UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Mark One)
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X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
- --- ACT OF 1934
For the fiscal year ended December 31, 2003
Or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the transition period from _______________________ to ______________________
Commission file number 000-30827
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CLICKSOFTWARE TECHNOLOGIES LTD.
(Exact name of registrant as specified in its charter)
Israel Not Applicable
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
34 Habarzel Street
Tel Aviv, Israel 69710
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972-3) 765-9400
--------------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Ordinary Shares, NIS 0.02 par value
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(Title of class)
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10-K CLICKSOFTWARE TECHNOLOGIES LTD. PAGE 1
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
[ ] Yes [X] No
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).
[ ] Yes [X] No
The aggregate market value of the Ordinary Shares held by non-affiliates of the
Registrant on June 30, 2003, the last business day of the Registrant's most
recently completed second fiscal quarter, was $21.3 million (based on the
closing market sales price of the Ordinary Shares on that date). Ordinary shares
held by each executive officer and director and by each person who owns 5% or
more of the outstanding voting stock have been excluded in that such persons may
be deemed to be affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes.
As of March 31, 2004, there were 27,134,819 Ordinary Shares of the Registrant
outstanding.
EXPLANATORY NOTE
THIS AMENDMENT NO. 1 ON FORM 10-K/A (THIS "AMENDMENT") AMENDS THE
REGISTRANT'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31,
2003, ORIGINALLY FILED ON MARCH 22, 2004 (THE "ORIGINAL FILING"). CLICKSOFTWARE
TECHNOLOGIES LTD. (THE "COMPANY") IS FILING THE AMENDMENT TO INCLUDE THE
INFORMATION REQUIRED BY PART III AND NOT INCLUDED IN THE ORIGINAL FILING,
BECAUSE THE COMPANY'S DEFINITIVE PROXY STATEMENT WILL NOT BE FILED WITHIN 120
DAYS OF THE END OF THE COMPANY'S FISCAL YEAR ENDED DECEMBER 31, 2003. IN
ADDITION, IN CONNECTION WITH THE FILING OF THIS AMENDMENT AND PURSUANT TO THE
RULES OF THE SECURITIES AND EXCHANGE COMMISSION, THE COMPANY IS INCLUDING WITH
THIS AMENDMENT CERTAIN CURRENTLY DATED CERTIFICATIONS.
EXCEPT AS DESCRIBED ABOVE, NO OTHER CHANGES HAVE BEEN MADE TO THE ORIGINAL
FILING. THIS AMENDMENT CONTINUES TO SPEAK AS OF THE DATE OF THE ORIGINAL FILING,
AND THE REGISTRANT HAS NOT UPDATED THE DISCLOSURES CONTAINED THEREIN TO REFLECT
ANY EVENTS WHICH OCCURRED AT A DATE SUBSEQUENT TO THE FILING OF THE ORIGINAL
FILING.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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10-K CLICKSOFTWARE TECHNOLOGIES LTD. PAGE 2
TABLE OF CONTENTS
PAGE
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PART III
Item 10. Directors and Executive Officers of the Registrant.......... 4
Item 11. Executive Compensation...................................... 8
Item 12. Security Ownership of Certain Beneficial Owners and
Management................................................ 11
Item 13. Certain Relationships and Related Transactions.............. 13
Item 14. Principal Accountant Fees and Services...................... 13
Item 15. Exhibits, Financial Statement Schedules and Reports on Form
8-K....................................................... 15
SIGNATURES........................................................... 17
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10-K CLICKSOFTWARE TECHNOLOGIES LTD. PAGE 3
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
EXECUTIVE OFFICERS -
Our executive officers and certain information about them as of March 31, 2004
are as follows:
NAME AGE POSITION
- ---- --- --------
Dr. Moshe BenBassat 56 Chief Executive Officer and Chairman of the Board
Shmuel Arvatz 41 Executive Vice President and Chief Financial Officer
Hannan Carmeli 45 Executive Vice President, Worldwide Professional Services
David Schapiro 46 Executive Vice President, Markets & Products
Amit Bendov 39 Senior Vice President, Product Marketing
DR. MOSHE BENBASSAT co-founded ClickSoftware and has served as Chairman and
Chief Executive Officer since inception. From 1987 to 1999, Dr. BenBassat served
as a Professor of Information Systems at the Faculty of Management at Tel Aviv
University. Dr. BenBassat has also held academic positions at the University of
Southern California and the University of California in 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, Master of Science
and PhD. degrees in Mathematics and Statistics from Tel-Aviv University.
SHMUEL ARVATZ has served as our Executive Vice President and Chief Financial
Officer since October 2002. Prior to joining ClickSoftware, Mr. Arvatz served as
the Chief Financial Officer at Shrem, Fudim, Kelner Technologies Ltd., a leading
investment house in Israel. From June 1999 to February 2001, Mr. Arvatz served
as Executive Vice President and Chief Financial Officer of Tecnomatix
Technologies Ltd. (NASDAQ: TCNO), a provider of software e-manufacturing
solutions. From 1990 to 1999, Mr. Arvatz served as Vice President and Chief
Financial Officer at ADC Israel Ltd. (previously Teledata Communications Ltd., a
telecommunications equipment provider which was acquired by ADC Telecom Inc. in
1998). Mr. Arvatz holds a B.A. in Accounting and Economics from Bar-Ilan
University.
HANNAN CARMELI has served as our Executive Vice President of Worldwide
Professional Services since August 2002. Prior to this role, he served as our
Senior Vice President, Products, Services and Operations since January 2001.
From August 1996 to December 2000, Mr. Carmeli held various executive roles
including General Manager of the TechMate Division as well as Manager of Product
Services and Operations. Prior to joining us, Mr. Carmeli held R&D and field
positions with software vendors ranging from software development through
product management and sales management. Mr. Carmeli holds a Bachelor of Science
degree from the Technion Institute and a Master of Science degree in Computer
Science from Boston University.
DAVID SCHAPIRO has served as our Executive Vice President of Markets and
Products since April 2001. Prior to this position and since 1994, he held
various executive and management roles at ClickSoftware, including Senior Vice
President of Product Development, ClickSchedule Division General Manager, and
Vice President of Business Development. From 1984 until 1994 Mr. Schapiro served
in positions at Applied Materials, a semiconductor equipment manufacturer,
Scitex Corporation, a digital printing system company, and ClickSoftware. Mr.
Schapiro received a Bachelor of Science degree in Mathematics and Computer
Science from Tel-Aviv University, and a Master of Science degree in Computer
Science from Bar-Ilan University.
AMIT BENDOV has served as our Senior Vice President of Product Marketing since
July 1998. From September 1996 to June 1998, Mr. Bendov served as our Director
of Customer Support and Integration. From August 1994 to August 1996, Mr. Bendov
served as our Research and Development Manager. Mr. Bendov holds a Bachelor of
Science degree in Computer Science and Statistics from Tel Aviv University.
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10-K CLICKSOFTWARE TECHNOLOGIES LTD. PAGE 4
Executive officers serve at the discretion of the Board and are appointed
annually. The employment of each of our executive officers is at will and may be
terminated at any time, with or without cause, subject to contractual notice
provisions. There are no family relationships between any of our directors or
executive officers.
DIRECTORS -
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
seven members on the Company's board. The Company has a classified board of
directors as set forth in the following table:
YEAR OF ANNUAL MEETING AT WHICH
NAME OF DIRECTOR AND CLASS TERM EXPIRES AGE
- ---------------------------------------------------- --------------------------------- ------------------
James W. Thanos, Class I 2004 55
Roni A. Einav, Class II 2005 60
Gil Weiser, Class II 2005 62
Moshe BenBassat, Class III 2006 56
Israel Borovich, external director 2004 62
Naomi Atsmon, external director 2006 51
Dan Falk, external director 2006 59
Eddy Shalev resigned as a Class III director effective December 31, 2003.
There are no family relationships among any directors or executive officers of
the Company.
Under the Israeli Companies Law, 1999, 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:
o an employment relationship,
o a business or professional relationship maintained on a regular basis,
o control, or
o service as an officer.
No person can serve as an external director if the person's position or other
business creates, or may create, conflicts of interest 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
must be of the other gender.
The following information as of March 31, 2004 is provided with respect to each
of our directors:
CLASS I DIRECTOR
NAME, PRINCIPAL OCCUPATION AND DIRECTORSHIPS AGE DIRECTOR SINCE
- --------------------------------------------------------------------------------- --------- --------------------
JAMES W. THANOS 55 May 2000
From October 1999 to June 2002, Mr. Thanos served as Executive Vice
President, Worldwide Field Operations of BroadVision, Inc. From March 1998
to June 2002, 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 Inc. Mr. Thanos
holds a Bachelor of Arts degree in International Relations and a Bachelor
of Arts degree in Behavioral Sciences from Johns Hopkins University.
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10-K CLICKSOFTWARE TECHNOLOGIES LTD. PAGE 5
CLASS II DIRECTORS
NAME, PRINCIPAL OCCUPATION AND DIRECTORSHIPS AGE DIRECTOR SINCE
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RONI A. EINAV
Mr. Einav is the General Manager of Einav High-Tec Assets Ltd., an 60 April 2000
investment company focused on technology ventures, founded by him in 1995.
From 1983 to April 1999, Mr. Einav served as Chairman of the Board of
Directors of New Dimension Software, Ltd., a systems software company he
had founded, which was subsequently acquired by BMC Software for over $650
million. Mr. Einav has also played a key role in founding approximately a
dozen other software companies, including Liraz Computers, Jacada Ltd.,
UDS, XciTel, CePost, CeDimension, ComDa, Computer Systems and Einav
Systems. Mr. Einav was a Major in the Israeli Defense Forces and served as
a systems analyst in a research and development division. Mr. Einav holds a
Bachelor of Science degree in Management and Industrial Engineering as well
as a Master of Science degree in Operations Research from the Technion
Institute, Haifa, Israel.
GIL WEISER
Mr. Weiser is currently Chairman or a member of the Board of Directors of 62 May 2003
the following companies: Fundtech, a software company, BBP, a subsidiary of
Fundtech, Tescom, a service company, and Carmel, a company connected with
Haifa University. Mr. Weiser is also currently a member of the Board of
Directors of the Tel Aviv Stock Exchange. From January to December 2002, he
was the Acting Vice Chairman of ORAMA, an international investment banking
group. From 1995 to 2000, Mr. Weiser served as Chief Executive Officer of
Hewlett-Packard Israel, a technology company. From 1993 to 1995, Mr. Weiser
served as Chief Executive Officer of Fibronics Corporation, a
communications company. From 1976 to 1993, he served as Chief Executive
Officer of Digital Israel, a computing company. Mr. Weiser is Chairman of
the Executive Committee of Haifa University. Mr. Weiser was the Vice
Chairman of the Israel Management Center and is a member of the Israel
High-Tech Association Executive Committee. Mr. Weiser holds a Bachelor of
Science degree in Electrical Engineering from the Technion Institute and a
Master of Science degree in Electronics and Computers from the University
of Minnesota in Minneapolis.
CLASS III DIRECTOR
NAME, PRINCIPAL OCCUPATION AND DIRECTORSHIPS AGE DIRECTOR SINCE
- --------------------------------------------------------------------------------- --------- --------------------
MOSHE BENBASSAT
Dr. BenBassat co-founded the Company and has served as its Chairman and 56 1979
Chief Executive Officer since its 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
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10-K CLICKSOFTWARE TECHNOLOGIES LTD. PAGE 6
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, Master of Science and
Ph.D. degrees in Mathematics and Statistics from Tel Aviv University.
EXTERNAL DIRECTORS
NAME, PRINCIPAL OCCUPATION AND DIRECTORSHIPS AGE DIRECTOR SINCE
- --------------------------------------------------------------------------------- --------- --------------------
ISRAEL BOROVICH
Dr. Borovich has served as a director of the Company since July 1997 and as 62 July 1997
an external director according to the Israeli Companies Law since July
2001. Since 1988, Dr. Borovich has served as President and CEO of Arkia
Israeli Airlines Ltd. and Knafaim-Arkia Holdings Ltd., an investment
management company. Dr. Borovich currently serves as a director of Issta
Lines Israel Students Travel Company Ltd., Arkia International (1981) Ltd.
and other companies of Arkia's group in the aviation and tourism business.
CR. Borovich also serves as Chairman of Granit Hacarmel Investments Ltd.
and Sonol Israel Ltd., an investment management company. Dr. Borovich also
serves as a director of Knafaim-Arkia Holdings, Ltd., an investment
management company, Maman-Cargo Terminals & Handling Ltd. and Ayalon
Highways (Israel) Ltd. Dr. Borovich served as a Professor on the Faculty of
Management of Tel Aviv University. Dr. Borovich holds Bachelor of Science,
Master of Science and Ph.D. degrees in Industrial Engineering from the
Polytechnic Institute in Brooklyn.
NAOMI ATSMON
Ms. Atsmon was employed by Amdocs Ltd., a customer care and billing 51 May 2003
software company, from 1986 until the end of 2002. From 1997 until 2002,
Ms. Atsmon served as a division President at Amdocs Ltd., managing large
scale billing projects for telephone companies in North America and Europe,
with overall responsibility for the profit and loss statement of the
division. From 1994 until 1997, Ms. Atsmon served as a Vice President at
Amdocs Ltd. From 1991 until 1994, she was a director for Amdocs Ltd. in
charge of software development and customer relations with one of the
largest telephone companies in the United States. Prior to joining Amdocs
Ltd., Ms. Atsmon was a project manager at Bank Hapoalim, in charge of a
large financial project for the bank controller. From 1976 to 1981, Ms.
Atsmon was a system analyst with Agrexco Ltd. Ms. Atsmon also currently
serves as a board member of Jacada Ltd., a software provider. Ms. Atsmon
holds a Bachelor of Science degree in Management & Industrial Engineering
from the Technion Institute, and studied business administration at Tel
Aviv University.
DAN FALK
From 2000 to May 2003 Mr. Falk served as the Chairman of the Board of 59 May 2003
Directors of Atara Technology Ventures Ltd., an Israeli company engaged in
investment in advanced technology enterprises. He is also a member of the
Boards of Directors of Orbotech Ltd., Nice System Ltd., Orad Ltd, Netafim,
Dor Chemicals Ltd, Attunity Ltd., Visionix Ltd., Ramdor Ltd., Medcon Ltd.
and Poalim Ventures I, all of which are Israeli high technology companies.
From July
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10-K CLICKSOFTWARE TECHNOLOGIES LTD. PAGE 7
NAME, PRINCIPAL OCCUPATION AND DIRECTORSHIPS AGE DIRECTOR SINCE
- --------------------------------------------------------------------------------- --------- --------------------
1999 to November 2000, Mr. Falk served as President and Chief Operating
Officer of Sapiens International Corporation N.V., a Netherlands Antilles
company engaged in the development of software solutions for large-scale,
cross-platform systems. Mr. Falk was Executive Vice President of Orbotech,
a high technology company, from August 1995 to July 1999, and between June
1994 and August 1995 served as its Executive Vice President and Chief
Financial Officer. From October 1992 until June 1994, Mr. Falk was Vice
President and Chief Financial Officer of Orbotech. Mr. Falk was Director of
Finance and Chief Financial Officer of Orbot Systems, predecessor of
Orbotech Ltd., from 1985 until 1992. Mr. Falk received a Master of Business
Administration degree in 1973 from the Hebrew University School of Business
and had 15 years experience in finance and banking, including senior
positions at Israel Discount Bank Ltd., prior to joining Orbot.
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
2003 all Section 16 filing requirements were met, except for the following:
Shmuel Arvatz, Amit Bendov, and David Schapiro each reported one transaction
late; Hannan Carmeli reported two transactions late on two Forms 4; former
director Eddy Shalev reported three transactions late on one Form 4; Naomi
Atsmon reported three transactions late on two Forms 4; and Genesis Partners
reported four transactions late on two Forms 4.
AUDIT COMMITTEE
The audit committee consists of Ms. Atsmon, Dr. Borovich, Mr. Falk and Mr.
Weiser, each of whom is "independent," as such term is defined under Rule
4200(a)(15) of the listing standards of the National Association of Securities
Dealers. The Company's board of directors has determined that Mr. Falk also
qualifies as a "financial expert" within the meaning of the rules of the
Securities and Exchange Commission, or SEC.
CODE OF ETHICS
The Company has adopted a Code of Ethics for Principal Executive and Senior
Financial Officers that applies to the Company's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. The Code of Ethics for Principal Executive
and Senior Financial Officers is filed as an exhibit to the Original Filing.
ITEM 11. EXECUTIVE COMPENSATION
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Moshe BenBassat, its
Chief Executive Officer, and Shmuel Arvatz, its Chief Financial Officer. The
agreements provide that each of the executives' employment relationships is
"at-will" and may be terminated at any time by either the Company or the
executive with or without cause and following three months' notice to Mr.
Arvatz. The agreements provide that in the event the executive is terminated by
the Company without cause, the executive will be entitled to severance payments
in amounts equal to twelve months of annual base salary as of the date of
termination for Dr. BenBassat and up to three months of annual compensation as
of the date of termination for Mr. Arvatz (plus, in the case of Mr. Arvatz, a
severance amount due in accordance with applicable law). Dr. BenBassat is
entitled to full acceleration of option vesting in the event of a change in
control, and Mr. Arvatz is entitled on his unvested options to 50% or 100%
vesting, depending on the conditions of a change of
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10-K CLICKSOFTWARE TECHNOLOGIES LTD. PAGE 8
control. The executives' rights to receive the contractual severance benefits
set forth above will immediately terminate if the executive competes with the
Company during the twelve months following termination of employment.
EXECUTIVE COMPENSATION
The following table sets forth information regarding executive compensation for
services rendered during our fiscal years ended December 31, 2003, 2002 and 2001
by the Company's chief executive officer and our other four most highly
compensated executive officers who were serving as executive officers as of
December 31, 2003 and whose salary and bonus for our last fiscal year exceeded
$100,000. These five individuals constitute the group referred to elsewhere as
the Named Executive Officers. The compensation summarized in the following table
does not include perquisites or other personal benefits that do not in the
aggregate exceed the lesser of $50,000 or 10% of the Named Executive Officer's
salary and bonus.
ANNUAL COMPENSATION
--------------------------------------------- -------------------------------
SECURITIES ALL OTHER
NAME AND PRINCIPAL OTHER ANNUAL UNDERLYING COMPENSATION
POSITION YEAR SALARY BONUS COMPENSATION OPTIONS ($)
- ---------------------------------- ------ -------- ----------- ------------------ ------------- ----------------
Moshe BenBassat.................. 2001 222,188 22,500 120,148 (1) - -
CEO 2002 209,297 - 121,838 (1) - -
2003 192,375 374,500(2) 219,137 (1) 250,000 -
Shmuel Arvatz (3)................ 2001 - - - - -
Chief Financial Officer 2002 24,191 - 4,145 (4) - -
2003 117,996 35,573 21,782 (4) 285,000 -
David Schapiro................... 2001 128,538 - 39,744 (4) 20,000 -
Executive V.P., 2002 111,378 - 24,905 (4) 10,000 -
Markets and Products 2003 112,102 34,392 19,916 (4) 25,000 -
Hannan Carmeli................... 2001 116,411 - 31,132 (4) 25,000 -
Executive V.P., 2002 105,488 - 14,967 (4) 10,000 -
Professional Services 2003 101,466 32,987 14,570 (4) 125,000 -
Amit BenDov...................... 2001 122,775 9,000 9,462 (5) 20,000 -
SR. V.P Product 2002 123,473 - 9,677 (5) 8,000 -
Marketing 2003 113,490 19,000 8,165 (5) 25,505 -
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(1) Other compensation to Dr. BenBassat includes $75,000 housing allowance for
2001 and 2002 and $190,000 housing allowance for 2003 (of which $62,000 was
with respect to the previous year).
(2) Of this amount, $149,500 is subject to the approval of the shareholders at
the 2004 annual meeting and $225,000 was granted pursuant to the bonus
feature of the employment agreement approved by the shareholders on May 28,
2003.
(3) Mr. Arvatz was appointed as Chief Financial Officer effective October 20,
2002. (4) Contributions to employee benefit programs. (5) Medical insurance
and executive disability insurance.
OPTION GRANTS IN 2003
The following table sets forth information concerning grants of stock options to
each of the Named Executive Officers during 2003. All such options were granted
under the Company's various option plans approved during 2003, and generally
vest over two to four years.
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10-K CLICKSOFTWARE TECHNOLOGIES LTD. PAGE 9
NUMBER OF % OF TOTAL
SHARES OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES PRICE EXPIRATION PRESENT
NAME GRANTED IN 2003 ($/SH) DATE VALUE (1)
---- --------------- --------------- ------------ ---------- -------------
Moshe BenBassat.............. 250,000 16% $1.30 5/28/13 $249,562
Shmuel Arvatz................ 260,000 17% $0.25 5/28/13 $49,912
25,000 2% $4.25 12/15/13 $82,398
David Schapiro............... 25,000 2% $4.25 12/15/13 $82,398
Hannan Carmeli............... 100,000 6% $1.22 6/11/13 $93,682
25,000 2% $4.25 12/15/13 $82,398
Amit BenDov.................. 15,000 1% $4.25 12/15/13 $49,439
10,505 1% $4.39 12/3/13 $30,837
- ---------------------------
(1) Computed using the Black-Scholes option pricing model. Full vesting of
options is two years from grant date. Assumes the average expected life of
the option is between 2 and 5 years, a volatility of 151%, an annual
dividend yield of 0.0% and a risk-free interest rate of 3.1%.
AGGREGATED OPTION EXERCISES IN 2003 AND YEAR-END OPTION VALUES
The following table sets forth certain information concerning options exercised
by the Named Executive Officers in 2003, and exercisable and unexercisable stock
options held by each of the Named Executive Officers as of December 31, 2003.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE DECEMBER 31, 2003 DECEMBER 31, 2003 (1)
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ---------- ------------- --------------- ------------- ---------------
Moshe BenBassat...... - - 610,392 136,000 $1,433,802 $378,080
Amit BenDov.......... 158,618 $368,313 46,505 16,000 $95,810 $2,680
Shmuel Arvatz........ - - 75,833 209,167 $290,440 $705,360
David Schapiro....... 91,963 $172,846 191,452 29,584 $539,617 $3,350
Hannan Carmeli....... 7,611 $9,617 147,138 103,250 $405,958 $217,850
- ---------------------------
(1) Based upon the closing price of the ordinary shares on December 31, 2003 of
$4.08, less the exercise price per share.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As noted above, Dr. Borovich, Mr. Thanos and Mr. Weiser currently serve on the
compensation committee. During 2003, Mr. Shalev also served on the compensation
committee; Mr. Shalev resigned as a director effective December 31, 2003. None
of these persons is or was formerly an officer or an employee of the Company or
any of its subsidiaries. No interlocking relationship exists between the
Company's board of directors or its compensation committee and the board of
directors or compensation committee of any other company, nor did any
interlocking relationships exist during the past fiscal year.
DIRECTOR COMPENSATION
CASH COMPENSATION. Regulations under the Israeli Companies Law govern the
compensation paid by the Company to its external directors. In addition, all
compensation paid to directors is subject to approval of shareholders.
In accordance with these regulations, on December 5, 2002, the board of
directors adopted a resolution, approved by the Company's shareholders on May
28, 2003, and following the recommendation and approval by the audit committee,
approving a cash compensation arrangement for outside directors (the Company's
external directors and all other directors, other than directors that are
employees of the Company and directors that beneficially own, or otherwise
represent a shareholder that beneficially owns, 5% or more of the outstanding
shares of the Company). Under this arrangement, outside directors receive the
fixed annual and per meeting participation fees provided in the regulations
under the Companies Law that are
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10-K CLICKSOFTWARE TECHNOLOGIES LTD. PAGE 10
payable by the Company to its external directors. The fixed fees are be based
upon the "fixed amounts" set forth in the second and third supplements to the
Israeli Companies Regulations (Rules for Compensation and Expenses of External
Directors), as amended, updated and adjusted from time to time. Based on the
category to which the Company belongs, under the regulations, the current
participation fees payable by the Company to its external directors equal NIS
15,750 for the annual fee and NIS 990 for the per meeting participation fees.
Such amounts may be updated from time to time as provided in the Israeli
Companies Regulations.
STOCK OPTIONS. Following the Company's May 28, 2003 annual meeting and in
accordance with the Company's 2000 Share Option Plan or 2003 Israeli Share
Option Plan, as applicable (the "Plans"), each of the Company's non-employee
directors received option grants. The Plans provide that each non-employee
director, including each external director, is automatically granted an option
to purchase 7,500 ordinary shares following each annual meeting of the
shareholders of the Company if on such date he or she will have served on the
board of directors for at least the preceding six (6) months (the "Annual
Grant"). Following the Company's May 28, 2003 annual meeting, the three
continuing non-employee directors, Dr. Borovich, Mr. Einav and Mr. Thanos, each
received Annual Grants of options to purchase 15,000 ordinary shares, 7,500 with
respect to service during 2002 and 7,500 with respect to service during 2003, at
an exercise price of $1.30 (the closing sale price for the ordinary shares on
the last market trading day prior to grant). Those options vest as to 100% of
the underlying stock on the first anniversary of the date of grant, provided
that the respective director continues to serve as a director on such date. The
Plans also provide that each non-employee director, except for external
directors, is automatically granted an option to purchase 30,000 ordinary shares
upon the date such individual first becomes a director. Also on May 28, 2003, in
connection with their initial election to the board of directors, Ms. Atsmon,
Mr. Falk and Mr. Weiser each received an automatic grant of options to purchase
30,000 ordinary shares at an exercise price of $1.30. These options vest as to
25% of the underlying stock on the first anniversary of the date of grant and as
to an additional 25% of the underlying stock on each anniversary of the date of
grant thereafter, provided that the respective director continues to serve as a
director on such date.
ITEM 12. 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 March
31, 2004 for:
o the Named Executive Officers;
o each of the Company's directors;
o each person or group known by the Company to beneficially own more
than 5% of its outstanding ordinary shares; and
o 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 SEC 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 March 31, 2004. 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 27,134,819 shares outstanding as of March 31, 2004.
Unless otherwise indicated below, the address of each of the principal
shareholders is c/o ClickSoftware Technologies Ltd., 34 Habarzel Street, Tel
Aviv, Israel 69710.
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10-K CLICKSOFTWARE TECHNOLOGIES LTD. PAGE 11
ORDINARY SHARES
BENEFICIALLY OWNED
------------------------------
NAME AND ADDRESS NUMBER PERCENT
- -------------------------------------------------------------------------------- ------------ ------------
Named Executive Officers and Directors
--------------------------------------
Moshe BenBassat (1)................................................... 5,208,022 18.7%
Shmuel Arvatz (2)................................................... 87,817 *
David Schapiro (3)................................................... 181,036 *
Hannan Carmeli (4)................................................... 166,221 *
Amit BenDov (5)................................................... 55,318 *
Naomi Atsmon (6)................................................... 38,100 *
Israel Borovich (7)................................................... 60,000 *
Roni A. Einav (8)................................................... 60,000 *
Dan Falk (9)................................................... 7,500 *
James W. Thanos (10)................................................... 64,688 *
Gil Weiser (11)................................................... 7,500 *
G. Nicholas Farwell (12) 1240 Arbor Road
Menlo Park, CA 94025............................................... 2,745,000 10.1%
RS Investment Management Co. LLC and affiliates (13)
388 Market Street, Suite 200
San Francisco, CA 94111............................................ 1,716,937 6.3%
Liberty Wanger Asset Management, L.P. (14)
227 West Monroe Street, Suite 3000
Chicago, IL 60606-5016............................................. 1,660,000 6.1%
All executive officers and directors as a group (11 persons) (15)...... 5,936,202 20.9%
- ---------------------------
* Less than one percent.
(1) Includes 2,246,887 shares held by Dr. BenBassat's spouse, Idit
BenBassat. Dr. BenBassat has disclaimed beneficial ownership of those
shares. Also includes options to purchase 650,392 ordinary shares
exercisable within 60 days of March 31, 2004 held by Dr. BenBassat.
(2) Includes options to purchase 87,817 ordinary shares exercisable within
60 days of March 31, 2004 held by Mr. Arvatz.
(3) Includes options to purchase 181,036 ordinary shares exercisable
within 60 days of March 31, 2004 held by Mr. Schapiro.
(4) Includes options to purchase 166,221 ordinary shares exercisable
within 60 days of March 31, 2004 held by Mr. Carmeli.
(5) Includes options to purchase 42,505 ordinary shares exercisable within
60 days of March 31, 2004 held by Mr. BenDov.
(6) Includes options to purchase 7,500 ordinary shares exercisable within
60 days of March 31, 2004 held by Ms. Atsmon.
(7) Includes options to purchase 60,000 ordinary shares exercisable within
60 days of March 31, 2004 held by Dr. Borovich.
(8) Includes options to purchase 60,000 ordinary shares exercisable within
60 days of March 31, 2004 held by Mr. Einav.
(9) Includes options to purchase 7,500 ordinary shares exercisable within
60 days of March 31, 2004 held by Mr. Falk.
(10) Includes options to purchase 59,688 ordinary shares exercisable within
60 days of March 31, 2004 held by Mr. Thanos.
(11) Includes options to purchase 7,500 ordinary shares exercisable within
60 days of March 31, 2004 held by Mr. Weiser.
(12) As reported by Mr. Farwell to the Company for fiscal 2003.
(13) As reported on Schedule 13G filed with the SEC for fiscal 2003.
Includes 13,450 ordinary shares held by RS Investment Management Co.
LLC and 1,703,487 ordinary shares held by RS Investment Management,
L.P. Voting and dispositive power is shared by RS Investment
Management Co. LLC (as to all
- --------------------------------------------------------------------------------
10-K CLICKSOFTWARE TECHNOLOGIES LTD. PAGE 12
shares), G. Randall Hecht (as to all shares), and RS Investment
Management, L.P. (as to 1,703,487 shares).
(14) As reported on Schedule 13G filed with the SEC for fiscal 2001.
Includes 260,000 ordinary shares held by Liberty Wanger Asset
Management, L.P. and 1,400,000 ordinary shares held by Liberty Acorn
Trust. Voting and dispositive power is shared by Liberty Wanger Asset
Management, L.P. (as to all shares), WAM Acquisition GP, Inc. (as to
all shares), and Liberty Acorn Trust (as to 1,400,000 shares).
(15) Includes options to purchase 1,330,159 ordinary shares exercisable
within 60 days of March 31, 2004.
EQUITY COMPENSATION PLAN INFORMATION
(AS OF DECEMBER 31, 2003)
NUMBER OF SECURITIES
NUMBER OF SECURITIES WEIGHTED-AVERAGE REMAINING AVAILABLE FOR
TO BE ISSUED UPON EXERCISE PRICE OF FUTURE ISSUANCE UNDER EQUITY
EXERCISE OF OUTSTANDING COMPENSATION PLANS (EXCLUDING
OUTSTANDING OPTIONS, OPTIONS, WARRANTS SECURITIES REFLECTED IN
PLAN CATEGORY WARRANTS AND RIGHTS AND RIGHTS COLUMN (A))
------------- ------------------- ---------- -----------
Equity compensation plans
approved by security holders 3,191,351 $2.10 1,122,020
Equity compensation plans
not approved by security holders 0 N/A 0
Total 3,191,351 $2.10 1,122,020
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Gilia BenBassat, an employee of the Company during 2003, is the daughter of
Moshe BenBassat, the Company's Chairman and Chief Executive Officer. During
2003, the Company made payments of $73,980 to Gilia BenBassat for services
provided as an employee.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The compensation of the auditors is either determined by the Company's
shareholders or, upon shareholder authorization, by the board of directors upon
the recommendation of the audit committee. Auditor compensation is determined
according to the nature and volume of the auditors' services.
The approximate fees billed to us by Brightman Almagor and by Luboshitz Kasierer
for services rendered with respect to 2002 and 2003 were as follows:
AUDIT FEES. Brightman Almagor billed to the Company an aggregate of
approximately $65,000 for professional services rendered in connection with its
audit of the Company's financial statements for the fiscal year ended December
31, 2003 and its review of the Company's financial statement included in
quarterly reports on Form 10-Q during fiscal year 2003.
Brightman Almagor billed to the Company an aggregate of approximately $32,000
for professional services rendered in connection with its audit of the Company's
financial statements for the fiscal year ended December 31, 2002 and its review
of the Company's financial statement included in quarterly reports on Form 10-Q
during fiscal year 2002. Brightman Almagor also billed the Company an aggregate
of $40,000 for professional services rendered in connection with the reaudit of
the financial statements for 1999, 2000 and 2001 and for the first six months of
2002.
- --------------------------------------------------------------------------------
10-K CLICKSOFTWARE TECHNOLOGIES LTD. PAGE 13
Luboshitz Kasierer billed to the Company an aggregate of approximately $17,000
for professional services rendered in connection with its audit of the Company's
financial statements for fiscal year 2002 and its review of the Company's
financial statements included in quarterly reports on Form 10-Q during fiscal
year 2002.
AUDIT-RELATED FEES. During fiscal years 2002 and 2003, neither Brightman Almagor
nor Luboshitz Kasierer billed the Company for any assurance and related services
that are reasonably related to the performance of the audit or review of the
Company's consolidated financial statements and are not reported under "Audit
Fees" above.
TAX FEES. Brightman Almagor billed the Company an aggregate of approximately
$11,000 for tax compliance, tax advice and tax planning services during 2003.
Neither Brightman Almagor nor Luboshitz Kasierer billed the Company for tax
compliance, tax advice and tax planning services during 2002.
ALL OTHER FEES. Brightman Almagor did not bill the Company for any other fees
during 2003. Brightman Almagor billed the Company an aggregate of approximately
$50,000 for a special investigation during 2002. Luboshitz Kasierer did not bill
the Company for any other fees during 2002.
PRE-APPROVAL OF AUDITORS' COMPENSATION. Pursuant to its charter, the audit
committee is responsible for pre-approving audit and non-audit services provided
to the Company by the independent auditors and, as requested by the board of
directors, other public accounting firms (or subsequently approving non-audit
services in those circumstances where a subsequent approval is necessary and
permissible). Absent such a request from the board of directors, the Company's
management approves the non-audit services provided to the Company by
accountants other than the auditors. The audit committee's policy is to
pre-approve, as a full committee, all non-audit services provided to the Company
by the independent auditors. 100% of the non-audit services provided to the
Company by the independent auditors in 2003 were pre-approved by the full audit
committee
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10-K CLICKSOFTWARE TECHNOLOGIES LTD. PAGE 14
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
The following documents are filed as part of this report:
(A)(1) FINANCIAL STATEMENTS - Incorporated by reference to the Registrant's
annual report on Form 10-K filed on March 22, 2004.
(A)(2) FINANCIAL STATEMENTS SCHEDULES - Incorporated by reference to the
Registrant's annual report on Form 10-K filed on March 22, 2004.
(A) EXHIBITS
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
3.3 (1) Articles of Association of ClickSoftware Technologies Ltd., amended and restated as of May 28, 2003
4.1 (2) Specimen of Ordinary Share Certificate
4.2 (2) Fourth Amended and Restated Registration Rights Agreement, dated December 15, 1999
10.1 (3) Form of 2000 Share Option Plan, as amended
10.2 (2) Form of 2000 Employee Share Purchase Plan
10.6 (2) Form of 1996 Option Plan
10.7 (2) Form of 1997 Option Plan
10.8 (2) Form of 1998 Option Plan
10.9 (2) Form of 1999 Option Plan
10.12(2) Form of 2000 Israeli Plan
10.13(2) Form of 2000 Unapproved U.K. Share Scheme
10.14(2) Form of 2000 Approved U.K. Share Scheme
10.17(4) Employment Agreement between ClickSoftware Technologies Ltd. and Shmuel Arvatz
10.18(5) Amended Form of Indemnification Agreement
10.19(5) Amended Employment Agreement between ClickSoftware Technologies Ltd. and Moshe BenBassat
10.20(5) 2003 Israeli Share Option Plan
10.21(6) Form of 2000 Unapproved U.K. Share Scheme, as amended
10.22(6) Form of 2000 U.K. Share Scheme, as amended
14 (6) Code of Ethics for Principal Executive Officer and Senior Financial Officers
21.1 (6) Subsidiaries of the Registrant
23.1 (6) Consent of Brightman Almagor & Co., member of Deloitte Touche Tohmatsu
31.1 Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934,
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange act of 1934,
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification of the Chief Executive Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
(1) Incorporated by reference to the Registrant's report on Form 10-Q filed on
August 13, 2003.
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10-K CLICKSOFTWARE TECHNOLOGIES LTD. PAGE 15
(2) Incorporated by reference to the Registrant's Registration Statement on
Form S-1/A (file no. 333-30274), as amended.
(3) Incorporated by reference to the Registrant's definitive proxy statement
filed on August 6, 2001.
(4) Incorporated by reference to the Registrant's annual report on Form 10-K
filed on March 24, 2003.
(5) Incorporated by reference to the Registrant's definitive proxy statement
filed on April 30, 2003.
(6) Incorporated by reference to the Registrant's annual report on Form 10-K
filed on March 22, 2004.
(B) REPORTS ON FORM 8-K:
On October 27, 2003, the Company furnished to the Commission a current report on
Form 8-K pursuant to the Securities and Exchange Act of 1934, as amended,
reporting the Company's financial results for the quarter ended September 30,
2003.
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10-K CLICKSOFTWARE TECHNOLOGIES LTD. PAGE 16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized,
CLICKSOFTWARE TECHNOLOGIES LTD.
By: /s/ Shmuel Arvatz
-----------------------------
Shmuel Arvatz
Chief Financial Officer
Date: April 28, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ----------------------------- -------------------------------------------------- ----------------
/s/ Dr. Moshe Benbassat Chief Executive Officer and Chairman of the April 28, 2004
- ----------------------------- Board of Directors (Principal Executive Officer)
Dr. Moshe BenBassat
/s/ Shmuel Arvatz Chief Financial Officer April 28, 2004
- ----------------------------- (Principal Financial and Accounting Officer)
Shmuel Arvatz
/s/ Naomi Atsmon Director April 28, 2004
- -----------------------------
Naomi Atsmon
/s/ Dr. Israel Borovich Director April 28, 2004
- -----------------------------
Dr. Israel Borovich
/s/ Roni A. Einav Director April 28, 2004
- -----------------------------
Roni A. Einav
/s/ Dan Falk Director April 28, 2004
- -----------------------------
Dan Falk
/s/ James W. Thanos Director April 28, 2004
- -----------------------------
James W. Thanos
/s/ GIL WEISER Director April 28, 2004
- -----------------------------
Gil Weiser
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10-K CLICKSOFTWARE TECHNOLOGIES LTD. PAGE 17