<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
SCHEDULE 14A
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:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ARIS CORPORATION
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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(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:
------------------------------------------------------------------------
(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.:
-----------------------
(3) Filing Party:
-------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
[ARIS LETTERHEAD]
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 21, 2000
To Aris Corporation Shareholders:
Notice is hereby given, that the Special Meeting of Shareholders of Aris
Corporation, a Washington corporation (the "Company"), will be held on Thursday,
December 21, 2000 at 5:00 p.m. at the offices of the Company, 2229 - 112th
Avenue NE, Bellevue, Washington 98004, for the following purposes:
1. To consider and act upon a proposal to approve an amendment to the
Company's 1998 Employee Stock Purchase Plan (the "ESPP") to increase
the number of shares of Common Stock reserved for issuance under the
ESPP from 500,000 to 800,000 shares, as recommended by the Board of
Directors.
2. To transact such other business as may properly come before the
meeting and any adjournments thereof.
Shareholders entitled to notice of and to vote at the meeting shall be
determined as of the close of business on Monday, November 13, 2000, the record
date fixed by the Board of Directors for such purpose. A list of such
shareholders will be available during regular business hours at the Company's
corporate headquarters located at 2229 - 112th Avenue NE, Bellevue, Washington,
for the ten days before the meeting for inspection by any shareholder for any
purpose germane to the meeting.
By Order of the Board of Directors,
/s/ Kendall W. Kunz
KENDALL W. KUNZ
President, Chief Executive Officer and Secretary
November 29, 2000
SHAREHOLDERS ARE REQUESTED TO SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE
ENCLOSED STAMPED ENVELOPE BY RETURN MAIL.
<PAGE> 3
ARIS CORPORATION
2229 - 112TH STREET NE
BELLEVUE, WASHINGTON 98004
PROXY STATEMENT
NOVEMBER 29, 2000
Proxies in the form enclosed with this Proxy Statement are solicited by
the Board of Directors of Aris Corporation (the "Company") for use at the
Special Meeting of Shareholders of the Company to be held on Thursday, December
21, 2000 at 5:00 p.m. at the offices of the Company, 2229-112th Avenue NE,
Bellevue, Washington, or at any adjournments thereof (the "Special Meeting"). It
is anticipated that this Proxy Statement and the accompanying proxy will be
first mailed to shareholders on or about November 29, 2000.
Only shareholders of record as of the close of business on November 13,
2000 (the "Record Date") will be entitled to vote at the meeting and any
adjournments thereof. As of the Record Date, 11,435,754 shares of Common Stock
of the Company were issued and outstanding. Each share outstanding as of the
Record Date will be entitled to one vote, and shareholders may vote in person or
by proxy. Execution of a proxy will not in any way affect a shareholder's right
to attend the meeting and vote in person. Any shareholder delivering a proxy has
the right to revoke it by written notice to the Secretary at any time before it
is exercised.
The representation in person or by proxy of at least a majority of all
shares of Common Stock issued, outstanding and entitled to vote at the meeting
is necessary to constitute a quorum for the transaction of business. Abstentions
and broker "non-votes" with respect to all other matters being submitted to
shareholders, are counted as present or represented for purposes of determining
the presence or absence of a quorum for the meeting. A "non-vote" occurs when a
nominee holding shares for a beneficial owner votes on one proposal, but does
not vote on another proposal because, in respect of such other proposal, the
nominee does not have discretionary voting power and has not received
instructions from the beneficial owner.
Shareholders may vote in favor of the proposal, or against the proposal,
or abstain from voting. An affirmative vote of a majority of the shares present
in person or by proxy and entitled to vote on each such matter is required for
approval. Abstentions will have the practical effect of voting against each such
matter since they are included in the number of shares present and voting on
each such matter. Shares subject to broker "non-votes" are not considered to
have been voted for the particular matter and have the practical effect of
reducing the number of affirmative votes required to achieve a majority for such
matter by reducing the total number of shares from which the majority is
calculated.
Each of the persons named as proxies in the proxy is an officer of the
Company. All properly executed proxies returned in time to be cast at the
meeting will be voted.
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The Board of Directors knows of no other matter to be presented at the
meeting. If any other matter should be presented at the meeting upon which a
vote may be properly taken, shares represented by all proxies received by the
Board of Directors will be voted with respect thereto in accordance with the
judgment of the persons named as proxies in the proxies.
PROPOSAL TO AMEND THE 1998 EMPLOYEE STOCK PURCHASE PLAN
The aggregate number of shares of Common Stock reserved for issuance under
the Company's 1998 Employee Stock Purchase Plan (the "ESPP") is 500,000 shares.
The Board of Directors has adopted and recommended to the shareholders that they
approve an amendment to the ESPP to increase the number of shares reserved for
issuance pursuant to the ESPP to 800,000 shares.
The Board of Directors believes that the ESPP provides the Company with a
further equity-based compensation incentive with which the Company can continue
to attract, motivate and retain key employees, thereby maximizing shareholder
value.
In 1998 and 1999, the Company issued an aggregate of 129,926 and 172,310
shares, respectively, to the Participants of the ESPP. Due to the volatility of
the Company's Common Stock during the first six months of 2000, the Company
issued 135,611 during the first offering period of 2000 and expects to exceed
the 500,000 shares currently reserved under the ESPP during the current purchase
period (the lower current share price of the Company's Common Stock relative to
the price of such Common Stock during 1998 and 1999 means that Participants are
able to acquire significantly more shares for the same dollar contribution).
Approval of the proposal to amend the ESPP will require an affirmative
vote of a majority of the outstanding shares of Common Stock of the Company
represented in person or by proxy at the Special Meeting entitled to vote. The
Board of Directors believes the amendment to the ESPP is in the best interests
of the Company and its shareholders and recommends a vote FOR the approval of
the proposal to amend the ESPP.
DESCRIPTION OF THE 1998 EMPLOYEE STOCK PURCHASE PLAN
PURPOSE
The ESPP provides a means for qualified employees of the Company and its
designated subsidiaries to purchase shares of the Company's common stock under
favorable terms through payroll deductions.
SHARES SUBJECT TO THE ESPP
The ESPP currently authorizes 500,000 shares of common stock to be sold to
employees electing to participate in the ESPP. Subject to the approval of this
Proposal by our shareholders, the number of shares of Common Stock reserved for
issuance under the ESPP will be increased by 300,000 shares, to a total of
800,000 shares.
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ADMINISTRATION
The ESPP is administered by a Company executive officer designated by the
Board or the Compensation Committee, except for those items expressly reserved
to the Board or the Compensation Committee under the ESPP. Any discretionary
decisions will be applicable equally to all eligible employees. Employees of
subsidiaries are eligible to participate in the ESPP only if the Board or the
Compensation Committee has designated the subsidiary as eligible for
participation.
ELIGIBILITY
To be eligible to participate in the ESPP, employees must have been with
the Company for at least ninety days, work more than 20 hours each week and own
less than 5% of the Company's stock. The Plan Administrator has the ability to
reduce the minimum hourly requirement for future offering periods. The ESPP
could also include a provision limiting participation to employees who work more
than five months a year.
Eligible employees may authorize payroll deductions in whole percentages
up to 10% of their regular cash compensation in payment of the discounted
purchase, subject to a maximum fair market value purchase amount in any calendar
year of $25,000. Participants will be automatically reenrolled in the next
offering period unless they have withdrawn from the ESPP. Termination of an
employee's employment with the Company for any reason will result in the
immediate termination of the employee's participation in the ESPP. Any
accumulated payroll deductions will be refunded to the employee, without
interest.
OFFERING PERIOD
The ESPP is divided into two six-month offering and purchase periods
beginning on January 1 and July 1 of each year. At the end of each purchase
period, eligible participating employees will purchase shares of the Company's
Common Stock at a price equal to 85% of the lesser of (a) the fair market value
of the Common Stock on the first business day of the offering period or (b) the
fair market value of Common Stock on the last business day of the purchase
period. The Board or the Compensation Committee can establish different offering
periods and purchase periods. A purchase period may be the same as the offering
period or may be shorter consecutive periods within the offering period, as
determined by the Board or the Compensation Committee. The Board or the
Compensation Committee can also decrease the amount of the discount for future
offering periods.
UNITED STATES FEDERAL INCOME TAX INFORMATION
The federal income tax information set forth below describes the tax
consequences for the Company and ESPP participants only with respect to
participants who are employed in the United States. Tax consequences for ESPP
participants employed in countries other than the United States will differ.
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Rights granted under the ESPP are intended to qualify for the favorable
federal income tax treatment associated with rights granted under an employee
stock purchase plan that qualifies under provisions of Section 423 of the Code.
A participant will be taxed on amounts withheld for the purchase of shares
of Common Stock as if such amounts were actually received. In addition, the
excess of the fair market value of the stock at the time of purchase of the
shares of Common Stock over the purchase price may be subject to employment
taxes. Other than this, no income will be taxable to a participant until
disposition of the acquired shares, and the method of taxation will depend upon
the holding period of the acquired shares.
If the stock is disposed of at least two years after the beginning of the
offering period and at least one year after the stock is transferred to the
participant, then the lesser of (i) the excess of the fair market value of the
stock at the time of such disposition over the exercise price or (ii) the excess
of the fair market value of the stock as of the beginning of the offering period
over the exercise price, determined as of the beginning of the offering period,
will be treated as ordinary income. Any further gain or any loss will be taxed
as a long-term capital gain or loss. Such capital gains currently are generally
subject to lower tax rates than ordinary income.
If the stock is sold or disposed of before the expiration of either of the
holding periods described above, then the excess of the fair market value of the
stock on the exercise date over the exercise price will be treated as ordinary
income at the time of the sale or disposition. The balance of any gain will be
treated as capital gain. Even if the stock is later disposed of for less than
its fair market value on the exercise date, the same amount of ordinary income
is attributed to the participant, and a capital loss is recognized equal to the
difference between the sales price and the fair market value of the stock on
such exercise date. Any capital gain or loss will be short-term or long-term,
depending on how long the stock has been held.
There are no federal income tax consequences to the Company by reason of
the grant or exercise of rights under the ESPP. The Company is entitled to a
deduction to the extent amounts are taxed as ordinary income to a participant
(subject to the requirement of reasonableness and the satisfaction of tax
reporting obligations).
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth as of the Record Date certain information
regarding the beneficial ownership of the Company's outstanding Common Stock by:
(i) each person who, to the knowledge of management, owned beneficially more
than 5% of the Common Stock; (ii) each director and director nominee of the
Company, (iii) each of the Named Executive Officers for whom compensation is
reported in this Proxy Statement and (iv) all directors and executive officers
of the Company as a group. Based on information furnished by the beneficial
owners to the Company, and except as otherwise noted and subject to community
property laws where applicable, the Company believes that the beneficial owners
listed below have sole voting and investment power with respect to such shares.
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<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS
-------------------------------------- ----------------------- -----------------
<S> <C> <C>
5% OWNERS:
Paul Y. Song 3,743,286(2) 32.7%
2229 112th Street NE
Bellevue, Washington 98004
Tina J. Song 3,743,286(3) 32.7%
2229 112th Street NE
Bellevue, Washington 98004
AHS LLC 650,000 5.7%
3700 First Interstate Center
999 Third Avenue
Seattle, Washington 98104
WM Advisors Inc (WA) 1,375,600(4) 12.0%
1201 Third Avenue
22nd Floor
Seattle, Washington 98101
Wellington Management Company, LLP 1,245,000(4) 10.9%
75 State Street
Boston, MA 02109
DIRECTORS AND NAMED EXECUTIVE
OFFICERS:
Kendall W. Kunz 341,294(5) 3.0%
Thomas W. Averill 50,704(6) *
William E. Berry 78,607(7) *
Carey E. Butler -- *
Bruce R. Kennedy 25,417(8) *
Barry L. Rowan 16,417(9) *
Kenneth A. Williams 38,217(10) *
All current directors and executive 4,294,246(11) 37.5%
officers as a group (8 persons)
* owns less than 1% of the Company's outstanding Common Stock.
</TABLE>
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(1) Beneficial ownership is determined in accordance with the rules of the
Commission and generally includes voting or investment power with respect
to securities. Common Stock subject to options currently exercisable or
exercisable within sixty (60) days of the Record Date are deemed
outstanding for purposes of computing the percentage ownership of the
person holding such option but are not deemed outstanding for purposes of
computing the percentage ownership of any other person.
(2) Includes 650,000 shares owned by AHS LLC, of which Mr. Song is a Manager.
Mr. Song has shared voting power of these shares. Also includes 472,000
shares owned by Tina Song, the spouse of Mr. Song.
(3) Includes 650,000 shares owned by AHS LLC, of which Ms. Song is a Manager.
Ms. Song has shared voting power of these shares. Also includes 2,621,286
shares owned by Paul Song, the spouse of Ms. Song.
(4) Share ownership determined pursuant to a Form 13F filed by the beneficial
owner with the Securities and Exchange Commission for the period ending
September 30, 2000.
(5) Includes 101,700 shares of Common Stock subject to options that are
exercisable within 60 days of November 13, 2000.
(6) Includes 29,800 shares of Common Stock subject to options that are
exercisable within 60 days of November 13, 2000.
(7) Includes 406 shares held by the William Berry Trust and 36,449 shares of
Common Stock subject to options that are exercisable within 60 days of
November 13, 2000.
(8) Includes 15,417 shares of Common Stock subject to options that are
exercisable within 60 days of November 13, 2000.
(9) Includes 6,417 shares of Common Stock subject to options that are
exercisable within 60 days of November 13, 2000.
(10) Includes 15,417 shares of Common Stock subject to options that are
exercisable within 60 days of November 13, 2000.
(11) Includes 200,200 shares of Common Stock subject to options that are
exercisable within 60 days of November 13, 2000.
COMPENSATION AND OTHER INFORMATION
CONCERNING EXECUTIVE OFFICERS
COMPENSATION SUMMARY
The following table sets forth certain information regarding annual and
long-term compensation for services in all capacities to the Company earned by
the Company's Chief Executive Officer and the four other executive officers who
earned in excess of $100,000 in salary and bonus during fiscal 1999, 1998 and
1997 (the "Named Executive Officers"). The Company did not make any restricted
stock awards, grant any stock appreciation rights or make any long-term
incentive plan payouts during 1999, 1998 or 1997.
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<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION
----------------------- ------------
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) OPTION(#) COMPENSATION($)
------------------------------- ---- --------- ----------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Kendall W. Kunz................ 1999 150,000 12,781 68,500 6,000(2)
President, Chief Executive 1998 150,000 53,007 14,000 6,000(2)
Officer and Secretary 1997 120,000 51,440 80,000 6,000(2)
Paul Y. Song................... 1999 240,000 15,178 0 3,745(2)
Former President and Chief 1998 180,000 70,100 0 4,143(2)
Executive Officer 1997 150,000 92,897 0 4,214(2)
Thomas W. Averill.............. 1999 106,000 -- 5,000 --
Vice President of Strategic 1998 106,000 2,090 4,000 --
Planning 1997 37,500 -- 0 --
William E. Berry............... 1999 175,000 16,928 13,000 6,000(2)
Vice President of Enterprise 1998 87,500 162,168 32,849 3,000(2)
Application Solutions 1997 -- -- -- --
Carey E. Butler ............... 1999 -- -- -- --
Vice President of eBusiness 1998 -- -- -- --
Solutions 1997 -- -- -- --
(1) Represents payments under the Company's Executive Profit Bonus Plan.
(2) Represents amount paid by the Company for automobile expenses.
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table shows information regarding grants of stock options to
the Named Executive Officers during the year ended December 31, 1999.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------- POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED ANNUAL
NUMBER OF TOTAL OPTIONS RATES OF STOCK PRICE
SHARES GRANTED TO APPRECIATION FOR OPTION
UNDERLYING EMPLOYEES IN EXERCISE TERM(3)
OPTIONS FISCAL PRICE EXPIRATION ------------------------
NAME GRANTED(#)(1) YEAR(%)(1)(2) ($/SHARE) DATE 5%($) 10%($)
-------------------- ------------- -------------- --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Paul Y. Song........ 0 -- -- -- -- --
Kendall W. Kunz..... 23,500 1.68 9.313 1/7/09 137,637 348,799
45,000 3.21 5.406 10/19/06 99,041 230,807
Thomas W. Averill... 5,000 0.36 9.313 1/7/09 29,284 70,407
William E. Berry .... 5,000 0.36 9.313 1/7/09 29,284 70,407
8,000 0.57 5.406 10/19/06 27,200 68,930
Carey E. Butler...... 0 -- -- -- -- --
</TABLE>
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(1) The exercise price per share of each option is equal to the fair market
value per share of the underlying Common Stock on the date of grant. All
options listed have a ten year term vest over four years, with 20% vesting
at the end of each of the first and second years and 30% vesting at the
end of each of the third and fourth years.
(2) Options to purchase 1,395,552 shares of Common Stock were granted by the
Company to its employees during 1999.
(3) Amounts represent hypothetical gains that could be achieved for the
respective options exercised at the end of the option term. These gains
are based on assumed rates of appreciation of 5% and 10% compounded
annually from the date the respective options were granted to their
expiration date. The gains shown are net of the option exercise price, but
do not include deductions for taxes or other expenses associated with the
exercise of the options or sale of the underlying shares. The actual
gains, if any, on the stock option exercises will depend on the future
performance of the Common Stock, the optionholder's continued employment
through the option period, and the date on which the options are
exercised.
OPTION EXERCISES AND YEAR-END VALUES
The following table provides information on stock option exercises by
the Named Executive Officers and the number and value of the Named Executive
Officers' unexercised options at December 31, 1999.
AGGREGATED OPTION EXERCISES DURING 1999 AND
OPTION VALUES AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
TOTAL NUMBER OF VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
ACQUIRED VALUE FISCAL YEAR-END(#) AT FISCAL YEAR-END($)(1)
ON REALIZED ----------------------------- -----------------------------
NAME EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------ ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kendall W. Kunz 0 -- 42,800 119,700 270,000 612,736
Paul Y. Song 0 -- -- -- -- --
Thomas W. Averill 0 -- 21,300 12,700 184,265 48,770
William E. Berry 0 -- 27,849 18,000 0 62,935
Carey E. Butler 0 -- -- -- -- --
(1) This amount is the aggregate number of the outstanding options multiplied
by the difference between $11.75 (the closing price of the Common Stock as
reported on the Nasdaq National Market on December 31, 1999) and the
exercise price of such options.
</TABLE>
COMPENSATION OF DIRECTORS
Directors of the Company do not receive cash compensation for their
services as directors or members of the committees of the Board of Directors.
Each non-employee director is entitled to receive non-discretionary grants of
options to purchase the Company's Common Stock pursuant to the provisions of the
Company's 2000 Stock Option Plan.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT
AND CHANGE OF CONTROL AGREEMENTS
The Company has enter into an employment agreement with Kendall Kunz,
which provides, among other things, a severance payment equal to one year's
salary in the event that Mr. Kunz is terminated as President and Chief Executive
Officer without cause. The Company has also entered
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<PAGE> 11
into an employment agreement with William E. Berry that expires on January 1,
2001.
The Company and its Named Officers have entered into agreements providing
for certain benefits to officers upon the change in control of the Company. The
agreements provide for acceleration of vesting following a change in control of
the Company. The acceleration of vesting will occur even if the successor entity
in the change in control transaction assumes the options. Fifty percent of all
unvested options will vest six months after the change of control, and the
remaining fifty percent will vest twelve months after the change in control,
provided, however, that all unvested options will vest upon the officer's
termination following the change in control. In addition to the acceleration of
the unvested options, the agreement also provides that if, within 24 months
following a change in control of the Company, the officer is involuntarily
terminated for any reason other than for disability or "cause," the officer will
be entitled to: (i) a severance payment equal to two times his prior year's
salary; and (ii) up to twelve month's of Company-paid health insurance benefits.
In addition, the agreement provides that if, within 12 months following a change
in control of the Company, the officer has not been involuntarily terminated for
any reason other than for disability or "cause," the officer will be entitled to
a bonus payment equal to the prior year's salary.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The purpose of the Compensation Committee is to review and make
recommendations to the Board of Directors regarding all forms of compensation to
be provided to the executive officers and directors of the Company and its
subsidiaries, including stock compensation and loans, and all bonus and stock
compensation to all employees. The Committee members consist of the Company's
non-employee directors, Bruce R. Kennedy (chair), Barry L. Rowan and Kenneth A.
Williams, who are appointed by and serve at the discretion of the Board of
Directors. None of the members of the compensation committee have ever been an
officer of the Company.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended for inclusion in the proxy statement to
be furnished to all shareholders entitled to vote at the next annual meeting of
the Company must be received at the Company's principal executive offices no
later than December 1, 2000. In order to curtail controversy as to the date on
which a proposal was received by the Company, it is suggested that proponents
submit their proposals by Certified Mail--Return Receipt Requested.
EXPENSES AND SOLICITATION
The cost of solicitation of proxies will be borne by the Company, and in
addition to soliciting shareholders by mail through its regular employees, the
Company may request banks, brokers and other custodians, nominees and
fiduciaries to solicit their customers who have stock of the Company registered
in the names of a nominee and, if so, will reimburse such banks, brokers and
other custodians, nominees and fiduciaries for their reasonable out-of-pocket
costs. Solicitation by officers and employees of the Company may also be made of
some shareholders in person or by mail, telephone, telegraph or electronic mail
following the original solicitation.
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APPENDIX A
AMENDMENT DATED OCTOBER 16, 2000
TO
ARIS CORPORATION
1998 EMPLOYEE STOCK PURCHASE PLAN
The ARIS Corporation 1998 Employee Stock Purchase Plan (the "ESPP") is
hereby amended as follows:
1. Section 4 of the ESPP is amended to read as follows:
SECTION 4. STOCK SUBJECT TO PLAN
Subject to adjustment from time to time as provided in Section 19, a
maximum of 800,000 shares of Stock may be sold under the Plan. Shares sold
under the Plan shall be drawn from authorized and unissued shares or shall
be shares acquired by the Company. Any shares of Stock subject to an
Option that cease to be subject to the Option (other than by reason of
exercise of the Option), including, without limitation, in connection with
the cancellation or termination of the Option, shall again be available
for sale in connection with future grants of Options under the Plan.
The date of the adoption of such amendment by the Board of Directors of
the corporation is October 16, 2000.
The date of the approval of such amendment by the shareholders of the
corporation is ______________, 2000.
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<PAGE> 13
ARIS CORPORATION
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 21, 2000
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Kendall W. Kunz and Diane Gamache, and
each or both of them, proxies, with full power of substitution to vote all
shares of stock of the Company which the undersigned is entitled to vote at the
Special Meeting of Shareholders of Aris Corporation, to be held on Thursday,
December 21, 2000 at 5:00 p.m. at the offices of the Company, 2229 - 112th
Avenue NE, Bellevue, Washington and at any adjournment thereof, upon matters set
forth in the Notice of Special Meeting of Shareholders and Proxy Statement dated
November 29, 2000, a copy of which has been received by the undersigned. The
proxies are further authorized to vote, in their discretion, upon such other
business as may properly come before the meeting or any adjournment thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED, OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR THE PROPOSAL IN ITEM 1.
Please mark your votes as indicated in this example. [X]
1. To approve an amendment to the Aris 1998 Employee Stock Purchase
Plan to increase the number of shares of Common Stock reserved for
issuance thereunder from 500,000 to 800,000 shares, as recommended
by the Board of Directors.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Date: December __, 2000
Signature(s) of Shareholder(s)
______________________________
Print Name(s)
(If signing as attorney, executor, trustee or
guardian, please give your full title as such.
If shares are held jointly, each holder should
sign.)
[ ] Check this box if you plan on attending the
Special Meeting of Shareholders in person.
