Form DEF 14A for MOBIUS MANAGEMENT SYSTEMS, INC filed on October 26, 1998
SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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14a-6(e)(2))
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/ / Definitive Additional Materials
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Mobius Management Systems, Inc.
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<PAGE>
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<PAGE>
MOBIUS MANAGEMENT SYSTEMS, INC.
120 OLD POST ROAD
RYE, NEW YORK 10580
-------------------
Dear Stockholder:
We invite you to attend our annual meeting of stockholders on Monday, November
23, 1998, in Rye, New York. At the meeting, you will hear a report on our
operations and have a chance to meet your directors and executives.
This booklet includes the formal notice of the meeting and the proxy statement.
The proxy statement tells you more about the agenda and procedures for the
meeting. It also describes how the Board operates and gives personal information
about our directors and executive officers.
Even if you only own a few shares, we want your shares to be represented at the
meeting. I urge you to complete, sign, date, and return your proxy card promptly
in the enclosed envelope.
To attend the meeting in person, please follow the instructions on page 1.
We look forward to seeing you on the 23rd.
Sincerely yours,
/s/ Mitchell Gross
Mitchell Gross
Chairman of the Board,
Chief Executive Officer &
President
October 26, 1998
<PAGE>
MOBIUS MANAGEMENT SYSTEMS, INC.
120 OLD POST ROAD
RYE, NEW YORK 10580
-------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Date and Time:
November 23, 1998, 10 a.m., Local Time
Place:
120 Old Post Road
Rye, New York
Purpose:
Elect Two Directors
Ratify appointment of independent accountants
Conduct other business if properly raised
Who may vote:
Only stockholders of record on October 16, 1998
Your vote is important. Please complete, sign, date, and return your
proxy card promptly in the enclosed self addressed, postage pre-paid
envelope.
/s/ Joseph J. Albracht
Joseph J. Albracht
Executive Vice President,
Chief Operating Officer &
Secretary
October 26, 1998
- --------------------------------------------------------------------------------
IMPORTANT
Stockholders are requested to DATE, SIGN and MAIL the enclosed proxy. A
postage paid envelope is provided.
- --------------------------------------------------------------------------------
<PAGE>
MOBIUS MANAGEMENT SYSTEMS, INC
120 OLD POST ROAD
RYE, NEW YORK 10580
-------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Table of Contents page
----------------- ----
General Information 1
Board of Directors Proposal No. 1
Election of Directors 3
Director Compensation 4
Board Committees 4
Director and Officer Stock Ownership 5
Information Concerning Executive
Officers 7
Compensation Committee Report on
Executive Compensation 8
Executive Compensation Tables 10
Stock Performance Graph 12
Certain Relationships and Related Transactions 13
Board of Directors Proposal No. 2
Ratification of Independent Auditors 14
Additional Information 14
<PAGE>
GENERAL INFORMATION
Who may vote
Stockholders of Mobius, as recorded in our stock register on October 16, 1998,
may vote at the meeting.
How proxies work
Mobius' Board of Directors is asking for your proxy. Giving us your proxy means
you authorize us to vote your shares at the meeting in the manner you direct.
You may vote for both, either or neither of our director candidates. You may
vote for or against the proposal to ratify our Independent Auditors or abstain
from voting.
If you sign and return the enclosed proxy card but do not specify how to vote,
we will vote your shares in favor of our director candidates and in favor of the
ratification of our Independent Auditors and in the proxies' discretion on such
other matters as may properly be raised at the meeting.
You may receive more than one proxy or voting card depending on how you hold
your shares. Shares registered in your name are covered by one card. If you hold
shares through someone else, such as a stockbroker, you may get material from
them asking how you want to vote those shares.
Revoking a proxy
You may revoke your proxy before it is voted by submitting a new proxy with a
later date; by voting in person at the meeting; or by notifying Mobius'
Secretary in writing at the address under "Questions?" on page 15.
Confidential Voting
Independent inspectors count the votes. Your individual vote is kept
confidential from us unless special circumstances exist. For example, a copy of
your proxy card will be sent to us if you write comments on the card.
Quorum
In order to carry on the business of the meeting, we must have a quorum. This
means a majority of the outstanding shares eligible to vote must be represented
at the meeting, either by proxy or in person. Shares owned by Mobius itself are
not voted and do not count for this purpose. Only the votes cast for or against
a proposal count. Abstentions and broker non-votes count for quorum purposes but
not for voting purposes. Broker non-votes occur when a broker returns a proxy
but does not have the authority to vote on a particular proposal.
1
<PAGE>
Attending in person
Only stockholders, their proxy holders and Mobius' guests may attend the
meeting.
2
<PAGE>
ELECTION OF DIRECTORS
There are currently five members of the Board of Directors. The Board is divided
into three classes with terms expiring, respectively, at the 1998, 1999 and 2000
annual meeting of stockholders. The Board has nominated Edward F. Glassemeyer
and Kenneth P. Kopelman, whose terms are expiring, for re-election. All Mobius
directors are elected for three-year terms. Personal information on each of our
nominees and directors is given below.
The Board oversees the management of the company on your behalf. It reviews
Mobius' long-term strategic plans and exercises direct decision-making authority
in key areas. The Board chooses the CEO, sets the scope of his authority to
manage Mobius' business day to day, and evaluates his performance.
A majority of the Mobius' directors -- including both our nominees -- are not
Mobius' employees. Only non-employee directors serve on Mobius' Audit and
Compensation committees.
The Board met 6 times last year. Each director attended at least 75% of the
aggregate number of meetings of the Board
If a director nominee becomes unavailable before the election, your proxy card
authorizes us to vote for a replacement nominee if the Board names one.
The Board recommends that you vote FOR each of the following candidates:
DIRECTOR NOMINEES FOR A TERM TO EXPIRE IN 2001
Edward F. Co-Founder of Oak Investment Partners
Glassemeyer (venture capital firm) and its General Partner
Age 57 since 1978. Holds a B.A. from Princeton
Director since 1997 University and a M.B.A. from the Tuck School
at Dartmouth College.
Kenneth P. Kopelman Partner of Kramer Levin Naftalis & Frankel
Age 47 LLP(1) (law firm) since 1984. Attended
Director since 1997 Cornell University (A.B.) and The London
School of Economics and received his J.D. from
Columbia University School of Law. Serves as
a Director of Liz Claiborne, Inc.
- -----------------
(1) Kramer Levin has served as legal counsel to Mobius since its founding in
1981.
3
<PAGE>
DIRECTORS WHOSE TERMS EXPIRE IN 1999
Joseph J. Albracht Co-founder of Mobius. Executive Vice
Age 49 President and Secretary since 1981, Chief
Director since 1981 Operating Officer since 1996 and Treasurer
from 1981 to 1996. Holds a B.S. in operations
research and a M.B.A. from Pennsylvania State
University.
Peter J. Barris General Partner, New Enterprise Associates
Age 46 (venture capital firm) since 1993. Holds a B.S.
Director since 1997 in electrical engineering from Northwestern
University and a M.B.A. from the Tuck School
at Dartmouth College.
DIRECTOR WHOSE TERM EXPIRES IN 2000
Mitchell Gross Co-Founder of Mobius. President since 1981
Age 48 and Chairman of the Board and Chief Executive
Director since 1981 Officer since 1996. Mr. Gross was an officer in
the U.S. Navy, serving on nuclear submarines,
from 1971-1976. Holds a B.S. in mechanical
engineering from Columbia University School
of Engineering and Applied Science and a
M.B.A. in finance from The Wharton School at
the University of Pennsylvania.
DIRECTOR COMPENSATION
Mobius employees receive no extra pay for serving as directors. Non-employee
directors are reimbursed for expenses incurred in attending Board meetings. No
additional compensation is paid to directors for attending Board or committee
meetings. Kramer Levin is paid Mr. Kopelman's standard rates for time Mr.
Kopelman devotes to preparation for and attendance at Board meetings.
The Mobius Non-Employee Directors' 1998 Stock Option Plan provides for initial
grants, upon a non-employee director's initial election to the Board, of
non-qualified stock options to purchase 10,000 shares of common stock, par value
$.0001 per share (the "Common Stock ") at the fair market value on the date of
the grant. On February 25, 1998, we granted our non-employee directors
immediately exercisable options to purchase 10,000 shares of Common Stock at
$11.00 per share.
4
<PAGE>
BOARD COMMITTEES
The Board appoints committees to help carry out its duties. Each committee
reviews the results of its meetings with the full Board. The Board established
its committees in February 1998 in connection with Mobius' initial public
offering.
The Audit Committee is responsible for accounting and internal control matters.
Subject to stockholder and Board approval, the Committee chooses the independent
public accountants to audit Mobius' financial statements and reviews the scope,
results and costs of the audit with such accountants. The Committee also reviews
the financial statements and accounting and control practices of Mobius. The
Audit Committee consists of Messrs. Barris, Glassemeyer and Kopelman. The
Committee did not meet prior to the June 30, 1998 year end.
The Compensation Committee oversees compensation for Mobius' executives and
Board of Directors, including salary, bonus and incentive awards. The Committee
is also responsible for administering Mobius' 1996 Stock Incentive Plan, Mobius'
1998 Employee Stock Purchase Plan and Mobius' 1998 Executive Compensation Plan.
The Compensation Committee consists of Messrs. Barris and Glassemeyer. The
Compensation Committee met one time prior to the June 30, 1998 year end.
DIRECTOR AND OFFICER STOCK OWNERSHIP
These tables show how much Mobius Common Stock each executive officer named in
the Summary Compensation Table on page 10, each non-employee director and
nominee, and certain stockholders, owned on September 1, 1998.
<TABLE>
<CAPTION>
Name and Address of Named Executive
Officers, Certain Stockholders and Shares Percent of
Directors / Nominees Owned(1) Class
- --------------------- -------- -----
<S> <C> <C>
Mitchell Gross(2)
c/o Mobius Management Systems, Inc.
120 Old Post Road
Rye, New York 10580 .............................................. 5,578,500 31.4%
Joseph J. Albracht
c/o Mobius Management Systems, Inc.
120 Old Post Road
Rye, New York 10580............................................... 4,078,500 22.9%
Oak Investment Partners VI, Limited
Partnership(3)
1 Gorham Island
Westport, CT 06880................................................ 2,045,500 11.5%
New Enterprise Associates VII L.P.(4)
1911 Freedom Drive
Reston, VA 20190.................................................. 1,943,200 10.9%
5
<PAGE>
E. Kevin Dahill(5)
c/o Mobius Management Systems, Inc.
120 Old Post Road
Rye, New York 10580............................................... 95,600 *
Karry Kleeman(6)
c/o Mobius Management Systems, Inc.
600 West Fulton Street
Chicago, IL 60661 ................................................ 103,002 *
Joseph Tinnerello(7)
c/o Mobius Management Systems, Inc.
600 West Fulton Street
Chicago, IL 60661................................................. 180,000 1.0%
Peter J. Barris(8)
c/o New Enterprise Associates
1911 Freedom Drive
Reston, VA 20190.................................................. 1,953,200 11.0%
Edward F. Glassemeyer(9)
c/o Oak Investments
1 Gorham Island
Westport, CT 06880................................................ 2,055,500 11.6%
Kenneth P. Kopelman(10)
c/o Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, NY 10022................................................ 11,500 *
All Executive Officers and Directors
as a group (10 persons) .......................................... 14,182,002 78.5%
</TABLE>
- -------------------
* Less than 1%
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission, and generally includes voting power
and/or investment power with respect to securities. Shares of Common Stock
subject to options currently exercisable or exercisable within 60 days
("Currently Exercisable Options") are deemed outstanding for computing the
percentage beneficially owned by the person holding such options but are
not deemed outstanding for computing the percentage beneficially owned by
any other person.
(2) Includes 4,100,000 shares of Common Stock held by HARMIT, LP, of which
Mitchell Gross and Harriet Gross, the spouse of Mr. Gross, are general
partners.
(3) Includes 46,600 shares of Common Stock held by Oak VII Affiliates Fund,
Limited Partnership.
(4) Includes 1,700 shares of Common Stock held by NEA Ventures 1997, 27,300
shares held by NEA President's Fund L.P. and 102,300 shares held by New
Ventures Partners III L.P.
(5) Includes 54,500 shares issuable pursuant to Currently Exercisable Options.
Also includes 500 shares owned by Mr. Dahill's wife and 600 shares owned
jointly by Mr. Dahill's wife and mother-in-law. Mr. Dahill disclaims
beneficial ownership to such shares.
(6) Includes 102,002 shares issuable pursuant to Currently Exercisable Options.
(7) Includes 100,000 shares issuable pursuant to Currently Exercisable Options.
(8) Includes 1,811,900 shares of Common Stock held by New Enterprise Associates
VII L.P., 1,700 shares held by NEA Ventures 1997, 27,300 shares held by NEA
President's Fund L.P. and 102,300 shares held by New Venture Partners III
L.P. Mr. Barris disclaims beneficial ownership of these shares except to
the extent of his pecuniary interest therein arising from his affiliation
with such entities. Also includes 10,000 shares issuable pursuant to
Currently Exercisable Options.
(9) Includes 1,998,900 shares of Common Stock held by Oak Investment Partners
VI, Limited Partnership and 46,600 shares held by Oak VI Affiliates Fund,
Limited Partnership. Mr. Glassemeyer disclaims beneficial ownership of
these shares
6
<PAGE>
except to the extent of his pecuniary interest therein arising from his
affiliation with such entities. Also includes 10,000 shares issuable
pursuant to Currently Exercisable Options.
(10) Includes 1,500 shares of Common Stock held in trust by Mr. Kopelman's
wife, as trustee, for Mr. Kopelman's three minor children. Mr. Kopelman
disclaims beneficial ownership to such shares. Also includes 10,000
shares issuable pursuant to Currently Exercisable Options.
INFORMATION CONCERNING EXECUTIVE OFFICERS
The executive officers of Mobius as of the date of this Proxy Statement are
identified below. Personal information on Mitchell Gross and Joseph J. Albracht
is given above. Executive officers are elected by the Board and serve until the
next meeting of the Board following the annual meeting of stockholders and until
their successors have been duly executed and qualified.
Name Position
- ---- --------
Mitchell Gross Chairman of the Board, Chief Executive Officer
and President
Joseph J. Albracht Executive Vice President, Chief Operating Officer
and Secretary
E. Kevin Dahill
Vice President, Finance, Chief Financial Officer
and Treasurer since 1996. Prior to joining Mobius,
was employed by Electronic Information Services
from 1991 to 1996, where he held a variety of
management positions, including President from
1995 to 1996, Chief Operating Officer from 1994 to
1996 and Senior Vice President, Finance and Chief
Financial Officer from 1991 to 1994. Holds a B.S.
in mechanical engineering from the University of
Notre Dame, a M.S. in mechanical engineering from
the Georgia Institute of Technology and a M.S. in
management from the Massachusetts Institute of
Technology.
Karry Kleeman
Vice President, Sales since 1997. Joined Mobius in
1990 and served as National Sales Manager from
1995 to 1997 and Regional Manager from 1992 to
1995. Holds a B.A. in marketing from Elmhurst
College.
Robert Lawrence
Vice President, Product Engineering since 1992.
Joined Mobius in 1985. Holds a B.S. in physics
from the University of Massachusetts.
Mario Pelleschi
Vice President, Sales (Europe, Middle East and
Africa) since 1998. Prior to joining Mobius, was
employed by Computer Associates from 1981 to 1997,
initially as a Branch Manager, and as Managing
Director of the following subsidiaries:
Switzerland, 1981 to 1985;
7
<PAGE>
Brazil, 1985 to 1987; Germany 1987 to 1995; and
France, 1995 to 1997. Holds a Swiss Federal Degree
in Electronic Engineering.
Joseph Tinnerello
Vice President, Business Development since
January, 1998. Joined Mobius in 1990 and served as
Vice President, Sales from 1995 to 1997. Following
a personal leave of absence, left Mobius from
October 1997 through January 1998. From 1988 to
1989, served as a Regional Manager with Legent
Software prior to its acquisition by Computer
Associates.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Overview
The Compensation Committee, which during fiscal 1998 consisted of Messrs. Barris
and Glassemeyer: (i) reviews and approves the compensation of Mobius' CEO and
President; (ii) approves the general policies applicable to salaries and bonuses
for the other executive officers and reviews and acts on bonuses for those
officers; and (iii) makes recommendations to the full Board and senior
management with respect to the adoption and administration of Mobius'
compensation programs.
Our executive compensation program is designed to attract, retain, motivate and
reward the management talent our company needs to achieve its business goals and
maintain its leadership in the increasingly competitive environment of
enterprise software products.
The three major components of our compensation program are salary, annual bonus
and stock options.
The salary and bonus components of Mobius' executive compensation are designed
to facilitate the fulfillment of the following objectives: (i) keeping competent
management; (ii) rewarding management for the achievement of short and long term
accomplishments; (iii) aligning the interests of management with the interests
of Mobius' stockholders; and (iv) relating executive compensation to the
achievement of our goals and financial performance.
Salary
We base salary on an executive's knowledge, skills and level of responsibility
as well as the economic and business conditions affecting Mobius. Other factors
we consider are: (i) competitive positioning (comparing Mobius' salary structure
with salaries paid by other companies); (ii) Mobius' own business performance;
and (iii) general economic factors.
Annual Bonus
We give our executives annual bonuses to provide an incentive and reward for
short-term financial success and long-term Company growth. Annual bonuses link
compensation in
8
<PAGE>
significant part to Mobius' financial performance and is determined solely by
the Compensation Committee.
Stock Options
We use stock options as a long-term, non-cash incentive and to align the
long-term interests of executives and stockholders. Stock options are awarded
based upon the market price of the Common Stock on the date of grant and are
linked to future performance of our stock because they do not become valuable to
the holder unless the price of our stock increases above the price on the date
of grant. The number of stock options granted to an executive as a form of
non-cash compensation is determined by the following factors: (i) number of
stock options previously granted to an executive; (ii) the executive's remaining
options exercisable; and (iii) the value of those remaining stock options, as
compared to the anticipated value that an executive will add to Mobius in the
future.
Employee Stock Purchase Plan
The Employee Stock Purchase Plan, which will commence in fiscal 1999, will
provide employees who wish to acquire our common stock with the opportunity to
purchase Mobius shares with a convenient way of doing so by accumulated payroll
deductions. We believe that employee participation in ownership of Mobius on
this basis will be to the mutual benefit of the employees and Mobius.
Compensation of the Chief Executive Officer
Mr. Gross is one of the founders of Mobius. He beneficially owns approximately
5,578,500 shares of Common Stock constituting approximately 31% of the total
amount outstanding. Accordingly, his interest is very much aligned with the
interest of all stockholders and Mobius has not considered it sensible to relate
Mr. Gross's compensation to Mobius' performance through long-term stock
incentives such as restricted stock or stock options. Mr. Gross's compensation
package consists primarily of salary and bonus. The levels of his salary and
bonus are established in Mr. Gross's employment agreement. The members of the
Compensation Committee believe that Mr. Gross continues to be significantly
responsible for Mobius' success.
Peter J. Barris
Edward F. Glassemeyer
9
<PAGE>
EXECUTIVE COMPENSATION TABLES
These tables show the compensation of Mobius' CEO and the four other most highly
paid executives.
SUMMARY COMPENSATION TABLE
Annual Compensation(1)
----------------------
<TABLE>
<CAPTION>
All Other Annual All Other
Year Salary Bonus Compensation (2) Compensation(3)
Name and Principal Position ---- ------ ----- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Mitchell Gross
Chairman of the Board, 1998 $200,000 $150,335 -- $46,050
Chief Executive Officer and 1997 200,000 150,151 -- 62,349
President 1996 187,000 150,000 -- 6,267
Joseph J. Albracht 1998 200,000 150,388 -- 30,458
Executive Vice President 1997 200,000 150,366 -- 46,134
Chief Operating Officer 1996 187,000 150,000 -- 6,867
and Secretary
Karry Kleeman 1998 127,888 80,130 $272,400 --
Vice President, Sales 1997 90,000 10,324 430,828 --
1996 90,169 113,800 140,203 --
E. Kevin Dahill 1998 158,750 71,019 -- --
Vice President, Finance, 1997 87,500(4) 25,477 -- --
Chief Financial Officer and 1996 -- -- -- --
Treasurer
Joseph Tinnerello(5) 1998 139,417 -- 250,750(6) --
Vice President, Business 1997 125,000 75,366 309,016 --
Development 1996 123,750 75,195 179,401 195
</TABLE>
- --------------------------
(1) In accordance with the rules of the Securities and Exchange Commission
("SEC"), other compensation in the form of perquisites and other personal
benefits has been omitted in those instances where the aggregate amount of
such perquisites and other personal benefits constituted less than the
lesser of $50,000 or 10% of the total annual salary and bonuses for the
named executive officer for such year.
(2) Consists of sales commissions.
(3) Includes premiums on insurance added to compensation. Also includes the
grossed up amount to cover taxes.
(4) Mr. Dahill joined Mobius in December, 1996; the amounts presented are for
the seven-month period ended June 30, 1998.
(5) Mr. Tinnerello was not employed by Mobius from October 1, 1997 to January
15, 1998.
(6) Includes $160,000 advance against future commissions. See "Certain
Relationships and Related Transactions - Relationship with Mr. Tinnerello."
10
<PAGE>
OPTIONS GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of
Stock Price Appreciation
Individual Grants for Option Term (3)
----------------- -------------------
% of Total
Number of Options
Securities Granted to
Underlying Employees in Exercise
Options Last Fiscal Price Expiration
Granted Year (2) ($/Share) Date 5% 10%
------- -------- --------- ---- -- ---
<S> <C> <C> <C> <C> <C>
Name
- ----
Karry Kleeman 170,000 14.0% $5.28 7/31/07 $564,496 $1,430,543
Joseph Tinnerello 100,000 8.2% $6.94 9/30/07 $436,453 $1,106,057
180,000 14.8% $9.68(3) 1/15/08 $2,330,014 $4,761,431
</TABLE>
- ------------------
(1) In fiscal 1998, Mobius granted employees options to purchase an aggregate of
1,218,500 shares of Common Stock.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. The 5% and
10% assumed annual rates of compounded stock price appreciation are mandated
by the rules of the Commission and do not represent Mobius' estimate or
projection of Mobius' future Common Stock prices. The amounts represent
certain assumed rates of appreciation in the value of Mobius' Common Stock
from the fair value on the date of the grant. Actual gains, if any, will
depend on stock market conditions.
The amounts reflected in the table may not necessarily be achieved.
(3) Based on events occurring after the grant of these options, Mobius
subsequently determined that these options were granted at exercise prices
below the fair market value of $14.00 per share.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Shares Number of Securities Value of Unexercised in-the-
Acquired on Value Underlying Unexercised Money Options at Fiscal
Name Exercise Realized ($) Options at Fiscal Year-End Year-End ($)(1)
- ---- --------- ------------ --------------------------- ---------------
<S> <C> <C> <C> <C>
Exercisable Unexercisable Exercisable Unexercisable
E. Kevin Dahill -- -- 81,000 189,000 $1,113,750 $2,598,750
Karry Kleeman -- -- 51,000 289,000 $701,250 $3,288,650
Joseph Tinnerello 80,000 $655,200 100,000 180,000 $806,000 $925,200
</TABLE>
- ------------------
(1) Based on the closing sale price on the Nasdaq National Market of the Common
Stock on June 30, 1998 of $15.00.
11
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph depicts a comparison of the cumulative total return
(assuming the reinvestment of dividends) for a $100 investment on April 27, 1998
(the date we completed our initial public offering) in each of the Common Stock
of Mobius (at the initial public offering price of $14.50 per share), Goldman
Sachs Technology Software Index (a published industry index), and the Nasdaq
Composite (a broad market index). The Company paid no dividends during the
period shown. The graph lines merely connect measurement dates and do not
reflect fluctuations between those dates.
<TABLE>
<CAPTION>
April 28, 1998 April 30, 1998 May 29, 1998 June 30, 1998
-------------- -------------- ------------ -------------
<S> <C> <C> <C>
Mobius $100 $127.58 $97.41 $103.44
Goldman Sachs $100 $102.25 $95.60 $108.45
Technology
Software Index
Nasdaq $100 $102.64 $97.72 $104.08
Composite
</TABLE>
12
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Relationship With Kramer Levin Naftalis & Frankel LLP
Since 1981 we have engaged, and we plan to continue to engage, the Kramer Levin
law firm to provide us with legal counsel. Mr. Kopelman, a member of our Board,
is also a partner of Kramer Levin. We believe that fees charged by Kramer Levin
are at rates and on terms no less favorable to us than could have been obtained
from unaffiliated third parties.
Relationship With Mr. Tinnerello
Following a personal leave, on September 30, 1997, we entered into a severance
agreement with Mr. Joseph Tinnerello, presently Mobius' Vice President, Business
Development, pursuant to which Mr. Tinnerello left our employment on October 1,
1997 and agreed to certain non-competition and non-solicitation restrictions in
consideration for (i) the acceleration of 80,000 options to purchase shares of
our common stock previously granted to him and (ii) the grant of 100,000 new
options to purchase shares of our common stock at an exercise price equal to the
fair market value of the shares at the time of the grant. Due to his termination
and the terms of Mobius' 1996 Employee Stock Incentive Plan, Mr. Tinnerello
forfeited 640,000 options to purchase shares of common stock that were
previously granted to him in November, 1996. On December 26, 1997, Mr.
Tinnerello agreed to return to Mobius effective January 15, 1998. On December
28, 1997, we agreed to advance $160,000 to Mr. Tinnerello against future
commissions. Such monies (net of applicable taxes) were used by Mr. Tinnerello
to exercise options to purchase 80,000 shares of common stock. On January 15,
1998, we granted Mr. Tinnerello options to purchase 180,000 shares of common
stock in accordance with and on terms similar to, our standard hiring practices.
Agreements With Employees
In February, 1998, we entered into employment agreements with each of Messrs.
Gross and Albracht providing for the employment of Mr. Gross as our Chairman of
the Board, Chief Executive Officer and President and Mr. Albracht as our
Executive Vice President and Chief Operating Officer. Each employment agreement
provides for a three-year term ending on April 27, 20001, the third anniversary
of our initial public offering. Each provides for an annual base salary of not
less than $200,000 as well as an annual bonus based upon our performance in an
amount determined solely by the Compensation Committee of the Board. Each
agreement also prohibits the executive from using the confidential information
of Mobius for a period of three years following the termination of his
employment (two years if he is terminated other than for cause (as defined
therein)) and contains a non-competition covenant pursuant to which the
executive is prohibited from competing with Mobius during his employment with
Mobius and for two years thereafter (one year if he is terminated other than for
cause). The agreements further provide that in the event that employment is
terminated by Mobius without cause (as defined therein) or by the executive for
good reason (as defined therein), the executive is entitled to receive (i) his
accrued but unpaid base salary and bonus through April 27, 2001; (ii) coverages
substantially identical to those provided immediately prior to the termination
for twelve months following April 27, 2001; and (iii) an aggregate amount,
payable in equal semi-monthly
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installments over a one-year period following April 27, 2001, equal to the
aggregate of what his base salary would have been for said period plus his
maximum bonus for such period, but not less than his highest annual bonus during
the preceding five years. In the event of death or disability of the executive,
we will continue to make base salary payments to the executive or his estate for
twelve months following such death or disability.
Compensation Committee Interlocks And Insider Participation
The current members of our Board's Compensation Committee are Messrs. Barris and
Glassemeyer. There are no compensation committee interlocks which are required
to be disclosed by applicable SEC rules. No member of our Compensation Committee
serves as a member of the board of directors or compensation committee of any
other entity that has one or more executive officers serving as a member of our
Board of Directors or Compensation Committee.
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT AUDITORS
The Audit Committee of the Board has appointed KPMG Peat Marwick LLP to audit
our financial statements for fiscal 1999. Ratification of the auditors requires
the favorable vote of a majority of the votes cast. We are asking you to ratify
that appointment.
KPMG has been Mobius' independent accounting firm since our fiscal year ended
June 30, 1992, and we believe they are well qualified for the job. A KPMG
representative will be at the annual meeting to answer appropriate questions and
to make a statement if he or she desires.
The Board recommends you vote FOR this proposal.
ADDITIONAL INFORMATION
Other Business
We do not expect any business to come up for stockholder vote at the meeting
other than the items raised in this booklet. If other business is properly
raised, your proxy card authorizes the people named as proxies to vote as they
think best.
People with disabilities
We can provide reasonable assistance to help you participate in the meeting if
you tell us about your disability and your plan to attend. Please call or write
the Secretary at least two weeks before the meeting at the number or address
under "Questions?" below.
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Outstanding shares
On October 16, 1998, 17,787,150 shares of common stock were outstanding. Each
share has one vote.
How we solicit proxies
In addition to mailing, Mobius employees may solicit proxies personally,
electronically, or by telephone. Mobius pays the costs of soliciting this proxy.
Stockholder proposals for next year
The deadline for stockholder proposals to be included in our proxy statement for
next year's annual meeting is June 30, 1999. As to stockholder proposals
intended to be presented without inclusion in our proxy statement for our next
annual meeting, the people named next year as proxies will be entitled to vote
as they think best on such proposals unless we have received notice of that
matter on or before September 13, 1999. However, even if such notice is timely
received, the people named next year as proxies may nevertheless be entitled to
vote as they think best on such proposals to the extent permitted by the SEC. On
request, the Secretary will provide detailed instructions for submitting
proposals.
Questions?
If you have questions or need more information about the annual meeting, write
to:
Investor Relations
Mobius Management Systems, Inc.
120 Old Post Road
Rye, NY 10580
or call us at (914) 921-7200
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MOBIUS MANAGEMENT SYSTEMS, INC.
----------------------
ANNUAL MEETING OF STOCKHOLDERS
November 23, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints and constitutes Mitchell Gross and Joseph J.
Albracht, or either of them, as proxies, each with full power of substitution,
to represent and to vote, as designated below, all shares of the Common Stock of
Mobius Management Systems, Inc. held by the undersigned at the Annual Meeting of
Stockholders to be held on November 23, 1998, at 10 a.m., or at any adjournment
or adjournments thereof, for the following purposes, described in the Proxy
Statement dated October 26, 1998, accompanying the notice of said meeting:
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
- ------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
/ X / PLEASE MARK
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE
1. ELECTION OF DIRECTORS
FOR all nominees / /
WITHHOLD AUTHORITY to vote for all nominees / /
FOR all nominees except:_________________ / /
E. Glassemeyer and K. Kopelman
2. RATIFICATION OF APPOINTMENT OF KPMG PEAT MARWICK LLP
FOR AGAINST ABSTAIN
/ / / / / /
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
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THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2. RECEIPT IS ACKNOWLEDGED OF THE NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS AND PROXY STATEMENT DATED OCTOBER, 26 1998 AND THE ANNUAL REPORT
FOR THE YEAR 1998.
I plan to attend the meeting / /
I do not plan to attend the meeting / /
Signature(s)_________________________________________ Dated __________, 1998
Please sign exactly as name appears above. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
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KRAMER LEVIN NAFTALIS & FRANKEL LLP
9 1 9 T H I R D A V E N U E
NEW YORK, N.Y. 10022 - 3852
(212) 715 - 9100
FAX
(212) 715-8000
-----
WRITER'S DIRECT NUMBER
(212) 715-9466
October 26, 1998
VIA EDGAR
- ---------
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington D.C. 20549
Re: Mobius Management Systems, Inc. Form DEF
14A
----------------------------------------
Dear Ladies and Gentlemen:
On behalf of Mobius Management Systems, Inc. (the "Company"), we
hereby electronically submit for filing with the Securities and Exchange
Commission (the "Commission"), via EDGAR the above referenced document.
If you have any questions, please contact the undersigned at
(212) 715-9466. Thank you.
Sincerely,
/s/ Jennifer G. Ross
---------------------
Jennifer G. Ross
cc: Mobius Management Systems, Inc.
Kenneth P. Kopelman, Esq.
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