SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Under Rule 14a-12
PERITUS SOFTWARE SERVICES, INC.
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(Name of Registrant as Specified in Its Charter)
Not Applicable.
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(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:
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2. Aggregate number of securities to which transaction applies:
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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:
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5. Total fee paid:
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[ ] 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:
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
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Filed by Peritus Software Services, Inc.
Pursuant to Rule 14a-12 under the Securities Exchange Act of 1934
Subject Company: Peritus Software Services, Inc.
Commission File No.: 000-22647
On April 18, 2001, Peritus Software Services, Inc. issued a press release
announcing that it had executed an agreement and plan of merger with Rocket
Software, Inc. and Rocket Acquisition Company, Inc. Peritus plans to file a
proxy statement with the Securities and Exchange Commission relating to its
proposed business combination with Rocket Software. Investors and stockholders
are urged to read the proxy statement when it becomes available, because it will
contain important information about Peritus, the proposed business combination
with Rocket Software and related matters. When the proxy statement is
completed, Peritus plans to send it to its stockholders to seek their approval
of the proposed business combination. A copy of the proxy statement (when it is
filed) and other documents filed by Peritus with the SEC are available for free
at the SEC's web site at http://www.sec.gov. Peritus' stockholders may also
obtain the proxy statement and other documents without charge by directing a
request to Peritus Software Services, Inc., Attention: Ronald C. Garabedian,
112 Turnpike Road, Suite 111, Westborough, Massachusetts 01581, Telephone:
(508) 870-0963.
Peritus, Rocket Software, their respective directors, executive officers
and certain employees and other persons are deemed to be participants in the
solicitation of proxies from Peritus' stockholders to approve the proposed
business combination between Peritus and Rocket Software. Peritus' directors
and executive officers and information relating to their beneficial ownership of
shares of Peritus' common stock are disclosed in Peritus' Annual Report on Form
10-K for the fiscal year ended December 31, 2000, as filed with the Securities
and Exchange Commission on March 21, 2001. Information relating to the
beneficial ownership of shares of Peritus' common stock by Rocket Software and
by Johan Magnusson, Andrew Youniss and Matthew Kelley, who constitute all of the
directors and executive officers of Rocket Software, is also disclosed in that
Annual Report on Form 10-K. These individuals may have interests in the
proposed business combination, some of which may differ from or may be in
addition to those of Peritus' stockholders generally. The following is a
description of those differing interests:
o Rocket Software Ownership Interests. Pursuant to the terms of the agreement
and plan of merger, if the proposed business combination closes, each
outstanding share of Peritus' common stock, other than shares held by
Rocket Software and certain of its affiliates and stockholders who are
entitled to and have dissenters' rights, will be canceled and converted
into the right to receive $0.19 in cash. Rocket Software owns of record
10,000,000 outstanding shares of Peritus' common stock. In lieu of
receiving $0.19 per share for those shares, Rocket Software will receive,
as the majority stockholder of Peritus following the proposed business
combination, substantially all of the Peritus business and assets remaining
after the cash payments to Peritus' other stockholders. The following
persons and entities may be deemed to beneficially own the shares of
Peritus' common stock owned of record by Rocket Software:
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o Johan Magnusson, a director of Peritus and Chief Operating Officer,
a director and a 40% stockholder of Rocket Software;
o Andrew Youniss, a director of Peritus and President, Chief Executive
Officer, Treasurer, Clerk, a director and a 40% stockholder of Rocket
Software;
o Matthew Kelley, a former Vice President, Research and Development of
Peritus and Chief Technology Officer and a 20% stockholder of Rocket
Software; and
o Rocket Acquisition Company, Inc., a majority-owned subsidiary of Rocket
Software.
o John Giordano Employment Arrangements. Peritus is a party to an employment
agreement with John Giordano, a director of Peritus and Peritus's President,
Chief Executive Officer and Chief Financial Officer. The proposed business
combination between Peritus and Rocket Software will be deemed to be a change
in control of Peritus under the employment agreement. Pursuant to the
employment agreement, if Mr. Giordano's employment by Peritus is terminated
upon a change in control of Peritus, Mr. Giordano will be entitled to receive
a severance payment equal to his annual base compensation of $202,800, as well
as continued employee benefits until the earlier of one year following the
termination date or the date Mr. Giordano commences other employment or
consulting work. Mr. Giordano is subject to a noncompetition agreement and a
nonsolicitation agreement for a period of one year following any termination
of his employment. If the proposed business combination between Peritus and
Rocket Software were to close on or prior to June 30, 2001, Mr. Giordano will
receive a cash bonus equal to $100,000, and if it were to close after June 30,
2001 but before January 1, 2002, Mr. Giordano will receive a cash bonus equal
to $50,000. In general, the agreement of merger may be terminated by either
Peritus or Rocket Software, if the closing has not occurred on or before June
30, 2001.
o Stock Options. Pursuant to the terms of the agreement of merger, each
outstanding option to purchase Peritus' common stock, whether vested or
unvested, with a per share exercise price less than $0.19, will be converted
into the right to receive, upon the surrender of the instrument evidencing the
stock option, a cash payment equal to the product of (1) the number of shares
underlying the option and (2) the difference between $0.19 and the per share
exercise price of the option. Those options will then be canceled. Peritus has
outstanding options to purchase an aggregate of 549,375 shares of its common
stock with an exercise price less than $0.19 held by its officers, directors
and employees. The weighted average exercise price of those options is
$0.1347. Pursuant to the terms of the agreement of merger all of those options
will be canceled and converted, as described above, into the right to receive
cash payments equal to an aggregate of $30,388. Specifically, the following
individuals will receive the cash payments described below with respect to
options to purchase Peritus common stock at an exercise price less than $0.19:
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Cash Payment Upon
Conversion
Peritus Office Number of Exercise Price of Pursuant to
Name Peritus Office Options Options Agreement of Merger
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Andrea Campbell Vice President, Sales and 154,375 $0.0988 $14,079.00
Marketing
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Dominic Chan Director 15,000 $0.1719 $ 271.50
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John Giordano President, Chief 300,000 $0.1406 $14,820.00
Executive Officer, Chief
Financial Officer and
Director
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Patrick Manning Controller 30,000 $0.1875 $ 75.00
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Roland Pampel Director 25,000 $0.1468 $ 1,080.00
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If the proposed business combination between Peritus and Rocket Software
closes, all other outstanding options to purchase Peritus' common stock,
including options held by the individuals named above, will be canceled,
unless exercised prior to the closing.
o Indemnification of Directors and Officers. All rights to indemnification of
individuals who were directors and officers of Peritus as of April 18, 2001
with respect to acts and omissions occurring prior to the closing of the
proposed business combination will survive that closing for a period of six
years. For the one-year period following the closing of the proposed
business combination, Rocket Software will maintain in effect for the
benefit of the directors and officers of Peritus for acts and omissions
occurring prior to the closing a $1.5 million policy of directors' and
officers' liability insurance comparable to Peritus' existing policy.
o Employee Benefits. If the proposed business combination between Peritus and
Rocket Software closes, Rocket Software has agreed to provide each employee
of Peritus with credit for their years of service with Peritus to the same
extent as those employees are entitled to credit for service under Rocket
Software's compensation and benefit plans. Peritus employees will be
immediately eligible to participate in all benefit plans sponsored by the
surviving corporation in the proposed business combination.
The 10,000,000 outstanding shares of Peritus' common stock owned of record
by Rocket Software represent approximately 37% of the total outstanding shares
of Peritus' common stock. Pursuant to the agreement of merger, Rocket Software
is required to vote in favor of approval of the agreement of merger and the
transactions contemplated by that agreement at the special meeting of Peritus'
stockholders to be held with respect to those matters.
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