def14a
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the
Registrant þ
Filed by a Party other than the
Registrant o
Check the appropriate box:
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o Preliminary
Proxy Statement
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o Confidential,
for Use of the Commission
only (as permitted by
Rule 14a-6(e)(2))
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þ Definitive
Proxy Statement
o Definitive
Additional Materials
o Soliciting
Material Pursuant to
Rule 14a-11(c)
or
Rule 14a-12
ART TECHNOLOGY GROUP, INC.
(Name of Registrant as Specified in
Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy
Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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þ
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No fee required.
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o
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11.
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(1) |
Title of each class of securities to which transaction applies:
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(2) |
Aggregate number of securities to which transaction applies:
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(3) |
Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11
(set forth the amount on which the filing fee is calculated and
state how it was determined):
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(4) |
Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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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.
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(1) |
Amount previously paid:
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(2) |
Form, Schedule or Registration Statement no.:
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* * * * *
ART
TECHNOLOGY GROUP, INC.
ONE MAIN STREET
CAMBRIDGE, MASSACHUSETTS 02142
Dear Stockholder:
I am pleased to invite you to attend the 2009 Annual Meeting of
Stockholders of Art Technology Group, Inc. on May 20, 2009.
We will hold the meeting at 10:00 a.m., Eastern time, at
the offices of Foley Hoag LLP, 155 Seaport Boulevard, Boston,
Massachusetts. Annual meetings play an important role in
maintaining communications and understanding among our
management, board of directors and stockholders, and I hope that
you will be able to join us.
On the pages following this letter you will find the Notice of
Annual Meeting of Stockholders, which lists the matters to be
considered at the meeting, and the proxy statement, which
describes the matters listed in the Notice. We have also
enclosed our 2008 Annual Report to Stockholders.
If you were a stockholder of record as of the close of business
on March 31, 2009, the record date for voting at the
meeting, we have enclosed your proxy card, which allows you to
vote on the matters considered at the meeting. Simply mark, sign
and date your proxy card, and then mail the completed proxy card
to our transfer agent, Computershare Trust Company, N.A.,
in the enclosed postage-paid envelope. You may also submit your
proxy electronically via the Internet or by telephone as
described on the enclosed proxy card. You may attend the meeting
and vote in person even if you have sent in a proxy card or
submitted your proxy electronically.
If your shares are held in street name, that is, in
the name of a bank, broker or other holder of record, you will
receive instructions from the holder of record that you must
follow in order for your shares to be voted.
Sincerely yours,
Robert D. Burke
Chief Executive Officer and President
THE
ABILITY TO HAVE YOUR VOTE COUNTED AT THE MEETING IS AN
IMPORTANT STOCKHOLDER RIGHT, AND I HOPE YOU WILL CAST
YOUR VOTE IN PERSON OR BY PROXY REGARDLESS
OF THE NUMBER OF SHARES YOU HOLD.
ART
TECHNOLOGY GROUP, INC.
One Main Street
Cambridge, Massachusetts 02142
Notice of
2009 Annual Meeting of Stockholders
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Time and Date
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10:00 a.m., Eastern time, on May 20, 2009 |
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Place
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Foley Hoag LLP
155 Seaport Boulevard
Boston, Massachusetts |
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Items of Business
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At the meeting, we will ask you and our other stockholders to: |
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(1) Elect John R. Held and Phyllis S. Swersky as
Class I directors of the Company to serve until the 2012
Annual Meeting or until their successors are elected and
qualified.
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(2) Amend our 1999 Employee Stock Purchase Plan to increase
the number of shares issuable under the plan by
1,500,000 shares.
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(3) Ratify the appointment by our Audit Committee of
Ernst & Young LLP as our independent registered public
accounting firm for the fiscal year ending December 31,
2009.
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(4) Transact any other business properly presented at the
meeting.
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Record Date
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You may vote if you were a stockholder of record at the close of
business on March 31, 2009. |
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Proxy Voting
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It is important that your shares be represented and voted at the
meeting. Whether or not you plan to attend the meeting, please
mark, sign, date and promptly mail your proxy card to our
transfer agent, Computershare Trust Company, N.A., in the
enclosed postage-paid envelope. Alternatively, you may submit
your proxy via the Internet or by telephone by following the
directions on the enclosed proxy card. You may revoke your proxy
at any time before its exercise at the meeting. You may revoke
electronic votes by using the same method as your original vote
and making any changes you deem necessary. |
By Order of the Board of Directors,
Julie M.B. Bradley
Secretary
Cambridge, Massachusetts
April 21, 2009
PROXY
STATEMENT
for the
ART TECHNOLOGY GROUP, INC.
2009 ANNUAL MEETING OF STOCKHOLDERS
TABLE OF
CONTENTS
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Annex A
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A-1
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IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
SHAREHOLDER MEETING TO BE HELD ON MAY 20, 2009
Pursuant to
Rule 14a-6,
our Annual Report on
Form 10-K
for the year ended December 31, 2008 is being made
available to stockholders along with these proxy materials on or
about April 23, 2009 at the following URL:
http://www.atg.com/proxy.
INFORMATION
ABOUT THE MEETING
This
Proxy Statement
We have sent you this proxy statement and the enclosed proxy
card because our board of directors is soliciting your proxy to
vote at our 2009 Annual Meeting of Stockholders or any
adjournment or postponement of the meeting. The meeting will be
held at 10:00 a.m., Eastern time, on Wednesday,
May 20, 2009, at the offices of Foley Hoag LLP, 155 Seaport
Boulevard, Boston, Massachusetts.
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THIS PROXY STATEMENT summarizes information about the proposals
to be considered at the meeting and other information you may
find useful in determining how to vote.
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THE PROXY CARD is the means by which you actually authorize
another person to vote your shares in accordance with the
instructions.
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Our directors, officers and employees may solicit proxies in
person or by telephone, mail, electronic mail, the Internet,
facsimile or telegram. We will pay the expenses of soliciting
proxies, although we will not pay additional compensation to
these individuals for soliciting proxies. We will request that
banks, brokers and other nominees holding shares for a
beneficial owner forward copies of the proxy materials to those
beneficial owners and to request instructions for voting those
shares. We will reimburse these banks, brokers and other
nominees for their related reasonable expenses. We have not
retained the services of any proxy solicitation firm to assist
us in soliciting proxies.
We are mailing this proxy statement and the enclosed proxy card
to stockholders for the first time on or about April 23,
2009. In this mailing, we are also sending you a copy of our
2008 Annual Report to Stockholders, which includes our annual
report on
Form 10-K
for the year ended December 31, 2008.
Who May
Vote
Holders of record of our common stock at the close of business
on March 31, 2009 are entitled to one vote per share on
each matter properly brought before the meeting. The proxy card
states the number of shares you are entitled to vote.
A list of stockholders entitled to vote will be available at the
meeting. In addition, you may contact our Secretary at Art
Technology Group, Inc., One Main Street, Cambridge,
Massachusetts, 02142, to make arrangements to review a copy of
the stockholder list at our offices before the meeting, between
the hours of 8:30 a.m. and 5:30 p.m., Eastern time, on
any business day from May 9, 2009 up to the time of the
meeting.
1
How to
Vote
You may vote your shares at the meeting in person or by proxy:
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Stockholder of record: Shares registered in your
name. If you are a stockholder of record, that
is, your shares are registered in your own name, not in
street name by a bank or brokerage firm, then you
can vote in any one of the following four ways:
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1.
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You may vote by mail. To vote by mail, you mark, sign and date
the enclosed proxy card and then mail the proxy card to our
transfer agent, Computershare Trust Company, N.A. in the
enclosed postage-prepaid envelope. The persons named in the
proxy card will vote the shares you own in accordance with your
instructions on the proxy card you mail. If you return the proxy
card but do not give any instructions on one or more of the
matters described in this proxy statement, then the persons
named in the proxy card will vote your shares in accordance with
the recommendations of our board of directors. Our board of
directors recommends that you vote FOR each
of the nominees listed in Proposal One and that you vote
FOR Proposals Two and Three.
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2.
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You may vote over the Internet. If you have Internet access,
then you may authorize the voting of your shares by following
the
Vote-by-Internet
instructions set forth on the enclosed proxy card.
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3.
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You may vote by telephone. You may authorize the voting of your
shares by following the
Vote-by-Telephone
instructions set forth on the enclosed proxy card.
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4.
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You may vote in person. If you attend the meeting, then you may
vote by delivering your completed proxy card in person or by
completing a ballot at the meeting. Ballots will be available at
the meeting.
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Beneficial owner: Shares held in street
name. If the shares you own are held in
street name by a bank or brokerage firm, then your
bank or brokerage firm, as the record holder of your shares, is
required to vote your shares according to your instructions. In
order to vote your shares, you will need to follow the
directions your bank or brokerage firm provides to you. Many
banks and brokerage firms also offer the option of voting over
the Internet or by telephone, instructions for which would be
provided by your bank or brokerage firm on your voting
instruction form. Under the rules that govern banks and
brokerage firms, if you do not give instructions to your bank or
brokerage firm, it will still be able to vote your shares with
respect to certain discretionary items, but will not
be allowed to vote your shares with respect to certain
non-discretionary items. An uncontested election of
directors is considered to be a discretionary item on which
banks and brokerage firms may vote. In the case of
non-discretionary items, the shares will be treated as
broker non-votes. Broker non-votes
are shares that are held in street name by a
bank or brokerage firm that indicates on its proxy that it does
not have discretionary authority to vote on a particular matter.
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If you wish to come to the meeting to personally vote your
shares held in street name, then you will need to
obtain a proxy card from the holder of record of your shares
(i.e., your bank or brokerage firm).
Even if you complete and return a proxy card or submit your
proxy electronically, you may revoke it at any time before it is
exercised by taking one of the following actions:
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send written notice to our Secretary at our address, which you
can find at the top of the first page of this proxy statement;
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send us another signed proxy with a later date;
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log on to the Internet the same way you did originally and
change your votes;
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call the telephone number listed on the proxy card; or
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attend the meeting, notify our Secretary that you are present,
and then vote by ballot.
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Quorum
Required to Transact Business
At the close of business on March 31, 2009,
126,562,038 shares of our common stock were outstanding.
Our by-laws require that a majority of the shares of our common
stock outstanding on that date be represented, in person or by
proxy, at the meeting in order to constitute the quorum we need
to transact business. We will count abstentions and broker
non-votes in determining whether a quorum exists. Broker-non
votes are described on the previous page.
DISCUSSION
OF PROPOSALS
Proposal One:
Election of Class I Directors
The first proposal on the agenda for the meeting is the election
of two Class I directors for a three-year term beginning at
the meeting and ending at our 2012 Annual Meeting of
Stockholders or until their successors are elected and
qualified. Upon the recommendation of the Nominating and
Governance Committee, the board has nominated John R. Held and
Phyllis S. Swersky, the current Class I directors, for
re-election. Brief biographies of Mr. Held and
Ms. Swersky follow.
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John R. Held |
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Mr. Held has been a director since July 2002. Mr. Held
formerly served as both the President and Chief Executive
Officer of Chipcom, Inc. and served in a variety of management
positions during his
14-year
tenure at Genrad, Inc. Mr. Held is also a director of BNS
Holding, Inc. Mr. Held is 70 years old. |
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Phyllis S. Swersky |
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Ms. Swersky has been a director since May 2000. Since 1995
she has been President of The Meltech Group which provides a
broad range of business advisory services to CEOs and Executive |
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Management Teams of rapidly growing businesses. Ms. Swersky
has served in various executive management positions in the
computer software and services industries including Chief
Financial Officer, Chief Operating Officer, and Chief Executive
Officer. Ms. Swersky also serves as a director of venture
backed and non-profit companies. Ms. Swersky is
57 years old. |
We expect that Mr. Held and Ms. Swersky will be able
to serve if elected. If either of them is not able to serve,
proxies may be voted for a substitute nominee. You can find more
information about Mr. Held and Ms. Swersky and our
other directors, including brief biographies and information
about their compensation and stock ownership, in the sections of
this proxy statement entitled INFORMATION ABOUT DIRECTORS
AND EXECUTIVE OFFICERS, COMPENSATION OF OUR
EXECUTIVE OFFICERS AND DIRECTORS and INFORMATION
ABOUT STOCK OWNERSHIP.
The nominees receiving the greatest number of votes cast will be
elected as directors. We will not count abstentions when we
tabulate votes cast for the director election. Brokers have
discretionary voting power with respect to director elections.
Our board of directors recommends that you vote FOR
the election of Mr. Held and Ms. Swersky.
Proposal Two:
Amendment to Our 1999 Employee Stock Purchase Plan
Description
of Amendment to our 1999 Employee Stock Purchase
Plan
On April 21, 2009, our board of directors approved an
amendment to our 1999 Employee Stock Purchase Plan (the
Purchase Plan) to increase the number of shares of
our common stock available for issuance under the Purchase Plan
from 6,500,000 to 8,000,000, subject to approval at the 2009
Annual Meeting.
Our board of directors believes that our growth and
profitability depend, in large part, upon our ability to
maintain a competitive position in attracting and retaining key
personnel. The board continues to believe that it is important
for employees to invest in our company in order for them to have
a financial stake in our success, and that employees in the
technology sector continue to expect and require the ability to
participate in an employee stock purchase as part of their total
compensation packages.
We are submitting Proposal Two for shareholder approval:
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to ensure that we will have a sufficient number of shares
available under the Purchase Plan to enable us to attract and
retain employees in a fashion that the board of directors
believes is beneficial to our company and its shareholders;
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to allow shares issued under the Purchase Plan to qualify for
favorable federal income tax treatment under Section 423 of
the Internal Revenue Code;
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to allow certain awards under the Purchase Plan to be treated
for federal income tax purposes as qualified
performance-based compensation, which is excludable from
the computation of the deduction limit set forth in
Section 162(m) of the Internal Revenue Code; and
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to comply with the rules of the Nasdaq Stock Market.
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As of April 4, 2009, 324,120 shares of our common
stock were available for future issuance under the Purchase
Plan, without regard to the proposed amendment.
The table below shows the details of employee participation in
the Purchase Plan during each offering period since its
inception.
Purchases
of Shares under 1999 Employee Stock Purchase Plan
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Purchase
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Shares
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Number of
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Purchase Date
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Price
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Purchased
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Participants
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January 20, 2000
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$
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5.10
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150,850
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180
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August 10, 2000
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53.23
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23,172
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257
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February 12, 2001
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32.03
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43,441
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415
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August 10, 2001
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1.62
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88,267
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273
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February 8, 2002
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1.49
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694,131
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271
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September 30, 2002
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0.81
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456,157
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198
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December 31, 2002
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0.79
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466,580
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209
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March 31, 2003
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0.69
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423,205
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151
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June 30, 2003
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0.69
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370,777
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136
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September 30, 2003
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1.33
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237,948
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150
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December 30, 2003
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1.30
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176,737
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121
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March 31, 2004
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1.24
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220,372
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127
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June 30, 2004
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1.02
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236,602
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116
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September 30, 2004
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0.77
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281,554
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97
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December 31, 2004
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0.76
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274,265
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86
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March 31, 2005
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0.89
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206,249
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89
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June 30, 2005
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0.89
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234,681
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97
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September 30, 2005
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0.87
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145,250
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90
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December 30, 2005
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0.86
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157,601
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87
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March 31, 2006
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1.59
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94,655
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105
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June 30, 2006
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2.53
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63,332
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115
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September 30, 2006
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2.18
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71,827
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99
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December 31, 2006
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1.98
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97,829
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101
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March 31, 2007
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1.96
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109,689
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108
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5
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Purchase
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Shares
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Number of
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Purchase Date
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Price
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Purchased
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Participants
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June 30, 2007
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$
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1.96
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113,129
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111
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September 30, 2007
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2.31
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92,059
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118
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December 31, 2007
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2.64
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95,843
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126
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March 31, 2008
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3.30
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76,144
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128
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June 30, 2008
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2.72
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97,461
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127
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September 30, 2008
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2.69
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88,289
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127
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December 31, 2008
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1.64
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136,144
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125
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March 31, 2009
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1.60
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151,640
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130
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Total
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6,175,880
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Any increase in the number of shares reserved under the Purchase
Plan must be approved by our shareholders in order for our
employees to benefit from the tax advantages that the Purchase
Plan is, in part, intended to make available to them. Therefore,
in order for us to continue to use the Purchase Plan effectively
as part of the compensation package we offer to our employees,
we need to obtain shareholder approval for the amendment to the
Purchase Plan.
In order to pass, this proposal must receive a majority of the
votes cast with respect to this matter. Abstentions and broker
non-votes will not be included in the number of votes cast in
the proposal.
The board of directors believes that stockholder approval
of the amendment to the 1999 Employee Stock Purchase Plan is in
the best interests of our company and our stockholders, and
therefore recommends that you vote FOR this
proposal.
Summary
of the 1999 Employee Stock Purchase Plan
The following summary is qualified in all respects by reference
to the full text of the Purchase Plan. The full text of the
Purchase Plan, including the proposed amendment, is attached as
Annex A.
Our board of directors administers the Purchase Plan and has the
authority to adopt, amend and repeal the related administrative
rules, guidelines and practices. Our board of directors also has
the authority to interpret the provisions of the Purchase Plan.
Our board of directors may amend the Purchase Plan at any time,
unless Section 423 of the Internal Revenue Code requires
that the stockholders approve an amendment, in which case the
amendment will not be effective until the stockholders approve
it. Section 423 requires approval of the proposal described
herein, to increase the number of shares issuable under the
Purchase Plan.
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The Purchase Plan was adopted by our board of directors on
May 10, 1999, and our stockholders subsequently approved
this adoption on June 18, 1999. Our board of directors
voted to amend the Purchase Plan on:
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March 20, 2002 and June 13, 2002, to (i) reduce
each Purchase Plan offering period from six months to three
months, and (ii) to increase the number of shares that may
be issued under the Purchase Plan from 1,000,000 to 3,000,000.
Our stockholders subsequently approved this increase in shares
on May 22, 2002;
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March 24, 2003, to increase the number of shares that may
be issued under the Purchase Plan from 3,000,000 to 5,000,000.
Our stockholders subsequently approved this increase in shares
on May 21, 2003;
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April 4, 2005, to reduce the maximum payroll deduction that
an employee may elect under the Purchase Plan from 10% to 5%;
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April 4, 2006, to (i) increase the maximum payroll
deduction that an employee may elect under the Purchase Plan
from 5% to 10%, (ii) to require participants to hold the
shares issued under the Purchase Plan for at least 90 days
before they can be sold, and (iii) to increase the number
of shares that may be issued under the Purchase Plan from
5,000,000 to 6,500,000. Our stockholders subsequently approved
this increase in shares on May 26, 2006; and on
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April 21, 2009, to increase the number of shares that may
be issued under the Purchase Plan from 6,500,000 to 8,000,000.
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Only our employees are eligible to purchase shares of our common
stock under the Purchase Plan. Employees receive the right to
purchase a specified number of shares of common stock at 85% of
the closing market price of our common stock on either
(i) the first business day of the offering period or
(ii) the last business day of the offering period,
whichever price is lower. While the duration of offering periods
under the Purchase Plan has varied, our current practice is to
provide three-month offering periods that coincide with our
fiscal quarters.
An employee may authorize us to make a payroll deduction of
between 1% and 10% of the employees compensation during
any offering period. At the end of the offering period, the
deducted money is used to buy shares of our common stock. During
an offering period, an employee may purchase no more than the
number of shares calculated by dividing the closing price of our
common stock on the first day of the offering period into
$6,250. This number is derived from a limitation imposed by the
Internal Revenue Code, which provides that no employee may be
granted an option which permits the employees rights to
purchase stock under an employee stock purchase plan to accrue
at a rate that exceeds $25,000 of the fair market value of the
common stock for each calendar year in which the option is
outstanding at any time. In accordance with Statement of
Financial Accounting Standards No. 123R, Share-Based
Payment, we record stock-based compensation expense, amortized
over each three month offering period under the Purchase Plan,
for shares issued out of the Purchase Plan based on the fair
value of the purchase options granted under the Purchase Plan as
of the beginning of such offering period.
Finally, as an issuer listed on the Nasdaq Global Market, we are
required by the rules of the Nasdaq Stock Market to seek
shareholder approval of any material amendment to any stock
option
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or purchase plan or other equity compensation arrangement under
which our executive officers, non-employee directors, or other
employees may acquire shares of our common stock.
Because an employees decision to participate in any
particular offering period under the Purchase Plan will occur in
the future and rests in his or her discretion, we are unable to
determine the dollar value or the number of shares that will be
received by or allocated to any person, including any executive
officer, or employee, as a result of the approval of the
amendment to the Purchase Plan. Our non-employee directors are
not eligible to purchase shares under the Purchase Plan.
Employees who own stock and hold options to purchase stock
representing 5% or more of the total combined voting power or
value of all classes of our stock also are ineligible to
participate in the Purchase Plan.
U.S.
Federal Income Tax Consequences
The following discussion is intended only as a brief overview of
the current federal income tax laws applicable to the Purchase
Plan. Employees should consult their tax advisors concerning
their own federal income tax situations, and concerning state
tax aspects of the acquisition of shares of our common stock
pursuant to the Purchase Plan. No state tax matters are
addressed in the following discussion.
Rights granted under the Purchase Plan are intended to qualify
for favorable federal income tax treatment associated with
rights granted under an employee stock purchase plan which
qualifies under provisions of Section 423 of the Internal
Revenue Code. If an employee acquires shares of our common stock
pursuant to the Purchase Plan and does not dispose of them
within two years after the commencement of the offering pursuant
to which the shares were acquired, nor within one year after the
date on which the shares were acquired, any gain realized upon
subsequent disposition will be taxable as a long-term capital
gain; except that, the portion of such gain equal to the lesser
of (i) the excess of the fair market value of the shares on
the date of disposition over the amount paid upon purchase of
the shares, or (ii) the excess of the fair market value of
the shares on the offering commencement date over by the amount
paid upon purchase of the shares, is taxable as ordinary income.
However, we do not have a corresponding deduction. If the
employee disposes of the shares at a price less than the price
at which he or she acquired the shares, the employee realizes no
ordinary income and has a long-term capital loss measured by the
difference between the purchase price and the selling price.
If an employee disposes of shares acquired pursuant to the
Purchase Plan within two years after the commencement of the
offering pursuant to which the shares were acquired, or within
one year after the date on which the shares were acquired, the
difference between the purchase price and the fair market value
of the shares at the time of purchase will be taxable to him or
her as ordinary income in the year of disposition. In this
event, we may deduct from our gross income an amount equal to
the amount treated as ordinary income to each such employee. Any
such deduction will be subject to the limitations of
Section 162(m) of the Internal Revenue Code. Any excess of
the selling price over the fair market value at the time the
employee purchased the shares will be taxable as long-term or
short-term capital gain, depending upon the period for which the
shares were held. If any shares are disposed of within either
the two-year or one-year period at a
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price less than the fair market value at the time of purchase,
the same amount of ordinary income (i.e., the difference between
the purchase price and the fair market value of the shares at
the time of purchase) is realized, and a capital loss is
recognized equal to the difference between the fair market value
of the shares at the time of purchase and the selling price.
If a participating employee should die while owning shares
acquired under the Purchase Plan, ordinary income may be
reportable on his or her final income tax return.
Proposal Three:
Ratification of Appointment of Independent Registered Public
Accounting Firm
Under rules of the Securities and Exchange Commission, or SEC,
and the Nasdaq Stock Market, appointment of our independent
registered public accountants is the direct responsibility of
our Audit Committee. Although ratification of this appointment
by our stockholders is not required by law, our board of
directors believes that seeking stockholder ratification is a
good practice, which provides stockholders an avenue to express
their views on this important matter.
Our Audit Committee has reappointed Ernst & Young LLP
as our independent registered public accounting firm for the
year ending December 31, 2009. Our board of directors
recommends that stockholders vote to ratify the appointment. If
this proposal is not approved by our stockholders, our Audit
Committee will reconsider its selection of Ernst &
Young, although it may elect to continue to retain
Ernst & Young. In any case, our Audit Committee may,
in its discretion, appoint new independent registered public
accountants at any time during the year if it believes that such
change would be in the best interests of our company and our
stockholders.
Representatives of Ernst & Young are expected to be
present at the 2009 Annual Meeting of Stockholders to make any
desired statements or to respond to appropriate questions.
The affirmative vote of the holders of a majority of the common
stock voting on the matter, in person or by proxy, is necessary
to ratify the selection by the Audit Committee of our board of
directors of Ernst & Young as our independent
registered public accounting firm for the year ending
December 31, 2009. Abstentions and broker non-votes will
not be included in calculating the number of votes cast on the
proposal.
Our board of directors recommends that you vote FOR
the proposal to ratify the appointment by our Audit Committee of
Ernst & Young LLP as our independent registered public
accounting firm for the year ending December 31,
2009.
Other
Matters
Our board is not aware of any other matters that are expected to
come before the meeting other than those referred to in this
proxy statement. If any other matter should properly come before
the meeting, the persons named in the accompanying proxy card
intend to vote the proxies in accordance with their best
judgment.
9
Submission
for Future Stockholder Proposals
Proposals
for Inclusion in the Proxy Statement for the 2010 Annual Meeting
of Stockholders
If a stockholder intends to submit a proposal for inclusion in
the proxy statement for the 2010 Annual Meeting of Stockholders
(the 2010 Annual Meeting), the stockholder must
follow the procedures outlined in
Rule 14a-8
of the Securities and Exchange Act of 1934. To be eligible for
inclusion in the proxy statement for the 2010 Annual Meeting,
the stockholder must submit a proposal in writing to our
Secretary at One Main Street, Cambridge, Massachusetts 02142, no
later than December 20, 2009.
Proposals
for Consideration at the 2010 Annual Meeting
If a stockholder wishes to present a proposal before the 2010
Annual Meeting, but does not wish to have the proposal
considered for inclusion in the proxy statement, the stockholder
must submit a proposal in writing to our Secretary at the
address specified above, not less than sixty days nor more than
ninety days before the meeting, pursuant to our by-laws.
We have yet to set a date for our 2010 Annual Meeting, however,
assuming that the 2010 Annual Meeting were to be held on
May 20, 2010, the deadline for receipt of a stockholder
proposal would be March 20, 2010. If a stockholder submits
a proposal in compliance with our by-laws, but after the
deadline for inclusion in the proxy statement, we may include or
exclude the proposal from our proxy statement for the 2010
Annual Meeting, at our discretion.
10
INFORMATION
ABOUT
OUR DIRECTORS AND EXECUTIVE OFFICERS
Background
Information about Directors Continuing in Office
Under our by-laws, our board of directors has the authority to
fix the number of directors, and our board is divided into three
classes serving for staggered three-year terms. We currently
have eight directors: two Class I directors whose terms
will expire at our upcoming 2009 Annual Meeting of Stockholders,
three Class II directors whose terms will expire at our
2010 Annual Meeting of Stockholders, and three Class III
directors whose terms will expire at our 2011 Annual Meeting of
Stockholders. Brief biographies of our Class II and
Class III directors who will be continuing in office follow.
Class II
Directors
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David B. Elsbree |
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Mr. Elsbree has been a director since June 2004. From June
1981 to May 2004, Mr. Elsbree was a partner at
Deloitte & Touche. He has been a member of the Board
of the New England Chapter of the National Association of
Corporate Directors and is a member of the Board of Directors of
Acme Packet, Inc. Mr. Elsbree is 61 years old. |
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Ilene H. Lang |
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Ms. Lang has served as a director since October 2001. Since
September 2003, Ms. Lang has been President of Catalyst,
Inc., a non-profit organization that works to advance women in
business. From May 2000 to August 2003, Ms. Lang was a
business and financial consultant to various boards of
directors, boards of trustees, and Chief Executive Officers.
From May 1999 to May 2000, Ms. Lang served as President and
Chief Executive Officer of Individual.com, Inc., an Internet
media service provider. Ms. Lang is 65 years old. |
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Daniel C. Regis |
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Mr. Regis has served as our chairman since July 2005 and as
a director since November 2004. Mr. Regis served on the
Board of Directors of Primus Knowledge Solutions, Inc. from
April 2003 until our acquisition of Primus in November 2004.
Mr. Regis is a Managing Director of Digital Partners, a
mid-sized venture capital fund specializing in Northwest
emerging technology companies, which he co-founded in 2000.
Mr. Regis is a member of the Board of Directors of Cray,
Inc. and Columbia Banking Systems, Inc. Mr. Regis is
69 years old. |
Class III
Directors
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Michael A. Brochu |
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Mr. Brochu has served as a director since November 2004,
when he was added to our board in connection with our
acquisition of Primus Knowledge Solutions, Inc. From November
1997 until our acquisition of Primus in November 2004,
Mr. Brochu served as the President, Chief Executive
Officer, and Chairman of the Board of Primus. Beginning in
December 2003, Mr. Brochu served as a director of Loudeye
Corp., and beginning in February 2005, Mr. Brochu served |
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as President and Chief Executive Officer of Loudeye Corp. In
October 2006, Loudeye Corp. was acquired by Nokia Corp. and
Mr. Brochu left Nokia Corp. in December 2006. Since June
2007, Mr. Brochu has been President, Chief Executive
Officer, and a director of Global Market Insite. Mr. Brochu
is 55 years old. |
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Robert D. Burke |
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Mr. Burke has served as our Chief Executive Officer and
President and as a director since December 2002. From November
2000 through November 2002, Mr. Burke served as Chief
Executive Officer of Quidnunc Group Ltd., a customer solutions
and services company. From June 1999 through October 2000,
Mr. Burke served as President, Worldwide Services Division
of ePresence, Inc., formerly Banyan Systems, Inc., an online
security and identity management company. Mr. Burke is
54 years old. |
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Mary E. Makela |
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Ms. Makela has served as a director since July 2002. Since
1994, Ms. Makela has provided management consulting
services to Chief Executive Officers, and various for profit and
non-profit boards of directors. Ms. Makela formerly served
as President of Cognos Corporation and President and Chief
Executive Officer of IMC Systems. Ms. Makela is
66 years old. |
Information
about Executive Officers
Our executive officers are elected by our board of directors.
Brief biographies of our current executive officers follow.
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Robert D. Burke |
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Mr. Burke serves as Chief Executive Officer and President. You
will find background information about Mr. Burke above
under Background Information about Directors Continuing in
Office, Class III Directors. |
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Julie M.B. Bradley |
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Ms. Bradley has been Senior Vice President, Chief Financial
Officer, Treasurer, and Secretary since July 2005. From April
2000 to June 2005, Ms. Bradley was employed by Akamai
Technologies, Inc., a service provider for accelerating content
and business processes online, most recently as its Vice
President of Finance. From January 1993 to April 2000,
Ms. Bradley was an accountant at Deloitte &
Touche LLP. Ms. Bradley is 40 years old. |
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Barry E. Clark |
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Mr. Clark has been Senior Vice President of Worldwide Sales
since February 2004. From February 2002 to February 2004,
Mr. Clark was President of SchoolKidz, Inc., a packaged
school supply retailer. From October 1998 to December 2001,
Mr. Clark was Division President of Domino Amjet, a
company that offers coding and printing solutions using ink jet
and laser technologies. Mr. Clark is 52 years old. |
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Louis R. Frio Jr. |
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Mr. Frio has been Senior Vice President of Services since
July 2006. From June 2004 to June 2006, Mr. Frio was
Managing Partner at Unisys Corporation where he oversaw the
integration of the security and identity access management
division of ePresence, Inc., formerly Banyan Systems, Inc.,
following its acquisition by Unisys in 2004. From 1994 to 2004,
Mr. Frio served in a variety of positions at ePresence,
including Vice President, Consulting North America;
Vice President, Managed Services; and Director, Worldwide
Support Services. Mr. Frio is 47 years old. |
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Nancy P. McIntyre |
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Ms. McIntyre has been Senior Vice President and Chief
Marketing Officer since February 2009. From January 2006 through
December 2008, Ms. McIntyre was Senior Vice President
of Marketing at Authoria, Inc., a talent management software
company. From August 2004 to December 2005, Ms. McIntyre
served as an independent marketing and strategy consultant. From
January 2003 through August 2004, Ms. McIntyre was the Vice
President of Marketing at Kubi Software, a collaboration and
email application software company. From March 1999 through
December 2002, Ms. McIntyre was Executive Vice President of
Worldwide Marketing and Strategic Alliances at Centive, Inc., a
company that created on-demand sales compensation management
solutions. Ms. McIntyre is 53 years old. |
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Patricia ONeill |
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Ms. ONeill has been Senior Vice President Human
Resources since January 2004. From May 2000 to January 2004,
Ms. ONeill served as our Vice President Human
Resources. From April 1995 to February 2000,
Ms. ONeill was the Vice President Human Resources of
The Shareholders Services Group, a division of First Data
Corporation. Ms. ONeill is 60 years old. |
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Andrew M. Reynolds |
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Mr. Reynolds has been Senior Vice President of Corporate
Development since July 2007. From September 2002 to June 2007,
Mr. Reynolds was Vice President of Corporate Development at
Hyperion Solutions, a provider of business performance
management solutions. From December 1999 to February 2002,
Mr. Reynolds was Director of Corporate Strategy at CMGI,
Inc., a technology holding company and venture capital firm.
Mr. Reynolds is 41 years old. |
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Kenneth Z. Volpe |
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Mr. Volpe has been Senior Vice President, Products and
Technology since September 2004. From November 2003 to September
2004, Mr. Volpe served as our Vice President and General
Manager, Platform Products. From June 1999 to November 2003,
Mr. Volpe served as our Vice President, Product Management,
and from September 1998 to June 1999, Mr. Volpe served as
our Director, Product Management. Mr. Volpe is
43 years old. |
13
CORPORATE
GOVERNANCE
General
We believe that good corporate governance is important to ensure
that Art Technology Group, Inc. is managed for the long-term
benefit of our stockholders. During the past few years, under
the leadership of our Nominating and Governance Committee, we
have continued to review our corporate governance policies and
practices, comparing them to those suggested by various
authorities in corporate governance and the practices of other
public companies. We have also continued to review the
provisions of the Sarbanes-Oxley Act of 2002, the new and
proposed rules of the SEC and the new listing standards of the
Nasdaq Stock Market.
Board and
Committee Meetings
The board of directors has responsibility for establishing broad
corporate policies and reviewing our overall performance rather
than day-to-day operations. The boards primary
responsibility is to oversee our management and, in so doing,
serve the best interests of the company and our stockholders.
The board selects, evaluates and provides for the succession of
executive officers and, subject to stockholder election,
directors. It reviews and approves corporate objectives and
strategies, and evaluates significant policies and proposed
major commitments of corporate resources. Management keeps the
directors informed of our activities through regular written
reports and presentations at board and committee meetings.
Our board met in person or via teleconference nine times in
2008. During 2008, each director attended at least 88% of the
total number of meetings held by the board and the committees of
the board on which he or she served at the time of such meeting.
The board has established three standing committees
Audit, Compensation, and Nominating and Governance
each of which operates under a charter that has been approved by
the board. Current copies of each committees charter are
posted on the Investors Corporate
Governance Committee Charters section of our
website, www.atg.com. This includes our Audit Committee
Charter, which was amended on April 21, 2009.
A majority of our directors are independent directors under the
rules of the Nasdaq Stock Market. The board has determined that
all of the members of the boards Audit Committee,
Compensation Committee and Nominating and Governance Committee
meet the independence requirements of the Nasdaq Stock Market
for membership on the committees on which he or she serves.
Audit
Committee
The Audit Committees responsibilities include:
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appointing, evaluating, approving the compensation of, and
assessing the independence of our independent registered public
accounting firm;
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overseeing the work of our independent registered public
accounting firm, which includes the receipt and consideration of
certain reports from our independent registered public
accounting firm;
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reviewing and discussing with management and our independent
registered public accounting firm our annual and quarterly
financial statements and related disclosures;
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monitoring our internal controls over financial reporting and
disclosure controls and procedures;
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establishing procedures for the receipt and retention of
accounting related complaints and concerns;
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risk management;
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meeting independently with our independent registered public
accounting firm and management; and
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preparing the Audit Committee report required by SEC rules
(which is included in this proxy statement under the heading
Audit Committee Report).
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The Audit Committee met in person or via teleconference nine
times during 2008. The current Audit Committee members are
Mr. Elsbree, Ms. Makela and Mr. Regis, with
Mr. Elsbree serving as the Chair of the committee. The
board of directors has determined that Messrs. Elsbree and
Regis are each an audit committee financial expert
as defined by SEC rules.
Compensation
Committee
The Compensation Committees responsibilities include:
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annually reviewing and approving general compensation strategy
and policy as well as corporate goals and objectives relevant to
Chief Executive Officer compensation;
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making recommendations to the board with respect to the Chief
Executive Officers compensation;
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reviewing and approving the compensation of our other executive
officers;
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overseeing and administering our stock option, stock incentive,
employee stock purchase and other equity-based plans, as well as
periodically reviewing all cash and equity incentive plans;
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creating succession and development plans for executives;
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reviewing and making recommendations to the board with respect
to director compensation; and
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preparing the Compensation Committee report required by SEC
rules (which is included in this proxy statement under the
heading Compensation Committee Report).
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The Compensation Committee met ten times during 2008. The
current members of the Compensation Committee are
Mr. Brochu, Mr. Held, Ms. Makela and
Ms. Swersky, with Ms. Makela serving as the Chair of
the committee.
Nominating
and Governance Committee
The Nominating and Governance Committees responsibilities
include:
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identifying individuals qualified to become members of the board
of directors;
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recommending to the board the persons to be nominated for
election as directors;
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recommending directors for each committee of the board;
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developing and recommending to the board corporate governance
principles;
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reviewing the Companys compliance programs; and
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overseeing the evaluation of the board and its committees.
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The Nominating and Governance Committee met five times during
2008. The Nominating and Governance Committees current
members are Mr. Held, Ms. Lang and Ms. Swersky,
with Ms. Swersky serving as the Chair of the committee.
Director
Candidates
The process that the Nominating and Governance Committee follows
to identify and evaluate director candidates includes requests
to members of the board of directors and others for
recommendations, meetings from time to time to evaluate
biographical information and background material relating to
potential candidates and interviews of selected candidates by
members of the Nominating and Governance Committee and the
board. In addition, the Nominating and Governance Committee is
authorized to retain, and has from time to time retained, the
services of a search firm to help identify and evaluate
potential director candidates.
In considering whether to recommend any particular candidate for
inclusion in the boards slate of recommended director
nominees, the Nominating and Governance Committee will apply the
written criteria established by the board. These criteria
include the candidates integrity, business acumen,
knowledge of our business and industry, experience, diligence,
conflicts of interest and the ability to act in the interests of
all stockholders. The Nominating and Governance Committee does
not assign specific weights to particular criteria, and no
particular criterion is a prerequisite for each prospective
nominee. We believe that the backgrounds and qualifications of
our directors, considered as a group, should provide a composite
mix of experience, knowledge and abilities that will allow the
board to fulfill its responsibilities.
Stockholders may recommend individuals to the Nominating and
Governance Committee for consideration as potential director
candidates. Stockholders may do so by submitting their names,
together with appropriate biographical information and
background materials and a statement as to whether the
stockholder or group of stockholders making the recommendation
has beneficially owned more than 5% of our common stock for at
least a year as of the date such recommendation
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is made, to Nominating and Governance Committee,
c/o Secretary,
Art Technology Group, Inc., One Main Street, Cambridge,
Massachusetts 02142. Assuming that appropriate biographical and
background material has been provided on a timely basis, the
Nominating and Governance Committee will evaluate
stockholder-recommended candidates by following substantially
the same process, and applying substantially the same criteria,
as it follows for candidates submitted by others. If the board
determines to nominate a stockholder-recommended candidate and
recommends his or her election, then his or her name will be
included in our proxy card for the next annual meeting.
Stockholder
Communications and Annual Meeting Attendance
The board of directors will give appropriate attention to
written communications that are submitted by stockholders, and
will respond if and as appropriate. Absent unusual circumstances
(or as contemplated by committee charters) and subject to any
required assistance or advice, the Chair of the Nominating and
Governance Committee is primarily responsible for monitoring
communications from stockholders and for providing copies or
summaries of such communications to the other directors as she
considers appropriate.
Communications are forwarded to all directors if they relate to
important substantive matters and include suggestions or
comments that the Chair of the Nominating and Governance
Committee considers to be important for the directors to know.
In general, communications relating to corporate governance and
long-term corporate strategy are more likely to be forwarded
than communications relating to ordinary business affairs or
personal grievances, or matters as to which we have received
repetitive or duplicative communications.
Stockholders who wish to send communications on any topic to the
board should address such communications to Chair of the
Nominating and Governance Committee,
c/o Secretary,
Art Technology Group, Inc., One Main Street, Cambridge,
Massachusetts 02142.
All directors who were members of the board of directors at the
time of our 2008 Annual Meeting of Stockholders attended the
annual meeting. To the extent reasonably practicable, directors
are expected to attend our annual meeting of stockholders.
Code of
Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics that
applies to all of our directors, officers and employees,
including our principal executive officer, principal financial
officer and principal accounting officer or controller. Our Code
of Business Conduct and Ethics is posted on the Investors
Corporate Governance Conduct
section of our website, www.atg.com, and a copy is
available without charge upon request to Secretary, Art
Technology Group, Inc., One Main Street, Cambridge,
Massachusetts 02142.
We will post information about any amendments to, or waivers
from, the Code of Business Conduct and Ethics on the
Investors Corporate Governance
Conduct section of our website,
www.atg.com.
17
Securities
Authorized for Issuance under Equity Compensation
Plans
The following table provides information as of December 31,
2008 about the securities authorized for issuance under our
equity compensation plans, consisting of our Amended and
Restated 1996 Stock Option Plan (the 1996 Plan), our
Amended and Restated 1999 Outside Director Stock Option Plan
(the 1999 Director Plan), our 1999 Employee
Stock Purchase Plan (the Purchase Plan), our Primus
1999 Non-Officer Stock Option Plan (the 1999 Non-Officer
Plan) and our Primus 1999 Stock Incentive Compensation
Plan (the 1999 Plan).
Equity
Compensation Plan Information
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|
|
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
|
Number of shares
|
|
|
|
|
|
Number of shares
|
|
|
|
to be issued upon
|
|
|
|
|
|
remaining available for
|
|
|
|
exercise of
|
|
|
Weighted-average
|
|
|
future issuance under
|
|
|
|
outstanding
|
|
|
exercise price of
|
|
|
equity compensation plans
|
|
|
|
options, warrants
|
|
|
outstanding options,
|
|
|
(excluding shares
|
|
Plan category
|
|
and rights
|
|
|
warrants and rights(2)
|
|
|
reflected in column (a))
|
|
|
Equity compensation plans approved by stockholders
|
|
|
16,941,848
|
|
|
$
|
2.80
|
|
|
|
9,838,718
|
|
Equity compensation plans not approved by stockholders(1)
|
|
|
231,873
|
|
|
$
|
0.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
17,173,721
|
|
|
$
|
2.76
|
|
|
|
9,838,718
|
|
|
|
|
(1) |
|
Consists of the 1999 Non-Officer Plan, which was assumed as part
of our acquisition of Primus Knowledge Solutions, Inc. and was
not approved by Primus stockholders. |
|
(2) |
|
Represents the weighted average exercise price of outstanding
options to purchase 13,424,021 shares and excludes
outstanding restricted stock units to purchase
3,749,700 shares because they do not have an exercise price. |
Audit
Committee Report
The Audit Committee reviewed the audited financial statements as
of, and for the year ended, December 31, 2008 and discussed
these financial statements with management. The Audit Committee
also reviewed and discussed the audited financial statements and
the matters required by Statement on Auditing Standards 61,
Communication with Audit Committees, or SAS 61, with
Ernst & Young LLP, our independent registered public
accounting firm for 2008. SAS 61 requires Ernst &
Young to discuss with our Audit Committee, among other things,
the following:
|
|
|
|
|
methods used to account for significant unusual transactions;
|
|
|
|
the effect of significant accounting policies in controversial
or emerging areas for which there is a lack of authoritative
guidance or consensus;
|
18
|
|
|
|
|
the process used by management in formulating particularly
sensitive accounting estimates and the basis for the
auditors conclusions regarding the reasonableness of those
estimates; and
|
|
|
|
disagreements, of which there were none, with management about
financial accounting and reporting matters and audit procedures.
|
Ernst & Young also provided the Audit Committee with
the written disclosures and the letter required by Public
Company Accounting Oversight Board Ethics and Independence
Rule 3526, Communication with Audit Committees
Concerning Independence. This Rule requires auditors
annually to disclose in writing all relationships that in the
auditors professional opinion may reasonably be thought to
bear on independence, confirm their perceived independence and
engage in a discussion of independence. In addition, the Audit
Committee discussed with Ernst & Young the
independence of Ernst & Young from the company, and
considered whether Ernst & Youngs provision of
other, non-audit related services, which are described below
under Independent Registered Public Accounting Firms
Fees, is compatible with maintaining such independence.
Based on its discussions with management and Ernst &
Young, and its review of the representations and information
provided by management and Ernst & Young, the Audit
Committee recommended to the board that the audited financial
statements be included in the annual report on
Form 10-K
for the year ended December 31, 2008.
Audit Committee
David B. Elsbree, Chair
Mary E. Makela
Daniel C. Regis
Principal
Accountant Fees and Services
Our Audit Committee has selected Ernst & Young LLP to
serve as our independent registered public accounting firm for
the year ending December 31, 2009. Ernst & Young
has served as our independent registered public accounting firm
since 2002. We expect that representatives of Ernst &
Young will be present at the annual meeting to answer
appropriate questions. They will have the opportunity to make a
statement if they desire to do so.
19
Independent
Registered Public Accounting Firms Fees
The following table summarizes the aggregate fees billed for
services rendered by Ernst & Young, our independent
registered public accounting firm, for the years ended
December 31, 2008 and 2007:
|
|
|
|
|
|
|
|
|
Fee Category
|
|
2008
|
|
|
2007
|
|
|
Audit fees
|
|
$
|
1,225,790
|
|
|
$
|
1,182,000
|
|
Audit-related fees
|
|
|
1,500
|
|
|
|
1,500
|
|
Tax fees
|
|
|
52,600
|
|
|
|
26,200
|
|
|
|
|
|
|
|
|
|
|
Total fees
|
|
$
|
1,279,890
|
|
|
$
|
1,209,700
|
|
|
|
|
|
|
|
|
|
|
Audit fees. Audit fees relate to professional
services rendered in connection with Ernst &
Youngs audit of our consolidated financial statements and
Ernst & Youngs audit of the effectiveness of our
internal control over financial reporting, review of the interim
financial statements included in our quarterly reports on
Form 10-Q,
international statutory audits, regulatory filings, including
registration statements, and accounting consultations that
relate to the audited financial statements and are necessary to
comply with United States generally accepted accounting
principles.
Audit-related fees. Audit-related fees are for
assurance and related services.
Tax fees. Tax fees are for professional
services related to tax compliance, tax advice and tax planning
services. Tax compliance services, which relate to preparation
and review of original and amended tax returns, claims for
refunds and tax payment-planning services, accounted for $20,960
of the total tax fees paid for in 2008 and $10,500 of the total
tax fees paid for in 2007. Tax advice and tax planning services
relate to transfer pricing studies and miscellaneous items.
Pre-Approval
Policy and Procedures
The Audit Committee has adopted policies and procedures relating
to the approval of all audit and non-audit services that are to
be performed by our independent registered public accounting
firm. These policies generally provide that we will not engage
our independent registered public accounting firm to render
audit or non-audit services unless the service is specifically
approved in advance by the Audit Committee or the engagement is
entered into pursuant to one of the pre-approval procedures
described below.
From time to time, the Audit Committee may pre-approve specified
types of services that are expected to be provided to us by our
independent registered public accounting firm during the next
twelve months. Any such pre-approval is detailed as to the
particular service or type of services to be provided and is
also generally subject to a maximum dollar amount.
20
COMPENSATION
OF OUR EXECUTIVE OFFICERS AND DIRECTORS
Executive
Compensation
Compensation
Discussion and Analysis
This compensation discussion and analysis describes the material
elements of compensation awarded to each of our executive
officers who served as named executive officers during 2008.
This compensation discussion and analysis focuses on the
information contained in the following tables and related
footnotes and the narrative primarily for 2008, but we also
describe compensation actions taken during 2009 to the extent
that they enhance the understanding of our executive
compensation disclosure for 2008.
Overview
and Compensation Philosophy
The boards Compensation Committee seeks to achieve the
following goals with our executive compensation programs: to
attract, motivate and retain key executives and to reward
executives for value creation. By responding to the market
pressures in the software industry and rewarding executive
performance, the Compensation Committee seeks to foster a
performance-oriented environment that is attractive to top
executive talent by tying a significant portion of each
executives cash and equity compensation to the achievement
of our performance targets.
Our executive compensation program has three elements: base
salary, cash incentive compensation and equity incentive awards.
Base salary, cash incentive compensation and equity incentive
awards for 2008 were established pursuant to our 2008 Executive
Management Compensation Plan, which was adopted on March 3,
2008 and our executive equity plan that was adopted on
March 14, 2008. The Compensation Committee seeks to promote
a performance-based culture among the executive management team
through the grant of variable cash compensation and
equity-incentive awards that are in line with both overall
company performance and individual performance. During fiscal
2008, equity incentives were awarded to our executives in the
form of restricted stock units and also, in the case of our
Chief Executive Officer, stock options.
The Compensation Committee attempts to balance long-term equity
with short-term cash compensation and decides upon the mix of
compensation through committee discussion and individual
executive performance reviews, which typically occur in February
of each year. For instance, our Chief Executive Officer receives
a 360 review that includes reviews from the board,
and from each of his direct reports as well as a
self-assessment. Such reviews are important in determining how
the executives have performed in the prior year, as well as in
determining what forms of compensation will best motivate the
executives to reach the goals we set for their performance for
the next year.
Target
Total Cash Compensation
We establish our target total cash compensation for each
executive primarily based upon peer group data. In 2008, the
Compensation Committee engaged the consulting firm Towers Perrin
to assist in determining which companies to include in our peer
group and also in the compilation of
21
compensation data for our peer group companies, further
described below. The Compensation Committee has included
companies in the peer group that the Committee believes are
comparable in terms of revenue and numbers of employees and that
are representative of the types of software companies with which
we compete for executive talent.
Benchmarking
To benchmark the elements of our senior executives
compensation, we utilized Towers Perrin to review the
compensation of our nine executive team members against data
from a peer group of seventeen companies consisting of: Ariba,
Broadvision, Chordiant Software, Convera, Digital River, GSI
Commerce, Interwoven, LivePerson, Omniture, PAR Technology,
Perficient, Progress Software, RightNow Technologies, Saba
Software, Selectica, Ultimate Software Group, and Vignette.
Competitive pay data was ascertained by Towers Perrin from the
most recent annual proxy statements for such companies, as well
as published survey information that focused on the broader
software industry/sector. Towers Perrin concluded that the total
cash compensation levels of our executives (including both base
salaries and non-equity incentive compensation) were generally
aligned with the peer group median of the seventeen peer
companies. Considering the current changing market conditions,
Towers Perrin concluded that our total direct compensation
(total cash plus the expected value of long-term incentives
granted in 2008, assuming that any performance objectives
specified in the awards were achieved) was generally between the
median and the seventy-fifth percentile levels, for the peer
group.
We use this benchmarking data to evaluate the competitiveness of
our compensation plans for our company executives. Other than
Towers Perrin, we have not retained any compensation consultant
to review our policies and procedures relating to executive
compensation. We expect that our Compensation Committee will
continue to engage either Towers Perrin or another compensation
consulting firm to provide advice as to executive compensation.
Base
Salary and Incentive Compensation
Total cash compensation is divided into two components: base
salary and cash incentive compensation.
The Compensation Committee sets, or, in the case of our Chief
Executive Officer, recommends to the board, base salary levels
for executive officers each year based on a number of factors,
including: the status of the competitive marketplace for such
positions, a comparison of base salaries for comparable
positions at comparable companies within the enterprise software
industry as well as within our peer group, the scope and
responsibilities associated with the position, and the previous
experience and knowledge of the individual. The goal of the
Compensation Committee is to fix base salaries on a basis
generally in line with base salary levels for comparable
companies. The committee retains discretion to respond to market
pressures affecting retention with small but meaningful
compensation awards and with long term incentive equity
22
grants. Base salary comparisons are based in part on information
provided by Towers Perrin to the Compensation Committee.
On March 3, 2008, our Compensation Committee recommended,
and our board of directors adopted, the 2008 Executive
Management Compensation Plan (the 2008 Compensation
Plan) that is designed to reward our executives for
superior performance. The 2008 Compensation Plan established
criteria for awarding annual cash incentive compensation for
fiscal year 2008 to our executive officers based on a percentage
of each officers base salary. Target annual cash incentive
compensation ranged from approximately 43% to 109% of the base
salaries of our executives.
Under the 2008 Compensation Plan, a specified portion of each
executives annual cash incentive compensation target was
based on our adjusted operating profit for 2008 (or, in the case
of our Senior Vice President of Services, our gross margin for
services in 2008), and the balance was based on individual goals
specific to the executive. Our executive officers were not
eligible to receive any portion of the target compensation based
on their individual goals unless we achieved more than 50% of
our adjusted operating profit goal for 2008. Our Senior Vice
President of Worldwide Sales and Senior Vice President of
Services were also eligible to receive quarterly bonuses based
on metrics set forth in their plans, irrespective of our
adjusted operating profit goal. The portion of each
executives cash incentive compensation payouts that was
based on individual goals was based on up to five components
from the following list:
|
|
|
|
|
ATG Adjusted Revenue (either in total or excluding eStara
Optimization Services, depending on the executive)
|
|
|
eStara and Cleverset Optimization Services Revenue
|
|
|
Customer Service and Support Revenue
|
|
|
Worldwide Professional Services, Education and OnDemand Margin
Revenue
|
|
|
ATG Adjusted Operating Profit
|
|
|
Worldwide Professional Services, Education and OnDemand Margin
Percent
|
|
|
Gross Services Margin
|
|
|
Cash Management
|
|
|
Bookings (On Demand and License)
|
|
|
Billings (eStara and Cleverset Optimization Services )
|
|
|
Effectiveness of HR Initiatives
|
|
|
Employee Satisfaction
|
|
|
Management by Objective goals, or MBOs, specific to each
executive in light of his or her responsibilities.
|
These components were weighted differently for each executive
and tied directly to the areas over which the executive has
functional responsibility. For instance, our Chief Executive
Officer had targets in three discrete areas (30% for ATG
Adjusted Revenue, 30% for ATG Adjusted Operating Profit and 40%
for MBOs) with a particular focus on the MBOs that can change
from year to year depending on the needs of the company. The
MBOs that were established were specific for each executive in
light of his or her responsibilities.
23
The target payouts in the 2008 Compensation Plan were based on
achieving a certain minimum percentage of our goals for each of
the listed performance metrics, and for all officers, no bonus
would be paid based on their individual goals, unless we
achieved at least 50% of our adjusted operating profit goal for
2008. If these goals were exceeded, our executive officers would
have been eligible to receive cash incentive compensation in
excess of the target payouts. The final payout amount to our
executive officers, except our Chief Executive Officer, was
approved by the Compensation Committee, including payout of any
amounts over 100% of target and partial payments when targets
were partially achieved. The final payout to our Chief Executive
Officer was approved by the board upon the recommendation of the
Compensation Committee.
For fiscal 2008, cash incentive compensation was paid to each
executive officer who was actively employed by the company on
the date such incentive payouts were made. Our named executive
officers, excluding our Chief Executive Officer and our former
Senior Vice President of Marketing, earned an aggregate of
$523,080 in cash incentive compensation under the 2008
Compensation Plan, as set forth in the Summary
Compensation Table on page 27, which amounted in
aggregate to approximately 89% of their aggregate target
incentive amount for 2008, based on the companys and the
executives performance relative to the companys and
the executives goals for 2008. Our Chief Executive Officer
earned an aggregate of $286,200 in cash incentive compensation
for fiscal 2008.
Equity
Incentive Awards
Our executive officers are eligible to receive equity incentive
awards under our Amended and Restated 1996 Stock Option Plan
(1996 Plan), which generally are made on an annual
basis. The board, upon recommendation from the Compensation
Committee, reviews and approves equity incentive awards for our
Chief Executive Officer. The Compensation Committee approves
equity incentive awards to the other executive officers, relying
in part on recommendations from our Chief Executive Officer. The
Compensation Committee and board meetings at which these awards
are approved generally occur during the first quarter of each
year. The Compensation Committee may on occasion issue equity
incentive awards at other times if it determines the awards are
necessary for retention, to reward extraordinary performance, or
in connection with a promotion. However, in 2008, other than to
our President and Chief Executive Officer, we made no equity
awards to any of our named executive officers other than in
connection with our annual company-wide equity grant, which
occurred in March 2008. Newly hired executive officers generally
receive sign-on grants at their hire dates, subject to the
approval of the Compensation Committee.
Equity awards pursuant to the 2008 Executive Equity Plan help us
enhance the link between the creation of stockholder value and
long-term executive incentive compensation, to provide an
opportunity for increased equity ownership by executives, and to
maintain competitive levels of total compensation. The number of
equity awards granted to each participant is determined
primarily based on median award values for executives in the
compensation peer group determined by the Compensation Committee
as discussed above in Target Total Cash Compensation
and the Compensation Committees subjective assessment of
each executives past and expected future performance.
Equity awards in the form of stock options are awarded at
exercise prices that are
24
equal to closing price of our common stock as reported by the
Nasdaq Global Market on the date of the grant.
In fiscal 2008, the equity awards we granted to our executive
officers consisted primarily of restricted stock units of two
types: performance-based restricted stock units and time-based
restricted stock units. Each restricted stock unit is a
contractual right which entitles the holder to receive, upon its
vesting, one share of our common stock. Additionally, our Chief
Executive Officer was granted stock options.
Performance-based restricted stock units are generally unvested
on the date of grant and are subject to both performance-based
vesting conditions as well as a time-based vesting schedule. The
restricted stock units underlying each award must be earned
pursuant to the performance-based criteria determined by the
Compensation Committee and set forth in the applicable
restricted stock unit agreement. Once earned, and provided that
the holder continues to be employed by us, performance-based
restricted stock units then vest over time, typically four
years, with 25% of the earned units vesting on each anniversary
of the date of grant (or such other date as determined by the
Compensation Committee) so that the award is fully vested on the
fourth anniversary of the date of grant.
At the time of the initial performance-based grant, the
Compensation Committee sets the maximum number of units subject
to each award. The actual number of units earned is dependent on
our achievement of adjusted operating profit threshold and
adjusted revenue goals for the fiscal year in which the award is
granted. Each award terminates, unvested, if we do not achieve
an adjusted operating profit threshold for the year in which the
unit was granted, as defined in the award agreement. However, if
the adjusted operating profit threshold is met, then the holder
is eligible to earn up to the maximum number of restricted stock
units underlying the award. The final determination of the
number of earned restricted stock units is based on our adjusted
revenue for the fiscal year in which the award is granted. If
our adjusted revenue equals or exceeds the target specified in
the award, then the holder earns the maximum number of units
subject to the award. If our adjusted revenue is greater than
80% but less than 100% of the specified target, then the holder
earns a percentage of the maximum number of units based on a
schedule specified in the agreement. If our adjusted revenue
does not exceed 80% of the target, no restricted stock units are
earned. All performance-based units that are earned are then
subject to time-based vesting and, upon vesting, entitle the
holder to receive an equivalent number of shares of our common
stock. The performance-based awards, to the extent earned, will
vest in full in the event that we achieve revenue in any
calendar year ending prior to the last vesting date of the
awards that exceeds a threshold amount, specified in the awards,
that is substantially in excess of our 2008 revenue.
Time-based restricted stock units vest in installments based
solely upon the lapse of time, provided that the holder
continues to be employed by us. The time-based restricted stock
units granted to our executive officers in 2008 vested 25% on
March 6, 2009, and will vest 25% on each of March 6,
2010, March 6, 2011, and March 6, 2012, provided that
the executive is an employee of ours on each of those dates.
25
All our restricted stock unit agreements provide that at the
time any underlying shares of our common stock become issuable
to the holder upon vesting, we may elect either to withhold from
the holder, or to cause to be issued to the holder and sold in
the open market, a sufficient number of shares to satisfy the
holders minimum tax withholding obligations.
In addition to the restricted stock units that we awarded to our
named executive officers in 2008, we also awarded to our Chief
Executive Officer in March 2008 a stock option to purchase an
aggregate of 200,000 shares of our common stock which vests
over a period of four years.
Other
Compensation
The amounts shown in the Summary Compensation Table under the
heading Other Compensation represent the value of
other compensation received, including company-paid medical,
dental, life and other insurance premiums.
Pension
Benefits
We do not provide pension arrangements or post-retirement health
coverage for our executives or employees. Our executive officers
are eligible to participate in our 401(k) contributory defined
contribution plan. In any plan year, we may contribute to each
participant a matching contribution equal to up to 50% of the
first 6% of the participants compensation that has been
contributed to the plan, up to the maximum matching contribution
permitted under the Internal Revenue Regulations. All our
executive officers (excluding our Chief Financial Officer)
participated in our 401(k) plan during fiscal 2008 and received
matching contributions. We do not provide any nonqualified
defined contribution or other deferred compensation plans.
Health
Benefits
We maintain broad-based benefits that are provided to all
employees, including health and dental insurance, life and
disability insurance, a 401(k) plan, an employee assistance
plan, and standard company holidays. We believe that it is
better to support executives and employees in preventative
measures rather than to provide only for coverage for diagnosis
and treatment of illness. We pursue this goal through a number
of methods, such as reimbursements for physicals, fitness
rooms/subsidy on health club memberships and monthly wellness
programs. We enjoy a very high enrollment in our medical plan
and have managed to keep the increase in premiums below 2%
annually in recent years. We believe that one of the most
effective ways to attract and retain valuable executives is to
provide benefits that help them to properly maintain their
health.
Chief
Executive Officer Compensation
In recommending the compensation of our Chief Executive Officer,
the Compensation Committee considered the same factors and
followed the same process as it did for our other named
executive officers. In April 2008, we set our Chief Executive
Officers annual base salary at $400,000, an increase of
approximately 14% from his salary of $350,000 in 2007. We
awarded our
26
Chief Executive Officer cash incentive payments under the 2008
Compensation Plan totaling $286,200, which represented 82% of
his target non-equity incentive payment.
Summary
Compensation Table
The following table provides information with respect to the
annual and long-term compensation earned during the years ended
December 31, 2008 and December 31, 2007 by the
following persons, who are referred to as our named executive
officers:
|
|
|
|
|
Robert D. Burke, our Chief Executive Officer;
|
|
|
|
Julie M.B. Bradley, our Chief Financial Officer;
|
|
|
|
Kenneth Z. Volpe, Barry E. Clark and Lou Frio, our three other
most highly compensated executive officers who were in office on
December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Incentive Plan
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Compensation
|
|
Total
|
Name and Principal Position
|
|
Year
|
|
Salary($)
|
|
Bonus($)
|
|
($)(1)(2)
|
|
($)(1)(3)
|
|
($)(4)
|
|
($)(5)
|
|
($)
|
|
Robert D. Burke
|
|
|
2008
|
|
|
$
|
387,308
|
|
|
|
|
|
|
$
|
338,722
|
|
|
$
|
289,508
|
|
|
$
|
286,200
|
|
|
$
|
15,778
|
|
|
$
|
1,317,516
|
|
President and Chief
Executive Officer
|
|
|
2007
|
|
|
|
350,000
|
|
|
|
|
|
|
|
206,399
|
|
|
|
251,775
|
|
|
|
174,125
|
|
|
|
15,284
|
|
|
|
997,583
|
|
Julie M.B. Bradley
|
|
|
2008
|
|
|
|
244,923
|
|
|
|
|
|
|
|
158,947
|
|
|
|
102,500
|
|
|
|
118,560
|
|
|
|
11,415
|
|
|
|
636,345
|
|
Senior Vice President,
Chief Financial Officer,
Treasurer and Secretary
|
|
|
2007
|
|
|
|
230,000
|
|
|
|
|
|
|
|
48,766
|
|
|
|
101,661
|
|
|
|
94,175
|
|
|
|
8,890
|
|
|
|
483,492
|
|
Barry E. Clark
|
|
|
2008
|
|
|
|
227,461
|
|
|
|
50,000
|
|
|
|
197,731
|
|
|
|
88,128
|
|
|
|
238,900
|
|
|
|
18,782
|
|
|
|
821,002
|
|
Senior Vice President of
Worldwide Sales
|
|
|
2007
|
|
|
|
220,000
|
|
|
|
15,000
|
|
|
|
60,958
|
|
|
|
142,848
|
|
|
|
234,947
|
|
|
|
18,004
|
|
|
|
691,757
|
|
Lou Frio
|
|
|
2008
|
|
|
|
230,000
|
|
|
|
20,000
|
|
|
|
158,947
|
|
|
|
134,783
|
|
|
|
51,860
|
|
|
|
18,819
|
|
|
|
614,410
|
|
Senior Vice President of
Services
|
|
|
2007
|
|
|
|
230,000
|
|
|
|
3,600
|
|
|
|
49,404
|
|
|
|
96,387
|
|
|
|
58,781
|
|
|
|
18,292
|
|
|
|
456,464
|
|
Kenneth Z. Volpe
|
|
|
2008
|
|
|
|
247,461
|
|
|
|
|
|
|
|
171,298
|
|
|
|
119,632
|
|
|
|
113,760
|
|
|
|
18,085
|
|
|
|
670,236
|
|
Senior Vice President of
Products and Technology
|
|
|
2007
|
|
|
|
240,000
|
|
|
|
|
|
|
|
60,958
|
|
|
|
150,525
|
|
|
|
93,675
|
|
|
|
16,978
|
|
|
|
562,136
|
|
|
|
|
(1) |
|
The amount shown does not reflect compensation actually received
by the named executive officer. Instead, the amount shown
represents the compensation expense recognized in our financial
statements for 2008 in respect of grants of restricted stock
units and stock options to the named executive officer. The
amount shown was computed in accordance with the provisions of
Statement of Financial Accounting Standards, referred to as
SFAS, No. 123R, Share-Based Payment, except
that pursuant to the applicable SEC rules, the amount shown
excludes the impact of estimated forfeitures related to
services-based vesting conditions. The specific assumptions used
in the valuation of these awards are described below in the
following footnotes. See Notes 1(p) and 5 of the
consolidated financial statements in our annual report on
Form 10-K
for the year ended December 31, 2008 regarding assumptions
underlying the valuation of stock awards. |
|
(2) |
|
Represents the compensation expense attributable to stock-based
awards in the form of restricted stock and restricted stock
units. The fair value of the restricted stock and restricted |
27
|
|
|
|
|
stock units is based on the market value of our common stock
price on the date of grant. Stock-based compensation expense
related to restricted stock shares and restricted stock units is
being recognized on a straight-line basis over the requisite
service period. The restricted stock grants provide the holder
with shares of our common stock, which are restricted as to sale
and subject to forfeiture until vesting. The restricted stock
units provide the holder with the right to receive shares of ATG
common stock upon vesting. |
|
(3) |
|
Represents the compensation expense attributable to stock
options. Key assumptions include: risk-free interest rate,
expected life of the option, expected stock price volatility and
expected dividend yield. The specific assumptions used in the
valuation of these stock options are summarized in the table
below: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expected Dividend
|
Grant Date
|
|
Risk Free Rate
|
|
Expected Life
|
|
Expected Volatility
|
|
Yield
|
|
3/24/08
|
|
3.31%
|
|
6.25 Years
|
|
93.87%
|
|
0.00%
|
7/23/07
|
|
4.93%
|
|
6.25 Years
|
|
85.33%
|
|
0.00%
|
10/10/06
|
|
4.69%
|
|
6.25 Years
|
|
109%
|
|
0.00%
|
2/28/06
|
|
4.55%
|
|
6.25 Years
|
|
114%
|
|
0.00%
|
7/18/05
|
|
3.93%
|
|
4 Years
|
|
93.50%
|
|
0.00%
|
1/27/05
|
|
3.62%
|
|
4 Years
|
|
93.50%
|
|
0.00%
|
1/25/05
|
|
3.62%
|
|
4 Years
|
|
93.50%
|
|
0.00%
|
8/30/04
|
|
3.27%
|
|
4 Years
|
|
97%
|
|
0.00%
|
2/19/04
|
|
2.59%
|
|
4 Years
|
|
110%
|
|
0.00%
|
1/30/04
|
|
2.59%
|
|
4 Years
|
|
110%
|
|
0.00%
|
12/2/03
|
|
3.24%
|
|
4 Years
|
|
110%
|
|
0.00%
|
4/21/03
|
|
2.57%
|
|
4 Years
|
|
117%
|
|
0.00%
|
3/3/03
|
|
2.91%
|
|
4 Years
|
|
125%
|
|
0.00%
|
1/2/03
|
|
2.91%
|
|
4 Years
|
|
125%
|
|
0.00%
|
12/5/02
|
|
3.01%
|
|
4 Years
|
|
125%
|
|
0.00%
|
8/29/02
|
|
3.36%
|
|
4 Years
|
|
125%
|
|
0.00%
|
1/8/02
|
|
4.46%
|
|
4 Years
|
|
125%
|
|
0.00%
|
|
|
|
(4) |
|
Represents payments made under our 2007 and 2008 Executive
Management Compensation Plans. |
|
(5) |
|
All Other Compensation is comprised of the
company-paid health, dental and other insurance programs and/or
the companys 401(k) match. Perquisites and other personal
benefits, if any, have been excluded because they did not exceed
$10,000 in the aggregate for any named executive officer. |
28
Grants of
Plan-Based Awards for 2008
The following table provides information about stock awards and
non-equity incentive awards granted to our named executive
officers during the year ended December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Target
|
|
|
All Other Stock
|
|
|
|
|
|
|
|
|
|
|
|
Payouts Under
|
|
|
Awards: Number
|
|
|
Exercise or Base
|
|
|
Grant Date
|
|
|
|
|
|
Non-Equity
|
|
|
of Securities
|
|
|
Price of
|
|
|
Fair Value
|
|
|
|
|
|
Incentive Awards
|
|
|
Underlying
|
|
|
Stock Awards
|
|
|
of Stock
|
|
Name
|
|
Grant Date
|
|
Target ($)(1)
|
|
|
Stock Awards (#)(2)
|
|
|
($/Sh)
|
|
|
Awards ($)
|
|
|
Robert D. Burke
|
|
March 10, 2008
|
|
$
|
300,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 24, 2008
|
|
|
|
|
|
|
200,000
|
(3)
|
|
|
|
|
|
$
|
732,000
|
(4)
|
|
|
March 24, 2008
|
|
|
|
|
|
|
200,000
|
(5)
|
|
$
|
3.66
|
|
|
|
504,420
|
(6)
|
Julie M.B. Bradley
|
|
March 3, 2008
|
|
|
120,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 24, 2008
|
|
|
|
|
|
|
60,000
|
(3)
|
|
|
|
|
|
|
219,600
|
(4)
|
|
|
March 24, 2008
|
|
|
|
|
|
|
50,000
|
(7)
|
|
|
|
|
|
|
183,000
|
(4)
|
Barry E. Clark
|
|
March 3, 2008
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 24, 2008
|
|
|
|
|
|
|
60,000
|
(3)
|
|
|
|
|
|
|
219,600
|
(4)
|
|
|
March 24, 2008
|
|
|
|
|
|
|
70,000
|
(7)
|
|
|
|
|
|
|
256,200
|
(4)
|
Lou Frio
|
|
March 3, 2008
|
|
|
80,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 24, 2008
|
|
|
|
|
|
|
60,000
|
(3)
|
|
|
|
|
|
|
219,600
|
(4)
|
|
|
March 24, 2008
|
|
|
|
|
|
|
50,000
|
(7)
|
|
|
|
|
|
|
183,000
|
(4)
|
Kenneth Z. Volpe
|
|
March 3, 2008
|
|
|
120,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 24, 2008
|
|
|
|
|
|
|
60,000
|
(3)
|
|
|
|
|
|
|
219,600
|
(4)
|
|
|
March 24, 2008
|
|
|
|
|
|
|
50,000
|
(7)
|
|
|
|
|
|
|
183,000
|
(4)
|
|
|
|
(1) |
|
Represents the target bonus payouts for 2008 for our 2008
Compensation Plan. There are no minimum or maximum payments
under the plan. |
|
(2) |
|
Except as set forth in note 5 below, represents restricted
stock units awarded under our Amended and Restated 1996 Stock
Option Plan. Each restricted stock unit is a contractual right
which entitles the holder to receive, upon its vesting, one
share of our common stock. |
|
(3) |
|
Represents time-based restricted stock units that vest in
installments based solely upon the lapse of time. These units
vest in four equal annual installments, starting on
March 6, 2009 and on each of the three succeeding
anniversaries of that date, provided that the executive is then
employed by us. |
|
(4) |
|
The amount shown does not reflect compensation actually received
by the executive, but represents the fair value of the
restricted stock units on the date of grant determined in
accordance with SFAS 123R based on the closing price of our
common stock price on that date. |
|
(5) |
|
Represents stock options that vest in sixteen equal quarterly
installments beginning on the three-month anniversary of the
date of grant, for as long as Mr. Burke is employed by us. |
|
(6) |
|
The amount shown does not reflect compensation actually received
by Mr. Burke, but represents the grant date fair value of
this stock option award, determined in accordance with
SFAS 123R. |
29
|
|
|
(7) |
|
Represents performance-based restricted stock units, which are
unvested on the date of grant and are subject to both
performance-based vesting conditions as well as a time-based
vesting schedule. Based on our financial performance in 2008,
only 89% of the performance-based component of each award was
earned. The earned portion vests in four equal annual
installments, starting on March 6, 2009 and on each of the
three succeeding anniversaries of that date, provided that the
executive is then employed by us. |
The performance-based restricted stock units we granted in 2008
were unvested on the date of grant and are subject to both
performance-based vesting conditions as well as a time-based
vesting schedule. The restricted stock units underlying each
performance-based award must be earned pursuant to criteria set
forth in the applicable restricted stock unit agreement. To the
extent earned, and provided that the holder continues to be
employed by us, the performance-based restricted stock units
vest over four years, with 25% of the earned units vesting on
each anniversary of the date of grant. The number of units
earned is dependent on our achievement of adjusted operating
profit threshold and adjusted revenue goals for the fiscal year
in which the award is granted. If the adjusted operating profit
threshold is met, then the holder is eligible to earn up to the
maximum number of restricted stock units underlying the award.
If our adjusted revenue equals or exceeds the target specified
in the award, then the holder earns the maximum number of units
subject to the award. If our adjusted revenue is greater than
80% but less than 100% of the specified target, then the holder
earns a percentage of the maximum number of units based on a
schedule specified in the agreement. If our adjusted operating
profit does not exceed 50% of the stated target, or if our
adjusted revenue does not exceed 80% of the stated target, no
restricted stock units are earned. All performance-based units
that are earned are then subject to time-based vesting and, upon
vesting, entitle the holder to receive an equivalent number of
shares of our common stock. The performance-based awards, to the
extent earned, will vest in full in the event that we achieve
revenue in any calendar year ending prior to the last vesting
date of the awards that exceeds a threshold amount set forth in
the awards. This revenue threshold is an amount substantially in
excess of either our 2008 revenue.
The time-based restricted stock units we granted in 2008 vest in
installments based solely upon the lapse of time, provided that
the holder continues to be employed by us.
Employment
Contracts, Termination of Employment and Change in Control
Arrangements
On April 14, 2008 we further amended and restated the
Amended and Restated Employment Agreement with Robert D. Burke,
our President and Chief Executive Officer. The amended and
restated agreement amends our prior letter agreement with
Mr. Burke, dated December 4, 2002, amended on
March 28, 2003 and amended and restated on November 8,
2004, and provides for severance benefits in the event his
employment is terminated under specified circumstances. This
agreement provides that if we terminate his employment without
cause or if he resigns for good reason, we will continue to pay
his base salary and all employee benefits for the
18-month
period following his termination in addition to any accrued
obligations, such as any annual cash incentive compensation
earned for our most recently completed fiscal year and not yet
paid, his base salary through the date of termination, any
deferred compensation and any accrued vacation pay. Among
30
other events that constitute good reason for
Mr. Burkes resignation is a change in control that
results in our no longer having a publicly traded class of
securities or our no longer being subject to reporting
requirements under the Securities Exchange Act of 1934. The
change in control provisions in Mr. Burkes amended
and restated agreement provide that in the event of a change in
control if we terminate his employment without cause or if he
resigns for good reason, in either event within eighteen months
of such change in control, Mr. Burke will receive:
|
|
|
|
|
his pro-rated target bonus in the year in which the termination
occurs,
|
|
|
|
base salary and health benefits for eighteen months, and
|
|
|
|
one and a half times the target bonus paid over the same
eighteen month period based on Mr. Burkes
then-current target bonus.
|
The agreement also provides that upon a change in control, all
of Mr. Burkes outstanding stock options and other
stock awards will vest in full. In addition, upon such change in
control, we will pay Mr. Burke the amount, if any,
necessary to compensate him for any excise taxes that he may owe
under Section 4999 of the Internal Revenue Code of 1986 as
a result of payments we make to him in connection with the
change in control.
On July 6, 2005, Julie M.B. Bradley accepted our offer
letter to become our Chief Financial Officer. The offer letter
provided that Ms. Bradley would receive an annual salary of
$230,000 and be eligible for potential annual cash incentive
compensation of $80,000 annually. In 2006,
Ms. Bradleys annual cash incentive compensation plan
was amended so that she would be eligible for potential on
target annual cash incentive compensation of $100,000. In March
2008, Ms. Bradleys annual executive compensation plan
was amended from a $230,000 annual base salary to a $250,000
annual base salary. Additionally, her target annual cash
incentive compensation was raised to $120,000.
Our General Change in Control Policy was amended by our board of
directors in March 2008. As a result of the amendment, the
policy is only applicable to general employees and a separate
policy has been created for our vice presidents. Each of
Ms. Bradley and our senior vice presidents and other
executives reporting directly to our Chief Executive Officer,
entered into Change in Control Agreements on April 18,
2008. The agreements provide that upon a change in control, 50%
of the executives outstanding stock options and other
stock awards will automatically vest. In addition, upon a change
in control and either our termination of the executive without
cause or termination by the executive due to good reason, within
twelve months of the change in control, the executive will
receive:
|
|
|
|
|
his or her pro-rated target bonus in the year the termination
occurs,
|
|
|
|
base salary and benefits for twelve months,
|
|
|
|
a target bonus for the same twelve month period based on the
executives current target bonus, and
|
|
|
|
an acceleration of
his/her
remaining unvested stock awards.
|
31
Had a change in control occurred on December 31, 2008 and
had their employment been terminated by us without cause or by
the individual for good reason (as defined in the Change of
Control Agreements) on December 31, 2008, under the terms
of the agreements as amended on April 14, 2008, the named
executive officers would have been eligible to receive the
payments set forth in the table below.
Payments
Resulting from a Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity as of
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary and
|
|
|
December 31 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
upon a Change of
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
|
|
|
Control
|
|
|
|
|
|
Outplacement
|
|
|
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
Benefits ($)
|
|
|
Services ($)
|
|
|
Total ($)
|
|
|
Robert D. Burke
|
|
$
|
1,475,000
|
(1)
|
|
$
|
1,577,150
|
(3)
|
|
$
|
15,778
|
|
|
$
|
15,000
|
|
|
$
|
3,082,928
|
|
Julie M.B. Bradley
|
|
|
550,000
|
(2)
|
|
|
477,485
|
(4)
|
|
|
11,415
|
|
|
|
15,000
|
|
|
|
1,053,900
|
|
Barry E. Clark
|
|
|
855,000
|
(2)
|
|
|
562,989
|
(4)
|
|
|
18,782
|
|
|
|
15,000
|
|
|
|
1,451,771
|
|
Lou Frio
|
|
|
480,000
|
(2)
|
|
|
317,485
|
(4)
|
|
|
18,819
|
|
|
|
15,000
|
|
|
|
831,304
|
|
Kenneth Z. Volpe
|
|
|
550,000
|
(2)
|
|
|
539,960
|
(4)
|
|
|
18,085
|
|
|
|
15,000
|
|
|
|
1,123,045
|
|
|
|
|
(1) |
|
Consists of (a) eighteen (18) months of
Mr. Burkes annual base salary for 2008, (b) a
pro-rated target bonus for 2008 and (c) a payment of one
and a half times the target bonus for 2008. |
|
(2) |
|
Consists of (a) twelve (12) months of the named
executive officers annual base salary for 2008, (b) a
pro-rated target bonus for 2008 and (c) a payment equal to
the target bonus for 2008. |
|
(3) |
|
Represents the value of all vested and outstanding long-term
incentive awards (both options and restricted stock units),
based on a stock price of $1.93 (the closing price of the
Companys common stock on the Nasdaq Stock Market on
December 31, 2008). Pursuant to Mr. Burkes
Amended and Restated Employment Agreement, all unvested options
and restricted stock units would accelerate upon the assumed
change in control. |
|
(4) |
|
Represents the value of all vested and outstanding long-term
incentive awards (both options and restricted stock units),
based on a stock price of $1.93 (the closing price of the
Companys common stock on the Nasdaq Stock Market on
December 31, 2008). Pursuant to the named executive
officers change in control agreements, all unvested
options and restricted stock units would accelerate upon an
assumed change in control and termination without cause by ATG
or by the individual for good reason (as defined in the
agreements). |
32
Outstanding
Equity Awards at Fiscal Year-End for 2008
The following table provides information about outstanding
equity awards, consisting of unexercised stock options and
unvested restricted stock awards and restricted stock units,
that were held by our named executive officers at
December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
Number of Shares
|
|
|
Market Value
|
|
|
Market Value
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
or Units
|
|
|
or Units
|
|
|
of Shares or
|
|
|
of Shares or
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
of Stock
|
|
|
of Stock
|
|
|
Units of Stock
|
|
|
Units of Stock
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option Exercise
|
|
|
|
|
|
that have
|
|
|
that have
|
|
|
that have
|
|
|
that have not
|
|
|
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Price
|
|
|
Option Expiration
|
|
|
vested
|
|
|
not vested
|
|
|
vested
|
|
|
vested
|
|
|
Date of Grant of
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
(#)
|
|
|
($)(5)
|
|
|
($)(6)
|
|
|
Stock Award
|
|
|
Robert D. Burke
|
|
|
37,500
|
|
|
|
162,500
|
|
|
$
|
3.66
|
|
|
|
3/24/2018
|
(1)
|
|
|
|
|
|
|
200,000
|
|
|
|
|
|
|
$
|
386,000
|
|
|
|
3/24/2008
|
|
|
|
|
137,500
|
|
|
|
62,500
|
|
|
|
2.93
|
|
|
|
2/28/2016
|
(1)
|
|
|
75,000
|
|
|
|
225,000
|
|
|
$
|
144,750
|
|
|
|
434,250
|
|
|
|
4/12/2007
|
(4)
|
|
|
|
247,812
|
|
|
|
17,188
|
|
|
|
1.27
|
|
|
|
1/27/2015
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
225,000
|
|
|
|
|
|
|
|
1.57
|
|
|
|
1/30/2014
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
400,000
|
|
|
|
|
|
|
|
1.29
|
|
|
|
1/2/2013
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000
|
|
|
|
|
|
|
|
1.44
|
|
|
|
12/5/2012
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Julie M. B. Bradley
|
|
|
58,437
|
|
|
|
26,563
|
|
|
|
2.93
|
|
|
|
2/28/2016
|
(1)
|
|
|
|
|
|
|
104,500
|
|
|
|
|
|
|
|
201,685
|
|
|
|
3/24/2008
|
(5)
|
|
|
|
153,125
|
|
|
|
46,875
|
|
|
|
1.13
|
|
|
|
7/18/2015
|
(3)
|
|
|
20,000
|
|
|
|
60,000
|
|
|
|
38,600
|
|
|
|
115,800
|
|
|
|
4/12/2007
|
(4)
|
Barry E. Clark
|
|
|
61,875
|
|
|
|
28,125
|
|
|
|
2.93
|
|
|
|
2/28/2016
|
(1)
|
|
|
|
|
|
|
122,300
|
|
|
|
|
|
|
|
236,039
|
|
|
|
3/24/2008
|
(5)
|
|
|
|
93,749
|
|
|
|
6,251
|
|
|
|
1.26
|
|
|
|
1/25/2015
|
(1)
|
|
|
25,000
|
|
|
|
75,000
|
|
|
|
48,250
|
|
|
|
144,750
|
|
|
|
4/12/2007
|
(4)
|
|
|
|
240,000
|
|
|
|
|
|
|
|
1.45
|
|
|
|
2/19/2014
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lou Frio
|
|
|
68,749
|
|
|
|
96,251
|
|
|
|
2.85
|
|
|
|
7/5/2016
|
(3)
|
|
|
|
|
|
|
104,500
|
|
|
|
|
|
|
|
201,685
|
|
|
|
3/24/2008
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
60,000
|
|
|
|
38,600
|
|
|
|
115,800
|
|
|
|
4/12/2007
|
(4)
|
Kenneth Z. Volpe
|
|
|
89,375
|
|
|
|
40,625
|
|
|
|
2.93
|
|
|
|
2/28/2016
|
(1)
|
|
|
|
|
|
|
104,500
|
|
|
|
|
|
|
|
201,685
|
|
|
|
3/24/2008
|
(5)
|
|
|
|
93,749
|
|
|
|
6,251
|
|
|
|
1.26
|
|
|
|
1/25/2015
|
(1)
|
|
|
25,000
|
|
|
|
75,000
|
|
|
|
48,250
|
|
|
|
144,750
|
|
|
|
4/12/2007
|
(4)
|
|
|
|
75,000
|
|
|
|
|
|
|
|
0.96
|
|
|
|
8/30/2014
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
1.57
|
|
|
|
1/30/2014
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
1.63
|
|
|
|
11/13/2013
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,250
|
|
|
|
|
|
|
|
0.91
|
|
|
|
4/21/2013
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
|
|
|
|
3.90
|
|
|
|
1/8/2012
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
2.13
|
|
|
|
8/3/2011
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000
|
|
|
|
|
|
|
|
9.31
|
|
|
|
5/2/2011
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,266
|
|
|
|
|
|
|
|
4.78
|
|
|
|
4/9/2011
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
78.00
|
|
|
|
10/18/2010
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
19.03
|
|
|
|
10/1/2009
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000
|
|
|
|
|
|
|
|
5.00
|
|
|
|
7/19/2009
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
This stock option vests in sixteen equal quarterly installments
beginning on the three-month anniversary of the date of grant. |
|
(2) |
|
This stock option is fully vested. |
|
(3) |
|
25% of the shares subject to this stock option vest one year
after the grant date, and the remaining shares vest in twelve
equal quarterly installments thereafter. |
|
(4) |
|
These restricted stock units were granted on April 12, 2007
and vest at a rate of 25% per year, commencing on May 12,
2008. |
|
(5) |
|
These restricted stock units were granted on March 24, 2008
and vest at a rate of 25% per year, commencing on March 6,
2009. |
|
(6) |
|
The value is based on the closing sale price for our common
stock as reported by the Nasdaq Stock Market on
December 31, 2008, which was $1.93. |
33
Stock
Option Exercises and Stock Vested for 2008
The following table provides information about stock option
exercises by our named executive officers as well as vesting of
restricted stock units held by them during the year ended
December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
Value Realized
|
|
|
Number of Shares
|
|
|
Value Realized
|
|
|
|
Acquired
|
|
|
on Exercise
|
|
|
Acquired
|
|
|
on Vesting
|
|
Name
|
|
on Exercise (#)
|
|
|
($)
|
|
|
on Vesting (#)
|
|
|
($)(4)
|
|
|
Robert D. Burke
|
|
|
|
|
|
|
|
|
|
|
75,000
|
|
|
$
|
247,500
|
|
Julie M.B. Bradley
|
|
|
50,000
|
|
|
$
|
147,500
|
(1)
|
|
|
20,000
|
|
|
|
66,000
|
|
Barry E. Clark
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
82,500
|
|
Lou Frio
|
|
|
55,000
|
|
|
|
67,650
|
(2)
|
|
|
20,000
|
|
|
|
66,000
|
|
Kenneth Z. Volpe
|
|
|
50,000
|
|
|
|
156,000
|
(3)
|
|
|
25,000
|
|
|
|
82,500
|
|
|
|
|
(1) |
|
The estimated value realized upon exercise is calculated based
on the difference between the closing market price of our common
stock on the date of exercise, August 20, 2008, at $4.08,
and the $1.13 exercise price of the exercised options. |
|
(2) |
|
The estimated value realized upon exercise is calculated based
on the difference between the closing market price of our common
stock on the date of exercise, September 2, 2008 at $4.08,
and the $2.85 exercise price of the exercised option. |
|
(3) |
|
The estimated value realized upon exercise is calculated based
on the difference between the closing market price of our common
stock on the date of exercise, August 21, 2008 at $4.08,
and the $0.96 exercise price of the exercised option. |
|
(4) |
|
The value realized on the vesting of restricted stock units is
the number of shares that vested multiplied by the closing price
of our common stock on the Nasdaq Stock Market on the date of
vesting, May 12, 2008 at $3.30. This calculation does not
account for shares withheld for tax purposes, but rather refers
to the gross value realized. |
Director
Compensation
Overview
and Compensation Philosophy
We stress many of the same areas of importance with director
compensation as with executive compensation, including the
desire to attract top talent and retain that talent with
competitive and fair compensation within our peer group. We also
reimburse directors living outside of the greater Boston area
for travel and living expenses for attending regular board
meetings and committee meetings.
34
Benchmarking
In 2008, the Compensation Committee engaged the consulting firm
Towers Perrin to provide a benchmarking analysis of the
compensation of our directors against data from our seventeen
peer group companies, identified above in the Executive
Compensation Benchmarking section.
Competitive pay data was ascertained using the most recent
annual proxy statements for such companies. Towers Perrin
determined that the current annual total compensation (including
both cash compensation and the value of annual stock
compensation) of our directors is well-aligned with the peer
groups fiftieth percentile.
We use this benchmarking data to evaluate our compensation plan
for our directors. The revisions to our Non-Employee Director
Compensation Plan effective in 2009, discussed below, reflect
the recommendations by Towers Perrin, along with our
Compensation Committee, with the aim of maintaining a desirable
competitive pay position compared with our peers. The goal of
the board of directors was to set the Companys director
compensation for 2009 at
50-60% of
the 2007 peer group median since director compensation for 2009
was expected to increase over the compensation paid in 2007.
Other than Towers Perrin, we did not retain any compensation
consultant to review our policies and procedures relating to
director compensation in 2008 or 2009. We expect that our
Compensation Committee will continue to engage either Towers
Perrin or another compensation consulting firm to provide advice
as to director compensation.
Director
Compensation Plan
Our board of directors adopted our Non-Employee Director
Compensation Plan (the Director Compensation Plan)
on July 19, 2005, as amended most recently on
September 16, 2008. The purpose of the Director
Compensation Plan is to advance the interests of our
stockholders by enhancing our ability to attract, retain and
motivate our outside directors by providing them with
compensation and equity ownership that is intended to better
align their interests with those of the companys
stockholders. Only non-employee directors are eligible for
awards under this plan.
Under the Director Compensation Plan, in fiscal 2008 we
compensated our non-employee directors as follows:
|
|
|
|
|
We paid an annual cash retainer of $10,000 to each of our
non-employee directors.
|
|
|
|
To compensate the Chair of the Board of Directors and committee
chairpersons for the additional work imposed by these roles, we
provided an additional annual retainer of $7,500 to the chairman
of the board and each non-employee committee chairperson.
|
|
|
|
We made additional payments to each non-employee director for
attending meetings of the board of directors and committees of
the board as follows: $1,500 for each in-person meeting of the
board, $1,000 for each in-person meeting of a committee of the
board and $500 for each teleconference meeting of the board or a
committee of the board.
|
|
|
|
On the date of our 2008 Annual Meeting of Stockholders, we
granted restricted stock units to each of our continuing
non-employee directors under our Amended and Restated 1999
|
35
|
|
|
|
|
Outside Director Stock Option Plan (the Director Stock
Plan). Each non-employee director received 25,000
restricted stock units. These restricted stock awards vest in
their entirety one year after the date of grant. Pursuant to the
terms of the grant, these restricted stock units will vest fully
upon a change in control.
|
Pursuant to the September 16, 2008 revisions to the
Director Compensation Plan, in fiscal 2009 the Company will
compensate our non-employee directors as follows:
|
|
|
|
|
We will pay an annual cash retainer of $15,000 to each of our
non-employee directors.
|
|
|
|
To compensate for the additional work imposed by these roles, we
will provide the Chair of the Board of Directors and the Chair
of the Audit Committee an additional annual retainer of $10,000
each, and we will provide the Chair of the Nominating and
Governance Committee and the Chair of the Compensation Committee
an additional annual retainer of $7,500 each.
|
|
|
|
We will make additional payments to each non-employee director
for attending meetings of the Board of Directors and committees
of the board as follows: $2,000 for each meeting of the board,
and $1,000 for each meeting of a committee of the board.
|
|
|
|
Our non-employee directors will also receive a restricted stock
unit grant of 28,000 shares of our common stock on the date
of our Annual Meeting of Stockholders, and on such other date on
which a non-employee director is first elected. The restricted
stock unit grant will vest after one year beginning from the
time of the grant. All restricted stock units granted to
non-employee directors after the 2007 Annual Meeting of
Stockholders will vest fully upon a change of control.
|
Non-Employee
Director Compensation Table for Fiscal 2008
The following table summarizes the compensation earned by our
non-employee directors during the year ended December 31,
2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
Fees Earned
|
|
|
Stock
|
|
|
Option
|
|
|
Non-Equity
|
|
|
Deferred
|
|
|
All Other
|
|
|
|
|
|
|
or Paid in
|
|
|
Awards
|
|
|
Awards
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Total
|
|
Name
|
|
Cash ($)(1)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
Compensation
|
|
|
Earnings
|
|
|
($)
|
|
|
($)
|
|
|
Michael A. Brochu
|
|
$
|
26,500
|
|
|
$
|
75,333
|
|
|
$
|
9,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
111,398
|
|
David B. Elsbree
|
|
|
36,500
|
|
|
|
75,333
|
|
|
|
9,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
121,398
|
|
John R. Held
|
|
|
32,500
|
|
|
|
75,333
|
|
|
|
9,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
117,398
|
|
Ilene H. Lang
|
|
|
24,000
|
|
|
|
75,333
|
|
|
|
9,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
108,898
|
|
Mary E. Makela
|
|
|
45,000
|
|
|
|
75,333
|
|
|
|
9,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
129,898
|
|
Daniel C. Regis
|
|
|
36,500
|
|
|
|
75,333
|
|
|
|
9,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
121,398
|
|
Phyllis S. Swersky
|
|
|
40,000
|
|
|
|
75,333
|
|
|
|
9,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
124,898
|
|
36
|
|
|
(1) |
|
Includes $10,000 annual retainer and fees earned in 2008 for
attendance at board or committee meetings. Also includes an
additional annual retainer of $7,500 to each of
Messrs. Regis and Elsbree and Mses. Makela and Swersky for
service as chairperson of the board or a committee of the board. |
|
(2) |
|
The amount shown does not reflect compensation actually received
by the non-employee director. Instead, the amount shown reflects
the compensation expense recognized in our financial statements
for 2008 including the grant of restricted stock awards and
restricted stock units to each non-employee director under the
Director Stock Plan. These amounts were calculated utilizing the
provisions of SFAS No. 123R, using a grant date fair value,
as indicated below, based on the fair market value of our common
stock on the date of grant. Pursuant to the applicable SEC
rules, the amount shown excludes the impact of estimated
forfeitures related to service-based vesting conditions. The
fair value of the restricted stock and restricted stock units is
based on the market value of our common stock price on the date
of grant. Stock-based compensation expense related to restricted
stock shares and restricted stock units is being recognized on a
straight-line basis over the requisite service period. The
restricted stock grants provide the holder with shares of our
stock, which are restricted as to sale and subject to forfeiture
until vesting. The restricted stock units provide the holder
with the right to receive shares of our stock upon vesting. |
|
(3) |
|
The amount shown does not reflect compensation actually received
by the non-employee director. Instead, the amount shown reflects
the compensation expense recognized in our financial statements
for 2008 including the vesting of stock options issued held by
each non-employee director under the Director Stock Plan. These
amounts were calculated utilizing the provisions of
SFAS No. 123R, using a grant date fair value, as
indicated below, based on the fair market value of our common
stock on the date of grant. Pursuant to the applicable SEC
rules, the amount shown excludes the impact of estimated
forfeitures related to service-based vesting conditions. The
specific assumptions used in the valuation of these awards are
described below. Key assumptions include: risk-free interest
rate, expected life of the option, expected stock price
volatility and expected dividend yield. |
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Grant Date
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Risk Free Rate
|
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Expected Life
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Expected Volatility
|
|
Expected Dividend Yield
|
|
|
5/23/06
|
|
4.94%
|
|
6.25 Years
|
|
115.00%
|
|
|
0.00
|
%
|
37
Compensation
Committee Report
The Compensation Committee reviewed the Compensation
Discussion and Analysis section of this proxy statement
and discussed the section with management. Based on this review
and discussions with management, the Compensation Committee
recommended to the board of directors that the Compensation
Discussion and Analysis section be included in this proxy
statement.
Compensation Committee
Mary E. Makela, Chair
John R. Held
Phyllis S. Swersky
Michael A. Brochu
Compensation
Committee Interlocks and Insider Participation
John R. Held, Mary E. Makela and Phyllis S. Swersky served on
the Compensation Committee during 2008. None of these directors
has ever been an officer or employee of our company or of any of
our affiliates. None of our executive officers serves as a
director or member of the compensation committee, or other
committee serving an equivalent function, of any other
organization that has one or more of its executive officers
serving as a member of our board of directors or Compensation
Committee.
38
INFORMATION
ABOUT STOCK OWNERSHIP
The following table provides information as of March 31,
2009 with respect to the beneficial ownership of our common
stock by:
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each person known by us to own beneficially more than 5% of our
outstanding shares of common stock;
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each of our directors;
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each of our named executive officers; and
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all of our directors and executive officers as a group.
|
Beneficial ownership is determined in accordance with
Rule 13d-3
under the Exchange Act and is based on 126,562,038 shares
of our common stock outstanding as of March 31, 2009.
Amounts under the heading Right to Acquire represent
shares that may be acquired upon the vesting of restricted stock
units within 60 days of March 31, 2009 or the exercise
of stock options that are currently exercisable or exercisable
within 60 days of March 31, 2009. In computing the
number of shares beneficially owned by a person and the
percentage ownership of that person, shares of common stock
subject to options or restricted stock units held by that person
that are currently exercisable within 60 days of
March 31, 2009 are deemed outstanding, but are not deemed
outstanding for computing the percentage ownership of any other
person. To our knowledge, except as set forth in the footnotes
to this table and subject to applicable community property laws,
each person named in the table has sole voting and investment
power with respect to the shares set forth opposite such
persons name. Except as otherwise indicated, the address
of each of the persons in this table is
c/o Art
Technology Group, Inc., One Main Street, Cambridge,
Massachusetts 02142.
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Shares Beneficially Owned
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Right to
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Name
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Outstanding
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Acquire(6)
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Total
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Percent(7)
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FMR LLC
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14,933,513
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(4)
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14,933,513
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11.8
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%
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Wellington Management Company, LLP
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8,963,400
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(5)
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8,963,400
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7.1
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%
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Robert D. Burke
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165,168
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1,677,500
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1,842,668
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1.4
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%
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Michael A. Brochu
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48,864
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951,947
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1,000,811
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*
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Kenneth Z. Volpe
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38,522
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483,141
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521,663
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*
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Barry E. Clark
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20,632
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438,125
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458,757
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*
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Ilene H. Lang(1)
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259,340
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134,345
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393,685
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*
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Julie M.B. Bradley
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17,686
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273,438
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291,124
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*
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Phyllis S. Swersky
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128,390
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179,345
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307,735
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*
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John R. Held
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126,190
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159,345
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285,535
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*
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David B. Elsbree(2)
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155,006
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109,253
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264,259
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*
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Daniel C. Regis(3)
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61,510
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177,840
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239,350
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*
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Mary E. Makela
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73,690
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159,345
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233,035
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*
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Louis R. Frio Jr.
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32,127
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116,249
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148,376
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*
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All current directors and executive officers as a group
(14 persons)
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1,173,600
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5,297,477
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6,471,077
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4.9
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%
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39
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* |
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Less than 1%. |
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(1) |
|
Includes 175,150 shares held directly by
Ms. Langs husband and an additional
48,000 shares held in a profit sharing plan in which
Ms. Langs husband has an indirect and indeterminate
beneficial interest. |
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(2) |
|
Includes 4,000 shares held directly by
Mr. Elsbrees wife. |
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(3) |
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Includes 24,000 shares that are held directly by Regis
Investments, L.P. |
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(4) |
|
This disclosure is based on an amendment to Schedule 13G filed
with the SEC on February 17, 2009. The Schedule 13G/A was
filed on behalf of FMR LLC and Edward C. Johnson 3d, Chairman of
FMR LLC, with an address of 82 Devonshire Street, Boston,
Massachusetts 02109. The Schedule 13G/A discloses that they had
sole power to dispose or to direct the disposition of 14,933,513
shares. These shares are beneficially owned through Fidelity
Management and Research Company, Pyramis Global Advisors, LLC
and Pyramis Global Advisors Trust Company, wholly owned
subsidiaries of FMR LLC, and Fidelity International Limited, a
partnership controlled by the Johnson family. |
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(5) |
|
This disclosure is based on a Schedule 13G filed with the SEC on
February 17, 2009. The address of the reporting person is
75 State Street, Boston, Massachusetts 02109. At the time
of the filing the reporting person reported that the Schedule
13G was filed by the reporting person in its capacity as a
registered investment advisor. |
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(6) |
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Shares included in the Right to Acquire column
consist of shares that may be acquired through the exercise of
options or vesting of restricted stock units within 60 days
of the date of this table. |
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(7) |
|
The percent ownership for each stockholder on March 31,
2009 is calculated by dividing (a) the total number of
shares beneficially owned by the stockholder by
(b) 126,562,038 shares (the number of shares of our common
stock outstanding on March 31, 2009) plus any shares
acquirable (including stock options exercisable by the
stockholder within 60 days after March 31, 2009), and
multiplying the result by 100. |
40
OTHER
MATTERS
Related
Party Transactions
Our Audit Committee reviews and approves all related party
transactions required to be disclosed pursuant to applicable SEC
rules and discusses with management the business rationale for
any such transactions and whether appropriate disclosures have
been made.
Compliance
with Section 16(a) of The Exchange Act
Section 16(a) of the Securities Exchange Act requires our
directors and executive officers and holders of 10% or more of
our securities to file reports of holdings and transactions in
our equity securities with the SEC. We are also required to
identify any such holders who fails to timely file with the SEC
any required report relating to ownership or changes in
ownership of our equity securities. Based solely upon a review
of Forms 3, 4 and 5 filed with the SEC and, in some cases,
written representations furnished to us, we believe that for
fiscal 2008, our executive officers and directors complied with
all applicable Section 16(a) filing requirements, except
that a Form 4 that reported a vesting of a restricted stock
unit award was inadvertently filed late on behalf of
Mr. Andrew Reynolds.
Householding
Some banks, brokers and other nominee record holders may be
participating in the practice of householding proxy
statements and annual reports. This means that only one copy of
our proxy statement or annual report may have been sent to
multiple stockholders in your household. We will promptly
deliver separate copies of our proxy statement and annual report
to you if you call us at
(617) 386-1000
or write us at Art Technology Group, Inc., One Main Street,
Cambridge, Massachusetts 02142, Attention: Secretary. If you
want to receive separate copies of the annual report and proxy
statement in the future, or if you are receiving multiple copies
and would like to receive only one copy for your household, you
should contact your bank, broker, or other nominee record
holder, or you may contact us at the above address and phone
number.
41
ANNEX A
ART
TECHNOLOGY GROUP, INC.
1999
EMPLOYEE STOCK PURCHASE PLAN
The 1999 Employee Stock Purchase Plan provides eligible
employees of Art Technology Group, Inc., or ATG, and certain of
our subsidiaries with opportunities to purchase shares of
ATGs common stock. A total of 500,000 shares of
common stock may be issued under the plan.
1. Administration. The plan
will be administered by ATGs Board of Directors or by a
committee appointed by the Board (all following references to
the Board include any committee appointed to administer the
plan). The Board will make rules and regulations for the
administration of the plan, and its decisions regarding the plan
are final. The Board will also designate which subsidiaries may
participate in the plan (all following references to ATG include
any applicable subsidiaries).
2. Eligibility.
Section 423 of the Internal Revenue Code of 1986, as
amended, and related regulations will govern participation in
the plan. Any ATG employee, including any Board member who is an
employee, is eligible to participate in the plan, so long as you
meet the following requirements:
(a) you are customarily employed by ATG for more than
20 hours a week and for more than five months in a calendar
year; and
(b) you are an employee of ATG on the first day of the
applicable offering period.
No employee may be granted an option under the plan if such
employee, immediately after the option is granted, owns 5% or
more of the total combined voting power or value of the stock of
ATG or any subsidiary. To determine whether you are ineligible
under this requirement, we are required to apply the attribution
rules of Section 424(d) of the Internal Revenue Code to
determine your stock ownership, and all stock which you have a
contractual right to purchase, including the stock which you
could purchase under the plan, will be treated as stock owned by
you.
3. Participation. If you
are eligible to participate in an offering, you may participate
by completing and forwarding a payroll deduction authorization
form to our payroll office at least 14 days before the
first date for that offering. By signing this form, you will
authorize ATG to make a regular payroll deduction from the
compensation you receive during the offering period.
Compensation means the amount of money reportable on your
Federal Income Tax Withholding Statement, also called a
W-2 form,
excluding overtime, shift premium, incentive or bonus awards
(but not excluding incentive and bonus awards paid as part of
ATGs annual bonus program), allowances and reimbursements
for expenses such as relocation allowances or travel expenses,
income or gains on the exercise of ATG stock options or stock
appreciation rights, and similar items, whether or not shown on
your W-2. If
you are a salesperson, compensation includes your sales
commissions. Unless you file a new form or withdraw from the
plan, your deductions and purchases will continue at the same
rate for future offerings as long as the plan remains in effect.
A-1
4. Deductions. We will
maintain a payroll deduction account for each participating
employee. For any offering, you may authorize a payroll
deduction from the compensation you receive during the offering
period of between 1% and 10%, in increments of 1%.
5. Deduction Changes. You
may decrease or discontinue your payroll deduction
once during any offering period by filing a new payroll
deduction authorization form. However, you may not increase
your payroll deduction during an offering period. If you
elect to discontinue your payroll deductions during an offering
period, you are not required to withdraw your funds; in that
case, funds deducted prior to discontinuing your participation
will be applied to the purchase of common stock on the last
business day of the offering period.
6. Interest. Interest will
not be paid on the amounts held in payroll deduction accounts.
7. Withdrawal of Funds. You
may, for any reason and at any time prior to the close of
business on the last business day in an offering period,
permanently withdraw the balance accumulated in your account and
thereby terminate your participation in an offering. Partial
withdrawals are not permitted. You may not participate again
during the remainder of the offering period, but you may
participate in any subsequent offering.
8. Offerings. ATG will make
one or more offerings to employees to purchase stock under the
plan. The Board will determine the start date of each offering.
The first offering will begin on the day on which trading of our
common stock begins on the Nasdaq National Market. Each offering
period will last for six months. During each offering period,
payroll deductions will be made, and the deducted money will be
held for you to buy common stock at the end of the offering
period.
On the first day of each offering period, you will receive an
option to buy up to, but no more than, the number of shares of
common stock calculated by dividing the closing market price of
our common stock on the first day of the offering period into
$12,500. This figure is derived from the restriction imposed by
the Internal Revenue Code which provides that no employee may be
granted an option which permits his rights to purchase stock
under this plan and any other employee stock purchase plan (as
defined in Section 423(b) of the Internal Revenue Code) of
the Company and its subsidiaries, to accrue at a rate which
exceeds $25,000 of the fair market value of the common stock
(determined as of the first day of the offering) for each
calendar year in which the option is outstanding at any time.
The actual number of shares which you will be able to purchase
will depend on the amount of money in your payroll deduction
account on the last business day of the offering period.
9. Purchase of Shares. On
the last business day of the offering period, your option will
be automatically exercised and your account will be used to buy
shares of our common stock at the following purchase price. The
purchase price will be 85% of the closing market price of our
common stock on either (i) the first business day of the
offering period or (ii) the last business day of the
offering period, whichever is lower. If no common stock was sold
on the first business day or the last business day of the
offering period, the price of the common stock for that day will
be the reported market price for the next preceding day on which
sales were made. Note, however,
A-2
that the closing price of the common stock on the first business
day of the first offering period will equal the initial
public offering price.
We will refund to you any balance remaining in your account at
the end of an offering period, except that we will carry forward
into your account for the following offering any balance which
is less than the purchase price of one share of common stock.
However, if you elect not to participate in the following
offering, we will refund to you the balance in your account.
10. Evidence of Stock
Ownership. Promptly after the end of each
offering period, we will deposit the number of shares of common
stock which you have purchased into an account established in
your name at a stock brokerage or other financial services firm
which we designate. You may ask us to establish this brokerage
account either in your name, or in your name and the name of
another person of legal age as joint tenants with rights of
survivorship.
You are free to sell or otherwise dispose of the shares in this
brokerage account at any time. However, for tax purposes, we
need to know if you dispose of your shares within the following
time periods. Therefore, until you dispose of your shares, you
agree to hold your shares in the brokerage account until
(a) two years after the beginning of the offering period in
which you purchased the shares or (b) one year after the
applicable exercise date, whichever comes later. Once these time
periods have elapsed, you may move your shares to another stock
brokerage or other financial services firm, or you may request
that we issue you a stock certificate.
11. Rights on Retirement, Death or Termination
of Employment. Your participation in the
plan will terminate if:
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your employment terminates;
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you retire;
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you die;
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the subsidiary which you work for is no longer an ATG
subsidiary; or
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you are transferred to an ATG subsidiary which does not
participate in the plan.
|
If your participation in the plan terminates, we will not make a
payroll deduction from any pay due and owing to you at the time
of termination and we will refund the balance in your account to
you. In the event of your death, we will refund the balance in
your account:
(a) to a beneficiary previously designated in a revocable
notice signed by you (with any spousal consent required under
state law),
(b) if you have not designated a beneficiary, to the
executor or administrator of your estate, or
(c) if, to our knowledge, no executor or administrator has
been appointed, to such other person(s) as we may designate.
A-3
12. Participants Are Not
Stockholders. Neither participation in the
plan nor making deductions from your pay make you a stockholder.
You are not a stockholder of any shares under the plan until
those shares have been bought by you and added to your brokerage
account.
13. Rights Are Not
Transferable. You cannot transfer your
rights under the plan except through a will or the laws of
descent and distribution. During your lifetime, only you may
exercise your rights under the plan.
14. Application of Funds.
We are allowed to combine the funds received from you or held by
ATG under the plan with other corporate funds, and we may use
the funds for any corporate purpose while we hold the funds.
15. Adjustment in Case of Changes Affecting
Common Stock. If there is a stock split,
stock dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation,
spin-off or other similar event or change in ATGs
capitalization, or if any distribution, other than a normal cash
dividend, is made to holders of common stock, we will
proportionately adjust all share and purchase price numbers
under the plan, and we may make any other adjustment that the
Board determines is fair. If any other change occurs which
affects the common stock, the Board will determine a fair
adjustment.
16. Merger. ATG could merge
or consolidate with another corporation. Continuity of control
would be deemed to occur if the holders of ATG stock immediately
prior to the merger or consolidation continue to hold at least
80% by voting power of the stock of the surviving corporation.
If there is continuity of control and you are participating in
the plan, at the next exercise date you will be entitled to
receive, for each share of ATG stock for which your option was
exercised, the securities or property which a holder of one
share of common stock was entitled to receive in the merger or
consolidation.
If there is no continuity of control, or if there is a sale of
all or substantially all of ATGs assets, the Board will
terminate the plan as of the effective date of such a
transaction, as long as notice of the cancellation is given to
each participating employee. You will then have the right to
receive shares of our common stock based on the payroll
deductions credited to your account as of a date determined by
the Board, which will not be less than ten (10) days
preceding the effective date of the transaction.
17. Amending the Plan. The
Board may amend the plan at any time in any way, except that
(a) if Section 423 of the Internal Revenue Code
requires that the stockholders approve the amendment, the
amendment will not be effective until the stockholders approve
it, and (b) the Board may not make an amendment which would
cause the plan to fail to comply with Section 423 of the
Internal Revenue Code.
18. Insufficient Shares. If
the total number of shares which all participating employees
elect to purchase under an offering, plus the number of shares
purchased under previous offerings, exceeds the maximum number
of shares issuable under the plan, the Board will allot the
shares available on a pro rata basis.
A-4
19. Termination of the
Plan. The Board may terminate the plan at
any time. If the plan is terminated, we will promptly refund the
amount in your account.
20. Governmental
Regulations. Our obligation to sell and
deliver common stock under the plan is subject to listing on a
national stock exchange or quotation on the Nasdaq National
Market and the approval of all government authorities required
in connection with the authorization, issuance or sale of this
stock.
21. Governing Law. The plan
is governed by Delaware law, except to the extent that federal
law preempts Delaware law.
22. Issuance of Shares. We
may issue the shares from authorized but unissued common stock,
from shares held in ATGs treasury, or from any other
proper source.
23. Effective Date. The
plan will take effect when the initial public offering becomes
effective.
Adopted by the Board of Directors
on May 10, 1999
Approved by the stockholders
on June 18, 1999
A-5
Amendment
No. 1 to the
Art Technology Group, Inc.
1999 Employee Stock Purchase Plan (Plan)
1. In the first unnumbered paragraph of the Plan, the
sentence A total of 500,000 shares of common stock
may be issued under the plan shall be replaced by the
following:
A total of 3,000,000 shares of common stock may be
issued under the plan.
2. Section 3 of the Plan is replaced in its entirety
by the following:
3. Participation. If
you are eligible to participate in an offering, you may
participate by completing and submitting an online authorization
form to our payroll office at least 14 days before the
first date for that offering. By submitting this authorization,
you will authorize ATG to make a regular payroll deduction from
the compensation you receive during the offering period.
Compensation means the amount of money reportable on your
Federal Income Tax Withholding Statement, also called a
W-2 form,
excluding overtime, shift premium, incentive or bonus awards
(but not excluding incentive and bonus awards paid as part of
ATGs annual bonus program), allowances and reimbursements
for expenses such as relocation allowances or travel expenses,
income or gains on the exercise of ATG stock options or stock
appreciation rights, and similar items, whether or not shown on
your W-2. If
you are a salesperson, compensation includes your sales
commissions. Unless you submit a new online form or withdraw
from the plan, your deductions and purchases will continue at
the same rate for future offerings as long as the plan remains
in effect.
3. The first sentence of Section 5 of the Plan is
hereby modified to read as follows:
You may discontinue but not change the amount of
your payroll deduction once during any offering period by means
of the then-current method of online authorization.
4. The first sentence of section 7 is hereby replaced
with the following:
You may, for any reason and at any time prior to the close
of business on the last day of the last payroll in an offering
period, permanently withdraw the balance accumulated in your
account and thereby terminate your participation in an
offering.
5. The fourth sentence of the first paragraph of
section 8 of the Plan shall be changed to read as follows:
Each offering period will last for three months.
A-6
6. The first sentence of the second paragraph of
section 8 shall be replaced with the following:
On the first day of each offering period, you will receive
an option to buy up to, but no more than, the number of shares
of common stock calculated by dividing the closing market price
of our common stock on the first day of the offering period into
$6,250.
Adopted by the Board of Directors
on March 20, 2002 and June 13, 2002
Approved by the stockholders
(only as to paragraph 1)
on May 19, 2002
A-7
Amendment
No. 2 to the
Art Technology Group, Inc.
1999 Employee Stock Purchase Plan (Plan)
1. In the first unnumbered paragraph of the Plan, the
sentence A total of 3,000,000 shares of common stock
may be issued under the plan shall be replaced by the
following:
A total of 5,000,000 shares of common stock may be
issued under the plan.
Adopted by the Board of Directors
on March 24, 2003
Approved by the stockholders
on May 21, 2003
A-8
Amendment
No. 3 to the
Art Technology Group, Inc.
1999 Employee Stock Purchase Plan (the
Plan)
1. Section 4 of the Plan is replaced in its entirety
by the following:
4. Deductions. We will
maintain a payroll deduction account for each participating
employee. For any offering, you may authorize a payroll
deduction from the compensation you receive during the period of
between 1% and 5%, in increments of 1%.
Adopted by the Board of Directors
on April 4, 2005
A-9
Amendment
No. 4 to the
Art Technology Group, Inc.
1999 Employee Stock Purchase Plan (the
Plan)
1. In the first unnumbered paragraph of the Plan, the
sentence A total of 5,000,000 shares of common stock
may be issued under the plan shall be replaced by the
following:
A total of 6,500,000 shares of common stock may be
issued under the plan.
2. Section 4 of the Plan is replaced in its entirety
by the following:
4. Deductions. We will maintain a
payroll deduction account for each participating employee. For
any offering, you may authorize a payroll deduction from the
compensation you receive during the period of between 1% and
10%, in increments of 1%.
3. The second paragraph of Section 10 is replaced in
its entirety by the following:
You may not sell or otherwise dispose of the shares
acquired in an offering for a period of ninety (90) days
after the applicable purchase date. Thereafter, you are free to
sell or otherwise dispose of the shares in this brokerage
account at any time. However, for tax purposes, we need to know
if you dispose of your shares within the following time periods.
Therefore, until you dispose of your shares, you agree to hold
your shares in the brokerage account until (a) two years
after the beginning of the offering period in which you
purchased the shares or (b) one year after the applicable
exercise date, whichever comes later. Once these time periods
have elapsed, you may move your shares to another stock
brokerage or other financial services firm, or you may request
that we issue you a stock certificate.
Adopted by the Board of Directors
on April 4, 2006
Approved by the stockholders
(only as to paragraph 1)
on May 26, 2006
A-10
Amendment
No. 5 to the
Art Technology Group, Inc.
1999 Employee Stock Purchase Plan (the Plan)
1. In the first unnumbered paragraph of the Plan, the
sentence A total of 6,500,000 shares of common stock
may be issued under the plan shall be replaced by the
following:
A total of 8,000,000 shares of common stock may be
issued under the plan.
Adopted by the Board of Directors
(subject to stockholder approval)
on April 21, 2009
A-11
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Art Technology Group, Inc.
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Electronic Voting
Instructions
You can vote by Internet or
telephone! Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose
one of the two voting methods outlined below to vote your
proxy.
VALIDATION DETAILS ARE
LOCATED BELOW IN THE TITLE BAR. |
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Proxies submitted by the
Internet or telephone must be received by 1:00 a.m., Central Time, on
May 20, 2009. |
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Vote by
Internet Log on to
the Internet and
go to www.investorvote.com/artg
Follow
the steps outlined on the secured website. |
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Vote by
telephone Call toll
free 1-800-652-VOTE (8683) within the
United States, Canada
& Puerto Rico any time on a touch
tone telephone. There
is NO CHARGE to you for the call. |
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Using a black
ink pen, mark your votes with an X as shown in this
example. Please do not write outside the designated areas. |
x |
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Follow the
instructions provided by the recorded message. |
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Annual Meeting Proxy
Card |
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C0123456789 |
12345
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▼ IF YOU HAVE NOT VOTED VIA THE INTERNET
OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM
PORTION IN THE ENCLOSED ENVELOPE. ▼
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A Proposals The Board
of Directors recommends a vote FOR all the nominees listed and FOR
Proposals 2 and 3. |
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1. Election of Class 1 Directors: |
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For |
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Withhold |
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For |
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Withhold |
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01 - John R. Held |
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02 - Phyllis S. Swersky |
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For |
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Abstain |
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For |
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Abstain |
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2. Amendment of our 1999 Employee Stock Purchase Plan. |
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3. Ratification of Appointment of Independent Registered Public Accounting Firm.
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B
Non-Voting Items |
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Change of Address
Please print new address below. |
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Meeting Attendance |
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Mark box to the right if you plan to attend the Annual Meeting.
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C |
Authorized Signatures This section must be
completed for your vote to be counted. Date and Sign Below
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Please sign exactly as your name is printed on this proxy. When signing as attorney-in-fact, executor, administrator, trustee, guardian or custodian, or in any other representative capacity, please write title.
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Date (mm/dd/yyyy) Please
print date below. |
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Signature 1 Please keep signature within the
box. |
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Signature 2 Please keep signature within the
box. |
/ / |
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6
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. 6
Proxy Art Technology Group, Inc.
The Board of Directors Of Art Technology Group, Inc. Is Soliciting This Proxy
The undersigned owns shares of common stock of Art Technology Group, Inc. (the Company). The
Companys 2009 Annual Meeting of Stockholders will be held on Wednesday, May 20, 2009 beginning at
10:00 a.m., local time, at the offices of Foley Hoag LLP, Seaport World Trade Center West, 155
Seaport Boulevard, Boston, Massachusetts 02210. The undersigned appoints each of Robert D. Burke
and Julie M.B. Bradley acting singly, with the power of substitution to each, as attorney, agent
and proxy to vote all shares of common stock that the undersigned is entitled to vote, at the
meeting and at any adjournment or postponement of the meeting.
The individuals named above will vote these shares as directed by the undersigned on this proxy.
IF NO PROPER VOTING INSTRUCTIONS ARE GIVEN, THE INDIVIDUALS NAMED ABOVE WILL VOTE THE SHARES OF
THE UNDERSIGNED FOR THE ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE OF THIS PROXY AS
DIRECTOR OF THE COMPANY AND FOR THE RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
AND FOR THE AMENDMENT OF OUR 1999 EMPLOYEE STOCK PURCHASE PLAN.
If any other matters are properly presented for consideration at the meeting, the individuals
named above will have the discretion to vote these shares on those matters.
(Items to be voted appear on reverse side.)