SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No.
)
Filed by the Registrant x
Filed by a Party other than the
Registrant ¨
Check the appropriate box:
¨ Preliminary Proxy Statement ¨ Confidential, for Use of the
Commission Only (as permitted by Rule 14a-6(e)(2)) |
x Definitive Proxy Statement
¨ Definitive Additional Materials
¨ Soliciting Material Pursuant to
Section 240.14a-11(c) or Section 240.14a-12
SUPPORTSOFT, INC.
(Name of Registrant as Specified In Its Certificate)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x |
No fee required. |
¨ |
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
1) |
Title of each class of securities to which transaction applies: |
2) |
Aggregate number of securities to which transaction applies: |
3) |
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it
was determined): |
4) |
Proposed maximum aggregate value of transaction: |
5) |
Total fee paid: |
¨ Fee paid previously with preliminary materials.
¨ |
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
1) |
Amount Previously Paid: |
2) |
Form, Schedule or Registration Statement No.: |
3) |
Filing Party: |
4) |
Date Filed: |
SUPPORTSOFT, INC.
575 Broadway
Redwood City, California 94063
(650) 556-9440
April 10, 2002
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of SupportSoft, Inc. that
will be held on Tuesday, May 28, 2002, at 4:00 p.m., local time, at the Company’s headquarters, located at 575 Broadway, Redwood City, California.
The formal notice of the Annual Meeting and the Proxy Statement have been made a part of this invitation.
After reading the Proxy Statement, please mark, date, sign and return, at an early date, the enclosed proxy in the enclosed prepaid envelope, to ensure that your shares will be represented. YOUR SHARES CANNOT BE VOTED
UNLESS YOU SIGN, DATE AND RETURN THE ENCLOSED PROXY OR ATTEND THE ANNUAL MEETING IN PERSON.
A copy of the Company’s 2001
Annual Report to Stockholders is also enclosed.
The Board of Directors and management look forward to seeing you at the
meeting.
Sin |
cerely yours, |
 |
Ra |
dha R. Basu |
President, Chief Executive Officer and |
Chairman of the Board |
SUPPORTSOFT, INC.
Notice of Annual Meeting of Stockholders
to be held
May 28, 2002
To the
Stockholders of SupportSoft, Inc.:
The Annual Meeting of Stockholders of SupportSoft, Inc., a Delaware corporation (the
“Company”), will be held at the Company’s headquarters, located at 575 Broadway, Redwood City, California 94063, on Tuesday, May 28, 2002, at 4:00 p.m., local time, for the following purposes:
1. To elect directors to serve until the 2003 Annual Meeting of Stockholders and thereafter until their successors are
elected and qualified;
2. To ratify the appointment of Ernst & Young LLP as the Company’s
independent auditors for the fiscal year ending December 31, 2002; and
3. To transact such other
business as may properly be brought before the Annual Meeting and any adjournment(s) of the Annual Meeting.
Stockholders of
record as of the close of business on March 28, 2002 are entitled to notice of and to vote at the Annual Meeting and any adjournment thereof. A complete list of stockholders entitled to vote at the Annual Meeting will be available at the
Secretary’s office, 575 Broadway, Redwood City, California, for ten days before the meeting.
It is important that your
shares are represented at this meeting. Even if you plan to attend the meeting, we hope that you will promptly mark, sign, date and return the enclosed proxy. This will not limit your right to attend or vote at the meeting.
By |
Order of the Board of Directors |
 |
Bri |
an M. Beattie |
Ex |
ecutive Vice President of Finance and Administration, Chief Financial Officer and Secretary |
Redwood City, California
April 10, 2002
SUPPORTSOFT, INC.
575
Broadway
Redwood City, California 94063
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed Proxy is solicited on behalf of the Board of Directors of SupportSoft, Inc. (which we will refer to as the “Company” or
“SupportSoft” throughout this Proxy Statement) for use at the Annual Meeting of Stockholders to be held at the Company’s headquarters located at 575 Broadway, Redwood City, California 94063, on Tuesday, May 28, 2002, at 4:00 p.m.,
local time, and at any adjournment(s) thereof, for the purposes set forth herein and in the accompanying Notice of Annual Meeting of Stockholders. The Company’s principal executive offices are located at the address listed at the top of the
page and the telephone number is (650) 556-9440.
The Company’s 2001 Annual Report on Form 10-K, containing financial
statements and financial statement schedules required to be filed for the year ended December 31, 2001, is being mailed together with these proxy solicitation materials to all stockholders entitled to vote. This Proxy Statement, the accompanying
Proxy and the Company’s Annual Report will first be mailed on or about April 10, 2002 to all stockholders entitled to vote at the meeting.
THE COMPANY WILL PROVIDE COPIES OF EXHIBITS TO THE ANNUAL REPORT ON FORM 10-K TO ANY REQUESTING STOCKHOLDER UPON THE PAYMENT OF A REASONABLE FEE AND UPON THE REQUEST OF THE STOCKHOLDER MADE IN WRITING TO
SUPPORTSOFT, INC., 575 BROADWAY, REDWOOD CITY, CALIFORNIA 94063, ATTN: DIRECTOR, INVESTOR RELATIONS. THE REQUEST MUST INCLUDE A REPRESENTATION BY THE STOCKHOLDER THAT, AS OF MARCH 28, 2002, THE STOCKHOLDER WAS ENTITLED TO VOTE AT THE ANNUAL
MEETING.
Record Date and Share Ownership
Stockholders of record at the close of business on March 28, 2002 (which we will refer to as the “Record Date” throughout this Proxy Statement) are entitled to notice of and to vote at the meeting and at any
adjournment(s) thereof. The Company has one series of Common Stock issued and outstanding, designated as Common Stock, $0.0001 par value per share. As of the Record Date, approximately 33,494,459 shares of the Company’s Common Stock were issued
and outstanding and entitled to vote.
How You Can Vote
Stockholders of record may vote their shares at the Annual Meeting either in person or by proxy. To vote by proxy, stockholders should mark, date, sign and mail the enclosed proxy form in the prepaid envelope.
Returning a proxy form will not affect a stockholder’s right to vote if the stockholder attends the Annual Meeting and wants to vote in person.
Stockholders holding shares through a bank or broker should follow the voting instructions on the proxy form received.
1
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before its use at the meeting by (a) delivering to the Company at its principal offices (Attention: Director, Investor
Relations) (i) a written notice of revocation or (ii) a duly executed proxy bearing a later date or (b) attending the meeting and voting in person.
Voting
On all matters, each share has one vote. Directors are elected by a plurality vote. The nominees for the
six director seats who receive the most affirmative votes of shares present in person or represented by proxy and entitled to vote on this proposal at the meeting will be elected to serve as directors. Each of the other proposals submitted for
stockholder approval at the Annual Meeting will be decided by the affirmative vote of the majority of the shares present in person or represented by proxy at the meeting entitled to vote on such proposal.
Solicitation of Proxies
The cost of soliciting
proxies will be borne by the Company. The Company may reimburse brokerage firms and other persons representing beneficial owners of shares for their expenses in forwarding solicitation material to such beneficial owners. Proxies may also be
solicited by certain of the Company’s directors, officers and regular employees, without additional compensation, personally or by telephone or facsimile.
Quorum; Abstentions; Broker Non-Votes
Votes cast by proxy or in person at the Annual Meeting (“Votes
Cast”) will be tabulated by the Inspector of Elections (the “Inspector”), with the assistance of the Company’s transfer agent. The Inspector will also determine whether or not a quorum is present. Except in certain specific
circumstances, the affirmative vote of a majority of shares present in person or represented by proxy at a duly held meeting at which a quorum is present is required under Delaware law for approval of proposals presented to stockholders. In general,
Delaware law provides that a quorum consists of a majority of shares entitled to vote and present or represented by proxy at the meeting.
The Inspector will treat shares that are voted WITHHELD or ABSTAIN as being present and entitled to vote for purposes of determining the presence of a quorum but will not be treated as votes in favor of approving any
matter submitted to the stockholders for a vote. When proxies are properly dated, executed and returned, the shares represented by such proxies will be voted at the Annual Meeting in accordance with the instructions of the stockholder. If no
specific instructions are given, the shares will be voted (i) for the election of the nominees for directors set forth herein; (ii) for the ratification of Ernst &Young LLP, as independent public accountants of the Company for the fiscal year
ending December 31, 2002; and (iii) upon such other business as may properly come before the Annual Meeting or any adjournment thereof in accordance with the discretion of the proxyholder but will not be voted in the election of directors. Proxies
that are not returned will not be counted in determining the presence of a quorum and will not be counted toward any vote.
If a
broker indicates on the enclosed proxy or its substitute that such broker does not have discretionary authority as to certain shares to vote on a particular matter (broker non-votes), those shares will not be considered as present with respect to
that matter. The Company believes that the tabulation procedures to be followed by the Inspector are consistent with the general statutory requirements in Delaware concerning voting of shares and determination of a quorum.
In a 1988 Delaware case, Berlin v. Emerald Partners, the Delaware Supreme Court held that while broker non-votes may be counted for purposes of
determining the presence or absence of a quorum for the transaction of business, broker non-votes should not be counted for purposes of determining the number of votes cast with respect to the particular proposal on which the broker has expressly
not voted. Broker non-votes with respect to
2
proposals set forth in this Proxy Statement will therefore not be considered “Votes Cast” and, accordingly, will not affect the determination as to whether the requisite majority of
Votes Cast has been obtained with respect to a particular matter.
Deadline for Receipt of Stockholder Proposals
Proposals of stockholders of the Company that are intended to be presented by such stockholders at the Company’s 2003 Annual Meeting must be
received by the Secretary of the Company no later than January 1, 2003 in order that they may be included in the Company’s proxy statement and form of proxy relating to that meeting.
A stockholder proposal not included in the Company’s proxy statement for the 2003 Annual Meeting will be ineligible for presentation at the meeting unless the stockholder gives
timely notice of the proposal in writing to the Secretary of the Company at the principal executive offices of the Company and otherwise complies with the provisions of the Company’s Bylaws. To be timely, the Company’s Bylaws provide that
the Company must have received the stockholder’s notice not less than 50 days nor more than 75 days prior to the scheduled date of such meeting. However, if notice or prior public disclosure of the date of the annual meeting is given or made to
stockholders less than 65 days prior to the meeting date, the Company must receive the stockholder’s notice by the earlier of (i) the close of business on the 15th day after the earlier of the day the Company mailed notice of the annual meeting date or provided such public disclosure of the meeting date and (ii) two days prior to the scheduled date of
the annual meeting.
IMPORTANT
PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT AT YOUR EARLIEST CONVENIENCE IN THE ENCLOSED POSTAGE-PREPAID RETURN ENVELOPE SO THAT, WHETHER YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING OR NOT,
YOUR SHARES CAN BE VOTED, THIS WILL NOT LIMIT YOUR RIGHTS TO ATTEND OR VOTE AT THE ANNUAL MEETING.
3
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees
The Board of Directors proposes the election of six (6) directors of the Company to serve until the next annual meeting of stockholders and thereafter until their successors are elected
and qualified. If any nominee is unable or declines to serve as director at the time of the Annual Meeting, an event not now anticipated, proxies will be voted for any nominee designated by the Board of Directors to fill the vacancy.
Names of the nominees and certain biographical information about them as of March 15, 2002 are set forth below:
| Name |
Age |
Business Experience and Education | ||
| Radha R. Basu |
51 |
Ms. Basu has served as president, chief executive officer and as a director of SupportSoft since July 1999. Ms. Basu has served as chairman since January 2001. Ms. Basu worked
at Hewlett-Packard Company, a computing and imaging solutions provider company, from November 1978 to January 1999, and held various general management positions, most recently the general manager of the electronic business software organization.
Ms. Basu also serves on the board of directors of Seec, Inc., an eBusiness solutions company. Ms. Basu holds a B.S. in engineering from the University of Madras, a masters degree in electrical engineering and computer science from the University of
Southern California and is a graduate of the Stanford University executive management program. | ||
| Manuel F. Diaz |
67 |
Mr. Diaz has served as a director of SupportSoft since April 2000. Mr. Diaz worked at Hewlett-Packard Company, a computing and imaging solutions provider company, from
November 1982 to February 1999, and held various general management positions, most recently the vice president for customer advocacy. Mr. Diaz holds a B.S. in electrical engineering from the University of Havana, a masters degree in solid-state
physics from the University of Cincinnati and is a graduate of the Stanford University executive management program. | ||
| Bruce Golden |
43 |
Mr. Golden has served as a director of SupportSoft since June 1998. Since September 1997, Mr. Golden has served initially as entrepreneur-in-residence and then as a partner at
Accel Partners, a venture capital firm. From 1993 to August 1996, Mr. Golden served as vice president of marketing at Illustra Information Technology, which was acquired by Informix Corporation, a database company, in 1996. Mr. Golden was employed
by Informix Corporation after the acquisition. Mr. Golden holds a B.A. in political science from Columbia University and an MBA from Stanford University. | ||
| Claude M. Leglise |
46 |
Mr. Leglise has served as a director of SupportSoft since January 2001. He has held various general management positions at Intel Corporation, a semiconductor company, since
1982. Mr. Leglise is currently vice president of Intel Capital. He has also served as vice president and general manager of the home products group of Intel Corporation, vice president of the content group, director of worldwide developer relations,
director of marketing in the microprocessor division and general manager of the supercomputer components operation. Mr. Leglise holds a bachelor degree in electrical engineering from ENSAM, in Paris, France, a masters degree in electrical
engineering from ENSAM and an MBA from Stanford University. |
4
| Name |
Age |
Business Experience and Education | ||
| Edward S. Russell |
41 |
Mr. Russell has served as a director of SupportSoft since June 1998. Since October 1996, Mr. Russell served as a general partner at Mobius Venture Capital (formerly SOFTBANK
Technology Ventures, Inc.), a venture capital firm. From 1988 to October 1996, Mr. Russell served as an executive director at SBC Warburg, an investment bank. Mr. Russell received his B.S. in computer science from Carnegie Mellon University and an
executive MBA from the London School of Business. | ||
| Roger J. Sippl |
47 |
Mr. Sippl has served as a director of SupportSoft since January 1999. Since August 1995, he has served as the managing partner of Sippl Macdonald Ventures, a venture capital
firm. From December 1990 to 1996, Mr. Sippl co-founded and served as a director of The Vantive Corporation, a customer relationship management solutions company. From 1996 to 1998, he served as chairman of the board of The Vantive Corporation. From
February 1993 until March 1998, Mr. Sippl was the founder and served as the chief executive officer and chairman of the board of Visigenic Software, Inc., a software tools provider company. Mr. Sippl holds a B.S. in computer science from the
University of California at Berkeley. |
Required Vote
The nominees for the six director seats who receive the most affirmative votes of shares present in person or represented by proxy and entitled to vote on this proposal at the meeting
will be elected to serve as directors. Unless marked to the contrary, proxies received will be voted “FOR” the nominees.
The Board of Directors recommends a vote “FOR” election as director of the nominees set forth above.
5
Board Meetings and Committees
The Board of Directors held 12 meetings during 2001. All directors attended at least 75% of the aggregate number of meetings of the Board of Directors and of the committees on which such
directors serve.
The Board of Directors has a standing Compensation Committee, an Audit Committee and a Non-section 16 Option
Plan Committee (the “Option Committee”).
The members of the Compensation Committee are Bruce Golden and Roger J.
Sippl. The Compensation Committee held two meetings during 2001. The Compensation Committee’s primary functions are to review the performance and establish the compensation of the Company’s executive officers, to recommend guidelines for
the review of the performance and the establishment of compensation and benefit policies for all other employees and to administer the Company’s compensation plans and programs.
The members of the Audit Committee are three non-employee directors, Edward S. Russell, Bruce Golden and Manuel Diaz, each of whom has been determined to be independent as defined by the
Nasdaq Marketplace Rules. The Audit Committee held five meetings during 2001. The Audit Committee’s primary functions are to review the scope of the annual audit, monitor the independent auditor’s relationship with the Company, advise and
assist the Board of Directors in evaluating the independent auditor’s examination, supervise the Company’s financial and accounting organization and financial reporting, and nominate, for approval of the Board of Directors, a firm of
certified public accountants whose duty it is to audit the financial records of the Company for the fiscal year for which it is appointed.
The member of the Option Committee is Radha R. Basu. The Option Committee’s primary function is to determine stock-based compensation awards for the Company’s non-section 16 reporting employees. The Option
Committee took action on 31 occasions during 2001.
Compensation of Directors
Directors who are employees of the Company do not receive any fees for service on the Board of Directors. We reimburse each member of the Board of Directors who is not an employee of the
Company for out-of-pocket expenses incurred in connection with attending board meetings. Pursuant to the Company’s 2000 Omnibus Equity Incentive Plan (the “2000 Incentive Plan”), non-employee directors of the Company are automatically
granted options to purchase shares of the Company’s Common Stock. Under the 2000 Incentive Plan, each non-employee director will be granted an option to purchase Common Stock as determined by the full Board of Directors on the date on which he
or she first becomes a non-employee director. Thereafter, following the conclusion of each regular annual meeting of the Company’s Stockholders, each non-employee director shall be automatically granted an additional option to purchase 8,000
shares of Common Stock (a “Subsequent Option”) if, on such date, he or she will continue to serve on the Company’s Board of Directors. Each Subsequent Option shall be immediately exercisable on the date of grant. Options granted under
the 2000 Incentive Plan have an exercise price equal to the fair market value of the Company’s Common Stock on the date of grant and a term of ten (10) years.
6
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January 2000, under two separate promissory notes, the Company loaned $100,000 and $572,075.60 to Radha Basu, the Company’s President, Chief
Executive Officer and Chairman of the Board of Directors. The loans had an interest rate of 5.86% and fifty percent of the principal and interest was due and payable on July 18, 2001, with the remaining principal and interest due and payable on July
18, 2002. In June 2001, the promissory note for $100,000 was repaid and the terms of the second note were amended whereby the loan now bears interest at a rate of 6.5% per annum with all principal and interest due and payable July 18, 2002. The loan
is a full recourse loan and secured by 1,580,189 shares of Common Stock. The largest aggregate amount of indebtedness outstanding in 2001 was approximately $732,705. As of March 15, 2002, the amount of indebtedness outstanding was approximately
$584,063.
In April 2001, the Compensation Committee authorized a $320,000 temporary interest-free loan to Radha Basu for the
purpose of allowing Ms. Basu to pay state and federal taxes associated with her exercise of 1,680,189 options in January 2000. During 2001, the Compensation Committee agreed to pay Ms. Basu $214,300 (which included $153,020 from the temporary loan)
as a result Ms. Basu being unable to exercise her initial option grant at fair market value.
In July 2000, the Company loaned
$540,000 to Manuel Diaz, a member of the Board of Directors. The loan had an interest rate of 5.86% per annum and all principal and interest was due and payable on July 18, 2001. The terms of the loan were amended in June of 2001. The loan now bears
interest at a rate of 6.5% per annum and all principal and interest is due and payable on July 18, 2002. The loan is a full recourse loan and is secured by Mr. Diaz’s 60,000 shares of the Company’s Common Stock. The largest aggregate
amount of indebtedness outstanding in 2001 was approximately $583,958. As of March 15, 2002, the amount of indebtedness outstanding was approximately $591,686.
In January 2000, the Company loaned $504,000 to Brian Beattie, the Company’s Executive Vice President of Finance and Administration and Chief Financial Officer. The loan had an interest rate of 5.86% per annum
and all principal and interest was due and payable on July 18, 2001. The terms of the loan were amended in June of 2001. The loan now bears interest at a rate of 6.5% per annum and all principal and interest is due and payable on July 18, 2002. The
loan is a full recourse loan secured by Mr. Beattie’s 560,000 shares of Common Stock. The largest aggregate amount of indebtedness outstanding in 2001 was approximately $571,927. As of March 15, 2002, the amount of indebtedness outstanding was
approximately $579,496.
7
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 15, 2002 as to shares of the Common Stock beneficially owned by: (i) each person who is
known by the Company to own beneficially more than 5% of the Common Stock, (ii) each of the Company’s named executive officers, (iii) each of the Company’s directors, and (iv) all directors and executive officers of the Company as a group.
Ownership information is based upon information furnished by the respective individuals or entities, as the case may be.
| Name and Address of Beneficial Owner (1) |
Shares Beneficially Owned (2) |
Percentage Beneficially Owned (2) |
|||
| 5% Stockholders: |
|||||
| Entities affiliated with RS Investment Management Co. LLC (3) 388 Market Street San Francisco, CA 94111 |
5,652,150 |
16.9 |
% | ||
| Entities affiliated with Accel VI L.P. (4) c/o Accel Partners 428 University Avenue Palo Alto, California 94301 |
3,178,397 |
9.5 |
| ||
| Entities affiliated with SOFTBANK Technology Ventures IV L.P. (5) 200 West Evelyn Avenue, Suite 200 Mountain View, California
94043 |
3,161,839 |
9.4 |
| ||
| Mark Pincus 1572 Shrader
Street San Francisco, CA 94117 |
2,213,203 |
6.6 |
| ||
| Executive Officers and Directors: |
|||||
| Radha R. Basu (6) |
1,746,708 |
5.2 |
| ||
| Brian M. Beattie (7) |
597,379 |
1.8 |
| ||
| Scott Dale (8) |
1,932,800 |
5.7 |
| ||
| David Duckwitz (9) |
136,415 |
* |
| ||
| Bruce Mowery (10) |
56,979 |
* |
| ||
| Manuel F. Diaz (11) |
108,000 |
* |
| ||
| Bruce Golden (12) |
108,000 |
* |
| ||
| Claude M. Leglise (13) |
40,750 |
* |
| ||
| Edward S. Russell (5)(14) |
3,169,839 |
9.5 |
| ||
| Roger J. Sippl (15) |
1,160,072 |
3.5 |
| ||
| All directors and executive officers as a group (12 persons) (16) |
11,313,824 |
32.8 |
|
* |
Represents less than 1% of the outstanding shares of Common Stock. |
(1) |
Unless otherwise indicated, the address of each officer, director or 5% stockholder is c/o SupportSoft, Inc., Attention: Directors, Investors Relations, 575 Broadway, Redwood
City, California 94063. |
(2) |
To the Company’s knowledge, the persons named in the table have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by
them, subject to community property laws where applicable and the information contained in the notes to this table. Beneficial ownership is determined in accordance with the rules and regulations of the Securities and Exchange
|
8
Commission. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of Common Stock subject to options held by that person that are
currently exercisable or exercisable within 60 days of March 15, 2002 are deemed outstanding. These shares, however, are not deemed outstanding for the purposes of computing ownership of any other person. Applicable percentage ownership is based on
33,494,459 shares of common stock outstanding as of March 15, 2002. |
(3) |
Based solely on information reported on a Schedule 13F filed with the Securities and Exchange Commission on February 11, 2002. Represents 310,000 shares held by RS Growth Group
LLC and 5,342,150 shares held by RS Investment Management, L.P. |
(4) |
Based solely on information provided on a Schedule 13G/Amendment No. 1 filed with the Securities and Exchange Commission on February 14, 2002. Includes 2,587,214 shares held by
Accel VI L.P. Accel VI Associates L.L.C., the general partner of Accel VI L.P., may be deemed to have sole voting and dispositive power of these shares. Includes 330,553 shares held by Accel Internet Fund II L.P. Accel Internet Fund II Associates
L.L.C., the general partner of Accel Internet Fund II L.P., may be deemed to have sole voting and dispositive power of these shares. Includes 41,320 shares held by Accel Keiretsu VI L.P. Accel Keiretsu VI Associates L.L.C., the general partner of
Accel Keiretsu VI L.P., may be deemed to have sole voting and dispositive power of these shares. Includes 219,310 shares held by Accel Investors ’98 L.P., James W. Breyer, Arthur C. Patterson, G. Carter Sednaoui, James R. Swartz and J. Peter
Wagner, the general partners of Accel Investors ’98 L.P., may be deemed to have sole voting and dispositive power of these shares. |
(5) |
Based solely on information provided on a Schedule 13G/Amendment No. 1 filed with the Securities and Exchange Commission on February 14, 2002. Includes 3,099,271 shares held by
SOFTBANK Technology Ventures IV L.P. STV IV L.L.C., the general partner of SOFTBANK Technology Ventures IV L.P., may be deemed to have sole voting and dispositive power of the shares. Includes 62,568 shares held by SOFTBANK Technology Advisors Fund
L.P. STV IV L.L.C., the general partner of SOFTBANK Technology Advisors Fund L.P., may be deemed to have sole voting and dispositive power of the shares. |
(6) |
Includes 1,330,189 shares held by Anudip Limited Partnership. Ms. Basu and Dipak Basu are the general partners of Anudip Limited Partnership and share voting and dispositive
power. Includes 560,064 shares subject to the Company’s right of repurchase, which lapses over time. Includes 166,519 shares subject to options that are exercisable within 60 days of March 15, 2002. |
(7) |
Includes 280,000 shares held by the Beattie 1999 Living Trust. Mr. Beattie and Barbara Beattie, the trustees of the trust, have shared voting and dispositive power of these
280,000 shares. Includes 260,000 shares held by The Beattie Limited Partnership. Includes 50 shares held by Mr. Beattie’s daughter, all of which Mr. Beattie disclaims beneficial ownership. Includes 221,667 shares subject to the
Company’s right of repurchase, which lapses over time. Includes 54,329 shares subject to options which are exercisable within 60 days of March 15, 2002. |
(8) |
Includes 250,000 shares issuable under immediately exercisable options subject to the Company’s right of repurchase, which lapses over time. Includes 200,000 shares held
by SDK Limited Partnership. Mr. Dale and Kelly Plater Dale are the general partners of SDK Limited Partnership and share voting and dispositive power over these 200,000 shares. Includes 10,686 shares subject to options which are exercisable within
60 days of March 15, 2002. |
(9) |
Includes 135,415 shares subject to options which are exercisable within 60 days of March 15, 2002. |
(10) |
Includes 54,979 shares subject to options which are exercisable within 60 days of March 15, 2002. |
(11) |
Includes 31,250 shares subject to the Company’s right of repurchase, which lapses over time. Includes 40,000 shares issuable under immediately exercisable options and
subject to the Company’s right of repurchase, which lapses over time. Includes 8,000 shares subject to options which are exercisable within 60 days of March 15, 2002. |
(12) |
Includes 8,000 shares subject to options which are exercisable within 60 days of March 15, 2002. |
9
(13) |
Includes 26,750 shares subject to options which are exercisable within 60 days of March 15, 2002. Includes 6,000 shares held in UTMA Trusts for Mr. Leglise’s sons. Mr.
Leglise disclaims beneficial ownership of these shares. Mr. Leglise is the Trustee for the UTMA Trusts. |
(14) |
Mr. Russell is a member of STV IV L.L.C., the general partner of the owners of 3,161,839 shares. Mr. Russell disclaims beneficial ownership of these shares, except to the
extent of his indirect pecuniary interest therein. Includes 8,000 shares subject to options which are exercisable within 60 days of March 15, 2002. |
(15) |
Includes 621,572 shares held by Sippl Investments, LLC. Mr. Sippl is a managing member of Sippl Investments, LLC. Includes 22,917 shares subject to the Company’s right of
repurchase, which lapses over time. Includes 330,500 shares held by Sippl MacDonald Ventures II, L.P. Mr. Sippl is a managing partner of Sippl MacDonald Ventures II, L.P. Includes 200,000 shares held by Sippl MacDonald Ventures III L.P. Mr. Sippl is
a managing partner of Sippl MacDonald Ventures III L.P. Mr. Sippl has shared voting and dispositive power over 1,152,072 of these shares. Includes 8,000 shares subject to options which are exercisable within 60 days of March 15, 2002.
|
(16) |
Includes 979,649 shares subject to the Company’s right of repurchase, which lapses over time. Includes 540,000 shares issuable under immediately exercisable options
subject to the Company’s right of repurchase, which lapses over time. Includes 499,446 shares subject to options which are exercisable within 60 days of March 15, 2002. |
10
EXECUTIVE COMPENSATION AND RELATED INFORMATION
The following table summarizes all compensation paid to the Company’s Chief Executive Officer and each of the Company’s other four (4) most
highly compensated executive officers whose total salary and bonus exceeded $100,000 in 2001, for services rendered in all capacities to the Company for the fiscal years ended December 31, 2001. These individuals are referred to as the named
executive officers. Other than the salary and bonus described, or otherwise noted, below, the Company did not pay any named executive officer in the Summary Compensation Table any fringe benefits, perquisites or other compensation in excess of 10%
of that executive officer’s salary and bonus during each of 1999 and 2000.
Summary Compensation Table
| Year |
Annual Compensation |
Long Term Compensation | |||||||
| Securities Underlying | |||||||||
| Name and Principal Position |
Salary($) |
Bonus($) |
Options(#) | ||||||
| Radha R. Basu President, Chief
Executive Officer and Chairman of the Board |
2001 2000 1999 |
263,269 200,000 94,744 |
75,000 100,000 45,834 |
(1) |
351,000 350,000 1,680,189 | ||||
| Brian M. Beattie Executive Vice
President of Finance and Administration and Chief Financial Officer |
2001 2000 1999 |
221,295 180,000 60,000 |
52,500 72,000 18,000 |
|
176,000 100,000 560,000 | ||||
| Scott W. Dale Chief Technology
Officer and Vice President of Engineering |
2001 2000 1999 |
186,295 150,000 120,833 |
25,000 — — |
|
101,000 — 250,000 | ||||
| David Duckwitz (2) Senior Vice
President of Sales |
2001 |
191,346 |
145,625 |
|
500,000 | ||||
| Bruce Mowery (3) Vice President
of Marketing |
2001 |
197,247 |
29,897 |
|
176,000 | ||||
(1) |
Excludes $214,300 as described more fully in the “Report of the Compensation Committee of the Board of Directors on Executive Compensation.”
|
(2) |
Mr. Duckwitz joined the Company in March 2001. |
(3) |
Mr. Mowery joined the Company in January 2001. |
The following tables set forth certain information as of December 31, 2001 and for the fiscal year then ended with respect to stock options granted to and exercised by the named executive officers. The options granted
to the named executive officers in 2001 were granted under the Company’s 2000 Omnibus Equity Incentive Plan. The options granted to Radha Basu, Brian Beattie and Scott Dale are exercisable as to 1/48th each month over four years from the date of grant. The options granted to David Duckwitz and Bruce Mowery are exercisable as to 25% one year from the date of grant and
then as to 1/48th each month over the next three years. The percent of the total options set forth below is based on an
aggregate of 4,113,350 options granted to employees during 2001. All options were granted at the then fair market value as determined by the Company’s Board of Directors on the date of grant.
Potential realizable value represents hypothetical gains that could be achieved for the options if exercised at the end of the option term assuming that
the fair market value of the common stock on the date of grant appreciates at 5% and 10% over the option term (ten years) and that the option is exercised and sold on the last day of its option term for the appreciated stock price. The assumed 5%
and 10% rates of stock price appreciation
11
are provided in accordance with rules of the Securities and Exchange Commission and do not represent the Company’s estimate or projection of the Company’s future common stock price. We
used the grant-date price (the closing price on the Nasdaq National Market on the date of grant) in determining the value of the options granted to named executive officers in 2001. The calculation includes the difference, if any, between the fair
market value on the date of grant and the exercise price for such options. The hypothetical gains shown are net of the option exercise price but do not include deductions for taxes and other expenses payable upon exercise of the option or for sale
of the underlying shares of common stock. Actual gains, if any, on stock option exercises will depend on the future performance of the Company’s common stock, the officer’s continued employment through applicable vesting periods and the
date on which the options are exercised.
Option Grants in 2001
| Individual Grants |
Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term | |||||||||||||||
| Number of Securities Underlying Options |
% of Total Options Granted to Employees in 2001 |
Exercise Price($/Sh) |
Expiration Date |
|||||||||||||
| Name |
Granted(#) |
5%($) |
10%($) | |||||||||||||
| Radha Basu |
1,000 350,000 |
* 8.5 |
% |
$ |
4.688 2.70 |
03/20/11 11/27/11 |
$ |
2,948.26 594,305.42 |
$ |
7,471.46 1,506,086.63 | ||||||
| Brian Beattie |
1,000 175,000 |
* 4.3 |
|
|
4.688 2.70 |
03/20/11 11/27/11 |
|
2,948.26 297,152.71 |
|
7,471.46 753,043.32 | ||||||
| Scott Dale |
1,000 100,000 |
* 2.4 |
|
|
4.688 2.70 |
03/20/11 11/27/11 |
|
2,948.26 169,801.55 |
|
7,471.46 430,310.46 | ||||||
| David Duckwitz |
500,000 |
12.2 |
|
|
4.875 |
03/28/11 |
|
1,532,930.65 |
|
3,884,747.24 | ||||||
| Bruce Mowery |
175,000 1,000 |
4.3 * |
|
|
12.50 5.00 |
01/16/11 03/09/11 |
|
1,375,707.00 3,144.47 |
|
3,486,311.63 7,968.71 | ||||||
* |
Represents less than 1% of the total number of options granted to employees in 2001. |
Aggregate Option Exercises in Last Fiscal Year and 2001 Year End Option Values
| Shares Acquired on |
Value Realized($) |
Number of Securities Underlying Unexercised Options at December 31, 2001(#) |
Value of Unexercised In-the-Money Options at December 31, 2001($)(1) |
||||||||||||
| Name |
Exercise(#) |
Exercisable |
Unexercisable |
Exercisable |
Unexercisable | ||||||||||
| Radha Basu |
— |
$ |
— |
103,436 |
597,564 |
$ |
30,490.89 |
$ |
1,220,590.90 | ||||||
| Brian Beattie |
— |
|
— |
30,998 |
245,002 |
|
13,604.79 |
|
612,727.20 | ||||||
| Scott Dale |
— |
|
— |
252,270 |
98,730 |
|
1,350,232.10 |
|
350,849.85 | ||||||
| David Duckwitz |
— |
|
— |
— |
500,000 |
|
— |
|
697,500.00 | ||||||
| Bruce Mowery |
— |
|
— |
— |
176,000 |
|
— |
|
1,270.00 | ||||||
(1) |
Calculated on the basis of the fair market value of the underlying securities at December 31, 2001 ($6.27 per share) minus the exercise price. |
Employment Agreements and Change of Control Arrangements
We have officer offer letters with Radha Basu, our president, chief executive officer and chairman, Brian Beattie, our executive vice president of finance and administration and chief financial officer, David
Duckwitz, our senior vice president of sales, and Bruce Mowery, our vice president of marketing. All of these officers may leave or be terminated at any time. We have a formal employment agreement with Scott Dale, our chief technology officer and
vice president of engineering.
12
In November 2001, the Compensation Committee approved for Ms. Basu an annual salary of $300,000
and a potential bonus of up to $180,000 tied to certain criteria for fiscal year 2002. Under the terms of Ms. Basu’s offer letter, if Ms. Basu is terminated for any reason other than for cause or if she terminates her own employment under
specified circumstances, she is entitled to 12 months of her salary, continued participation in all benefit plans for 12 months, vesting of all stock options granted to her that would have vested by the end of the month of her termination, and a
portion of her bonus based on the number of months worked during that year. Within 12 months following a change of control of SupportSoft, if Ms. Basu is terminated for any reason other than for cause or if she terminates her employment under
specified circumstances, she is entitled to vesting of all stock options granted to her by SupportSoft, 12 months of her salary, continued participation in all benefit plans for 12 months and a portion of her bonus based on the number of months
worked during that year.
Mr. Beattie is entitled to an annual salary of $260,000 and a potential bonus of up to $130,000 tied
to certain criteria as established by the Compensation Committee in November 2001. Under the terms of Mr. Beattie’s offer letter, if Mr. Beattie is terminated for any reason other than for cause or if he terminates his own employment under
specified circumstances, he is entitled to six months of his salary, continued participation in all benefit plans for six months, vesting of all stock options granted to him that would have vested by the end of the month of his termination, and a
portion of his bonus based on the number of months worked during that year. Within 12 months following a change of control of SupportSoft, if Mr. Beattie is terminated for any reason other than for cause or if he terminates his employment under
specified circumstances, he is entitled to vesting of 50% of his remaining unvested stock options granted to him by SupportSoft, six months of his salary, continued participation in all benefit plans for six months and a portion of his bonus based
on the number of months worked during that year.
We have a formal employment agreement with Mr. Dale, which was originally
entered into in August 1999. The agreement had an initial term of one year and is automatically renewed for three successive one-year terms unless terminated with 30 days notice. The agreement also contains non-competition provisions. In November
2001, the Compensation Committee approved an annual salary of $200,000 and a potential bonus of up to $60,000 tied to certain criteria for Mr. Dale for fiscal year 2002. Under the terms of the original employment agreement and unchanged by the
Compensation Committee, Mr. Dale is entitled to salary through date of termination if terminated for cause; salary, benefits and bonus earned through their date of termination if terminated without cause or because of constructive termination; and
salary and benefits for three months after termination if terminated for disability.
Mr. Duckwitz is entitled to an annual
salary of $250,000 and variable compensation based on certain criteria as determined by the Company. Under the terms of Mr. Duckwitz’s offer letter, Mr. Duckwitz received a signing bonus of $30,000. In addition, under the terms of his offer
letter, if Mr. Duckwitz is terminated for any reason other than for cause or if he terminates his own employment under specified circumstances, he is entitled to 12 months of his salary, continued participation in all benefit plans for 12
months, and a pro rata portion of his bonus earned through the date of termination. Within 12 months following a change of control of SupportSoft, if Mr. Duckwitz is terminated for any reason other than for cause or if he terminates his employment
under specified circumstances, he is entitled to vesting of 50% of his remaining unvested stock options granted to him by SupportSoft, 12 months of his salary, continued participation in all benefit plans for 12 months and a pro rata portion of his
bonus earned through the date of termination.
Under the terms of Mr. Mowery’s offer letter, Mr. Mowery is entitled to an
annual salary of $205,000, a potential bonus of up to $70,000 tied to certain criteria as established by the Company and receipt of employee benefits provided by the Company.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee
consists of two non-employee directors, Bruce Golden and Roger Sippl. Neither Mr. Golden nor Mr. Sippl serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member
of the Company’s Board of Directors or Compensation Committee.
13
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Compensation Committee of the
Company’s Board of Directors (the “Compensation Committee”) consists of two non-employee directors, Bruce Golden and Roger J. Sippl, neither of whom have interlocking relationships as defined by the Securities and Exchange Commission.
The Compensation Committee is responsible for setting and administering the policies governing annual compensation of executive officers, considers their performance and makes recommendations regarding their cash compensation and stock options to
the full Board of Directors. The Compensation Committee was established in connection with the Company’s initial public offering and therefore the Compensation Committee has a limited history. The Compensation Committee expects, pursuant to its
charter, to periodically review the approach to executive compensation and make changes as competitive conditions and other circumstances warrant and will seek to ensure the Company’s compensation philosophy is consistent with the
Company’s best interests and is properly implemented.
Compensation Philosophy and Review
The Compensation Committee strives to ensure that the Company’s executive compensation programs will enable the Company to attract and retain key
people and motivate them to achieve or exceed certain key objectives of the Company, including certain financial goals, such as profitability and asset management.
The Compensation Committee believes that compensation of the Company’s executive officers should (a) encourage creation of stockholder value and achievement of certain
corporate objectives, (b) integrate compensation with the Company’s annual and long-term corporate objectives and strategy, and focus executive behavior on the fulfillment of those objectives, (c) provide a competitive total compensation
package that enables the Company to attract and retain, on a long-term basis, high caliber personnel, and (d) align the interests of executive officers with the long-term interests of stockholders. As the Company continues to grow and develop, the
Company and the Compensation Committee will work to shift compensation arrangements to mirror those of other publicly traded companies in similar sectors and to reflect the size and value of the Company.
To meet these objectives, executive compensation is comprised of three elements (i) base salary, (ii) incentive awards payable in cash and (iii)
long-term stock-based incentive awards. The overall compensation package is variable. The Company’s policy is generally to qualify and structure such variable compensation arrangements so as to qualify for deductibility under Section 162(m) of
the Internal Revenue Code. However, the Company reserves the discretion to pay compensation to its executive officers that may not be deductible.
The summary below describes in more detail the factors which the Board considers in establishing each of the three primary components of the variable compensation package provided to the executive officers.
Key Elements of Executive Compensation
The Compensation Committee determined the base salaries and incentive awards of the executive officers for fiscal 2002. The Company provides its executive officers with a variable compensation package consisting of
base salary, cash incentive awards and participation in benefit plans generally available to other employees.
Base
Salary. The Compensation Committee reviews salaries recommended by the Chief Executive Officer for executive officers other than the Chief Executive Officer. The Compensation Committee set the salary and bonus potential of
each executive officer on a case by case basis. Final decisions on base salary adjustments of executive officers other than the Chief Executive Officer are made with the Chief Executive Officer’s involvement. In determining the appropriate
salary levels for the executive officers, the Compensation Committee considers, among other factors, each executive officer’s relative position, scope of responsibility, industry comparables and historical and expected contributions to the
Company.
14
Cash Incentive Awards. The cash incentive awards vary for each of
the executive officers. The incentive award depends on the extent to which business and individual performance objectives are achieved. The Company’s objectives consist of operating, strategic and financial goals that are considered to be
critical to its fundamental long-term goal of building stockholder value.
Stock-based Incentive
Awards. The Compensation Committee believes that stock options provide additional incentive to executive officers to work toward maximizing stockholder value. Grants of stock options to executive officers are based upon
each executive officer’s relative position, scope of responsibility, industry comparables, historical and expected contributions to the Company, and the executive officer’s existing stock ownership and previous option grants. The Committee
strives to align the interests of the Company’s executive officers with the long-term interests of stockholders through stock option grants such that grants of stock options should relate the performance of the executive to the market
perception of the performance of the Company.
Chief Executive Officer Compensation
The Compensation Committee meets without the presence of the Chief Executive Officer to evaluate her performance and uses the same procedures described above in setting her annual
compensation package. For 2001, the Compensation Committee decided to raise Ms. Basu’s salary from $250,000 to $300,000. The Compensation Committee considered Ms. Basu’s many accomplishments in helping to grow the Company, increase the
Company’s senior management team as the Company’s business expanded in scope and grew in size, as well as Ms. Basu’s expected contributions to the Company in the future. On March 20, 2001 and November 27, 2001, Ms. Basu received
options to purchase 1,000 shares and 350,000 shares of the Company’s Common Stock at an exercise price of $4.688 and $2.70 per share, respectively, the closing prices per share on the Nasdaq National Market on those days. The options become
exercisable as to 1/48th of the shares each full month of service. As of March 15, 2002, Ms. Basu had a right to exercise 134,977 shares. Ms. Basu received a bonus of $75,000 for services rendered in 2001.
In April 2001, the Compensation Committee authorized a $320,000 temporary interest-free loan to Ms. Basu for the purpose of allowing Ms. Basu to pay
state and federal taxes associated with her exercise of 1,680,189 options in January 2000. During 2001, the Compensation Committee agreed to pay Ms. Basu $214,300 (which included $153,020 from the temporary loan) as a result of Ms. Basu being unable
to exercise her initial option grant at fair market value, which arrangement was provided for in Ms. Basu’s original offer letter.
Su |
bmitted by the Compensation Committee of the Company’s Board of Directors |
Bru |
ce Golden |
Ro |
ger J. Sippl |
15
STOCK PRICE PERFORMANCE GRAPH
The following graph illustrates a comparison of the cumulative total stockholder return (change in stock price plus reinvested dividends) of the Company’s Common Stock and the CRSP
Total Return Index for the Nasdaq U.S. and Foreign Stocks (the “Nasdaq Composite Index”) and J.P. Morgan H&Q Computer Software Index since the date of our initial public offering (July 19, 2000) through December 31, 2001. The graph
assumes that $100 was invested on July 19, 2000 (the date of the Company’s initial public offering) at the offering price of $14 per share, and $100 was invested on July 19, 2000 in the Nasdaq Composite Index and the J.P. Morgan H&Q
Computer Software Index and that all dividends were reinvested. No cash dividends have been declared or paid on the Company’s Common Stock. The Company’s Common Stock has been traded on the Nasdaq National Market since July 19, 2000. The
comparisons in the table are required by the Securities and Exchange Commission and are not intended to forecast or be indicative of possible future performance of the Company’s Common Stock.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
SUPPORTSOFT, INC.,
THE NASDAQ COMPOSITE INDEX, AND
J.P. MORGAN H&Q COMPUTER SOFTWARE INDEX
CUMULATIVE TOTAL RETURN AT PERIOD END
| July 19, 2000 |
Sept. 29, 2000 |
Dec. 29, 2000 |
Mar. 30, 2001 |
June 29, 2001 |
Sept. 28, 2001 |
Dec. 31, 2001 | |||||||||||||||
| SupportSoft, Inc. |
$ |
100 |
$ |
218.75 |
$ |
114.64 |
$ |
36.05 |
$ |
46.07 |
$ |
17.14 |
$ |
44.79 | |||||||
| J.P. Morgan H&Q Computer Software Index |
$ |
100 |
$ |
114.92 |
$ |
79.45 |
$ |
48.32 |
$ |
63.94 |
$ |
34.50 |
$ |
51.98 | |||||||
| Nasdaq Composite Index |
$ |
100 |
$ |
90.13 |
$ |
60.35 |
$ |
45.05 |
$ |
53.10 |
$ |
36.84 |
$ |
47.89 | |||||||
The information contained above under the captions “Report of the
Compensation Committee of the Board of Directors on Executive Compensation” and “Stock Price Performance Graph” shall not be deemed to be soliciting material or to be filed with the Securities and Exchange Commission, nor shall such
information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, (the “Securities Act”) or the Exchange Act, except to the extent that the Company specifically incorporates it by reference into
such filing.
16
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS(1)
The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors of SupportSoft, Inc. Management has the
primary responsibility for the financial statements and the reporting process, including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed the audited financial statements for fiscal year
2001 with management, including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements.
The Audit Committee reviewed with the independent auditors, who are responsible for expressing an opinion on the conformity of those audited financial
statements with generally accepted accounting principles, their judgments as to the quality, not just the acceptability, of the Company’s accounting principles and such other matters as are required to be discussed with the Audit Committee
under generally accepted auditing standards and in compliance with Statement on Auditing Standards No. 61. In addition, the Audit Committee has discussed with the independent auditors the auditors’ independence from management and the Company,
including the matters provided to the Audit Committee by the independent auditors in the written disclosures and the letter required by the Independence Standards Board No. 1. The Audit Committee discussed with the auditors the compatibility of
nonaudit services with the auditors’ independence.
The Audit Committee discussed with the Company’s independent
auditors the overall scope and plans for their respective audits. The Audit Committee met with the independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of the Company’s
internal controls and the overall quality of the Company’s financial reporting. The Committee held five meetings during fiscal year 2001.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors (and the Board has approved) that the audited financial statements be included in the
Company’s Annual Report on Form 10-K for the year ended December 31, 2001 for filing with the Securities and Exchange Commission. The Audit Committee and the Board have also recommended, subject to stockholder approval, the selection of the
Company’s independent auditors.
Fro |
m the members of the Audit Committee: |
Bru |
ce Golden |
Ma |
nuel Diaz |
Ed |
ward S. Russell |
(1) |
The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference into
any filing of the Company under the 1933 Act or 1934 Act, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing. |
17
PROPOSAL 2
RATIFICATION OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the
Board of Directors has appointed the firm of Ernst & Young LLP as the Company’s independent auditors for the fiscal year ending December 31, 2002, subject to ratification by the stockholders. Ernst & Young LLP has audited the
Company’s financial statements since the Company’s inception in 1997. Representatives of Ernst & Young LLP are expected to be present at the Company’s Annual Meeting. They will have an opportunity to make a statement, if they
desire to do so, and will be available to respond to appropriate questions.
Audit and Non-Audit Fees
Audit Fees. The aggregate fees billed by Ernst & Young LLP for professional services rendered for the audit of the
Company’s annual financial statements for fiscal year 2000 and the reviews of the financial statements included in the Company’s Forms 10-Q and Form 10-K was $207,000. Less than 50% of the hours expended on the engagement to audit the
Company’s financial statements for fiscal year 2001 were attributed to work performed by persons other than Ernst & Young LLP’s full time, permanent employees.
Financial Information Systems Design and Implementation Fees. No fees were billed for professional services rendered for information technology services
related to financial information systems design and implementation by Ernst & Young LLP for fiscal year 2001.
All Other
Fees. The aggregate fees billed for services rendered by Ernst & Young LLP other than for the services described above, including services rendered in connection with tax consulting, permitted internal audit
outsourcing and other non-audit services, for fiscal year 2001 was $75,000.
Upon consideration, the Audit Committee determined
that the provision of the services other than the audit services is compatible with maintaining Ernst & Young LLP’s independence.
Required
Vote
Ratification will require the affirmative vote of a majority of the shares present and voting at the meeting in person
or by proxy. In the event ratification is not provided, the Board of Directors will review its future selection of the Company’s independent auditors.
The Board of Directors recommends a vote “FOR” ratification of Ernst & Young LLP as the Company’s independent auditors.
18
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company’s directors, executive officers and any persons holding more than 10% of the
Company’s Common Stock are required to report their initial ownership of the Company’s Common Stock and any subsequent changes in that ownership to the Securities and Exchange Commission. Specific due dates for these reports have been
established and the Company is required to identify in this Proxy Statement those persons who failed to timely file these reports. Based solely on a review of Forms 3, 4 and 5 and any amendments thereto furnished to the Company, the Company
believes that all of the Section 16 filing requirements were satisfied for 2001.
OTHER MATTERS
The Company knows of no other business that will be presented at the Annual Meeting. If any other business is properly brought before the Annual
Meeting, it is intended that proxies in the enclosed form will be voted in accordance with the judgment of the persons voting the proxies.
Whether you intend to be present at the Annual Meeting or not, we urge you to return your signed proxy promptly.
By |
order of the Board of Directors. |
| |
Ra |
dha R. Basu |
President, Chief Executive Officer and Chairman of the Board |
April 10, 2002
19
| PROXY |
PROXY |
SUPPORTSOFT, INC.
THIS PROXY
IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby authorizes RADHA R. BASU or BRIAN M. BEATTIE, as Proxies with full power in each to act without
the other and with the power of substitution in each, to represent and to vote all the shares of stock the undersigned is entitled to vote at the Annual Meeting of Stockholders of SupportSoft, Inc. (the “Company”) to be held at the
Company’s headquarters at 575 Broadway, Redwood City, California on May 28, 2002 at 4:00 p.m., or at any postponements or adjournment thereof, and instructs said Proxies to vote as follows:
Shares represented by this proxy will be voted as directed by the stockholder. If no such directions are indicated, the Proxies will have the authority to vote FOR the election of directors, FOR Proposal 2, and in
accordance with the discretion of the Proxies on any other matters as may properly come before the Annual Meeting.
PLEASE MARK, DATE, SIGN, AND RETURN THIS
PROXY CARD PROMPTLY, USING THE ENCLOSED ENVELOPE.
(Continued on reverse side)
Ù FOLD AND DETACH HERE Ù
(continued from reverse side)
SUPPORTSOFT, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. []
The Board of Directors recommends a vote FOR the election of directors and FOR Proposal 2.
| 1. To elect |
FOR ALL nominees |
WITHHOLD for all nominees |
AUTHORITY TO VOTE for all nominees, except those listed below. | |||||
| (01) Radha R. Basu (02) Manuel F. Diaz (03) Bruce Golden |
(04) Claude M. Leglise (05) Edward
S. Russell (06) Roger J. Sippl |
[] |
[] |
[] | ||||
| as directors of the Company to serve until the next Annual Meeting of Stockholders or until their successors are duly elected and
qualified. (To withhold authority to vote for an individual nominee(s), write the name of such nominee(s) for whom you wish to withhold
authority to vote in the space provided below.) |
||||||||
| 2. To ratify the appointment of Ernst & Young LLP as the Company’s Independent Auditors. |
FOR |
AGAINST |
ABSTAIN | |||
| [] |
[] |
[] | ||||
| 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting or any
postponement or adjournment thereof. |
||||||
| This proxy when properly executed will be voted in the manner directed herein by the undersigned stockholder. If no direction is given, this proxy
will be voted “FOR” the election of directors listed below and “FOR” Proposal 2. | ||||||
| Please sign where indicated below. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If a corporation, please sign in full corporate name by an authorized officer. If a partnership, please sign in full partnership name by an authorized person. |
| Date: |
, 2002 |
|||||
| Signature |
| Signature if held jointly |
Ù FOLD AND DETACH HERE Ù