, among other exceptions, before that time the corporation's
board of directors approved either the business combination or the transaction
that resulted in that stockholder becoming an interested stockholder. Our Board
of Directors has approved, and determined that Section 203 of Delaware General
Corporation Law does not apply to, our merger agreement with Reuters, the
stockholder tender and voting agreement and the transactions contemplated
thereby (including the tender offer and the subsequent merger).
SECTION 253 OF DELAWARE GENERAL CORPORATION LAW
Under Section 253 of Delaware General Corporation Law, if Reuters' merger
subsidiary acquires, pursuant to its offer or otherwise, at least 90% of the
outstanding common shares, the merger subsidiary would be able to effect its
merger with Multex without a vote of our stockholders. If the merger subsidiary
does not acquire at least 90% of the outstanding common shares, the merger
subsidiary would have to seek approval from our stockholders of our merger
agreement with Reuters and the subsequent merger. In that instance, approval of
our merger agreement with Reuters and the merger would require the affirmative
vote of holders of a majority of the outstanding common shares. If the Minimum
Condition (as defined in our merger agreement with Reuters) and the other
conditions to Reuters' offer are satisfied and the offer is completed, the
merger subsidiary will own a sufficient number of common shares to ensure that
our merger agreement with Reuters will be approved by our stockholders.
Additionally, under the merger agreement, if Reuters' merger subsidiary
consummates the offer, Multex has granted the merger subsidiary an irrevocable
option to purchase up to that number of shares of our common stock that is equal
to the lowest number of shares that, when added to the number of shares
collectively owned, directly or indirectly, by Reuters or the merger subsidiary
immediately after the Offer, will constitute at least 90 percent of the shares
of Multex common stock then outstanding on a fully diluted basis at a price per
share equal to that paid in the offer. The merger subsidiary can make this
payment in cash or by issuing a demand note to Multex in the required amount.
The exercise of this option is subject to satisfaction of a number of conditions
that are described more fully under "SPECIAL FACTORS -- 9. The Merger Agreement;
The Tender Agreement and The Employment Agreement -- Top-Up Option" in the
Reuters Offer to Purchase, and are set forth in the merger agreement which is
attached as Exhibit (d)(1) to the Reuters Offer to Purchase, each of which we
are incorporating into this document by reference. If those conditions are
satisfied and the merger subsidiary exercises this option, then Reuters and the
merger subsidiary will collectively own a sufficient number of shares of common
stock to effect the merger pursuant to Section 253 of the Delaware General
Corporation Law without the need to obtain stockholder approval. If this were to
occur, it would have the effect of accelerating the payment of our stockholders
for their shares pursuant to the merger.
25
APPRAISAL RIGHTS
Stockholders do not have appraisal rights in connection with the tender
offer by Reuters' merger subsidiary. Under Section 262 of Delaware General
Corporation Law, however, if the merger is consummated, stockholders of Multex
who have neither voted in favor of the merger nor consented to it in writing and
who otherwise comply with the applicable statutory procedures under Delaware
General Corporation Law will be entitled to receive a judicial determination of
the fair value of their common shares (exclusive of any element of value arising
from the accomplishment or expectation of the merger) and to receive payment of
that fair value in cash, together with a fair rate of interest, if any, for
their common shares. Any such judicial determination of the fair value of those
dissenting common shares could be based upon considerations, other than or in
addition to the offer price of $7.35 per common share payable by Reuters' merger
subsidiary and the market value of those shares. Our stockholders should
recognize that the value so determined could be higher or lower than the
consideration paid in the merger. Moreover, Reuters and its merger subsidiary
may argue in an appraisal proceeding that, for purposes of that proceeding, the
fair value of the dissenting common shares is less than the price paid in the
tender offer and the merger.
If any holder of common shares who demands appraisal under Section 262 of
Delaware General Corporation Law fails to perfect, or effectively withdraws or
loses the rights to appraisal as provided in Delaware General Corporation Law,
the common shares of that stockholder will be converted into the right to
receive the price per common share paid in the merger. A stockholder may
withdraw the demand for appraisal by delivering to the merger subsidiary a
written withdrawal of the demand and a written acceptance of its merger with and
into Multex.
Failure to follow the steps required by Section 262 of Delaware General
Corporation Law for perfecting appraisal rights may result in the loss of those
rights.
CERTAIN LEGAL MATTERS
Except as otherwise disclosed in this document, Multex is not aware of any
licenses or other regulatory permits that appear to be material to the business
of Multex and that might be adversely affected by the acquisition of common
shares by the merger subsidiary pursuant to the offer or of any approval or
other action by any governmental, administrative or regulatory agency or
authority that would be required for the acquisition or ownership of common
shares by the merger subsidiary pursuant to its offer. The merger subsidiary's
obligation under the offer to accept for payment and pay for common shares is
subject to certain conditions that are set forth under "THE TENDER OFFER -- 9.
Certain Conditions of the Offer" in the Reuters Offer to Purchase and are
incorporated into this document by reference.
The transactions contemplated by the offer and the subsequent merger are or
may be subject to a number of applicable laws and regulations, including the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules that have
been promulgated thereunder by the Federal Trade Commission, certain regulations
of the Federal Reserve Board, certain state takeover laws and certain non-U.S.
antitrust filings and/or approvals. The applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 expired at 11:59 p.m., New
York City time, on March 11, 2003.
In connection with the offer, Reuters and Multex are required to file
information with certain foreign governmental authorities under their pre-merger
notification statutes. The approval of such governmental authorities or the
termination of any review period under such statutes is a condition to the
consummation of the offer and the merger.
Reuters and Multex made a filing with the antitrust authorities in Germany
on February 24, 2003. The German antitrust authorities cleared the proposed
acquisition of Multex by Reuters on March 17, 2003.
Reuters and Multex made a filing with the antitrust authorities in Austria
on February 25, 2003. The review period typically expires in six to seven weeks
from filing. However, the Austrian competition authorities have informed Reuters
that they will issue a waiver of their right to request an in-depth examination
of the proposed acquisition of Multex by Reuters. Upon receipt of the waiver,
the Austrian Cartel Court will render the clearance of the proposed acquisition
prior to the typical expiration of the review period. Reuters expects to
26
receive formal notification of such clearance from the Cartel Court prior to the
currently scheduled expiration of the tender offer, and does not believe that
the Austrian clearance process will delay the closing of the tender offer.
Information concerning these matters is described more fully under "THE
TENDER OFFER -- 10. Certain Legal Matters" in the Reuters Offer to Purchase, and
we incorporate that information into this document by reference.
CERTAIN FINANCIAL STATEMENTS
We also incorporate into this document by reference:
- the audited financial statements of Multex as of and for the two fiscal
years ended December 31, 2000 and December 31, 2001 contained in Item 8
of Multex's Annual Report on Form 10-K for the year ended December 31,
2001 filed with the Securities and Exchange Commission on April 1, 2002;
- the unaudited financial statements of Multex as of and for the quarter
and nine months ended September 30, 2002 contained in Part I, Item 1 of
Multex's Quarterly Report on Form 10-Q for the quarter ended September
30, 2002 filed with the Securities and Exchange Commission on November
14, 2002;
- the unaudited financial statements of Multex as of and for the quarter
and six months ended June 30, 2002 contained in Part I, Item 1 of
Multex's Quarterly Report on Form 10-Q for the quarter ended June 30,
2002 filed with the Securities and Exchange Commission on August 14,
2002; and
- the unaudited financial statements of Multex as of and for the quarter
ended March 31, 2002 contained in Part I, Item 1 of Multex's Quarterly
Report on Form 10-Q for the quarter ended March 31, 2002 filed with the
Securities and Exchange Commission on May 14, 2002.
As of December 31, 2002, the book value per share of Multex was $3.36.
FORWARD-LOOKING STATEMENTS
This document, including its exhibits and all information that we have
incorporated into this document by reference, includes forward-looking
statements which are often denoted by words such as "anticipates," "expects,"
"intends," "plans," "believes," "seeks," "estimates," "foresees" and similar
expressions. These statements are not guarantees of future performance. They are
based on our current expectations and projections about future events, and are
subject to a number of risks, uncertainties and assumptions about Multex that
could cause actual results to differ materially from those expressed in this
document. Those risks and uncertainties are described in the periodic reports
Multex files with the Securities and Exchange Commission, including under the
caption "Risk Factors that May Affect Future Results" in our Annual Report on
Form 10-K. Those risks and uncertainties include, but are not limited to:
changing Internet markets and economic conditions; downturns in the financial
services industry; increasing competition in our investment research, earnings
estimates and ASP businesses; the loss of existing customers or channel
partners; our ability to attract and retain highly skilled employees;
uncertainty as to future U.S. and international regulations governing the
Internet; and potential failures of our network infrastructure. Our reported
results should not be considered an indication of future performance. Unless
required by law, Multex undertakes no obligation to update forward-looking
statements.
ADDITIONAL INFORMATION
Multex files annual, quarterly and special reports, proxy statements and
other information with the SEC under the Exchange Act. Reuters files special
reports and other information with the SEC under the Exchange Act. You may read
and copy this information at the SEC's Public Reference Room, 450 Fifth Street,
N.W., Suite 1024, Washington, D.C. 20549 and the SEC's Northeast Regional
Office, 233 Broadway, New York, New York 10279. You may also obtain copies of
this information by mail from the Public Reference Section of the SEC, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed
27
rates. The SEC also maintains an Internet web site that has reports, proxy
statements and other information about issuers, like Multex and Reuters, that
make electronic filings with the SEC. The address of that site is
http://www.sec.gov.
The SEC allows us to "incorporate by reference" information into this
document, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
that we have incorporated by reference is deemed to be part of this document,
except for any information superseded by information directly in this document.
We have incorporated the information in all of the Exhibits referred to in Item
9 below into this document by reference.
ITEM 9. EXHIBITS.
We are filing the following exhibits with this document:
Exhibit 1* The Offer to Purchase dated February 26, 2003 (incorporated
into this document by reference to Exhibit (a)(1)(i) to the
Schedule TO of Reuters and its merger subsidiary filed on
February 26, 2003).
Exhibit 2* Letter of Transmittal (incorporated into this document by
reference to Exhibit (a)(1)(ii) to the Schedule TO of
Reuters and its merger subsidiary filed on February 26,
2003).
Exhibit 3* Letter to Stockholders of Multex dated February 26, 2003.
Exhibit Press Release of Multex dated February 18, 2003
4.1* (incorporated into this document by reference to the press
release filed under cover of Schedule 14D-9C by Multex on
February 18, 2003).
Exhibit Text of Press Release issued by Reuters and Multex on
4.2* February 26, 2003 (incorporated into this document by
reference to Exhibit (a)(5)(ii) to the Schedule TO of
Reuters and its merger subsidiary filed on February 26,
2003).
Exhibit 5* The Information Statement of Multex dated February 26, 2003
(included as Annex A to this document).
Exhibit 6* Opinion of Bear, Stearns & Co. Inc. to Multex's Board of
Directors dated February 17, 2003(included as Annex B to
this document).
Exhibit 7* Amended and Restated Agreement and Plan of Merger dated as
of February 24, 2003 among Reuters, its merger subsidiary
and Multex (incorporated into this document by reference to
Exhibit (d)(1) to the Schedule TO of Reuters and its merger
subsidiary filed on February 26, 2003).
Exhibit 8* Stockholder Tender and Voting Agreement dated as of February
17, 2003 among Reuters, its merger subsidiary and certain
executive officers of Multex (incorporated into this
document by reference to Exhibit (d)(2) to the Schedule TO
of Reuters and its merger subsidiary filed on February 26,
2003).
Exhibit 9* Employment Agreement dated as of February 17, 2003 between
Reuters America Inc. and Mr. Isaak Karaev (incorporated into
this document by reference to Exhibit (d)(3) to the Schedule
TO of Reuters and its merger subsidiary filed on February
26, 2003).
Exhibit 10* Confidentiality Agreement between Multex and Reuters America
Inc. dated as of December 16, 2002 (incorporated into this
document by reference to Exhibit 99.2 to the Report on Form
8-K of Multex filed on February 25, 2003).
Exhibit 11* Standstill Letter Agreement between Multex and Reuters dated
January 29, 2003 (incorporated into this document by
reference to Exhibit 99.3 to the Report on Form 8-K of
Multex filed on February 25, 2003).
Exhibit 12* Rule 13e-3 Transaction Statement filed by Reuters on
February 26, 2003 and amended on March 12, 2003 and March
19, 2003.
Exhibit 13* Rule 13e-3 Transaction Statement filed by Multex on February
26, 2003 and amended on March 19, 2003.
28
Exhibit 14* Fairness Presentation by Bear, Stearns & Co. Inc. to the Transaction Committee of the Board of
Directors of Multex.com, Inc. (incorporated into this document by reference to Exhibit (c)(4) to
the Schedule TO of Reuters and its merger subsidiary filed on February 26, 2003).
Exhibit 15* Letter Agreement dated March 11, 2003 among Reuters, its merger subsidiary and Mr. Isaak Karaev
(incorporated into this document by reference to Exhibit (d)(4) to the Schedule TO of Reuters and
its merger subsidiary filed on February 26, 2003, as amended by Amendment No. 1 to the Schedule TO
filed on March 12, 2003 and by Amendment No. 2 to the Schedule TO filed on March 19, 2003).
Exhibit 16 Amendment No. 1 TO the Amended and Restated Agreement and Plan of Merger dated as of March 17, 2003
among Reuters, the merger subsidiary and Multex (incorporated into this document by reference to
Exhibit (d)(5) to the Schedule TO of Reuters and its merger subsidiary filed on February 26, 2003,
as amended by Amendment No. 1 to the Schedule TO filed on March 12, 2003 and by Amendment No. 2 to
the Schedule TO filed on March 19, 2003).
---------------
* Previously filed.
29
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
MULTEX.COM, INC.
By: /s/ Isaak Karaev
------------------------------------
Name: Mr. Isaak Karaev
Title: Chairman and Chief Executive
Officer
Dated: March 19, 2003
30
ANNEX A
MULTEX.COM, INC.
100 WILLIAM STREET, 7TH FLOOR
NEW YORK, NEW YORK 10038
---------------------
INFORMATION STATEMENT PURSUANT TO
SECTION 14(F) OF THE SECURITIES EXCHANGE
ACT OF 1934 AND RULE 14F-1 THEREUNDER
---------------------
This Information Statement is being mailed on or about February 26, 2003 as
part of the Solicitation/ Recommendation Statement on Schedule 14D-9 of
Multex.com, Inc. You are receiving this document in connection with the possible
election of persons designated by Reuters Group PLC to a majority of seats on
the Board of Directors of Multex.
On February 17, 2003, Multex entered into an Agreement and Plan of Merger
with Reuters and its wholly owned merger subsidiary, Proton Acquisition
Corporation, a Delaware corporation, as thereafter amended and restated as of
February 24, 2003, pursuant to which the merger subsidiary is required to
commence a tender offer to purchase all outstanding common shares, par value
$0.01 per share, of Multex at a price per share of $7.35, net to each selling
stockholder in cash, upon the terms and conditions set forth in the Offer to
Purchase, dated February 26, 2003, and in the related Letters of Transmittal.
Copies of the Offer to Purchase and the Letters of Transmittal have been mailed
to stockholders of Multex and are filed as Exhibits (a)(1)(i) and (a)(1)(ii),
respectively, to the Tender Offer Statement on Schedule TO that Reuters filed
with the Securities and Exchange Commission on February 26, 2003.
Our merger agreement with Reuters provides that, subject to the
satisfaction or waiver of certain conditions, following completion of the offer,
and in accordance with the Delaware General Corporation Law, the merger
subsidiary will be merged with and into Multex. Following consummation of the
merger, Multex will continue as the surviving corporation and will become a
subsidiary of Reuters. At the effective time of the merger, except for common
shares held, directly or indirectly, by Reuters, the merger subsidiary or
Multex, and common shares held by Multex stockholders who have perfected their
dissenters' rights of appraisal under Section 262 of the Delaware General
Corporation Law, each outstanding common share will be converted into the right
to receive $7.35 in cash or any greater amount per common share paid by Reuters'
merger subsidiary pursuant to the offer.
The tender offer, the merger, and our merger agreement with Reuters are
more fully described in the Solicitation/Recommendation Statement, to which this
document is attached as Annex A, which Multex filed with the Securities and
Exchange Commission on February 26, 2003, and which Multex mailed to its
stockholders along with this document.
This document is being mailed to you in accordance with Section 14(f) of
the Securities Exchange Act of 1934 and Rule 14f-1 promulgated thereunder. The
information set forth in this document supplements certain information set forth
in the Solicitation/Recommendation Statement. Information set forth in this
document related to Reuters, the merger subsidiary or Reuters' designees (as
described below) has been provided by Reuters. Accordingly, Multex assumes no
responsibility for the accuracy or completeness of that information. We urge you
to read this document carefully. You are not, however, required to take any
action in connection with the matters set forth in this document.
Pursuant to our merger agreement, the merger subsidiary commenced the
tender offer on February 26, 2003. This offer is currently scheduled to expire
at 12:00 midnight, New York City time, on March 25, 2003, unless the merger
subsidiary extends it (as required under the merger agreement).
A-1
VOTING SECURITIES OF MULTEX
Multex's common stock is the only class of its equity securities that is
outstanding and entitled to vote at a meeting of its stockholders. Each share of
common stock is entitled to one vote. As of February 10, 2003, there were
32,511,117 common shares outstanding, of which Reuters and the merger subsidiary
own 1,944,445.
RIGHTS TO DESIGNATE DIRECTORS AND REUTERS DESIGNEES
Our merger agreement with Reuters provides that, subject to compliance with
Section 14(f) of the Securities Exchange Act of 1934 and Rule 14f-1 promulgated
thereunder, as soon as practicable following the purchase by the merger
subsidiary of at least a majority of the issued and outstanding common shares
pursuant to the offer and before the effective time of the merger, Reuters shall
be entitled to designate a majority of the members of Multex's Board of
Directors. Multex shall take all action necessary to cause Reuters' designees to
be elected or appointed to the Board of Directors, including increasing the
number of directors and seeking and accepting resignations of incumbent
directors. Multex shall use its reasonable best efforts to cause directors
designated by Reuters to have majority representation (a) on the committees of
the Board (other than the Audit Committee and the special committee of
independent directors that has been established by Multex's Board to consider
the proposed transaction with Reuters and other potential strategic alternatives
(i.e., the Transaction Committee)) and (b) on the board of directors of each of
Multex's subsidiaries. In connection with entering into the merger agreement,
Reuters requested that all of Multex's directors, except Devin Wenig, tender
their resignations from Multex's Board effective as of the closing of the tender
offer, but only to the extent that that resignation is requested and accepted by
Reuters and Multex. All of the directors, except Devin Wenig, have signed those
conditional resignations pending the outcome of the offer and the decision by
Reuters and Multex to accept any such resignations. Notwithstanding the
foregoing, however, the parties have also agreed to use their respective
reasonable best efforts to maintain on the Multex Board of Directors two members
of the Transaction Committee. If Reuters is unable to obtain the consent of two
such members of the Transaction Committee to remain on the Multex Board after
consummation of the offer but before the effective time of the merger, then the
parties are required to use their respective reasonable best efforts to retain
on the Multex Board at least two individuals who are not officers, designees,
stockholders, affiliates, or associates of, or otherwise have material
relationships with, Reuters or Multex.
After the election of Reuters' designees to Multex's Board of Directors and
prior to the effective time of the merger, the affirmative vote of a majority of
the directors not appointed by Reuters, or if none of such directors other than
independent directors are remaining on the Board, a majority of those
independent directors, will be necessary to (i) amend or terminate the merger
agreement, (ii) extend the time for performance of any obligation of Reuters or
the merger subsidiary, (iii) waive compliance with any of the agreements or
conditions contained in the merger agreement for the benefit of Multex, (iv)
assert or enforce Multex's rights under the merger agreement to object to a
failure to consummate the merger for a failure of a condition contained in the
merger agreement for the benefit of Multex to be satisfied or a termination of
the merger agreement in accordance with its terms or (v) approve any
transactions between Multex or any of its subsidiaries, on the one hand, and
Reuters or any of its affiliates, on the other.
Reuters will select its designees from among the individuals listed below
and such other individuals as Purchaser may identify in the future. Each of the
following individuals has consented to serve as a director of Multex if elected.
Reuters has advised Multex that none of the individuals listed below or any of
their affiliates beneficially owns any equity securities of Multex (or the right
to acquire any such equity securities), nor has any such person been involved in
any transaction with Multex or any of its directors, executive officers, or
affiliates that is required to be disclosed pursuant to the rules and
regulations of the Securities and Exchange Commission other than with respect to
transactions between Reuters and Multex that have been described in the Schedule
TO or the Solicitation/Recommendation Statement. In addition, Reuters has
advised Multex that none of the individuals listed below (i) is currently a
director of, or holds any position with, Multex or (ii) has a familial
relationship with any directors or executive officers of Multex.
A-2
The name, current principal occupation or employment and material
occupations, positions, offices or employment for the past five years, of each
of the individuals who may be selected by Reuters are set forth below. Unless
otherwise indicated below, the business address of each such person is c/o
Reuters America Inc., The Reuters Building, 3 Times Square, New York, New York
10036. Unless otherwise indicated below, none of the individuals listed below
has, during the past five years, (i) been convicted in a criminal proceeding or
(ii) been a party to any judicial or administrative proceeding that resulted in
a judgment, decree or final order enjoining the person from future violations
of, or prohibiting activities subject to, U.S. Federal or state securities laws,
or a finding of any violation of U.S. Federal or state securities laws. Unless
otherwise indicated below, all of the individuals listed below are citizens of
the United States.
NAME, CITIZENSHIP AND OFFICE(S) AT PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT,
BUSINESS ADDRESS PURCHASER MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
--------------------- -------------- ----------------------------------------------------
Christopher John Ahearn President and Became President--Corporates & Media for Reuters in
Director 2002. In 2001, joined Reuters as Executive Vice
President. Was a Vice President at JPMorgan from
1995 to 2000, and Head of Corporate Development,
LabMorgan, 2000 to 2001. He is a director of Dow
Jones Reuters Business Interactive LLC (Factiva) and
is a former director of Intralinks, Inc.
(2001-2003).
Eric Bradford Lint Vice President Executive Vice President--Business Development,
and Director Reuters America since 2002. From 2000 to 2002, Eric
was Senior Vice President--Business Development,
Reuters America, and from 1998 to 2000 he was Vice
President--Corporate Staff Mergers and Acquisitions,
ABB Ltd. He is a director of Riskmetrics Group, Inc.
(since 2003) and is a former director of Mpower.com,
Inc. (2001-2002).
It is expected that Reuters' designees may assume office at any time
following the purchase by the merger subsidiary of at least a majority of the
issued and outstanding common shares pursuant to the tender offer by Reuters'
merger subsidiary, which purchase cannot be earlier than after March 26, 2003,
and that, upon assuming office, Reuters' designees will thereafter constitute a
majority of the Multex Board. As of the date of this document, no determination
has been made as to which of the individuals listed above will be designated to
serve as members of Multex's Board, if any.
DIRECTORS AND EXECUTIVE OFFICERS OF MULTEX
The following table sets forth the name, age, business address, present
principal occupation, principal business address of any corporation or other
organization in which the employment or occupation is conducted, and material
occupations, positions, offices or employment held within the past five years of
each director and executive officer of Multex. Unless otherwise specified, each
person listed below is a citizen of the United States of America and has his
principal business address at 100 William Street, 7th Floor, New York, New York
10038. There is no family relationship between any director or executive officer
of Multex.
None of the individuals listed below has been convicted in a criminal
proceeding during the past five years (excluding traffic violations or similar
misdemeanors), nor has any of these persons been a party to any judicial or
administrative proceeding during the past five years that resulted in a
judgment, decree or final order enjoining the person from future violations of,
or prohibiting activities subject to, federal or state securities laws or a
finding of any violation of federal or state securities laws.
A-3
NAME, AGE, CITIZENSHIP PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL
AND BUSINESS ADDRESS OFFICE(S) AT MULTEX POSITIONS HELD DURING THE PAST FIVE YEARS
---------------------- ------------------- ----------------------------------------------------
Isaak Karaev (56) Chairman and Chief Mr. Karaev co-founded Multex in April 1993 and has
Executive Officer served as Chief Executive Officer and a director of
Multex since that time. In addition, Mr. Karaev
served as Chairman of the Board of Directors from
Multex's inception to October 1996, and as President
from September 2000 to September 2001. He has served
as Chairman of the Board of Directors since April
1998. Before founding Multex, Mr. Karaev was the
Senior Vice President for Advanced Systems
Development in the Brokerage Services Information
Group of ADP from 1989 to April 1993.
I. Robert Greene (42) Director Mr. Greene became a director in July 1996. Since
Flatiron Partners June 1999, he has been a Managing Partner at
c/o JPMorgan Partners Flatiron Partners. From January 1999 through May
1221 Avenue of the Americas 1999, Mr. Greene was a General Partner of Chase
39th Floor Capital Partners (now known as JP Morgan Partners),
New York, New York 10020 a global private equity organization. From August
1994 to December 1998, he was a Principal with Chase
Capital Partners. From 1988 to July 1994, Mr. Greene
was an Associate, a Director and a Principal of
Prudential Equity Investors. Mr. Greene is a
director of Resonate Inc. (Nasdaq: RSNT).
Peter Job (61) Director Sir Peter Job became a director in June 2002. In
(United Kingdom) July 2001, he retired from Reuters, where he had
served as Chief Executive Officer since 1991. Sir
Peter is a member of the Supervisory Board of
Deutsche Bank, and a member of the boards of
directors of the following companies: Shell
Transport and Trading PLC, GlaxoSmithkline PLC,
Instinet Group Incorporated, Tibco Software Inc.,
and Schroders PLC. Sir Peter is also Chairman of the
International Advisory Council of The Nasdaq Stock
Market. He is a graduate of Exeter College, Oxford.
A-4
NAME, AGE, CITIZENSHIP PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL
AND BUSINESS ADDRESS OFFICE(S) AT MULTEX POSITIONS HELD DURING THE PAST FIVE YEARS
---------------------- ------------------- ----------------------------------------------------
Lennert J. Leader (47) Director Mr. Leader became a director in December 1998. Mr.
AOL Time Warner Ventures, Leader is President of AOL Time Warner Ventures.
Inc. From February 1998 to January 2001, Mr. Leader
22000 AOL Way served as President of AOL Investments. Mr. Leader
Dulles, Virginia 20166-9323 is also a member of the board of directors of
iVillage, Inc. (Nasdaq: IVIL), an Internet-based
programmer of content for women, and Viewpoint
Corporation (Nasdaq: VWPT), a provider of rich media
Internet technologies. Mr. Leader served as Senior
Vice President, Chief Financial Officer and
Treasurer of America Online, Inc. from September
1989 until July 1998 and was Chief Accounting
Officer from October 1993 until July 1998. Prior to
joining America Online, Mr. Leader was Vice
President, Finance, of Legent Corporation, a
computer software and services company, from March
1989 to September 1989. He also served as Chief
Financial Officer of Morino, Inc., a computer
software and services company, from 1986 to March
1989 and as Morino, Inc.'s Director of Finance from
1984 to 1986. Prior to joining Morino, Inc. in 1984,
he was an audit manager at Price Waterhouse. America
Online, Inc., which is a subsidiary of AOL Time
Warner Inc., is a stockholder of Multex.
Maurice Miller (55) Director Mr. Miller became a director in April 2002. For the
(United Kingdom) past five years, Mr. Miller has been a director of
Dean Clough Ltd. various private companies, including Dean Clough
Halifax Ltd., a West Yorkshire-based real property
Yorkshire HX3 5AX management and development company (since 1982);
Salts Estates Ltd., a West Yorkshire-based real
property company (since 1995); and Images and
Editions Group Ltd., a Lincolnshire-based paper
products company (since 1992). In addition, Mr.
Miller is a Governor of Design Dimension, a charity
focused on education in the United Kingdom. Design
Dimension manages the FOCUS ON FOOD campaign in
association with the Royal Society of Arts. Mr.
Miller holds a degree in Economics from Leeds
University (UK) and is a Fellow of the Institute of
Chartered Accountants in England and Wales.
A-5
NAME, AGE, CITIZENSHIP PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL
AND BUSINESS ADDRESS OFFICE(S) AT MULTEX POSITIONS HELD DURING THE PAST FIVE YEARS
---------------------- ------------------- ----------------------------------------------------
John Tugwell (62) Director Mr. Tugwell became a director in July 1999. Since
October 1997, Mr. Tugwell has provided consulting
services on strategic and financial issues to
family-owned and middle market companies in the
metropolitan New York region, including as Chairman
and Chief Executive Officer of Stone Industries,
Inc., a manufacturer of quarry stone and sand
products. From April 1996 to April 1997, Mr. Tugwell
served as President and Chief Executive Officer of
Fleet Bank N.A. after its acquisition of NatWest
Bancorp Inc. in 1996. Prior to this acquisition, Mr.
Tugwell served as President and Chief Executive
Officer of NatWest Bancorp, a 400-branch financial
services company.
Devin N. Wenig (36) Director Mr. Wenig became a director in February 2000. Mr.
The Reuters Building Wenig is a director of and President of Customer
Three Times Square Segments of Reuters Group PLC, which is an affiliate
New York, New York 10036 of Reuters Limited and Reuters America Inc., the
latter of which is a significant stockholder of
Multex. Reuters Limited and Multex operate Multex
Investor Europe and Multex Investor Japan as joint
ventures. Mr. Wenig is also Chairman of the board of
directors of Nastech Pharmaceutical Company Inc., a
biotech pharmaceutical company and a director of
Instinet Group Incorporated, a majority owned
publicly traded subsidiary of Reuters. Mr. Wenig has
been serving from 1994 through the present in
various management positions at Reuters, including
most recently as President of the Investment Banking
& Brokerage segment. Prior to joining Reuters, Mr.
Wenig practiced law at the New York firm of Cravath,
Swaine & Moore from 1991 to 1994.
Christopher F. Feeney (47) President Mr. Feeney became President in September 2001.
Between April 2000 and September 2001, Mr. Feeney
was our Chief Operating Officer. Prior to joining
Multex, Mr. Feeney was Managing Director,
Information Technology of Banc of America Securities
LLC from September 1997 until joining Multex in
April 2000. From March 1989 until September 1997,
Mr. Feeney served in various capacities at ADP,
including most recently as Vice President of Account
Management.
Jeffrey S. Geisenheimer Senior Vice Mr. Geisenheimer became Senior Vice President and
(37) President and Chief Chief Financial Officer in December 2001. Prior to
Financial Officer that, Mr. Geisenheimer had served as our Vice
President, Finance, since October 1999. Mr.
Geisenheimer was Chief Financial Officer of Market
Guide Inc. from April 1996 until September 1999
(when it was acquired by Multex).
A-6
NAME, AGE, CITIZENSHIP PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL
AND BUSINESS ADDRESS OFFICE(S) AT MULTEX POSITIONS HELD DURING THE PAST FIVE YEARS
---------------------- ------------------- ----------------------------------------------------
Mikhail Akselrod (48) Senior Vice Mr. Akselrod became Senior Vice President,
President, Development in August 1999. He also served as
Development Multex's Vice President, Operations from April 1997
to August 1999. Mr. Akselrod joined Multex in April
1993.
Gregg B. Amonette (50) Executive Vice Mr. Amonette became Executive Vice President,
President, Corporate Development in January 2002, and also
Corporate served as Executive Vice President, Global Business
Development Units from January 2001 until January 2002, as
Senior Vice President, Global Sales from June 1999
until January 2001, as Senior Vice President Sales
and Marketing between December 1998 and June 1999,
and as Multex's Vice President, Sales and Marketing
from August 1996 to December 1998. From January 1995
to July 1996, Mr. Amonette was Vice President and
General Manager of Micrognosis, Inc., a division of
CSK Software, Inc. and a provider of bank and
brokerage trading-room software and technology. From
1984 to December 1994, Mr. Amonette served in
various capacities in the Brokerage Services
Information Group of ADP, including most recently as
Vice President of Retail Sales.
John J. Mahoney (43) Senior Vice Mr. Mahoney became Senior Vice President, Chief
President, Chief Technology Officer in September 2000, and previously
Technology Officer served as Senior Vice President, Product Management
from December 1998 until September 2000, and also
served as Multex's Vice President, Product
Development from August 1994 to December 1998. Prior
to joining Multex, Mr. Mahoney was Vice President of
Workstation Products in the Brokerage Services
Information Group of ADP from 1987 to March 1993.
Homi M. Byramji (50) Senior Vice Mr. Byramji became Senior Vice President in
President, Content September 1999. Prior to joining Multex, Mr. Byramji
and Applications had been the President and Chief Executive Officer
of Market Guide Inc. since 1992. Mr. Byramji was
also a director of Multex from 1999 to 2002.
BOARD OF DIRECTORS AND COMMITTEES
BOARD OF DIRECTORS
The Multex Board consists of eight directors divided into three classes
with staggered three-year terms, with each class consisting, as nearly as
possible, of one-third of the total number of directors. The Board currently
consists of seven persons and one vacancy in Class I. At the annual meeting of
stockholders in the year in which the term of a class of directors expires,
director nominees in such class stand for election to three-year terms. With
respect to each class, a director's term will be subject to the election and
qualification of that director's successor, or the earlier death, resignation or
removal of that director.
A-7
BOARD COMMITTEES AND MEETINGS
The Board of Directors held six meetings and did not act by unanimous
written consent during the fiscal year ended December 31, 2002. The Board of
Directors has an Audit Committee, a Compensation Committee and an Executive
Committee. The Board of Directors does not have a nominating committee. Except
for Devin Wenig, each director attended, in person or by telephone, 75% or more
of the aggregate of (i) the total number of meetings of the Board of Directors
and (ii) the total number of meetings held by all committees of the Board on
which such director served during the 2002 fiscal year.
The Audit Committee of the Board of Directors reviews, acts on and reports
to the Board of Directors with respect to various auditing and accounting
matters, including the selection of our independent auditors, the scope of the
annual audits, fees to be paid to the auditors, the performance of our auditors
and our accounting practices. The members of the Audit Committee are Messrs.
Greene, Leader and Tugwell (Chairman). The Audit Committee held four meetings
during the 2002 fiscal year.
The Compensation Committee of the Board of Directors determines the
salaries and incentive compensation of our senior officers and oversees Multex's
overall compensation philosophy and objectives. The Compensation Committee also
oversees the administration of our various incentive compensation, stock and
benefit plans. The members of the Compensation Committee are Messrs. Greene
(Chairman), Miller and Tugwell. The Compensation Committee held four meetings
during the 2002 fiscal year.
The Executive Committee of the Board of Directors meets monthly with
management to advise upon and consider strategic and financial developments that
may arise between the regularly scheduled Board meetings. The members of the
Executive Committee are Messrs. Greene, Karaev (Chairman) and Tugwell. The
Executive Committee held ten meetings during the 2002 fiscal year.
COMPENSATION OF DIRECTORS
Multex pays its non-employee directors $40,000 per year. In addition,
members of the Executive Committee receive an additional $8,000 per annum.
Members of the Audit Committee receive $3,000 per annum ($6,000 for the Chairman
of the Audit Committee) and members of the Compensation Committee receive $2,000
per annum ($5,000 for the Chairman of the Compensation Committee). Each
non-employee director is paid on a quarterly basis, in arrears, in cash or in
shares of Multex's common stock, in the discretion of each respective director.
Non-employee directors who elect to receive their quarterly stipend in the form
of our common stock receive a premium equal to 20% of that quarterly stipend
amount. Each director's right to receive payment of the annual stipend is
conditioned upon attendance, in person or via videoconference or teleconference,
of at least 75% of the regular meetings of Multex's Board. Personal attendance
at those meetings is strongly preferred. Any non-employee member of the Board of
Directors who, directly or indirectly, is a 5% or greater stockholder or is
affiliated with or a representative of a 5% or greater stockholder is not be
eligible to receive the annual stipend described in this document. All directors
are reimbursed for their reasonable out-of-pocket expenses incurred in attending
the meetings of the Board of Directors and committees thereof. Additionally,
each member of the Transaction Committee will receive a cash payment of $10,000.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
RELATIONSHIP WITH REUTERS
For a summary of Multex's existing relationship with Reuters, see the
section entitled "SPECIAL FACTORS -- 1. Background of the Offer; Contacts with
Multex" in Reuters' Offer to Purchase filed with the Securities and Exchange
Commission on February 26, 2003, which we are incorporating into this document
by reference.
AMERICA ONLINE AGREEMENTS
In the first quarter of 2002, the commercial relationship between Multex
and AOL Time Warner, Inc. ("AOLTW"), one of our stockholders, was allowed to
expire. Since 1998, AOLTW had provided Multex a position as an exclusive anchor
tenant for brokerage research on the America Online Personal Finance
A-8
channel, giving us prominent placement on the channel, a programming presence on
other screens within the America Online service, and links from those locations
back to Multex Investor. For several years, Multex had provided AOLTW with
Multex's fundamental data and other content for use on various AOLTW online
properties. In consideration of the anchor tenant position, we paid AOLTW a
carriage fee of $1.8 million in eight equal installments, which began in
February 1999 and ended in February 2001. Payment of a prorated carriage fee (at
the same quarterly rate of $225,000) continued through February 2002. AOLTW paid
Multex approximately $60,000 pursuant to the Market Guide data license during
2002. Mr. Lennert J. Leader, who is one of our directors, is the President of
AOL Time Warner Ventures, an affiliate of AOLTW.
MERRILL LYNCH AGREEMENTS
In December 1999, Multex entered into a multi-year strategic relationship
with Merrill Lynch to develop and host global research and information Web sites
that now include sites for various Merrill Lynch entities and clients of Merrill
Lynch's institutional businesses. As part of this relationship, Multex (i) sold,
for a purchase price of $400,000, warrants to purchase 100,000 shares of
Multex's common stock at an exercise price of $20 per share; and (ii) sold, for
a purchase price of $100,000, warrants to purchase 1,500,000 shares of Multex's
common stock at an exercise price of $20 per share. The warrants vest based on
certain performance and renewal criteria and will be accounted for at their fair
market value on the date when the performance is complete.
On February 1, 2000, Multex (i) issued 1,000,000 shares of common stock to
Merrill Lynch at a purchase price of $21.60 per share; (ii) issued vested
warrants to purchase 750,000 shares of Multex's common stock with an exercise
price of $50 per share; and (iii) purchased technology from Merrill Lynch for
$500,000 and 200,000 shares of Multex common stock.
During 2002, Multex continued to provide various development, hosting, and
content services to Merrill Lynch pursuant to these agreements. Multex has
received revenues from Merrill Lynch that have accounted for approximately
13.5%, 11.1% and 9.9% of Multex's revenues in fiscal 2000, 2001 and 2002,
respectively. We believe that the terms of the agreements with Merrill Lynch are
no less favorable than the terms we would have otherwise negotiated with an
unaffiliated third party.
On June 20, 2002, Multex amended its agreement with Merrill Lynch. Pursuant
to the amendment, in exchange for the elimination of certain cash license fees
to be received by Multex through December 2004, Merrill Lynch surrendered
530,000 shares of Multex's common stock and warrants to purchase an aggregate of
1,250,000 shares of Multex's common stock. Multex valued the common stock at
$2,077,000, which represents the number of shares exchanged, multiplied by the
average closing sale price over the period commencing three days prior to, and
ending three days after, the date of the amendment, but excluding the date of
the transaction. The surrendered shares have been recorded as treasury stock.
The warrants surrendered by Merrill Lynch were valued at $2,325,000 using the
Black Scholes valuation model and recorded as a reduction in additional paid-in
capital. The value of the securities received will be amortized to revenue on a
straight-line basis over the remaining life of the contract. For the six months
ended December 31, 2002, Multex recorded $880,000 in revenue relating to the
surrender of those securities.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of our outstanding common stock as of February 10, 2003, by each
director, each of the current executive officers named in the Summary
Compensation Table, and all of our current directors and executive officers as a
group.
The following table gives effect to the shares of common stock issuable
within 60 days of February 10, 2003 upon the exercise of all options and other
rights beneficially owned by the indicated stockholders on that
A-9
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 shares. Percentage of beneficial ownership is based on 32,511,117
shares of common stock outstanding at February 10, 2003. Unless otherwise
indicated, the persons named in the table directly own the shares and have sole
voting and sole investment control with respect to all shares beneficially
owned. Unless otherwise indicated, the address for those listed below is c/o
Multex.com, Inc., 100 William Street, 7th Floor, New York, New York 10038.
PERCENT OF
NUMBER OF SHARES COMMON STOCK
NAME AND ADDRESS BENEFICIALLY OWNED OUTSTANDING
---------------- ------------------ ------------
5% STOCKHOLDERS
Liberty Wanger Asset Management, L.P.(1).................... 5,110,000 15.7%
Cannell Capital LLC(2)...................................... 3,965,049 12.2%
State of Wisconsin Investment Board(3)...................... 2,036,600 6.3%
Reuters Group PLC(4)........................................ 1,944,445 6.0%
Munder Capital Management(5)................................ 1,935,000 6.0%
Dimensional Fund Advisors Inc.(6)........................... 1,880,402 5.8%
DIRECTORS AND EXECUTIVE OFFICERS
Isaak Karaev(7)............................................. 1,863,271 5.6%
Christopher F. Feeney(8).................................... 213,502 *
Jeffrey S. Geisenheimer(9).................................. 95,333 *
Mikhail Akselrod(10)........................................ 131,679 *
Gregg B. Amonette(11)....................................... 245,320 *
John J. Mahoney(12)......................................... 332,579 1.0%
Homi M. Byramji(13)......................................... 495,285 1.5%
I. Robert Greene(14)........................................ 89,173 *
Peter Job................................................... 0 *
Lennert J. Leader(15)....................................... 436,250 1.3%
Maurice Miller.............................................. 0 *
John Tugwell(16)............................................ 38,900 *
Devin N. Wenig(17).......................................... 1,944,445 6.0%
All executive officers and directors as a group (13
persons)(18).............................................. 5,885,237 17.1%
---------------
* Less than 1%.
(1) Based on the Schedule 13G (Amendment No. 1) filed with the Securities and
Exchange Commission on February 12, 2003 for the year ended December 31,
2002 by Liberty Wanger Asset Management, L.P. ("WAM"), WAM Acquisition GP,
Inc. ("WAM GP") and Liberty Acorn Trust ("Acorn"). The address for each of
WAM, WAM GP and Acorn is 227 West Monroe Street, Suite 3000, Chicago,
Illinois 60606. WAM and its general partner WAM GP have shared voting and
investment power over 5,110,000 shares, which includes 3,700,000 shares
acquired on behalf of its discretionary client Acorn. Acorn shares voting
and investment power over these 3,700,000 shares with WAM and WAM GP.
(2) Based on the Schedule 13G (Amendment No. 1) filed with the Securities and
Exchange Commission on February 12, 2003 for the year ended December 31,
2002 by (i) Cannell Capital LLC, a California limited liability company and
California licensed advisor ("IA"), (ii) J. Carlo Cannell ("Managing
Member"), (iii) The Anegada Fund Limited ("Anegada"), (iv) The Cuttyhunk
Fund Limited ("Cuttyhunk"), (v) Tonga Partners, L.P. ("Tonga"), (vi) GS
Cannell Portfolio, LLC ("GS Cannell") and (vii) Pleiades Investment
Partners, LP ("Pleiades"). Managing Member controls IA by virtue of
Managing Member's position as managing member and majority owner of IA.
IA's principal business office is located at: 150 California Street, Fifth
Floor, San Francisco, CA 94111; Managing Member's
A-10
principal business office is located at: 150 California Street, Fifth
Floor, San Francisco, CA 94111; Anegada's principal business office is
located at: c/o Bank of Butterfield International (Cayman) Ltd., 68 Fort
Street, PB Box 705, George Town, Grand Cayman, Cayman Islands; Cuttyhunk's
principal business office is located at: 73 Front Street, Hamilton, Bermuda
HM 12; Tonga's principal business office is located at: 150 California
Street, Fifth Floor, San Francisco, CA 94111; GS Cannell's principal
business office is located at: 701 Mount Lucas Road, CN 850, Princeton, NJ
08542; Pleiades' principal business office is located at: 6022 West Chester
Pike, Newtown Square, PA 19073. Anegada holds shared voting and dispositive
power over 1,082,164 shares. Cuttyhunk holds shared voting and dispositive
power over 260,385 shares. Tonga holds shared voting and dispositive power
over 1,926,100 shares. GS Cannell holds shared voting and dispositive power
over 500,800 shares. Pleiades holds shared voting and dispositive power
over 195,600 shares.
(3) Based on the Schedule 13G filed with the Securities and Exchange Commission
on February 14, 2003 for the year ended December 31, 2002 by the State of
Wisconsin Investment Board. The address for the State of Wisconsin
Investment Board is P.O. Box 7842, Madison, Wisconsin 53707.
(4) Based on the Schedule 13G filed with the Securities and Exchange Commission
on September 21, 2000 for the year ended December 31, 1999 by Reuters Group
PLC, for and on behalf of itself, Reuters Investments Limited, Reuters
Holdings Limited, Reuters Limited, Reuters Group Overseas Holdings (UK)
Limited, Reuters Overseas Holdings BV, Reuters International Holdings Sarl,
Reuters America Holdings Inc. and Reuters America Inc. (together with
Reuters Group PLC, the "Reuters Entities"). The address for Reuters America
Inc. and Reuters America Holdings Inc. is 1700 Broadway, 4th Floor, New
York, New York 10019. The address for Reuters Group PLC, Reuters
Investments Limited, Reuters Holdings Limited, Reuters Limited and Reuters
Group Overseas Holdings (UK) Limited is 85 Fleet Street, London EC4P 4AJ,
England. Reuters International Holdings Sarl is located at 153 route de
Thonon, 1245 Collonge-Bellerive, Geneva, Switzerland. Reuters Overseas
Holdings BV is located at Drentestraat 11, 1083 HK Amsterdam, The
Netherlands. Reuters America Inc. is a wholly-owned subsidiary of Reuters
America Holdings Inc., which is a wholly-owned subsidiary of Reuters
International Holdings Sarl which is a wholly-owned subsidiary of Reuters
Overseas Holdings BV, which is a wholly-owned subsidiary of Reuters Group
Overseas Holdings (UK) Limited, which is a wholly-owned subsidiary of
Reuters Limited, which is a wholly-owned subsidiary of Reuters Holdings
Limited, which is a wholly-owned subsidiary of Reuters Investments Limited
which is a wholly-owned subsidiary of Reuters Group PLC. The Reuters
Entities each have shared voting and investment power of 1,944,445 shares
of common stock and no sole voting or investment power.
(5) Based on the Schedule 13G (Amendment No. 2) filed with the Securities and
Exchange Commission on February 12, 2003 for the year ended December 31,
2002 by Munder Capital Management ("Munder"). The address for Munder is
Munder Capital Center, 480 Pierce Street, Suite 300, P.O Box 3043,
Birmingham, Michigan 48012-3043.
(6) Based on the Schedule 13G filed with the Securities and Exchange Commission
on February 3, 2003 for the year ended December 31, 2002 by Dimensional
Fund Advisors Inc. The address for Dimensional is 1299 Ocean Avenue, 11th
Floor, Santa Monica, California 90401. Dimensional has sole voting and
investment power over the shares, which are owned by four investment
companies to which Dimensional furnishes investment advice and by certain
other commingled group trusts and separate accounts of which Dimensional
serves as investment manager. Dimensional disclaims beneficial ownership of
the shares.
(7) Includes 912,500 shares of common stock issuable upon exercise of options
exercisable within 60 days of February 10, 2003.
(8) Includes 202,500 shares of common stock issuable upon exercise of options
exercisable within 60 days of February 10, 2003.
(9) Includes 86,250 shares of common stock issuable upon exercise of options
exercisable within 60 days of February 10, 2003.
(10) Includes 99,875 shares of common stock issuable upon exercise of options
exercisable within 60 days of February 10, 2003.
A-11
(11) Includes 226,875 shares of common stock issuable upon exercise of option
exercisable within 60 days of February 10, 2003.
(12) Includes 148,750 shares of common stock issuable upon exercise of options
exercisable within 60 days of February 10, 2003.
(13) Includes 16,125 shares of common stock owned by members of Mr. Byramji's
immediate family and 185,000 shares of common stock issuable upon exercise
of options exercisable within 60 days of February 10, 2003.
(14) Includes 670 shares of common stock owned by Mr. Greene's wife. Also
includes 29,462 shares of common stock held by Flatiron Fund 1998/99, LLC,
of which Mr. Greene is a managing member. Mr. Greene disclaims beneficial
ownership of the Flatiron shares except to the extent of his pecuniary
interest in this document, if any. Also includes 35,750 shares of common
stock issuable upon exercise of options exercisable within 60 days of
February 10, 2003.
(15) Includes 400,000 shares of common stock beneficially owned by AOL Time
Warner Inc. and registered in the name of America Online Inc. Mr. Leader
serves as President of AOL Time Warner Ventures, an affiliate of AOL Time
Warner Inc. In this capacity, Mr. Leader may be deemed to be a beneficial
owner of these shares. He disclaims beneficial ownership of these shares.
Also includes 35,750 shares of common stock issuable upon exercise of
options exercisable within 60 days of February 10, 2003. Mr. Leader is
contractually obligated to transfer any shares acquired upon exercise of
his stock options to AOL Time Warner Inc. Also includes 500 shares held by
The Lennert J. Leader Trust.
(16) Includes 35,750 shares of common stock issuable upon exercise of options
exercisable within 60 days of February 10, 2003.
(17) Consists of 1,944,445 shares of common stock held by Reuters America Inc.
Mr. Wenig is President of the Investment Banking/Brokerage Division of
Reuters Group PLC, an affiliate of Reuters America Inc. In this capacity,
Mr. Wenig may be deemed to be a beneficial owner of these shares. He
disclaims beneficial ownership of these shares except to the extent of his
pecuniary interest in this document, if any.
(18) Includes 1,969,000 shares of common stock issuable upon exercise of options
exercisable within 60 days of February 10, 2003.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth all compensation earned by Multex's Chief
Executive Officer and each of the four other most highly compensated executive
officers of Multex whose salary and bonus for the 2002 Fiscal Year exceeded
$100,000. In this document we refer to the individuals listed below as the
"Named Executive Officers."
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION(1) -------------------------
--------------------------------- RESTRICTED SECURITIES
FISCAL STOCK UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) AWARDS(#) OPTIONS(#)
--------------------------- ------ ---------- --------- ---------- -----------
Isaak Karaev.......................... 2002 275,000 -- -- --
Chief Executive Officer 2001 254,000 -- -- 350,000
2000 250,000 -- 599,989 200,000
Christopher F. Feeney................. 2002 250,000 40,000 -- 90,000
President 2001 200,000 -- -- 60,000
2000 130,769 150,000 179,997 250,000
A-12
LONG-TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION(1) -------------------------
--------------------------------- RESTRICTED SECURITIES
FISCAL STOCK UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) AWARDS(#) OPTIONS(#)
--------------------------- ------ ---------- --------- ---------- -----------
John J. Mahoney....................... 2002 200,000 -- -- 40,000
Chief Technology Officer 2001 182,000 -- -- 50,000
2000 187,000 -- 239,996 --
Jeffrey S. Geisenheimer............... 2002 188,846 30,000 -- 90,000
Chief Financial Officer 2001 144,615 53,750 -- 100,000
2000 135,000 5,000 30,000 10,000
Homi M. Byramji....................... 2002 245,000 -- -- 20,000
Senior Vice President, Content and
Applications 2001 226,000 -- -- 40,000
2000 200,000 -- 239,996 --
---------------
(1) The column for "Other Annual Compensation" has been omitted because there is
no compensation required to be reported in that column. The aggregate amount
of perquisites and other personal benefits provided to each Named Executive
Officer above is less than 10% of the total annual salary and bonus of that
Named Executive Officer.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The following table sets forth information regarding options granted to the
Named Executive Officers during the 2002 fiscal year. We have never granted any
stock appreciation rights.
INDIVIDUAL GRANTS(1)
--------------------------------------------------------------- POTENTIAL REALIZABLE VALUE
PERCENT OF AT ASSUMED ANNUAL RATES
NUMBER OF TOTAL OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM($)(3)
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION --------------------------
NAME GRANTED(#) 2002(%)(2) PER SHARE($) DATE FIVE PERCENT TEN PERCENT
---- ------------------ ------------ -------------- ---------- ------------ -----------
Isaak Karaev -- -- -- -- -- --
Christopher F. Feeney 90,000 5.56% 3.44 7/22/12 194,706 493,423
John J. Mahoney 40,000 2.47% 3.44 7/22/12 86,536 219,299
Homi M. Byramji 20,000 1.24% 3.44 7/22/12 43,268 109,649
Jeffrey S.
Geisenheimer 40,000 2.47% 3.44 7/22/12 86,536 219,299
50,000 3.09% 3.05 10/21/12 95,906 243,046
---------------
(1) All options were granted pursuant to our 1999 Stock Incentive Plan. All
options shown in this table become exercisable at a rate of 25% annually
over four years from the date of grant.
(2) In the 2002 Fiscal Year, we granted options to employees to purchase an
aggregate of 1,618,500 shares of Common Stock.
(3) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. The 5% and
10% assumed annual rates of compounded stock price appreciation are mandated
by the rules of the Securities and Exchange Commission and do not represent
an estimate or projection of our future Common Stock prices. These amounts
represent certain assumed rates of appreciation in the value of our Common
Stock from the fair market value on the date of grant. Actual gains, if any,
on stock option exercises are dependent on the future performance of the
Common Stock and overall stock market conditions. The amounts reflected in
the table may not necessarily be achieved.
A-13
AGGREGATED OPTION EXERCISES IN THE YEAR ENDED DECEMBER 31, 2002 AND
FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning options to purchase
common stock exercised by the Named Executive Officers during the 2002 Fiscal
Year and the number and value of unexercised options held by each of the
executive officers at December 31, 2002.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 2002 DECEMBER 31, 2002($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
Isaak Karaev............ -- -- 912,500 262,500 1,579,875 14,625
Christopher F. Feeney... -- -- 140,000 260,000 1,950 123,750
John J. Mahoney......... -- -- 148,750 77,500 81,313 57,275
Homi M. Byramji......... -- -- 185,000 75,000 1,300 30,100
Jeffrey S.
Geisenheimer.......... -- -- 83,750 176,250 22,913 206,138
---------------
(1) The last quoted bid price of Multex's common stock on the Nasdaq National
Market on December 31, 2002 was $4.20 per share.
EMPLOYMENT CONTRACTS AND NON-COMPETITION AGREEMENTS
None of our executive officers has an employment agreement, although all of
our executive officers have entered into agreements that contain
non-competition, non-disclosure and non-solicitation restrictions and covenants,
including a provision prohibiting these officers from competing with Multex
during their employment with us and for a period of six months after termination
of their employment with us.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of Messrs.
Greene, Miller and Tugwell, none of whom has been an officer or employee of
Multex at any time since our inception. No executive officer of Multex serves as
a member of the Board of Directors or Compensation Committee of any entity that
has one or more executive officers serving as a member of our Board of Directors
or Compensation Committee. Prior to the formation of the Compensation Committee,
the Board of Directors as a whole made decisions relating to the compensation of
our executive officers.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors is composed entirely
of independent outside directors. It is the duty of the Compensation Committee
to review and approve the salaries and bonuses of executive officers of the
Company, including the Chief Executive Officer; to establish the general
compensation policies for such individuals; and to oversee the Company's overall
compensation philosophy and objectives.
The Compensation Committee believes that the compensation programs for the
Company's executive officers should reflect the Company's performance and the
value created for the Company's stockholders. In addition, the compensation
programs should support the short-term and long-term strategic goals and values
of the Company and should reward individual contribution to the Company's
success. The Company is engaged in a very competitive industry, and the
Company's success depends upon its ability to attract and retain qualified
executives through the competitive compensation packages it offers to such
individuals.
GENERAL COMPENSATION POLICY. The Compensation Committee's policy is to
provide the Company's executive officers with compensation opportunities that
are based upon their personal performance, the financial performance of the
Company and their contribution to that performance. In addition, the
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Company's compensation arrangements are designed to attract and retain highly
skilled individuals in a very competitive environment. Each executive officer's
compensation package is comprised of three elements: (i) base salary that is
competitive with the market and reflects individual performance, (ii) annual
variable performance awards payable in cash and tied to the Company's
achievement of annual financial performance goals and (iii) long-term
stock-based incentive awards designed to strengthen the mutuality of interests
between the executive officers and the Company's stockholders. As an officer's
level of responsibility increases, a greater proportion of his or her total
compensation will be dependent upon the Company's financial performance and
stock price appreciation rather than base salary. The Compensation Committee
believes that the Company should provide officers with strong financial
incentives towards the achievement of corporate and personal performance goals.
FACTORS. The principal factors that were taken into account in
establishing each executive officer's compensation package for the 2002 fiscal
year are described below.
BASE SALARY. The base salary for each executive officer reflects the
salary levels for comparable positions in comparable companies, as well as the
individual's personal abilities and performance and internal alignment
considerations. The relative weight given to each factor varies with each
individual. Each executive officer's base salary is reviewed each year on the
basis of (i) management's recommendations to the Compensation Committee
regarding the officer's personal performance for the year and (ii) the
competitive marketplace for persons in comparable positions. The Company's
performance and profitability are also important factors in determining the base
salaries of executive officers. Given the continued worldwide recession and its
impact on the Company's earnings in 2002, as was the case at the beginning of
2002, no executive officers were granted salary increases at the beginning of
2002.
ANNUAL INCENTIVES. In general, Multex's results of operations exceeded its
preliminary forecasts for 2002. Nevertheless, except as described below, due to
our limited bonus plan for fiscal year 2002, no cash and/or restricted stock
bonuses were awarded to the executive officers named in the Summary Compensation
Table, or to other senior officers of the Company. The decision not to grant
annual cash bonuses to the executive officers of the Company for fiscal year
2002 was based on management's recommendation that top performers among the
company's rank and file were most deserving of the Company's 2002 bonus pool.
Messrs. Feeney and Geisenheimer were granted modest mid-year cash bonuses in
recognition of their important contributions to the continuing success of the
enterprise.
LONG TERM INCENTIVES. In general, stock option grants are made annually by
the Compensation Committee to each of the Company's executive officers. Each
grant is designed to align the interests of the executive officer with those of
the stockholders and to provide each individual with a significant incentive to
manage the Company from the perspective of an owner with an equity stake in the
business. Each grant allows the officer to acquire shares of the Company's
Common Stock at a fixed price per share (the market price on the grant date)
over a specified period of time (up to ten years). Generally, each option
becomes exercisable in a series of installments over a 4-year period, contingent
upon the officer's continued employment with the Company. In all cases, the
option will provide a return to the executive officer only if he or she remains
employed by the Company during the vesting period, and then only if the market
price of the shares appreciates over the option term.
The size of the Company's periodic option grant to each executive officer,
including the Chief Executive Officer, is set by the Compensation Committee at a
level that is intended to create a meaningful opportunity for stock ownership
based upon the individual's current position with the Company, the individual's
personal performance in recent periods and his or her potential for future
responsibility and promotion over the option term. The Compensation Committee
also takes into account the need to retain skilled and qualified individuals in
its executive management team, as well as the number of unvested options held by
each individual executive officer, in order to maintain an appropriate level of
equity incentive for that individual. The relevant weight given to each of these
factors varies from individual to individual. The Compensation Committee has
established certain guidelines with respect to the option grants made to the
executive officers, but has the flexibility to make adjustments to those
guidelines at its discretion.
CEO COMPENSATION. In setting the total compensation payable to the
Company's Chief Executive Officer for the 2002 fiscal year, the Compensation
Committee sought to make that compensation
A-15
competitive with the compensation paid to the chief executive officers of
similar companies, while at the same time assuring that a significant percentage
of compensation was tied to Company performance.
Isaak Karaev's base salary for the 2002 fiscal year was set at a
competitive level when compared with the base salary levels in effect for
similarly situated chief executive officers. With respect to Mr. Karaev's base
salary, it is the Compensation Committee's intent to provide him with a level of
stability and certainty each year and not have this particular component of
compensation affected to any significant degree by Company performance factors.
The remaining components of Mr. Karaev's 2002 fiscal year compensation were
primarily dependent upon corporate performance. Mr. Karaev was eligible for a
cash bonus for the 2002 fiscal year, conditioned on the Company's attainment of
certain goals, with additional consideration to be given to individual business
plan objectives. Despite the continuing worldwide recession and global economic
conditions generally, those goals and objectives were generally achieved,
however, no cash bonus was awarded to Mr. Karaev for 2002 in light of
management's recommendation that rank and file managers and employees be
recognized and in light of the Company's modest 2002 bonus plan. Mr. Karaev was
awarded no options to purchase shares of common stock during the 2002 fiscal
year.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M). Section 162(m) of
the Internal Revenue Code disallows a tax deduction to publicly held companies
for compensation paid to certain of their executive officers, to the extent that
compensation exceeds $1 million per covered officer in any fiscal year. The
limitation applies only to compensation that is not considered to be
performance-based. Non-performance based compensation paid to the Company's
executive officers for the 2002 fiscal year did not exceed the $1 million limit
per officer, and the Compensation Committee does not anticipate that the non-
performance based compensation to be paid to the Company's executive officers
for the 2003 fiscal year will exceed that limit. The Company's 1999 Stock Option
Plan has been structured so that any compensation deemed paid in connection with
the exercise of option grants made under that plan with an exercise price equal
to the fair market value of the option shares on the grant date will qualify as
performance-based compensation which will not be subject to the $1 million
limitation. Because it is unlikely that the cash compensation payable to any of
the Company's executive officers in the foreseeable future will approach the $1
million limit, the Compensation Committee has decided at this time not to take
any action to limit or restructure the elements of cash compensation payable to
the Company's executive officers. The Compensation Committee will reconsider
this decision should the individual cash compensation of any executive officer
ever approach the $1 million level.
It is the opinion of the Compensation Committee that the executive
compensation policies and plans provide the necessary total remuneration program
to properly align the Company's performance and the interests of the Company's
stockholders through the use of competitive and equitable executive compensation
in a balanced and reasonable manner, for both the short and long-term.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE COMPANY'S BOARD OF
DIRECTORS:
I. ROBERT GREENE
MAURICE MILLER
JOHN TUGWELL
FEBRUARY 26, 2003
MULTEX STOCK PRICE PERFORMANCE
The following graph shows a comparison of cumulative total stockholder
returns for Multex, the Russell 2000 Index and a composite of the following peer
group companies: EDGAR Online, Inc., Factset Research Systems Inc., Hoover's,
Inc., MarketWatch.com, Inc., OneSource Information Services, Inc., Reuters Group
PLC (American Depositary Receipts) and TheStreet.com, Inc.
A-16
[GRAPH OMITTED]
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF MULTEX'S
PREVIOUS OR FUTURE FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE BY REFERENCE
THIS INFORMATION STATEMENT OR FUTURE FILINGS MADE BY MULTEX UNDER THOSE
STATUTES, THE COMPENSATION COMMITTEE REPORT, THE AUDIT COMMITTEE REPORT,
REFERENCE TO THE INDEPENDENCE OF THE AUDIT COMMITTEE MEMBERS AND THE STOCK
PERFORMANCE GRAPH ARE NOT DEEMED FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AND SHALL NOT BE DEEMED INCORPORATED BY REFERENCE INTO ANY OF THOSE
PRIOR FILINGS OR INTO ANY FUTURE FILINGS MADE BY MULTEX UNDER THOSE STATUTES.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors oversees the Company's
financial reporting process. The Company's management has primary responsibility
for the financial statements and the reporting process, including the systems of
internal controls. Each of the three members of the Audit Committee is
"independent," as defined under the listing standards of the Nasdaq National
Market, and at least one member has accounting or related financial management
expertise. The Audit Committee operates under a written charter adopted by the
Board of Directors. As required by the charter, we review and reassess the
charter annually and recommend any changes to the Board of Directors for
approval.
In fulfilling its oversight responsibilities, the Audit Committee will
review with management the audited financial statements in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2002, including a
discussion of the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and the clarity of the
disclosures in the financial statements.
A-17
The Audit Committee periodically reviews with the independent auditors, who
are responsible for expressing an opinion on the conformity of the audited
financial statements with generally accepted accounting principles, their
judgments as to the quality, not just the acceptability, of the Company's
accounting principles, the matters required to be discussed by Statement on
Auditing Standards No. 61 ("Communication with Audit Committees"), as amended,
and such other matters as are required to be discussed with the Audit Committee
under generally accepted auditing standards. In addition, the Audit Committee
has discussed with the independent auditors the auditor's independence from
management and the Company, including the matters in the written disclosures and
the letter required by the Independence Standards Board Standard No. 1
("Independence Discussions with Audit Committees"), as amended, which were
received from Ernst & Young LLP.
The Audit Committee discussed with the Company's independent auditors the
overall scope and plans for their audit of the Company's 2002 financial
statements. The Audit Committee meets with the independent auditors, with and
without management present, to discuss the results of their examinations, their
evaluations of the Company's internal controls, and the overall quality of the
Company's financial reporting. The Audit Committee held four meetings during
fiscal year 2002.
SUBMITTED BY THE AUDIT COMMITTEE OF THE COMPANY'S BOARD OF DIRECTORS:
JOHN TUGWELL, Audit Committee Chairman
I. ROBERT GREENE, Audit Committee Member
LENNERT J. LEADER, Audit Committee Member
FEBRUARY 26, 2003
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The members of our Board of Directors, our executive officers and persons
who hold more than ten percent of our outstanding common stock are subject to
the reporting requirements of Section 16(a) of the Securities Exchange Act of
1934, as amended, which requires them to file reports with respect to their
ownership of our common stock and their transactions in such common stock. Based
upon a review of (i) the copies of Section 16(a) reports which Multex has
received from such persons or entities for transactions in our common stock and
their common stock holdings for the fiscal year ended December 31, 2002, and
(ii) the written representations received from one or more of such persons or
entities that no annual Form 5 reports were required to be filed by them for the
fiscal year ended December 31, 2002, Multex believes that all reporting
requirements under Section 16(a) for such fiscal year were met in a timely
manner by its directors, executive officers and beneficial owners of more than
ten percent of its common stock, except that Mr. Geisenheimer reported his
October 22, 2002 option grant on Form 5 on February 14, 2003.
A-18
ANNEX B
[BEAR STEARNS LOGO] BEAR, STEARNS & CO. INC.
383 MADISON AVENUE
NEW YORK, NEW YORK 10179
TEL 212-272-2000
WWW.BEARSTEARNS.COM
February 17, 2003
Transaction Committee of the Board of Directors
Board of Directors
Multex.com, Inc.
100 William Street
7th Floor
New York, New York 10038
Gentlemen:
We understand that Multex.com, Inc. ("Multex"), Reuters Group PLC (together with
its affiliates, "Reuters") and Proton Acquisition Corporation ("Merger Sub")
have entered into an Agreement and Plan of Merger (the "Agreement") dated
February 17, 2003, pursuant to which Merger Sub, a wholly owned subsidiary of
Reuters, will commence a tender offer (the "Offer") to purchase all issued and
outstanding shares of Multex common stock, par value $0.01 (the "Shares"), at a
price of $7.35 per Share, net to the seller in cash. The Offer is subject to not
less than 50.1% of the Shares being properly tendered. Following consummation of
the Offer, assuming not less than 50.1% of the Shares are purchased pursuant to
the Offer, Merger Sub will merge (the "Merger") with and into Multex (the Merger
together with the Offer, the "Transaction"). Pursuant to the Merger, those
shareholders who do not tender their Shares pursuant to the Offer will receive
$7.35 per Share in cash. The cash amount pursuant to the Offer and the Merger is
herein defined as the "Consideration to be Received." You have provided us with
a copy of the Agreement in substantially final form. One current officer and one
former officer of Reuters are members of Multex's Board of Directors and Reuters
owns approximately 6% of the Shares.
You have asked us to render our opinion as to whether the Consideration to be
Received is fair, from a financial point of view, to the shareholders of Multex,
excluding Reuters.
In the course of performing our review and analyses for rendering this opinion,
we have:
- reviewed the Agreement, the various Tender and Voting Agreements between seven
senior managers of Multex and Reuters, and the proposed Employment Agreement
between Isaak Karaev, Chairman and Chief Executive Officer of Multex, and
Reuters;
- reviewed Multex's Annual Reports to Shareholders and Annual Reports on Form
10-K for the three years ended December 31, 1999 through 2001, its Quarterly
Reports on Form 10-Q for the periods ended March 31, 2002, June 30, 2002 and
September 30, 2002, and its press release dated January 30, 2003 setting forth
the preliminary results of operations for the quarter ended and year ended
December 31, 2002;
- reviewed certain operating and financial information relating to Multex's
business and prospects, including projections for the four years ended
December 31, 2006, provided to us by management of Multex consisting of a base
case and a sensitivity to the base case, quantifying the effect of certain
risks to the base case, including, among others, new entrants to Multex's
markets (together, the "Projections");
- met with certain members of Multex's senior management to discuss Multex's
business, operations, historical financial results, the Projections and future
prospects;
- reviewed the historical prices, trading multiples and trading volume of the
Shares;
B-1
Multex.com, Inc.
February 17, 2003
Page 2
- reviewed publicly available financial data, stock market performance data and
trading multiples of companies in the financial information services sector
that we believed to be relevant;
- reviewed the terms of (i) recent mergers and acquisitions of companies in the
financial information services sector that we believed to be relevant and (ii)
premia paid in acquisitions of a diverse set of companies of a similar size to
Multex and which we believed relevant to our analysis of the Transaction;
- performed discounted cash flow analyses on the Projections; and
- conducted such other studies, analyses, inquiries and investigations as we
deemed appropriate.
We have relied upon and assumed, without independent verification, the accuracy
and completeness of the financial and other information, including without
limitation the Projections, provided to us by Multex. With respect to the
Projections, we have relied on representations that they have been reasonably
prepared on bases reflecting the best currently available estimates and
judgments of the senior management of Multex as to the expected future
performance of Multex with and without taking into account the risks described
above. We have not assumed any responsibility for the independent verification
of any such information or of the Projections provided to us, and we have
further relied upon the assurances of the senior management of Multex that they
are unaware of any facts that would make the information and Projections
provided to us incomplete or misleading.
In arriving at our opinion, we have not performed or obtained any independent
appraisal of the assets or liabilities (contingent or otherwise) of Multex, nor
have we been furnished with any such appraisals. During the course of our
engagement, while not authorized to seek offers for Multex, we and Multex's
management held preliminary, informal discussions with other large financial
information services companies with respect to a possible acquisition of Multex
and we have considered the results of such discussions in rendering our opinion.
We have assumed that the Transaction will be consummated in a timely manner and
in accordance with the terms of the Agreement without any amendments or
modifications that collectively would have a material effect on Multex.
We have acted as a financial advisor to the Transaction Committee of the Board
of Directors of Multex in connection with the Transaction and will receive a
customary fee for such services, a substantial portion of which is contingent on
successful consummation of the Transaction. In the ordinary course of business,
we and our affiliates may actively trade the equity and debt securities and/or
bank debt of Multex and/or Reuters for our own account and for the account of
our customers and, accordingly, may at any time hold a long or short position in
such securities or bank debt.
It is understood that this letter is intended for the benefit and use of the
Transaction Committee of the Board of Directors of Multex and the Board of
Directors of Multex in connection with their review of the Transaction and does
not constitute a recommendation to the Transaction Committee of the Board of
Directors of Multex, the Board of Directors of Multex or any holders of Shares
as to how to vote in connection with the Transaction or whether to tender their
Shares in the Offer. This opinion does not address Multex's underlying business
decision to pursue the Transaction, the relative merits of the Transaction as
compared to any alternative business strategies that might exist for Multex or
the effects of any other transaction in which Multex might engage. This letter
is not to be used for any other purpose, or to be reproduced, disseminated,
quoted from or referred to at any time, in whole or in part, without our prior
written consent; provided, however, that this letter may be included in its
entirety in any Schedule 14D-9 or any proxy statement to be distributed to the
holders of Shares in connection with the Transaction, if applicable. Our opinion
is subject to the assumptions and conditions contained herein and is necessarily
based on economic, market and other conditions, and the
Form of Fairness Opinion Letter
B-2
Multex.com, Inc.
February 17, 2003
Page 3
information made available to us, as of the date hereof. We assume no
responsibility for updating or revising our opinion based on circumstances or
events occurring after the date hereof.
Based on and subject to the foregoing, it is our opinion that, as of the date
hereof, the Consideration to be Received is fair, from a financial point of
view, to the shareholders of Multex, excluding Reuters.
Very truly yours,
BEAR, STEARNS & CO. INC.
By: /s/ MARK A. VAN LITH
--------------------------------------------------------
Mark A. Van Lith
Senior Managing Director
Form of Fairness Opinion Letter
B-3