SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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CHORDIANT SOFTWARE, INC.
-----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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[LOGO OF CHORDIANT SOFTWARE, INC.]
20400 Stevens Creek Blvd., Suite 400
Cupertino, CA 95014
----------------
Notice of Annual Meeting of Stockholders
to be held on May 15, 2001
----------------
TO THE STOCKHOLDERS OF CHORDIANT SOFTWARE, INC.:
Notice Is Hereby Given that the Annual Meeting of Stockholders of Chordiant
Software, Inc., a Delaware corporation (the "Company"), will be held on
Tuesday, May 15, 2001 at 9:00 a.m. local time at the Company's principal
executive office, located at 20400 Stevens Creek Blvd., Suite 400, Cupertino,
CA 95014, for the following purposes:
1. To elect 2 directors to hold office until the 2004 Annual Meeting of
Stockholders.
2. To ratify the selection of PricewaterhouseCoopers LLP as independent
auditors of the Company for its fiscal year ending December 31, 2001.
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on April 2, 2001 as
the record date for the determination of stockholders entitled to notice of and
to vote at this Annual Meeting and at any adjournment or postponement thereof.
By Order of the Board of Directors
/S/ STEVE G. VOGEL
Steve G. Vogel
Secretary
Cupertino, California
April 20, 2001
All Stockholders are cordially invited to attend the meeting in person.
Whether or not you expect to attend the meeting, please complete, date,
sign and return the enclosed proxy as promptly as possible to ensure your
representation at the meeting. A return envelope (which is postage prepaid
if mailed in the United States) is enclosed for that purpose. Even if you
have given your proxy, you may still vote in person if you attend the
meeting. Please note, however, that if your shares are held of record by a
broker, bank or other nominee and you wish to vote at the meeting, you
must obtain from the record holder a proxy issued in your name.
CHORDIANT SOFTWARE, INC.
20400 Stevens Creek Blvd., Suite 400
Cupertino, CA 95014
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PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
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TO BE HELD ON MAY 15, 2001
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy is solicited on behalf of the Board of Directors of
Chordiant Software, Inc., a Delaware corporation ("Chordiant" or the
"Company"), for use at the Annual Meeting of Stockholders to be held on May 15,
2001, at 9:00 a.m. local time (the "Annual Meeting"), or at any adjournment or
postponement thereof, for the purposes set forth herein and in the accompanying
Notice of Annual Meeting. The Annual Meeting will be held at the principal
executive office of the Company, located at 20400 Stevens Creek Blvd., Suite
400, Cupertino, CA 95014. The Company intends to mail this proxy statement and
accompanying proxy card on or about April 20, 2001 to all stockholders entitled
to vote at the Annual Meeting.
Solicitation
The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
card and any additional information furnished to stockholders. Copies of
solicitation materials will be furnished to banks, brokerage houses,
fiduciaries and custodians holding in their names shares of common stock
beneficially owned by others to forward to such beneficial owners. The Company
may reimburse persons representing beneficial owners of common stock for the
reasonable costs associated with the forwarding of solicitation materials to
such beneficial owners. Original solicitation of proxies by mail may be
supplemented via telephone, telegram, email, facsimile or other similar
suitable means, or by personal solicitation by directors, officers or other
regular employees of the Company or, at the Company's request, by Corporate
Investor Communications, Inc. No additional compensation will be paid to
directors, officers or other regular employees for such services, but, should
it render solicitation services, Corporate Investor Communications, Inc. will
be paid its customary fee, which is not expected to exceed $5,500.00, plus
reasonable out of pocket expenses.
Voting Rights and Outstanding Shares
Only holders of record of common stock at the close of business on April 2,
2001 will be entitled to notice of and to vote at the Annual Meeting. At the
close of business on April 2, 2001 the Company had outstanding and entitled to
vote 50,596,537 shares of common stock. Each holder of record of common stock
on such date will be entitled to one vote for each share held on all matters to
be voted upon at the Annual Meeting.
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether any matter
to which this proxy statement relates has been approved.
Revocability of Proxies
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of the Company, at the Company's principal executive
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office, 20400 Stevens Creek Blvd., Suite 400, Cupertino, CA 95014, a written
notice of revocation or a duly executed proxy bearing a later date, or it may
be revoked by attending the meeting and voting in person. Attendance at the
meeting will not, by itself, revoke a proxy.
Stockholder Proposals
The deadline for submitting a stockholder proposal for inclusion in the
Company's proxy statement and form of proxy for the Company's 2002 annual
meeting of stockholders pursuant to Rule 14a-8 of the Securities and Exchange
Commission is January 20, 2002.
Stockholders wishing to submit proposals or director nominations at the 2002
Annual Meeting that are not to be included in such proxy statement and proxy
must submit written notice of such proposals or nominations to the Secretary of
the Company. Pursuant to the Company's bylaws, such notice must be received at
the principal executive office of the Company, located at 20400 Stevens Creek
Blvd., Suite 400, Cupertino, CA 95014, not later than the close of business on
March 16, 2002 nor earlier than the close of business on February 14, 2002.
Such notice must also provide as to each matter the stockholder proposes to
bring before the annual meeting: (i) a brief description of the business
desired to be brought before the annual meeting and the reasons for conducting
such business at the annual meeting, (ii) the name and address, as they appear
on the Company's books, of the stockholder proposing such business, (iii) the
class and number of shares of the Company which are beneficially owned by the
stockholder, (iv) any material interest of the stockholder in such business and
(v) any other information that is required to be provided by the stockholder
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended (the "1934 Act").
Stockholders wishing to submit proposals or director nominations are advised
to review the Company's bylaws, which contain information relating to the
foregoing requirements.
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PROPOSAL 1
ELECTION OF DIRECTORS
The Company's amended and restated certificate of incorporation and bylaws
provide that the board of directors shall be divided into three classes, each
class consisting, as nearly as possible, of one-third of the total number of
directors, with each class having a three-year term. Vacancies on the board may
be filled only by persons elected by a majority of the remaining directors. A
director elected by the board to fill a vacancy (including a vacancy created by
an increase in the number of directors) shall serve for the remainder of the
full term of the class of directors in which the vacancy occurred and until
such director's successor is elected and qualified.
The board of directors is presently composed of eleven (11) members divided
into three classes. The authorized size of the board will decrease
automatically by one (1) member for each vacancy arising prior to May 14, 2001,
but in no event will the size of the board decrease to fewer than seven (7)
board members without further board authorization.
The division of the three classes and their respective initial election
dates are as follows: (i) the class I directors' term will expire at the 2001
annual meeting; (ii) the class II directors' term will expire at the 2002
annual meeting; and (iii) the class III directors' term will expire at the 2003
annual meeting. At each annual meeting of stockholders after the initial
election dates mentioned above, the successors to directors whose terms will
then expire, as well as those directors with expiring terms who are reelected,
will be elected to serve from the time of election and qualification until the
third annual meeting following their election.
There are five (5) class I directors whose term of office expires at the
2001 annual meeting. Two current class I directors, Kathryn C. Gould and David
R. Springett, have been nominated by the board for election to a three-year
term, which expires at the 2004 annual meeting. Oliver D. Curme, Carol L.
Realini and William Raduchel, each of whom is a current class I director, have
expressed a desire not to run for election at the 2001 annual meeting and are
expected to resign prior to May 14, 2001. Mitchell Kertzman, currently serving
as a class III director, has expressed that he may resign prior to the 2001
annual meeting. Each resignation prior to May 14, 2001 will automatically
decrease the authorized size of the board by one (1). If the four directors who
currently contemplate resigning all resign prior to May 14, 2001, the
authorized size of the will be seven (7) members on May 14, 2001.
If elected at the 2001 annual meeting, each of the nominees will serve until
the 2004 annual meeting and until his or her successor is elected and has
qualified, or until such director's earlier death, resignation or removal. Each
person nominated for election has agreed to serve if elected, and management
has no reason to believe that any nominee will be unable to serve.
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote at the meeting. Shares represented by
executed proxies will be voted, if authority to do so is not withheld, for the
election of the two nominees named below. In the event that any nominee should
be unavailable for election as a result of an unexpected occurrence, such
shares will be voted for the election of such substitute nominee as management
may propose.
Set forth below is biographical information for each person nominated for
election to a class I directorship at the 2001 annual meeting.
Nominees for Election for a Three-year Term Expiring at the 2004 Annual Meeting
Kathryn C. Gould has been a director of Chordiant since July 1996. She is a
manager for each of the general partners for Foundation Capital I, II, and III,
a family of venture capital limited partnerships, and has been a member of that
firm since December 1995. Since 1989, Ms. Gould has been a general partner of
Merrill, Pickard, Anderson & Eyre, a venture capital firm. Ms. Gould also
serves as a director of Eloquent, Inc., a
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Web-based business communications solutions provider, and as a director of
Interwoven, Inc., a software provider. Ms. Gould received a B.Sc. in physics
from the University of Toronto and an M.B.A. from the University of Chicago.
David R. Springett, Ph.D. has been a director of Chordiant since January
2000. Dr. Springett has served as president of the Community College
Foundation, an educational foundation, since February 1994. Dr. Springett was
also president of Strategic Marketing Associates, a marketing company, from
January 1992 to January 1994 and held various positions with Xerox Corporation,
a photocopy and computer equipment company, from May 1963 to May 1991,
including vice-president, strategic marketing and director, European marketing.
He is a member of the board of directors of the California Vehicle Foundation
and the California State Commission on Welfare Reform and Training. Dr.
Springett has received degrees from the Royal Military College of Canada, the
University of Toronto, Queen's University and Harvard University.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NAMED NOMINEE.
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Chordiant's officers and current directors and the positions held by them
are as follows:
Name Age Position
---- --- --------
Samuel T. Spadafora.. 58 Chief Executive Officer and Chairman of the Board
Stephen Kelly........ 39 President, Chief Operating Officer and Director
Donald J. Morrison... 43 Executive Vice President, Business Development and
Marketing
Joseph F. Tumminaro.. 52 Chief Strategy Officer and Director
Steve G. Vogel....... 49 Senior Vice President of Finance, Chief Financial
Officer, Chief Accounting Officer and Secretary
Oliver D. Curme...... 47 Director
Kathryn C. Gould..... 50 Director
William E. Ford...... 39 Director
Mitchell Kertzman.... 52 Director
Robert S. McKinney... 59 Director
William Raduchel..... 54 Director
Carol L. Realini..... 47 Director
David R. Springett... 65 Director
Class I Directors Not Continuing In Office After the 2001 Annual Meeting
Oliver D. Curme has been a director of Chordiant since July 1996. Mr. Curme
has served as a general partner of several entities associated with Battery
Ventures LP, a venture capital company, since 1988. Mr. Curme received his B.S.
from Brown University and his M.B.A. from Harvard Business School. Mr. Curme
has elected not to run for a new term as a class I director and expects to
resign as a director prior to the 2001 annual meeting.
Carol L. Realini was a founder of Chordiant and has been a director since
Chordiant's inception in March 1991. She recently joined the board of Finestra
Software in Palo Alto, CA. Ms. Realini has served as president, chief executive
officer and chairman of XO Family, Inc. from November 1999 through November
2000. From May 1997 to November 1999, she served as Chordiant's chairman. From
May 1997 until June 1998, Ms. Realini served as Chordiant's president and chief
executive officer. From January 1990 until May 1997,
4
Ms. Realini served as president, chief executive officer and chairman of J.
Frank Consulting, Inc., a consulting services firm and the predecessor company
to Chordiant. From June 1988 to January 1990, Ms. Realini served as vice
president of sales and marketing of Legato Systems, Inc. Ms. Realini received
her B.A. with honors in mathematics from University of California, Santa Cruz
and her masters degree from California State University, San Jose. Ms. Realini
and Mr. Tumminaro, Chordiant's chief strategy officer and also a director, are
married to each other. Ms. Realini has elected not to run for a new term as a
class I director and expects to resign prior to the 2001 annual meeting.
William Raduchel, Ph.D has been a director of Chordiant since August 1998.
Mr. Raduchel is currently the chief technology officer of AOL Time Warner,
Inc., an online service provider. Mr. Raduchel held various positions with Sun
Microsystems, a computer systems company, from 1989 to 1998, including chief
strategy officer from January 1998 to September 1999, vice president, corporate
planning and development and chief information officer from July 1991 to
January 1998 and chief financial officer. Mr. Raduchel received his B.A. from
Michigan State University and his A.M. and Ph.D. from Harvard University. He is
a director of MIH Limited and OpenTV, Inc. and two private companies. Mr.
Raduchel has elected not to run for a new term as a class I director and
expects to resign as a director prior to the 2001 annual meeting.
Class II Directors Continuing in Office Until the 2002 Annual Meeting
Joseph F. Tumminaro is a founder of Chordiant and has served as a director
since Chordiant's inception in March 1991. In April 2001, Mr. Tumminaro became
Chordiant's chief strategy officer, stepping down from the position of chief
technology officer that he had held since Chordiant's inception in March 1991.
Mr. Tumminaro also served as secretary of Chordiant from its inception until
October 1999. From 1985 to 1990, Mr. Tumminaro served as president, vice
president of technology and a director of J. Frank Consulting, the predecessor
company to Chordiant. Mr. Tumminaro received his B.A. from Southern Illinois
University. Mr. Tumminaro and Ms. Realini, a current director of Chordiant who
has elected not to run for a second term as a class I director and expects to
resign as a director prior to the 2001 annual meeting, are married to each
other.
Stephen Kelly has been a director of Chordiant since March 2001. Mr. Kelly
has acted as Chordiant's president and chief operating officer since October
2000. Between September 1998 and October 2000, he served as Chordiant's senior
vice president of Europe, Middle East and Africa operations. From October 1997
to September 1998, Mr. Kelly served as Chordiant's vice president of Europe,
Middle East and Africa operations. From 1987 to 1998, Mr. Kelly worked in
various sales, alliances and marketing roles at Oracle's United Kingdom
operations, most recently as director of Europe, Middle East and Africa
alliances and industry groups. Mr. Kelly received his B.A. with honors in
business administration and accounting from the University of Bath, in England.
William E. Ford was appointed as a director of Chordiant on March 27, 2001.
Mr. Ford has served as a director of Prime Response from October 1997 until it
was acquired by Chordiant on March 27, 2001. Mr. Ford has served as a managing
member of General Atlantic Partners, LLC (or its predecessor), a private equity
investment firm that invests globally in Internet information technology
companies, since 1991. Mr. Ford also serves as a director of Priceline.com,
Inc., a provider of Internet pricing systems, E*Trade Group, Inc., a provider
of Internet financial services, Eclipsys Corporation, a software company, Wit
Soundview Group, Inc., a technology-focused investment bank and several private
information technology companies.
Class III Directors Continuing in Office Until the 2003 Annual Meeting
Samuel T. Spadafora has served as chief executive officer and a director of
Chordiant since June 1998. From June 1998 until October 2000, he was also
Chordiant's president. In November 1999, Mr. Spadafora was elected as
Chordiant's chairman of the board of directors. From April 1994 to June 1998,
Mr. Spadafora served as vice president of worldwide field operations for the
microelectronic business of Sun Microsystems, a computer systems and networking
company. Mr. Spadafora holds a B.A. in marketing from Eastern Michigan
University.
5
Robert S. McKinney has been a director of Chordiant since January 2000. Mr.
McKinney has served as president of Information Management Consulting, a
consulting firm, since September 1998 and is acting chief information officer
of Metropolitan Life Insurance Company's individual business and client
services business units. Mr. McKinney was chief information officer of Tenneco
Automotive Inc., an automotive parts manufacturing company, from March 1996 to
September 1998 and chief information officer of PaineWebber, an investment
banking firm, from February 1990 to February 1996. Mr. McKinney received a B.S.
in mechanical engineering from the U.S.M.M.S, Kings Point and a masters degree
in management and industrial engineering from Columbia University.
Mitchell Kertzman has been a director of Chordiant since February 1997. Mr.
Kertzman has served as chief executive officer and a director of Liberate
Technologies, a Internet access software company, since November 1998. From
November 1998 to January 2001 Mr. Kertzman served as president of Liberate
Technologies. Before joining Liberate, Mr. Kertzman was a member of the board
of directors of Sybase, Inc., a database company, from February 1995 until
November 1998. He has served as chairman of Sybase's board of directors since
July 1997. Between February 1998 and August 1998, he also served as co-chief
executive officer of Sybase. From July 1996 until February 1997 Mr. Kertzman
served as chief executive officer of Sybase, and from July 1996 until July 1997
he also served as president of Sybase. Between February 1995 and July 1996, Mr.
Kertzman served as an executive vice president of Sybase. In February 1995,
Sybase merged with Powersoft Corporation, a provider of application development
tools. Mr. Kertzman had served as chief executive officer and a director of
Powersoft since he founded it in 1974. Mr. Kertzman has also served as a
director of CNET Networks, Inc., an Internet content company, since 1997 and as
a director of Handspring, Inc. since 2000.
Executive Officers Who Are Not Directors
Steve G. Vogel has served as Chordiant's senior vice president, chief
financial officer and chief accounting officer since March 12, 2001. From April
of 2000 to March 2001, Mr. Vogel was vice president and chief financial officer
of Tessera, Inc., an intellectual property company serving the semiconductor
industry. From February 1999 to March 2000, Mr. Vogel was the vice president of
finance and chief financial officer of iLogistix, a supply chain management
company. On March 23, 2001 (more than a year after Mr. Vogel left his
position), iLogistix filed for protection under Chapter 11 of the federal
bankruptcy laws. Mr. Vogel also served from 1994 to 1999 as the vice president,
chief financial officer and general counsel of Microbank Software, Inc., a
software company providing back office automation to the financial services
industry. Previously, Mr. Vogel was the vice president and chief financial
officer of Transform Logic Corp., director of finance for Guardian Industries
and in progressive financial roles at Ryder System, Corning and Ford Motor
Company. He holds an MBA from The Wharton School at the University of
Pennsylvania, an LL.M. in corporation law from the New York University School
of Law, a JD, cum laude, from the Arizona State University School of Law, and a
BA and MBA from Lehigh University. An attorney at law, Mr. Vogel was admitted
to the State Bars of New York, New Jersey and Arizona, and holds both CPA and
CMA designations.
Donald J. Morrison has served as Chordiant's executive vice president,
business development and marketing since September 2000. From January 1999
until September 2000, Mr. Morrison served as Chordiant's executive vice
president, worldwide sales and marketing. Mr. Morrison joined Chordiant as
executive vice president of marketing in June 1997. From March 1995 to June
1996, Mr. Morrison served as senior vice president of marketing and OEM sales
for Network Peripherals Inc., a high-speed networking company focused on fast
Internet products. From January 1994 to February 1995, Mr. Morrison served as
vice president of marketing at Strategic Mapping, Inc., an applications
software company. Mr. Morrison received his B.A. in business administration
from San Francisco State University and his masters degree in marketing
management from Golden Gate University.
6
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended December 31, 2000 the board of directors held
ten meetings and acted by unanimous written consent one time. The board has
both an audit committee and a compensation committee.
Board and Committee Attendance
During the fiscal year ended December 31, 2000, all directors, except Joseph
F. Tumminaro and Oliver D. Curme, attended at least 75% of the aggregate of the
meetings of the board and of the committees on which they served held during
the period for which they were a director or committee member, respectively.
Compensation Committee
The compensation committee makes recommendations to the board concerning
salaries and incentive compensation for directors, officers, employees and
consultants of the Company, and awards stock options to employees and
consultants under the Company's stock option plans. The compensation committee
is composed of three outside directors: Kathryn C. Gould, Robert S. McKinney
and Mitchell Kertzman. Mr. McKinney was appointed to the compensation committee
on March 26, 2001. It met two times and acted by unanimous written consent four
times during the fiscal year ended December 31, 2000. The "Report of the
Compensation Committee of the Board of Directors on Executive Compensation" can
be found beginning at page 19 of this Proxy Statement.
Audit Committee
The audit committee is presently composed of three directors, Oliver D.
Curme, William Raduchel and David R. Springett, each of whom is independent (as
independence is defined in Rule 4200(a)(14) of the Nasdaq Stock Market listing
standards). It met three times during the fiscal year ended December 31, 2000.
The audit committee meets at least annually with both the Company's
independent auditors and management to review the results of the annual audit
and discuss the year-end financial statements and all other related
disclosures; recommends to the board on an annual basis the independent
auditors to be retained for the ensuing year; evaluates the independent
auditors' performance, including the scope, extent and procedures of the audit
and the compensation to be paid therefor; receives and considers the
independent auditors' comments as to controls, adequacy of staff and management
performance and procedures in connection with audit and financial controls;
reviews and approves all professional services provided to the Company by its
independent auditors and assesses the potential effect of such services on the
independence of such auditors; remains, through the individual efforts of its
members, knowledgeable with respect to accounting and reporting principles and
practices applied by the Company in preparing its financial statements,
including without limitation, the policies for recognition of revenues in such
financial statements; investigates, reviews and reports to the board the
propriety and ethical implications of any transaction made known to it between
the Company and any Company employee, officer or director, or any affiliates
thereof; consults with the independent auditors and Company management
regarding the scope and quality of internal accounting and financial reporting
controls in effect at the Company; reviews all quarterly financial statements
and any changes in accounting policies; and evaluates the cooperation received
by the independent auditors during their audit examination, including their
access to all requested records, data and information; and elicits the comments
of management regarding the responsiveness of the independent auditors to the
Company's needs.
7
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The audit committee is responsible for providing independent, objective
oversight of Chordiant's accounting functions and internal controls. The audit
committee is composed of independent directors (as independence is defined in
Rule 4200(a)(14) of the Nasdaq Stock Market listing standards). The audit
committee acts under a written charter first adopted and approved by the board
in November 1999 and subsequently amended in January 2000. A copy of the audit
committee charter, as amended, is attached to this Proxy Statement as Appendix
A.
The responsibilities of the audit committee include recommending to the
board an accounting firm to be engaged as Chordiant's independent accountants
for the ensuing fiscal year. Additionally, and as appropriate, the audit
committee reviews and evaluates the independent accountants' performance, and
discusses and consults with Chordiant's management and the independent
accountants regarding the following:
. the plan for, and the independent accountants' report on, each audit of
Chordiant's financial statements;
. changes in Chordiant's accounting practices, principles, controls or
methodologies;
. significant developments in accounting rules;
. the adequacy of Chordiant's internal accounting and financial reporting
controls and financial accounting and auditing personnel; and
. the cooperation received by the independent auditors during their audit
examination, including access to all requested records, data and
information and the responsiveness of the independent auditors to
Chordiant's needs.
The audit committee is responsible for recommending to the board that
Chordiant's financial statements be included in the Company's Annual Report on
Form 10-K. The audit committee undertook a number of steps before reaching a
decision to make this recommendation with respect to the Company's Annual
Report on Form 10-K for the year ended December 31, 2000.
First, the audit committee discussed with PricewaterhouseCoopers LLP, the
Company's independent accountants for fiscal year ended December 31, 2000,
those matters communicated to and discussed with the audit committee under
applicable auditing standards. This discussion specifically included those
matters enumerated under SAS 61 (Codification of Statement on Auditing
Standards, AU Section 380), which includes, among other things, methods used to
account for significant unusual transactions, the effect of significant
accounting policies in controversial or emerging areas for which there is a
lack of authoritative guidance or consensus, the process used by management in
formulating particularly sensitive accounting estimates and the basis for the
auditor's conclusion regarding the reasonableness of those estimates,
disagreements with management over the application of accounting principles,
the basis for management's accounting estimates and the disclosures in the
financial statements.
Second, the audit committee reviewed the written disclosures from the
independent accountants (covering those matters addressed by Independence
Standards Board Standard No. 1, INDEPENDENCE DISCUSSIONS WITH AUDIT COMMITTEES)
and then discussed with PricewaterhouseCoopers LLP various considerations
relevant in the assessment of their independence, including the rendition of
non-audit services by PricewaterhouseCoopers LLP. This discussion informed the
audit committee of the extent of PricewaterhouseCoopers LLP's independence, and
assisted the committee in determining such independence was sufficient to
assure that the auditing and oversight functions provided by
PricewaterhouseCoopers LLP generated unbiased and objective information.
Specifically, the audit committee determined the rendering of information
technology consulting services and all other non-audit services by
PricewaterhouseCoopers LLP is compatible with maintaining the auditor's
independence.
Finally, the audit committee reviewed and discussed, with Chordiant's
management and PricewaterhouseCoopers LLP, Chordiant's audited consolidated
balance sheets at December 31, 2000 and 1999,
8
consolidated statements of operations, consolidated statements of stockholders'
equity and consolidated statements of cash flows for each of the years in the
three-year period ended December 31, 2000.
Based on the discussions with PricewaterhouseCoopers LLP concerning the
audit, the independence discussions and the financial statements review, and
such other matters deemed relevant and appropriate by the audit committee, the
audit committee recommended to the board that the audited financial statements
be included in Chordiant's 2000 Annual Report on Form 10-K and that
PricewaterhouseCoopers LLP be retained as the Company's independent auditors
for the fiscal year ending December 31, 2001.
February 1, 2001
Oliver D. Curme, Audit Committee
Chair
William Raduchel, Audit Committee
Member
David R. Springett, Audit Committee
Member
9
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The board of directors has selected PricewaterhouseCoopers LLP as the
Company's independent auditors for the fiscal year ending December 31, 2001 and
has further directed that management submit the selection of independent
auditors for ratification by the stockholders at the Annual Meeting.
PricewaterhouseCoopers LLP has audited the Company's financial statements since
1996. Representatives of PricewaterhouseCoopers LLP are expected to be present
at the Annual Meeting, will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.
Stockholder ratification of the selection of PricewaterhouseCoopers LLP as
the Company's independent auditors is not required by the Company's bylaws or
otherwise. However, the board is submitting the selection of
PricewaterhouseCoopers LLP to the stockholders for ratification as a matter of
good corporate practice. If the stockholders fail to ratify the selection, the
audit committee and the board will reconsider whether or not to retain that
firm. Even if the selection is ratified, the audit committee and the board in
their discretion may direct the appointment of different independent auditors
at any time during the year if they determine that such a change would be in
the best interests of the Company and its stockholders.
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the Annual Meeting will
be required to ratify the selection of PricewaterhouseCoopers LLP as the
Company's independent auditors for the fiscal year ending December 31, 2001.
Abstentions will be counted toward the tabulation of votes cast on proposals
presented to the stockholders and will have the same effect as negative votes.
Broker non-votes are counted towards a quorum, but are not counted for any
purpose in determining whether this matter has been approved.
Audit Fees. During the fiscal year ended December 31, 2000, the aggregate
fees billed by PricewaterhouseCoopers LLP for the audit of the Company's
financial statements for such fiscal year and for the reviews of the Company's
interim financial statements was $226,000.
Financial Information Systems Design and Implementation Fees. During the
fiscal year ended December 31, 2000, PricewaterhouseCoopers LLP did not provide
information technology consulting services to the Company.
All Other Fees. During fiscal year ended December 31, 2000, the aggregate
fees billed by PricewaterhouseCoopers LLP for professional services other than
audit and information technology consulting fees was $852,000.
The audit committee has determined the rendering of the information
technology consulting services and all other non-audit services by
PricewaterhouseCoopers LLP is compatible with maintaining the auditor's
independence.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2.
10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth certain information regarding the beneficial
ownership of the Company's outstanding common stock as of March 30, 2001 by:
(i) each director and nominee for director; (ii) each of the executive officers
named in the Summary Compensation Table; (iii) all executive officers and
directors of the Company as a group; and (iv) each person (or group of
affiliated persons) who is known by the Company to beneficially own more than
5% of the Company's outstanding common stock.
Beneficial Ownership(1)
Percent
Number of of
Name of Beneficial Owner Shares total
- ------------------------ ---------- -------
Directors, Nominees and Executive Officers:
Samuel T. Spadafora(2)................................... 1,664,233 3.2
Stephen Kelly(3)......................................... 1,254,083 2.4
Donald J. Morrison(4).................................... 684,794 1.3
Joseph F. Tumminaro(5)................................... 4,498,122 8.9
Steve G. Vogel(6)........................................ 312,500 *
Oliver D. Curme(7)....................................... 2,526,263 5.0
Kathryn C. Gould(8)...................................... 3,140,813 6.2
Mitchell Kertzman(9)..................................... 113,825 *
Robert S. McKinney(10)................................... 25,000 *
William Raduchel(11)..................................... 112,500 *
David R. Springett(12)................................... 25,000 *
Carol L. Realini(5)...................................... 4,498,122 8.9
William Ford(13)......................................... 5,801,528 11.4
All directors and officers as a group(14)................ 24,656,783 45.4
Five Percent Stockholders:
Entities associated with General Atlantic Partners,
LLC(15)................................................. 5,749,028 11.0
General Atlantic Services Corporation
3 Pickwick Plaza
Greenwich, CT 06830
First Plaza Group Trust(16).............................. 3,120,719 6.2
The Chase Manhattan Bank, Trustee
4 Chase Metrotech Center
18th Floor
Brooklyn, NY 11245
Entities associated with Foundation Capital, L.P.(17).... 3,115,813 6.2
70 Willow Road
Suite 200
Menlo Park, CA 94025
James Carling(18)........................................ 3,171,300 6.3
291 Nahanton Street
Newton, MA 02459
Battery Ventures III, L.P................................ 2,501,263 5.0
20 William Street
Suite 200
Wellesley, MA 02481
- --------
*Less than 1%.
(1) Beneficial ownership is calculated according to rules established by the
Securities and Exchange Commission. According to such rules, in computing
the number of shares beneficially owned by a person
11
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 30, 2001 are considered outstanding.
These shares, however, are not considered outstanding for the purposes of
computing the percentage ownership of any other person. Except as
indicated in the footnotes to this table or as a result of applicable
community property laws, the Company believes each stockholder named in
the table has sole voting and investment power to the shares shown as
beneficially owned by them.
This table is based upon information supplied by officers, directors and
principal stockholders and Schedule 13F and 13G filings filed with the
Securities and Exchange Commission.
(2) Consists of:
. shares held by Mr. Spadafora's children;
. 4,083 shares acquired under Chordiant's Employee Stock Purchase Plan;
. 70,000 shares held by trusts for the benefit of Mr. Spadafora's
children and grandchildren;
. 653,750 shares held by a family trust; and
. 936,400 shares issuable upon exercise of options within 60 days of
March 30, 2001.
(3) Consists of:
. 4,083 shares acquired under Chordiant's Employee Stock Purchase Plan;
. 138,541 shares held by Mr. Kelly's spouse; and
. 1,111,459 shares issuable upon exercise of options within 60 days of
March 30, 2001.
(4) Consists of:
. 15,000 shares held by trusts for the benefit of Mr. Morrison's
children;
. 1,935 shares acquired under Chordiant's Employee Stock Purchase Plan;
and
. 438,172 shares issuable upon exercise of options within 60 days of
March 30, 2001.
(5) The common stock held by Mr. Tumminaro and Ms. Realini consists of:
. 4,424,696 shares held by a family trust and trusts for the benefit of
Mr. Tumminaro's and Ms. Realini's children; and
. 73,426 shares issuable upon exercise of options within 60 days of
March 30, 2001.
(6) Consists of 312,500 shares issuable upon exercise of options within 60
days of March 30, 2001.
(7) Includes 25,000 shares issuable upon exercise of options within 60 days
of March 30, 2001. Includes 2,501,263 shares held by Battery Ventures
III, L.P. Mr. Curme is a managing member of Battery Partners III LLC,
general partner of Battery Ventures III, L.P. Mr. Curme disclaims
beneficial ownership of the shares held by these entities except to the
extent of his proportionate partnership interest in these entities.
(8) Includes 25,000 shares issuable upon exercise of options within 60 days
of March 30, 2001. Ms. Gould is a managing member of Foundation Capital
Management, LLC, which is the general partner and managing member of
Foundation Capital, LP and Foundation Capital Entrepreneurs Fund LLC. She
disclaims beneficial ownership of the shares held by the entities
associated with Foundation Capital, except to the extent of her financial
interest in these entities.
(9) Includes 113,825 shares issuable upon exercise of options within 60 days
of March 30, 2001.
(10) Includes 25,000 shares issuable upon exercise of options within 60 days
of March 30, 2001.
(11) Includes 112,500 shares issuable upon exercise of options within 60 days
of March 30, 2001.
(12) Includes 25,000 shares issuable upon exercise of options within 60 days
of March 30, 2001.
(13) Includes 27,500 shares issuable upon exercise of options assumed as a
result of the Company's acquisition of Prime Response, and 25,000 shares
issuable upon the exercise of options granted under the Company's
12
non-employee director plan (upon Mr. Ford becoming a member of the
Chordiant board) within 60 days of March 30, 2001. Ms. Ford is a managing
member of General Atlantic Partners, LLC ("GAP LLC") and a general partner
of GAP Coinvestment Partners, L.P. ("GAPCO I") and GAP Coinvestment
Partners II, L.P. ("GAPCO II"). GAP LLC is the general partner of General
Atlantic Partners 42, L.P. ("GAP 42"), General Atlantic Partners 48, L.P.
("GAP 48"), General Atlantic Partners 52 ("GAP 52") and General Atlantic
Partners 57, L.P. ("GAP 57"). The managing members of GAP LLC are also the
general partners of GAPCO I and GAPCO II. GAP 42, GAP 48, GAP 52, GAP 57,
GAP LLC, GAPCO I and GAPCO II (the "GAP Group") are a "group" within the
meaning of Rule 13d-5 of the Securities Exchange Act of 1934, as amended.
Mr. Ford disclaims beneficial ownership of the securities held by entities
associated with GAP LLC, except to the extent of his pecuniary interest
therein.
(14) Includes shares described in the notes above, as applicable.
(15) Consists of:
. 2,818,400 shares held by General Atlantic Partners 42, L.P;
. 286,267 shares held by General Atlantic Partners, 48 L.P;
. 932,185 shares held by General Atlantic Partners, 52 L.P;
. 406,476 shares held by General Atlantic Partners, 57 L.P;
. 828,018 shares held by GAP Coinvestment Partners, L.P;
. 290,182 shares held by GAP Coinvestment Partners II, L.P; and
. 187,500 shares issuable upon the exercise of warrants held by GAP
Coinvestment Partners, L.P. and GAP Coinvestment Partners II, L.P. The
warrants are immediately exercisable, and expire on March 3, 2004.
General Atlantic Partners, LLC ("GAP LLC") is the general partner of
General Atlantic Partners 42, L.P. ("GAP 42"), General Atlantic Partners
48, L.P. ("GAP 48"), General Atlantic Partners 52 ("GAP 52") and General
Atlantic Partners 57, L.P. ("GAP 57"). The managing members of GAP LLC are
also the general partners of GAP Coinvestment Partners, L.P. ("GAPCO I")
and GAP Coinvestment Partners II ("GAPCO II"). GAP 42, GAP 48, GAP 52, GAP
57, GAP LLC, GAPCO I and GAPCO II (the "GAP Group") are a "group" within
the meaning of Rule 13d-5 of the Securities Exchange Act of 1934, as
amended. Mr. Ford disclaims beneficial ownership of the securities held by
entities associated with GAP LLC, except to the extent of his pecuniary
interest therein.
(16) The Chase Manhattan Bank acts as the trustee for First Plaza Group Trust.
These shares may be considered to be owned beneficially by General Motors
Investment Management, a wholly-owned subsidiary of General Motors
Corporation. General Motors Investment Management is serving as the
trust's investment manager for these shares and in that capacity it has
the sole power to direct the trustee about the voting and disposition of
these shares. Because of the trustee's limited role, beneficial ownership
of the shares by the trustee is disclaimed.
(17) Consists of:
. 265,987 shares held by Foundation Capital Entrepreneurs LLC; and
. 2,849,826 shares held by Foundation Capital LP.
Foundation Capital Management, LLC is the managing member of Foundation
Capital Entrepreneurs Fund, LLC and is the general partner of Foundation
Capital, LP. Ms. Gould is a director of Chordiant and disclaims beneficial
ownership of the shares held by these Foundation Capital entities, except
to the extent of her financial interest as a member of Foundation Capital
Management, LLC.
(18) Mr. Carling is the former chief technology officer of Prime Response,
Inc. His stockholdings in Chordiant were acquired as a result of the
share exchange that occurred pursuant to the merger agreement between
Chordiant and Prime Response under which 0.6 shares of Chordiant common
stock were exchanged for each outstanding share of Prime Response's
common stock.
13
DIRECTOR AND EXECUTIVE COMPENSATION
Compensation of Directors
Directors do not receive cash compensation from the Company for their
services as members of the board or for attendance at committee meetings.
Directors are, however, eligible for reimbursement for expenses incurred in
connection with attendance at board meetings in accordance with Company policy.
Each non-employee director also receives stock option grants under the 1999
Non-Employee Directors' Stock Option Plan (the "Directors' Plan") (only non-
employee directors of the Company or an affiliate of such directors are
eligible to receive options under the Director's Plan). Options granted under
the Director's Plan are non-discretionary, and are intended by the Company not
to qualify as incentive stock options.
Under the Directors' Plan, each non-employee director is automatically
entitled to receive an initial option to purchase 25,000 shares of the
Company's common stock. Pursuant to the terms of the Directors' plan, initial
grants to purchase 25,000 shares of the Company's common stock were made to
those non-employee directors serving on the board on February 14, 2000, the
effective date of the Company's initial public offering. The Directors' Plan
also provides that each director elected or appointed subsequent to February
14, 2000 receive an initial option to purchase 25,000 shares of the Company's
common stock on the date of such non-employee director's election or
appointment to the board. As provided under the Directors' Plan, these option
grants are immediately exercisable with 25% of the shares vesting on the
anniversary of the grant date and 1/48th of the shares vesting each month
thereafter.
In addition, on the day after each of the Company's annual meetings of
stockholders, starting with the 2001 annual meeting, the Directors' Plan
provides that each person who is then a non-employee director will
automatically be granted an annual option to purchase 7,500 shares of the
Company's common stock. As provided under the Directors' Plan, these annual
option grants are immediately exercisable, with the shares vesting in equal
monthly installments over a year period measured from the date of grant.
Beginning after the Company's 2001 annual Meeting, if a non-employee director
is appointed to the board between annual meetings, the annual option is
prorated to reflect the amount of time to be served until the next annual
meeting.
Finally, on the day after each of the Company's annual meetings, starting
with the annual meeting in 2001, the Directors' Plan provides that each non-
employee director who is then serving on a board committee will automatically
be granted an option to purchase 5,000 shares of the Company's common stock. As
provided under the Directors' Plan, these option grants are exercisable
immediately and vests monthly over the year period measured from the date of
grant. If the non-employee director is appointed to a committee after the
annual meeting, the option is prorated according to the time to be served until
the next annual meeting.
The exercise price of options granted under the Directors' Plan is the fair
market value of the Company's common stock on the date of the grant. Each
option grant made pursuant to the Directors' Plan has a term of ten years.
However, the time in which an option granted under the Directors' Plan may be
exercised ends three months from the date the optionee's service with the
Company is terminated, with the exception of termination resulting from death
or disability of the optionee, in which case the option terminates 12 months
following the former and 18 months following the later of the two above-
mentioned events.
In addition, in the event of a dissolution, liquidation, sale of
substantially all the assets of the Company, a merger or consolidation in which
the Company is not the surviving corporation, a reverse merger in which the
Company is the surviving corporation but the shares of the Company's common
stock outstanding immediately preceding the merger are converted by virtue of
the merger into other property or the acquisition by any person, entity or
group of the beneficial ownership of the Company's securities representing at
least 50% of the combined voting power permitted to vote in the election of
directors, then those unvested options issued under the Directors' Plan held by
optionees then performing services as an employee or director of, or consultant
to, the Company are accelerated by one year.
During the last fiscal year, the Company granted options covering 25,000
shares to each non-employee director who became a director in the year 2000,
each having a per share exercise price equal to the fair market value of such
common stock on the date of grant, as determined by the closing price reported
on the Nasdaq National Market on the date of grant.
14
Compensation of Executive Officers
The following table sets forth for the fiscal years ended December 31, 1998,
1999 and 2000, the compensation earned during such periods by the Company's
chief executive officer, the four most highly compensated executive officers
serving at fiscal year end December 31, 2000 whose salary and bonus for the
fiscal year ended December 31, 2000 exceeded $100,000 and one executive officer
who departed from the Company during fiscal year 2000 (an individual who would
otherwise have been for fiscal year 2000 among the four most highly compensated
executive officers serving at fiscal year end had he not departed prior to
December 31, 2000). None of the officers named below have received from
Chordiant any other annual compensation, were granted any restricted stock
award, long term incentive plan payout or received any other compensation other
than as set forth below.
Summary Compensation Table for Chordiant Executive Officers(9)
Long-term
Compensation
Awards
------------
Annual Compensation
----------------------- Securities
Name and Principal Underlying All Other
Position Year Salary($) Bonus($) Options(#) Compensation($)
------------------ ---- --------- -------- ------------ ---------------
Samuel T. Spadafora.... 2000 291,667 312,500 -- 1,750(8)
Chairman of the Board
and Chief Executive 1999 250,000 312,500 -- 1,500(8)
Officer 1998 145,833 46,966 1,809,525 --
Stephen Kelly.......... 2000 184,888 619,948(1) 100,000 --
President and Chief
Operating Officer 1999 172,926 267,016(2) 150,000 --
1998 112,660 155,164(3) 75,000 --
Donald J. Morrison..... 2000 207,500 174,123(4) 75,000 1,578(8)
Executive Vice
President Business
Development and
Marketing 1999 190,836 122,645(5) 87,500 1,500(8)
1998 169,166 53,214(6) 257,859 1,500(8)
Joseph F. Tumminaro.... 2000 174,167 125,375 -- 4,831(8)
Chief Technology
Officer 1999 162,083 51,077 -- 1,500(8)
1998 160,000 38,452 9,358 1,500(8)
Cary G. Morgan......... 2000 134,494 75,241 37,500 3,741(8)
Acting Chief Financial
Officer, Acting Chief 1999 109,298 20,499 34,507 1,500(8)
Accounting Officer and 1998 97,552 9,146 27,500 1,500(8)
Acting Secretary, Vice
President, Controller
and Accounting Officer
Steven R.
Springsteel(7)........ 2000 174,060 150,828 -- --
Former Chief Financial
Officer (resigned) 1999 183,912 93,672 100,000 --
1998 155,400 19,425 232,946 --
- --------
(1) Includes commissions of $604,778.
(2) Includes commissions of $251,285.
(3) Includes commissions of $155,164.
(4) Includes commissions of $75,685.
(5) Includes commissions of $50,658.
(6) Includes commissions of $51,607.
(7) In October 2000, Mr. Springsteel resigned as our executive vice president
of finance and chief financial officer and is no longer an officer of
Chordiant.
(8) Consists of 401(k) matching contributions paid by Chordiant.
(9) As required by the rules of the Securities and Exchange Commission, the
compensation described in the table excludes medical, group life insurance
or other benefits that are available generally to all salaried employees of
the Company and other perquisites and personal benefits received that do
not exceed the lesser of $50,000 or 10% of any officer's salary and bonus
disclosed in this table.
15
Employment Agreements
On April 24, 1998, Chordiant entered into an employment agreement with Mr.
Spadafora. Under the terms of that agreement, Mr. Spadafora is entitled to
receive an annual base salary of $250,000 and is eligible to receive an annual
incentive bonus of $200,000. Mr. Spadafora received a $100,000 hiring bonus
upon signing the agreement. Pursuant to the terms of his employment agreement,
Mr. Spadafora was granted options to purchase 1,809,650 shares of Chordiant
common stock. In the event of a "Change in Control" of Chordiant, which is
defined as a sale of substantially all of the assets of Chordiant, a merger in
which Chordiant is not the surviving corporation or the transfer of more than
50% of the voting interests of Chordiant, Mr. Spadafora will immediately vest
in 50% of his then unvested shares. The agreement also provides that Mr.
Spadafora's employment may be terminated by either Mr. Spadafora or Chordiant
at any time. If Mr. Spadafora's employment is terminated without cause, Mr.
Spadafora is entitled to receive 12 months of base salary and he will
automatically vest in 50% of his then unvested shares.
Effective as of January 5, 2001, Chordiant entered into an employment
agreement with Mr. Kelly. Under the terms of that agreement, Mr. Kelly is
entitled to receive an annual base salary of $300,000 and is eligible to
receive quarterly bonuses of $50,000 per quarter and an additional bonus of up
to 20% of his salary. Mr. Kelly also receives reimbursements for nanny expenses
of up to $30,000 per year and reimbursements for a home rental of up to $4,000
per month. Pursuant to the terms of his employment agreement, Mr. Kelly was
granted options to purchase 800,000 shares of Chordiant common stock. In the
event of a "Change in Control" of Chordiant, which is defined as a sale of
substantially all the assets of Chordiant, a merger in which Chordiant is not
the surviving corporation or the transfer of more than 50% of the voting
interests of Chordiant, Mr. Kelly will immediately vest in 50% of his then
unvested shares. The agreement also provides that Mr. Kelly's employment may be
terminated by Chordiant or Mr. Kelly at any time. If Mr. Kelly's employment is
terminated without cause, Mr. Kelly is entitled to receive 12 months of base
salary and he will immediately vest in 50% of his then unvested shares.
Effective as of February 14, 2001, Chordiant entered into an employment
agreement with Steve G. Vogel. During the period from February 14, 2001 until
March 12, 2000, the date upon which he first assumed the tasks of chief
financial officer and chief accounting officer, Mr. Vogel was on unpaid leave
of absence from the Company. Under the terms of his employment agreement, Mr.
Vogel is entitled to receive an annual base salary of $200,000 and is eligible
to participate in the Company's bonus plan under which he can receive a bonus,
based on the achievement of certain Company objectives, of up to 40% of his
salary, and an additional executive year-end bonus of up to 20% of his salary
(on a pro-rated basis). The employment agreement also provides for a $40,000
hiring bonus to be paid in two $20,000 installments; the first installment will
be paid upon 30 continuous days of employment and the second installment will
be paid upon 90 continuous days of employment. These bonus payments are
recoverable by the Company on a pro-rated basis should Mr. Vogel's employment
terminate for any reason before one full year of service. Pursuant to the terms
of his employment agreement, Mr. Vogel was granted options to purchase 312,500
shares of Chordiant common stock. The agreement also provides that Mr. Vogel's
employment may be terminated by either Chordiant or Mr. Vogel at any time, for
any reason, with or without notice.
16
STOCK OPTION GRANTS AND EXERCISES
The Company grants options to its executive officers under its 1999 Equity
Incentive Program (the "Incentive Plan") and its 2000 Nonstatutory Equity
Incentive Plan (the "Nonstatutory Plan").
Option Grants In Last Fiscal Year
The following table lists each grant of stock options made during the fiscal
year ended December 31, 2000 to each of the individuals named below. Please
also note that a description of the terms used in the table below can be found
in the text of the footnotes referenced in the table.
Individual Grants
---------------------
Potential Realizable
Number of Percentage Value at Assumed
Securities of Options Annual Rates of Stock
Underlying Granted to Price appreciation
Options Employees Exercise for Option Term(1)
Granted In Fiscal Price Expiration ---------------------
Name (#)(2) year(3) ($/Share)(4) Date 5%($) 10%($)
---- ---------- ---------- ------------ ---------- --------- -----------
Samuel T. Spadafora..... -- -- -- -- -- --
Stephen Kelly........... 50,000 1.1 6.25 05/02/10 509,030 810,545
50,000 1.1 11.125 06/23/10 906,073 1,442,769
Donald J. Morrison...... 75,000 1.7 7.00 10/18/10 855,170 1,361,715
Joseph F. Tumminaro..... -- -- -- -- -- --
Cary G. Morgan.......... 15,000 0.3 6.25 05/02/10 152,709 243,163
22,500 0.5 6.375 06/23/10 233,645 372,040
Steven Springsteel...... -- -- -- -- -- --
- --------
(1) The potential realizable value is calculated based on the ten-year term of
the option at the time of grant. Stock price appreciation of 5% and 10% is
assumed as prescribed by the rules of the Securities and Exchange
Commission and does not represent Chordiant's prediction of Chordiant's
stock price performance.
(2) The shares listed in the table under "Number of Securities Underlying
Options Granted" vest in a series of equal monthly installments over the
four years following the vesting start date. Chordiant's stock option plans
allow for the early exercise of options granted to employees. All options
exercised early are subject to repurchase by Chordiant at the original
exercise price upon the option holder's cessation of service before the
vesting of such holder's shares. Each of the options has a ten-year term,
subject to earlier termination if the option holder's service with
Chordiant ceases.
(3) Percentages shown under "Percentage of Total Options Granted to Employees
in Fiscal Year" are based on an aggregate of 4,360,234 options granted to
Chordiant's employees under Chordiant's equity incentive plans during the
period from January 1, 2000 through December 31, 2000.
(4) The exercise price of each option was equal to the fair market value of
Chordiant's common stock as valued by the board of directors on the date of
grant. The exercise price may be paid in cash, in shares of Chordiant's
common stock valued at fair market value on the exercise date or through a
cashless exercise procedure involving a same day sale of the purchased
shares.
17
Aggregated Option Exercises In Last Fiscal Year
The following table provides the number of shares acquired on exercise and
the number and value of securities underlying unexercised options that are held
by each of the individuals named below as of December 31, 2000.
Number of
Securities
Underlying
Unexercised
Options at Value of Unexercised
Fiscal year In-the-Money Options at
Shares End(#) Fiscal year End($)(2)
Acquired on Value ---------------- -------------------------
Name Exercise(#) Realized(1) Vested Unvested Exercisable Unexercisable
---- ----------- ----------- ------- -------- ----------- -------------
Samuel T. Spadafora..... 678,750 $5,629,068 785,125 301,275 3,225,522 --
Stephen Kelly........... 138,541 201,770 62,499 248,960 330,922 --
Donald J. Morrison...... 244,687 905,344 207,596 230,576 929,808 --
Joseph F. Tumminaro..... -- -- 26,027 -- 77,274 --
Cary G. Morgan.......... -- -- 45,656 65,629 144,843 --
Steven Springsteel...... 388,340 1,498,989 8,333 -- 12,372 --
- --------
(1) Based on the fair market value of the Company's common stock on the
exercise date, minus the exercise price, multiplied by the number of shares
exercised.
(2) Based on the fair market value of the Company's common stock as of December
31, 2000, minus the exercise price, multiplied by the number of shares
underlying the options.
18
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The compensation committee of the board of directors is responsible for
recommending to the board the compensation levels for directors, officers,
employees and consultants of the Company, including, but not limited to, annual
salary, bonus, stock options and other direct or indirect benefits;
administering and granting stock options under the various equity compensation
plans of the Company; reviewing on a periodic basis the operation of the
Company's executive compensation programs to determine whether they are
properly coordinated; and establishing and periodically reviewing policies for
the administration of executive compensation programs.
The compensation committee is currently composed of three non-employee
directors. Mitchell Kertzman and Kathryn C. Gould have served on the committee
since its inception on November 30, 1999. Robert S. McKinney joined the
committee on March 26, 2001, bringing the committee membership to its current
three members.
Compensation Philosophy & Committee Policies
The compensation committee seeks to institute programs and policies that
align compensation with business objectives and performance and to enable the
Company to attract and retain the highest quality executive officers and other
key employees, reward them for the Company's progress and motivate them to
enhance long-term stockholder value. Key operational components to uphold this
philosophy are as follows:
. The Company pays competitively with comparable technology companies, both
inside and outside its industry, with which the Company competes for
talent. To ensure that compensation is competitive, the Company compares
its practices with firms competing in the customer relationship
management services and software market space, firms that in many cases
are more established or mature.
. The Company maintains cash-based incentive opportunities for executives
and other key employees in the form of bonuses and commissions sufficient
to provide motivation to achieve operating goals and to generate rewards
that bring total compensation to competitive levels.
. The Company provides significant equity-based incentives for executives,
other key employees and consultants to ensure that they are motivated
over the long term to respond to the Company's business challenges and
opportunities as owners, not merely as employees.
To meet these goals, the compensation committee has recommended to the board
a mix of salary, bonus and stock options as aggregate compensation.
Base Salary. The compensation committee annually reviews each executive
officer's base salary. When reviewing base salaries, the compensation committee
considers levels of responsibility, prior experience, breadth of knowledge and
industry-related competitive pay practices. Base salaries for executive
officers were increased by a range of 7% to 23% for fiscal year 2000 compared
to fiscal year 1999. The increases were partially a function of the Company's
performance in fiscal year 1999, as well as a function of (i) the need to
provide salaries that were within the range of competitive salaries for
comparable positions in comparable companies and (ii) the need to address
increased living costs in the geographic area where the Company's executive
officers live and work.
Bonus. Bonuses are linked to the attainment of corporate goals including
revenue growth achievement, expense containment and earnings per share growth.
In determining a given officer's bonus payments, the compensation committee
will subjectively evaluate the individual's performance in relation to certain
corporate goals and the individuals performance in relation to various
achievements of the Company in the recent fiscal year. Other bonus payments are
a direct function of percentage of sales-based commissions measured by revenue
achievement.
Equity-based Incentives. The Company is permitted to grant stock options,
restricted stock purchase awards and stock bonus awards under its 1999 Equity
Incentive Plan to executives and other employees and under its 2000
Nonstatutory Equity Incentive Plan to executives, other employees and
consultants. To date, the Company has not granted any restricted stock purchase
awards or stock bonuses.
19
Through stock option grants, executives and employees receive significant
equity incentives to build long-term stockholder value. The options granted to
executives and employees have various time-based vesting provisions,
encouraging executives and other key employees to remain at the Company and
work toward the generation of increased long-term shareholder value. Stock
options typically have been granted to executive officers when the executive
first joins the Company, in connection with a significant change in
responsibilities or job title and, occasionally, to achieve equity with a peer
group within the Company.
The number of shares subject to each stock option grant made to Company
executives is based on anticipated future contributions and potential to impact
corporate results, and, in certain instances, on past performance. In addition,
the vesting schedule for grants made to executive employees during the last
fiscal year consisted of monthly vesting over four years following from the
vesting start date. However, the compensation committee does believe that
vesting should be utilized to create time-based incentives finely-tuned to
specific circumstances in the effort to bolster the link between compensation
and the creation of increased stockholder value.
A total of five grants were made to three executive officers during the last
fiscal year. The nature of each grant was determined based on consideration of
those factors mentioned above. No additional option grants were made to other
executive officers because the amount of the existing equity participation by
each of those other officers was deemed adequate (The size of these prior
option grants, made before the compensation committee came into existence, was
determined at the discretion of the board).
2000 Chief Executive Officer Compensation
Recommended compensation for the CEO is determined through a process similar
to that discussed above for other executive officers of the Company.
Mr. Spadafora's base salary during fiscal year 2000 as president and chief
executive officer was $291,667 (In October of 2000, Mr. Kelly became the acting
President). Mr. Spadafora's bonus for the fiscal year 2000 was $312,500. This
bonus was based largely on fiscal 2000 performance. In fiscal 2000, the Company
achieved, largely as a result of Mr. Spadafora's leadership, several key
objectives. First, the Company achieved record financial performance. Second,
Chordiant raised $80.4 million in net proceeds through the Company's initial
public offering. This provided a substantial amount of working capital to cover
increased operating costs associated with the expansion of the Chordiant sales
and service infrastructure in both foreign and domestic markets, continued
research and development, and the costs associated with the integration of
strategic assets acquired via merger and acquisition.
No stock options were granted to Mr. Spadafora in fiscal year 2000, because
the amount of existing equity participation subject to vesting was determined
to be an adequate incentive for the next fiscal year.
Limitations on Deduction of Compensation Paid to Certain Executive Officers
Section 162(m) of the Internal Revenue Code (the "Code") limits the Company
to a deduction for federal income tax purposes of no more than $1 million of
compensation paid to certain Named Executive Officers in a taxable year.
Compensation above $1 million may be deducted if it is "performance-based
compensation" within the meaning of the Code.
The compensation committee has not yet established a policy for determining
which forms of incentive compensation awarded to its Named Executive Officers
shall be designed to quality as "performance-based compensation."
Compensation Committee
Kathryn C. Gould (Chair)
Mitchell Kertzman
Robert S. McKinney
20
PERFORMANCE MEASUREMENT COMPARISON(1)
The following graph shows the stockholder return of an investment of $100 in
cash on February 14, 2000, the date the Company's initial public offering
commenced, for (i) the Company's common stock, (ii) The Nasdaq Stock Market-
U.S. Index (the "Nasdaq Stock Market-U.S. Index") and (iii) The Standard &
Poor's Computers (Software and Services) Index (the "S&P Computers (Software &
Services) Index") to December 31, 2000, the date the Company's 2000 fiscal year
ended. All values assume reinvestment of the full amount of all dividends (No
cash dividends have been declared on the Company's common stock).
COMPARISON OF 10 MONTH CUMULATIVE TOTAL RETURN AMONG CHORDIANT SOFTWARE, INC.,
THE NASDAQ STOCK MARKET (U.S.) INDEX AND THE S&P COMPUTERS (SOFTWARE &
SERVICES) INDEX(2)
[PERFORMANCE CHART APPEARS HERE]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
CUMULATIVE TOTAL RETURN
CHORDIANT NASDAQ STOCK S&P COMPUTERS
SOFTWARE INC. MARKET (U.S.) (SOFTWARE & SERVICES)
------------- ------------- ---------------------
2/15/00 $100.00 $100.00 $100.00
2/00 88.75 119.01 104.50
3/00 41.20 116.56 115.78
4/00 15.37 98.04 91.49
5/00 17.12 86.21 82.57
6/00 42.15 101.34 94.92
7/00 33.60 95.85 84.88
8/00 30.59 107.18 93.21
9/00 19.65 93.25 83.53
10/00 15.45 85.57 82.21
11/00 7.77 65.97 65.48
12/00 7.53 62.43 57.30
- --------
(1) This Section is not "soliciting material," is not deemed "filed" with the
SEC and is not to be incorporated by reference in any filing of the Company
under the 1933 Act or the 1934 Act whether made before or after the date
hereof and irrespective of any general incorporation language.
(2) The Nasdaq Stock Market-U.S. Index is calculated by the Center for Research
in Securities Prices. The S&P Computers (Software and Services) Index is
calculated by Standard & Poor's.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of Chordiant's executive officers serve 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 Chordiant's board of directors or
compensation committee. For a further description of interlocking transactions,
see "Certain Relationships and Related Party Transactions of the Company" found
below.
21
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS OF THE COMPANY
Chordiant has entered into indemnification agreements with Chordiant's
directors and officers for the indemnification of and advancement of expenses
to these persons to the full extent permitted by law. Chordiant also intends to
execute these agreements with Chordiant's future directors and officers.
Options granted to Chordiant's directors, executive officers and employees
are immediately exercisable for both vested and unvested shares, with unvested
shares being subject to a right of repurchase in Chordiant's favor if
termination of employment occurs before such shares vest. The following
individuals have elected to pay the exercise price for some of their
outstanding options with full recourse promissory notes secured by the common
stock underlying their respective options. The notes bear interest at 5.74% to
6.45% per year, and interest payments on the notes are due and payable annually
on the anniversary date of the note. Unpaid principal and interest on the notes
are due and payable immediately upon termination of the employee's employment
with Chordiant, or two years after the date of the promissory note, whichever
is earlier. As of December 31, 2000, the original and outstanding aggregate
principal amounts of the promissory notes executed by each executive officer in
favor of Chordiant are listed below.
Aggregate
Original and
Outstanding
Executive Officer Note Amount
----------------- ------------
Samuel T. Spadafora.......................................... $440,800
Donald J. Morrison........................................... $ 68,906
Steven Springsteel(1) ....................................... $134,555
- --------
(1) Pursuant to the terms of Mr. Springsteel's separation agreement with the
Company, the time in which unpaid principal and interest was due and
payable under Mr. Springsteel's promissory note was extended 90 days from
the date of Mr. Springsteel's termination.
Pursuant to the terms of that certain Agreement and Plan of Merger and
Reorganization by and among the Company, Puccini Acquisition Corp., and Prime
Response, Inc., dated January 8, 2001, the Company exchanged 0.60 shares of its
common stock for each outstanding share of Prime Response common stock on March
27, 2001. The above-referenced agreement also provided that prior to the
closing of the acquisition of Prime Response, the Company undertake efforts to
place on its board one non-employee director from the Prime Response board of
directors, as then comprised. Pursuant to this provision, Mr. Ford, a managing
member of General Atlantic Partners LLP, was appointed to the Company's board
of directors on March 27, 2001 as a class II director. As a result of the share
exchange effected by the above-mentioned agreement, General Atlantic Partners,
LLC, together with its affiliated entities, acquired beneficial ownership of
greater than 10% of the outstanding voting securities of the Company.
Priceline.com, Inc., a provider of Internet pricing systems, is a client of
Prime Response, Inc., which as of March 27, 2001 became a wholly-owned
subsidiary of Chordiant. Entities affiliated with General Atlantic Partners,
LLC held, as of November 10, 2000, approximately 10.52% of the outstanding
common stock of Priceline.com, Inc. William E. Ford, one of Chordiant's
directors, also serves as a director of Priceline.com, Inc. Mr. Ford is also a
managing member of General Atlantic Partners, LLC. During the years ended
December 31, 1999 and 2000, Prime Response made sales totaling $540,000 and
$340,000, respectively, to Priceline.com consisting of licensed software and
related services. At December 31, 2000, $136,000 remained outstanding from this
related party.
E*Trade Group, Inc., a provider of Internet financial services, is a client
of Prime Response, Inc., which as of March 27, 2001 became a wholly-owned
subsidiary of Chordiant. Mr. Ford serves as a director of E*Trade. During the
years ended December 31, 1999 and 2000, Prime Response made sales totaling
$27,000 and $391,000, respectively, to E*Trade consisting of licensed software
and related services. At December 31, 2000, $71,000 remained outstanding from
this related party.
22
All future transactions, including loans, between Chordiant and Chordiant's
officers, directors and principal stockholders must be approved by a majority
of the board of directors, including a majority of the independent and
disinterested directors.
Chordiant does not have any formal policy concerning the direct or indirect
pecuniary interest of any of its officers, directors, security holders or
affiliates in any investment to be acquired or disposed of by Chordiant or in
any transaction to which Chordiant is a party or has an interest. Chordiant
will not enter into any such transactions unless approved by a majority of the
entire board of directors, not including any interested director.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act")
requires the Company's directors and executive officers, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file with the SEC initial reports of ownership and reports of changes in
ownership of common stock and other equity securities of the Company. Officers,
directors and greater than ten percent stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 2000, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with; except that an
initial statement of beneficial ownership of securities was filed late by Cary
Morgan and an initial statement of beneficial ownership of securities and one
report of a change in beneficial, which covered a single transaction, was filed
late by Stephen Kelly.
OTHER MATTERS
The board of directors knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters are properly brought
before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
/S/ STEVE G. VOGEL
Steve G. Vogel
Secretary
April 20, 2001
A copy of the Company's Annual Report to the Securities and Exchange
Commission on Form 10-K for the fiscal year ended December 31, 2001 accompanies
this Proxy Statement. Further copies are also available without charge upon
written request to: Corporate Secretary, Chordiant Software, Inc., 20400
Stevens Creek Blvd., Suite 400, Cupertino, CA 95014. Copies may also be
obtained without charge through the SEC's World Wide Web site at http://www.
sec.gov.
23
APPENDIX A
CHORDIANT SOFTWARE, INC.
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Purpose:
The purpose of the Audit Committee (the "Committee") of the Board of
Directors (the "Board") of Chordiant Software, Inc., a Delaware corporation
(the "Company"), shall be to make such examinations as are necessary to monitor
the corporate financial reporting and the internal and external audits of the
Company, to provide the Board with the results of its examinations and
recommendations derived therefrom, to outline to the Board improvements made,
or to be made, in internal accounting controls, to nominate independent
auditors, and to provide such additional information and materials as it may
deem necessary to make the Board aware of significant financial matters that
require the Board's attention. The Committee shall also assist the Board in
monitoring the independence and performance of the Company's internal and
external auditors.
Composition:
The Committee shall be comprised of a minimum of three (3) members of the
Board. The members of the Committee shall meet the independence and experience
requirements of The Nasdaq Stock Market, Inc. The members of the Committee and
its Chairperson will be appointed by and serve at the discretion of the Board.
Functions and Authority:
The operation of the Committee shall be subject to the provisions of the
Bylaws of the Company, as in effect from time to time, and to Section 141 of
the Delaware General Corporation Law. The Committee shall have the full power
and authority to carry out the following responsibilities:
1. To review and reassess the adequacy of this Charter annually.
2. To recommend annually to the full Board the firm of certified public
accountants to be employed by the Company as its independent auditors for
the ensuing year, which firm is ultimately accountable to the Committee and
the Board.
3. To evaluate the performance of the independent auditor and, if so
determined by the Audit Committee, recommend that the Board replace the
independent auditor.
4. To review the engagement of the independent auditors, including the
scope, extent and procedures of the audit and the compensation to be paid
therefore, and all other matters the Committee deems appropriate.
5. To have familiarity, through the individual efforts of its members,
with the accounting and reporting principles and practices applied by the
Company in preparing its financial statements, including, without
limitation, the policies for recognition of revenues in financial
statements.
6. To review with management and the independent auditors, upon
completion of their audit, financial results for the year, as reported in
the Company's financial statements or other disclosures.
7. To assist and interact with the independent auditors in order that
they may carry out their duties in the most efficient and cost effective
manner.
8. To evaluate the cooperation received by the independent auditors
during their audit examination, including their access to all requested
records, data and information, and elicit the comments of management
regarding the responsiveness of the independent auditors to the Company's
needs.
9. To review the Company's balance sheet, profit and loss statement and
statements of cash flows and stockholders' equity for each interim period,
and any changes in accounting policy that have occurred during the interim
period.
A-1
10. To review and approve all professional services provided to the
Company by its independent auditors and consider the possible effect of
such services on the independence of such auditors.
11. Receive periodic written reports from the independent auditor
regarding the auditor's independence (including ensuring receipt from the
auditor of a formal written statement delineating all relationships between
the auditor and the Company, consistent with Independence Standards Board
Standard 1), discuss such reports with the auditor, and if so determined by
the Committee, recommend that the Board take appropriate action to insure
the independence of the auditor.
12. To consult with the independent auditors and discuss with Company
management the scope and quality of internal accounting and financial
reporting controls in effect.
13. To investigate, review and report to the Board the propriety and
ethical implications of any transactions, as reported or disclosed to the
Committee by the independent auditors, employees, officers, members of the
Board or otherwise, between (a) the Company and (b) any employee, officer
or member of the Board of the Company, or any affiliates of the foregoing.
14. To prepare any report required by the rules of the Securities and
Exchange Commission to be included in the Company's annual proxy statement.
15. To perform such other functions and have such power as may be
necessary or convenient in the efficient and lawful discharge of the
foregoing.
While the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits or to
determine that the Company's financial statements are complete and accurate and
are in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent auditor. Nor is it the duty of
the Audit Committee to conduct investigations, to resolve disagreements, if
any, between management and the independent auditor or to assure compliance
with laws and regulations and the Company's Code of Conduct.
Meetings:
The Committee will hold at least four (4) regular meetings per year and
additional meetings as the Chairperson or Committee deems appropriate. The
President and Chief Financial Officer may attend any meeting of the Committee,
except for portions of the meetings where his, her or their presence would be
inappropriate, as determined by the Committee Chairperson. The Committee will
also meet at least annually with the Chief Financial Officer, the senior
internal auditing executive and the independent auditor in separate executive
sessions.
Minutes and Reports:
Minutes of each meeting of the Committee shall be kept and distributed to
each member of the Committee, members of the Board who are not members of the
Committee and the Secretary of the Company. The Chairperson of the Committee
shall report to the Board from time to time, or whenever so requested by the
Board.
A-2
PROXY
CHORDIANT SOFTWARE, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 15, 2001
The undersigned hereby appoints SAMUEL T. SPADAFORA and STEVE G. VOGEL, and
each of them, as attorneys-in-fact and proxies of the undersigned, with full
power of substitution, to vote all of the shares of stock of Chordiant Software,
Inc. which the undersigned may be entitled to vote at the Annual Meeting of
Stockholders of Chordiant Software, Inc. to be held at the principal executive
office of CHORDIANT SOFTWARE, INC., 20400 STEVENS CREEK BLVD., SUITE 400,
CUPERTINO, CA 95014 on TUESDAY, MAY 15, 2001 at 9:00 a.m. (local time), and at
any and all postponements, continuations and adjournments thereof, with all
powers that the undersigned would possess if personally present, upon and in
respect of the following matters and in accordance with the following
instructions, with discretionary authority as to any and all other matters that
may properly come before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED "FOR" ALL
NOMINEES LISTED IN PROPOSAL 1 AND "FOR" PROPOSAL 2, AS MORE SPECIFICALLY
DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS
PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
- ----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- -----------
Please mark
[X] votes as in
this example.
Management recommends a vote "FOR" the nominees for director listed below.
1. To elect two directors to hold office until the 2004 Annual
Meeting of Stockholders.
Nominees: (01) Kathryn C. Gould and (02) David R. Springett.
FOR WITHHELD MARK HERE
BOTH [_] [_] FROM BOTH IF YOU PLAN [_]
NOMINEES NOMINEES TO ATTEND
THE MEETING
[_]____________________________________________________________
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided above.)
Management recommends a vote "FOR" Proposal 2.
FOR AGAINST ABSTAIN
2. To ratify selection of PricewaterhouseCoopers
LLP as independent auditors of the Company for [_] [_] [_]
its fiscal year ending December 31, 2001.
Please vote, sign, date and promptly return this proxy in the
enclosed return envelope which is postage prepaid if mailed
in the United States.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
Please sign exactly as your name appears hereon. If the stock is registered in
the names of two or more persons, each should sign. Executors, administrators,
trustees, guardians and attorneys-in-fact should add their titles. If signer is
a corporation, please give full corporate name and have a duly authorized
officer sign, stating title. If signer is a partnership, please sign in
partnership name by authorized person.
Signature:___________________ Date:______ Signature:______________ Date:________