SCHEDULE 14A INFORMATION
Proxy Statement Pursuant To Section 14(a) Of the Securities
Exchange Act of 1934
Filed by the registrant X
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Filed by a party other than the registrant
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Check the appropriate box:
X Preliminary Proxy Statement. Confidential, for use of the Commission
- - --- --- only (as permitted by Rule 14a-6(e)(2)).
Definitive proxy statement
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Definitive additional materials
- - ----
Soliciting material Pursuant to Rule 14a-11(c) or Rule 14a-12
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CLICKSOFTWARE TECHNOLOGIES LTD.
(Name of Registrant as Specified in Its Charter)
Payment of filing fee (check the appropriate box):
X No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
- - ----
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials:
- - ---
Check box if any part of the fee is offset as provided by Exchange Act Rule
- - --- 0-11(a) (2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
CLICKSOFTWARE TECHNOLOGIES LTD.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held September 6, 2001
August 7, 2001
To the Shareholders of ClickSoftware Technologies Ltd.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
ClickSoftware Technologies Ltd., an Israeli corporation (the "Company"), will be
held on Thursday, September 6, 2001, at 4:00 p.m., local time, at the offices of
the Company's subsidiary, ClickSoftware, Inc., 655 Campbell Technology Parkway,
Suite 250, Campbell, CA 95008, for the following purposes:
1. To elect one External Director to hold office according to the Israeli
Companies Law;
2. To ratify the appointment of Arthur Andersen LLP as independent accountants
for the Company for the fiscal year ending December 31, 2001 and to
authorize the Board of Directors to determine their compensation;
3. To approve certain amendments to the Company's 2000 Share Option Plan;
4. To ratify and approve grants of stock options to certain members of the
Company's Board of Directors;
5 To ratify and approve a loan from the Company to Dr. Moshe BenBassat,
Chairman of the Company's Board of Directors and Chief Executive Officer;
6. To ratify and approve compensation terms for Dr. Moshe BenBassat, Chairman
of the Company's Board of Directors and Chief Executive Officer, and
7. To receive and consider the Directors' Report and the Audited Financial
Statements for the year ended December 31, 2000.
The foregoing matters are more fully described in the Proxy Statement
accompanying this Notice.
Only shareholders of record at the close of business on July 30, 2001
are entitled to receive notice of and vote at the Annual Meeting.
All shareholders are cordially invited to attend the Annual Meeting in
person. However, to assure your representation at the Annual Meeting, you are
urged to mark, sign, date and return the enclosed proxy as promptly as possible
in the postage-prepaid envelope for that purpose. All proxies must be received
at least 48 hours prior to the meeting to be validly included in the tally of
shares voted at the meeting. Your shares will be voted in accordance with the
instructions you have given. Any shareholder attending the Annual Meeting may
vote in person even if he or she has previously returned a proxy. Please note,
however, that if your shares are held of record by a broker, bank or other
nominee and you wish to attend and vote in person at the Annual Meeting, you
must obtain from the record holder a proxy issued in your name.
By Order of the Board of Directors
MOSHE BENBASSAT
Chairman of the Board of Directors
and Chief Executive Officer
Tel Aviv, Israel
August 7, 2001
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IMPORTANT: YOUR VOTE IS IMPORTANT. IN ORDER TO ENSURE YOUR REPRESENTATION AT THE
MEETING, YOU ARE REQUESTED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AS
PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENVELOPE PROVIDED.
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CLICKSOFTWARE TECHNOLOGIES LTD.
34 Habarzel Street
Tel Aviv, Israel
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PROXY STATEMENT
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The enclosed Proxy is solicited on behalf of the Board of Directors of
ClickSoftware Technologies Ltd. ("ClickSoftware" or the "Company") for use at
the Annual Meeting of Shareholders to be held on Thursday, September 6, 2001, at
4:00 p.m. local time, or at any adjournment thereof, for the purposes set forth
herein and in the accompanying Notice of Annual Meeting of Shareholders (the
"Annual Meeting"). The Annual Meeting will be held at the offices of the
Company's subsidiary, ClickSoftware Inc., 655 Campbell Technology Parkway, Suite
250, Campbell, CA 95008. The telephone number at that location is (408)
377-6088.
These proxy solicitation materials were mailed on or about August 7,
2001 to all shareholders of record entitled to vote at the Annual Meeting.
RECORD DATE; OUTSTANDING SHARES; PROCEDURAL MATTERS
Shareholders of record as of the close of business on July 30, 2001
(the "Record Date") are entitled to notice of and to vote at the Annual Meeting.
At the Record Date, [ ] Ordinary Shares (the "Ordinary Shares") were
issued and outstanding. For information regarding holders of more than 5% of the
outstanding Ordinary Shares, see "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT." The closing sale price of ClickSoftware's Ordinary
Shares as reported on the Nasdaq National Market on July 30, 2001 was [$ ]
per share.
Proxies properly executed, duly returned to the Company and not
revoked will be voted in accordance with the specifications made. Where no
specifications are given, such proxies will be voted FOR each proposition for
which the Board of Directors recommends a vote FOR. No matters other than those
referred to in this Proxy Statement will be brought before the Annual Meeting.
Each shareholder is entitled to one vote for each Ordinary Share on
all matters presented at the meeting. The required quorum for the transaction of
business at the Annual Meeting shall be two or more shareholders present in
person or by proxy, holding or representing in the aggregate at least thirty
three percent (33%) of the total voting rights in the Company. Shares that are
voted in person or by proxy "FOR," "AGAINST," or "ABSTAIN" are treated as being
present at the meeting for purposes of establishing a quorum and are also
treated as voted at the Annual Meeting with respect to such matters (the "Votes
Cast"). Broker non-votes will be counted for purposes of determining the
presence or absence of a quorum for the transaction of business, but such
non-votes will not be counted for purposes of determining the number of Votes
Cast with respect to the particular proposal on which a broker has expressly not
voted. Thus, a broker non-vote will not affect the outcome of the voting on a
proposal.
The Company will bear the cost of soliciting proxies for the Annual
Meeting. The Company will ask banks, brokerage houses, fiduciaries and
custodians holding Ordinary Shares in their names for others to send proxy
materials to and obtain proxies from the beneficial owners of such Ordinary
Shares, and the Company may also reimburse them for their reasonable expenses in
doing so. In addition to soliciting proxies by mail, the Company and its
directors, officers and employees, may also solicit proxies personally, by
telephone or by other appropriate means. No additional compensation will be paid
to directors, officers or employees for such services.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Secretary of
the Company at the above address or at the address of the Company's subsidiary
at 655 Campbell Technology Parkway, Suite 250, Campbell, CA 95008, written
notice of revocation or a duly executed proxy bearing a later date, or by
attending the meeting and voting in person (attendance at the meeting will not,
by itself, revoke a proxy).
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DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
One or more shareholders, who have held at least $2,000 in market
value, or 1%, of the Company's securities entitled to vote at the Annual Meeting
for at least one year prior to the date such shareholder(s) submit the proposal,
may submit proper proposals for inclusion in the Company's agenda at the next
annual meeting of its shareholders by submitting their proposals in writing to
the Secretary of the Company in a timely manner. Proposals of shareholders of
the Company that are intended to be presented by such shareholders at the
Company's 2002 Annual Meeting and that shareholders desire to have included in
the Company's proxy materials relating to such meeting must be received by the
Company no later than April 9, 2002, which is 120 calendar days prior to the
anniversary of the date of this proxy statement, and must be in compliance with
applicable laws and regulations in order to be considered for possible inclusion
in the proxy statement and form of proxy for that meeting.
PROPOSAL NO. 1
ELECTION OF ONE EXTERNAL DIRECTOR
The Company's Articles of Association currently provide for a board of
directors of not less than two members nor more than eleven members. There are
currently six members on the Company's Board. The Company has a classified Board
of Directors as set forth in the following table:
NAME OF DIRECTOR AND CLASS YEAR IN WHICH TERM EXPIRES AGE
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Dr. Moshe BenBassat, Class III 2003 53
Roni Einav, Class II 2002 45
Nathan Gantcher, Class II 2002 61
Eddy Shalev, Class III 2003 54
James W. Thanos, Class III 2003 52
Dr. Israel Borovich, External Director 2004 59
These directors have been elected to serve until the annual meetings
of shareholders to be held in 2002 for the Class II directors and 2003 for the
Class II directors. One of the Company's Class I directors, Fredric W. Harman,
resigned from the Board of Directors in November 2000. Dr. Israel Borovich, who
was previously also a Class I director, was elected as an External Director by
the Board of Directors of the Company on July 25, 2001 (see below).
Under the new Israeli Companies Law which came into effect on February
1, 2000, Israeli companies whose shares have been offered to the public in or
outside of Israel (such as the Company) are required to appoint two people to
serve as external directors on the board of directors of the company. The
Companies Law provides that a person may not be appointed as an external
director if the person or the person's relative, partner, employer or any entity
controlled by that person has at the date of appointment, or has had at any time
during the two years preceding that date, any affiliation with the company, any
entity controlling the company or any entity controlled by the company or by
this controlling entity. The term "affiliation" includes:
* an employment relationship;
* business or professional relationship maintained on a regular basis;
* control; or
* service as an officer.
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No person can serve as an external director if the person's position or other
business creates, or may create, conflict of interests with the person's
responsibilities as an external director or if such position or other business
may impair such director's ability to serve as an external director. No person
who is a director in one company can serve as an external director in another
company, if at that time a director of the other company serves as an external
director in the first company. The Companies Law further provides that when, at
the time of appointment of an external director, all members of the board of
directors of the company are of one gender, then the external director appointed
shall be of the other gender.
The initial term of an external director will be three years and may
be extended for an additional three-year period. Each committee of the Company's
board of directors will be required to include at least one external director
and all external directors must be members of the Company's audit committee.
Regulations promulgated under the Companies Law provide that the applicability
of the Companies Law with respect to the nomination by an Israeli company whose
shares are publicly traded only outside Israel (such as the Company) only shall
commence August 1, 2000. These regulations also provide that, with respect to a
company whose shares are publicly traded only outside Israel, the external
directors do not have to be residents of Israel.
An external director is entitled to consideration and to the refund of
expenses, only as provided in regulations adopted under the Companies Law and is
otherwise prohibited from receiving any other consideration, directly or
indirectly, in connection with service provided as an external director.
Nevertheless, the grant of an exemption from liability for breach of fiduciary
duty or duty of care, an undertaking to indemnify, indemnification or insurance
under the provisions of the Companies Law shall not be deemed as consideration.
Under the Companies Law, an external director cannot be dismissed from the
office unless:
* the board of directors determines that the external director no longer
meets the requirements for holding such office, as set forth in the Companies
Law or that the director is in breach of his or her fiduciary duties to the
company and the shareholders of the company vote (by the same majority required
for the appointment) to remove the external director after the external director
has been given the opportunity to present his or her position;
* an Israeli court determines, upon a request of a director or a
shareholder, that the director no longer meets the requirements for holding such
office as set forth in the Companies Law or that the director is in breach of
his or her fiduciary duties to the company; or
* the court determines, upon a request of the company or a director,
shareholder or creditor of the company, that the external director is unable to
fulfill his or her duty or has been convicted of certain crimes as specified in
the Companies Law.
According to regulations promulgated under the new Israeli Companies
Law, the board of directors of a company such as the Company whose shares are
traded outside Israel is permitted to elect a director who was appointed prior
to February 1, 2000, and who would otherwise qualify as an external director, as
an external director for a period of three years after such appointment. On July
25, 2001, the Board of Directors appointed Dr. Israel Borovich as an external
director according to these regulations.
NOMINEE
The Company proposes that Ms. Janet Schinderman be appointed as one of
the Company's external directors to hold office until the third anniversary of
the date of the Annual Meeting, according to the provisions of the Companies Law
and the regulations thereunder and that she be paid the maximum amount permitted
under the Companies Law and the regulations thereunder or such lesser amount as
determined by the Board of Directors, subject to the provisions of the Companies
Law and regulations thereunder.
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Ms. Schinderman's term will continue until the Annual Meeting of
Shareholders held in 2004 or until her successor has been duly elected and
qualified, and she may be re-elected for an additional three-year term.
Certain information about Ms. Schinderman is set forth below. There
are no family relationships among any directors or executive officers of the
Company.
Name, Principal Occupation and Directorships Age Director Since
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JANET SCHINDERMAN
50 Not applicable
Janet Schinderman has served as associate dean for special projects and
secretary to the Board of Overseers at Columbia Business School of Columbia
University since 1990. Ms. Schinderman serves on the Board of Directors of
four CIBC World Markets mutual funds, the Columbia University Knight-Bagehot
Business Journalist Board of Advisors and the Department of Education's
Center for International Business Education and Research (CIBER) operating
committee. Ms. Schinderman holds a Bachelor of Arts degree from Newcomb
College of Tulane University and a Masters of Business Administration degree
from Tulane University. Ms. Schinderman is qualified to act as an external
director in accordance with the requirements of the Israeli Companies Law.
VOTE REQUIRED
Ms. Schinderman is to be elected as an external director by a simple
majority of Votes Cast (not including abstentions), provided that either:
- A majority of the Votes Cast, including at least one-third of the
shares held by non-controlling shareholders voted at the meeting vote
in favor of election of Ms. Schinderman, or
- the total number of shares held by non-controlling shareholders who
voted against the election of Ms. Schinderman does not exceed one
percent of the Company's aggregate voting rights.-
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS VOTE "FOR" THE ELECTION OF JANET SCHINDERMAN TO ACT AS AN EXTERNAL
DIRECTOR TO HOLD OFFICE IN ACCORDANCE WITH THE ISRAELI COMPANIES LAW. AND THAT
SHE BE PAID THE MAXIMUM AMOUNT PERMITTED UNDER THE ISRAELI COMPANIES LAW AND THE
REGULATIONS THEREUNDER OR SUCH LESSER AMOUNT AS DETERMINED BY THE BOARD OF
DIRECTORS, SUBJECT TO THE PROVISIONS OF THE ISRAELI COMPANIES LAW AND
REGULATIONS THEREUNDER.
DIRECTORS NOT STANDING FOR ELECTION
Certain information about the members of the Board of Directors who
are not standing for election at this year's Annual Meeting is set forth below.
DR. MOSHE BENBASSAT co-founded ClickSoftware and has served as the
Company's Chairman and Chief Executive Officer since the Company's inception.
From 1987 to 1999, Dr. BenBassat served as a professor of Information Systems at
the Faculty of Management of Tel-Aviv University. Dr. BenBassat has also held
academic positions at the University of Southern California and the University
of California at Los Angeles. From 1996 to January 1999, Dr. BenBassat also
served as a board member of Tadiran Telecommunications Inc., a
telecommunications company. From 1990 to 1996, Dr. BenBassat served as a board
member of Tadiran Electronic Systems Ltd., a defense electronics company. Dr.
BenBassat holds Bachelor of Science, a Master of Science and a Doctor of
Philosophy degrees in Mathematics and Statistics from Tel-Aviv University.
DR. ISRAEL BOROVICH has served as a director of the Company since July
1997 and as an External Director according to the Israeli Companies Law since
July 25, 2001. He has served as President of Arkia Israeli Airlines and
Knafaim-Arkia Holdings Ltd. since 1988. Dr. Borovich also serves as a director
of Knafaim-Arkia Holdings, Ltd., Maman-Cargo Terminals & Handling Ltd., Issta
Lines Israel Students Travel Company Ltd., Ogen Investments, Ltd., Granit
Hacarmel investments, Ltd. and Vulcan Batteries Ltd. Dr. Borovich holds Bachelor
of Science, Master of Science and a Doctor of Philosophy degrees in Industrial
Engineering from the Polytechnic Institute in Brooklyn. Dr. Borovich is
qualified to act as an external director in accordance with the requirements of
the Israeli Companies Law.
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RONI EINAV has served as a director of ClickSoftware since April 2000.
From 1983 to April 1999, Mr. Einav served as Chairman of the Board of Directors
of New Dimension Software, Ltd., a software company which he founded. Mr. Einav
has also played a role in founding over ten additional Israeli high-tech
companies including: Liraz Computers, which owns Level 8, Jacada, UDS-Ultimate
Distribution Systems, CreditView, CePost, CeDimension, ComDa and Einav Systems.
Mr. Einav is a Major in the Israeli Defense Forces, serving in the Systems
Analysis Division. Mr. Einav holds a Bachelor of Science degree in Management
and Industrial Engineering and a Master of Science degree in Operations Research
from the Technion Institute.
NATHAN GANTCHER has served as a director of ClickSoftware since April
2000. From October 1997 to October 1999, Mr. Gantcher served as Vice Chairman of
CIBC World Markets Corp. From 1983 to November 1997, Mr. Gantcher served as
President, Chief Operating Officer and Co-Chief Executive Officer of Oppenheimer
& Co. Since 1983, Mr. Gantcher has served as Chairman of the Board of Trustees
of Tufts University. Mr. Gantcher is a member of the Board of Overseers at the
Columbia University Graduate School of Business, a director of Mack-Cali Realty
Corp and the Jewish Communal Fund, and a trustee of the Anti-Defamation League
Foundation. Mr. Gantcher holds a Bachelor of Arts degree in Business from Tufts
University and a Master of Business Administration degree from the Columbia
University Graduate School of Business.
EDDY SHALEV has served as a director of ClickSoftware since April
1997. Since April 1997, Mr. Shalev has also served as a director of Fundtech
Corp. Mr. Shalev has served as Chief Executive Officer of E. Shalev Ltd. since
January 1997 and as the Managing General Partner of E. Shalev Management since
1983. . Mr. Shalev holds a Master of Science degree in Management Information
Systems from Tel Aviv University.
JAMES W. THANOS has served as a director of ClickSoftware since May
2000. Since October 1999, Mr. Thanos has served as Executive Vice President,
Worldwide Field Operations of BroadVision, Inc. From March 1998 to October 1999,
Mr. Thanos served as BroadVision's Vice President and General Manager, Americas.
Prior to working for BroadVision, Mr. Thanos served as Senior Vice President of
Worldwide Sales at Aurum Software. Mr. Thanos holds a Bachelor of Arts degree in
International Relations and a Bachelor of Arts degree in Behavioral Sciences
from Johns Hopkins University. Board Meetings and Committees
The Board of Directors of the Company held five meetings during 2000.
The Board has a Compensation Committee and an Audit Committee, but does not have
a nominating committee or any committee performing a similar function. Fred
Harman, a director in 2000, resigned from the board of directors in November
2000. Roni Einav, director, missed one of two meetings held by the Board after
his appointment in April 2000, and thus attended fewer than 75% of the sum of
the total number of meetings held by the Board (at a time when he was a director
of the Company) and the total number of committee meetings held by the
committees on which he served. See "Director Compensation" for information on
the compensation of non-employee directors.
The Compensation Committee was formed on February 10, 2000 and during
2000 consisted of two non-employee directors: Messrs. Harman and Shalev. The
Compensation Committee makes recommendations to the Board of Directors regarding
the Company's executive compensation policies and administers the Company's
stock option plans and employee stock purchase plan. There was one meeting of
the Compensation Committee in 2000. See "Compensation Committee Report." For
2001, the Compensation Committee consists of Dr. Borovich and Mr. Shalev.
The Audit Committee was formed on February 10, 2000 and during 2000
consisted of three non-employee directors: Dr. Borovich and Messrs. Harman and
Shalev. The Audit Committee operates pursuant to a written charter (the "Audit
Committee Charter") that was adopted as amended by the Board of Directors
January 30, 2001. A copy of the Audit Committee Charter is attached to this
Proxy Statement as Exhibit A. Under the provisions of the Audit Committee
Charter, the purpose and responsibilities of the Audit Committee include: (1)
making recommendations to the Board of Directors concerning the appointment and,
where appropriate, replacement of the independent auditors; (2) reviewing the
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scope of the audit and related fees; (3) reviewing audit findings and
recommendations with independent auditors to determine the adequacy and
effectiveness of internal controls; (4) reviewing the appropriateness of
accounting principles and financial disclosure practices with independent
auditors and the Company financial management; and (5) reviewing the Company's
quarterly and annual financial statements prior to filing with the Securities
and Exchange Commission. There were two meetings of the Audit Committee in 2000.
See "Audit Committee Report."
As of the date of this proxy statement, the Audit Committee for 2001
consists of Dr. Borovich and Messrs. Gantcher and Shalev. Each of these
directors is "independent," as such term is defined under Rule 4200, as amended,
of the listing standards of the National Association of Securities Dealers. The
Board of Directors will also name Janet Schinderman, if she is elected as a
director, to serve on the Audit Committee.
DIRECTOR COMPENSATION
Our directors do not receive cash for services they provide as
directors.
In April 2000, Mr. Gantcher was granted an option to purchase 50,000
Ordinary Shares at an exercise price of $10.00 per share. The option granted to
Mr. Gantcher vests at the rate of one-fourth (1/4th) of such shares on April 6,
2001 and monthly thereafter over a period of three additional years.
In April 2000, Mr. Einav was granted an option to purchase 15,000
Ordinary Shares at an exercise price of $10.00 per share. The option granted to
Mr. Einav vests at the rate of one-fourth (1/4th) of such shares on April 6,
2001 and monthly thereafter over a period of three additional years.
On May 31, 2000, Mr. Thanos was granted an option to purchase 15,000
Ordinary Shares at an exercise price of $8.00 per share. The option granted to
Mr. Thanos vests at the rate of one-fourth (1/4th) of such shares on May 31,
2001 and monthly thereafter over a period of three additional years.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed Arthur Andersen LLP, independent
accountants, to audit ClickSoftware's financial statements for the current
fiscal year ending December 31, 2001. Such nomination is being presented to the
shareholders for ratification at the meeting. The affirmative vote of the
holders of a majority of the Votes Cast on this proposal at the Annual Meeting
is required to ratify the Board's selection. If the shareholders reject the
nomination, the Board will reconsider its selection. The remuneration of the
auditors shall be fixed by the Board of Directors according to the nature and
volume of their services.
Arthur Andersen LLP has audited ClickSoftware's financial statements
since the fiscal period ended December 31, 1995. Representatives of Arthur
Andersen LLP are expected to be present at the Annual Meeting and will have the
opportunity to respond to questions and to make a statement if they desire to do
so.
VOTE REQUIRED
The approval of this proposal requires the affirmative vote of a
majority of the Votes Cast on the proposal at the Annual Meeting.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS VOTE "FOR" RATIFICATION OF ARTHUR ANDERSEN LLP AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS AND AUTHORIZE THE BOARD OF DIRECTORS TO FIX THEIR
REMUNERATION.
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AUDIT COMMITTEE REPORT
In connection with the issuance of the Company's Annual Report on Form
10-K, the Audit Committee of the Board of Directors of the Company:
1. Reviewed and discussed the Company's audited financial statements for
the fiscal year ended December 31, 2000 with Company management.
2. Met with Arthur Andersen LLP, the Company's independent auditors, to
review the audited financial statements and to discuss with the
auditors all matters required to be discussed by the Auditing
Standards Board Statement of Auditing Standards (SAS) No. 61, as
amended.
3. Requested and obtained from, and discussed with the independent
auditors written disclosures and a letter required by Independent
Standards Board (ISB) Standard No. 1, as amended, that the auditors
were in all respects independent.
AUDIT FEES. Arthur Andersen LLP billed to the Company an aggregate of
approximately $64,000 for professional services rendered by Arthur Andersen LLP
in connection with its audit of the Company's financial statements for the
fiscal year ended December 31, 2000 and its review of the Company's financial
statements included in quarterly reports on Form 10-Q during fiscal year 2000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION. During fiscal
year 2000, Arthur Andersen LLP did not bill for any professional services for
financial information systems design or implementation as described in Paragraph
(c)(4)(ii) of Rule 2-01 of Regulation S-X (17 CFR ss. 210.2-01(c)(4)(ii)).
ALL OTHER FEES. Arthur Andersen LLP billed the Company an aggregate of
approximately $207,000 for professional services rendered in connection with the
Company's initial public offering during fiscal year 2000.
The Audit Committee considered the services rendered by Arthur
Andersen during fiscal year 2000 and determined that such services were
compatible with Arthur Andersen LLP's independence.
As a result of the above-referenced review and discussions with the
Company's management and independent auditors, the Audit Committee recommended
to the Board of Directors that the audited financial statements for the fiscal
year 2000 be accepted and included in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2000 for filing with the Securities and
Exchange Commission.
Respectfully Submitted by the 2000
Audit Committee of the Board of Directors:
Israel Borovich
Nathan Gantcher
Eddy Shalev
PROPOSAL NO. 3
APPROVAL OF AMENDMENTS TO THE COMPANY'S 2000 SHARE OPTION PLAN
Amendments to the 2000 Share Option Plan (the "Plan") were adopted by
the Board of Directors in May 2001 and are being submitted for approval by the
shareholders at the Annual Meeting.
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SUMMARY OF THE AMENDMENTS TO THE PLAN
PURPOSE. The purposes of the amendments to the Plan are to attract and
retain the best available personnel for service as Directors who are not
Employees ("Outside Directors") of the Company, including Directors designated
as External Directors under Israeli law, to provide additional incentive to
Outside Directors of the Company to serve as directors, and to encourage their
continued service on the Board. As of the date hereof, there are five Outside
Directors.
ADMINISTRATION. The amendments to the Plan provides for grants of
options to Outside Directors to be made in two ways:
(a) Each Outside Director, except for individuals who became directors
prior to shareholder approval of these amendments to the Plan,
and except for Outside Directors who are designated as External
Directors, is automatically granted an option to purchase thirty
thousand (30,000) shares (the "First Option"), upon the date such
individual first becomes a director, whether through election by the
shareholders of the Company or by appointment by the Board in order to
fill a vacancy; and
(b) Each Outside Director, including External Directors, is automatically
granted an option to purchase seven thousand five hundred (7,500)
shares (the "Subsequent Option") following each annual meeting of the
shareholders of the Company, beginning in 2002, if on such date he or
she shall have served on the Board for at least the preceding six (6)
months.
In the future, the Board will approve and seek shareholder approval
for grants to Outside Directors who are designated as External Directors, when
they become members of the Board, which are no greater than the First Options
under the Plan, unless otherwise required by applicable law and regulations in
effect from time to time.
ELIGIBILITY; LIMITATIONS. Only Outside Directors of the Board are
eligible to receive automatic grants of nonstatutory stock options pursuant to
the amendments to the Plan.
TERMS AND CONDITIONS OF OPTIONS. Each option is evidenced by a option
agreement between the Company and the director optionee, and is subject to the
following additional terms and conditions:
(a) EXERCISE PRICE. The exercise price of options granted to Outside
Directors under the Plan is not less than 100% of the fair market
value per share of the Ordinary Shares on the date of grant, generally
determined with reference to the closing sale price for the Ordinary
Shares (or the closing bid if no sales were reported) on the date of
grant.
(b) EXERCISE OF OPTION. BOTH THE FIRST OPTION AND THE SUBSEQUENT OPTION
SHALL VEST AS TO 25% OF THE OPTIONED STOCK ON THE FIRST ANNIVERSARY
AFTER THE DATE OF GRANT, AND AS TO AN ADDITIONAL 25% OF THE OPTIONED
STOCK ON EACH ANNIVERSARY OF THE DATE OF GRANT, AFTER THAT. AN OPTION
SHALL BE EXERCISABLE IN WHOLE OR IN PART BY GIVING WRITTEN NOTICE TO
THE COMPANY, STATING THE NUMBER OF SHARES WITH RESPECT TO WHICH THE
OPTION IS BEING EXERCISED, ACCOMPANIED BY PAYMENT IN FULL FOR SUCH
SHARES.(B)
(C) FORMS OF CONSIDERATION. THE MEANS OF PAYMENT FOR SHARES ISSUED UPON
EXERCISE OF AN OPTION IS SPECIFIED IN EACH OPTION AGREEMENT. THE PLAN
PERMITS PAYMENT TO BE MADE BY CASH, CHECK, PROMISSORY NOTE, OTHER
ORDINARY SHARES OF THE COMPANY (WITH SOME RESTRICTIONS), CASHLESS
EXERCISES, ANY OTHER PAYMENT PERMITTED BY UNDER APPLICABLE LAW, OR ANY
COMBINATION THEREOF.
(d) TERM OF OPTION. The term of any option shall be ten years from the
date of grant . No option may be exercised after the expiration of its
term.
(e) TERMINATION OF DIRECTORSHIP. If an optionee's status as a director
terminates for any reason other than death or disability, then all
options held by the optionee under the Plan expire three months
following the termination. If the optionee's status as a director
terminates due to death or disability, then all options held by the
optionee under the Plan expire six months following the termination.
In no case may an option be exercised after the expiration date of the
option.
10
(f) NONTRANSFERABILITY OF OPTIONS: Options granted under the Plan are not
transferable other than by will or the laws of descent and
distribution, and may be exercised during the optionee's lifetime only
by the optionee.
(g) OTHER PROVISIONS: The director option agreement may contain other
terms, provisions and conditions not inconsistent with the Plan as may
be determined by the Board.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event that the
stock of the Company changes by reason of any stock split, reverse stock split,
stock dividend, combination, reclassification or other similar change in the
capital structure of the Company effected without the receipt of consideration,
appropriate adjustments shall be made in the number and class of shares of stock
subject to the Plan, the number and class of shares of stock subject to any
option outstanding under the Plan, and the exercise price of any such
outstanding option.
Unless otherwise determined by the Board, in the event of a proposed
liquidation or dissolution, any unexercised options will terminate prior to such
action. The Board may give the optionee the right to exercise any unexercised
options, including shares as to which the option would not otherwise be
exercisable, prior to their termination.
In the event of a merger of the Company or the sale of substantially
all of the assets of the Company, each option may be assumed or an equivalent
option substituted for by the successor corporation. If an option is assumed or
substituted for by the successor corporation, it shall continue to vest as
provided in the Plan. If the director optionee's status is terminated other than
upon a voluntary resignation, the Option shall become fully exercisable. If the
successor corporation does not agree to assume or substitute for the option,
each option shall become fully vested and exercisable for a period of thirty
days from the date the Board notifies the director optionee of the option's full
exercisability, after which period the option will terminate.
AMENDMENT AND TERMINATION OF THE PLAN. The Board may amend, alter,
suspend or terminate the Plan, or any part thereof, at any time and for any
reason. However, the Company shall obtain shareholder approval for any further
amendment to the Plan to the extent necessary to comply with applicable laws or
regulations. No such action by the Board or shareholders may alter or impair any
option previously granted under the Plan without the consent of the optionee.
Unless terminated earlier, the Plan shall terminate ten years from the date of
its approval by the shareholders or the Board, whichever is earlier.
FEDERAL INCOME TAX CONSEQUENCES. The following discussion summarizes
certain U.S. federal income tax considerations for directors receiving options
under the Plan and certain tax effects on the Company, based upon the provisions
of the Code as in effect on the date of this Proxy Statement, current
regulations and existing administrative rulings of the Internal Revenue Service.
However, the summary is not intended to be a complete discussion of all the
federal income tax consequences of these plans:
NONSTATUTORY STOCK OPTIONS. Options granted to Outside Directors under
the Plan do not qualify as incentive stock options under Section 422 of
the Code. An optionee does not recognize any taxable income at the time
he or she is granted a nonstatutory stock option. Upon exercise, the
optionee recognizes taxable income generally measured by the excess of
the then fair market value of the shares over the exercise price. The
Company is entitled to a deduction in the same amount as the ordinary
income recognized by the optionee. Upon a disposition of such shares by
the optionee, any difference between the sale price and the optionee's
exercise price, to the extent not recognized as taxable income as
provided above, is treated as long-term or short-term capital gain or
loss, depending on the holding period. Net capital gains on shares held
more than twelve months may be taxed at a maximum federal rate of 20%.
Capital losses are allowed in full against capital gains and up to
$3,000 against other income.
11
VOTE REQUIRED
The affirmative vote of a majority of the Votes Cast will be required
to approve the amendment of the Plan.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS VOTE "FOR" AMENDMENT OF THE COMPANY'S 2000 SHARE OPTION PLAN.
PROPOSAL NO. 4
RATIFICATION AND APPROVAL OF GRANT OF STOCK OPTIONS
TO MEMBERS OF THE BOARD OF DIRECTORS
BACKGROUND
On February 9, 2001, the Board of Directors granted, subject to
shareholder approval, options to purchase 30,000 Ordinary Shares at an exercise
price of $1.69 per share, the then current fair market value, to each of Messrs.
Borovich, Einav, Gantcher and Thanos, each members of the Board of Directors.
The options vest monthly over a period of twenty-four (24) months.
Under the Israeli Companies Law, arrangements with directors as to the
terms of their service, including the grant of stock options to directors and
the payment of other compensation, requires shareholder approval. Messrs.
Borovich, Einav, Gantcher and Thanos are currently members of the Board of
Directors.
Regulations under the Israeli Companies Law also govern the option
consideration to be received by Ms. Schinderman if she is elected as an External
Director. In accordance with these regulations, on July __, 2001, the Board of
Directors granted to Ms. Schinderman, subject to shareholder approval and
subject to her election to the Company's Board of Directors at the Annual
Meeting, option consideration at an exercise price equal to the closing sale
price per share of the Company's Ordinary Shares on the date of the Annual
Meeting (the "Annual Meeting Date Price"), in an amount such that the
consideration in unvested options received by Ms. Schinderman shall be the
greater of (i) the value of an option to purchase 30,000 Ordinary Shares at the
Annual Meeting Date Price (see Proposal 3 above regarding First Options to be
granted to Outside Directors) and (ii) the aggregate consideration in unvested
options held by the Outside Director who otherwise holds the least. The value of
Ms. Schinderman's option consideration shall be measured as of the date of
grant, which is the date of shareholder approval.
Because the calculations of the aggregate consideration in unvested
options will be based on the Annual Meeting Date Price, the Company cannot
calculate the exact number of Ordinary Shares represented by the option to be
granted to Ms. Schinderman or the exercise price per share until the date of the
Annual Meeting. For example, as of the date of the Annual Meeting, Mr. Einav, an
Outside Director, will hold unvested options to purchase _____ Ordinary Shares
with exercise prices of $10.00 and $1.69 per share. If the Annual Meeting Date
Price is, for example, $____, the closing sale price of the Company's Ordinary
Shares as reported on the Nasdaq National Market on the Record Date, July 30,
2001, Mr. Einav would hold an aggregate consideration in unvested options equal
to $_____, less than the value of an option to purchase 30,000 Ordinary Shares
at the Annual Meeting Date Price. Ms. Schinderman would receive an option to
purchase 30,000 Ordinary Shares at the Annual Meeting Date Price. However,
assuming a price of $____ per share as of the date of the Annual Meeting, Mr.
Einav would hold an aggregate consideration in unvested options equal to $____,
greater than the value of an option to purchase 30,000 Ordinary Shares at an
exercise price of $____. Ms. Schinderman would receive an option to purchase
_____ Ordinary Shares at an exercise price of $____, with an aggregate
consideration of $____. As noted above, until the date of the Annual Meeting,
the Company cannot determine the exact number of Ordinary Shares underlying the
option to be granted to Ms. Schinderman or the exercise price per share.
Pursuant to these regulations under the Israeli Companies Law, the
vesting provisions of Ms. Schinderman's option shall also be no less favorable
12
than the vesting of the outstanding options held by the incumbent External
Director, Dr. Borovich. Dr. Borovich currently holds options vesting monthly
over 36 and 24 months, with vesting commencement dates of November 30, 1999 and
February 9, 2001, respectively.
In addition, in order to equalize External Director compensation in
accordance with the Israeli Companies Law regulations, on July __, 2001, the
Board of Directors granted, subject to shareholder approval, additional option
consideration to Dr. Borovich, an External Director under Israeli law, equal to
the excess, if any, of (i) the aggregate consideration in unvested options
received by Ms. Schinderman if she is elected as an External Director over (ii)
the aggregate consideration in unvested options held by Dr. Borovich prior to
her election. The value of the option consideration shall be measured as of the
date of grant, which is the date of shareholder approval.
As of the date of the Annual Meeting, Dr. Borovich will hold unvested
options to purchase _____ Ordinary Shares, with exercise prices of $3.67 and
$1.69 per share. For instance, as in the first example above, if the Annual
Meeting Date Price is $____, the aggregate consideration in unvested options to
be received by Ms. Schinderman would be equal to $_____. Dr. Borovich would
receive an additional option to purchase _____ Ordinary Shares at an exercise
price of $____, equal in value to the excess of (i) the aggregate consideration
to be received by Ms. Schinderman over (ii) the aggregate consideration held by
Dr. Borovich prior to her election. If, as in the second example above, the
Annual Meeting Date Price as of the date of the Annual Meeting is $____, the
aggregate consideration in unvested options to be received by Ms. Schinderman
would be equal to $____. Dr. Borovich would again receive an additional option
to purchase _____ Ordinary Shares at an exercise price of $____, equal in value
to the excess of (i) the aggregate consideration to be received by Ms.
Schinderman over (ii) the aggregate consideration held by Dr. Borovich prior to
her election.
PROPOSAL
IT IS HEREBY PROPOSED TO RATIFY AND APPROVE THE STOCK OPTION GRANTS AS
SPECIFIED BELOW FOR THE APPLICABLE NUMBER OF ORDINARY SHARES ON THE TERMS
SPECIFIED ABOVE:
ORDINARY SHARES
NAME REPRESENTED BY
OPTIONS
------ ---------------
Dr. Israel Borovich 30,000 + *
Mr. Roni Einav 30,000
Mr. Nathan Gantcher 30,000
Ms. Janet Schinderman *
Mr. James Thanos 30,000
* Number of shares and exercise price to be calculated as of the date of the
Annual Meeting.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the Votes Cast
for the approval of the grant of stock options as set forth above.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR"
THE APPROVAL OF THE GRANT OF STOCK OPTIONS AS SET FORTH ABOVE.
PROPOSAL NO. 5
RATIFICATION AND APPROVAL OF LOAN FROM THE COMPANY TO DR. MOSHE BENBASSAT,
CHAIRMAN OF THE COMPANY'S BOARD OF DIRECTORS AND CHIEF EXECUTIVE OFFICER
13
On May 9, 2001 the Company's Board of Directors approved a loan of
$300,000 from the Company to Dr. Moshe BenBassat, Chairman of the Company's
Board of Directors and Chief Executive Officer. The interest rate is 4.99% per
annum, based upon the minimum Applicable Federal Rate for August 2001 for a
medium term, annually compounded loan . Interest will compound annually, and all
accrued interest and principal will be due and payable within five years from
the date of the loan. All interest and principal will also be due and payable
upon the termination of Dr. BenBassat's employment with the Company for any
reason or upon a change in control of the Company. Dr. Moshe BenBassat has
represented to the Company that the loan will not be used, directly or
indirectly, to purchase shares of the Company.
VOTE REQUIRED
A simple majority of Votes Cast (not including abstentions), provided
that either:
- a majority of the Votes Cast, including at least one-third of the
shares held by non-controlling shareholders voted at the meeting,
vote in favor of approval of the loan to Dr. BenBassat, or
- the total number of shares held by non-controlling shareholders
who voted against approval of the loan to Dr. BenBassat does not
exceed one percent of the Company's aggregate voting rights.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR"
THE APPROVAL OF THE GRANT OF THE LOAN TO DR. MOSHE BENBASSAT AS SET FORTH ABOVE.
.
PROPOSAL NO. 6
RATIFICATION AND APPROVAL OF COMPENSATION TERMS FOR DR. MOSHE BENBASSAT,
CHAIRMAN OF THE COMPANY'S BOARD OF DIRECTORS AND CHIEF EXECUTIVE OFFICER
Pursuant to the Israeli Companies Law, the Company's shareholders must
approve the compensation terms of any executive officer who also serves as a
director. Dr. BenBassat, the Company's Chief Executive Officer, also serves as
Chairman of the Board of Directors of the Company. Accordingly, his compensation
is subject to approval of the Company's shareholders.
The Compensation Committee has recommended to the Audit Committee and
to the Board of Directors that Dr. BenBassat shall be eligible to receive for
fiscal 2001 salary of up to $250,000 per year with a bonus of up to $250,000.
Based on this recommendation, both the Audit Committee and, subsequently, the
Board approved Dr. BenBassat's compensation for fiscal 2001. If the shareholders
do not approve the compensation of Dr. BenBassat as described above, then his
salary and bonus would revert to the previously approved levels. The
Compensation Committee and the Audit Committee of the Board believe that the
compensation for Dr. BenBassat is reasonable under the circumstances. For a
detailed description of the compensation paid to all the Company's executive
officers during the fiscal year ended December 31, 2000, please see the section
entitled "Executive Compensation" beginning on page __ of this proxy statement.
VOTE REQUIRED
A simple majority of Votes Cast (not including abstentions), provided
that either:
- a majority of the Votes Cast, including at least one-third of the
shares held by non-controlling shareholders voted at the meeting
vote in favor of approval of Dr. BenBassat's compensation, or
- the total number of shares held by non-controlling shareholders
who voted against approval of Dr. BenBassat's compensation does
not exceed one percent of the Company's aggregate voting rights.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR"
THE APPROVAL OF THE COMPENSATION TERMS FOR DR. BENBASSAT AS SET FORTH ABOVE.
PROPOSAL NO. 7
RECEIVE AND CONSIDER THE DIRECTORS' REPORT AND THE AUDITED FINANCIAL STATEMENTS
At the Meeting, the Directors' Report and Audited Consolidated
Financial Statements of the Company and its subsidiaries for the fiscal year
ended December 31, 2000, will be presented. The affirmative vote of a majority
of the Votes Cast will be required for shareholder approval to receive and
consider the Directors' Report and Audited Consolidated Financial Statements of
the Company and its subsidiaries for the fiscal year ended December 31, 2000.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS VOTE "FOR" THE RECEIPT AND CONSIDERATION BY THE ANNUAL MEETING OF
THE DIRECTORS' REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE
COMPANY AND ITS SUBSIDIARIES FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000. 34
14
17
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the
beneficial ownership of the Company's ordinary shares as of June 30, 2001 for:
* the Company's Chief Executive Officer and its four other most highly
compensated executive officers during fiscal year 2000 (collectively,
the "Named Executive Officers");
* each of the Company's directors;
* each person or group known by the Company to beneficially own more
than 5% of its outstanding ordinary shares; and
* all of the Company's executive officers and directors as a group.
Beneficial ownership of ordinary shares is determined in accordance
with the rules of the Securities and Exchange Commission and generally includes
any ordinary shares over which a person exercises sole or shared voting or
investment powers, or of which a person has a right to acquire ownership at any
time within 60 days of June 30, 2001. Except as otherwise indicated, and subject
to applicable community property laws, the persons named in this table have sole
voting and investment power with respect to all ordinary shares held by them.
Applicable percentage ownership in the following table is based on 26,201,118
shares outstanding as of June 30, 2001.
Unless otherwise indicated below, the address of each of the principal
shareholders is c/o ClickSoftware Technologies Ltd., 34 Habarzel Street, Tel
Aviv, Israel.
Ordinary Shares
Beneficially Owned
------------------------
Name and Address Number Percent
- - ----------------------------------------------------------------------------------------------------------------
Named Executive Officers And Directors
Moshe BenBassat(1)..................................................... 4,794,844 18.30%
Shimon Rojany (2)...................................................... 390,578 1.49%
David Schapiro(3)...................................................... 178,171 *
Ami Shpiro(4).......................................................... 204,351 *
Robert Spina (5)....................................................... 18,563 *
Israel Borovich(6)..................................................... 18,894 *
Roni Einav(7).......................................................... 12,500 *
Nathan Gantcher(8)..................................................... 74,166 *
Eddy Shalev(9).........................................................
c/o Genesis Partners
50 Dizengoff Street
Tel-Aviv 64332, Israel ............................................ 2,871,270 10.96%
James W. Thanos(10).................................................... 18,750 *
Shareholders
Worldview Technology International I, L.P. ("WVTI I").................. 745,612 2.85%
Worldview Technology Partners I, L.P. ("WVTP I")....................... 1,668,203 6.37%
Worldview Strategic Partners I, L.P. ("WVSP I")........................ 149,606 0.57%
----------- --------
15
Ordinary Shares
Beneficially Owned
------------------------
Name and Address Number Percent
- - ----------------------------------------------------------------------------------------------------------------
Total, Entities associated with Worldview
435 Tasso Street, Suite 120
Palo Alto, CA 94301................................................ 2,563,421 9.78%
Entities affiliated with Genesis Partners
50 Dizengoff Street
Tel-Aviv 64332, Israel............................................. 2,871,270 10.96%
Entities affiliated with Oak Investments Partners
525 University Avenue, Suite 1300
Palo Alto, CA 94301............................................... 4,724,027 18.03%
Meritech Capital Associates LLC
90 Middlefield Road, Suite 201
Menlo Park, CA 94025.............................................. 1,828,629 6.98%
Liberty Wanger Asset Management
227 West Monroe Street, Suite 3000
Chicago, IL 60606-5016............................................. 1,660,000 6.34%
All executive officers and directors as a group (14 persons)........... 8,886,998 33.92%
- - -----------------
* Less than one percent.
(1) Includes 2,246,887 shares held by Dr. BenBassat's spouse, Idit BenBassat.
Also includes options to purchase 197,858 Ordinary Shares exercisable
within 60 days of June 30, 2001 held by Dr. BenBassat.
(2) Includes options to purchase 63,621 Ordinary Shares exercisable within 60
days of June 30, 2001 held by Mr. Rojany.
(3) Includes options to purchase 178,171 Ordinary Shares exercisable within 60
days of June 30, 2001 held by Mr. Schapiro.
(4) Includes options to purchase 33,614 Ordinary Shares exercisable within 60
days of June 30, 2001 held by Mr. Shpiro.
(5) Mr. Spina resigned effective December 31, 2000.
(6) Includes options to purchase 15,833 Ordinary Shares exercisable within 60
days of June 30, 2001 held by Dr Borovich.
(7) Includes options to purchase 12,500 Ordinary Shares exercisable
within 60 days of June 30, 2001 held by Mr. Einav.
(8) Includes options to purchase 24,166 Ordinary Shares exercisable
within 60 days of June 30, 2001 held by Mr. Gantcher.
(9) Includes shares held by Genesis Partners I L.P. and Genesis Partners I
(Cayman) L.P. Eddy Shalev is a managing general partner of Genesis
Partners I, L.P. and Genesis Partners I (Cayman) L.P. Mr. Shalev disclaims
beneficial ownership of these shares, except for his proportional interest
therein, if any.
(10) Includes options to purchase 13,750 Ordinary Shares exercisable within
60 days of June 30, 2001 held by Mr. Thanos.
EXECUTIVE OFFICER COMPENSATION
COMPENSATION ARRANGEMENTS
The Company has entered into employment agreements with Dr. Moshe
BenBassat, its Chief Executive Officer, Shimon M. Rojany, its Chief Financial
Officer, and Corey Leibow, its Chief Operating Officer. The agreements provide
that the executives' employment relationships are "at-will" and may be
terminated at any time by either the Company or the executive with or without
cause or notice. The agreements provide that in the event the executive is
terminated by the Company without cause, the executive shall be entitled to
16
severance payments (to be paid in a lump sum or monthly at the executive's
discretion) in amounts equal to twelve months of annual base salary as of the
date of termination for Dr. BenBassat, six months of the annual base salary as
of the date of termination for Mr. Rojany, and three months of the annual base
salary as of the date of termination, if termination occurs within the first
twelve months of employment (before November 6, 2001), or six months if
termination occurs thereafter, for Mr. Leibow. Dr. BenBassat is entitled to full
acceleration of option vesting in the event of a change in control, and Mr.
Leibow is entitled to 50% vesting or 100% vesting depending on the conditions of
a change of control. The executive's right to receive the benefits set forth
above will immediately terminate if the executive competes with the Company
during the six or twelve months following termination of employment with the
Company.
COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") is comprised of Mr. Eddy
Shalev, Dr. Borovich and, prior to his resignation from the board of directors,
Mr. Fredric Harman. All have been independent, non-employee members of the Board
of Directors. No interlocking relationship exists between the Company's board of
directors or compensation committee and the board of directors or compensation
committee of any other company, nor has such an interlocking relationship
existed in the past. The Committee is responsible for setting and administering
the policies governing annual compensation of executive officers, considers
their performance and makes recommendations regarding their cash compensation
and stock options to the full Board of Directors. As the Company only recently
established the Committee in connection with its initial public offering, there
is a limited history; however the Committee expects, pursuant to its charter, to
periodically review the approach to executive compensation and make changes as
competitive conditions and other circumstances warrant.
COMPENSATION PHILOSOPHY
In July 2000, the Company completed the initial public offering of its
Ordinary Shares. In reviewing the compensation for the upcoming fiscal year, the
Committee addressed two distinct areas in order to meet the needs of the Company
as it continues to grow and mature. The Committee recognizes that in order for
the Company to develop new products and scale the business, the ability to
attract, retain and reward executive officers who will be able to operate
effectively in a high growth complex environment is vital. In that regard, the
Company must offer compensation that (a) is competitive in the industry; (b)
motivates executive officers to achieve the Company's strategic business
objectives; and (c) aligns the interests of executive officers with the
long-term interests of shareholders.
The Company currently uses salary, a management incentive plan and
stock options to meet these requirements. For incentive-based compensation, the
Committee considers the desirability of structuring such compensation
arrangements so as to qualify for deductibility under Section 162(m) of the
Internal Revenue Code. As the Committee applies this compensation philosophy in
determining appropriate executive compensation levels and other compensation
factors, the Committee reaches its decisions with a view towards the Company's
overall performance.
17
COMPENSATION
The following table sets forth all compensation received for services
to the Company and the Company's subsidiaries in all capacities during
the last three years by the Named Executive Officers:
Long Term Compensation
Annual Compensation Awards
-----------------------------------------------------------------------
Securities All Other
Other Annual Underlying Compensation
Name Position Year Salary Bonus Compensation Options ($)
- - ---------------------------------------------------------------------------------------------------------------------------
Moshe BenBassat................... 1998 67,418 - - - -
CEO 1999 178,989 189,112 - 720,000 -
2000 225,000 239,709 83,594 (1) - -
Shimon Rojany..................... 1998 41,667 - - 30,000 -
CFO 1999 88,333 32,083 - 73,227 -
2000 185,833 68,083 4,362 (2) 30,000 -
Robert Spina (3).................. 1998 91,875 79,705 - 27,000 -
VP Sales 1999 83,916 66,484 - 21,000 -
2000 120,000 128,996 706 (2) 7,200 -
Ami Shpiro........................ 1998 116,396 18,703 3,009 (4) 6,000 -
President, European 1999 130,500 92,389 7,221 (4) 6,781 -
Operations 2000 130,500 83,692 6,528 (4) 18,000 -
David Schapiro.................... 1998 96,201 7,650 21,400 (5) 90,000 -
Sr. VP, Product 1999 103,080 12,397 23,142 (5) 31,036 -
Development 2000 131,858 14,714 29,006 (5) 30,000 -
- - --------------------------
(1) Other compensation to Dr. BenBassat includes $75,000 housing allowance.
(2) Executive disability insurance.
(3) Mr. Spina resigned effective December 31, 2000.
(4) Pension contributions.
(5) Contributions to employee benefit programs.
OPTION GRANTS IN YEAR 2000
The following table sets forth information concerning grants of stock
options to each of the Named Executive Officers during the year ended December
31, 2000. All such options were granted under the Company's various option plans
approved during 2000, and generally vest over four years.
18
% of Total
Number of Shares Options Granted
Underlying to Employees Exercise Expiration Grant Date
Options Granted in 2000 Price ($/sh) Date Present Value (1)
---------------------------------------------------------------------------------------
Moshe BenBassat.............. - 0.00% - - -
Robert Spina (2)............. 7,200 0.71% $ 8.50 3/20/10 $ 3,432
Shimon Rojany................ 30,000 2.96% $ 8.50 3/20/10 $ 14,299
Ami Shpiro................... 18,000 1.77% $ 8.50 3/20/10 $ 10,469
David Schapiro............... 30,000 2.96% $ 8.50 3/20/10 $ 17,448
(1) Computed using the Black-Scholes option pricing model. Full vesting of
options is four years from grant date. Assumes the average expected life of
the option is 1.31 years, a volatility of 116%, an annual dividend yield of
0.0%, and interest risk free interest rate of 5%.
(2) Mr. Spina resigned effective December 31, 2000.
AGGREGATE OPTION EXERCISES IN LAST YEAR AND YEAR-END OPTION VALUES
The following table sets forth certain information concerning options
exercised by the Named Executive Officers in year 2000, and exercisable and
unexercisable stock options held by each of the Named Executive Officers as of
December 31, 2000.
Number of Securities
Underlying Unexercised Options Value of Unexercised
Shares as of In-the-Money Options at
Acquired On Value December 31, 2000 December 31, 2000 (1)
Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
--------------------------------------------------------------------------------------------------
Moshe BenBassat............ 205,608 $ 574,640.57 75,372 439,020 $ - $ -
Robert Spina (2)........... 23,249 $ 69,097.77 1,563 - $ 1,714 $ -
Shimon Rojany.............. 36,920 $ 130,724.31 15,942 77,365 $ 31,199 $ 45,726
Ami Shpiro................. - $ - 23,527 30,735 $ 20,165 $ 20,447
David Schapiro............. - $ - 136,963 121,036 $159,794 $ 98,453
- - ------------------------
(1) Based upon the Closing Price of the Ordinary Shares on December 29, 2000 of
$1.75 less the exercise price per share.
(2) Mr. Spina resigned effective December 31, 2000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As noted above, the Compensation Committee is comprised of two
non-employee directors: Dr. Borovich and Mr. Shalev. No member of the
Compensation Committee is or was formerly an officer or an employee of the
Company. No executive officer of ClickSoftware serves as a member of the board
of directors or compensation committee of any entity that has one or more
executive officers serving as a member of ClickSoftware's Board of Directors,
nor has such interlocking relationship existed in the past.
19
PERFORMANCE GRAPH
The following graph compares the quarterly share price of the
Company's common stock with the index return of the NASDAQ National Market Index
and with the NASDAQ Index of Computer Stocks for the period from June 23, 2000
(the date on which the Company's common stock began trading on the NASDAQ)
through December 31, 2000. The Company has paid no dividends on its Common
Stock. Historical stock price performance should not be relied upon as
indicative of future stock price performance:
6/30/00 9/30/00 12/30/00
---------- ---------- ----------
CKSW -5% -14% -76%
NASDX 2% - 3% -36%
NASD:COMPUTER: 3% - 6% -43%
CERTAIN RELATIONSHIPS AND TRANSACTIONS
On May 9, 2001 the Company's Board of Directors approved a loan of
$300,000 from the Company to Dr. Moshe BenBassat, Chairman of the Company's
Board of Directors and Chief Executive Officer. The interest rate is 4.99% per
annum, based upon the minimum Applicable Federal Rate for August 2001 for a
medium term, annually compounded loan. Interest will compound annually, and all
accrued interest and principal will be due and payable within five years from
the date of the loan. All interest and principal will also be due and payable
upon the termination of Dr. BenBassat's employment with the Company for any
reason or upon a change in control of the Company. Dr. Moshe BenBassat has
represented to the Company that the loan will not be used, directly or
indirectly, to purchase shares of the Company. In accordance with Israeli law,
the granting of the loan to Dr. BenBassat requires the approval of the
shareholders.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on its review of copies of filings under Section 16(a) of
the Securities Exchange Act of 1934, as amended, received by it, or written
representations from certain reporting persons, the Company believes that during
year 2000, all Section 16 filing requirements were met, with the following
exceptions:
For Shimon Rojany, CFO, Form 4 for the month of June 2000 was filed on
August 8, 2000 indicating a single indirect acquisition of 3,000 shares of
20
Company stock. For James Thanos, Director, Form 4 for the month of June 2000 was
filed on August 8, 2000 indicating a single direct acquisition of 5,000 shares
of Company stock. For Corey Leibow, COO, Form 3 due November 25, 2000 was filed
on February 14, 2001. For Timothy Spence, VP of Business Affairs and Controller,
Form 3 due September 25, 2000 was filed on February 8, 2001
By Order of the Board of Directors
Campbell, California
August 7, 2001
MOSHE BENBASSAT
Chairman of the Board of Directors and
Chief Executive Office
.
21
APPENDIX A
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS OF
CLICKSOFTWARE TECHNOLOGIES LTD.
PURPOSES
The purpose of the Audit Committee of the Board of Directors of
ClickSoftware Technologies Ltd., an Israeli corporation (the "Company"), shall
be to make such examinations as are necessary to monitor the Company's system of
internal controls, to provide the Company's Board of Directors with the results
of its examinations and recommendations derived therefrom, to outline to the
Board of Directors improvements made, or to be made, in internal accounting
controls, to nominate independent auditors and to provide to the Board of
Directors such additional information and materials as it may deem necessary to
make the Board of Directors aware of significant financial matters which require
the Board of Director's attention.
In addition, the Audit Committee will undertake those specific duties
and responsibilities listed below and such other duties as the Board of
Directors may from time to time prescribe.
MEMBERSHIP
The Audit Committee members will be appointed by, and will serve at
the discretion of, the Board of Directors and will consist of at least three
members of the Board of Directors, each of whom:
1. Will be an independent director;
2. Will be able to read and understand fundamental financial statements,
in accordance with the NASDAQ National Market Audit Committee
requirements; and
3. At least one of whom will have past employment experience in finance
or accounting, requisite professional certification in accounting, or
other comparable experience or background, including a current or past
position as a chief executive or financial officer with financial
oversight responsibilities.
RESPONSIBILITIES
The responsibilities of the Audit Committee shall include:
1. Reviewing on a continuing basis the adequacy of the Company's system
of internal controls;
2. Reviewing on a continuing basis the activities, organizational
structure and qualifications of the Company's internal audit function;
3. Reviewing the independent auditors' proposed audit scope, approach and
independence;
4. Conducting a post-audit review of the financial statements and audit
findings, including any significant suggestions for improvements
provided to management by the independent auditors;
5. Reviewing the performance of the independent auditors, who shall be
accountable to the Board of Directors and the Audit Committee;
6. Recommending the appointment of independent auditors to the Board of
Directors;
7. Reviewing fee arrangements with the independent auditors;
22
8. Reviewing before release the audited financial statements and
Management's Discussion and Analysis in the Company's annual report on
Form 10-K;
9. Reviewing before release the unaudited quarterly operating results in
the Company's quarterly earnings release;
10. Overseeing compliance with the requirements of the Securities and
Exchange Commission for disclosure of independent auditor's services
and audit committee members and activities;
11. Overseeing of compliance with the Company's Standards of Business
Conduct and with the Foreign Corrupt Practices Act;
12. Reviewing, in conjunction with counsel, any legal matters that could
have a significant impact on the Company's financial statements;
13. Providing oversight and review of the Company's asset management
policies, including an annual review of the Company's investment
policies and performance for cash and short-term investments;
14. If necessary, instituting special investigations and, if appropriate,
hiring special counsel or experts to assist;
15. Reviewing related party transactions for potential conflicts of
interest;
16. Providing a report in the Company's proxy statement in accordance with
the requirements of Item 306 of Regulations S-K and S-B and Item
7(e)(3) of Schedule 14A; and
17. Performing other oversight functions as requested by the full Board of
Directors.
In addition to the above responsibilities, the Audit Committee will
undertake such other duties as the Board of Directors may delegate to it and
will report, at least annually, to the Board of Directors regarding the
Committee's examinations and recommendations.
MEETINGS
The Audit Committee will meet at least four times each year. The Audit
Committee should attempt to have one of the meetings as a face-to-face meeting.
The Audit Committee may establish its own schedule and shall provide such
schedule to the Board of Directors in advance.
The Audit Committee will meet separately with the Company's president
and separately with the Company's chief financial officer at least annually to
review the financial controls of the Company. The Audit Committee will meet with
the independent auditors of the Company at such times as it deems appropriate to
review the independent auditor's examination and management report.
MINUTES
The Audit Committee will maintain written minutes of its meetings,
which minutes will be filed with the minutes of the meetings of the Board of
Directors.
23
APPENDIX B
CLICKSOFTWARE TECHNOLOGIES LTD.
AMENDED AND RESTATED 2000 SHARE OPTION PLAN
1. Purposes of the Plan. The purposes of this Share Option Plan are to
attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to
Employees, Directors and Consultants and to promote the success of the
Company's business. Options granted under the Plan may be Incentive
Stock Options or Nonstatutory Stock Options, as determined by the
Administrator at the time of grant.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 hereof.
(b) "Applicable Laws" means the requirements relating to the
administration of share option plans under Israeli corporate and securities
laws, U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Shares are listed or
quoted and the applicable laws of any country or jurisdiction where Options are
granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the U.S. Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the Board
in accordance with Section 4 hereof.
(f) "Company" means ClickSoftware Technologies Ltd., a corporation
incorporated under the laws of the State of Israel.
(g) "Consultant" means any person who is engaged by the Company or any
Parent or Subsidiary to render consulting or advisory services to such entity.
(h) "Director" means a member of the Board of Directors of the
Company.
(i) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. An Employee
shall not cease to be an Employee in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the Company or
between the Company, its Parent, any Subsidiary, or any successor. For purposes
of Incentive Stock Options, no such leave may exceed ninety days, unless
reemployment upon expiration of such leave is guaranteed by statute or contract.
If reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, on the 181st day of such leave any Incentive Stock Option
held by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Fair Market Value" means, as of any date, the value of a Share
determined as follows:
(i) If the Shares are listed on the Nasdaq National Market or The
Nasdaq SmallCap Market of The Nasdaq Stock Market, their Fair Market Value shall
24
be the closing sales price for such Shares (or the closing bid, if no sales were
reported) as quoted on such system for the last market trading day prior to the
time of determination, as reported in Globes, HaAretz or such other source as
the Administrator deems reliable;
(ii) If the Shares are listed on the Tel Aviv Stock Exchange, but
are not traded on the Nasdaq National Market or The Nasdaq Small Cap Market,
their Fair Market Value shall be the closing sales price for such Shares (or the
closing bid if no sales were reported) as quoted on such exchange for the last
market trading day prior to the time of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable;
(iii) If the Shares are regularly quoted by a recognized
securities dealer but selling prices are not reported, their Fair Market Value
shall be the mean between the high bid and low asked prices for the Shares on
the last market trading day prior to the day of determination, or;
(iv) In the absence of an established market for the Shares, the
Fair Market Value thereof shall be determined in good faith by the
Administrator.
(l) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(m) "Inside Director" means a Director who is an Employee.
(n) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(o) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(p) "Option" means a share option granted pursuant to the Plan.
(q) "Option Agreement" means a written or electronic agreement between
the Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.
(r) "Optioned Shares" means the Shares subject to an Option.
(s) "Optionee" means the holder of an outstanding Option granted under
the Plan.
(t) "Outside Director" means a Director who is not an Employee.
(u) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(v) "Plan" means this 2000 Share Option Plan.
(w) "Service Provider" means an Employee, Director or Consultant.
(x) "Share" means a share of the Company's Ordinary Shares having a
nominal value of 1.00 NIS, as adjusted in accordance with Section 12 below.
(y) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Shares Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate
25
4. number of Shares that may be subject to option and sold under the Plan
is 3,000,000 Shares, plus an annual increase to be added on the first
day of the Company's fiscal year beginning in 2001 equal to the lesser
of (i) 5% of outstanding shares on such date, (ii) 1,250,000 Shares,
or (iii) a lesser amount determined by the Board. The Shares may be
authorized, but unissued, or reacquired.
If an Option expires or becomes unexercisable without having
been exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan shall not be returned to the Plan and shall not become available for
future distribution under the Plan.
5. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. Different Committees with
respect to different groups of Service Providers may administer the Plan.
(ii) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule 16b-3.
(iv) Other Administration. Other than as provided above, the Plan
shall be administered by (A) the Board or (B) a Committee, which committee shall
be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan
and, in the case of a Committee, the specific duties delegated by the Board to
such Committee, and subject to the approval of any relevant authorities, the
Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options may from
time to time be granted hereunder;
(iii) to determine the number of Shares to be covered by each
such award granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions of any Option granted
hereunder;
(vi) to determine whether and under what circumstances an Option
may be settled in cash under subsection 9(e) instead of Shares;
(vii) to reduce the exercise price of any Option to the then
current Fair Market Value (or the nominal value of the Shares, if higher than
the Fair Market Value), if the Fair Market Value of the Shares covered by such
Option has declined since the date the Option was granted;
(viii) to prescribe, amend and rescind rules and regulations
relating to the Plan;
26
(ix) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.
(c) Effect of Administrator's Decision. All decisions, determinations
and interpretations of the Administrator shall be final and binding on all
Optionees.
6. Eligibility. Nonstatutory Stock Options may be granted to Service
Providers. Incentive Stock Options may be granted only to Employees.
7. Limitations.
(a) Each Option shall be designated in the Option Agreement as either
an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
(b) Neither the Plan nor any Option shall confer upon an Optionee any
right with respect to continuing the Optionee's relationship as a Service
Provider with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such relationship at any
time, with or without cause.
(c) The following limitations shall apply to grants of Options:
(i) No Service Provider shall be granted, in any fiscal year of
the Company, Options to purchase more than 1,000,000 Shares.
(ii) In connection with his or her initial service, a Service
Provider may be granted Options to purchase up to an additional 1,000,000
Shares, which shall not count against the limit set forth in subsection (i)
above.
(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 12.
(iv) If an Option is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 12), the cancelled Option will be counted against the
limits set forth in subsections (i) and (ii) above. For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.
8. Term of Plan. The Plan shall become effective upon its adoption by the
Board. It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 15 of the Plan.
9. Term of Option. The term of each Option shall be stated in the Option
Agreement; provided, however, that the term shall be no more than ten (10) years
from the date of grant thereof. In the case of an Incentive Stock Option granted
to an Optionee who, at the time the Option is granted, owns shares representing
more than ten percent (10%) of the voting power of all classes of shares of the
Company or any Parent or Subsidiary, the term of the Option shall be five (5)
years from the date of grant or such shorter term as may be provided in the
Option Agreement.
10. Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:
27
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of such
Incentive Stock Option, owns shares representing more than ten percent (10%) of
the voting power of all classes of shares of the Company or any Parent or
Subsidiary, the exercise price shall be no less than 110% of the Fair Market
Value per Share on the date of grant.
(B) granted to any Employee other than an Employee described in the
preceding subparagraph, the per Share exercise price shall be no less than 100%
of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted with
a per Share exercise price (other than as required above) of less than 100% of
Fair Market Value on the date of grant pursuant to a merger or other corporate
transaction.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) consideration received by the Company under a
formal cashless exercise program adopted by the Company in connection with the
Plan, or (5) any combination of the foregoing methods of payment. To the extent
that the consideration paid for the Shares is denominated in a currency other
than New Israeli Shekels, the exchange rate to be used to obtain a New Israeli
Shekel value of such consideration shall be the noon buying rate as reported by
the Federal Reserve Bank of New York (expressed in shekels per unit of
non-Israeli currency) on the date of grant of the Option. In making its
determination as to the type of consideration to accept, the Administrator shall
consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
11. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Options shall become exercisable at a rate to be
determined by the Administrator. Unless the Administrator provides otherwise,
vesting of Options granted hereunder shall be tolled during any unpaid leave of
absence. An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in (i) the name of the Optionee or,
if requested by the Optionee, in the name of the Optionee and his or her spouse,
or (ii) the name of the Optionee to Yoav Bruckner as trustee (the "Trustee"), to
be held by the Trustee on behalf of Optionee if so required by Applicable Laws.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Shares, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 12 of the Plan.
28
Exercise of an Option in any manner shall result in a decrease in the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.
(b) Termination of Relationship as a Service Provider. If an Optionee
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination, but in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement. In the absence of a specified time in the Option Agreement,
the Option shall remain exercisable for twelve (12) months following the
Optionee's termination. If, on the date of termination, the Optionee is not
vested as to the entire Option, the Shares covered by the unvested portion of
the Option shall revert to the Plan. If, after termination, the Option is not
exercised within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan. If such disability is
not a "disability" as such term is defined in Section 22(e)(3) of the Code, in
the case of an Incentive Stock Option such Incentive Stock Option shall
automatically cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option on the day three months
and one day following such termination.
(d) Death of Optionee. If an Optionee dies while a Service Provider,
the Option may be exercised within such period of time as is specified in the
Option Agreement to the extent that the Option is vested on the date of death
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement) by the Optionee's estate or by a person who
acquires the right to exercise the Option by bequest or inheritance. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. If, at
the time of death, the Optionee is not vested as to the entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If the Option is not so exercised within the time specified herein, the Option
shall terminate, and the Shares covered by such Option shall revert to the Plan.
12. Non-Transferability of Options. Unless determined otherwise by the
Administrator, Options may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.
13. Adjustments Upon Changes in Capitalization or Merger.
(a) Changes in Capitalization. In the event the Shares shall be
subdivided or combined into a greater or smaller number of Shares or if, upon a
reorganization, recapitalization or the like, the Shares shall be exchanged for
other securities of the Company, each Optionee shall be entitled, subject to the
conditions herein stated, to purchase such number of Shares or amount of other
securities of the Company as were exchangeable for the number of Shares of the
Company which such Optionee would have been entitled to purchase except for such
action, and appropriate adjustments shall be made in the purchase price per
share to reflect such subdivision, combination or exchange.
In the event that the Company shall issue any of its Shares or other
securities as bonus shares or a stock dividend upon or with respect to any
Shares which shall at the time be subject to an Option hereunder, each Optionee
upon exercising such Option shall be entitled to receive (for the purchase price
payable upon such exercise), the Shares as to which he or she is exercising such
Option and, in addition thereto (at no additional cost), such number of shares
of the class or classes in which such bonus shares or stock dividend were
29
declared, and such amount of Shares (and the amount in lieu of fractional
Shares) as is equal to the Shares which he would have received had he been the
holder of the Shares as to which he is exercising his Option at all times
between the date of the granting of such Option and the date of its exercise.
Upon the occurrence of any of the foregoing events, the class and
aggregate number of Shares or other securities issuable pursuant to the Plan, in
respect of which Options have not yet been granted, as well as the number of
Shares which may be granted pursuant to the automatic grant provisions of
Section 13, shall also be appropriately adjusted to reflect the events specified
above. If the Company offers the holders of the Shares, or of any other class of
security for which the Options are then exercisable, rights to purchase
securities of the Company, then the Company shall offer the same rights to the
Optionees as if they had exercised their Options on the record date with respect
to such rights offering.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until fifteen (15) days prior to
such transaction as to all of the Optioned Shares, including Shares as to which
the Option would not otherwise be exercisable. To the extent it has not been
previously exercised, an Option will terminate immediately prior to the
consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company with
or into another corporation, or the sale of substantially all of the assets of
the Company, each outstanding Option shall be assumed or an equivalent option
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. With respect to Options granted to an Outside Director
pursuant to Section 13 that are assumed or substituted for, if following such
assumption or substitution the Optionee's status as a Director or a director of
the successor corporation, as applicable, is terminated other than upon a
voluntary resignation by the Optionee, then the Optionee shall fully vest in and
have the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable.
In the event that the successor corporation refuses to assume or
substitute for the Option, the Optionee shall fully vest in and have the right
to exercise the Option as to all of the Optioned Stock, including Shares as to
which it would not otherwise be vested or exercisable. If an Option becomes
fully vested and exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Administrator shall notify the Optionee in
writing or electronically that the Option shall be fully exercisable for a
period of fifteen (15) days from the date of such notice, and the Option shall
terminate upon the expiration of such period.
For the purposes of this Section 12(c), the Option shall be considered
assumed if, following the merger or sale of assets, the option confers the right
to purchase or receive, for each Share of Optioned Shares immediately prior to
the merger or sale of assets, the consideration (whether shares, cash, or other
securities or property) received in the merger or sale of assets by holders of
Shares for each Share held on the effective date of the transaction (and if such
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding Shares); provided, however, that
if such consideration received in the merger or sale of assets is not solely
ordinary shares (or their equivalent) of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option,
for each Share of Optioned Shares, to be solely ordinary shares (or their
equivalent) of the successor corporation or its Parent equal in fair market
value to the per Share consideration received by holders of in the merger or
sale of assets.
14. Formula Option Grants to Outside Directors. Outside Directors shall be
automatically granted Options each year in accordance with the following
provisions:
(a) All Options granted pursuant to this Section shall be Nonstatutory
Stock Options and, except as otherwise provided herein, shall be subject to the
other terms and conditions of the Plan.
(b) Each Outside Director, except for individuals who became directors
of the Company prior to the Company's 2001 Annual Meeting, and except for
Outside Directors who are designated as External Directors in accordance with
Israeli law, is automatically granted an option to purchase thirty thousand
(30,000) shares (the "First Option"), upon the date such individual first
30
becomes a director, whether through election by the shareholders of the Company
or by appointment by the Board in order to fill a vacancy (the "Anniversary
Date"); provided, however, that an Inside Director who ceases to be an Inside
Director but who remains a Director shall not receive a First Option.
Each Outside Director is automatically granted an option to purchase
seven thousand five hundred (7,500) shares (the "Subsequent Option") following
each annual meeting of the shareholders of the Company, beginning in 2002, if on
such date he or she shall have served on the Board for at least the preceding
six (6) months.
(c) The terms of each First Option granted pursuant to this Section
shall be as follows:
(i) the term of the First Option shall be ten (10) years.
(ii) the exercise price per Share shall be 100% of the Fair
Market Value per Share on the date of grant of the First Option.
(iii) the First Option shall vest as to 25% of the Shares
subject to the First Option on each anniversary of its date of grant provided
that the Optionee continues to serve as a Director on such date.
(d) The terms of each Subsequent Option granted pursuant to this
Section shall be as follows:
(i) the term of the Subsequent Option shall be ten (10) years.
(ii) the exercise price per Share shall be 100% of the Fair
Market Value per Share on the date of grant of the Subsequent Option.
(iii) the Subsequent Option shall vest as to 100% of the Shares
subject to the Subsequent Option on the anniversary of its date of grant
provided that the Optionee continues to serve as a Director on such date.
15. Date of Grant. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board. Notice
of the determination shall be given to each Service Provider to whom an Option
is so granted within a reasonable time after the date of such grant.
16. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.
(b) Shareholder Approval. The Board shall obtain shareholder approval
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.
17. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
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(b) Investment Representations. As a condition to the exercise of an
Option, the Administrator may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.
18. Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
19. Reservation of Shares. The Company, during the term of this Plan, shall
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
20. Shareholder Approval. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.
32
CLICKSOFTWARE TECHNOLOGIES LTD.
c/o EquiServe
P.O. Box 9398
Boston, MA 02205-9398
ANNUAL MEETING OF SHAREHOLDERS, SEPTEMBER 7, 2001
P R O X Y B A L L O T
THIS PROXY/BALLOT IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
CLICKSOFTWARE TECHNOLOGIES LTD.
The undersigned revokes all previous proxies, acknowledges receipt of
the notice of the Annual Meeting of Shareholders to be held September 7, 2001
and the proxy statement related thereto and appoints Moshe BenBassat and Shimon
Rojany, jointly and severally, the proxy of the undersigned, with full power of
substitution, to vote all Ordinary Shares of ClickSoftware Technologies Ltd.
which the undersigned is entitled to vote, either on his or her own behalf or on
behalf of an entity or entities, at the Annual Meeting of Shareholders of the
Company to be held at 655 Campbell Technology Parkway, Suite 250, Campbell, CA
95008 on September 7, 2001 at 4:00 p.m. local time, and at any adjournment or
postponement thereof, with the same force and effect as the undersigned might or
could do it personally present thereat. The shares represented by this proxy
shall be voted in the manner set forth on the reverse side.
I hereby vote my Ordinary Shares of ClickSoftware Technologies Ltd. as
specified on the reverse side of this card.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE
----------------
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Please mark votes as in this example.
The Board of Directors recommends a vote FOR each of the matters
listed below. This Proxy/Ballot, when properly executed, will be voted as
specified below. This Proxy/Ballot will be voted FOR Proposals No. 1, 2, 3, 4, 5
and 6 if no specification is made.
1. ELECTION OF EXTERNAL DIRECTOR FOR WITHHOLD
Janet Schinderman AUTHORITY
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS FOR AGAINST ABSTAIN
3. AMENDMENT OF 2000 SHARE OPTION PLAN FOR AGAINST ABSTAIN
4. RATIFICATION AND APPROVAL OF GRANT OF STOCK OPTIONS TO FOR AGAINST ABSTAIN
MEMBERS OF THE BOARD OF DIRECTORS
5. RATIFICATION AND APPROVAL OF LOAN TO CHIEF EXECUTIVE FOR AGAINST ABSTAIN
OFFICER
6. RATIFICATION AND APPROVAL OF COMPENSATION FOR AGAINST ABSTAIN
TERMS FOR CHIEF EXECUTIVE OFFICER
7. RECEIPT AND CONSIDERATION OF DIRECTORS' REPORT AND FOR AGAINST ABSTAIN
AUDITED 2000 FINANCIAL STATEMENTS
MARK HERE FOR
ADDRESS CHANGE
AND NOTE AT LEFT
Address Change Information
Please sign your name exactly as it appears hereon. If acting as attorney,
executor, trustee or in other representative capacity, sign name and title. By
signing below, the undersigned confirms that he/she/it does not have a personal
interest in the transaction described in Proposal Two, unless the box to the
right is checked.
Signature: Date:
---------------------- --------------------------
Signature: Date:
---------------------- --------------------------
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