<PAGE> 1
SCHEDULE 14a
(RULE 14-101)
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 [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</TABLE>
NEW ERA OF NETWORKS, 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.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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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):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[LOGO OF NEW ERA OF NETWORKS, INC.]
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 15, 1999
To the Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders of New
Era of Networks, Inc., a Delaware corporation (the "Company"), will be held on
Tuesday, June 15, 1999 at 2:00 p.m., local time, at the Marriott Financial
Center, 85 West Street, New York, New York, for the following purposes:
1. To elect two Class II directors to serve for terms of three
years and until their successors are duly elected and
qualified.
2. To approve an amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of
Common Stock of the Company from 45,000,000 to 200,000,000.
3. To ratify the appointment by the Board of Directors of Arthur
Andersen LLP as independent auditors for the Company for the
fiscal year ending December 31, 1999.
4. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this notice.
Only stockholders of record of the Company's Common Stock at the close
of business on April 30, 1999, the record date, are entitled to vote at the
Annual Meeting.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, to assure your representation at the Annual Meeting, you are
urged to sign and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the Annual Meeting may vote in person even if he or she has returned a proxy.
By the Order of the Board of Directors
of New Era of Networks, Inc.
LEONARD M. GOLDSTEIN
Senior Vice President, Senior Counsel
and Secretary
Englewood, Colorado
May 10, 1999
================================================================================
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO
COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
================================================================================
<PAGE> 3
NEW ERA OF NETWORKS, INC.
---------------------
PROXY STATEMENT
FOR 1999 ANNUAL MEETING OF STOCKHOLDERS
---------------------
PROCEDURAL MATTERS
GENERAL
This Proxy Statement is being furnished to holders of common stock, par
value $0.0001 per share (the "Common Stock"), of New Era of Networks, Inc., a
Delaware corporation (the "Company"), in connection with the solicitation of
proxies by the Board for use at the Annual Meeting of Stockholders (the "Annual
Meeting") to be held on June 15, 1999 at 2:00 p.m., local time, and at any
adjournment or postponement thereof, for the purposes of considering and acting
upon the matters set forth herein.
The Annual Meeting will be held at the Marriott Financial Center, 85
West Street, New York, New York. The telephone number of the Marriott Financial
Center is (212) 385-4900. The Company's headquarters are located at 7400 East
Orchard Road, Englewood, Colorado 80111. The Company's telephone number is (303)
694-3933.
This Proxy statement and the accompanying form of proxy card are first
being mailed on or about May 10, 1999, together with the Company's 1998 Annual
Report to Stockholders, to all holders of Common Stock entitled to vote at the
Annual Meeting.
VOTING AT THE ANNUAL MEETING; RECORD DATE
Only holders of record of the Company's Common Stock at the close of
business on April 30, 1999 (the "Record Date") are entitled to notice of and to
vote at the Annual Meeting. Such stockholders are entitled to cast one vote for
each share of Common Stock held as of the Record Date on all matters properly
submitted for the vote of stockholders at the Annual Meeting. As of the Record
Date, there were [___________] shares of the Company's Common Stock outstanding.
No shares of preferred stock were outstanding. For information regarding
security ownership by management and by the beneficial owners of more than 5% of
the Company's Common Stock, see "Beneficial Share Ownership by Principal
Stockholders and Management."
QUORUM; REQUIRED VOTE
The presence, in person or by proxy, of the holders of a majority of
the shares entitled to be voted generally at the Annual Meeting is necessary to
constitute a quorum at the Annual Meeting. A plurality of the votes duly cast is
required for the election of directors. The affirmative vote of the holders of a
majority of the outstanding shares of the Common Stock will be required to
approve the amendment to the Company's Certificate of Incorporation. The
affirmative vote of a majority of the votes duly cast is required to ratify the
appointment of auditors.
Under the General Corporation Law of the State of Delaware, an
abstaining vote and a broker "non-vote" are counted as present and entitled to
vote and are, therefore, included for purposes of determining
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<PAGE> 4
whether a quorum of shares is present at a meeting. However, broker non-votes
are not deemed to be "votes cast." As a result, broker non-votes are not
included in the tabulation of the voting results on the election of directors or
issues requiring approval of a majority of the votes cast and, therefore, do not
have the effect of votes in opposition in such tabulations. However, with
respect to the proposed amendment to the Company's Certificate of Incorporation,
abstentions and broker non-votes will have the same effect as negative votes. A
broker "non-vote" occurs when a nominee holding shares for a beneficial owner
does not vote on a particular proposal because the nominee does not have
discretionary voting power with respect to that item and has not received
instructions from the beneficial owner.
PROXIES
All shares entitled to vote and represented by properly executed
proxies received prior to the Annual Meeting, and not revoked, will be voted at
the Annual Meeting in accordance with the instructions indicated on those
proxies. If no instructions are indicated on a properly executed proxy, the
shares represented by that proxy will be voted as recommended by the Board of
Directors. If any other matters are properly presented for consideration at the
Annual Meeting, including, among other things, consideration of a motion to
adjourn the Annual Meeting to another time or place (including, without
limitation, for the purpose of soliciting additional proxies), the persons named
in the enclosed proxy and acting thereunder will have discretion to vote on
those matters in accordance with their best judgment. The Company does not
currently anticipate that any other matters will be raised at the Annual
Meeting.
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is voted. A proxy may be revoked (1) by
filing with the Secretary of the Company, at or before the taking of the vote at
the Annual Meeting, a written notice of revocation or a duly executed proxy, in
either case later dated than the prior proxy relating to the same shares or (2)
by attending the Annual Meeting and voting in person (although attendance at the
Annual Meeting will not of itself revoke a proxy). Any written notice of
revocation or subsequent proxy must be received by the Secretary of the Company
prior to the taking of the vote at the Annual Meeting. Such written notice of
revocation or subsequent proxy should be hand delivered to the Secretary of the
Company or should be sent so as to be delivered to New Era of Networks, Inc.,
7400 East Orchard Road, Englewood, Colorado 80111, Attention: Secretary.
EXPENSES OF SOLICITATION
All expenses of this solicitation, including the cost of preparing and
mailing this Proxy Statement, will be borne by the Company. The Company may
reimburse brokerage firms, custodians, nominees, fiduciaries and other persons
representing beneficial owners of the Company's Common Stock for their
reasonable expenses in forwarding solicitation material to such beneficial
owners. Directors, officers and employees of the Company may also solicit
proxies in person or by telephone, telegram, letter, facsimile or other means of
communication. Such directors, officers and employees will not be additionally
compensated, but they may be reimbursed for reasonable out-of-pocket expenses in
connection with such solicitation.
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<PAGE> 5
PROCEDURE FOR SUBMITTING STOCKHOLDER PROPOSALS
Stockholders may present proper proposals for inclusion in the
Company's proxy statement and for consideration at the next annual meeting of
its stockholders by submitting their proposals in writing to the Secretary of
the Company in a timely manner. In order to be included in the Company's proxy
materials for the 2000 annual meeting of stockholders, stockholder proposals
must be received by the Secretary of the Company no later than January 11, 2000,
and must otherwise comply with the requirements of Rule 14a-8 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
In addition, the Company's Bylaws establish an advance notice procedure
with regard to certain matters, including stockholder proposals not included in
the Company's proxy statement, to be brought before an annual meeting of the
stockholders. To be properly brought before an annual meeting or special
meeting, nominations for the election of director or other business must be (1)
specified in the notice of meeting (or any supplement thereto) given by or at
the direction of the Board of Directors or other person so authorized pursuant
to the Company's Bylaws, (2) otherwise properly brought before the meeting by or
at the direction of the Board of Directors or (3) otherwise properly brought
before the meeting by a stockholder. For such nominations or other business to
be considered properly brought before the meeting by a stockholder, such
stockholder must have given timely notice and in proper form of his or her
intent to bring such business before such meeting.
To be timely, such stockholder's notice must be delivered to or mailed
and received by the secretary of the Company not less than 90 days prior to the
meeting; provided, however, that in the case of a meeting called by or on behalf
of the Board of Directors of the Company where prior notice, or public
disclosure, of the meeting has not been given or made at least 100 days prior to
such meeting, notice by the stockholder to be timely must be so received not
later than the close of business on the tenth day following the day on which
such notice of the date of the meeting was mailed or such public disclosure was
made. To be in proper form, a stockholder's notice to the secretary shall set
forth: (1) the name and address of the stockholder who intends to make the
nominations, propose the business, and, as the case may be, the name and address
of the person or persons to be nominated or the nature of the business to be
proposed; (2) a representation that the stockholder is a holder of record of
stock of the Company entitled to vote at such meeting and, if applicable,
intends to appear in person or by proxy at the meeting to nominate the person or
persons specified in the notice or introduce the business specified in the
notice; (3) if applicable, a description of all arrangements or understandings
between the stockholder and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination or nominations are to
be made by the stockholder; (4) such other information regarding each nominee or
each matter of business to be proposed by such stockholder as would be required
to be included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission had the nominee been nominated, or intended
to be nominated, or the matter been proposed, or intended to be proposed by the
board of directors' and (5) if applicable, the consent of each nominee to serve
as director of the Company if so elected. The chairman of the meeting may refuse
to acknowledge the nomination of any person or the proposal of any business not
made in compliance with the foregoing procedures. All notices of proposals by
stockholders, whether or not included in the Company's proxy materials should be
sent to New Era of Networks, Inc., 7400 East Orchard Road, Englewood, Colorado
80111, Attention: Secretary.
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<PAGE> 6
PROPOSAL NO. 1
ELECTION OF DIRECTORS
GENERAL
The Company's Board of Directors is currently comprised of seven
members who are divided into three classes with overlapping three-year terms. A
director serves in office until his or her respective successor is duly elected
and qualified or until his or her earlier death or resignation. Any additional
directorships resulting from an increase in the number of directors will be
distributed among the three classes so that, as nearly as possible, each class
will consist of an equal number of directors.
NOMINEES FOR CLASS II DIRECTORS
Two Class II directors are to be elected at the Annual Meeting for
three-year terms ending on the date of the annual stockholder's meeting in 2002.
The Board of Directors has nominated JOSEPH E. KASPUTYS AND HAROLD A. PISKIEL
for re-election as Class II directors. Unless otherwise instructed, the persons
named in the enclosed proxy intend to vote proxies received by them for the
election of Mr. Kasputys and Mr. Piskiel. The Company expects that Mr. Kasputys
and Mr. Piskiel will accept such nomination; however, in the event that Mr.
Kasputys or Mr. Piskiel are unable or decline to serve as a director at the time
of the Annual Meeting, proxies will be voted for a substitute nominee or
nominees designated by the present Board of Directors to fill the vacancy. The
term of office of the persons elected as directors will continue until such
directors' terms expire in 2002 or until such directors' successors have been
elected and qualified.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED ABOVE.
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<PAGE> 7
INFORMATION REGARDING NOMINEE AND OTHER DIRECTORS
Set forth below is certain information regarding the nominees for Class
II directors and each other director of the Company whose term of office
continues after the Annual Meeting.
NOMINEES FOR CLASS II DIRECTORS FOR TERMS EXPIRING IN 2002
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
---- --- --------------------------------------------
<S> <C> <C>
Joseph E. Kasputys 62 Chairman, President and Chief Executive Officer of Primark Corporation. Mr.
Kasputys has served as a director of the Company since July 1998. Since 1988,
Mr. Kasputys has served as Chairman, President and Chief Executive Officer of
Primark Corporation. He currently serves as a director of Lifeline Systems.
Mr. Kasputys holds a B.A. degree from Brooklyn College and an M.B.A. degree
from the Harvard Graduate School of Business.
Harold A. Piskiel 52 Executive Vice President, Chief Technology Officer of the Company. Mr. Piskiel
has served as Executive Vice President, Chief Technology Officer and a Director
of the Company since joining the Company in March 1995. From 1993 to 1995, Mr.
Piskiel served as the Chief Architect and Project Manager for the Information
Technology Division of Merrill Lynch & Co. From 1984 to 1993, Mr. Piskiel
served as Vice President of Data Administration and Distribution Architecture
at Goldman, Sachs & Co. Mr. Piskiel holds a B.A. degree from Long Island
University.
INCUMBENT CLASS I DIRECTORS WHOSE TERMS EXPIRE IN 2000
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
---- --- --------------------------------------------
<S> <C> <C>
George F. (Rick) Adam, Jr. 52 Chairman of the Board of Directors and CEO of the Company. Mr. Adam has served
as Chairman of the Board, Chief Executive Officer, President and a Director of
the Company since founding the Company in June 1993. From 1987 to 1993, Mr.
Adam was a General Partner of Goldman, Sachs & Co. and served as the Chief
Information Technology Officer. From 1980 to 1987, Mr. Adam was Chief
Information Officer and Vice President of Personnel for Baxter Health Care
Corporation. Mr. Adam received a B.S. degree from the U.S. Military Academy,
West Point, New York and an M.B.A. degree from Florida State University.
Steven Lazarus 67 Venture Capitalist. Mr. Lazarus has served as a Director of the Company since
April 1995. Since 1986, Mr. Lazarus has served as a senior principal of
various venture capital funds associated with ARCH Venture, including President
and Chief Executive Officer of ARCH Development Corporation and Managing
Director of ARCH Venture Partners. From 1986 to 1994, Mr. Lazarus served as
the Associate Dean of the Graduate School of Business of the University of
Chicago. He currently serves as a director of Amgen, Primark, Nanophase
Technologies and Illinois Superconductor. Mr. Lazarus holds a B.A. degree from
Dartmouth College and an M.B.A. degree from the Harvard Graduate School of
Business.
</TABLE>
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<PAGE> 8
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
---- --- --------------------------------------------
<S> <C> <C>
INCUMBENT CLASS III DIRECTORS WHOSE TERMS EXPIRE IN 2001
Patrick J. Fortune 51 President and Chief Operating Officer of the Company. Dr. Fortune has served as
a Director of the Company since February 1998. Since April 1999, Dr. Fortune
has been President and Chief Operating Officer of the Company. From October
1995 to April 1999 he served as Vice President, Information Technology, and
Chief Information Officer for Monsanto Company. From September 1994 to
September 1995, Dr. Fortune served as President and Chief Operating Officer of
Coram Healthcare Corporation in Colorado. From December 1991 to August 1994,
Dr. Fortune was Vice President, Information Management, at Bristol-Myers
Squibb. He currently serves as a director of Parexel International Corporation.
Dr. Fortune holds a B.A. degree from the University of Wisconsin, an M.B.A.
degree from Northwestern University and a Ph.D. in physical chemistry from the
University of Wisconsin.
Mark L. Gordon 48 Attorney at Law. Mr. Gordon has served as a Director of the Company since the
Company's inception. Since 1979, Mr. Gordon has been a partner in the law firm
of Gordon & Glickson PC, directing the firm's information communications and
technology practice. Mr. Gordon holds a B.A. degree from the University of
Michigan and a J.D. degree from the Northwestern University School of Law.
Elisabeth W. Ireland 41 Partner, The Hamilton Companies. Ms. Ireland has served as a Director of the
Company since January 1998. Since January 1994, Ms. Ireland has been a partner
with The Hamilton Companies, an investment partnership. From 1988 to 1994,
Ms. Ireland was a private investor and consultant. From 1986 to 1988,
Ms. Ireland was Director of Marketing and Sales for Bloomberg L.P., a financial
information service. Ms. Ireland holds an A.B. degree from Smith College and
an M.B.A. degree from The Wharton School at the University of Pennsylvania.
</TABLE>
BOARD MEETINGS AND COMMITTEES
The Board of Directors held a total of eight meetings (including
regularly scheduled and special meetings) during fiscal 1998. During the last
fiscal year, no incumbent director while a member of the Board of Directors,
attended or participated in fewer than 75% of the aggregate of (1) the total
number of meetings of the Board of Directors and (2) the total number of
meetings held by all committees on which such director served.
The Board of Directors of the Company has three standing committees: an
Audit Committee, a Compensation Committee and a Nominating Committee.
The Audit Committee, which currently consists of Ms. Ireland and Mr.
Fortune, is responsible for (1) recommending engagement of the Company's
independent auditors, (2) approving the services performed by such auditors, (3)
consulting with such auditors and reviewing with them the results of their
examination, (4) reviewing and approving any material accounting policy changes
affecting the Company's operating results, (5) reviewing the Company's control
procedures and personnel, and (6) reviewing and evaluating the Company's
accounting principles and its system of internal accounting controls. The Audit
Committee held two meetings during fiscal 1998.
The Compensation Committee, which currently consists of Messrs. Lazarus
and Gordon, is responsible for (1) reviewing and approving the compensation and
benefits for the Company's officers and other employees, (2) administering the
Company's stock purchase and stock option plans, and (3) making recommendations
to the Board of Directors regarding such matters. The Compensation Committee
held
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<PAGE> 9
one meeting during fiscal 1998. Neither Mr. Lazarus nor Mr. Gordon is an
officer or employee of the Company.
The Nominating Committee, which currently consists of Messrs. Lazarus
and Adam (1) recommends candidates to fill vacancies on the Board of Directors
and a slate of directors for election at the Annual Meeting, (2) evaluates the
size and composition of the Board of Directors, and recommends criteria for the
selection of persons to the Board of Directors, and (3) periodically reviews and
makes recommendations to the Board of Directors with respect to the Company's
overall compensation programs for directors.
COMPENSATION OF DIRECTORS
In fiscal year 1998, each non-employee director received $1,000 per
meeting, plus all expenses associated with attendance at Board of Directors
meetings, as their sole cash remuneration. In addition, non-employee directors
participate in the Company's 1997 Director Option Plan (the "Director Plan").
The Board of Directors adopted and the stockholders of the Company
approved the 1997 Director Plan in June 1997 to provide for the automatic grant
to non-employee directors of the Company of options to purchase shares of Common
Stock. The Director Plan is administered by the Board of Directors, unless the
Board delegates administration to a committee. An aggregate of 200,000 shares of
Common Stock has been reserved for issuance under the Director Plan, subject to
adjustment in the event of certain capital changes. Each non-employee director
is automatically granted an option to purchase 33,332 shares on the date such
person first becomes a non-employee director. In addition, each non-employee
director is automatically granted an option to purchase 10,000 shares for each
subsequent year of service, on the day following the annual stockholder meeting.
Options granted under the Director Plan expire ten years after the date
of grant unless terminated sooner upon termination of optionee's status as a
director or otherwise pursuant to the Director Plan, and have an exercise price
equal to 100% of the fair market value of the Common Stock on the date of grant.
Initial options granted under the Director Plan become exercisable cumulatively
over a three-year period as to one-third of the shares subject to the option on
each anniversary of the grant date, provided the optionee continues to serve as
a director. Each annual grant under the Director Plan becomes exercisable in
full on the third anniversary of the grant date, provided the optionee continues
to serve as a director. In the event of any change in control of the Company, as
defined in the Director Plan, outstanding options under the Director Plan must
be assumed (or an equivalent option substituted) by the successor corporation,
or the options shall become exercisable in full for at least 15 days after
notice of the change of control is given by the Company to the optionee. In
addition, if within one year following such a change in control a director shall
involuntarily cease to be a director, such director shall be entitled to option
vesting through the date of termination as a director plus one additional year
thereafter.
In January, February and July 1998, the Company granted each of Ms.
Ireland, Dr. Fortune, and Mr. Kasputys, respectively, options to purchase 33,332
shares of Common Stock under the Director Plan at exercise prices of $4.94,
$8.25 and $19.25 per share, respectively. In January 1998, Mr. Lazarus was
granted options, pursuant to the Amended and Restated 1995 Stock Option Plan, to
purchase 36,666 shares of Common Stock at an exercise price of $6.29. In May
1998, the Company granted each of Mr. Lazarus, Mr. Gordon, Mr. Reep, Ms. Ireland
and Dr. Fortune options to purchase 10,000 shares of Common Stock under the
Director Plan at an exercise price of $12.31 per share.
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<PAGE> 10
REQUIRED VOTE
The three nominees receiving the highest number of affirmative votes of
the shares present or represented and entitled to be voted shall be elected as
directors. Votes withheld from any director are counted for purposes of
determining the presence or absence of a quorum for the transaction of business,
but they have no legal effect under Delaware law.
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<PAGE> 11
PROPOSAL NO. 2
APPROVAL OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has determined that it is in the best interests
of the Company and its stockholders to amend the Company's Certificate of
Incorporation to increase the number of authorized shares of Common Stock of the
Company from 45,000,000 to 200,000,000 (the "Amendment"). Accordingly, the Board
of Directors has unanimously approved the Amendment and hereby solicits the
approval of the Company's stockholders of the Amendment. If the Amendment is
adopted by the stockholders, it will become effective upon filing of a
Certificate of Amendment of the Company's Certificate of Incorporation in
substantially the form attached hereto as Exhibit A, with the Secretary of State
of the State of Delaware.
As of April 15, 1999, the Company had 45,000,000 authorized shares of
Common Stock. Of this authorized number, 30,923,203 shares were outstanding and
9,047,948 shares were reserved for issuance under the Company's equity
compensation plans, leaving 5,028,849 shares unreserved, unissued and available
for issuance.
PURPOSE AND EFFECT OF THE AMENDMENT
The principal purpose of the proposal to authorize additional shares of
Common Stock is to provide the Company with the flexibility to issue Common
Stock for a variety of proper corporate purposes which the Board of Directors
may deem advisable without further action by the Company's stockholders, except
as may be required by law, regulation or Nasdaq rule. These purposes include,
among other things, raising equity capital, adopting additional equity incentive
plans or reserving additional shares for issuance under such plans, making
acquisitions through the use of stock and declaring stock dividends or
distributions. The availability of additional shares of Common Stock is
particularly important in the event that the Board of Directors needs to
undertake any of the foregoing actions on an expedited basis and thus avoid the
time (and expense) of seeking stockholder approval in connection with the
contemplated action. The Board of Directors has no present agreement,
arrangement or intention to issue any of the additional shares for which
approval is sought. However, if these situations were to arise, the issuance of
additional shares of Common Stock could have a dilutive effect on earnings per
share and a stockholder's percentage voting power in the Company.
The increase in the authorized number of shares of Common Stock and the
subsequent issuance of such shares could, under certain circumstances, have the
effect of delaying or preventing a change in control of the Company without
further action by the stockholders (for example, by diluting the stock ownership
of a person seeking to effect a change in the composition of the Board of
Directors or contemplating a tender offer). The Company is not presently aware
of any pending or proposed transaction involving a change in control of the
Company. While it may be deemed to have potential anti-takeover effects, the
proposed amendment to increase the authorized Common Stock is not prompted by
any specific effort or takeover threat currently perceived by management.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the outstanding
shares of the Common Stock will be required to approve this Amendment to the
Company's Certificate of Incorporation. As a result, abstentions and broker
non-votes will have the same effect as negative votes.
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<PAGE> 12
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS
VOTE "FOR" APPROVAL OF THE AMENDMENT OF THE
COMPANY'S CERTIFICATE OF INCORPORATION.
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<PAGE> 13
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Arthur Andersen LLP, independent
auditors, to audit the consolidated financial statements of the Company for the
fiscal year ending December 31, 1999, and has determined that it would be
desirable to request that the stockholders ratify such appointment.
Arthur Andersen LLP has audited the Company's financial statements
since the Company's inception. A representative of Arthur Andersen LLP is
expected to be present at the Annual Meeting, will have the opportunity to make
a statement, and is expected to be available to respond to appropriate
questions.
REQUIRED VOTE
Although stockholder approval is not required for the appointment of
Arthur Andersen LLP since the Board of Directors has the responsibility of
selecting auditors, the Board of Directors has conditioned its appointment of
the Company's independent auditors upon the receipt of the affirmative vote of a
majority of the votes duly cast at the Annual Meeting. In the event that the
stockholders do not approve the selection of Arthur Andersen LLP, the Board of
Directors will reconsider its appointment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION
OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT
AUDITORS FOR FISCAL YEAR ENDING DECEMBER 31, 1999.
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<PAGE> 14
BENEFICIAL SHARE OWNERSHIP BY
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information concerning the
beneficial ownership of Common Stock of the Company as of April 15, 1999 for the
following: (1) each person or entity who is known by the Company to own
beneficially more than 5% of the outstanding shares of the Company's Common
Stock; (2) each of the Company's directors; (3) each of the officers named in
the Summary Compensation Table on page 15 hereof; and (4) all directors and
executive officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES PERCENTAGE
BENEFICIALLY BENEFICIALLY
5% STOCKHOLDERS, DIRECTORS AND OFFICERS (1) OWNED(2) OWNED
- --------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
George F. (Rick) Adam, Jr.(3).............................................. 5,018,435 16.3%
Putnam Investments, Inc.(4)................................................ 2,847,410 9.2%
Pilgrim Baxter & Associates, Ltd.(5) ...................................... 2,752,000 8.9%
DIRECTORS
Patrick J. Fortune(6)...................................................... 14,443 *
Mark L. Gordon(7).......................................................... 35,666 *
Elisabeth W. Ireland(8).................................................... 28,909 *
Joseph E. Kasputys(9)...................................................... 0 *
Steven Lazarus(10)......................................................... 537,871 1.7%
Harold A. Piskiel(11) ..................................................... 344,998 1.1%
James Reep(12) ............................................................ 31,666 *
EXECUTIVE OFFICERS
Frank A. Russo(13)......................................................... 98,624 *
Robert I. Theis(14) ....................................................... 90,766 *
Stephen E. Webb(15)........................................................ 63,452 *
All directors and executive officers as a group (18 persons)(16) .......... 5,930,796 18.7%
</TABLE>
- --------------------
* Less than 1%.
(1) This information was obtained from filings made with the SEC pursuant to
Sections 13(d) or 13(g) of the Exchange Act. Unless otherwise indicated,
the address of each of the individuals or entities named above is: c/o New
Era of Networks, Inc., 7400 East Orchard Road, Suite 230, Englewood,
Colorado 80111.
(2) The number and percentage of shares beneficially owned is determined is
determined in accordance with Rule 13d-3 of the Exchange Act, and the
information is not necessarily indicative of beneficial ownership for any
other purpose. Under such rule, beneficial ownership includes any shares
as to which the individual or entity has voting power or investment power
and also any shares which the individual or entity has the right to
acquire within 60 days of April 15, 1999 through the exercise of any stock
option or other right. Unless otherwise indicated in the footnotes, each
person has sole voting and investment power (or shares such powers with
his or her spouse) with respect to the shares shown as beneficially owned.
(3) Mr. Adam is also Chairman of the Board and Chief Executive Officer of the
Company. Includes 65,982 shares of the Common Stock held in the name of
Adam's Investments I, LLLP, George F. Adam, III; 65,982 shares of Common
Stock held in the name of Adam's Investments II, LLLP, John C. Adam;
30,604 shares of Common Stock held in the name of Adam's Investments III,
LLLP, George F. Adam, Jr., Trustee for Gregory S. Adam; 30,604 shares of
Common Stock held in the name of Adam's Investments IV, LLLP, George F.
Adam, Jr., Trustee for Rebecca Adam; 1,000 shares of Common Stock held in
the name of Adam's Investments V, LLLP, George F. Adam, Jr. Trustee for
Naomi Adam; and 36,000 shares of Common Stock held in the name of the Adam
Family Foundation, George F. Adam, Jr., Trustee. Also includes 3,667
shares of Common Stock issuable upon exercise of stock options that are
exercisable within 60 days of April 15, 1999.
(4) The address of Putnam Investments, Inc. is One Post Office Square, Boston,
MA 02109.
(5) The address of Pilgrim Baxter & Associates, Ltd. is 825 Puportail Road,
Wayne, PA 19087.
(6) Dr. Fortune is also President and Chief Operating Officer of the Company.
Includes 14,443 shares of Common Stock issuable upon exercise of stock
options that are exercisable within 60 days of April 15, 1999.
(7) Includes 2,000 shares held by Mark L. Gordon, Trustee of the Mark L.
Gordon Trust. Also includes 31,666 shares of Common Stock issuable upon
exercise of stock options that are exercisable within 60 days of
April 15,1999.
-13-
<PAGE> 15
(8) Includes 14,443 shares of Common Stock issuable upon exercise of stock
options that are exercisable within 60 days of April 15, 1999.
(9) Mr. Kasputys joined the Board of Directors in July 1998. Mr. Kasputys owns
no Common Stock and is not yet vested in any stock options.
(10) Includes 474,918 shares of Common Stock registered in the name of ARCH
Venture Fund II, L.P., a limited partnership of which Mr.Lazarus is a
general partner. Also includes 10,860 shares held in The Lazarus Gift
Trust dated 8/13/93, F/B/O Arlene Lazaras. Also includes 31,665 shares of
Common Stock issuable upon exercise of stock options that are exercisable
within 60 days of April 15, 1999.
(11) Mr. Piskiel is also Executive Vice President, Chief Technology Officer of
the Company. Includes 144,332 shares of Common Stock issuable upon
exercise of stock options exercisable within 60 days of April 15, 1999.
(12) Includes 31,666 shares of Common Stock issuable upon the exercise of stock
options that are exercisable within 60 days of April 15, 1999.
(13) Includes 16,706 shares of Common Stock issuable upon the exercise of stock
options exercisable within 60 days of April 15, 1999.
(14) Includes 29,126 shares of Common Stock issuable upon the exercise of stock
option exerciseable within 60 days of April 15, 1999.
(15) Includes 52,002 shares of Common Stock issuable upon the exercise of stock
option exerciseable within 60 days of April 15, 1999.
(16) Includes 369,095 shares of Common Stock issuable upon the exercise of
stock option exerciseable within 60 days of April 15, 1999.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act ("Section 16(a)") requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership on Form 3 and changes in ownership on Form 4 or Form 5 with the
Securities and Exchange Commission (the "SEC") and the National Association of
Securities Dealers, Inc. Such officers, directors and ten-percent stockholders
are also required by SEC rules to furnish the Company with copies of all such
forms that they file.
Based solely on its review of the copies of such forms received by the
Company, or written representations from certain reporting persons that no Forms
5 were required for such persons, the Company believes that during fiscal 1998
all Section 16(a) filing requirements applicable to its officers, directors and
ten-percent stockholders were complied with.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee currently consists of Messrs.
Lazarus and Gordon. No interlocking relationship exists between any member of
the Company's Board of Directors or Compensation Committee and any member of the
Board of Directors or compensation committee of any other Company, nor has any
such interlocking relationship existed in the past. No member of the
Compensation Committee is or was formerly an officer or an employee of the
Company or its subsidiaries.
-14-
<PAGE> 16
EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning total
compensation received by the Chief Executive Officer and each of the four most
highly compensated executive officers during the last fiscal year (the "Named
Officers") for services rendered to the Company in all capacities during the
last three fiscal years.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------- ------------
SECURITIES
FISCAL SALARY BONUS UNDERLYING
NAME AND PRINCIPAL POSITION YEAR ($)(1) ($) OPTIONS (#)
- ---------------------------------------------- ------ -------- ------- -----------
<S> <C> <C> <C> <C>
George F. (Rick) Adam, Jr 1998 $205,000 -- 20,000
Chairman of the Board and 1997 162,500 -- 22,000
Chief Executive Officer 1996 140,000 $40,000 --
- -----------------------------------------------------------------------------------------------------
Harold Piskiel 1998 $175,000 $20,340 40,000
Executive Vice President 1997 152,500 -- 26,000
Chief Technology Officer 1996 140,000 -- 53,332
- -----------------------------------------------------------------------------------------------------
Frank A. Russo, Jr. 1998 $250,868 (2) $129,959 40,000
President, North American Sales 1997 233,362 -- 20,500
and Field Operations 1996 118,921 -- 46,666
- -----------------------------------------------------------------------------------------------------
Robert I. Theis 1998 $75,092 80,000
Senior Vice President 1997 $181,768 (3) -- 26,000
Chief Marketing Officer 1996 142,500 -- 108,124
- -----------------------------------------------------------------------------------------------------
Stephen E. Webb 1998 $157,500 $4,000 20,000
Senior Vice President and 1997 139,167 45,079 20,334
Chief Financial Officer 1996 1,000 -- 113,334
</TABLE>
- --------------------
(1) These amounts reflect salary paid for the full fiscal year 1998.
(2) Includes $90,868 of commissions.
(3) Includes $22,185 of commissions.
-15-
<PAGE> 17
OPTION GRANTS IN LAST FISCAL YEAR
The following table Sets forth, as to the Named Officers, information
concerning stock options granted during the fiscal year ended December 31, 1998.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------
NUMBER OF PERCENT OF POTENTIAL REALIZABLE VALUE
SECURITIES TOTAL OPTIONS AT ASSUMED ANNUAL RATES OF
UNDERLYING GRANTED TO STOCK PRICE APPRECIATION FOR
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION OPTION TERM (4)
NAME GRANTED(1) FISCAL YEAR (2) PRICE DATE(3) 5% 10%
- ------------------------------ -------------- --------------- -------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
George F. (Rick) Adam, Jr..... 6,822 0.29% $19.525 7/29/08 $63,597 $152,326
13,178 0.57% 19.525 7/29/08 122,850 294,246
Harold Piskiel................ 11,264 0.48% 17.75 7/29/08 95,461 228,645
28,736 1.23% 17.75 7/29/08 243,533 583,303
Frank A. Russo, Jr............ 16,240 0.70% 12.3125 5/15/08 95,470 228,666
23,760 1.02% 12.3125 5/15/08 139,677 334,551
Robert I. Theis............... 80,000 3.44% 12.3125 5/15/08 470,294 1,126,435
Stephen E. Webb............... 20,000 0.86% 12.3125 5/15/08 117,573 281,609
</TABLE>
(1) All options in this table are incentive stock options and were granted
under the Amended and Restated 1995 Stock Option Plan and have exercise
prices equal to the fair market value on the date of grant. All such
options have five-year terms. All options vests over a three-year period at
the rate of one-sixth, one-third and one-half at the end of each year from
the date of grant.
(2) The Company granted options to purchase 2,327,781shares of Common Stock to
employees and consultants in fiscal 1998.
(3) Options may terminate before their expiration upon the termination of
optionee's status as an employee or consultant, the optionee's death or an
acquisition of the Company.
(4) Potential realizable value assumes that the stock price increases from the
exercise price from the date of grant until the end of the option term (10
years) at the annual rate specified (5% and 10%). Annual compounding
results in total appreciation of approximately 63% (at 5% per year) and
159% (at 10% per year). If the price of the Company's Common Stock were to
increase at such rates from the price at 1998 fiscal year end ($44 per
share) over the next 10 years, the resulting stock price at 5% and 10%
appreciation would be $71.72 and $113.96, respectively. The assumed annual
rates of appreciation are specified in SEC rules and do not represent the
Company's estimate or projection of future stock price growth. The Company
does not necessarily agree that this method can properly determine the
value of an option.
-16-
<PAGE> 18
OPTION EXERCISES AND HOLDINGS
The following table sets forth, as to the Named Officers, certain
information concerning stock options exercised during fiscal 1998 and the number
of shares subject to both exercisable and unexercisable stock options as of
December 31, 1998. Also reported are values for "in-the-money" options that
represent the positive spread between the respective exercise prices of
outstanding stock options and the fair market value of the Company's Common
Stock as of December 31, 1998.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL 1998 AND FISCAL 1998 YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-THE-
UNDERLYING UNEXERCISED MONEY OPTIONS AT FISCAL YEAR
SHARES VALUE OPTIONS AT FISCAL YEAR END END ($)(1)
ACQUIRED ON REALIZED ---------------------------- ----------------------------
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- ------------ -------- ----------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
George F. (Rick) Adam, Jr...... -- -- 3,667 38,333 $ 136,733 $ 1,173,092
Harold Piskiel................. -- -- 124,331 88,333 5,286,696 2,992,278
Frank A. Russo, Jr............. 87,248 $1,320,336 56,705 26,701 2,367,639 912,921
Robert I. Theis................ 65,208 837,334 25,789 188,335 1,030,619 6,855,908
Stephen E. Webb................ 24,332 1,380,385 58,668 95,000 2,314,010 3,566,876
</TABLE>
- --------------------
(1) Market value of underlying securities based on the closing price of
Company's Common Stock on December 31, 1998 (the last trading day of fiscal
1998) on the Nasdaq National Market of $44.00 minus the exercise price.
CERTAIN TRANSACTIONS
In October 1998, the Company executed a lease for commercial office
space in a building owned by George F. Adam, Jr., the Company's Chairman of the
Board and Chief Executive Officer, and his family. The initial lease term is for
10 years at an initial annual rental amount of approximately $911,000 and will
commence upon occupancy of the building during 1999. The annual lease rate is
subject to two scheduled lease escalations in years six and nine at market
rates. The Company believes that the lease was entered into on terms no less
favorable to the Company than could have been obtained from an unaffiliated
third party.
-17-
<PAGE> 19
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors (the "Committee")
consists of directors Steven Lazarus and Mark L. Gordon, neither of whom is an
employee or officer of the Company. The Committee sets policy and administers
the Company's cash and equity incentive programs for the purpose of attracting
and retaining highly skilled executives who will promote the Company's business
goals and build long-term stockholder value. The Committee is also responsible
for reviewing and making recommendations to the Board of Directors regarding all
forms of compensation to be provided to the executive officers and directors of
the Company, including stock compensation and loans, and all bonus and stock
compensation to all employees.
To the extent appropriate, the Company intends to take the necessary
steps to conform its compensation practices to comply with the $1 million
compensation deduction cap under Section 162(m) of the Internal Revenue Code of
1986, as amended.
COMPENSATION PHILOSOPHY AND POLICIES
The policy of the Committee is to attract and retain key personnel
through the payment of competitive base salaries and to encourage and reward
performance through bonuses and stock ownership. The Committee's objectives are
to:
o ensure that there is an appropriate relationship between executive
compensation and the creation of stockholder value;
o ensure that the total compensation program will motivate, retain
and attract executives of outstanding abilities; and
o ensure that current cash and equity incentive opportunities are
competitive with comparable companies
ELEMENTS OF COMPENSATION
Compensation for officers and key employees includes both cash and
equity elements.
Cash compensation consists of base salary, which is determined on the
basis of the level of responsibility, expertise and experience of the employee,
and competitive conditions in the industry. The Committee believes that the
salaries of its officers fall within the software industry norm. In addition,
cash bonuses may be awarded to officers and other key employees. Compensation of
sales personnel also includes sales commissions tied to quarterly targets.
Ownership of the Company's Common Stock is a key element of executive
compensation. Officers and other employees of the Company are eligible to
participate in the Amended and Restated 1995 Stock Option Plan, the 1998 Non
Statutory Stock Option Plan (collectively the "Option Plans") and the 1997
Employee Stock Purchase Plan (the "Purchase Plan"), each of which was adopted
prior to the Company's initial public offering in June 1997. The Option Plans
permit the Board of Directors or the Committee to grant stock options to
employees on such terms as the Board of Directors or the Committee may
determine. The Committee has the sole authority to grant stock options to
executive officers of the Company and is currently administering stock option
grants to all employees. In determining the size of a stock option grant to a
new officer or other key employee, the Committee takes into account equity
participation by comparable employees within the Company, external competitive
circumstances and other relevant factors. Additional
-18-
<PAGE> 20
options may be granted to current employees to reward exceptional performance or
to provide additional unvested equity incentives. The Purchase Plan permits
employees to acquire Common Stock of the Company through payroll deductions and
promotes broad-based equity participation throughout the Company. The Committee
believes that such stock plans align the interests of the employees with the
long-term interests of the stockholders.
The Company also maintains a 401(k) Plan to provide retirement benefits
through tax deferred salary deductions for all its employees. The Company does
not contribute to the 401(k) Plan.
1998 EXECUTIVE COMPENSATION
Executive compensation for 1998 included base salary, cash and
equity-based incentive compensation and, in the case of sales executives, sales
commissions. Cash incentive compensation is designed to motivate executives to
attain corporate, business unit and individual goals. The Company's policy is to
have a significant portion of an executive's total compensation at risk based on
the Company's overall performance. Executive officers, like other employees,
were eligible for option grants under the Option Plans.
CHIEF EXECUTIVE OFFICER COMPENSATION
Compensation for the Chief Executive Officer is determined by a process
similar to that discussed above for executive officers. The Chief Executive
Officer's target base pay level has been analyzed using data for comparable
software companies. Mr. Adam receives no other material compensation or benefits
not provided to all executive officers.
The Committee has considered the potential impact of Section 162(m) of
the Internal Revenue Code of 1986, as amended, which limits the tax
deductibility of cash compensation paid to individual executive officers to $1
million per officer. The cash compensation to be paid to the Company's executive
officers in fiscal 1998 is not expected to exceed the $1 million limit per
individual officer.
COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
STEVEN LAZARUS
MARK L. GORDON
-19-
<PAGE> 21
COMPANY STOCK PRICE PERFORMANCE GRAPH
The following graph compares the cumulative total return to
stockholders on the Company's Common Stock with the cumulative return of the
Nasdaq Composite Stock Market Index (the "Nasdaq Composite Index") and the
Standard & Poors 500 Index (the "S&P 500 Index"). The graph assumes that $100
was invested on June 18, 1997 in the Company's Common Stock, the Nasdaq
Composite Index and the S&P 500 Index, including reinvestment of dividends. No
dividends have been declared or paid on the Company's Common Stock. Historic
price performance is not indicative of future stock price performance.
COMPARISON OF CUMULATIVE TOTAL RETURN*
AMONG NEW ERA OF NETWORKS, INC., THE S&P 500 INDEX AND THE
NASDAQ COMPOSITE INDEX
[PERFORMANCE GRAPH PLACEHOLDER]
6/19/97 12/97 12/98
------- ----- -----
NEW ERA OF NETWORKS, INC. 100 94 733
NASDAQ STOCK MARKET (U.S.) 100 109 154
S & P 500 100 109 140
* $100 INVESTED ON 6/19/97 IN STOCK OR INDEX - INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
-20-
<PAGE> 22
OTHER MATTERS
The Board of Directors does not know of any other matters to be
presented at the Annual Meeting. If any other matters are properly presented at
the Annual Meeting, the persons named in the enclosed proxy card will have the
discretion to vote the shares they represent in accordance with their own
judgment on such matters.
It is important that your shares be presented at the meeting,
regardless of the number of shares which you hold. You are, therefore, urged to
execute and return, at your earliest convenience, the accompanying proxy card in
the envelope which has been enclosed.
THE BOARD OF DIRECTORS
Englewood, Colorado
May 10, 1999
-21-
<PAGE> 23
EXHIBIT A
---------
CERTIFICATE OF AMENDMENT
OF THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
NEW ERA OF NETWORKS, INC.
New Era of Networks, Inc., a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), pursuant to the
provisions of the General Corporation Law of the State of Delaware (the "DGCL"),
DOES HEREBY CERTIFY as follows:
FIRST: The Amended and Restated Certificate of Incorporation of the
Corporation is hereby amended by deleting the first paragraph of ARTICLE FOUR in
its present form and substituting therefor a new first paragraph of ARTICLE FOUR
in the following form:
A. This Corporation is authorized to issue two classes of shares to be
designated respectively Preferred Stock and Common Stock. The total number of
shares of Common Stock this Corporation shall have the authority to issue is
200,000,000 shares, and shall have a par value of $0.0001 per share ("Common
Stock"), and the total number of shares of Preferred Stock this corporation
shall have authority to issue is 2,000,000 and shall have a par value of $0.0001
per share and shall be undesignated as to series ("Preferred Stock").
SECOND: The amendment to the Amended and Restated Certificate of
Incorporation of the Corporation set forth in this Certificate of Amendment has
been duly adopted in accordance with the provisions of Section 242 of the DGCL
by (a) the Board of Directors of the Corporation having duly adopted a
resolution setting forth such amendment and declaring its advisability and
submitting it to the stockholders of the Corporation for their approval, and (b)
the stockholders of the Corporation having duly adopted such amendment by vote
of the holders of a majority of the outstanding stock entitled to vote thereon
at an annual meeting of stockholders called and held upon notice in accordance
with Section 222 of the DGCL.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
hereunto affixed and this Certificate of Amendment to be signed by George F.
Adam, Jr., its Chief Executive Officer, and attested by Leonard M. Goldstein,
its Secretary, this ___ day of _______________ 1999.
NEW ERA OF NETWORKS, INC.
By:
-------------------------------------
George F. Adam, Jr.
Chief Executive Officer
ATTEST:
- -----------------------------------
Leonard M. Goldstein
Secretary
<PAGE> 24
Appendix A
----------
Dear Stockholder:
Please take note of the important information enclosed with this Proxy. There
are a number of issues related to the operation of the Company that require your
immediate attention.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on the proxy card to indicate you your shares will be
voted. Then sign the card, detach it and return your proxy in the enclosed
postage paid envelope.
Thank you in advance for your prompt consideration of these matters
Sincerely,
New Era of Networks, Inc.
DETACH HERE
PROXY
NEW ERA OF NETWORKS, INC.
7400 EAST ORCHARD ROAD
ENGLEWOOD, CO 80111
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints George F. Adam, Jr., Stephen E. Webb
and Leonard M. Goldstein each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated on the reverse
side, all shares of common stock of New Era of Networks, Inc. (the "Company")
held of record by the undersigned on April 30, 1999 at the Annual Meeting of
Shareholders to be held on June 15, 1999 and any adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS PROXY WILL BE
VOTED FOR SUCH PROPOSAL.
PLEASE MARK, DATE, SIGN, AND RETURN THIS PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE> 25
DETACH HERE
[ X ] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
1. Election of Directors
Nominees: Joseph E. Kasputys and Harold A. Piskiel
FOR WITHHELD
[ ] [ ]
[ ]
------------------------
For all nominees except as noted above
2. To approve an amendment to the Company's Certificate of Incorporation
to increase the number of authorized shares of Common Stock of the
Company from 45,000,000 to 200,000,000.
FOR WITHHELD
[ ] [ ]
3. To ratify the appointment of Arthur Andersen LLP as independent
auditors for the Company.
FOR WITHHELD
[ ] [ ]
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please sign exactly as name appears hereon. Joint owners should each sign.
Executors, administrators, trustees, guardians or other fiduciaries should give
full title as such. If signing for a corporation, please sign in full corporate
name by a duly authorized officer.
Signature: Date:
------------------------------- -----------------
Signature: Date:
------------------------------- -----------------
-2-
