Form DEF 14A for filed on December 13, 1999
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant /x/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or 240.14a-12
Mobius Management Systems, Inc.
-----------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required
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and 0-11
(1) Title of each class 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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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
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previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
<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 January
7, 2000, 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 7th.
Sincerely yours,
/s/ Mitchell Gross
Mitchell Gross
Chairman of the Board,
Chief Executive Officer &
President
December 13, 1999
<PAGE>
MOBIUS MANAGEMENT SYSTEMS, INC.
120 OLD POST ROAD
RYE, NEW YORK 10580
-------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Date and Time:
January 7, 2000, 10 a.m., Local Time
Place:
120 Old Post Road
Rye, New York
Purpose:
Elect Two Directors
Approve an amendment to the 1998 Employee Stock Purchase Plan
Ratify appointment of Independent Auditors Conduct other
business if properly raised
Who may vote:
Only stockholders of record on December 8, 1999
Your vote is important. Please complete, sign, date, and return your
proxy card promptly in the enclosed self addressed, postage pre-paid
envelope.
/s/ E. Kevin Dahill
E. Kevin Dahill
Chief Financial Officer,
Vice President & Assistant
Secretary
December 13, 1999
<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
Proposal No. 1
Election of Directors 3
Director Compensation 4
Board Committees 5
Director and Officer Stock Ownership 5
Information Concerning Executive
Officers 7
Compensation Committee Report on
Executive Compensation 8
Executive Compensation Tables 11
Stock Performance Graph 12
Certain Relationships and Related Transactions 13
Proposal No. 2
Approval of an Amendment to the 1998 Employee Stock Purchase Plan 14
Proposal No. 3
Ratification of Independent Auditors 18
Additional Information 19
<PAGE>
GENERAL INFORMATION
Who may vote
Stockholders of Mobius, as recorded in our stock register on December
8, 1999, 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, IN FAVOR
of the amendment to the 1998 Employee Stock Purchase Plan 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 "Additional Information--Questions?"
on page 19.
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. 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 six members of the Board of Directors. The Board is
divided into three classes with terms expiring, respectively, at the 1999, 2000
and 2001 annual meeting of stockholders. The Board has nominated Joseph J.
Albracht and Peter J. Barris, 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 one of our nominees --
are not Mobius' employees. Only non-employee directors serve on Mobius' Audit
and Compensation committees.
The Board met 7 times last year. Each director attended at least 85% 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:
DIRECTORS NOMINEES FOR A TERM TO EXPIRE IN 2002
Joseph J. Albracht.................. Co-founder of Mobius. Executive Vice
Age 50 President and Secretary since 1981, Chief
Director since 1981 Operating Officer since 1996 and
Treasurer from 1981 to 1996. On October
1, 1999, Mr.Albracht began a one year
sabbatical from Mobius. See "Certain
Relationships and Related
Transactions--Agreements with Employees"
on page 13. Holds a B.S. in operations
research and a M.B.A. from Pennsylvania
State University.
Peter J. Barris..................... General Partner, New Enterprise
Age 47 Associates (venture capital firm) since
Director since 1997 1993. Holds a B.S. in electrical
engineering from Northwestern University
and a M.B.A. from the Tuck School at
Dartmouth College. Serves as a director
of Career Builder, Inc. and PCOrder.com.
-3-
<PAGE>
DIRECTORS WHOSE TERM EXPIRES IN 2000
Mitchell Gross...................... Co-Founder of Mobius. President since
Age 50 1981 and Chairman of the Board and Chief
Director since 1981 Executive 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.
Gary Greenfield..................... President and Chief Executive Officer of
Age 44 MERANT plc (software development company)
Director since 1998 since 1998. Holds a M.S. in information
systems from George Washington University
and a M.B.A from Harvard Business School.
Serves as a director of MERANT plc,
Hyperion Solutions, Inc. and Managed
Object Solutions.
DIRECTORS WHOSE TERMS EXPIRES IN 2001
Edward F. Glassemeyer............... Co-Founder of Oak Investment Partners
Age 58 (venture capital firm) and its General
Director Since 1997 Partner since 1978. Holds a B.A. from
Princeton University and a M.B.A. from
the TuckSchool at Dartmouth College.
Serves as a Director ofTheStreet.com.
Kenneth P. Kopelman................. Partner of Kramer Levin Naftalis &
Age 48 Frankel LLP(1) (law firm). 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.
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
the grant to Mobius directors of non-qualified stock options to purchase Mobius
shares. These include an initial
-4-
<PAGE>
grant of 10,000 options, made upon a non-employee director's first election to
the Board, as well as an annual grant of 10,000 options, made at each annual
meeting to those directors having at least nine months of Board service on the
grant date. All such options have an exercise price equal to the fair market
value of the underlying Mobius shares on the date of grant.
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 and Glassemeyer. The
Committee met two times last year.
The Compensation Committee oversees compensation for Mobius'
executives, 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 Incentive Plan. The
Compensation Committee consists of Messrs. Barris and Glassemeyer. The
Compensation Committee met two times last year.
DIRECTOR AND OFFICER STOCK OWNERSHIP
These tables show how much Mobius Common Stock each executive officer
named in the Summary Compensation Table on page 11, each non-employee director
and nominee, and certain stockholders, owned on September 15, 1999.
Name and Address of Named Executive
- ----------------------------------
Officers, Certain Stockholders and Shares Percent of
- ---------------------------------- ------ ----------
Directors / Nominees Owned(1) Class
- -------------------- -------- -----
Mitchell Gross(2)
c/o Mobius Management Systems, Inc.
120 Old Post Road
Rye, New York 10580 ............................... 5,573,500 31.1%
Joseph J. Albracht
c/o Mobius Management Systems, Inc.
120 Old Post Road
Rye, New York 10580 ............................... 4,058,500 22.6%
Oak Investment Partners VI, Limited
Partnership(3)
1 Gorham Island
Westport, CT 06880 ................................ 1,498,900 8.4%
-5-
<PAGE>
New Enterprise Associates VII L.P.(4)
1911 Freedom Drive
Reston, VA 20190 .................................. 1,839,200 10.3%
Karry Kleeman(5)
c/o Mobius Management Systems, Inc.
600 West Fulton Street
Chicago, IL 60661 ................................. 225,928 1.2%
Robert Lawrence (6)
c/o Mobius Management Systems, Inc.
120 Old Post Road
Rye, New York 10580 ............................... 191,000 1.1%
Joseph Tinnerello(7)
c/o Mobius Management Systems, Inc.
600 West Fulton Street
Chicago, IL 60661 ................................. 240,000 1.3%
Peter J. Barris(8)
c/o New Enterprise Associates
1911 Freedom Drive
Reston, VA 20190 .................................. 1,849,200 10.3%
Edward F. Glassemeyer(9)
c/o Oak Investments
1 Gorham Island
Westport, CT 06880 ................................ 1,532,417 8.5%
Gary Greenfield (10)
c/o MERANT plc
9420 Key West Avenue
Rockville, MD 20850 ............................... 10,000 *
Kenneth P. Kopelman(11)
c/o Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, NY 10022 ................................ 14,000 *
All Executive Officers and Directors
as a group (13 persons) ........................... 13,904,345 75.1%
- -------------------
* 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 3,732,358 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 27,300 shares held by NEA President's Fund L.P.
(5) Includes 224,928 shares issuable pursuant to Currently Exercisable
Options.
(6) Includes 75,000 shares issuable pursuant to Currently Exercisable
Options.
(7) Includes 160,000 shares issuable pursuant to Currently Exercisable
Options.
(8) Includes 1,811,900 shares of Common Stock held by New Enterprise
Associates VII L.P. and 27,300 shares held by NEA President's Fund L.P.
Mr. Barris disclaims beneficial ownership of these shares except to the
extent of his pecuniary interest
-6-
<PAGE>
therein arising from his affiliation with such entities. Also includes
10,000 shares issuable pursuant to Currently Exercisable Options.
(9) Includes 1,452,300 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 except to the extent of his
pecuniary interest therein arising from his affiliation with such
entities. Also includes 23,517 shares (of which 910 shares are
beneficially owned by EFG Trust I and 1,744 shares are beneficially
owned by EFG Trust II) received by Mr. Glassemeyer from an in kind
distribution by Oak Investment Partners VI, L.P. pro rata to its
partners in accordance with their beneficial ownership without any
additional consideration. Also includes 10,000 shares issuable pursuant
to Currently Exercisable Options.
(10) Shares issuable pursuant to Currently Exercisable Options.
(11) Includes 1,500 shares of Common Stock held in trust by Mr. Kopelman's
wife, as trustee, for Mr. Kopelman's three minor children and 2,500
shares of Common Stock held jointly by Mr. Kopelman and his wife. 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. See "Certain
Relationships and Related
Transactions--Agreements with Employees" on
page 13 for a discussion of Mr. Albracht's
sabbatical from Mobius.
Sandra Becker Senior Vice President, Marketing since 1998.
Prior to joining Mobius, Ms. Becker was
employed by Ceridian Employer Services as
Vice President of Marketing and held several
marketing and strategy leadership positions
for U.S. West Communications. Holds a B.S.
from College of St. Catherine and a M.B.A.
from the University of Minnesota.
E. Kevin Dahill Vice President, Finance, Chief Financial
Officer and Treasurer since 1996. Prior to
joining Mobius, Mr. Dahill 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.
-7-
<PAGE>
Karry Kleeman Vice President, World Sales since
1999. Joined Mobius in 1990 and served as
Vice President, Sales (North and South
America) from 1997-1999, 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, Mr. Pelleschi 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;
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, Mr. Tinnerello served as a Regional
Manager with Legent Software.
Hiromasa Yazaki Vice President, Sales (North Asia) since
1999. Prior to joining Mobius, Mr. Yazaki
was employed by Kodak Japan Ltd. in 1997 and
1998 as a General Manger/Consumer Imaging
Marketing and employed by Informix K.K. in
1996 as Director of Sales. Holds a B.A. from
Dokkyo University.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Overview
The Compensation Committee, which during fiscal 1999 consisted of
Messrs. Barris and Glassemeyer:
(1) reviews and approves the compensation of Mr. Gross;
(2) approves the general policies applicable to salaries and
bonuses for the other executive officers and reviews and acts
on bonuses for those officers; and
(3) 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.
-8-
<PAGE>
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:
(1) keeping competent management;
(2) rewarding management for the achievement of short and long
term accomplishments;
(3) aligning the interests of management with the interests of
Mobius' stockholders; and
(4) 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:
(1) competitive positioning (comparing Mobius' salary structure
with salaries paid by other companies);
(2) Mobius' own business performance; and
(3) 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 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:
(1) number of stock options previously granted to an executive;
(2) the executive's remaining options exercisable; and
(3) the value of those remaining stock options, as compared to the
anticipated value that an executive will add to Mobius in the
future.
-9-
<PAGE>
Employee Stock Purchase Plan
The Employee Stock Purchase Plan commenced in fiscal 1999 and provides
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.
Executive Incentive Plan
The Executive Incentive Plan ("Incentive Plan") was established in
fiscal 1998 and participation in the Incentive Plan is limited to those
executives and key employees who, in the judgment of the Compensation Committee,
are in a position to have a significant impact on the performance of Mobius.
Awards under the Incentive Plan are based upon the extent to which performance
goals established by the Compensation Committee for a designated performance
period are satisfied. The Incentive Plan also provides for grants of
discretionary bonuses. As of September 15, 1999, there were no awards made under
the Incentive Plan.
Compensation of the Chief Executive Officer
Mr. Gross is one of the founders of Mobius. He beneficially owns
approximately 5,573,500 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. Given Mobius' level of
profitability in fiscal 1999, Mr. Gross declined to be considered for any bonus
compensation in respect of such year.
Peter J. Barris
Edward F. Glassemeyer
-10-
<PAGE>
EXECUTIVE COMPENSATION TABLES
These tables show the compensation of Mobius' CEO and the four other
most highly paid executives.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Name and Principal Position Annual Compensation(1)
- --------------------------- ------------------------------------
All Other
Compensation(3)
All Other Annual --------------
Year Salary Bonus Compensation (2)
---- ------ ----- ----------------
<S> <C> <C> <C> <C> <C>
Mitchell Gross 1999 $200,000 -- -- $61,632
Chairman of the Board, 1998 200,000 $150,335 -- 46,050
Chief Executive Officer and 1997 200,000 150,151 -- 62,349
President
Joseph J. Albracht(4) 1999 200,000 -- -- 38,556
Executive Vice President 1998 200,000 150,388 -- 30,458
Chief Operating Officer 1997 200,000 150,366 -- 46,134
and Secretary
Karry Kleeman 1999 125,000 60,267 $325,972 --
Vice President, World Sales 1998 127,888 80,130 272,400 --
1997 90,000 10,324 430,828 --
Robert Lawrence 1999 170,000 48,423 -- 271,175(5)
Vice President, Project 1998 163,332 47,087 -- --
Engineering 1997 156,910 32,509 -- --
Joseph Tinnerello(6) 1999 150,000 -- 198,000 --
Vice President, Business 1998 139,417 -- 250,750(7) --
Development 1997 125,000 75,366 309,016 195
</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 and non-recoverable draws.
(3) Includes premiums on insurance added to compensation. Also includes the
grossed up amount to cover taxes.
(4) On October 1, 1999, Mr. Albracht began a one year sabbatical from
Mobius; he will not receive salary, bonus, or paid benefits during his
leave. Given Mobius' level of profitability in fiscal 1999, Mr.
Albracht declined to be considered for any bonus compensation in
respect of such year.
(5) Disqualifying disposition of shares obtained through the exercise of
incentive stock options.
(6) Mr. Tinnerello was not employed by Mobius from October 1, 1997 to
January 15, 1998.
(7) Includes $160,000 advance against future commissions. See "Certain
Relationships and Related Transactions - Relationship with Mr.
Tinnerello" on page 13.
OPTIONS GRANTS IN LAST FISCAL YEAR
Mobius did not grant options to executive officers in fiscal 1999.
-11-
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Shares Number of Securities Value of Unexercised in-the-
Name Acquired on Value Underlying Unexercised Money Options at Fiscal
- ---- ----------- ----- ---------------------- -----------------------
Exercise Realized ($) Options at Fiscal Year-End Year-End ($)(1)
--------- ------------ --------------------------- ---------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Karry Kleeman -- -- 182,421 157,579 $884,370 $810,560
Robert Lawrence 18,000 $144,000 54,000 180,000 $378,000 $1,260,000
Joseph Tinnerello -- -- 160,000 120,000 $131,000 --(2)
</TABLE>
- ------------------
(1) Based on the closing sale price on the Nasdaq National Market of the
Common Stock on June 30, 1999 of $8.25.
(2) Options bear an exercise price of $9.86 and are therefore "under
water."
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 28, 1998
(the date we completed our initial public offering) in each of the Common Stock
of Mobius (at a closing price of $18.25 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.
April 28, 1998 June 30, 1998 June 30, 1999
-------------- ------------- -------------
Mobius $100 $82.19 $45.21
Goldman Sachs $100 $107.33 $152.85
Technology Software
Index
Nasdaq Composite $100 $103.44 $146.64
-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 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 (1) the acceleration of
80,000 options to purchase shares of our common stock previously granted to him
and (2) 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. As of September 15, 1999, the full amount of such advance
remains outstanding. 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, 2001, 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 (1) his
accrued but unpaid base salary and bonus through April 27, 2001; (2) coverages
substantially identical to those provided immediately prior to the termination
for twelve months following April 27, 2001; and (3)
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an aggregate amount, payable in equal semi-monthly 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.
On October 1, 1999, Mr. Albracht began a one year leave of absence from
Mobius. Mr. Albracht will not receive salary, bonus or paid benefits during his
leave.
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
AMENDMENT TO THE 1998 EMPLOYEE STOCK PURCHASE PLAN
The Compensation Committee on behalf of the Board of Directors has
approved and recommended for submission to Mobius' stockholders an amendment to
Mobius' 1998 Employee Stock Purchase Plan (the "Plan") to increase the maximum
number of shares of Mobius' Common Stock available for issuance under the Plan
from 300,000 to 650,000.
The Plan originally authorized the issuance of up to 300,000 shares. To
date, 53,812 shares have been purchased by Mobius' employees pursuant to the
Plan and subscriptions for substantially all of the remaining shares available
under the Plan have been received from Mobius' employees during the current
offering period under the Plan. The Compensation Committee believes that as a
result of the size of Mobius' current and expected employee base and the current
market prices of Mobius' Common Stock, additional shares should be authorized to
enable Mobius to continue to achieve the objectives of the Plan. Accordingly,
the Compensation Committee, on behalf of the Board of Directors, has approved
and recommended for submission to Mobius' stockholders an amendment to the Plan
that would increase the aggregate number of shares of Common Stock which may be
issued under the Plan to 650,000 shares. Assuming the stockholders approve the
proposal, Mobius will register the 350,000 additional shares of Common Stock
issuable under the Plan under the Securities Act.
The effectiveness of this amendment to the Plan is subject to approval
by the stockholders. Until such approval is obtained, the amendment to the Plan
shall not be effective. If the amendment to the Plan is not approved, the Plan
as in effect prior to the amendment will continue in operation and shares may
continue to be purchased thereunder. The affirmative vote of holders of a
majority of Mobius' outstanding Common Stock represented in person or by proxy
and entitled to vote on this proposal is required for approval of this amendment
to the Plan.
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A description of the Employee Stock Purchase Plan is set forth below.
This description is only a summary and is not intended to be complete. Any
stockholder who wishes to obtain a copy of the Plan can call Mobius to receive a
copy free of charge.
Summary Description of the Plan
General
Any employee of Mobius or of any subsidiary which adopts the Plan with
the consent of Mobius is eligible to participate in the Plan. An employee will
qualify if he or she: (1) is employed twenty hours or more per week; (2) is
employed for more than five months per calendar year; and (3) has been employed
for at least ninety (90) days as of the commencement of an Offer (as defined in
the Plan). An employee may not receive an option grant under the Plan, if,
immediately after the grant, the employee would own stock (including shares
subject to all outstanding options held by the employee) possessing five percent
(5%) or more of the total combined voting power or value of all classes of
issued and outstanding stock of Mobius or any subsidiary.
The Plan is being administered by the Compensation Committee, composed
of not fewer than two non-employee directors of Mobius as defined under Rule
16b-3 promulgated under the Securities Exchange Act of 1934. The Board and the
Compensation Committee are authorized to construe, interpret and implement the
provisions of the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, and to make all determinations necessary or advisable in
administering the Plan. The determinations of the Board and the Compensation
Committee are made in their sole discretion and are conclusive.
The Compensation Committee currently consists of Messrs. Peter J.
Barris and Edward F. Glassemeyer. The members of the Compensation Committee were
elected by the Board of Directors, and hold such offices at the pleasure of the
Board.
Participation Under the Plan
Offering Periods. The Compensation Committee shall determine the date
or dates upon which one or more Offers shall be made under the Plan. The term of
each Offer shall be twelve (12) months, or such other term as the Compensation
Committee shall determine prior to the commencement of an Offer, which shall not
exceed 27 months.
Participation. To participate in the Plan, an eligible employee must
complete and submit the appropriate enrollment forms, including a payroll
deduction authorization form at prescribed times. At the election of the
participant, the rate of payroll deductions may be any multiple of 1% up to a
maximum of 10% of the participant's "regular compensation" during an offering
period. A participant's "regular compensation" is the participant's base
compensation, targeted commissions and targeted bonus (but will exclude variable
items, such as, commissions and bonuses in excess of targeted amounts, overtime,
sick pay, severance pay, expense reimbursements and allowances and other special
payments).
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Terms of Options. On the effective date of an Offer, each participant
will be granted an option to purchase, through payroll deductions, as many whole
shares of Common Stock as he or she may with the amount to be deducted from his
or her pay during the term of the offer. The option price at which shares may be
purchased will equal the lesser of (a) eighty-five percent (85%) of the fair
market value (as defined below) of the Common Stock on the date of grant of the
option (the "base option price") or (b) eighty-five percent (85%) of the fair
market value of the Common Stock on the date of purchase of the shares (the
"adjusted option price"). At the end of an offering period, a participant's
accumulated payroll deductions will be automatically applied to purchase shares
at the lesser price.
Participation Limitations. The maximum number of shares which a
participant may purchase pursuant to any one offer will be determined by
multiplying (a) ten percent (10%) by (b) the participant's base compensation in
the pay period immediately preceding the effective date of the Offer and (c) the
number of pay periods during the term of an offer, and dividing the product of
(a), (b) and (c) by (d) 85% of the "fair market value" of a share of Common
Stock on the date of grant. In addition, a participant's right to purchase stock
under an option may not accrue at a rate in excess of $25,000 in fair market
value (determined at the time of option grant) for each calendar year in which
the option is outstanding.
Fair market value is the last price on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") National Market on the
relevant date, or if no reported sales take place on the relevant date, the
average of the high bid and low asked price of Common Stock as reported on the
NASDAQ National Market on such date, or if no such quotation is made on such
date, on the next preceding day on which there were quotations, provided that
such quotations shall have been made within ten (10) business days preceding the
applicable date.
Withdrawal. A participant may elect to withdraw from participation in
an offer at any time, in which case deductions from the participant's pay will
cease and all amounts previously deducted from the participant's pay during the
offering period will be refunded. A participant who has withdrawn from
participation during an offering period may recommence participation in the
offer, provided that the deductions will be at the same rate as in effect prior
to such suspension.
Termination of Employment. Upon termination of a participant's
employment with Mobius and its subsidiaries for any reason, the participant's
participation in the Plan will cease, and all amounts previously deducted from
the participant's pay will be refunded.
Change of Control. In the event of a merger or consolidation of Mobius
with or into any other corporation or entity, or a dissolution or liquidation of
Mobius, all payroll deductions will cease and all amounts credited to
participants will be refunded to each participant immediately prior to the
consummation of such action.
Nonassignment of Rights. A participant's rights under the Plan are not
assignable or transferable, except by will or the laws of descent or
distribution.
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Other Features of the Plan. All participants in the Plan will have the
same rights and privileges under the Plan, except that the number of shares
subject to a participant's options will depend upon his or her compensation and
the percentage payroll deduction authorized.
Prior to the exercise of an option under the Plan, and as a condition
precedent to such exercise and the issuance of any shares, the Compensation
Committee may require the participant to represent and warrant that the shares
are being acquired for investment purposes only, and may impose such other
restrictions on the issuance of such shares as the Compensation Committee in its
discretion deems necessary or advisable.
The Board of Directors may suspend, discontinue, revise or amend the
Plan at any time and in any respect; provided, however, that stockholder
approval will be obtained to the extent necessary to comply with section 423 of
the Code and other applicable law. Unless sooner terminated by the Board of
Directors, the Plan will terminate on the date as of which the Compensation
Committee determines that the shares remaining available under the Plan are
insufficient to meet all unfilled purchase requirements.
Federal Income Tax Consequences
The following is a description of the principal federal income tax
consequences of awards under the Plan based on present federal tax laws. Federal
tax laws may change from time to time and any legislation that may be enacted in
the future by the United States Congress may significantly affect the federal
income tax consequences described below. No representation is or can be made
regarding whether any such legislation will or may be enacted and/or the impact
of any such legislation. The description below does not purport to be a complete
description of the tax consequences associated with awards under the Plan
applicable to any particular participant. Differences in each individual's
financial situation may cause federal, state and local tax consequences of
awards to vary. Each participant should consult his or her personal tax adviser
about the detailed provisions of the applicable tax laws and regulations. No
employee of Mobius is authorized or permitted to give tax advice to any award
recipient.
The Plan is intended to satisfy the requirements of Sections 421 and
423 of the Code. Under these provisions, an employee generally will not
recognize income at the time an option is granted or exercised. The tax
consequences to an employee upon a disposition of shares acquired upon option
exercise will depend upon the holding period of the shares.
If shares acquired upon the exercise of an option are disposed of at
least two years after the shares are offered (that is, the time of option grant)
and at least one year after the shares are purchased, then the employee will
recognize, at the time of disposition, compensation income equal to the lesser
of (a) the excess of the fair market value of the shares at the time of option
grant over the base option price and (b) the excess of the fair market value of
the shares at the time of disposition over the purchase price of the shares
(which, under the Plan, equals the lesser of the base option price and adjusted
option price). Any additional gain will be treated as capital gain. If the
requisite holding periods are met, however, Mobius will not be entitled to a tax
deduction at any time.
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If the shares acquired upon the exercise of an option are sold or
disposed of before the expiration of either holding period described above (a
"disqualifying disposition"), then the employee will recognize, at the time of
disposition, compensation income equal to the excess of the fair market value of
the shares on the purchase date over the purchase price of the shares, and
Mobius will be entitled to a tax deduction in that amount. Any appreciation in
the price of the shares between the purchase date and disposition date will be
treated as capital gain.
Under current law, the rate at which net long-term capital gain will be
taxed will vary depending on the participant's holding period and the date the
optionee disposes of the shares. The Internal Revenue Code currently provides
that, in general, the net long-term capital gain resulting from the sale of
shares held for more than 12 months will be subject to tax at a maximum rate of
20% (10% for individuals in the 15% tax bracket). The Internal Revenue Code
currently provides that net long-term capital gain resulting from dispositions
after December 31, 2000 of shares held for more than 5 years may be subject to a
reduced rate.
Individuals employed outside of the United States should see their
local [Human Resources administrator] for a summary of local tax consequences of
participating in the Plan.
Restrictions on Resale
All of Mobius' personnel and consultants must observe Mobius' policy
regarding the use and abuse of inside information and the sales of Mobius' stock
only during predetermined "window periods." If you have not received a copy of
such policy, or if you are unsure about how the policy applies to you, please be
certain to contact the Human Resources Department at the address and telephone
number below. Directors, executive officers and certain other designated
officers or employees of Mobius should also notify the Human Resources
Department prior to making any sales of Common Stock.
The Compensation Committee, on behalf of the Board of Directors, recommends a
vote FOR the amendment to the plan.
PROPOSAL NO. 3
RATIFICATION OF INDEPENDENT AUDITORS
The Audit Committee of the Board has appointed KPMG LLP to audit our
financial statements for fiscal 2000. 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.
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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.
Outstanding shares
On December 8, 1999, 17,980,462 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 will pay 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, 2000. 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, 2000. 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
January 7, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints and constitutes Mitchell Gross and E. Kevin
Dahill, 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 January 7, 2000, at 10 a.m., or at any adjournment or
adjournments thereof, for the following purposes, described in the Proxy
Statement dated December 13, 1999, accompanying the notice of said meeting:
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
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^ 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:_________________ / /
Joseph J. Albracht and Peter J. Barris
2. APPROVAL OF THE AMENDMENT TO THE 1998 EMPLOYEE STOCK PURCHASE PLAN
FOR AGAINST ABSTAIN
/ / / / / /
3. RATIFICATION OF APPOINTMENT OF KPMG LLP
FOR AGAINST ABSTAIN
/ / / / / /
<PAGE>
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
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, 2 AND 3. RECEIPT IS ACKNOWLEDGED OF THE NOTICE OF ANNUAL
MEETING OF STOCKHOLDERS AND PROXY STATEMENT DATED DECEMBER 13, 1999 AND THE
ANNUAL REPORT FOR THE YEAR 1999.
I plan to attend the meeting / /
I do not plan to attend the meeting / /
Signature(s)_________________________________________ Dated _________________
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.
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^ FOLD AND DETACH HERE ^
