10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarterly period ended June 30, 2003

OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934.
	For the Transition period from            to

Commission File Number 0-25849

OneSource Information Services, Inc.

(Exact name of registrant as specified in its charter)

Delaware	04-3204522
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

300 Baker Avenue, Concord, MA 01742

(Address of principal executive offices, including Zip Code)

(978) 318-4300

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

               Yes x     No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

               Yes o     No x

The number of shares of the issuer’s Common Stock, $0.01 par value per share, outstanding as of August 5, 2003 was 11,323,205.

OneSource Information Services, Inc.

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION
	Item 1. Consolidated Financial Statements
		CONSOLIDATED BALANCE SHEETS
		CONSOLIDATED STATEMENTS OF INCOME
		CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
	Item 4. Controls and Procedures
PART II OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 2. Changes in Securities and Use of Proceeds
	Item 3. Defaults upon Senior Securities
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 5. Other Information
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
EX-10.02 1999 Stock Option & Incentive Plan
EX-10.03 1999 Employee Stock Purchase Plan
EX-31.01 Certification of Daniel J. Schimmel, CEO
EX-31.02 Certification of Roy D. Landon, CFO
EX-32.01 906 Cert. of Daniel J. Schimmel, CEO
EX-32.02 906 Certification of Roy D. Landon, CFO

CONTENTS

			Page
Part I          FINANCIAL INFORMATION
	Item 1. Consolidated Financial Statements (unaudited)
		Consolidated Balance Sheets as of June 30, 2003 and December 31, 2002		2
		Consolidated Statements of Income for the three months and six months ended June 30, 2003 and 2002		3
		Consolidated Statements of Cash Flows for the six months ended June 30, 2003 and 2002		4
		Notes to Consolidated Financial Statements		5
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			9
	Item 3. Quantitative and Qualitative Disclosures About Market Risk			24
	Item 4. Controls and Procedures			24
Part II         OTHER INFORMATION
	Item 1. Legal Proceedings			24
	Item 2. Changes in Securities and Use of Proceeds			25
	Item 3. Defaults upon Senior Securities			25
	Item 4. Submission of Matters to a Vote of Security Holders			25
	Item 5. Other Information			26
	Item 6. Exhibits and Reports on Form 8-K			26
	Signature			28

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PART I FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

ONESOURCE INFORMATION SERVICES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)
(unaudited)

				June 30,			December 31,
				2003			2002
Assets
Current assets:
	Cash and cash equivalents			$	25,563		$	23,096
	Accounts receivable, net of allowance for doubtful accounts of $179 and $299 at June 30, 2003 and December 31, 2002, respectively				9,349			16,499
	Deferred royalties				1,965			2,873
	Deferred commissions				1,407			1,644
	Prepaid expenses and other current assets				899			822
		Total current assets			39,183			44,934
Property and equipment, net					4,411			3,629
Goodwill					4,445			4,445
Acquired intangible assets, net					1,054			1,217
Restricted time deposit					—			603
Long-term deferred royalties					1,517			1,540
Capitalized software development costs, net					3,640			2,250
Other assets					101			180
			Total assets	$	54,351		$	58,798
Liabilities and Stockholders’ Equity
Current liabilities:
	Current portion of long-term debt			$	512		$	—
	Accounts payable				2,764			2,222
	Accrued compensation and benefits				2,084			2,534
	Accrued royalties				2,453			3,419
	Accrued expenses				2,880			2,857
	Deferred revenues				25,948			30,257
		Total current liabilities			36,641			41,289
Long-term debt					897			—
			Total liabilities		37,538			41,289
Commitments and contingencies (Note 9)					—			—
Stockholders’ equity:
	Preferred stock, $0.01 par value:
		1,000,000 shares authorized; no shares issued and outstanding			—			—
	Common stock, $0.01 par value:
		35,000,000 shares authorized; 13,287,453 shares issued and 11,449,455 shares outstanding at June 30, 2003; 13,287,453 shares issued and 11,681,741 shares outstanding at December 31, 2002			133			133
	Additional paid-in capital				35,548			35,128
	Accumulated deficit				(5,924	)		(5,856	)
	Accumulated other comprehensive income				583			437
	Treasury stock, at cost				(13,527	)		(12,333	)
		Total stockholders’ equity			16,813			17,509
			Total liabilities and stockholders’ equity	$	54,351		$	58,798

The accompanying notes are an integral part of these consolidated financial statements.

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ONESOURCE INFORMATION SERVICES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)
(unaudited)

			For the three months ended					For the six months ended
			June 30,					June 30,
			2003			2002		2003			2002
Revenues:
	Web-based product		$	13,837		$	13,803	$	27,934		$	27,452
	CD Rom product and other			562			570		961			1,145
				14,399			14,373		28,895			28,597
Cost of revenues:
	Web-based product			4,238			4,046		8,507			8,034
	CD Rom product and other			402			408		842			833
				4,640			4,454		9,349			8,867
	Gross profit			9,759			9,919		19,546			19,730
Operating expenses:
	Selling and marketing			4,350			4,189		8,794			7,912
	Platform and product development			2,630			2,741		5,321			5,394
	General and administrative			1,705			1,291		3,212			2,866
	Amortization of acquired intangible assets			82			115		163			230
		Total operating expenses		8,767			8,336		17,490			16,402
		Income from operations		992			1,583		2,056			3,328
Interest income				138			102		250			204
Interest expense				(21	)		—		(24	)		—
		Income before provision for income taxes		1,109			1,685		2,282			3,532
Provision for income taxes				422			642		856			1,307
		Net income	$	687		$	1,043	$	1,426		$	2,225
Basic net income per share			$	0.06		$	0.09	$	0.12		$	0.19
Diluted net income per share			$	0.06		$	0.08	$	0.12		$	0.17
Weighted average common shares outstanding:
		Basic		11,558			11,957		11,619			11,992
		Diluted		11,883			12,620		12,000			12,752

The accompanying notes are an integral part of these consolidated financial statements.

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ONESOURCE INFORMATION SERVICES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
(unaudited)

				For the six months ended
				June 30,
				2003			2002
Cash flows relating to operating activities:
	Net income			$	1,426		$	2,225
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			1,544			1,621
		Amortization of acquired intangible assets			163			230
		Amortization of unearned compensation relating to grants of stock options			—			49
		Tax benefit of stock options			421			532
		Loss on disposal of fixed assets			11			—
		Changes in operating assets and liabilities:
			Accounts receivable		7,255			6,891
			Deferred royalties		908			445
			Deferred commissions		237			103
			Prepaid expenses and other assets		7			(43	)
			Long-term deferred royalties		23			(514	)
			Accounts payable		509			(574	)
			Accrued compensation and benefits		(349	)		72
			Accrued royalties		(966	)		(646	)
			Accrued expenses		(105	)		353
			Deferred revenues		(4,548	)		(2,475	)
		Net cash provided by operating activities			6,536			8,269
Cash flows relating to investing activities:
	Decrease in restricted time deposit				603			—
	Purchases of property and equipment				(2,020	)		(679	)
	Capitalization of software development costs				(1,698	)		(427	)
		Net cash used by investing activities			(3,115	)		(1,106	)
Cash flows relating to financing activities:
	Issuance of stock pursuant to stock options and employee stock purchase plan				622			518
	Repurchase of common stock for treasury				(3,310	)		(2,492	)
	Proceeds from equipment line of credit				1,537			—
	Repayments under equipment line of credit				(128	)		—
		Net cash used by financing activities			(1,279	)		(1,974	)
Effect of exchange rate changes on cash and cash equivalents					325			194
Increase in cash and cash equivalents					2,467			5,383
Cash and cash equivalents, beginning of period					23,096			18,162
Cash and cash equivalents, end of period				$	25,563		$	23,545

The accompanying notes are an integral part of these consolidated financial statements.

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ONESOURCE INFORMATION SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation

     The accompanying consolidated financial statements of OneSource Information Services, Inc. (“OneSource”) as of June 30, 2003 and for the three- and six-month periods ended June 30, 2003 and 2002 are unaudited. In the opinion of OneSource’s management, these unaudited interim consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial position and results of operations for those periods. The results of operations for the six-month period ended June 30, 2003 are not necessarily indicative of the results of operations for the year ending December 31, 2003.

     The balance sheet as of December 31, 2002 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in OneSource’s Annual Report on Form 10-K, as filed with the United States Securities and Exchange Commission on March 27, 2003.

2. Net Income Per Share

     Basic net income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the sum of the weighted-average number of common stock outstanding during the period and, if dilutive, the weighted-average number of potential shares of common stock from the assumed exercise of stock options using the treasury stock method.

     Shares used in calculating basic and diluted net income per share are as follows (in thousands):

	Three months ended				Six months ended
	June 30,				June 30,
	2003		2002		2003		2002
Weighted-average shares outstanding used for basic net income per share		11,558		11,957		11,619		11,992
Incremental shares from dilutive stock options		325		663		381		760
Weighted-average shares outstanding used for diluted net income per share		11,883		12,620		12,000		12,752

     Options to purchase 2,250,974 and 2,485,195 shares of common stock were outstanding as of June 30, 2003 and 2002, respectively, but were not included in the computation of diluted net income per share because the exercise prices of the options were greater than the average market price of OneSource’s common stock during the three and six months ended June 30, 2003 and 2002, respectively.

3. Accounting for Stock-Based Compensation

     In December 2002, the Financial Accounting Standards Board (the “FASB”) issued Statement of Financial Accounting Standards No. 148 (“SFAS No. 148”), “Accounting for Stock-Based Compensation – Transition and Disclosure, an amendment of FASB Statement No. 123,” which provides alternative methods of transition to the fair value method of accounting for stock-based employee compensation, and also amends the disclosure provisions of Statement of Financial Accounting Standards No. 123 (“SFAS No. 123”), “Accounting for Stock-Based Compensation,” to require disclosure in the summary of significant accounting policies of the effects of an entity’s accounting policy with respect to stock-based employee compensation on reported net income and net income per share in annual and interim financial statements. OneSource adopted the disclosure provisions of SFAS No. 148 in fiscal year 2002.

     If OneSource had elected to recognize compensation cost based on the fair value of all stock awards at grant date as prescribed by SFAS No. 123, the net income and basic and diluted net income per share for three- and six-month periods ended June 30, 2003 and June 30, 2002 would have been reduced to the pro forma amounts shown below:

5

		Three months ended						Six months ended
		June 30,						June 30,
		2003			2002			2003			2002
		(In thousands, except per share data)
Net income :
	As reported	$	687		$	1,043		$	1,426		$	2,225
	Add: Stock-based employee compensation expense included in reported net income, net of related tax effects		—			25			—			49
	Less: Stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(744	)		(719	)		(1,469	)		(1,360	)
Pro forma net income (loss)		$	(57	)	$	349		$	(43)		$	914
Basic net income per share:
	As reported	$	0.06		$	0.09		$	0.12		$	0.19
	Pro forma	$	—		$	0.03		$	—		$	0.08
Diluted net income per share:
	As reported	$	0.06		$	0.08		$	0.12		$	0.17
	Pro forma	$	—		$	0.03		$	—		$	0.07

4. Goodwill and Acquired Intangible Assets

     As of January 1, 2002, OneSource adopted Statement of Financial Accounting Standards No. 142 (“SFAS No. 142”), “Goodwill and Other Intangible Assets.” Under SFAS No. 142, goodwill and certain other intangible assets with indefinite lives are no longer amortized, but instead are reviewed for impairment annually, or more frequently if impairment indicators arise. OneSource has chosen to perform this annual impairment test in the third quarter of each fiscal year.

     There was no change in the carrying value of goodwill during the six months ended June 30, 2003. During the year ended December 31, 2002, the carrying value of goodwill was reduced by $0.5 million as a result of the utilization of acquired net operating loss carryforward.

     Acquired intangible assets consist of the following:

	June 30, 2003							December 31, 2002
	(In thousands)
	Gross					Net		Gross					Net
	Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
	Amount		Amortization			Amount		Amount		Amortization			Amount
Subscriber list	$	1,150	$	(595	)	$	555	$	1,150	$	(516	)	$	634
Database		986		(528	)		458		986		(458	)		528
Trademarks		145		(104	)		41		145		(90	)		55
	$	2,281	$	(1,227	)	$	1,054	$	2,281	$	(1,064	)	$	1,217

     Amortization of acquired intangible assets was $0.1 million and $0.2 million, respectively, for each of the three- and six-month periods ended June 30, 2003 and 2002. The following table summarizes estimated future amortization expense related to acquired intangible assets recorded at June 30, 2003 for the periods indicated:

6

	Estimated
Year ending	Amortization
December 31,	Expense
	(In thousands)
2003 (Remainder)	$	164
2004		327
2005		299
2006		264
	$	1,054

5. Long-Term Debt

     In December 2002, OneSource entered into a loan and security agreement with Silicon Valley Bank permitting borrowings of up to $10.0 million. The loan and security agreement represents a working capital revolving line of credit and an equipment line of credit for up to $5.0 million each and is effective for one year from the date of signing. OneSource has granted Silicon Valley Bank a security interest in substantially all of its assets as collateral.

     Borrowings under the working capital line of credit incur interest at the prime interest rate plus 0.25%, and borrowings under the equipment line of credit incur interest at the prime interest rate plus 0.50%. The equipment line of credit has two draw-down periods, one that expired on March 31, 2003 and a second that expires September 30, 2003. Repayment of the equipment line of credit is over 36 months, commencing at the end of each draw-down period. The working capital line of credit matures on December 20, 2003. The maximum borrowing capacity for the working capital line is limited to 80% of OneSource’s eligible domestic accounts receivable that are less than 90 days outstanding.The loan and security agreement contains financial covenants that require that once a borrowing takes place, OneSource maintain an adjusted quick ratio of 2.0:1 and to report a net profit of at least $1.00 for each fiscal quarter. The adjusted quick ratio is defined as quick assets to current liabilities, minus deferred revenue. As of June 30, 2003, OneSource was in compliance with these financial covenants.

     In March 2003, OneSource borrowed $1.5 million under the equipment line of credit. Monthly repayments of thirty-six equal installments began on April 1, 2003.

     In June 2003, OneSource reserved $0.6 million from the working capital line of credit to secure two letters of credit related to leased office space.

     The following table summarizes future principal repayments for the periods indicated:

Year ending	Equipment
December 31,	Line
	(In thousands)
2003 (Remainder)	$	256
2004		512
2005		512
2006		129
	$	1,409

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6. Comprehensive Income

     Total comprehensive income, which includes net income and the foreign currency translation adjustment, was approximately $929,000 and $1,572,000 for the three- and six-month periods ended June 30, 2003, respectively, and $1,085,000 and $2,274,000 for the three- and six-month periods ended June 30, 2002, respectively.

7. Geographic Information

     Revenue was distributed geographically as follows (in thousands):

	Three months ended				Six months ended
	June 30,				June 30,
	2003		2002		2003		2002
United States	$	10,386	$	10,609	$	20,698	$	21,021
United Kingdom		4,013		3,764		8,197		7,576
	$	14,399	$	14,373	$	28,895	$	28,597

8. Treasury Stock

     In April 2001, OneSource announced a stock buyback program to repurchase up to 1,000,000 shares of OneSource common stock over the following twelve months. In January 2002, OneSource completed the repurchase of its common stock authorized under this stock buyback program at an average price of $8.48 per share.

     In January 2002, OneSource announced a second stock buyback program to repurchase up to an additional $5.0 million of its common stock over the following twelve months. In November 2002, OneSource completed its second stock buyback program, having repurchased 749,931 shares of its common stock at an average price of $6.67 per share.

     In October 2002, OneSource announced a third stock buyback program to repurchase up to an additional $5.0 million of its common stock over the following twelve months. As of June 30, 2003, OneSource had repurchased 540,519 shares of its common stock under this third stock buyback program at an average price of $6.48 per share for a total cost of $3.5 million. In July 2003, OneSource announced a fourth stock buyback program to repurchase up to an additional $7.0 million of its common stock over the following twelve months. OneSource intends to use a portion of its current cash and cash equivalents balances to execute additional repurchases under these third and fourth stock buyback programs.

     Effective August 31, 2002, OneSource began to re-issue its treasury stock, using the average cost method, for stock option exercises associated with OneSource’s various stock option plans and the 1999 Employee Stock Purchase Plan. As of June 30, 2003, OneSource had re-issued 452,452 shares of its treasury stock having an average cost of $7.63 per share.

     Gains resulting from the re-issuance of treasury stock at per share prices that are above the average cost are recorded as an increase to additional paid-in capital. Losses resulting from the re-issuance of treasury stock at per share prices that are below the average cost are first recorded as a reduction of additional paid-in capital for previously recorded gains, then as a reduction of retained earnings. During the three- and six-month periods ended June 30, 2003, OneSource recorded losses of $0.4 million and $1.5 million, respectively, resulting from the re-issuance of treasury stock, which were recorded as increases to the accumulated deficit. During the year ended December 31, 2002, OneSource recorded losses of $0.9 million resulting from the re-issuance of treasury stock, which were recorded as increases to the accumulated deficit.

9. Guarantor Agreements and Provisions

     The following is a summary of agreements and provisions that OneSource has determined are within the scope of Financial Accounting Standards Board Interpretation No. 45 (“FIN 45”), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others:”

     OneSource’s agreements with OneSource product customers, third party information and technology providers, and vendors include standard indemnification provisions. Under these agreements, OneSource generally agrees to defend, indemnify, and hold harmless the indemnified party with respect to any third party claim that the OneSource product, excluding any data or technology provided by the indemnified party, infringes a United States or United Kingdom patent, copyright, trade secret, or

8

other proprietary right. The terms of these indemnification provisions are generally perpetual after execution of the agreement. The maximum potential amount of future payments OneSource may be required to make under these indemnification provisions is unlimited. OneSource has never incurred costs to defend lawsuits or settle actions related to these indemnification provisions. As a result, OneSource believes that the estimated fair market value of these indemnification provisions is minimal. Accordingly, OneSource does not have any liabilities recorded in its financial statements related to these provisions as of June 30, 2003.

     OneSource’s agreements with OneSource product customers also include standard warranty provisions. OneSource warrants that it has the right to license the OneSource product line to customers, but does not warrant the accuracy, adequacy, completeness, or timeliness of the OneSource products or content from the OneSource products. If required, OneSource would disclose the estimated cost of product warranties based on specific warranty claims received. However, OneSource has never incurred expense under its product warranties. As a result, OneSource believes that the estimated fair market value of this warranty provision is minimal. Accordingly, OneSource does not have any liabilities recorded in its financial statements related to this provision as of June 30, 2003.

     OneSource has provisions in its articles of incorporation whereby it indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was serving, at OneSource’s request in such capacity. The maximum potential amount of future payments OneSource could be required to make under these indemnification provisions is unlimited; however, OneSource has a Directors and Officers insurance policy that limits its exposure and should enable it to recover a portion of any future amounts paid. As a result of OneSource’s insurance policy coverage, OneSource estimates that the exposure resulting from these indemnification provisions is minimal. Accordingly, OneSource does not have any liabilities recorded for these provisions as of June 30, 2003.

10. Recently Issued Accounting Pronouncements

     In November 2002, the Emerging Issues Task Force reached a consensus on Emerging Issues Task Force Issue 00-21 (“EITF Issue 00-21”), “Revenue Arrangements with Multiple Deliverables.” EITF Issue 00-21 addresses revenue recognition on arrangements encompassing multiple elements that are delivered at different points in time, defining criteria that must be met for elements to be considered to be a separate unit of accounting. If an element is determined to be a separate unit of accounting, the revenue for the element is recognized at the time of delivery. EITF Issue 00-21 is effective for revenue arrangements entered into in fiscal periods beginning after June 15, 2003. OneSource has determined that the adoption of EITF Issue 00-21 will have no impact on its results of operations or financial position.

     In April 2003, the FASB issued Statement of Financial Accounting Standards No. 149 (“SFAS No. 149”), “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” SFAS No. 149 amends and clarifies the accounting and reporting for derivatives, amending the previously issued Statement of Financial Accounting Standards No. 133 (“SFAS No. 133”), “Accounting for Derivative Instruments and Hedging Activities.” SFAS No. 149 clarifies under what circumstances a contract with an initial net investment meets the characteristics of a derivative, amends the definition of an underlying contract, and clarifies when a derivative contains a financing component in order to increase the comparability of accounting practices under SFAS No. 133. SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003. OneSource has determined that the adoption of SFAS No. 149 is not expected to have any impact on its financial position and results of operations.

     In May 2003, the FASB issued Statement of Financial Accounting Standards No. 150 (“SFAS No. 150”), “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”. SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 applies specifically to a number of financial instruments that companies have historically presented within their financial statements, either as equity or between the liabilities section and the equity section, rather than as liabilities. SFAS 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. OneSource has determined that the adoption of SFAS No. 150 is not expected to have any impact on its financial position and results of operations.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following discussion contains forward-looking statements that involve risks and uncertainties. OneSource makes such forward-looking statements under the provision of the “Safe Harbor” section of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements should be considered in light of the factors described below in Item 7 under “Certain Factors that

9

May Affect Future Results.” Actual results may vary materially from those projected, anticipated or indicated in any forward-looking statements. In this Annual Report on Form 10-K, the words “anticipates,” “believes,” “expects,” “intends,” “future,” “could,” and similar words or expressions (as well as other words or expressions referencing future events, conditions or circumstances) identify forward-looking statements.

Overview

     OneSource provides primarily Web-based business and financial information products to professionals who need quick access to timely and reliable company, industry, and market intelligence. In addition, OneSource provides fee-based consulting services to customers who seek to integrate content from OneSource^® products into their internal software platforms and applications such as intranets, portals, and customer relationship management systems. These fee-based services include helping customers apply OneSource’s proprietary classification system, which organizes and links customers’ internal data with content from OneSource products, as well as assisting customers in designing and building custom information applications. OneSource was formed as a division of Lotus Development Corporation in 1987 and became an independent company when it was purchased in a management buy-out in 1993. Until December 1996, OneSource’s business focused on providing business information to the professional and financial service industries using CD Rom technology as the primary method of distribution. The introduction of the OneSource Business Browser^SM product line in December 1996 marked a fundamental shift in the business as OneSource began a transition away from its legacy CD Rom business and toward Web-based products. The OneSource Business Browser product line is designed to be a comprehensive and easy-to-use business and financial information resource, integrating over 2,500 sources of business information from more than 30 business and financial information providers and OneSource’s own CorpTech^® high-technology company database. The OneSource product line also includes the AppLink^SM software development kit, which allows Business Browser customers to access content from OneSource products through their own internal applications and without the use of the Business Browser user interface and pre-established screens and workflow.

     Revenues from both Web-based and CD Rom products generally consist of monthly subscription fees from customer contracts. Customer contracts span varying periods of time but are generally for one year, are renewable for like periods, and are payable in advance. Subscription fees generally are quoted to clients on an annual basis but are earned as revenues on a monthly basis over the subscription period. Invoices are recorded as accounts receivable until paid and as deferred revenues until earned. Deferred revenues attributable to Web-based products decreased 15% to $25.3 million as of June 30, 2003 from $29.7 million as of December 31, 2002, and increased 3% from $24.5 million as of June 30, 2002.

     Cost of revenues consists primarily of royalties to information providers and, to a lesser extent, employee salaries and benefits, facilities allocation and related expenses, depreciation associated with computers for data processing and on-line requirements, amortization of capitalized software development costs, and Web hosting expenses. OneSource enters into contracts with information providers, which are generally for a term of at least one year and are automatically renewable if not canceled effective at the end of any term with advance notice. These contracts may be terminated by either party during the term under certain breach(es) and other circumstances. Under these agreements, royalties are generally paid on a quarterly basis to information providers. Royalties are generally calculated as a flat percentage of OneSource revenues, as a per-user fee that declines as the number of authorized users of the product increases, as a fixed fee per period, or in some cases, as a calculated fee based upon product growth compared to like periods from the prior year. Royalties are recorded as deferred royalties and are expensed as revenues are earned over the term of the contract period.

     Selling and marketing expense consists primarily of employee salaries and benefits paid to OneSource’s sales force, customer support organization, and marketing personnel; sales commissions paid to OneSource’s sales force; facilities allocation and related expenses; direct marketing promotional materials; trade show exhibitions; and advertising. Sales commissions are paid when customers are invoiced, recorded as deferred commissions, and expensed as revenues are earned over the term of the contract period. All other selling and marketing costs are expensed as incurred.

     Platform and product development expense consists primarily of employee salaries and benefits, facilities allocation and related expenses, as well as outside contractor expenses, relating to the development of the “platform” of core software supporting OneSource products and the development of new products based upon that platform. Platform and product development expense includes expenses relating to the editorial staff that implements the Global Business Taxonomy system to integrate disparate information sources into the OneSource Web-based products.

     General and administrative expense consists primarily of employee salaries and benefits, facilities allocation and related expenses associated with OneSource’s management, finance, purchasing, human resources, legal, management information systems, and administrative groups.

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Critical Accounting Policies, Significant Judgments and Estimates

     OneSource’s discussion and analysis of its financial condition and results of operations are based upon OneSource’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires OneSource to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, OneSource evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

     OneSource believes the following accounting policies are most critical to fully understanding and evaluating its financial results, as well as the areas of more significant judgments and estimates used in the preparation of its consolidated financial statements:

     Revenue Recognition. OneSource products are generally sold on a subscription basis pursuant to customer contracts that span varying periods of time, but are generally for a period of one year. OneSource initially records accounts receivable and defers the related revenue when persuasive evidence of an arrangement exists, fees are fixed or determinable, and collection is reasonably assured. Revenues are recognized ratably over the related subscription period beginning when access to products is granted to the customer in accordance with customer agreements. OneSource believes that this policy significantly reduces subjectivity in determining the timing of revenue recognition.

     Software Development Costs. Platform and product development costs, other than certain software development costs, are charged to expense as incurred. OneSource has adopted Statement of Position 98-1 (“SOP 98-1”), “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use,” which requires research and development costs associated with the application development stage to be capitalized for internal use software. Examples of capitalized software development projects are software platforms used in OneSource products and programs used for its proprietary classification system. Management is required to use professional judgment in determining whether development costs meet the criteria in SOP 98-1 for immediate expense or capitalization. Capitalized software is amortized over its estimated useful life, generally three years. Management periodically reviews the carrying value of the projects that have been capitalized to determine if impairment may exist. If it is determined that the carrying value of the asset has been impaired, the value will be reduced by a charge to operations in the amount of the impairment.

     Deferred Royalties and Commissions. Deferred royalties and commissions include royalty costs and sales commissions that are associated with procuring information and securing a subscription to be delivered over the subscription period, respectively. These costs are deferred and amortized ratably over the associated subscription period as a component of cost of revenues and selling and marketing expense, respectively. If a contract relating to the procurement of information used in the OneSource products is terminated prematurely, for any reason, royalty expense recognition may be accelerated and incurred sooner than originally anticipated.

     Allowance For Doubtful Accounts. OneSource assesses collectibility of accounts receivable based on a number of factors including, but not limited to, past transactions history with the customer and the credit worthiness of the customer. OneSource does not request collateral from its customers. OneSource maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of OneSource’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances might be required.

     Acquired Intangible Assets. Acquired intangible assets consist of goodwill, trademarks, a subscriber list, and a database. Acquired intangible assets, excluding goodwill, are amortized using the straight-line method over periods of 5.25 to 7 years, based on the estimated useful life. The carrying value of acquired intangible assets is reviewed on a quarterly basis for the existence of facts or circumstances both internally and externally that may suggest impairment. For acquired intangible assets, OneSource determines whether an impairment has occurred based on gross expected future cash flows, and measures the amount of the impairment based on the related future estimated discounted cash flows. To date, no such impairment has occurred. Factors which OneSource considers important and that could trigger an impairment review include the following: significant underperformance relative to expected historical or projected future operating results and significant negative industry or economic trends. The cash flow estimates used to determine the impairment, if any, contain management’s best estimates, using appropriate and customary assumptions and projections at the time. In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” OneSource ceased amortizing goodwill as of January 1, 2002 and will annually review the goodwill for potential impairment in the third quarter, as well as on event-driven basis, using a fair value approach. Since OneSource constitutes one reporting unit under SFAS No. 142, its fair value, which equals its market capitalization based on the closing price of its common stock as quoted on the Nasdaq National Market, is compared to its net assets, which includes the carrying value of goodwill. If market capitalization exceeds net assets, it is determined that no impairment has occurred and no adjustment is required.

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     Income Tax. OneSource records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. At June 30, 2003, OneSource has provided a valuation allowance for the full amount of its net deferred tax assets. While OneSource has considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance, in the event OneSource were to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax asset would increase net income in the period such determination was made.

Comparison of Results for the Quarters Ended June 30, 2003 and June 30, 2002

     Revenues. Revenues were $14.4 million for each of the quarters ended June 30, 2003 and 2002.

     Web-based product revenues were $13.8 million for each of the quarters ended June 30, 2003 and 2002. At the same time, CD Rom product and other revenues, which consist of licensing royalties and mailing lists, were $0.6 million for each of the quarters ended June 30, 2003 and 2002.

     Cost of Revenues. Cost of revenues increased 4% to $4.6 million for the quarter ended June 30, 2003 from $4.5 million for the quarter ended June 30, 2002. This increase was principally due to increased royalty expense by $0.5 million, associated with the recent addition of Global Business Browser Asia Pacific and content on small and mid-market United States and Canadian companies. This expense was incurred in advance of revenue recognition from customer subscription agreements. Partially offsetting this increase in royalty expense for the quarter ended June 30, 2003 was lower compensation-related expense in product production by $0.2 million as a result of decreased headcount, and decreased depreciation expense associated with computer equipment used for data processing and on-line requirements by $0.1 million.

     Cost of Web-based product revenues increased 5% to $4.2 million for the quarter ended June 30, 2003 from $4.0 million for the quarter ended June 30, 2002. As a percentage of Web-based product revenues, cost of Web-based product revenues increased to 31% for the quarter ended June 30, 2003 from 29% for the quarter ended June 30, 2002. This increase was primarily due to increased royalty expense by $0.5 million associated with the recent addition of Global Business Browser Asia Pacific and content on small and mid-market United States and Canadian companies. This expense was incurred in advance of revenue recognition from customer subscription agreements. Partially offsetting this increase in royalty expense for the quarter ended June 30, 2003 was a decreased compensation-related expense in product production by $0.2 million as a result of decreased headcount, and decreased depreciation expense associated with computer equipment used for data processing and on-line requirements by $0.1 million.

     Cost of CD Rom product and other revenues was $0.4 million for each of the quarters ended June 30, 2003 and 2002. As a percentage of CD Rom product and other revenues, cost of CD Rom product and other revenues was 72% for each of the quarters ended June 30, 2003 and 2002.

     Selling and Marketing Expense. Selling and marketing expense increased 4% to $4.4 million for the quarter ended June 30, 2003 from $4.2 million for the quarter ended June 30, 2002. As a percentage of revenues, selling and marketing expense increased to 30% for the quarter ended June 30, 2003 from 29% for the quarter ended June 30, 2002. This increase was principally due to increased recruiting and employee development costs by $0.1 million, increases in travel and entertainment expense and direct marketing expenses by $0.1 million, partially offset by decreased fees paid to external consultants by $0.1 million. OneSource expects selling and marketing expense to remain at the second quarter of 2003 spending level during the remainder of 2003.

     Platform and Product Development Expense. Platform and product development expense decreased 4% to $2.6 million for the quarter ended June 30, 2003 from $2.7 million for the quarter ended June 30, 2002. As a percentage of revenues, platform and product development expense decreased to 18% for the quarter ended June 30, 2003 from 19% for the quarter ended June 30, 2002. This decrease was primarily due to the capitalization of software development costs associated with the expanded development of new platforms and products that increased to $1.1 million for the quarter ended June 30, 2003 from $0.2 million for the quarter ended June 30, 2002. These costs were capitalized in accordance with SOP 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use.” Costs associated with the maintenance of existing systems are expensed as incurred. In addition, there were decreased recruiting and employee development costs by $0.1 million. These decreases were partially offset by increases in compensation-related expense by $0.4 million and an increase in the use of outside contractors for platform and product development by $0.4 million. OneSource expects platform and product development expense, net of capitalized software development costs, to increase modestly during the remainder of 2003 from the second quarter of 2003 spending level as a result of continuing development initiatives. OneSource anticipates capitalized software development costs to be approximately $1.0 million in the third quarter of 2003.

     General and Administrative Expense. General and administrative expense increased 32% to $1.7 million for the quarter ended June 30, 2003 from $1.3 million for the quarter ended June 30, 2002. As a percentage of revenues, general and administrative expense

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increased to 12% for the quarter ended June 30, 2003 from 9% for the quarter ended June 30, 2002. This increase was primarily due to an increase in compensation expense by $0.1 million related to increased headcount, increased fees paid to external management consultants by $0.2 million, an increase in bad debt expense by $0.1 million, and increased general supplies by $0.1 million. These increases were partially offset by decreased recruiting and employee development costs by $0.1 million. OneSource expects general and administrative expense to decrease slightly from the second quarter of 2003 spending level during the remainder of 2003.

     Amortization of Acquired Intangible Assets. Amortization of acquired intangible assets was $0.1 million for each of the quarters ended June 30, 2003 and 2002. This expense is the result of the acquisition of Corporate Technology Information Services, Inc. in October 1999 and the associated amortization of the intangible assets acquired.

     Interest Income, Net. Interest income, net of interest expense, was $0.1 million for each of the quarters ended June 30, 2003 and 2002. Interest expense associated with OneSource’s line of credit was approximately $20,000 for the quarter ended June 30, 2003.

     Provision for Income Taxes. Provision for income taxes decreased 34% to $0.4 million for the quarter ended June 30, 2003 from $0.6 million for the quarter ended June 30, 2002. This decrease was due to pre-tax income of $1.1 million at an effective tax rate of 38% for the quarter ended June 30, 2003 as compared to pre-tax income of $1.7 million at an effective tax rate of 38% for the quarter ended June 30, 2002. For both quarters ended June 30, 2003 and 2002, OneSource calculated its provision for income taxes for its domestic income using the federal statutory tax rate of 34%, plus an estimated effective state tax rate of 5%. For both quarters ended June 30, 2003 and 2002, OneSource calculated its provision for income taxes for its foreign income using a 30% effective tax rate. Due to differentials in domestic and foreign income for the quarters ended June 30, 2003 and 2002, these calculations yielded annualized worldwide effective tax rates of 37.5% for the full year 2003 and 37% for the full year 2002. An effective tax rate of 38% was used for both quarters ended June 30, 2003 and 2002, to adjust the cumulative provision to the respective annual effective tax rate.

Comparison of Results for the Six Months Ended June 30, 2003 and June 30, 2002

     Revenues. Revenues increased 1% to $28.9 million for the six months ended June 30, 2003 from $28.6 million for the six months ended June 30, 2002.

     Web-based product revenues increased 2% to $27.9 million for the six months ended June 30, 2003 from $27.5 million for the six months ended June 30, 2002. The increase in Web-based product revenues was primarily attributable to a higher average currency conversion rate relating to the conversion of British pounds to United States’ dollars, which resulted in an increase of Web-based product revenues of $0.8 million. This increase was offset by a decrease of Web-based product revenues of $0.4 million resulting from a decrease in the number of customers and related licenses. At the same time, CD Rom product and other revenues, which consist of licensing royalties and mailing lists, decreased 16% to $1.0 million for the six months ended June 30, 2003 from $1.1 million for the six months ended June 30, 2002, and was primarily the result of focus on the Business Browser product line.

     Cost of Revenues. Total cost of revenues increased 5% to $9.3 million for the six months ended June 30, 2003 from $8.9 million for the six months ended June 30, 2002. This increase was principally due to increased royalty expense by $1.0 million associated with the recent addition of Global Business Browser Asia Pacific and content on small and mid-market United States and Canadian companies. This expense was incurred in advance of revenue recognition from customer subscription agreements. Partially offsetting this increase in royalty expense for the six months ended June 30, 2003 was lower compensation-related expense in product production by $0.3 million as a result of decreased headcount, decreased depreciation expense associated with computer equipment used for data processing and on-line requirements by $0.2 million, and decreased outside software purchases by $0.1 million.

     Cost of Web-based product revenues increased 6% to $8.5 million for the six months ended June 30, 2003 from $8.0 million for the six months ended June 30, 2002. As a percentage of Web-based product revenues, cost of Web-based product revenues increased to 30% for the six months ended June 30, 2003 from 29% for the six months ended June 30, 2002. This increase was primarily due to increased royalty expense by $1.0 million associated with the addition of Global Business Browser Asia Pacific and content on small and mid-market United States and Canadian companies. This expense was incurred in advance of revenue recognition from customer subscription agreements. Partially offsetting this increase in royalty expense for the six months ended June 30, 2003 was a decreased compensation-related expense in product production by $0.3 million as a result of decreased headcount, and decreased depreciation expense associated with computer equipment used for data processing and on-line requirements by $0.2 million.

     Cost of CD Rom product and other revenues was $0.8 million for each of the six months ended June 30, 2003 and 2002. As a percentage of CD Rom product and other revenues, cost of CD Rom product and other revenues increased to 88% for the six months ended June 30, 2003 from 73% for the six months ended June 30, 2002, primarily due to the decrease in CD Rom product and other revenues.

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     Selling and Marketing Expense. Selling and marketing expense increased 11% to $8.8 million for the six months ended June 30, 2003 from $7.9 million for the six months ended June 30, 2002. As a percentage of revenues, selling and marketing expense increased to 30% for the six months ended June 30, 2003 from 28% for the six months ended June 30, 2002. This increase was principally due to increased recruiting and employee development costs by $0.3 million, increased travel and entertainment expense by $0.1 million, increased direct marketing expenses by $0.1 million, and increased fees paid to external consultants by $0.3 million. OneSource expects selling and marketing expense to remain at the second quarter of 2003 spending level during the remainder of 2003.

     Platform and Product Development Expense. Platform and product development expense decreased 1% to $5.3 million for the six months ended June 30, 2003 from $5.4 million for the six months ended June 30, 2002. As a percentage of revenues, platform and product development expense decreased to 18% for the six months ended June 30, 2003 from 19% for the six months ended June 30, 2002. This decrease was principally due to the capitalization of software development costs associated with the expanded development of new platforms and products that increased to $1.9 million for the six months ended June 30, 2003 from $0.4 million for the six months ended June 30, 2002. These costs were capitalized in accordance with SOP 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use.” Costs associated with the maintenance of existing systems are expensed as incurred. In addition, recruiting and employee development costs decreased by $0.1 million. Offsetting these decreases were increases in compensation-related expense by $1.0 million and an increase in the use of outside contractors for platform and product development, which totaled $0.5 million. OneSource expects platform and product development expense, net of capitalized software development costs, to increase modestly during the remainder of 2003 from the second quarter of 2003 spending level as a result of continuing development initiatives. OneSource anticipates capitalized software development costs to be approximately $1.0 million in the third quarter of 2003.

     General and Administrative Expense. General and administrative expense increased 12% to $3.2 million for the six months ended June 30, 2003 from $2.9 million for the six months ended June 30, 2002. As a percentage of revenues, general and administrative expense increased to 11% for the six months ended June 30, 2003 from 10% for the six months ended June 30, 2002. This increase was primarily due to increased compensation expense by $0.2 million related to increased headcount and increased fees paid to outside management consultants by $0.2 million. These increases were partially offset by a reduction in recruiting and employee development costs by $0.1 million. OneSource expects general and administrative expense to decrease slightly from the second quarter of 2003 spending level for the remainder of 2003.

     Amortization of Acquired Intangible Assets. Amortization of acquired intangible assets was $0.2 million for each of the six months ended June 30, 2003 and 2002. This expense is the result of the acquisition of Corporate Technology Information Services, Inc. in October 1999 and the associated amortization of other intangible assets acquired.

     Interest Income, Net. Interest income, net of interest expense, was $0.2 million for each of the six months ended June 30, 2003 and 2002. Interest expense associated with OneSource’s line of credit was approximately $20,000 for the six months ended June 30, 2003.

     Provision for Income Taxes. Provision for income taxes decreased 35% to $0.9 million for the six months ended June 30, 2003 from $1.3 million for the six months ended June 30, 2002. This decrease was due to pre-tax income of $2.3 million at an effective tax rate of 37.5% for the six months ended June 30, 2003 as compared to pre-tax income of $3.5 million at an effective tax rate of 37% for the six months ended June 30, 2002. For both six months ended June 30, 2003 and 2002, OneSource calculated its provision for income taxes for its domestic income using the federal statutory tax rate of 34%, plus an estimated effective state tax rate of 5%. For both six months ended June 30, 2003 and 2002, OneSource calculated its provision for income taxes for its foreign income using a 30% effective tax rate. Due to differentials in domestic and foreign income for the six months ended June 30, 2003 and 2002, these calculations yielded worldwide effective tax rates of 37.5% for the six months ended June 30, 2003 and 37% for the six months ended June 30, 2002.

Annualized Contract Value

     One measure of the performance of OneSource’s business is “annualized contract value.” Annualized contract value is a measurement that OneSource uses for normalized period-to-period comparisons to indicate business volume and growth, both in terms of new customers and upgrades and expansions by existing customers. OneSource’s presentation and calculation of annualized contract value may not be comparable to similarly titled measures used by other companies. It is not an absolute indicator, and OneSource cannot guarantee that any annualized contract value will be ultimately realized as revenues.

     OneSource uses annualized contract value as a measure of its business because it shows the growth or decline in OneSource’s customer base in a way that revenues cannot. Since OneSource’s business is primarily subscription-based, revenues are recognized not when a sale is made, but in ratable portions over the term of the subscription (which is usually twelve months). As a result, from a revenue viewpoint the addition or loss of even a major customer contract may not have a dramatic impact on a quarter-to-quarter

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basis. On the other hand, by looking at the value of customer contracts in hand at the end of each quarter, OneSource can more readily see trends in its business. For example, the addition of a one-year subscription contract with total payments of $1.0 million may only increase revenues by approximately $250,000 ($1.0 million divided by four) in the quarter in which the sale is made, but would increase annualized contract value by $1.0 million. Similarly, if the customer did not renew that contract, revenues in the next quarter would only decrease by $250,000, while annualized contract value would decrease by $1.0 million.

     In calculating annualized contract value, OneSource factors only those contracts for which the customer has actually been invoiced. Since amounts invoiced are included in deferred revenues on OneSource’s balance sheet for all customer contracts with terms extending beyond the month of invoice, this demonstrates that annualized contract value is based on actual customer contracts reflected in OneSource’s historical financial statements. To compute annualized contract value, one multiplies by twelve the amount of total invoiced fees for one month that are included in deferred revenues. Annualized contract value is not intended to be an absolute indicator of future revenues. OneSource only annualizes existing, invoiced contracts, but does so without regard to the remaining term of those contracts. Most of OneSource’s contracts are for 12 months, but as of the date that OneSource calculates annualized contract value, the remaining term of nearly all of OneSource’s contracts will be less than 12 months. If a customer fails to pay its invoiced fees or terminates the contract or if OneSource is unable to renew a contract, its revenues in subsequent periods may be less than expected if based solely on annualized contract value. Conversely, if OneSource adds additional customers or renews existing contracts at higher rates, its revenues in future periods may exceed expectations if based solely on annualized contract value.

     The calculation of annualized contract value for OneSource’s Web-based products is illustrated below:

			One Month of
	Web-Based		Invoiced Fees
	Deferred		in Deferred		Annualized
Measurement Date	Revenues		Revenues		Contract Value
			(In thousands)
June 30, 2002	$	24,510	$	4,619.6	$	55,435
June 30, 2003	$	25,342	$	4,421.8	$	53,061

     The aggregate annualized contract value for Web-based products was $53.1 million as of June 30, 2003, compared to $55.4 million as of June 30, 2002. Of this $53.1 million, $46.6 million was attributable to those customers that were under contract as of both June 30, 2003 and 2002. The renewal rate for subscribers of the Business Browser product line as of June 30, 2003 was 75%, calculated on a dollar basis, whereas the renewal rate for those subscribers that also used the AppLink software development kit as of June 30, 2003 was 81%, calculated on a dollar basis.

     The number of Web-based customers decreased to 762 at June 30, 2003 from 790 at March 31, 2003 and 831 at June 30, 2002. On average, OneSource’s customers for Web-based products as of June 30, 2003 had an annualized contract value of $69,600 per customer, compared to an average annualized contract value of $66,700 per customer as of June 30, 2002. This growth in average annualized contract value was primarily attributable to an increase in the number of user licenses purchased by individual customers, the addition of new Web-based products subscribed to by individual customers, and a higher average currency conversion rate relating to the conversion of British pounds to United States’ dollars.

     As of June 30, 2003, 45 organizations subscribed to the AppLink software development kit. Such customers as of June 30, 2003 generated, on average, approximately $371,500 each in annualized contract value.

Liquidity and Capital Resources

     Since acquiring the business from Lotus Development Corporation in 1993, OneSource has funded operations through a combination of seller financing, proceeds received from the sale of Class P common stock and common stock in connection with the purchase of the business from Lotus Development Corporation, bank debt, proceeds received from the sale of non-strategic lines of business, capitalized equipment leases, cash flows from operations, OneSource’s initial public offering which closed in May 1999, and issuance of stock pursuant to stock options and the 1999 Employee Stock Purchase Plan. In addition, in December 2002, OneSource entered into a loan and security agreement with Silicon Valley Bank for borrowings of up to $10.0 million. The loan and security agreement is for one year from the date of the execution and represents a working capital revolving line of credit and an equipment line of credit for up to $5.0 million each.

     Cash and cash equivalents totaled $25.6 million at June 30, 2003, compared to $23.1 million at December 31, 2002. The increase was primarily due to funds provided by operating activities of $6.5 million, partially offset by net cash used by investing activities of $3.1 million and net cash used by financing activities of $1.3 million.

     Net cash provided by operating activities was $6.5 million for the six months ended June 30, 2003, compared to $8.3 million for the six months ended June 30, 2002. The net decrease of $1.7 million was the result of net income of $1.4 million for the six months

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ended June 30, 2003, compared to net income of $2.2 million for the six months ended June 30, 2002, a net decrease based on changes in operating assets and liabilities of $0.6 million, a decrease of $0.1 million due to a decrease of tax benefit associated with the disposition of stock options, and a decrease in depreciation and amortization by $0.1 million.

     Net cash used by investing activities was $3.1 million for the six months ended June 30, 2003, compared to $1.1 million for the six months ended June 30, 2002. Net cash used by investing activities was primarily for purchases of property and equipment of $2.0 million during the six months ended June 30, 2003 and $0.7 million during the six months ended June 30, 2002, as well as $1.7 million for capitalized software development costs for the six months ended June 30, 2003 and $0.4 million for the six months ended June 30, 2002, offset in part by proceeds from the release of restricted time deposits of $0.6 million during the six months ended June 30, 2003.

     Net cash used by financing activities was $1.3 million for the six months ended June 30, 2003, compared to $2.0 million for the six months ended June 30, 2002. Net cash used by financing activities primarily consisted of the repurchase of common stock of $3.3 million during the six months ended June 30, 2003 and $2.5 million during the six months ended June 30, 2002, and payments on the equipment line of credit of $0.1 million during the six months ended June 30, 2003. Partially offsetting these uses were proceeds from the equipment line of credit of $1.5 million during the six months ended June 30, 2003 and proceeds from the issuance of stock pursuant to stock options and the 1999 Employee Stock Purchase Plan of $0.6 million during the six months ended June 30, 2003 and $0.5 million during the six months ended June 30, 2002.

     In April 2001, OneSource announced a stock buyback program to repurchase up to 1,000,000 shares of OneSource common stock over the following twelve months. In January 2002, OneSource completed the repurchase of its common stock authorized under this stock buyback program at an average price of $8.48 per share.

     In January 2002, OneSource announced a second stock buyback program to repurchase up to an additional $5.0 million of its common stock over the following twelve months. In November 2002, OneSource completed its second stock buyback program, having repurchased 749,931 shares of its common stock at an average price of $6.67 per share.

     In October 2002, OneSource announced a third stock buyback program to repurchase up to an additional $5.0 million of its common stock over the following twelve months. As of June 30, 2003, OneSource had repurchased 540,519 shares of its common stock under this third stock buyback program at an average price of $6.48 per share, for a total cost of $3.5 million. In July 2003, OneSource announced a fourth stock buyback program to repurchase up to an additional $7.0 million of its common stock over the following twelve months. OneSource intends to use a portion of its current cash and cash equivalents balances to execute additional repurchases under these third and fourth stock buyback programs.

     OneSource believes that its current cash and cash equivalents and funds anticipated to be generated from operations will be sufficient to satisfy working capital and capital expenditure requirements for at least the next twelve months. However, in the event of a strategic cash requirement, OneSource entered into a revolving loan agreement in December 2002 with Silicon Valley Bank for up to $10.0 million, of which $1.5 million was drawn in order to finance the purchase of equipment, and $0.6 million has been reserved from the working capital line of credit to secure two letters of credit related to leases of office space. Under the revolving loan agreement, as of June 30, 2003, $3.6 million is available to finance equipment purchases through September 2003, and $4.4 million is available to fund working capital requirements through December 20, 2003.

Contractual Obligations and Commitments

     The following table presents OneSource’s contractual obligations and commercial commitments as of June 30, 2003 over the next five calendar years.

	Payments due by period
	(remainder)
	2003		2004		2005		2006		2007		Total
					(In thousands)
Operating leases	$	570	$	651	$	239	$	156	$	116	$	1,732
Royalty contracts		3,432		4,355		189		—		—		7,976
Equipment line of credit		256		512		512		129		—		1,409
	$	4,258	$	5,518	$	940	$	285	$	116	$	11,117

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Recently Issued Accounting Pronouncements

     In November 2002, the Emerging Issues Task Force reached a consensus on EITF Issue 00-21, “Revenue Arrangements with Multiple Deliverables.” EITF Issue 00-21 addresses revenue recognition on arrangements encompassing multiple elements that are delivered at different points in time, defining criteria that must be met for elements to be considered to be a separate unit of accounting. If an element is determined to be a separate unit of accounting, the revenue for the element is recognized at the time of delivery. EITF Issue 00-21 is effective for revenue arrangements entered into in fiscal periods beginning after June 15, 2003. OneSource has determined that the adoption of EITF Issue 00-21 will have no impact on its results of operations or financial position.

     In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” SFAS No. 149 amends and clarifies the accounting and reporting for derivatives, amending the previously issued SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” SFAS No. 149 clarifies under what circumstances a contract with an initial net investment meets the characteristics of a derivative, amends the definition of an underlying contract, and clarifies when a derivative contains a financing component in order to increase the comparability of accounting practices under SFAS No. 133. SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003. OneSource has determined that the adoption of SFAS No. 149 is not expected to have any impact on its financial position and results of operations.

     In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”. SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 applies specifically to a number of financial instruments that companies have historically presented within their financial statements, either as equity or between the liabilities section and the equity section, rather than as liabilities. SFAS 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. OneSource has determined that the adoption of SFAS No. 150 is not expected to have any impact on its financial position and results of operations.

Certain Factors that May Affect Future Results

     This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. OneSource’s actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including without limitation, those set forth in the following risk factors discussed below and elsewhere in this Quarterly Report on Form 10-Q. In addition to the other information included or incorporated by reference in this Quarterly Report on Form 10-Q, the following risk factors should be considered carefully in evaluating OneSource and its business:

     AS WE COMPLEMENT THE EXISTING ONESOURCE PRODUCT LINE WITH NEW PRODUCTS AND SERVICES, THIS MAY DIVERT MANAGEMENT AND TECHNICAL ATTENTION AND FINANCIAL RESOURCES AND MAY NOT PRODUCE THE DESIRED BUSINESS RESULTS. As we complement the existing OneSource product line with new business information products and services, our management team and technical personnel may spend a significant amount of time and management and financial resources in such development and implementation.

     Despite the investment of these management and financial resources with respect to these efforts, the potential new products and services may not produce the revenues, earnings, or business results that we may anticipate for the following reasons:

• we may experience difficulty in developing and implementing products and services that integrate and operate effectively with our customers’ existing applications, business processes, and functions;

• the market may not adopt these products and services as readily as we envision;

• we may contract with certain third parties to provide content and/or supplement the products and services we provide, which may yield lower gross margins than our existing business;

• we may experience delays in the development and implementation of these products and services; and

• the introduction of new products and services may require changes to accounting methods, policies, and procedures.

     WE HAVE A CUMULATIVE DEFICIT AND EXPECT TO CONTINUE TO HAVE A CUMULATIVE DEFICIT FOR THE FORESEEABLE FUTURE, AND WE MAY NOT SUSTAIN OR INCREASE NET INCOME UNLESS WE CONTINUE TO OFFSET OUR ROYALTY PAYMENTS AND OPERATING EXPENSES WITH REVENUES FROM OUR WEB-BASED

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PRODUCTS AND SERVICES. We incurred losses from operations of approximately $1.6 million in 1996, $1.4 million in 1997, $5.0 million in 1998, $6.4 million in 1999, and $2.0 million in 2000, and had income from operations of $5.7 million in 2001 and $6.6 million in 2002. As of June 30, 2003, we had an accumulated deficit of $5.9 million. If we are unable to offset our royalty payments and operating expenses with revenues from our Web-based products and services, we may not be able to sustain or increase net income.

     WE RELY ON GENERATING SUBSCRIPTION REVENUES FROM OUR WEB-BASED PRODUCT LINE, AND WE MAY NOT SUSTAIN OR INCREASE NET INCOME UNLESS DEMAND FOR OUR WEB-BASED PRODUCTS REMAINS THE SAME OR CONTINUES TO GROW. Subscription revenues from our Web-based product line accounted for 97% of total revenues for the six months ended June 30, 2003, 96% of total revenues in 2002, 95% of total revenues in 2001, 91% of total revenues in 2000, 90% of total revenues in 1999, 53% of total revenues in 1998, and 11% of total revenues in 1997. As a result, our future financial condition may depend heavily on the success or failure of our Web-based product line, including the ease of integration of information from these products with customer internal applications. These products were introduced in December 1996, and it is difficult to predict demand and market acceptance in the rapidly evolving Web-based business information products and services market. If the demand for our Web-based products does not remain the same or continue to grow, whether due to, among other factors, increased competition, lack of market acceptance, insufficient enhancements, failure of Internet or Web use to grow in general, or technological change, we may not be able to sustain or increase net income.

     OUR SALES EFFORTS TO OUR TARGET MARKET MAY BE LENGTHY, INVOLVE DELAYS, OR INVOLVE UNCERTAINTY, ALL OF WHICH MAY ADVERSELY IMPACT OUR BUSINESS, OPERATING RESULTS, AND FINANCIAL CONDITION. Selling our products and services to Global 5000 companies, our target market, involves sales cycles that we believe are potentially longer and more uncertain than those involving small-size organizations. Our customers generally commit significant time and resources to evaluate our products and services, and they often require us to expend substantial time, effort, and money to educate them about our products and services. In addition, these sales efforts often require final approval from our customers’ senior level management, potentially resulting in delays to the sales cycle. Any of these factors may extend the sales cycle and increase the uncertainty of whether a sale will actually be completed. The timing and uncertainty of sales and the length of the sales cycle may cause our operating results to vary significantly from quarter to quarter and may adversely impact our business, operating results, and financial condition.

     ANNUALIZED CONTRACT VALUE MAY NOT BE AN ACCURATE INDICATOR OF OUR PERFORMANCE. We use “annualized contract value” as a measurement for normalized period-to-period comparisons to indicate business volume and growth. Our presentation and calculation of annualized contract value may not be comparable to similarly titled measures used by other companies. It is not an absolute indicator, and we cannot guarantee that any annualized contract value will be ultimately realized as revenues.

     COMPETITION IN OUR INDUSTRY IS INTENSE, AND MANY OF OUR COMPETITORS HAVE GREATER RESOURCES THAN WE DO; THIS COMPETITION MAY ADVERSELY AFFECT OUR FINANCIAL RESULTS. The business information products and services industry is intensely competitive. Several of our information providers compete against each other and in some cases with us. We face direct or indirect competition from numerous companies including the following:

• large, well-established business and financial information providers such as Dow Jones & Co., Pearson PLC, Reuters Group PLC, and McGraw-Hill Companies Inc.;

• aggregators of business and financial information, such as LexisNexis Group (a Reed Elsevier Plc subsidiary), The Dialog Corporation (a Thomson Corporation subsidiary), Factiva (a Dow Jones & Co. subsidiary), and Bureau Van Dijk Computer Services SA;

• providers of company information, such as Thomson Financial, Inc. (a Thomson Corporation subsidiary), Hemscott Group Ltd., and Hoovers, Inc. (a subsidiary of The Dun & Bradstreet Corporation);

• providers of sales, marketing, and credit information such as Dun & Bradstreet, Inc. (a subsidiary of The Dun & Bradstreet Corporation) and InfoUSA Inc.; and

• Web retrieval, Web “portal” companies, and other free or low-cost mass market on-line services, such as Yahoo! Inc., AOL-Time Warner, Inc., MarketWatch.com, Inc., and TheStreet.com, Inc.

     Based on reported operating results, industry reports and other publicly available information, we believe that many of our existing competitors, as well as a number of prospective competitors, have longer operating histories, greater name recognition, larger customer bases, and significantly greater financial, technical, and marketing resources than we possess. As a result, they may be able to respond more quickly to new or emerging technologies and changes in user requirements, or to devote greater resources to the

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research, development, promotion, and sale of their products and services than we can. These competitors may be able to undertake more extensive marketing campaigns, adopt more aggressive pricing policies, and make more attractive offers to potential employees, customers, and information providers. Our competitors also may develop products and services that are equal or superior to our products and services or that achieve greater market acceptance than our products and services. Ultimately, we may lose customers to competitors if we are not able to satisfy increasingly sophisticated customer requirements, enhance existing OneSource products and services, and develop new products and services in a timely, economical fashion. In addition, increased competition may result in price reductions, reduced margins, or loss of market share, any of which may adversely affect our business, operating results, and financial condition.

     OUR FAILURE TO INCREASE THE NUMBER OF OUR SUBSCRIBERS OR RETAIN OUR CURRENT SUBSCRIBER BASE MAY ADVERSELY AFFECT OUR OPERATING RESULTS AND FINANCIAL CONDITION. Our future success remains highly dependent on attracting organizations that are financially able to and willing to allocate funds to subscribe to on-line business information products and services. If the market for subscription-based on-line business information products and services develops more slowly than we may anticipate, or if our efforts to retain existing subscribers or attract new subscribers are not successful or cost-effective, our operating results and financial condition may be adversely impacted.

     IF A SIGNIFICANT NUMBER OF OUR CUSTOMERS EXPERIENCE A DECLINE IN THEIR FINANCIAL CONDITION, THE COLLECTABILITY OF OUR ACCOUNTS RECEIVABLE MAY SUFFER, AND MAY ADVERSELY AFFECT OUR OPERATING RESULTS AND FINANCIAL CONDITION. If a significant number of our customers experience a decline in their financial condition, it may cause us to write-off the amounts owed by these customers as bad debt, and/or realize a revenue reduction, either of which may adversely affect our operating results and financial condition.

     EXPANDING INTO INTERNATIONAL MARKETS WHERE WE HAVE LIMITED PRIOR EXPERIENCE MAY ADVERSELY AFFECT OUR BUSINESS. Our principal offices are located in the United States and in the United Kingdom, but we look to expand our business opportunities into new markets. Expanding into diverse international markets exposes us to certain risks of conducting business that include, but are not limited to, the following: potential higher costs, unanticipated regulatory changes, political instability, difficulties in staffing and managing operations, adverse tax consequences, currency and exchange rate fluctuations, and seasonal reductions in business activity. In addition, the impact of language and other cultural differences may result in product and service offerings that may not satisfy the needs of our customers and may not be profitable. Further, strategic relationships may be necessary to facilitate expansion into certain markets, and our business may be adversely affected if we misallocate our resources and ultimately fail to gain new or effective alliances in these areas. Moreover, possible nationalization, expropriation, and limits and unique laws pertaining to the collection and provision of certain types of information on individuals (e.g., the Data Protection Act) may hinder operations in international markets, and may adversely affect our business.

     GENERAL ECONOMIC AND GEOPOLITICAL CONDITIONS MAY NEGATIVELY AFFECT OUR OPERATING RESULTS AND FINANCIAL CONDITION. An ongoing economic downturn and uncertain geopolitical environment may cause organizations to delay or forego entirely investments in value-added business information products and services such as our Web-based products and services. We have experienced these effects in the last quarter as a result of the recent economic slowdown and geopolitical conditions. A prolonged recession and difficult geopolitical situation may cause organizations that comprise our target market to significantly reduce discretionary spending with business information providers and create a greater risk of business failure among existing subscribers. These effects may adversely affect our operating results and financial condition.

     IF OUR INFORMATION PROVIDERS PROVIDE US WITH INACCURATE OR UNRELIABLE DATA, FAIL TO TRANSMIT THEIR DATA FEEDS IN A TIMELY MANNER, CEASE DOING BUSINESS WITH US, OR REQUIRE US TO SIGNIFICANTLY INCREASE OUR ROYALTY OBLIGATIONS, FUTURE SALES OF OUR WEB-BASED PRODUCTS AND SERVICES MAY BE JEOPARDIZED, AND THIS MAY ADVERSELY AFFECT OUR BUSINESS, OPERATING RESULTS, AND FINANCIAL CONDITION. We depend significantly on information providers to supply accurate and reliable information and data feeds to us on a timely basis. Our Web-based products and services may experience interruptions (and potentially may be compromised) due to any failure, delay, or cut-off in the transmission or receipt of this information, or a requirement by our information providers that royalty payments be significantly increased. In addition, our products and services may be negatively affected if our information providers provide us with faulty or erroneous data that becomes integrated with our products and services. We may then have to seek alternatives to the information providers’ information and data feeds, and, in some cases, it is possible that reasonable alternatives may not exist without resorting to multiple sources, or may not be provided in a timely manner. This may result in increased costs or reduced functionality of our products and services and may adversely affect our business, operating results, and financial condition.

     IF OUR THIRD PARTY HOSTING FACILITY SUFFERED A DISASTER, IT MAY BE COSTLY TO CORRECT, AND OUR BUSINESS MAY SUFFER SIGNIFICANT LOSSES. Our third party hosting facility may suffer a disaster relating to the facility, its power supplies, or telecommunications transports. Defects, errors, or a disaster at our third party hosting facility also may result in significant downtime, and our business may as a consequence suffer significantly from potential adverse customer reaction, litigation, negative publicity, loss of revenues, or harm to our reputation.

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     IF OUR SOFTWARE OR HARDWARE BECOMES DEFECTIVE, OR IF OUR SOFTWARE, HARDWARE, OR WEB SITE BECOMES THE TARGET OF INTENTIONAL DISRUPTIONS, DIRECTLY OR INDIRECTLY, OUR PRODUCTS AND SERVICES MAY BE NEGATIVELY IMPACTED, AND OUR REPUTATION, FUTURE SALES, OPERATING RESULTS, AND FINANCIAL CONDITION MAY BE HARMED IF THESE EFFORTS ARE SUCCESSFUL. Complex software like the software we develop and use and the hardware we use for our products and services may contain or develop errors or defects, especially when first implemented and as our product and service offerings increase in scope and complexity, that may be difficult and costly to correct. In addition, our software, hardware, or Web site may become the target of intentional disruptions, directly or indirectly, including software viruses and malicious code specifically designed to impede the performance of our products and services; such software viruses and malicious code may avoid detection by our anti-virus software in place. Similarly, experienced computer programmers or hackers may attempt to penetrate our network security or the security of our Web site and misappropriate proprietary information or cause interruptions to the delivery of our products and services. As a result, our activities may be substantially disrupted; the introduction of new products, services, and enhancements may be delayed; and our reputation, future sales, operating results, and financial condition may be adversely impacted if these efforts are successful.

     POTENTIAL GROWTH IN OUR FUTURE OPERATIONS MAY STRAIN OUR MANAGERIAL AND FINANCIAL RESOURCES AND OPERATING SYSTEMS. FAILURE TO SUCCESSFULLY MANAGE GROWTH, OR UNEXPECTED DIFFICULTIES DURING EXPANSION, MAY ADVERSELY AFFECT OUR OPERATING RESULTS AND FINANCIAL CONDITION. We have experienced growth in our operations and plan to pursue growth opportunities as relate to the OneSource product line, related software applications, and fee-based services, particularly in our target market accounts. In order to support such potential growth, we may need to: (i) implement and modify relevant financial, operational, and management controls; reporting systems; and procedures on a timely basis; (ii) expand, train, and manage our employee base; and (iii) alter the coordination among our staff responsible for product and platform development, sales and marketing, and finance and administration. If we are unable to accomplish any of these objectives during a period of growth, our operating results and financial condition may be adversely impacted.

     WE MAY HAVE DIFFICULTY IDENTIFYING AND COMPETING FOR ACQUISITION OPPORTUNITIES, AND THE TIME, ENERGY, AND RESOURCES DEDICATED TO THESE ACQUISITION OPPORTUNITIES MAY ADVERSELY AFFECT OUR OPERATING RESULTS AND FINANCIAL CONDITION. Our business strategy includes the pursuit of strategic acquisitions. From time to time we may engage in discussions with third parties concerning potential acquisitions of niche expertise, business, and/or proprietary rights. In executing our acquisition strategy, we may be unable to identify suitable companies as acquisition candidates. In addition, if we pursue an acquisition and are unable to identify a suitable acquisition candidate, management may potentially spend a significant amount of time, energy, and resources that may adversely affect our operating results and financial condition.

     PURSUING AND COMPLETING ANY POTENTIAL ACQUISITION(S) MAY DIVERT MANAGEMENT ATTENTION AND FINANCIAL RESOURCES AND MAY NOT PRODUCE THE DESIRED BUSINESS RESULTS. If we pursue and complete any potential acquisition(s), our management team may spend a significant amount of time and management and financial resources in the acquisition process and to integrate the acquired business with our existing business. To pay for acquisition(s), we may use capital stock, cash, or a combination of both. Alternatively, we may borrow money from a bank or other lender. If we use cash or debt financing, our financial liquidity will be reduced. In addition, from an accounting perspective, the potential acquisition(s) may involve nonrecurring charges or involve amortization of significant amounts of acquired intangible assets, excluding goodwill, that may adversely affect our operating results and financial condition.

     Despite the investment of these management and financial resources and completion of due diligence with respect to these efforts, the potential acquisition(s) may not produce the revenues, earnings, or business synergies that we may anticipate, and the acquired technology or proprietary right(s) may not perform as expected for a variety of reasons, including the following:

• difficulty in the integration of the operations, technologies, rights, products, services, and personnel of the acquired business(es);

• difficulty in maintaining controls, procedures, and policies during the transition and integration;

• risks of entering markets in which we have no or limited prior experience;

• inability to maintain the key business relationships and the reputations of acquired business(es);

• potential dilution to current stockholders from the issuance of additional equity securities;

• failure through the due diligence process to identify significant issues with product and service quality, product architecture, legal and financial contingencies, and product and service development, among other things;

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• expenses of any undisclosed or potential legal liabilities of the acquired business(es); and

• the potential loss of key employees of the acquired business(es).

     WE MAY EXPERIENCE SIGNIFICANT FLUCTUATIONS IN OUR QUARTERLY RESULTS, WHICH MAY MAKE IT DIFFICULT FOR INVESTORS TO PERFORM RELIABLE PERIOD-TO-PERIOD COMPARISONS, AND CONTRIBUTE TO VOLATILITY IN THE MARKET PRICE FOR OUR COMMON STOCK, THUS POTENTIALLY REDUCING INVESTMENT IN OUR STOCK. Our quarterly revenues, gross profits, and operating results may fluctuate in the future. In addition, we believe that an important measure of our business is the annualized contract value at the end of each period, which also may fluctuate. Causes of such fluctuations have included and may include, among other factors, as follows:

• changes in demand for our products and services;

• the size, value and timing of both new and renewal subscriptions with our corporate customers;

• any delays or deferrals in recognizing revenue in any transaction;

• the cost and renewal status of contracts with our content providers;

• competition (particularly price, product, and service competition);

• increases in selling and marketing expense, as well as other operating expenses;

• technical difficulties or system downtime affecting our products or the Web generally;

• overall performance of our products, services, and technology;

• our ability to develop, market, and introduce new and enhanced versions of our products on a timely basis;

• economic conditions specific to the Web, as well as general economic and political conditions; and

• consolidation of our customers.

     Further, a substantial portion of our expenses, including most product and platform development and selling and marketing expenses, must be incurred in advance of revenue generation. If we are unable to expand our sales and marketing efforts and our projected revenues do not meet our expectations, then we are likely to experience a shortfall in our income from operations relative to our expectations. Moreover, although we are not presently a party to a lawsuit, any potential claims, even if not meritorious, against us may result in the expenditure of significant financial and managerial resources on our part, which may contribute to a decrease in investment of our stock and may adversely impact our operating results and financial condition by potentially subjecting us to significant liabilities and negative publicity and by diverting management’s attention and resources.

     WE MAY BE SUBJECT TO POTENTIAL LITIGATION BY ANY THIRD PARTY CONCERNING THE INFRINGEMENT OF ANY PROPRIETARY RIGHT, AND SUCH LITIGATION MAY BE COSTLY AND TIME CONSUMING. IN ADDITION, WE MAY HAVE TO INCUR LEGAL EXPENSES TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS. There has been substantial litigation in the information services industry involving intellectual property rights. Although we believe that we have not infringed, and are not infringing, the intellectual property of others through our products and services, if such claims were to be asserted, with or without merit, they may materially and adversely affect our business, operating results, and financial condition. In addition, to the extent that we license from third parties information that is included in our Web-based product line, our potential exposure to copyright infringement actions may increase because we must rely upon warranties and representations by such information providers as to the origin and ownership of content that we are subsequently licensing to users of our Web-based products; such warranties and representations that may be inaccurate or inadequate. In addition, although we generally obtain indemnification provisions in our agreements with information providers, indemnification may not be adequate compensation for breach of such warranties and representations. In the event of a successful claim against us, we may be required to pay significant monetary damages if we are held to have willfully infringed a patent, copyright, trade secret, or other proprietary right; discontinue use or sale of the infringing products or information; expend significant resources to develop non-infringing technology; and/or enter into royalty and licensing agreements that may not be offered on acceptable terms. If a successful claim is filed against us and we fail to commercially develop or license a substitute technology, our business may be adversely harmed.

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     In the future, litigation may be necessary to defend, enforce, and/or protect our own intellectual property, including our copyrights, patents, trademarks, and other proprietary information. The protective steps we have taken and continue to take may be inadequate to deter misappropriations of our intellectual property rights, and we may be unable to detect the unauthorized use of, or take appropriate steps to enforce, our intellectual property rights.

     Any litigation involving intellectual property rights may be costly and time consuming, and divert management’s attention, either of which may adversely affect our business, operating results, and financial condition. Adverse determinations in this litigation may result in the loss of our proprietary rights, subject us to significant liabilities, require us to seek licenses from additional third parties, cause our customers to prematurely cancel their subscriptions to our products, and prevent us from selling our products and services; any one of these results may materially and adversely affect our business, operating results, and financial condition. Additionally, our general liability insurance may not cover any of these claims or may not be adequate to protect us against all liability that may be imposed. Further, effective protection of intellectual property rights is limited or unavailable in certain foreign countries, thus making the possibility of misappropriation of our intellectual property more likely. Policing unauthorized use of our products is difficult, expensive, and time consuming, and the unique technology of the Internet may provide new methods for illegal copying and distribution. Accordingly, we cannot be certain that we may be able to protect our intellectual property rights against unauthorized third party copying, distribution, or use. This may subject us to litigation and adversely affect our competitive position.

     IF WE LOSE KEY PERSONNEL AND ARE UNABLE TO ATTRACT ADDITIONAL AND RETAIN EXISTING KEY PERSONNEL, IT MAY CAUSE AN ADVERSE EFFECT ON OUR BUSINESS. We expect that our future success will depend, in substantial part, on the continued services of our senior management. None of our senior management has entered into employment agreements with us, and we do not maintain key-person life insurance on any of our employees. The loss of the services of one or a group of our key personnel may have a material, adverse effect on development of new products and services, our ability to manage the business, and our financial condition. In addition, we expect that our future success will depend on our continuing ability to attract, retain, and motivate highly qualified technical, customer support, sales, financial, accounting, and managerial personnel. Competition for such key personnel is intense, and we cannot assure that we will be able to retain such personnel or that we will be able to attract, assimilate, or retain other highly qualified personnel in the future. Moreover, competition for highly qualified key personnel may lead to increased recruitment and retention costs, thus potentially hindering our financial condition.

     THE FUTURE SALES OF OUR COMMON STOCK MAY NEGATIVELY AFFECT OUR COMMON STOCK PRICE, WHICH MAY CAUSE DIFFICULTIES IN THE FUTURE TO SELL EQUITY. If our stockholders decide to sell substantial amounts of our common stock, including shares that may be issued upon the exercise of outstanding options in the public market, the market price of our common stock may decrease. Such potential sales may make it increasingly difficult for us to sell equity securities in the future at a time and price that we deem reasonable and appropriate.

     IF WE ARE UNABLE TO MAINTAIN OUR REPUTATION AND EXPAND OUR NAME RECOGNITION, WE MAY HAVE DIFFICULTY ATTRACTING NEW BUSINESS AND RETAINING OUR CURRENT CUSTOMER BASE AND EMPLOYEES, AND OUR BRAND NAME, REPUTATION, AND BUSINESS MAY SUFFER. Establishing and maintaining a solid reputation and name recognition are critical for attracting and retaining customers as well as employees. The importance of reputation and name recognition is increasing and will continue to increase due to the growing number and quality of providers of Web-based business and financial information products and services. If our reputation is damaged or if potential customers and employees are not familiar with our products and services, we may not be able to attract new, or retain existing, customers and employees. The promotion and enhancement of our name will depend largely on our success in continuing to provide valuable products and services and to successfully market our products and services. If customers do not perceive our products and services to be effective or high quality, our brand name, reputation, and business may suffer.

     IF WE ARE REQUIRED TO RECORD A SIGNIFICANT CHARGE TO OPERATING EXPENSES DUE TO A REASSESSMENT OF OUR ACQUIRED INTANGIBLE ASSETS, THIS MAY ADVERSELY AFFECT OUR OPERATING RESULTS AND FINANCIAL CONDITION. We are required under generally accepted accounting principles to review our acquired intangible assets, which consist of goodwill, trademarks, a subscriber list, and a database, for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill is required to be tested for impairment at least annually. Factors that may be considered a change in circumstances indicating that the carrying value of our acquired intangible assets may not be recoverable include significant underperformance relative to expected historical or projected operating results and significant negative industry or economic trends. If we experience significant underperformance relative to expected historical or projected operating results and significant negative industry or economic trends, we may be required to record a significant charge to operating expenses in our consolidated statements of income during the period in which any impairment of our acquired intangible assets is determined. This may adversely affect our operating results and financial condition.

     LAWS, RULES, AND REGULATIONS WITH RESPECT TO CORPORATE GOVERNANCE, REPORTING, AND DISCLOSURE MAY HINDER OUR ABILITY TO ATTRACT AND/OR RETAIN CAPABLE BOARD MEMBERS, A CHIEF

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EXECUTIVE OFFICER, AND A CHIEF FINANCIAL OFFICER, AND MAY RESULT IN A REDUCTION IN THE NUMBER OF BOARD MEMBERS, WHICH MAY ADVERSELY AFFECT OUR BUSINESS, OPERATING RESULTS, AND FINANCIAL CONDITION AND OUR ABILITY TO MEET LISTING CRITERIA. In July 2002, President George W. Bush signed the Sarbanes-Oxley Act of 2002 into law, and several new rules and regulations were announced thereafter. Among other things, the Sarbanes-Oxley Act of 2002 imposes new corporate governance, reporting, and disclosure requirements; introduces stricter independence and financial expertise standards for audit committees; and imposes stiff penalties for securities fraud. In addition, the United States Securities and Exchange Commission and the Nasdaq National Market are considering proposals on related corporate governance topics. The Sarbanes-Oxley Act of 2002 and the related rules and regulations will likely increase the scope, complexity and costs of our corporate governance, reporting, and disclosure practices, and may increase the risk of personal liability for our board members, chief executive officer, and chief financial officer. Consequently, it may become more difficult to attract and/or retain such individuals, and may result in a decrease in the number of board members, which may adversely affect our business, operating results, and financial condition and our ability to meet listing criteria.

     IF THE INTERNET BECOMES SUBJECT TO INCREASED LEGISLATION AND GOVERNMENT REGULATION, USE OF THE INTERNET AS A MEDIUM TO RECEIVE SUBSCRIPTION-BASED INFORMATION PRODUCTS AND SERVICES MAY DECLINE, AND WE MAY BE SUBJECT TO LITIGATION, EITHER OF WHICH MAY HAVE AN ADVERSE EFFECT ON OUR BUSINESS, OPERATING RESULTS, AND FINANCIAL CONDITION. The laws governing the Internet continue to be unsettled, even in areas where there has been legislative action. Legislation may dampen the growth in the use of the Internet generally and decrease the acceptance of the Internet as a medium to receive subscription-based information products and services. In addition, due to the global nature of the Internet, it is possible that, although our corporate headquarters are located in the Commonwealth of Massachusetts and pre-production and development relating to our products and services occurs primarily in the Commonwealth of Massachusetts, other states, the United States, or foreign countries may attempt to regulate our products and services or levy sales or other applicable taxes on our Web-based products and services. We cannot guarantee that any violations of federal, state, local, or other laws will not be alleged by governmental entities; that we may not unintentionally violate these laws; or that these laws will not be modified, or new laws enacted, in the future. Any of these developments may have an adverse effect on our business, operating results, and financial condition.

     IF REQUIREMENTS RELATED TO ACCOUNTING TREATMENT FOR EMPLOYEE STOCK OPTIONS ARE MODIFIED, WE MAY BE FORCED TO CHANGE OUR BUSINESS PRACTICES, WHICH MAY HINDER OUR ABILITY TO RETAIN EXISTING EMPLOYEES AND ATTRACT HIGHLY QUALIFIED CANDIDATES, WHICH MAY HAVE A NEGATIVE EFFECT ON OUR NET INCOME. We currently account for the issuance of stock options under Accounting Principles Board Opinion No. 25 (“APB Opinion No. 25”), “Accounting for Stock Issued to Employees.” If proposals currently under consideration by accounting standards organizations and governmental authorities are adopted, we may be required to treat the value of stock options granted to employees as a compensation expense. As a result, we may decide to reduce the number of stock options granted to employees or to grant options to fewer employees. This may affect our ability to retain existing employees and attract highly qualified candidates, and increase the cash compensation we may be required to pay these individuals. Such a change may have a negative effect on our net income.

     SOME OF OUR STOCKHOLDERS MAY BE ABLE TO SIGNIFICANTLY INFLUENCE THE OUTCOME OF MATTERS REQUIRING STOCKHOLDER APPROVAL, WHICH MAY DELAY OR MAKE MORE DIFFICULT A MERGER, TENDER OFFER, OR PROXY CONTEST, AND MAY ADVERSELY AFFECT THE RIGHTS OF OUR STOCKHOLDERS. Our current directors, officers, and greater than 10% stockholders together beneficially own a significant portion of our outstanding shares of common stock. While these stockholders do not hold a majority of our outstanding common stock, they will be able to exercise significant influence over matters requiring shareholder approval, which may delay or make more difficult a merger, tender offer, or proxy contest, and may adversely affect the rights of our stockholders that may otherwise receive a premium over the fair market value of our common stock.

     PROVISIONS IN OUR RESTATED CERTIFICATE OF INCORPORATION AND AMENDED AND RESTATED BY-LAWS CONTAIN PROVISIONS THAT MAY HAVE THE EFFECT OF DELAYING OR PREVENTING CERTAIN CORPORATE ACTIONS, WHICH MAY ADVERSELY AFFECT THE RIGHTS OF OUR STOCKHOLDERS. Our Board of Directors is authorized to issue up to 1,000,000 shares of preferred stock and to determine the price, rights, preferences, privileges, and restrictions, including voting rights, of those shares without further approval by stockholders. Preferred stock may be issued with voting, liquidation, dividend, and other rights superior to those of common stock, without stockholder approval. The rights of the holders of common stock will be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. The issuance of preferred stock may make it more difficult for a third party to acquire, or may discourage a third party from acquiring, a majority of our outstanding common stock. This may delay or make more difficult a merger, tender offer, or proxy contest and may adversely affect the rights of our stockholders that may otherwise receive a premium over the fair market value of our common stock.

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     IF FUTURE OR EXISTING PLATFORMS EMERGE IN THE MARKETPLACE, THEY MAY REQUIRE US TO UNDERGO THE EXPENSE OF DEVELOPING AND MAINTAINING COMPATIBLE PRODUCT LINES, AND SUCH DEVELOPMENT AND MAINTENANCE MAY PLACE A SIGNIFICANT STRAIN ON OUR RESOURCES AND PRODUCT RELEASE SCHEDULES, WHICH MAY HAVE AN ADVERSE EFFECT ON OUR BUSINESS, OPERATING RESULTS, AND FINANCIAL CONDITION. Although our Web-based products can be licensed for use with a variety of customer relationship management platforms, there may be future or existing platforms that emerge in the marketplace that may not be architecturally compatible with our Web-based product design. Moreover, future or existing user interfaces that emerge in the business application marketplace may or may not be architecturally compatible with our Web-based product design. Developing and maintaining consistent performance across all of these combinations may place a significant strain on our resources and product release schedules, which may adversely affect our business, operating results, and financial condition. To maintain performance across accepted platforms and operating environments, or to achieve market acceptance of those that we support, or to adapt to emerging new ones, our expenses may increase, and our sales and revenues may be adversely impacted.

     Any one or more of these factors may affect our business, operating results, and financial condition, and this makes the prediction of operating results on a quarterly basis unreliable. As a result, we believe that period-to-period comparisons of our historical operating results and annualized contract values are not necessarily meaningful and should not be relied upon as an indication for future performance. Also, due to these and other factors, it is possible that our quarterly operating results (including the annualized contract value) may be below expectations. If this happens, the price of our common stock would likely decrease.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     OneSource is exposed to various market risks, including changes in foreign currency exchange rates and interest rates. Our exposure to currency exchange rate fluctuations has been and is expected to continue to be modest due to the fact that the operations of our United Kingdom subsidiary are almost exclusively conducted in local currency, rather than multiple foreign currencies. Operating results are translated into United States dollars and consolidated for reporting purposes. The impact of currency exchange rate movements on inter-company transactions was immaterial for the six months ended June 30, 2003. OneSource does not engage in hedging activities.

     OneSource also owns money market funds that are sensitive to market risks as part of its investment portfolio. The investment portfolio is used to preserve OneSource’s capital until it is required to fund operations, including OneSource’s sales and marketing and product development activities. None of these market-risk sensitive instruments are held for trading purposes. The investment portfolio contains instruments that are subject to the risk of a decline in interest rates. OneSource does not enter into derivatives or any other financial instruments for trading or speculative purposes. As of June 30, 2003, OneSource had $25.6 million in cash and cash equivalents.

Item 4. Controls and Procedures

     Evaluation of Disclosure Controls and Procedures. Based on their evaluation of OneSource’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this quarterly report, OneSource’s principal executive officer and principal financial officer have concluded the following: (i) OneSource’s disclosure controls and procedures are effective to ensure that information required to be disclosed by OneSource in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within time periods specified in Securities and Exchange Commission rules and forms; and (ii) OneSource’s disclosure controls and procedures are effective to ensure that information required to be disclosed by OneSource in reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to OneSource’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

     Changes in Internal Controls Over Financial Reporting. There were no changes in OneSource’s internal controls over financial reporting that occurred during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, OneSource’s internal control over financial reporting.

PART II      OTHER INFORMATION

Item 1. Legal Proceedings

          OneSource is not a party to any material legal proceedings.

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Item 2. Changes in Securities and Use of Proceeds

     On May 19, 1999, OneSource commenced an initial public offering of 3,636,000 shares of common stock, $0.01 par value per share, pursuant to a final prospectus dated May 19, 1999. The prospectus was contained in OneSource’s registration statement on Form S-1, which was declared effective by the United States Securities and Exchange Commission (SEC File No. 333-73263) on May 18, 1999. Of the 3,636,000 shares of common stock offered, 2,500,000 shares were offered and sold by OneSource and 1,136,000 shares were offered and sold by certain stockholders of OneSource. The offering closed on May 24, 1999 upon the sale of all 3,636,000 shares. The aggregate offering price of the offering to the public was $43,632,000, with proceeds to OneSource and the selling stockholders, after deduction of the underwriting discount, of $27,900,000 and $12,677,760, respectively. The aggregate amount of expenses incurred by OneSource in connection with the issuance and distribution of the shares of common stock sold in the offering were approximately $3.9 million, including approximately $3.0 million in underwriting discounts and commissions and $0.9 million in other offering expenses.

     The net proceeds to OneSource from the offering, after deducting underwriting discounts and commissions and other offering expenses, were approximately $27.0 million.

     The net proceeds from the offering, less $6.8 million used to pay off long-term debt and $7.6 million used to acquire Corporate Technology Information Services, Inc., have been invested in interest bearing, investment grade securities.

     Since the initial public offering, OneSource has produced positive cash flow, and has not needed to further draw from these funds for day-to-day operations.

     OneSource has not sold any securities during the six months ended June 30, 2003 and for the years ended December 31, 2002, 2001, and 2000 that were not registered under the Securities Act of 1933.

Item 3. Defaults upon Senior Securities

     None.

Item 4. Submission of Matters to a Vote of Security Holders

(a)	The annual meeting of stockholders was held on May 22, 2003.
(b)	The six directors elected at the meeting were Martin Kahn, Daniel J. Schimmel, Carl P. Fisher, Henry Ancona, Robert J. Massie, and Peter H. Kamin.
(c)	A vote was proposed to (1) elect six directors to OneSource’s Board of Directors, each to serve for a term of one year or until his successor is duly elected and qualified; (2) consider and act upon a proposal to approve an amendment to the 1999 Stock Option and Incentive Plan to: (i) increase the maximum number of shares of OneSource common stock that may be issued under the plan by 500,000 shares, (ii) provide that options granted under the plan will expire not later than ten years from the date of grant, (iii) prohibit the repricing of options granted under the plan at a lower purchase price per share than the original grant without the prior approval of the stockholders holding at least a majority of shares of OneSource common stock, and (iv) remove provisions of the plan relating to pooling of interests; (3) approve an amendment to the 1999 Employee Stock Purchase Plan to increase the aggregate number of shares authorized for issuance under the plan by 100,000 shares; and (4) ratify the selection of PricewaterhouseCoopers LLP, independent accountants, as auditors for the fiscal year ending December 31, 2003.

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               The voting results were as follows:

			Votes For		Votes Against		Votes Withheld		Abstained		Broker Nonvotes
(1	)	Martin Kahn		9,844,729				64,253
		Daniel J. Schimmel		9,843,101				65,881
		Carl P. Fisher		9,844,729				64,253
		Henry Ancona		9,844,729				64,253
		Robert J. Massie		9,844,729				64,253
		Peter H. Kamin		9,844,729				64,253
(2	)	Amendment to the 1999 Stock Option and Incentive Plan		5,426,949		2,409,384				4,505		2,068,144
(3	)	Amendment to the 1999 Employee Stock Purchase Plan		7,627,615		211,223				2,000		2,068,144
(4	)	Ratification of PricewaterhouseCoopers LLP as auditors		9,892,182		15,100				1,700

Item 5. Other Information

     None.

Item 6. Exhibits and Reports on Form 8-K

     (a)  Exhibits

     OneSource hereby files as part of this Quarterly Report on Form 10-Q the exhibits listed below. Exhibits that are incorporated herein by reference can be inspected and copied at the public reference rooms maintained by the United States Securities and Exchange Commission in Washington, D.C.; New York, New York; and Chicago, Illinois. Please call the United States Securities and Exchange Commission at 1-800-SEC-0330 for further information on the public reference rooms. United States Securities and Exchange Commission filings are also available to the public from commercial document retrieval services and at the web site maintained by the SEC at HTTP://WWW.SEC.GOV.

Exhibit
No.	Description
2.01	Agreement and Plan of Merger dated September 8, 1999 by and between the Registrant and Corporate Technology Information Services, Inc. (filed as Exhibit 2.1 to Form 8-K dated September 8, 1999, No. 000-25849 and incorporated herein by reference).
2.02	Escrow Agreement dated September 8, 1999 by and among the Registrant, Corporate Technology Information Services, Inc., Andrew Campbell and Citizens Bank of Massachusetts (filed as Exhibit 2.2 to Form 8-K dated September 8, 1999, No. 000-25849 and incorporated herein by reference).
3.01	Second Amended and Restated Certificate of Incorporation of the Registrant, as amended on May 24, 2001 (filed as Exhibit 3.01 to the Annual Report on Form 10-K on March 27, 2002 and incorporated herein by reference).
3.02	Second Amended and Restated By-Laws of the Registrant (filed as Exhibit 3.04 to the Registration Statement on Form S-1, No. 333-73263 and incorporated herein by reference).
10.01*	1993 Stock Purchase and Option Plan (filed as Exhibit 10.01 to the Registration Statement on Form S-1, No. 333-73263 and incorporated herein by reference).
10.02*	1999 Stock Option and Incentive Plan, as amended on May 22, 2003.
10.03*	1999 Employee Stock Purchase Plan, as amended on May 22, 2003.
10.04	Registration Agreement dated September 8, 1993 (filed as Exhibit 10.04 to the Registration Statement on Form S-1, No. 333-73263 and incorporated herein by reference).
10.05	Lease dated January 20, 1999 by and between the Registrant and 300 Baker Avenue Associates, Limited Partnership (filed

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Exhibit
No.	Description
	as Exhibit 10.12 to the Registration Statement on Form S-1, No. 333-73263 and incorporated herein by reference).
10.06	Agreement and Plan of Merger dated February 26, 1999 by and between the Registrant and OneSource Holding Corporation (filed as Exhibit 10.13 to the Registration Statement on Form S-1, No. 333-73263 and incorporated herein by reference).
10.08	Form of Management Stock Purchase Agreement (filed as Exhibit 10.09 the Registration Statement on Form S-1, No. 333-73263 and incorporated herein by reference).
10.09	Stock Purchase Agreement dated August 3, 1993, by and among Lotus Development Corporation, Datext, Inc. and Datext Holding Corporation (filed as Exhibit 10.10 to the Registration Statement on Form S-1, No. 333-73263 and incorporated herein by reference).
10.10	Form of Fee Termination Agreement (filed as Exhibit 10.16 to the Registration Statement on Form S-1, No. 333-73263 and incorporate herein by reference).
10.11	Stock Redemption Agreement dated April 21, 1999 (filed as Exhibit 10.17 to the Registration Statement on Form S-1, No. 333-73263 and incorporated herein by reference).
10.12*	2001 Non-Employee Director Stock Option Plan dated May 24, 2001 (filed as Exhibit 10.3 to the Quarterly Report on Form 10-Q on August 10, 2001 and incorporated herein by reference).
10.13	Registration Rights Agreement dated November 1, 2002 by and among the Registrant, ValueAct Capital Partners, L.P., ValueAct Capital Partners II, L.P., and ValueAct International, Ltd. (filed as Exhibit 10.1 to the Form 8-K on November 6, 2002, and incorporated herein by reference).
10.14	Loan and Security Agreement, dated as of December 20, 2002, between Silicon Valley Bank and OneSource Information Services, Inc. (filed as Exhibit 10.14 to the Annual Report on Form 10-K on March 27, 2003, and incorporated herein by reference).
31.01	Certification pursuant to 15 U.S.C. section 7241, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002
31.02	Certification pursuant to 15 U.S.C. section 7241, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002
32.01	Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
32.02	Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002

* Indicates a management contract or compensatory plan, contract, or arrangement required to be filed as an exhibit pursuant to Item 14(c).

     (b)  Reports on Form 8-K

     A current report on Form 8-K dated July 17, 2003 was filed by OneSource on July 17, 2003 with the United States Securities and Exchange Commission that reported that OneSource announced financial results for the second quarter ended June 30, 2003.

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SIGNATURE

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

OneSource Information Services, Inc.

By: /s/ Roy D. Landon
Roy D. Landon
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
Date: August 13, 2003

28 EX-10.02 3 b47177osexv10w02.txt EX-10.02 1999 STOCK OPTION & INCENTIVE PLAN EXHIBIT 10.02 ONESOURCE INFORMATION SERVICES, INC. 1999 STOCK OPTION AND INCENTIVE PLAN 1. Purpose and Eligibility The purpose of this 1999 Stock Option and Incentive Plan (the "Plan") of OneSource Information Services, Inc. (the "Company") is to provide stock options and other equity interests in the Company (each an "Award") to employees, officers, directors, consultants and advisors of the Company and its Subsidiaries, all of whom are eligible to receive Awards under the Plan. Any person to whom an Award has been granted under the Plan is called a "Participant". Additional definitions are contained in Section 8. 2. Administration a. Administration by Board of Directors. The Plan will be administered by the Board of Directors of the Company (the "Board"). The Board, in its sole discretion, shall have the authority to grant and amend Awards, to adopt, amend and repeal rules relating to the Plan and to interpret and correct the provisions of the Plan and any Award. All decisions by the Board shall be final and binding on all interested persons. Neither the Company nor any member of the Board shall be liable for any action or determination relating to the Plan. b. Appointment of Committees. To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to one or more committees or subcommittees of the Board (a "Committee"). All references in the Plan to the "Board" shall mean such Committee or the Board. c. Delegation to Executive Officers. To the extent permitted by applicable law, the Board may delegate to one or more executive officers of the Company the power to grant Awards and exercise such other powers under the Plan as the Board may determine, provided that the Board shall fix the maximum number of Awards to be granted and the maximum number of shares issuable to any one Participant pursuant to Awards granted by such executive officers. 3. Stock Available for Awards a. Number of Shares. Subject to adjustment under Section 3(c), the aggregate number of shares of Common Stock of the Company (the "Common Stock") that may be issued pursuant to the Plan is 2,800,000 shares. If any Award expires, or is terminated, surrendered or forfeited, in whole or in part, the unissued Common Stock covered by such Award shall again be available for the grant of Awards under the Plan. If shares of Common Stock issued pursuant to the Plan are repurchased by, or are surrendered or forfeited to, the Company at no more than cost, such shares of Common Stock shall again be available for the grant of Awards under the Plan; provided, however, that the cumulative number of such shares that may be so reissued under the Plan will not exceed 3,300,000 shares. Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares. b. Per-Participant Limit. Subject to adjustment under Section 3(c), no Participant may be granted Awards during any one fiscal year to purchase more than 250,000 shares of Common Stock. c. Adjustment to Common Stock. In the event of any stock split, stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off, split-up, or other similar change in capitalization or event, (i) the number and class of securities available for Awards under the Plan and the per-Participant share limit, (ii) the number and class of securities, vesting schedule and exercise price per share subject to each outstanding Option, (iii) the repurchase price per security subject to repurchase, and (iv) the terms of each other outstanding stock-based Award shall be adjusted by the Company (or substituted Awards may be made) to the extent the Board shall determine, in good faith, that such an adjustment (or substitution) is appropriate. If Section 7(e)(i) applies for any event, this Section 3(c) shall not be applicable. 4. Stock Options a. General. The Board may grant options to purchase Common Stock (each, an "Option") and determine the number of shares of Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option and the Common Stock issued upon the exercise of each Option, including vesting provisions, repurchase provisions and restrictions relating to applicable federal or state securities laws, as it considers advisable. b. Incentive Stock Options. An Option that the Board intends to be an "incentive stock option" as defined in Section 422 of the Code (an "Incentive Stock Option") shall be granted only to employees of the Company and shall be subject to and shall be construed 30 consistently with the requirements of Section 422 of the Code. The Board and the Company shall have no liability if an Option or any part thereof that is intended to be an Incentive Stock Option does not qualify as such. An Option or any part thereof that does not qualify as an Incentive Stock Option is referred to herein as a "Nonstatutory Stock Option". c. Exercise Price. The Board shall establish the exercise price (or determine the method by which the exercise price shall be determined) at the time each Option is granted and specify it in the applicable option agreement. d. Duration of Options. Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable option agreement. e. Exercise of Option. Options may be exercised only by delivery to the Company of a written notice of exercise signed by the proper person together with payment in full as specified in Section 4(f) for the number of shares for which the Option is exercised. f. Payment Upon Exercise. Common Stock purchased upon the exercise of an Option shall be paid for by one or any combination of the following forms of payment: (i) by check payable to the order of the Company; (ii) except as otherwise explicitly provided in the applicable option agreement, and only if the Common Stock is then publicly traded, delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price, or delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price; or (iii) to the extent explicitly provided in the applicable option agreement, by (x) delivery of shares of Common Stock owned by the Participant valued at fair market value (as determined by the Board or as determined pursuant to the applicable option agreement), (y) delivery of a promissory note of the Participant to the Company (and delivery to the Company by the Participant of a check in an amount equal to the par value of the shares purchased), or (z) payment of such other lawful consideration as the Board may determine. 5. Restricted Stock a. Grants. The Board may grant Awards entitling Participants to acquire shares of Common Stock, subject to (i) delivery to the Company by the Participant of a check in an amount at least equal to the par value of the shares purchased, and (ii) the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price from the Participant in the event that conditions specified by the Board in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by the Board for such Award (each, a "Restricted Stock Award"). b. Terms and Conditions. The Board shall determine the terms and conditions of any such Restricted Stock Award. Any stock certificates issued in respect of a Restricted Stock Award shall be registered in the name of the Participant and, unless otherwise determined by the Board, deposited by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). After the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or, if the Participant has died, to the beneficiary designated by a Participant, in a manner determined by the Board, to receive amounts due or exercise rights of the Participant in the event of the Participant's death (the "Designated Beneficiary"). In the absence of an effective designation by a Participant, Designated Beneficiary shall mean the Participant's estate. 6. Other Stock-Based Awards The Board shall have the right to grant other Awards based upon the Common Stock having such terms and conditions as the Board may determine, including, without limitation, the grant of shares based upon certain conditions, the grant of securities convertible into Common Stock and the grant of stock appreciation rights, phantom stock awards or stock units. 7. General Provisions Applicable to Awards a. Transferability of Awards. Except as the Board may otherwise determine or provide in an Award, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the life of the Participant, shall be exercisable only by the Participant. References to a Participant, to the extent relevant in the context, shall include references to authorized transferees. 31 b. Documentation. Each Award under the Plan shall be evidenced by a written instrument in such form as the Board shall determine or as executed by an officer of the Company pursuant to authority delegated by the Board. Each Award may contain terms and conditions in addition to those set forth in the Plan provided that such terms and conditions do not contravene the provisions of the Plan. c. Board Discretion. The terms of each type of Award need not be identical, and the Board need not treat Participants uniformly. d. Termination of Status. The Board shall determine the effect on an Award of the disability, death, retirement, authorized leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, or the Participant's legal representative, conservator, guardian or Designated Beneficiary, may exercise rights under the Award. e. Acquisition of the Company (i) Consequences of an Acquisition. (A) Acquisition Intended to be Accounted for as a Pooling-of-Interests. With respect to an Acquisition intended to be accounted for as a pooling-of-interests: (x) all outstanding Awards shall remain the obligation of the Company or be assumed by the surviving or acquiring entity, and there shall be automatically substituted for the shares of Common Stock then subject to such Awards the consideration payable with respect to the outstanding shares of Common Stock in connection with the Acquisition and (y) if a recipient of an Award is terminated by the surviving or acquiring Company without Cause (as defined in the applicable option agreement) before the first anniversary of the consummation of the Acquisition, then upon the consummation of the Acquisition, (1) all Options then outstanding shall become immediately exercisable in full and will terminate, to the extent unexercised, on their scheduled expiration date, and if the shares of Common Stock subject to such Options are subject to repurchase provisions, then such repurchase provisions shall immediately lapse; (2) all Restricted Stock Awards then outstanding shall become free of all repurchase provisions; and (3) all other stock-based Awards shall become exercisable, realizable or vested in full, or shall be free of all repurchase provisions, as the case may be (B) Acquisition Intended to be Accounted for under the Purchase Method. Unless otherwise expressly provided in the applicable Option or Award, upon the occurrence of an Acquisition intended to be accounted for under the purchase method, the Board or the board of directors of the surviving or acquiring entity (as used in this Section 7(e)(i)(B), also the "Board"), shall, as to outstanding Awards (on the same basis or on different bases, as the Board shall specify), make appropriate provision for the continuation of such Awards by the Company or the assumption of such Awards by the surviving or acquiring entity and by substituting on an equitable basis for the shares then subject to such Awards either (a) the consideration payable with respect to the outstanding shares of Common Stock in connection with the Acquisition, (b) shares of stock of the surviving or acquiring corporation or (c) such other securities as the Board deems appropriate, the fair market value of which (as determined by the Board in its sole discretion) shall not materially differ from the fair market value of the shares of Common Stock subject to such Awards immediately preceding the Acquisition. In addition to or in lieu of the foregoing, with respect to outstanding Options, the Board may, upon written notice to the affected optionees, provide that one or more Options must be exercised, to the extent then exercisable or to be exercisable as a result of the Acquisition, within a specified number of days of the date of such notice, at the end of which period such Options shall terminate; or terminate one or more Options in exchange for a cash payment equal to the excess of the fair market value (as determined by the Board in its sole discretion) of the shares subject to such Options (to the extent then exercisable or to be exercisable as a result of the Acquisition) over the exercise price thereof. (C) Acquisition Defined. An "Acquisition" shall mean: (x) any merger or consolidation after which the voting securities of the Company outstanding immediately prior thereto represent (either by remaining outstanding or by being converted into voting securities of the surviving or acquiring entity) less than 50% of the combined voting power of the voting securities of the Company or such surviving or acquiring entity outstanding immediately after such event; or (y) any sale of all or substantially all of the assets or capital stock of the Company (other than in a spin-off or similar transaction) or (z) any other acquisition of the business of the Company, as determined by the Board. (ii) Assumption of Options Upon Certain Events. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Board may grant Awards under the Plan in substitution for stock and stock-based awards issued by such entity or an affiliate thereof. The substitute Awards shall be granted on such terms and conditions as the Board considers appropriate in the circumstances. (iii) Pooling-of Interests-Accounting. If the Company proposes to engage in an Acquisition intended to be accounted for as a pooling-of-interests, and in the event that the provisions of this Plan or of any Award hereunder, or any actions of the Board taken in connection with such Acquisition, are determined by the Company's or the acquiring company's independent public accountants to 32 cause such Acquisition to fail to be accounted for as a pooling-of-interests, then such provisions or actions shall be amended or rescinded by the Board, without the consent of any Participant, to be consistent with pooling-of-interests accounting treatment for such Acquisition. (iv) Parachute Awards. Notwithstanding the provisions of Section 7(e)(i)(A), if, in connection with an Acquisition described therein, a tax under Section 4999 of the Code would be imposed on the Participant (after taking into account the exceptions set forth in Sections 280G(b)(4) and 280G(b)(5) of the Code), then the number of Awards which shall become exercisable, realizable or vested as provided in such section shall be reduced (or delayed), to the minimum extent necessary, so that no such tax would be imposed on the Participant (the Awards not becoming so accelerated, realizable or vested, the "Parachute Awards"); provided, however, that if the "aggregate present value" of the Parachute Awards would exceed the tax that, but for this sentence, would be imposed on the Participant under Section 4999 of the Code in connection with the Acquisition, then the Awards shall become immediately exercisable, realizable and vested without regard to the provisions of this sentence. For purposes of the preceding sentence, the "aggregate present value" of an Award shall be calculated on an after-tax basis (other than taxes imposed by Section 4999 of the Code) and shall be based on economic principles rather than the principles set forth under Section 280G of the Code and the regulations promulgated thereunder. All determinations required to be made under this Section 7(e)(iv) shall be made by the Company. f. Withholding. Each Participant shall pay to the Company, or make provisions satisfactory to the Company for payment of, any taxes required by law to be withheld in connection with Awards to such Participant no later than the date of the event creating the tax liability. The Board may allow Participants to satisfy such tax obligations in whole or in part by transferring shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their fair market value (as determined by the Board or as determined pursuant to the applicable option agreement). The Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to a Participant. g. Amendment of Awards. The Board may amend, modify or terminate any outstanding Award including, but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option, provided that, except as otherwise provided in Section 7(e)(iii), the Participant's consent to such action shall be required unless the Board determines that the action, taking into account any related action, would not materially and adversely affect the Participant. h. Conditions on Delivery of Stock. The Company will not be obligated to deliver any shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company's counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations. i. Acceleration. The Board may at any time provide that any Options shall become immediately exercisable in full or in part, that any Restricted Stock Awards shall be free of some or all restrictions, or that any other stock-based Awards may become exercisable in full or in part or free of some or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be, despite the fact that the foregoing actions may (i) cause the application of Sections 280G and 4999 of the Code if a change in control of the Company occurs, or (ii) disqualify all or part of the Option as an Incentive Stock Option. 8. Miscellaneous a. Definitions. (i) "Company," for purposes of eligibility under the Plan, shall include any present or future subsidiary corporations of OneSource Information Services, Inc., as defined in Section 424(f) of the Code (a "Subsidiary"), and any present or future parent corporation of OneSource Information Services, Inc., as defined in Section 424(e) of the Code. For purposes of Awards other than Incentive Stock Options, the term "Company" shall include any other business venture in which the Company has a direct or indirect significant interest, as determined by the Board in its sole discretion. (ii) "Code" means the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder. (iii) "employee" for purposes of eligibility under the Plan shall include a person to whom an offer of employment has been extended by the Company. b. No Right To Employment or Other Status. No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan. 33 c. No Rights As Stockholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed with respect to an Award until becoming the record holder thereof. d. Effective Date and Term of Plan. The Plan shall become effective after adoption by the Board on a date determined by the Board. No Awards shall be granted under the Plan after the completion of ten years from the date on which the Plan was adopted by the Board, but Awards previously granted may extend beyond that date. e. Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time. f. Governing Law. The provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware, without regard to any applicable conflicts of law. 34 EX-10.03 4 b47177osexv10w03.txt EX-10.03 1999 EMPLOYEE STOCK PURCHASE PLAN EXHIBIT 10.03 ONESOURCE INFORMATION SERVICES, INC. 1999 EMPLOYEE STOCK PURCHASE PLAN ARTICLE 1 PURPOSE This 1999 Employee Stock Purchase Plan (the "Plan") is intended to encourage stock ownership by all eligible employees of OneSource Information Services, Inc. (the "Company"), a Delaware corporation, and its participating subsidiaries (as defined in Article 17) so that they may share in the growth of the Company by acquiring or increasing their proprietary interest in the Company. The Plan is designed to encourage eligible employees to remain in the employ of the Company and its participating subsidiaries. The Plan is intended to constitute an "employee stock purchase plan" within the meaning of Section 423(b) of the Internal Revenue Code of 1986, as amended (the "Code"). ARTICLE 2 ADMINISTRATION OF THE PLAN The Plan may be administered by a committee appointed by the Board of Directors (the "Committee"). The Committee shall consist of not less than two members of the Company's Board of Directors. The Board of Directors may from time to time remove members from, or add members to, the Committee. Vacancies on the Committee, howsoever caused, shall be filled by the Board of Directors. The Committee may select one of its members as Chairman, and shall hold meetings at such times and places as it may determine. Acts by a majority of the Committee, or acts reduced to or approved in writing by a majority of the members of the Committee, shall be the valid acts of the Committee. The interpretation and construction by the Committee of any provisions of the Plan or of any option granted under it shall be final, unless otherwise determined by the Board of Directors. The Committee may from time to time adopt such rules and regulations for carrying out the Plan as it may deem best, provided that any such rules and regulations shall be applied on a uniform basis to all employees under the Plan. No member of the Board of Directors or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any option granted under it. In the event the Board of Directors fails to appoint or refrains from appointing a Committee, the Board of Directors shall have all power and authority to administer the Plan. In such event, the word "Committee" wherever used herein shall be deemed to mean the Board of Directors. ARTICLE 3 ELIGIBLE EMPLOYEES All employees of the Company or any of its participating subsidiaries whose customary employment is more than 20 hours per week and for more than five months in any calendar year and who have completed at least three months service shall be eligible to receive options under the Plan to purchase common stock of the Company, and all eligible employees shall have the same rights and privileges hereunder. Persons who are eligible employees on the first business day of any Payment Period (as defined in Article 5) shall receive their options as of such day. Persons who become eligible employees after any date on which options are granted under the Plan shall be granted options on the first day of the next succeeding Payment Period on which options are granted to eligible employees under the Plan. In no event, however, may an employee be granted an option if such employee, immediately after the option was granted, would be treated as owning stock possessing five percent or more of the total combined voting power or value of all classes of stock of the Company or of any parent corporation or subsidiary corporation, as the terms "parent corporation" and "subsidiary corporation" are defined in Section 424(e) and (f) of the Code. For purposes of determining stock ownership under this paragraph, the rules of Section 424(d) of the Code shall apply, and stock which the employee may purchase under outstanding options shall be treated as stock owned by the employee. ARTICLE 4 STOCK SUBJECT TO THE PLAN The stock subject to the options under the Plan shall be shares of the Company's authorized but unissued common stock, par value $.01 par value per share (the "Common Stock"), or shares of Common Stock reacquired by the Company, including shares purchased in the open market. The aggregate number of shares which may be issued pursuant to the Plan is 300,000, subject to adjustment as provided in Article 12. If any option granted under the Plan shall expire or terminate for any reason without having been exercised in full or shall cease for any reason to be exercisable in whole or in part, the unpurchased shares subject thereto shall again be available under the Plan. 35 ARTICLE 5 PAYMENT PERIOD AND STOCK OPTIONS The first Payment Period during which payroll deductions will be accumulated under the Plan shall commence on June 1, 1999 and shall end on January 31, 2000. The second Payment Period will commence on February 1, 2000 and shall end on July 31, 2000. The third Payment Period will commence on August 1, 2000 and shall end on February 28, 2001. For the remainder of the duration of the Plan, Payment Periods shall consist of the six-month periods commencing on March 1 and September 1 and ending on August 31 and February 28 (or February 29 in the case of a leap year), respectively, of each calendar year. Twice each year, on the first business day of each Payment Period, the Company will grant to each eligible employee who is then a participant in the Plan an option to purchase on the last day of such Payment Period, at the Option Price hereinafter provided for, a maximum of 1,000 shares, on condition that such employee remains eligible to participate in the Plan throughout the remainder of such Payment Period. The participant shall be entitled to exercise the option so granted only to the extent of the participant's accumulated payroll deductions on the last day of such Payment Period. If the participant's accumulated payroll deductions on the last day of the Payment Period would enable the participant to purchase more than 1,000 shares except for the 1,000-share limitation, the excess of the amount of the accumulated payroll deductions over the aggregate purchase price of the 1,000 shares shall be promptly refunded to the participant by the Company, without interest. The Option Price per share for each Payment Period shall be the lesser of (i) 85% of the average market price of the Common Stock on the first business day of the Payment Period and (ii) 85% of the average market price of the Common Stock on the last business day of the Payment Period, in either event rounded up to the nearest cent. The foregoing limitation on the number of shares subject to option and the Option Price shall be subject to adjustment as provided in Article 12. For purposes of the Plan, the term "average market price" on any date means (i) the average (on that date) of the high and low prices of the Common Stock on the principal national securities exchange on which the Common Stock is traded, if the Common Stock is then traded on a national securities exchange; or (ii) the last reported sale price (on that date) of the Common Stock on the NASDAQ National Market, if the Common Stock is not then traded on a national securities exchange; or (iii) the average of the closing bid and asked prices last quoted (on that date) by an established quotation service for over-the-counter securities, if the Common Stock is not reported on the NASDAQ National Market; or (iv) if the Common Stock is not publicly traded, the fair market value of the Common Stock as determined by the Committee after taking into consideration all factors which it deems appropriate, including, without limitation, recent sale and offer prices of the Common Stock in private transactions negotiated at arm's length. For purposes of the Plan, the term "business day" means a day on which there is trading on the NASDAQ National Market or the aforementioned national securities exchange, whichever is applicable pursuant to the preceding paragraph; and if neither is applicable, a day that is not a Saturday, Sunday or legal holiday in Massachusetts. No employee shall be granted an option which permits the employee's right to purchase stock under the Plan, and under all other Section 423(b) employee stock purchase plans of the Company and any parent or subsidiary corporations, to accrue at a rate which exceeds $25,000 of fair market value of such stock (determined on the date or dates that options on such stock were granted) for each calendar year in which such option is outstanding at any time. The purpose of the limitation in the preceding sentence is to comply with Section 423(b)(8) of the Code. If the participant's accumulated payroll deductions on the last day of the Payment Period would otherwise enable the participant to purchase Common Stock in excess of the Section 423(b)(8) limitation described in this paragraph, the excess of the amount of the accumulated payroll deductions over the aggregate purchase price of the shares actually purchased shall be promptly refunded to the participant by the Company, without interest. ARTICLE 6 EXERCISE OF OPTION Each eligible employee who continues to be a participant in the Plan on the last day of a Payment Period shall be deemed to have exercised his or her option on such date and shall be deemed to have purchased from the Company such number of full shares of Common Stock reserved for the purpose of the Plan as the participant's accumulated payroll deductions on such date will pay for at the Option Price, subject to the 1,000-share limit of the option and the Section 423(b)(8) limitation described in Article 5. If the individual is not a participant on the last day of a Payment Period, then he or she shall not be entitled to exercise his or her option. Only full shares of Common Stock may be purchased under the Plan. Unused payroll deductions remaining in a participant's account at the end of a Payment Period by reason of the inability to purchase a fractional share shall be carried forward to the next Payment Period. ARTICLE 7 AUTHORIZATION FOR ENTERING THE PLAN An employee may elect to enter the Plan by filling out, signing and delivering to the Company an authorization: 36 A. Stating the percentage to be deducted regularly from the employee's pay; B. Authorizing the purchase of stock for the employee in each Payment Period in accordance with the terms of the Plan; and C. Specifying the exact name or names in which stock purchased for the employee is to be issued as provided under Article 11 hereof. Such authorization must be received by the Company at least ten days before the first day of the next succeeding Payment Period and shall take effect only if the employee is an eligible employee on the first business day of such Payment Period. Unless a participant files a new authorization or withdraws from the Plan, the deductions and purchases under the authorization the participant has on file under the Plan will continue from one Payment Period to succeeding Payment Periods as long as the Plan remains in effect. The Company will accumulate and hold for each participant's account the amounts deducted from his or her pay. No interest will be paid on these amounts. ARTICLE 8 MAXIMUM AMOUNT OF PAYROLL DEDUCTIONS An employee may authorize payroll deductions in an amount (expressed as a whole percentage) not less than one percent (1%) but not more than ten percent (10%) of the employee's total compensation, including base pay or salary and any overtime, bonuses or commissions. ARTICLE 9 CHANGE IN PAYROLL DEDUCTIONS Deductions may not be increased or decreased during a Payment Period. However, a participant may withdraw in full from the Plan. ARTICLE 10 WITHDRAWAL FROM THE PLAN A participant may withdraw from the Plan (in whole but not in part) at any time prior to the last day of a Payment Period by delivering a withdrawal notice to the Company. To re-enter the Plan, an employee who has previously withdrawn must file a new authorization at least ten days before the first day of the next Payment Period in which he or she wishes to participate. The employee's re-entry into the Plan becomes effective at the beginning of such Payment Period, provided that he or she is an eligible employee on the first business day of the Payment Period. ARTICLE 11 ISSUANCE OF STOCK Certificates for stock issued to participants shall be delivered as soon as practicable after each Payment Period by the Company's transfer agent. Stock purchased under the Plan shall be issued only in the name of the participant, or if the participant's authorization so specifies, in the name of the participant and another person of legal age as joint tenants with rights of survivorship. ARTICLE 12 ADJUSTMENTS Upon the happening of any of the following described events, a participant's rights under options granted under the Plan shall be adjusted as hereinafter provided: A. In the event that the shares of Common Stock shall be subdivided or combined into a greater or smaller number of shares or if, upon a reorganization, split-up, liquidation, recapitalization or the like of the Company, the shares of Common Stock shall be exchanged for other securities of the Company, each participant shall be entitled, subject to the conditions herein stated, to purchase such number of shares of Common Stock or amount of other securities of the Company as were exchangeable for the number of shares of Common Stock that such participant would have been entitled to purchase except for such action, and appropriate adjustments shall be made in the purchase price per share to reflect such subdivision, combination or exchange; and B. In the event the Company shall issue any of its shares as a stock dividend upon or with respect to the shares of stock of the class which shall at the time be subject to option hereunder, each participant upon exercising such an option shall be entitled to receive (for 37 the purchase price paid upon such exercise) the shares as to which the participant is exercising his or her option and, in addition thereto (at no additional cost), such number of shares of the class or classes in which such stock dividend or dividends were declared or paid, and such amount of cash in lieu of fractional shares, as is equal to the number of shares thereof and the amount of cash in lieu of fractional shares, respectively, which the participant would have received if the participant had been the holder of the shares as to which the participant is exercising his or her option at all times between the date of the granting of such option and the date of its exercise. Upon the happening of any of the foregoing events, the class and aggregate number of shares set forth in Article 4 hereof which are subject to options which have been or may be granted under the Plan and the limitations set forth in the second paragraph of Article 5 shall also be appropriately adjusted to reflect the events specified in paragraphs A and B above. Notwithstanding the foregoing, any adjustments made pursuant to paragraphs A or B shall be made only after the Committee, based on advice of counsel for the Company, determines whether such adjustments would constitute a "modification" (as that term is defined in Section 424 of the Code). If the Committee determines that such adjustments would constitute a modification, it may refrain from making such adjustments. If the Company is to be consolidated with or acquired by another entity in a merger, a sale of all or substantially all of the Company's assets or otherwise (an "Acquisition"), the Committee or the board of directors of any entity assuming the obligations of the Company hereunder (the "Successor Board") shall, with respect to options then outstanding under the Plan, either (i) make appropriate provision for the continuation of such options by arranging for the substitution on an equitable basis for the shares then subject to such options either (a) the consideration payable with respect to the outstanding shares of the Common Stock in connection with the Acquisition, (b) shares of stock of the successor corporation, or a parent or subsidiary of such corporation, or (c) such other securities as the Successor Board deems appropriate, the fair market value of which shall not materially exceed the fair market value of the shares of Common Stock subject to such options immediately preceding the Acquisition; or (ii) terminate each participant's options in exchange for a cash payment equal to the excess of (a) the fair market value on the date of the Acquisition, of the number of shares of Common Stock that the participant's accumulated payroll deductions as of the date of the Acquisition could purchase, at an option price determined with reference only to the first business day of the applicable Payment Period and subject to the 1,000-share limit, Code Section 423(b)(8) and fractional-share limitations on the amount of stock a participant would be entitled to purchase, over (b) the result of multiplying such number of shares by such option price. The Committee or Successor Board shall determine the adjustments to be made under this Article 12, and its determination shall be conclusive. ARTICLE 13 NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS An option granted under the Plan may not be transferred or assigned and may be exercised only by the participant. ARTICLE 14 TERMINATION OF EMPLOYEE'S RIGHTS Whenever a participant ceases to be an eligible employee because of retirement, voluntary or involuntary termination, resignation, layoff, discharge, death or for any other reason, his or her rights under the Plan shall immediately terminate, and the Company shall promptly refund, without interest, the entire balance of his or her payroll deduction account under the Plan. Notwithstanding the foregoing, eligible employment shall be treated as continuing intact while a participant is on military leave, sick leave or other bona fide leave of absence, for up to 90 days, or for so long as the participant's right to re-employment is guaranteed either by statute or by contract, if longer than 90 days. ARTICLE 15 TERMINATION AND AMENDMENTS TO PLAN The Plan may be terminated at any time by the Company's Board of Directors but such termination shall not affect options then outstanding under the Plan. It will terminate in any case when all or substantially all of the unissued shares of stock reserved for the purposes of the Plan have been purchased. If at any time shares of stock reserved for the purpose of the Plan remain available for purchase but not in sufficient number to satisfy all then unfilled purchase requirements, the available shares shall be apportioned among participants in proportion to the amount of payroll deductions accumulated on behalf of each participant that would otherwise be used to purchase stock, and the Plan shall terminate. Upon such termination or any other termination of the Plan, all payroll deductions not used to purchase stock will be refunded, without interest. The Committee or the Board of Directors may from time to time adopt amendments to the Plan provided that, without the approval of the stockholders of the Company, no amendment may (i) increase the number of shares that may be issued under the Plan; (ii) change the class of employees eligible to receive options under the Plan, if such action would be treated as the adoption of a new plan for 38 purposes of Section 423(b) of the Code; or (iii) cause Rule 16b-3 under the Securities Exchange Act of 1934 to become inapplicable to the Plan. ARTICLE 16 LIMITS ON SALE OF STOCK PURCHASED UNDER THE PLAN The Plan is intended to provide shares of Common Stock for investment and not for resale. The Company does not, however, intend to restrict or influence any employee in the conduct of his or her own affairs. An employee may, therefore, sell stock purchased under the Plan at any time the employee chooses, subject to compliance with any applicable federal or state securities laws and subject to any restrictions imposed under Article 21 to ensure that tax withholding obligations are satisfied. THE EMPLOYEE ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE PRICE OF THE STOCK. ARTICLE 17 PARTICIPATING SUBSIDIARIES The term "participating subsidiary" shall mean any present or future subsidiary of the Company, as that term is defined in Section 424(f) of the Code, which is designated from time to time by the Board of Directors to participate in the Plan. The Board of Directors shall have the power to make such designation before or after the Plan is approved by the stockholders. ARTICLE 18 OPTIONEES NOT STOCKHOLDERS Neither the granting of an option to an employee nor the deductions from his or her pay shall constitute such employee a stockholder of the shares covered by an option until such shares have been actually purchased by the employee. ARTICLE 19 APPLICATION OF FUNDS The proceeds received by the Company from the sale of Common Stock pursuant to options granted under the Plan will be used for general corporate purposes. ARTICLE 20 NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION By electing to participate in the Plan, each participant agrees to notify the Company in writing immediately after the participant transfers Common Stock acquired under the Plan, if such transfer occurs within two years after the first business day of the Payment Period in which such Common Stock was acquired. Each participant further agrees to provide any information about such a transfer as may be requested by the Company or any subsidiary corporation in order to assist it in complying with the tax laws. Such dispositions generally are treated as "disqualifying dispositions" under Sections 421 and 424 of the Code, which have certain tax consequences to participants and to the Company and its participating subsidiaries. ARTICLE 21 WITHHOLDING OF ADDITIONAL INCOME TAXES By electing to participate in the Plan, each participant acknowledges that the Company and its participating subsidiaries are required to withhold taxes with respect to the amounts deducted from the participant's compensation and accumulated for the benefit of the participant under the Plan, and each participant agrees that the Company and its participating subsidiaries may deduct additional amounts from the participant's compensation, when amounts are added to the participant's account, used to purchase Common Stock or refunded, in order to satisfy such withholding obligations. Each participant further acknowledges that when Common Stock is purchased under the Plan the Company and its participating subsidiaries may be required to withhold taxes with respect to all or a portion of the difference between the fair market value of the Common Stock purchased and its purchase price, and each participant agrees that such taxes may be withheld from compensation otherwise payable to such participant. It is intended that tax withholding will be accomplished in such a manner that the full amount of payroll deductions elected by the participant under Article 7 will be used to purchase Common Stock. However, if amounts sufficient to satisfy applicable tax withholding obligations have not been withheld from compensation otherwise payable to any participant, then, notwithstanding any other provision of the Plan, the Company may withhold such taxes from the participant's accumulated payroll deductions and apply the net amount to the purchase of Common Stock, unless the participant pays to the Company, prior to the exercise date, an amount sufficient to satisfy such withholding obligations. Each participant further acknowledges that the Company and its participating subsidiaries may be required to withhold taxes in connection with the disposition of stock acquired under the Plan and agrees that the Company or any participating subsidiary may take whatever action it considers appropriate to satisfy such withholding requirements, including deducting from compensation otherwise payable to such participant an amount sufficient to satisfy such withholding requirements or conditioning any disposition of 39 Common Stock by the participant upon the payment to the Company or such subsidiary of an amount sufficient to satisfy such withholding requirements. ARTICLE 22 GOVERNMENTAL REGULATIONS The Company's obligation to sell and deliver shares of Common Stock under the Plan is subject to the approval of any governmental authority required in connection with the authorization, issuance or sale of such shares. Government regulations may impose reporting or other obligations on the Company with respect to the Plan. For example, the Company may be required to identify shares of Common Stock issued under the Plan on its stock ownership records and send tax information statements to employees and former employees who transfer title to such shares. ARTICLE 23 GOVERNING LAW The validity and construction of the Plan shall be governed by the laws of Delaware, without giving effect to the principles of conflicts of law thereof. ARTICLE 24 APPROVAL OF BOARD OF DIRECTORS AND STOCKHOLDERS OF THE COMPANY The Plan was adopted by the Board of Directors on February 17, 1999 and was approved by the stockholders of the Company on April 21, 1999. The Plan was amended by the Board of Directors on April 21, 1999 to change the Payment Periods as set forth in the second sentence of Article 5. The Plan was amended by the Board of Directors on July 18, 2000 to replace the first paragraph in its entirety of Article 5. The Plan was amended by the Board of Directors on March 23, 2001 to increase the number of shares issuable pursuant to the plan to 200,000, and such amendment was approved by the stockholders of the Company on May 24, 2001. 40 EX-31.01 5 b47177osexv31w01.txt EX-31.01 CERTIFICATION OF DANIEL J. SCHIMMEL, CEO EXHIBIT 31.01 CERTIFICATIONS I, Daniel J. Schimmel, Chief Executive Officer of OneSource Information Services, Inc., certify that: 1. I have reviewed this quarterly report on Form 10-Q of OneSource Information Services, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) [Paragraph omitted in accordance with United States Securities and Exchange Commission transition instructions contained in SEC Release 34-47986.] (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 13, 2003 /s/ Daniel J. Schimmel --------------------------- Daniel J. Schimmel Chief Executive Officer 41 EX-31.02 6 b47177osexv31w02.txt EX-31.02 CERTIFICATION OF ROY D. LANDON, CFO EXHIBIT 31.02 CERTIFICATIONS I, Roy D. Landon, Chief Financial Officer of OneSource Information Services, Inc., certify that: 1. I have reviewed this quarterly report on Form 10-Q of OneSource Information Services, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) [Paragraph omitted in accordance with United States Securities and Exchange Commission transition instructions contained in SEC Release 34-47986.] (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (c) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (d) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 13, 2003 /s/ Roy D. Landon ---------------------- Roy D. Landon Chief Financial Officer 42 EX-32.01 7 b47177osexv32w01.txt EX-32.01 906 CERT. OF DANIEL J. SCHIMMEL, CEO EXHIBIT 32.01 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of OneSource Information Services, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2003 as filed with the United States Securities and Exchange Commission on the date hereof (the "Report"), I, Daniel J. Schimmel, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Daniel J. Schimmel Daniel J. Schimmel Chief Executive Officer August 13, 2003 43 EX-32.02 8 b47177osexv32w02.txt EX-32.02 906 CERTIFICATION OF ROY D. LANDON, CFO EXHIBIT 32.02 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of OneSource Information Services, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2003 as filed with the United States Securities and Exchange Commission on the date hereof (the "Report"), I, Roy D. Landon, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Roy D. Landon Roy D. Landon Chief Financial Officer August 13, 2003 44 -----END PRIVACY-ENHANCED MESSAGE-----

EX-10.02

EXHIBIT 10.02

                      ONESOURCE INFORMATION SERVICES, INC.
                      1999 STOCK OPTION AND INCENTIVE PLAN

1.       Purpose and Eligibility

         The purpose of this 1999 Stock Option and Incentive Plan (the "Plan")
of OneSource Information Services, Inc. (the "Company") is to provide stock
options and other equity interests in the Company (each an "Award") to
employees, officers, directors, consultants and advisors of the Company and its
Subsidiaries, all of whom are eligible to receive Awards under the Plan. Any
person to whom an Award has been granted under the Plan is called a
"Participant". Additional definitions are contained in Section 8.

2.       Administration

         a.       Administration by Board of Directors. The Plan will be
administered by the Board of Directors of the Company (the "Board"). The Board,
in its sole discretion, shall have the authority to grant and amend Awards, to
adopt, amend and repeal rules relating to the Plan and to interpret and correct
the provisions of the Plan and any Award. All decisions by the Board shall be
final and binding on all interested persons. Neither the Company nor any member
of the Board shall be liable for any action or determination relating to the
Plan.

         b.       Appointment of Committees. To the extent permitted by
applicable law, the Board may delegate any or all of its powers under the Plan
to one or more committees or subcommittees of the Board (a "Committee"). All
references in the Plan to the "Board" shall mean such Committee or the Board.

         c.       Delegation to Executive Officers. To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of the
Company the power to grant Awards and exercise such other powers under the Plan
as the Board may determine, provided that the Board shall fix the maximum number
of Awards to be granted and the maximum number of shares issuable to any one
Participant pursuant to Awards granted by such executive officers.

3.       Stock Available for Awards

         a.       Number of Shares. Subject to adjustment under Section 3(c),
the aggregate number of shares of Common Stock of the Company (the "Common
Stock") that may be issued pursuant to the Plan is 2,800,000 shares. If any
Award expires, or is terminated, surrendered or forfeited, in whole or in part,
the unissued Common Stock covered by such Award shall again be available for the
grant of Awards under the Plan. If shares of Common Stock issued pursuant to the
Plan are repurchased by, or are surrendered or forfeited to, the Company at no
more than cost, such shares of Common Stock shall again be available for the
grant of Awards under the Plan; provided, however, that the cumulative number of
such shares that may be so reissued under the Plan will not exceed 3,300,000
shares. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.

         b.       Per-Participant Limit. Subject to adjustment under Section
3(c), no Participant may be granted Awards during any one fiscal year to
purchase more than 250,000 shares of Common Stock.

         c.       Adjustment to Common Stock. In the event of any stock split,
stock dividend, extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, combination, exchange of shares, liquidation, spin-off,
split-up, or other similar change in capitalization or event, (i) the number and
class of securities available for Awards under the Plan and the per-Participant
share limit, (ii) the number and class of securities, vesting schedule and
exercise price per share subject to each outstanding Option, (iii) the
repurchase price per security subject to repurchase, and (iv) the terms of each
other outstanding stock-based Award shall be adjusted by the Company (or
substituted Awards may be made) to the extent the Board shall determine, in good
faith, that such an adjustment (or substitution) is appropriate. If Section
7(e)(i) applies for any event, this Section 3(c) shall not be applicable.

4.       Stock Options

         a.       General. The Board may grant options to purchase Common Stock
(each, an "Option") and determine the number of shares of Common Stock to be
covered by each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option and the Common Stock
issued upon the exercise of each Option, including vesting provisions,
repurchase provisions and restrictions relating to applicable federal or state
securities laws, as it considers advisable.

         b.       Incentive Stock Options. An Option that the Board intends to
be an "incentive stock option" as defined in Section 422 of the Code (an
"Incentive Stock Option") shall be granted only to employees of the Company and
shall be subject to and shall be construed

                                       30


consistently with the requirements of Section 422 of the Code. The Board and the
Company shall have no liability if an Option or any part thereof that is
intended to be an Incentive Stock Option does not qualify as such. An Option or
any part thereof that does not qualify as an Incentive Stock Option is referred
to herein as a "Nonstatutory Stock Option".

         c.       Exercise Price. The Board shall establish the exercise price
(or determine the method by which the exercise price shall be determined) at the
time each Option is granted and specify it in the applicable option agreement.

         d.       Duration of Options. Each Option shall be exercisable at such
times and subject to such terms and conditions as the Board may specify in the
applicable option agreement.

         e.       Exercise of Option. Options may be exercised only by delivery
to the Company of a written notice of exercise signed by the proper person
together with payment in full as specified in Section 4(f) for the number of
shares for which the Option is exercised.

         f.       Payment Upon Exercise. Common Stock purchased upon the
exercise of an Option shall be paid for by one or any combination of the
following forms of payment:

                  (i)      by check payable to the order of the Company;

                  (ii)     except as otherwise explicitly provided in the
applicable option agreement, and only if the Common Stock is then publicly
traded, delivery of an irrevocable and unconditional undertaking by a
creditworthy broker to deliver promptly to the Company sufficient funds to pay
the exercise price, or delivery by the Participant to the Company of a copy of
irrevocable and unconditional instructions to a creditworthy broker to deliver
promptly to the Company cash or a check sufficient to pay the exercise price; or

                  (iii)    to the extent explicitly provided in the applicable
option agreement, by (x) delivery of shares of Common Stock owned by the
Participant valued at fair market value (as determined by the Board or as
determined pursuant to the applicable option agreement), (y) delivery of a
promissory note of the Participant to the Company (and delivery to the Company
by the Participant of a check in an amount equal to the par value of the shares
purchased), or (z) payment of such other lawful consideration as the Board may
determine.

5.       Restricted Stock

         a.       Grants. The Board may grant Awards entitling Participants to
acquire shares of Common Stock, subject to (i) delivery to the Company by the
Participant of a check in an amount at least equal to the par value of the
shares purchased, and (ii) the right of the Company to repurchase all or part of
such shares at their issue price or other stated or formula price from the
Participant in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award (each, a
"Restricted Stock Award").

         b.       Terms and Conditions. The Board shall determine the terms and
conditions of any such Restricted Stock Award. Any stock certificates issued in
respect of a Restricted Stock Award shall be registered in the name of the
Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). After the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or, if the Participant has died, to the
beneficiary designated by a Participant, in a manner determined by the Board, to
receive amounts due or exercise rights of the Participant in the event of the
Participant's death (the "Designated Beneficiary"). In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.

6.       Other Stock-Based Awards

         The Board shall have the right to grant other Awards based upon the
Common Stock having such terms and conditions as the Board may determine,
including, without limitation, the grant of shares based upon certain
conditions, the grant of securities convertible into Common Stock and the grant
of stock appreciation rights, phantom stock awards or stock units.

7.       General Provisions Applicable to Awards

         a.       Transferability of Awards. Except as the Board may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall be
exercisable only by the Participant. References to a Participant, to the extent
relevant in the context, shall include references to authorized transferees.

                                       31


         b.       Documentation. Each Award under the Plan shall be evidenced by
a written instrument in such form as the Board shall determine or as executed by
an officer of the Company pursuant to authority delegated by the Board. Each
Award may contain terms and conditions in addition to those set forth in the
Plan provided that such terms and conditions do not contravene the provisions of
the Plan.

         c.       Board Discretion. The terms of each type of Award need not be
identical, and the Board need not treat Participants uniformly.

         d.       Termination of Status. The Board shall determine the effect on
an Award of the disability, death, retirement, authorized leave of absence or
other change in the employment or other status of a Participant and the extent
to which, and the period during which, the Participant, or the Participant's
legal representative, conservator, guardian or Designated Beneficiary, may
exercise rights under the Award.

         e.       Acquisition of the Company

                  (i)      Consequences of an Acquisition.

                           (A)      Acquisition Intended to be Accounted for as
a Pooling-of-Interests. With respect to an Acquisition intended to be accounted
for as a pooling-of-interests: (x) all outstanding Awards shall remain the
obligation of the Company or be assumed by the surviving or acquiring entity,
and there shall be automatically substituted for the shares of Common Stock then
subject to such Awards the consideration payable with respect to the outstanding
shares of Common Stock in connection with the Acquisition and (y) if a recipient
of an Award is terminated by the surviving or acquiring Company without Cause
(as defined in the applicable option agreement) before the first anniversary of
the consummation of the Acquisition, then upon the consummation of the
Acquisition, (1) all Options then outstanding shall become immediately
exercisable in full and will terminate, to the extent unexercised, on their
scheduled expiration date, and if the shares of Common Stock subject to such
Options are subject to repurchase provisions, then such repurchase provisions
shall immediately lapse; (2) all Restricted Stock Awards then outstanding shall
become free of all repurchase provisions; and (3) all other stock-based Awards
shall become exercisable, realizable or vested in full, or shall be free of all
repurchase provisions, as the case may be

                           (B)      Acquisition Intended to be Accounted for
under the Purchase Method. Unless otherwise expressly provided in the applicable
Option or Award, upon the occurrence of an Acquisition intended to be accounted
for under the purchase method, the Board or the board of directors of the
surviving or acquiring entity (as used in this Section 7(e)(i)(B), also the
"Board"), shall, as to outstanding Awards (on the same basis or on different
bases, as the Board shall specify), make appropriate provision for the
continuation of such Awards by the Company or the assumption of such Awards by
the surviving or acquiring entity and by substituting on an equitable basis for
the shares then subject to such Awards either (a) the consideration payable with
respect to the outstanding shares of Common Stock in connection with the
Acquisition, (b) shares of stock of the surviving or acquiring corporation or
(c) such other securities as the Board deems appropriate, the fair market value
of which (as determined by the Board in its sole discretion) shall not
materially differ from the fair market value of the shares of Common Stock
subject to such Awards immediately preceding the Acquisition. In addition to or
in lieu of the foregoing, with respect to outstanding Options, the Board may,
upon written notice to the affected optionees, provide that one or more Options
must be exercised, to the extent then exercisable or to be exercisable as a
result of the Acquisition, within a specified number of days of the date of such
notice, at the end of which period such Options shall terminate; or terminate
one or more Options in exchange for a cash payment equal to the excess of the
fair market value (as determined by the Board in its sole discretion) of the
shares subject to such Options (to the extent then exercisable or to be
exercisable as a result of the Acquisition) over the exercise price thereof.

                           (C)      Acquisition Defined. An "Acquisition" shall
mean: (x) any merger or consolidation after which the voting securities of the
Company outstanding immediately prior thereto represent (either by remaining
outstanding or by being converted into voting securities of the surviving or
acquiring entity) less than 50% of the combined voting power of the voting
securities of the Company or such surviving or acquiring entity outstanding
immediately after such event; or (y) any sale of all or substantially all of the
assets or capital stock of the Company (other than in a spin-off or similar
transaction) or (z) any other acquisition of the business of the Company, as
determined by the Board.

                  (ii)     Assumption of Options Upon Certain Events. In
connection with a merger or consolidation of an entity with the Company or the
acquisition by the Company of property or stock of an entity, the Board may
grant Awards under the Plan in substitution for stock and stock-based awards
issued by such entity or an affiliate thereof. The substitute Awards shall be
granted on such terms and conditions as the Board considers appropriate in the
circumstances.

                  (iii)    Pooling-of Interests-Accounting. If the Company
proposes to engage in an Acquisition intended to be accounted for as a
pooling-of-interests, and in the event that the provisions of this Plan or of
any Award hereunder, or any actions of the Board taken in connection with such
Acquisition, are determined by the Company's or the acquiring company's
independent public accountants to

                                       32


cause such Acquisition to fail to be accounted for as a pooling-of-interests,
then such provisions or actions shall be amended or rescinded by the Board,
without the consent of any Participant, to be consistent with
pooling-of-interests accounting treatment for such Acquisition.

                  (iv)     Parachute Awards. Notwithstanding the provisions of
Section 7(e)(i)(A), if, in connection with an Acquisition described therein, a
tax under Section 4999 of the Code would be imposed on the Participant (after
taking into account the exceptions set forth in Sections 280G(b)(4) and
280G(b)(5) of the Code), then the number of Awards which shall become
exercisable, realizable or vested as provided in such section shall be reduced
(or delayed), to the minimum extent necessary, so that no such tax would be
imposed on the Participant (the Awards not becoming so accelerated, realizable
or vested, the "Parachute Awards"); provided, however, that if the "aggregate
present value" of the Parachute Awards would exceed the tax that, but for this
sentence, would be imposed on the Participant under Section 4999 of the Code in
connection with the Acquisition, then the Awards shall become immediately
exercisable, realizable and vested without regard to the provisions of this
sentence. For purposes of the preceding sentence, the "aggregate present value"
of an Award shall be calculated on an after-tax basis (other than taxes imposed
by Section 4999 of the Code) and shall be based on economic principles rather
than the principles set forth under Section 280G of the Code and the regulations
promulgated thereunder. All determinations required to be made under this
Section 7(e)(iv) shall be made by the Company.

         f.       Withholding. Each Participant shall pay to the Company, or
make provisions satisfactory to the Company for payment of, any taxes required
by law to be withheld in connection with Awards to such Participant no later
than the date of the event creating the tax liability. The Board may allow
Participants to satisfy such tax obligations in whole or in part by transferring
shares of Common Stock, including shares retained from the Award creating the
tax obligation, valued at their fair market value (as determined by the Board or
as determined pursuant to the applicable option agreement). The Company may, to
the extent permitted by law, deduct any such tax obligations from any payment of
any kind otherwise due to a Participant.

         g.       Amendment of Awards. The Board may amend, modify or terminate
any outstanding Award including, but not limited to, substituting therefor
another Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that, except as otherwise provided in Section 7(e)(iii), the
Participant's consent to such action shall be required unless the Board
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.

         h.       Conditions on Delivery of Stock. The Company will not be
obligated to deliver any shares of Common Stock pursuant to the Plan or to
remove restrictions from shares previously delivered under the Plan until (i)
all conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.

         i.       Acceleration. The Board may at any time provide that any
Options shall become immediately exercisable in full or in part, that any
Restricted Stock Awards shall be free of some or all restrictions, or that any
other stock-based Awards may become exercisable in full or in part or free of
some or all restrictions or conditions, or otherwise realizable in full or in
part, as the case may be, despite the fact that the foregoing actions may (i)
cause the application of Sections 280G and 4999 of the Code if a change in
control of the Company occurs, or (ii) disqualify all or part of the Option as
an Incentive Stock Option.

8.       Miscellaneous

         a.       Definitions.

                  (i)      "Company," for purposes of eligibility under the
Plan, shall include any present or future subsidiary corporations of OneSource
Information Services, Inc., as defined in Section 424(f) of the Code (a
"Subsidiary"), and any present or future parent corporation of OneSource
Information Services, Inc., as defined in Section 424(e) of the Code. For
purposes of Awards other than Incentive Stock Options, the term "Company" shall
include any other business venture in which the Company has a direct or indirect
significant interest, as determined by the Board in its sole discretion.

                  (ii)     "Code" means the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder.

                  (iii)    "employee" for purposes of eligibility under the Plan
shall include a person to whom an offer of employment has been extended by the
Company.

         b.       No Right To Employment or Other Status. No person shall have
any claim or right to be granted an Award, and the grant of an Award shall not
be construed as giving a Participant the right to continued employment or any
other relationship with the Company. The Company expressly reserves the right at
any time to dismiss or otherwise terminate its relationship with a Participant
free from any liability or claim under the Plan.

                                       33


         c.       No Rights As Stockholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
with respect to an Award until becoming the record holder thereof.

         d.       Effective Date and Term of Plan. The Plan shall become
effective after adoption by the Board on a date determined by the Board. No
Awards shall be granted under the Plan after the completion of ten years from
the date on which the Plan was adopted by the Board, but Awards previously
granted may extend beyond that date.

         e.       Amendment of Plan. The Board may amend, suspend or terminate
the Plan or any portion thereof at any time.

         f.       Governing Law. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.

                                       34

EX-10.03

EXHIBIT 10.03

                      ONESOURCE INFORMATION SERVICES, INC.
                        1999 EMPLOYEE STOCK PURCHASE PLAN

                                    ARTICLE 1
                                     PURPOSE

This 1999 Employee Stock Purchase Plan (the "Plan") is intended to encourage
stock ownership by all eligible employees of OneSource Information Services,
Inc. (the "Company"), a Delaware corporation, and its participating subsidiaries
(as defined in Article 17) so that they may share in the growth of the Company
by acquiring or increasing their proprietary interest in the Company. The Plan
is designed to encourage eligible employees to remain in the employ of the
Company and its participating subsidiaries. The Plan is intended to constitute
an "employee stock purchase plan" within the meaning of Section 423(b) of the
Internal Revenue Code of 1986, as amended (the "Code").

                                    ARTICLE 2
                           ADMINISTRATION OF THE PLAN

The Plan may be administered by a committee appointed by the Board of Directors
(the "Committee"). The Committee shall consist of not less than two members of
the Company's Board of Directors. The Board of Directors may from time to time
remove members from, or add members to, the Committee. Vacancies on the
Committee, howsoever caused, shall be filled by the Board of Directors. The
Committee may select one of its members as Chairman, and shall hold meetings at
such times and places as it may determine. Acts by a majority of the Committee,
or acts reduced to or approved in writing by a majority of the members of the
Committee, shall be the valid acts of the Committee.

The interpretation and construction by the Committee of any provisions of the
Plan or of any option granted under it shall be final, unless otherwise
determined by the Board of Directors. The Committee may from time to time adopt
such rules and regulations for carrying out the Plan as it may deem best,
provided that any such rules and regulations shall be applied on a uniform basis
to all employees under the Plan. No member of the Board of Directors or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted under it.

In the event the Board of Directors fails to appoint or refrains from appointing
a Committee, the Board of Directors shall have all power and authority to
administer the Plan. In such event, the word "Committee" wherever used herein
shall be deemed to mean the Board of Directors.

                                    ARTICLE 3
                               ELIGIBLE EMPLOYEES

All employees of the Company or any of its participating subsidiaries whose
customary employment is more than 20 hours per week and for more than five
months in any calendar year and who have completed at least three months service
shall be eligible to receive options under the Plan to purchase common stock of
the Company, and all eligible employees shall have the same rights and
privileges hereunder. Persons who are eligible employees on the first business
day of any Payment Period (as defined in Article 5) shall receive their options
as of such day. Persons who become eligible employees after any date on which
options are granted under the Plan shall be granted options on the first day of
the next succeeding Payment Period on which options are granted to eligible
employees under the Plan. In no event, however, may an employee be granted an
option if such employee, immediately after the option was granted, would be
treated as owning stock possessing five percent or more of the total combined
voting power or value of all classes of stock of the Company or of any parent
corporation or subsidiary corporation, as the terms "parent corporation" and
"subsidiary corporation" are defined in Section 424(e) and (f) of the Code. For
purposes of determining stock ownership under this paragraph, the rules of
Section 424(d) of the Code shall apply, and stock which the employee may
purchase under outstanding options shall be treated as stock owned by the
employee.

                                    ARTICLE 4
                            STOCK SUBJECT TO THE PLAN

The stock subject to the options under the Plan shall be shares of the Company's
authorized but unissued common stock, par value $.01 par value per share (the
"Common Stock"), or shares of Common Stock reacquired by the Company, including
shares purchased in the open market. The aggregate number of shares which may be
issued pursuant to the Plan is 300,000, subject to adjustment as provided in
Article 12. If any option granted under the Plan shall expire or terminate for
any reason without having been exercised in full or shall cease for any reason
to be exercisable in whole or in part, the unpurchased shares subject thereto
shall again be available under the Plan.

                                       35


                                    ARTICLE 5
                        PAYMENT PERIOD AND STOCK OPTIONS

The first Payment Period during which payroll deductions will be accumulated
under the Plan shall commence on June 1, 1999 and shall end on January 31, 2000.
The second Payment Period will commence on February 1, 2000 and shall end on
July 31, 2000. The third Payment Period will commence on August 1, 2000 and
shall end on February 28, 2001. For the remainder of the duration of the Plan,
Payment Periods shall consist of the six-month periods commencing on March 1 and
September 1 and ending on August 31 and February 28 (or February 29 in the case
of a leap year), respectively, of each calendar year.

Twice each year, on the first business day of each Payment Period, the Company
will grant to each eligible employee who is then a participant in the Plan an
option to purchase on the last day of such Payment Period, at the Option Price
hereinafter provided for, a maximum of 1,000 shares, on condition that such
employee remains eligible to participate in the Plan throughout the remainder of
such Payment Period. The participant shall be entitled to exercise the option so
granted only to the extent of the participant's accumulated payroll deductions
on the last day of such Payment Period. If the participant's accumulated payroll
deductions on the last day of the Payment Period would enable the participant to
purchase more than 1,000 shares except for the 1,000-share limitation, the
excess of the amount of the accumulated payroll deductions over the aggregate
purchase price of the 1,000 shares shall be promptly refunded to the participant
by the Company, without interest. The Option Price per share for each Payment
Period shall be the lesser of (i) 85% of the average market price of the Common
Stock on the first business day of the Payment Period and (ii) 85% of the
average market price of the Common Stock on the last business day of the Payment
Period, in either event rounded up to the nearest cent. The foregoing limitation
on the number of shares subject to option and the Option Price shall be subject
to adjustment as provided in Article 12.

For purposes of the Plan, the term "average market price" on any date means (i)
the average (on that date) of the high and low prices of the Common Stock on the
principal national securities exchange on which the Common Stock is traded, if
the Common Stock is then traded on a national securities exchange; or (ii) the
last reported sale price (on that date) of the Common Stock on the NASDAQ
National Market, if the Common Stock is not then traded on a national securities
exchange; or (iii) the average of the closing bid and asked prices last quoted
(on that date) by an established quotation service for over-the-counter
securities, if the Common Stock is not reported on the NASDAQ National Market;
or (iv) if the Common Stock is not publicly traded, the fair market value of the
Common Stock as determined by the Committee after taking into consideration all
factors which it deems appropriate, including, without limitation, recent sale
and offer prices of the Common Stock in private transactions negotiated at arm's
length.

For purposes of the Plan, the term "business day" means a day on which there is
trading on the NASDAQ National Market or the aforementioned national securities
exchange, whichever is applicable pursuant to the preceding paragraph; and if
neither is applicable, a day that is not a Saturday, Sunday or legal holiday in
Massachusetts.

No employee shall be granted an option which permits the employee's right to
purchase stock under the Plan, and under all other Section 423(b) employee stock
purchase plans of the Company and any parent or subsidiary corporations, to
accrue at a rate which exceeds $25,000 of fair market value of such stock
(determined on the date or dates that options on such stock were granted) for
each calendar year in which such option is outstanding at any time. The purpose
of the limitation in the preceding sentence is to comply with Section 423(b)(8)
of the Code. If the participant's accumulated payroll deductions on the last day
of the Payment Period would otherwise enable the participant to purchase Common
Stock in excess of the Section 423(b)(8) limitation described in this paragraph,
the excess of the amount of the accumulated payroll deductions over the
aggregate purchase price of the shares actually purchased shall be promptly
refunded to the participant by the Company, without interest.

                                    ARTICLE 6
                               EXERCISE OF OPTION

Each eligible employee who continues to be a participant in the Plan on the last
day of a Payment Period shall be deemed to have exercised his or her option on
such date and shall be deemed to have purchased from the Company such number of
full shares of Common Stock reserved for the purpose of the Plan as the
participant's accumulated payroll deductions on such date will pay for at the
Option Price, subject to the 1,000-share limit of the option and the Section
423(b)(8) limitation described in Article 5. If the individual is not a
participant on the last day of a Payment Period, then he or she shall not be
entitled to exercise his or her option. Only full shares of Common Stock may be
purchased under the Plan. Unused payroll deductions remaining in a participant's
account at the end of a Payment Period by reason of the inability to purchase a
fractional share shall be carried forward to the next Payment Period.

                                    ARTICLE 7
                       AUTHORIZATION FOR ENTERING THE PLAN

An employee may elect to enter the Plan by filling out, signing and delivering
to the Company an authorization:

                                       36


A. Stating the percentage to be deducted regularly from the employee's pay;

B. Authorizing the purchase of stock for the employee in each Payment Period in
accordance with the terms of the Plan; and

C. Specifying the exact name or names in which stock purchased for the employee
is to be issued as provided under Article 11 hereof.

Such authorization must be received by the Company at least ten days before the
first day of the next succeeding Payment Period and shall take effect only if
the employee is an eligible employee on the first business day of such Payment
Period.

Unless a participant files a new authorization or withdraws from the Plan, the
deductions and purchases under the authorization the participant has on file
under the Plan will continue from one Payment Period to succeeding Payment
Periods as long as the Plan remains in effect.

The Company will accumulate and hold for each participant's account the amounts
deducted from his or her pay. No interest will be paid on these amounts.

                                    ARTICLE 8
                      MAXIMUM AMOUNT OF PAYROLL DEDUCTIONS

An employee may authorize payroll deductions in an amount (expressed as a whole
percentage) not less than one percent (1%) but not more than ten percent (10%)
of the employee's total compensation, including base pay or salary and any
overtime, bonuses or commissions.

                                    ARTICLE 9
                          CHANGE IN PAYROLL DEDUCTIONS

Deductions may not be increased or decreased during a Payment Period. However, a
participant may withdraw in full from the Plan.

                                   ARTICLE 10
                            WITHDRAWAL FROM THE PLAN

A participant may withdraw from the Plan (in whole but not in part) at any time
prior to the last day of a Payment Period by delivering a withdrawal notice to
the Company.

To re-enter the Plan, an employee who has previously withdrawn must file a new
authorization at least ten days before the first day of the next Payment Period
in which he or she wishes to participate. The employee's re-entry into the Plan
becomes effective at the beginning of such Payment Period, provided that he or
she is an eligible employee on the first business day of the Payment Period.

                                   ARTICLE 11
                                ISSUANCE OF STOCK

Certificates for stock issued to participants shall be delivered as soon as
practicable after each Payment Period by the Company's transfer agent.

Stock purchased under the Plan shall be issued only in the name of the
participant, or if the participant's authorization so specifies, in the name of
the participant and another person of legal age as joint tenants with rights of
survivorship.

                                   ARTICLE 12
                                   ADJUSTMENTS

Upon the happening of any of the following described events, a participant's
rights under options granted under the Plan shall be adjusted as hereinafter
provided:

A. In the event that the shares of Common Stock shall be subdivided or combined
into a greater or smaller number of shares or if, upon a reorganization,
split-up, liquidation, recapitalization or the like of the Company, the shares
of Common Stock shall be exchanged for other securities of the Company, each
participant shall be entitled, subject to the conditions herein stated, to
purchase such number of shares of Common Stock or amount of other securities of
the Company as were exchangeable for the number of shares of Common Stock that
such participant would have been entitled to purchase except for such action,
and appropriate adjustments shall be made in the purchase price per share to
reflect such subdivision, combination or exchange; and

B. In the event the Company shall issue any of its shares as a stock dividend
upon or with respect to the shares of stock of the class which shall at the time
be subject to option hereunder, each participant upon exercising such an option
shall be entitled to receive (for

                                       37


the purchase price paid upon such exercise) the shares as to which the
participant is exercising his or her option and, in addition thereto (at no
additional cost), such number of shares of the class or classes in which such
stock dividend or dividends were declared or paid, and such amount of cash in
lieu of fractional shares, as is equal to the number of shares thereof and the
amount of cash in lieu of fractional shares, respectively, which the participant
would have received if the participant had been the holder of the shares as to
which the participant is exercising his or her option at all times between the
date of the granting of such option and the date of its exercise.

Upon the happening of any of the foregoing events, the class and aggregate
number of shares set forth in Article 4 hereof which are subject to options
which have been or may be granted under the Plan and the limitations set forth
in the second paragraph of Article 5 shall also be appropriately adjusted to
reflect the events specified in paragraphs A and B above. Notwithstanding the
foregoing, any adjustments made pursuant to paragraphs A or B shall be made only
after the Committee, based on advice of counsel for the Company, determines
whether such adjustments would constitute a "modification" (as that term is
defined in Section 424 of the Code). If the Committee determines that such
adjustments would constitute a modification, it may refrain from making such
adjustments.

If the Company is to be consolidated with or acquired by another entity in a
merger, a sale of all or substantially all of the Company's assets or otherwise
(an "Acquisition"), the Committee or the board of directors of any entity
assuming the obligations of the Company hereunder (the "Successor Board") shall,
with respect to options then outstanding under the Plan, either (i) make
appropriate provision for the continuation of such options by arranging for the
substitution on an equitable basis for the shares then subject to such options
either (a) the consideration payable with respect to the outstanding shares of
the Common Stock in connection with the Acquisition, (b) shares of stock of the
successor corporation, or a parent or subsidiary of such corporation, or (c)
such other securities as the Successor Board deems appropriate, the fair market
value of which shall not materially exceed the fair market value of the shares
of Common Stock subject to such options immediately preceding the Acquisition;
or (ii) terminate each participant's options in exchange for a cash payment
equal to the excess of (a) the fair market value on the date of the Acquisition,
of the number of shares of Common Stock that the participant's accumulated
payroll deductions as of the date of the Acquisition could purchase, at an
option price determined with reference only to the first business day of the
applicable Payment Period and subject to the 1,000-share limit, Code Section
423(b)(8) and fractional-share limitations on the amount of stock a participant
would be entitled to purchase, over (b) the result of multiplying such number of
shares by such option price.

The Committee or Successor Board shall determine the adjustments to be made
under this Article 12, and its determination shall be conclusive.

                                   ARTICLE 13
                 NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS

An option granted under the Plan may not be transferred or assigned and may be
exercised only by the participant.

                                   ARTICLE 14
                        TERMINATION OF EMPLOYEE'S RIGHTS

Whenever a participant ceases to be an eligible employee because of retirement,
voluntary or involuntary termination, resignation, layoff, discharge, death or
for any other reason, his or her rights under the Plan shall immediately
terminate, and the Company shall promptly refund, without interest, the entire
balance of his or her payroll deduction account under the Plan. Notwithstanding
the foregoing, eligible employment shall be treated as continuing intact while a
participant is on military leave, sick leave or other bona fide leave of
absence, for up to 90 days, or for so long as the participant's right to
re-employment is guaranteed either by statute or by contract, if longer than 90
days.

                                   ARTICLE 15
                       TERMINATION AND AMENDMENTS TO PLAN

The Plan may be terminated at any time by the Company's Board of Directors but
such termination shall not affect options then outstanding under the Plan. It
will terminate in any case when all or substantially all of the unissued shares
of stock reserved for the purposes of the Plan have been purchased. If at any
time shares of stock reserved for the purpose of the Plan remain available for
purchase but not in sufficient number to satisfy all then unfilled purchase
requirements, the available shares shall be apportioned among participants in
proportion to the amount of payroll deductions accumulated on behalf of each
participant that would otherwise be used to purchase stock, and the Plan shall
terminate. Upon such termination or any other termination of the Plan, all
payroll deductions not used to purchase stock will be refunded, without
interest.

The Committee or the Board of Directors may from time to time adopt amendments
to the Plan provided that, without the approval of the stockholders of the
Company, no amendment may (i) increase the number of shares that may be issued
under the Plan; (ii) change the class of employees eligible to receive options
under the Plan, if such action would be treated as the adoption of a new plan
for

                                       38


purposes of Section 423(b) of the Code; or (iii) cause Rule 16b-3 under the
Securities Exchange Act of 1934 to become inapplicable to the Plan.

                                   ARTICLE 16
                LIMITS ON SALE OF STOCK PURCHASED UNDER THE PLAN

The Plan is intended to provide shares of Common Stock for investment and not
for resale. The Company does not, however, intend to restrict or influence any
employee in the conduct of his or her own affairs. An employee may, therefore,
sell stock purchased under the Plan at any time the employee chooses, subject to
compliance with any applicable federal or state securities laws and subject to
any restrictions imposed under Article 21 to ensure that tax withholding
obligations are satisfied. THE EMPLOYEE ASSUMES THE RISK OF ANY MARKET
FLUCTUATIONS IN THE PRICE OF THE STOCK.

                                   ARTICLE 17
                           PARTICIPATING SUBSIDIARIES

The term "participating subsidiary" shall mean any present or future subsidiary
of the Company, as that term is defined in Section 424(f) of the Code, which is
designated from time to time by the Board of Directors to participate in the
Plan. The Board of Directors shall have the power to make such designation
before or after the Plan is approved by the stockholders.

                                   ARTICLE 18
                           OPTIONEES NOT STOCKHOLDERS

Neither the granting of an option to an employee nor the deductions from his or
her pay shall constitute such employee a stockholder of the shares covered by an
option until such shares have been actually purchased by the employee.

                                   ARTICLE 19
                              APPLICATION OF FUNDS

The proceeds received by the Company from the sale of Common Stock pursuant to
options granted under the Plan will be used for general corporate purposes.

                                   ARTICLE 20
                 NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION

By electing to participate in the Plan, each participant agrees to notify the
Company in writing immediately after the participant transfers Common Stock
acquired under the Plan, if such transfer occurs within two years after the
first business day of the Payment Period in which such Common Stock was
acquired. Each participant further agrees to provide any information about such
a transfer as may be requested by the Company or any subsidiary corporation in
order to assist it in complying with the tax laws. Such dispositions generally
are treated as "disqualifying dispositions" under Sections 421 and 424 of the
Code, which have certain tax consequences to participants and to the Company and
its participating subsidiaries.

                                   ARTICLE 21
                     WITHHOLDING OF ADDITIONAL INCOME TAXES

By electing to participate in the Plan, each participant acknowledges that the
Company and its participating subsidiaries are required to withhold taxes with
respect to the amounts deducted from the participant's compensation and
accumulated for the benefit of the participant under the Plan, and each
participant agrees that the Company and its participating subsidiaries may
deduct additional amounts from the participant's compensation, when amounts are
added to the participant's account, used to purchase Common Stock or refunded,
in order to satisfy such withholding obligations. Each participant further
acknowledges that when Common Stock is purchased under the Plan the Company and
its participating subsidiaries may be required to withhold taxes with respect to
all or a portion of the difference between the fair market value of the Common
Stock purchased and its purchase price, and each participant agrees that such
taxes may be withheld from compensation otherwise payable to such participant.
It is intended that tax withholding will be accomplished in such a manner that
the full amount of payroll deductions elected by the participant under Article 7
will be used to purchase Common Stock. However, if amounts sufficient to satisfy
applicable tax withholding obligations have not been withheld from compensation
otherwise payable to any participant, then, notwithstanding any other provision
of the Plan, the Company may withhold such taxes from the participant's
accumulated payroll deductions and apply the net amount to the purchase of
Common Stock, unless the participant pays to the Company, prior to the exercise
date, an amount sufficient to satisfy such withholding obligations. Each
participant further acknowledges that the Company and its participating
subsidiaries may be required to withhold taxes in connection with the
disposition of stock acquired under the Plan and agrees that the Company or any
participating subsidiary may take whatever action it considers appropriate to
satisfy such withholding requirements, including deducting from compensation
otherwise payable to such participant an amount sufficient to satisfy such
withholding requirements or conditioning any disposition of

                                       39


Common Stock by the participant upon the payment to the Company or such
subsidiary of an amount sufficient to satisfy such withholding requirements.

                                   ARTICLE 22
                            GOVERNMENTAL REGULATIONS

The Company's obligation to sell and deliver shares of Common Stock under the
Plan is subject to the approval of any governmental authority required in
connection with the authorization, issuance or sale of such shares.

Government regulations may impose reporting or other obligations on the Company
with respect to the Plan. For example, the Company may be required to identify
shares of Common Stock issued under the Plan on its stock ownership records and
send tax information statements to employees and former employees who transfer
title to such shares.

                                   ARTICLE 23
                                  GOVERNING LAW

The validity and construction of the Plan shall be governed by the laws of
Delaware, without giving effect to the principles of conflicts of law thereof.

                                   ARTICLE 24
         APPROVAL OF BOARD OF DIRECTORS AND STOCKHOLDERS OF THE COMPANY

The Plan was adopted by the Board of Directors on February 17, 1999 and was
approved by the stockholders of the Company on April 21, 1999.

The Plan was amended by the Board of Directors on April 21, 1999 to change the
Payment Periods as set forth in the second sentence of Article 5.

The Plan was amended by the Board of Directors on July 18, 2000 to replace the
first paragraph in its entirety of Article 5.

The Plan was amended by the Board of Directors on March 23, 2001 to increase the
number of shares issuable pursuant to the plan to 200,000, and such amendment
was approved by the stockholders of the Company on May 24, 2001.

                                       40

EX-31.01

EXHIBIT 31.01

                                 CERTIFICATIONS

I, Daniel J. Schimmel, Chief Executive Officer of OneSource Information
Services, Inc., certify that:

1.   I have reviewed this quarterly report on Form 10-Q of OneSource Information
     Services, Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer(s) and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

          (a)  Designed such disclosure controls and procedures, or caused such
               disclosure controls and procedures to be designed under our
               supervision, to ensure that material information relating to the
               registrant, including its consolidated subsidiaries, is made
               known to us by others within those entities, particularly during
               the period in which this report is being prepared;

          (b)  [Paragraph omitted in accordance with United States Securities
               and Exchange Commission transition instructions contained in SEC
               Release 34-47986.]

          (c)  Evaluated the effectiveness of the registrant's disclosure
               controls and procedures and presented in this report our
               conclusions about the effectiveness of the disclosure controls
               and procedures, as of the end of the period covered by this
               report based on such evaluation; and

          (d)  Disclosed in this report any change in the registrant's internal
               control over financial reporting that occurred during the
               registrant's most recent fiscal quarter (the registrant's fourth
               fiscal quarter in the case of an annual report) that has
               materially affected, or is reasonably likely to materially
               affect, the registrant's internal control over financial
               reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

          (a)  All significant deficiencies and material weaknesses in the
               design or operation of internal control over financial reporting
               which are reasonably likely to adversely affect the registrant's
               ability to record, process, summarize and report financial
               information; and

          (b)  Any fraud, whether or not material, that involves management or
               other employees who have a significant role in the registrant's
               internal control over financial reporting.

Date: August 13, 2003

                        /s/ Daniel J. Schimmel
                        ---------------------------
                        Daniel J. Schimmel
                        Chief Executive Officer

                                       41

EX-31.02

EXHIBIT 31.02

                                 CERTIFICATIONS

I, Roy D. Landon, Chief Financial Officer of OneSource Information Services,
Inc., certify that:

1.   I have reviewed this quarterly report on Form 10-Q of OneSource Information
     Services, Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer(s) and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

          (a)  Designed such disclosure controls and procedures, or caused such
               disclosure controls and procedures to be designed under our
               supervision, to ensure that material information relating to the
               registrant, including its consolidated subsidiaries, is made
               known to us by others within those entities, particularly during
               the period in which this report is being prepared;

          (b)  [Paragraph omitted in accordance with United States Securities
               and Exchange Commission transition instructions contained in SEC
               Release 34-47986.]

          (c)  Evaluated the effectiveness of the registrant's disclosure
               controls and procedures and presented in this report our
               conclusions about the effectiveness of the disclosure controls
               and procedures, as of the end of the period covered by this
               report based on such evaluation; and

          (d)  Disclosed in this report any change in the registrant's internal
               control over financial reporting that occurred during the
               registrant's most recent fiscal quarter (the registrant's fourth
               fiscal quarter in the case of an annual report) that has
               materially affected, or is reasonably likely to materially
               affect, the registrant's internal control over financial
               reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

          (c)  All significant deficiencies and material weaknesses in the
               design or operation of internal control over financial reporting
               which are reasonably likely to adversely affect the registrant's
               ability to record, process, summarize and report financial
               information; and

          (d)  Any fraud, whether or not material, that involves management or
               other employees who have a significant role in the registrant's
               internal control over financial reporting.

Date: August 13, 2003

                     /s/ Roy D. Landon
                     ----------------------
                     Roy D. Landon
                     Chief Financial Officer

                                       42

EX-32.01

EXHIBIT 32.01

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of OneSource Information Services, Inc.
(the "Company") on Form 10-Q for the period ended June 30, 2003 as filed with
the United States Securities and Exchange Commission on the date hereof (the
"Report"), I, Daniel J. Schimmel, Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.

/s/ Daniel J. Schimmel

Daniel J. Schimmel
Chief Executive Officer
August 13, 2003

                                       43

EX-32.02

EXHIBIT 32.02

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of OneSource Information Services, Inc.
(the "Company") on Form 10-Q for the period ended June 30, 2003 as filed with
the United States Securities and Exchange Commission on the date hereof (the
"Report"), I, Roy D. Landon, Chief Financial Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.

/s/ Roy D. Landon

Roy D. Landon
Chief Financial Officer
August 13, 2003

                                       44