SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Soliciting Material Pursuant to
sec.240.14a-11(c) or sec.240.14a-12
[X] Definitive Proxy Statement [ ] Confidential, for Use of the
Commission Only
[ ] Definitive Additional Materials (as permitted by Rule 14a-6(e)(2))
Indus International, 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.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
<PAGE>
INDUS INTERNATIONAL, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 4, 1999
To The Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Indus International,
Inc. (the "Company"), a Delaware corporation, will be held on May 4,
1999 at 2:00 p.m., local time, at the Company's headquarters located at
60 Spear Street, San Francisco, California, for the following purposes:
1. To elect the following directors to serve for the ensuing year
and until their successors are duly elected and qualified: Robert
W. Felton, William J. Grabske, William H. Janeway, Joseph P.
Landy and Jeanne D. Wohlers.
2. To approve an amendment to the Company's 1997 Stock Plan to
increase the number of shares reserved for issuance thereunder by
2,500,000 shares to 10,000,000 shares.
3. To approve an amendment to the Company's 1997 Director's Option
Plan to increase the number of shares of Common Stock granted as a
First Option from 10,000 to 50,000 shares and the shares granted
as a Subsequent Option under the Director's Plan from 5,000 to
10,000 shares.
4. To ratify the appointment by the Board of Directors of Ernst &
Young LLP as independent auditors of the Company for the year
ending December 31, 1999.
5. To transact such other business as may properly come before the
Annual Meeting and any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on March 10, 1999
are entitled to notice of and 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 mark, sign and return the enclosed proxy card 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 returned a proxy.
By Order of the Board of Directors
Anna Ng-Borden
Corporate Secretary
San Francisco, California
April 2, 1999
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE REQUESTED
TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE
AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
INDUS INTERNATIONAL, INC.
PROXY STATEMENT
FOR 1999 ANNUAL MEETING OF STOCKHOLDERS
General
The enclosed Proxy is solicited on behalf of the Board of Directors
of Indus International, Inc. (the "Company") for use at the Annual
Meeting of Stockholders to be held May 4, 1999 at 2:00 p.m., local time,
or at any adjournment of postponement thereof, for the purposes set
forth in this Proxy Statement and in the accompanying Notice of Annual
Meeting of Stockholders. The Annual Meeting will be held at the
Company's headquarters located at 60 Spear Street, San Francisco,
California.
These proxy solicitation materials and the Annual Report to
Stockholders for the year ended December 31, 1998 were mailed on or
about April 2, 1999 to all stockholders entitled to vote at the Annual
Meeting.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to ChaseMellon
Shareholder Services, LLC, Attention: Joseph W. Thatcher, Jr. Inspector
of Elections, 235 Montgomery Street, 23rd Floor, San Francisco, CA 94104,
a written notice of revocation or a duly executed proxy bearing a later
date or by attending the Annual Meeting and voting in person. The
presence at the Annual Meeting of the stockholder who has appointed a
proxy will not of itself revoke the prior appointment. If not revoked,
the proxy will be voted at the Annual Meeting in accordance with the
instructions indicated on the proxy card, or if no instructions are
indicated, will be voted FOR the slate of directors described herein,
FOR Proposals Two Three and Four and as to any other matter that may be
properly brought before the Annual meeting, in accordance with the
judgment of the proxy holders.
Voting at the Annual Meeting; Record Date
Only holders of record of the Company's common stock ("Common
Stock") at the close of business on March 10, 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 and to vote on all matters properly
submitted for the vote of stockholders at the Annual Meeting. As of the
Record Date, 31,774,206 shares of the Company's Common Stock were issued
and 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
"Security Ownership of Management; Principal Stockholders."
Quorum; Required Vote
The required quorum for the transaction of business at the Annual
Meeting is a majority of the shares of Common Stock issued and
outstanding on the record date. All shares represented at the meeting,
whether in person or by a general or limited proxy, will be counted for
the purpose of establishing a quorum.
While there is not definitive statutory or case law authority in
Delaware as to the proper treatment of abstentions, the Company believes
that abstentions should be counted for purposes of determining both (i)
the presence or absence of a quorum for the transaction of business and
(ii) the total number of shares present and entitled to vote ("Votes
Cash") with respect to a proposal (other than the election of
directors). In the absence of controlling precedent to the contrary,
the Company intends to treat abstentions in this manner. Accordingly,
abstentions will have the same effect as a vote against the proposal.
Under current Delaware case law, while broker non-votes (i.e. the
votes of shares held of record by brokers as to which the underlying
beneficial owners have given no voting instructions) should be counted
for purposes of determining the presence or absence of a quorum for the
transaction of business, broker non-votes should not be counted for
purposes of determining the number of Votes Cast with respect to the
particular proposal on which the broker has expressly not voted.
Accordingly, the Company intends to treat broker non-votes in this
manner. Thus, a broker non-vote will make a quorum more readily
obtainable, but the broker non-vote will not otherwise affect the
outcome of the voting on a proposal.
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 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 or
facsimile. 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.
Procedure for Submitting Stockholder Proposals
Stockholders may present proper proposals for inclusion in the
Company's proxy materials for consideration at the next annual meeting
of its stockholders by submitting their proposals 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, stockholder
proposals must be received by the Secretary of the Company no later than
December 3, 1999, and must otherwise comply with the requirements of
Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). In connection with its 2000 Annual Meeting of
Stockholders, the Company intends to solicit proxies granting
discretionary authority to proxyholders to vote on any matters submitted
to the Company by stockholders after February 16, 2000.
PROPOSAL ONE
ELECTION OF DIRECTORS
Nominees
A board of five directors will be elected at the Annual Meeting.
Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the Company's five nominee's names below, all of
whom are presently directors of the Company. If any nominee of the
Company is unable or declines to serve as a director at the time of the
Annual Meeting, the proxies will be voted for any nominee designated by
the present Board of Directors to fill the vacancy. Management has no
reason to believe that any of the nominees will be unable or unwilling
to serve if elected. The term of office of each person elected as a
director will continue until the next Annual Meeting of Stockholders or
until his successor has been elected and qualified.
All nominees are presently directors of the Company. The names of
the nominees, their ages as of the date of this proxy statement and
certain information about them are set forth below:
<TABLE>
<CAPTION>
Name of Nominee Age Principal Occupation
- ------------------------ ---- --------------------------------------
<S> <C> <C>
Robert W. Felton...... 60 Director, former Chief Executive Officer
William J. Grabske.... 56 Chairman of the Board and Chief Executive
Officer
William H. Janeway.... 55 Managing Director and the head of the
Venture Capital High Technology Team of
E.M. Warburg, Pincus & Co., LLC
Joseph P. Landy....... 37 Managing Director of E.M. Warburg, Pincus
& Co., LLC
Jeanne D. Wohlers..... 53 Director
</TABLE>
There are no family relationships between or among any directors
or executive officers of the Company.
Mr. Felton is a founder of The Indus Group, Inc. and has been a
director since the Company was formed pursuant to the merger of The
Indus Group, Inc. and TSW International, Inc. (the "Merger") which was
consummated on August 25, 1997. He was Chairman of the Board until
March 17, 1999. He also served as Chief Executive Officer of the
Company until December 31, 1998. From 1988 until August 25, 1997, he
was the Chairman, President and Chief Executive Officer of The Indus
Group, Inc.
Mr. Grabske has served as Chief Executive Officer and director of
the company since January 1, 1999. He was elected as Chairman of the
Board on March 17, 1999. He has served as President since June 15,
1998. From June 15, 1998 until December 31, 1998, he served as Chief
Operating Officer of the Company. Mr. Grabske was formerly President of
the EDS' Utilities Industry. He joined EDS in 1995, after serving as
Senior Vice President and Managing Director of JWP International.
Mr. Janeway served as a director of the Company since the
consummation of the Merger on August 25, 1997. From 1994 to August 25,
1997, he served as a director of TSW International, Inc. Since 1988, he
has been a managing director and the head of the Venture Capital High
Technology Team of E.M. Warburg, Pincus & Co., LLC ("EMW LLC") and its
predecessor, EMW Inc. Mr. Janeway serves on the Board of Directors as a
nominee of Warburg. Mr. Janeway also serves as a director of BEA
Systems, Inc., an on-line transaction processing software and services
company, Industri-Matematik International Corp., a client/server
application software company, Veritas Software, a Unix system software
company, and Vanstar/Inacom, a technology services company, and several
privately-held companies.
Mr. Landy has served as a director of the Company since the
consummation of the Merger on August 25, 1997. From 1992 to August 25,
1997, he served as a director of TSW International, Inc. Since 1994,
Mr. Landy has been a managing director of EMW LLC and its predecessor;
EMW Inc. Mr. Landy has been employed in various capacities by EMW LLC
and EMW Inc. since 1985. Mr. Landy also serves on the Board of Directors
as a nominee of Warburg. Mr. Landy also serves as a director of Level
One Communications.
Ms. Wohlers has served as a director of the Company since January 1,
1999. Ms. Wohlers currently serves on the board of directors of 44
mutual funds managed by American Century. Ms. Wohlers has held a
number of corporate senior management positions with high growth
companies and investment management firms from 1974 through 1998. From
1994 to 1998, Ms. Wohlers was a partner at Windy Hill Productions, a
producer of educational entertainment software.
Board Meeting and Committees
The Board of Directors of the Company held a total of four meetings
in 1998. The Board of Directors has two committees, an Audit Committee
and a Compensation Committee, which were established in June 1997.
During the last fiscal year, all directors attended 100% of the meetings
of the Board of Directors and the meetings of all committees of the
Board of Directors on which such directors served
The Audit Committee of the Board of Directors currently consists of,
Joseph P. Landy and Jeanne D. Wohlers. The Audit Committee recommends
engagement of the Company's independent accounts and is primarily
responsible for approving the services performed by the Company's
independent accountants and for reviewing and evaluating the Company's
accounting principles and its system of internal accounting controls.
The Audit Committee held three meetings during fiscal 1998.
The Compensation Committee of the Board of Directors currently
consists of Mr. William H. Janeway and Jeanne D. Wohlers. The
Compensation Committee establishes the Company's executive compensation
policy, determines the salary and bonuses of the Company's executive
officers and recommends to the Board of Directors stock option grants
for executive officers. The Compensation Committee held five meetings
via teleconferencing during fiscal 1998.
Director Compensation
Directors currently receive no cash fees for services provided in
that capacity but are reimbursed for out-of-pocket expenses they incur
in connection with their attendance at meetings of the Board of
Directors. The Company's 1997 Director Option Plan (the "Director
Option Plan") was adopted by the Board of Directors and approved by the
stockholders of the Company on July 17, 1997. Under the Director Option
Plan, the Company reserved 200,000 shares of Common Stock for issuance
to the directors of the Company pursuant to non-statutory stock options.
As of March 10, 1999, options to purchase an aggregate of 55,000 shares
were outstanding under the Director Option Plan at a weighted average
exercise price of $15.40 per share, of which options to purchase 7,500
shares were fully vested and immediately exercisable; no options had
been exercised pursuant to the Plan; and 145,000 shares remained
available for future grant.
Each director who is not an employee of the Company is automatically
granted a nonstatutory option to purchase 10,000 shares of Common Stock
of the Company (the "First Option") on the date such person becomes a
director or, if later, on the effective date of the Director Option
Plan. Thereafter, each such person will automatically be granted an
option to acquire 5,000 shares of the Company's Common Stock (the
"Subsequent Option") upon such outside director's re-election at each
Annual Meeting of Stockholders, provided that on such date such person
has served on the Board of Directors for at least six months. Each
option granted under the Director Option Plan will become exercisable as
to 25% of the Shares subject to such option on each anniversary of its
date of grant. Messrs. Janeway and Landy each received grants of
options to purchase 5,000 shares on May 5, 1998. Ms. Wohlers was
granted a First Option on January 1, 1999 at an exercise price of $6.63
per share.
1995 Director Option Plan
Prior to the Merger, The Indus Group, Inc. had implemented a 1995
Director Option Plan (the "1995 Director Plan"). Under the 1995
Director Plan each non-employee director was automatically granted a
nonstatutory option to purchase 10,000 shares of Common Stock of The
Indus Group, Inc. on the date such person became a director or, if
later, on the effective date of the 1995 Director Plan. Thereafter, each
such person would automatically be granted an option to acquire 2,500
shares of The Indus Group, Inc's Common Stock upon such outside
director's re-election at each Annual Meeting of Stockholders, provided
that on such date such director had served on the Board of Directors for
at least six months. Each option granted under the 1995 Director Plan
would become exercisable as to 25% of the Shares subject to such option
on each anniversary of its date of grant.
As of March 10, 1999, no options have or will be granted to the
current directors under the 1995 Director Plan
Required Vote
The five nominees receiving the highest number of affirmative votes
of the shares present or represented and entitled to be voted for them
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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED ABOVE.
PROPOSAL TWO
AMENDMENT TO 1997 STOCK PLAN
On March 10, 1999, the Board of Directors of the Company approved
an amendment to the 1997 Stock Plan (the "Stock Plan") to increase the
number of shares of Common Stock available for issuance under the Plan
from 2,500,000 to 10,000,000 shares. The Board of Directors believed
that increasing the number of shares available under the Stock Plan
would enable the Company to continue to attract, retain and motivate it
employees and consultants through equity incentives.
Of the 2,500,000 shares authorized under the Stock Plan prior to
the amendment described above, as of March 10, 1999, no options to
purchase shares had been exercised, options to purchase an aggregate of
3,465,500 shares were outstanding, and 1,534,500 shares remained
available for future grant.
At the Annual Meeting, the stockholders are being asked to approve
the amendment to the Stock Plan to increase the number of shares of
Common Stock reserved thereunder.
A summary of the amended 1997 Stock Plan is disclosed in Appendix A.
Amended Stock Plan Benefits
The following table sets forth certain information regarding
options granted under the Stock Plan during the fiscal year ended
December 31, 1998 to each of the executives names in the Summary
Compensation Table below, all current executive officers as a group, all
current directors who are not executive officers as a group, and all
other employees (including current officers who are not executive
officers) as a group:
AMENDED PLAN BENEFITS TABLE
<TABLE>
<CAPTION>
NUMBER OF
OPTIONS
GRANTED
DOLLAR UNDER THE
VALUE OF STOCK PLAN
NAME AND PRINCIPAL POSITION GRANTS (1) IN 1998
- ----------------------------------------- ---------- -----------
<S> <C> <C>
Robert W. Felton
Former Chief Executive Officer............
$ -- --
William J. Grabske
Chief Executive Officer, President
and Director............................ 610,000 1,000,000
C. Jeffrey Simpson
Former Executive Vice President of
Worldwide Sales......................... -- 750,000
Frank M. Siskowski
Former Chief Financial Officer and
Executive Vice President of
Investor Relations...................... -- --
Robert A. Pocsik
Senior Vice President Human
Resources and Administration............ 106,000 50,000
Kerry P. Lamson
Senior Vice President Worldwide
Marketing............................... 146,400 285,000
All Executive Officers as a
Group (5 persons)....................... 862,400 2,085,000
Non-Executive Directors as a
Group (3 persons)....................... -- --
All Employees Other than
Executive Officers...................... 2,852,665 1,536,625
</TABLE>
- -------------------------
(1) The dollar value of option grants under the Stock Plan was computed
based on the closing price of the Company's Common Stock on December
31, 1998 on the Nasdaq National market of $7.00 minus the exercise
price of such options. On such date, some options granted under the
Stock Plan were "out-of-the-money." These included options to
purchase 750,000 shares granted to William J. Grabske, options to
purchase 750,000 shares to C. Jeffrey Simpson, options to purchase
225,000 shares to Kerry P. Lamson and all grants to non-executive
directors. All employees other than executive officers were "in the
money" due to the repricing of all options "out-of the money" at
the fair market value on 12/14/98. "Value of Grants" represents
only those options "in-the-money."
Required Vote
The approval of amendments to the Stock Plan requires the affirmative
vote of the holders of a majority of the shares of the Company's Common
Stock represented in person or by proxy and entitled to vote on the
proposal. See "Quorum; Required Vote" above.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT TO THE
1997 STOCK PLAN.
PROPOSAL THREE
AMENDMENT TO 1997 DIRECTOR'S OPTION PLAN
On March 10, 1999, the Board of Directors of the Company approved an
amendment to the 1997 Director's Option Plan ("Director's Plan") to
increase the number of shares of Common Stock granted as a First Option
from 10,000 to 50,000 and the shares granted as a Subsequent Option
under the Director's Plan from 5,000 shares to 10,000 shares. This
amendment will be effective for all grants under the 1997 Director's
Option Plan dated on or after January 1, 1999. The Board of Directors
believed that increasing the number of shares available under the
Director's Plan would enable the Company to continue to attract and
retain Outside Directors through equity incentives.
At the Annual Meeting, the stockholders are being asked to approve
the amendment to the Director's Plan to increase the number of shares of
Common Stock granted as a First Option and any Subsequent Option to each
Outside Director.
Upon approval of this amendment by the stockholders, the First Option
granted to Ms. Wohlers on January 1, 1999 will be increased from 10,000
to 50,000 shares at an exercise price of $6.63 per share.
A summary of the amended Director's Option Plan is disclosed in Appendix B.
AMENDED PLAN BENEFITS TABLE
<TABLE>
<CAPTION>
NUMBER OF
OPTIONS TO
BE GRANTED
DOLLAR UNDER THE
VALUE OF DIRECTOR'S PLAN
NAME OF OUTSIDE DIRECTOR GRANTS (1) DURING 1998
- ----------------------------------------- ---------- ---------------
<S> <C> <C>
William H. Janeway........................ -- 10,000
Joseph P. Landy........................... -- 10,000
Jeanne D. Wohlers......................... -- 50,000
</TABLE>
- -------------------------
(1) The exercise price for all grants under the Director's Plan will
be the fair market value of the Company's common stock at the time
of the grant.
Required Vote
The approval of amendments to the Director's Plan requires the
affirmative vote of the holders of a majority of the shares of the
Company's Common Stock represented in person or by proxy and entitled
to vote on the proposal. See "Quorum; Required Vote" above.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT TO
THE 1997 DIRECTOR'S OPTION PLAN.
PROPOSAL FOUR
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP as independent
auditors of the Company, to audit the financial statements of the
Company for the current year ending December 31, 1999 and recommends
that the stockholders ratify this selection. Representatives of Ernst &
Young LLP are expected to be available at the meeting with the
opportunity to make a statement if they desire to do so and are expected
to be available to respond to appropriate questions.
In the event that the stockholders do not approve the selection of
Ernst & Young LLP, the Board of Directors will reconsider its selection.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT AUDITORS.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the Company
during 1996, 1997 and 1998 to its Chief Executive officer and the five
most highly compensated executive officer's who were serving as
executive officers during the year ended December 31, 1998 (the "Named
Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
All
Annual Compensation Other
------------------- Compensa-
Name and Principal Position Year Salary($) Bonus tion($)(1)
- ------------------------------ --------- --------- --------- -----------
<S> <C> <C> <C> <C>
Robert W. Felton (2)
Former Chief
Executive Officer ............. 1998 $325,000 $ -- $5,793
1997 240,000 4,307 2,027
1996 195,000 7,334 4,435
William J. Grabske (3)
Former Chief Operating
Officer........................ 1998 381,859 349,372 7,025
1997 -- -- --
1996 -- -- --
C. Jeffrey Simpson(4)
Former Executive Vice
President of Worldwide Sales.. 1998 179,615 100,000 2,233
1997 -- -- --
1996 -- -- --
Frank M. Siskowski (5)
Former Chief Financial Officer
and Executive Vice President
of Investor Relations.......... 1998 240,976 -- 11,011
1997 180,000 50,000 801
1996 52,500 -- 3,389
Robert A. Pocsik (6)
Senior Vice President Human
Resources and Administration... 1998 56,250 180,293 1,448
1997 -- -- --
1996 -- -- --
Kerry P. Lamson(7)
Senior Vice President
of Worldwide Marketing......... 1998 146,875 50,000 6,770
1997 -- -- --
1996 -- -- --
</TABLE>
- ----------------
(1) "All Other Compensation" is itemized as follows:
o In 1998, Mr. Felton received $2,400 in payment pursuant to the
Company's 401(k) plan and $5,793 in life and health insurance
premiums. In 1997, he received $1,226 in payment to his profit
sharing plan and $801 in payment of life insurance premiums. In
1996, he received $2,519 in payment to the Company's profit
sharing plan and $1,916 in payment of life insurance premiums.
o In 1998, Mr. Grabske received $2,400 in payment pursuant to the
Company's 401(k) and $4,625 in life and health insurance premiums
life insurance premiums. Mr. Grabske's date of hire with the
Company was June 1998.
o In 1998, Mr. Simpson received $2,232 in life and health insurance
premiums. Mr. Simpson's date of hire with the Company was June
1998.
o In 1998, Mr. Siskowski received $2,177 in payment pursuant to the
Company's 401(k) and $8,834 in life and health insurance premiums.
In 1997, he received $801 in payment of life insurance
premiums. In 1996, he received $338 in payment of life insurance
premiums. Mr. Siskowski's date of hire with the Company was
September 1996.
o In 1998, Mr. Pocsik received $1,448 in life and health insurance
premiums. Mr. Pocsik's date of hire with the Company was October
1998.
o In 1998, Mr. Lamson received $1,484 in payment pursuant to the
Company's 401(k) and $5,286 in life and health insurance
premiums. Mr. Lamson's date of hire with the Company was May
1998.
(2) Robert W. Felton was previously Chairman, Chief Executive Officer and
President of The Indus Group, Inc. From the effective date of the
Merger through December 1998, he served as Chairman and Chief
Executive Officer of the Company. The compensation described in this
Summary Compensation Table for 1996 and 1997 includes amounts paid by
both the Company and The Indus Group, Inc. and has been reported on a
calendar year basis. The Merger was accounted for as a pooling-of-
interests, therefore all revenues and expenses for the Company have
been combined retroactively.
(3) William J. Grabske became President and Chief Operating Officer of
the Company on June, 15, 1998. Mr. Grabske became Chief Executive
Officer on January 1, 1999. Mr. Grabske became Chairman of the Board
on March 17, 1999.
(4) C. Jeffrey Simpson became Executive Vice President Worldwide sales
on May 26, 1998. Mr. Simpson became a consultant to the Chief
Executive Officer on January 1, 1999. Mr. Simpson left the Company
March 1, 1999.
(5) Frank M. Siskowski was Chief Financial Officer and Senior Vice
President of The Indus Group, Inc. Subsequent to the Merger, he
became Chief Financial Officer and Executive Vice President of
Investor Relations of the Company effective August 25, 1997. The
compensation described in this Summary Compensation Table for 1996
and 1997 include amounts paid by both the Company and The Indus
Group, Inc. and have been reported on a calendar year basis. The
Merger was accounted for as a pooling-of-interests, therefore all
revenues and expenses for the Company have been combined
retroactively. Mr. Siskowski left the Company July 31, 1998.
(6) Robert A. Pocsik, became Senior Vice President Human Resources &
Administration October 1, 1998.
(7) Kerry P. Lamson became Senior Vice President Worldwide Marketing May
18, 1998.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding each grant of
options to purchase common stock of the Company made to a Named
Executive Officer during 1998.
<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------
Percent Potential Realizable
of Total Value at Assumed
Options Annual Rates of
Number of Granted Stock Price
Securities to Appreciation for
Underlying Employees Exercise Expir- Option Term (2)
Options in Fiscal Price per ation -----------------------
Name Granted Year Share Date(1) 5% %10%
- ----------------------------- ------------ ---------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Robert W. Felton.............. -- 0% $ -- -- -- --
William J Grabske (3)(5)(6)... 750,000 20.7% 8.50 05/12/08 4,016,250 10,136,250
(3)(4)...... 250,000 6.9% 4.56 12/14/08 718,200 10,136,250
C. Jeffrey Simpson (3)(5)(6).. 750,000 20.7% 8.31 05/26/08 3,926,475 9,909,675
Frank M. Siskowski............ -- -- -- -- -- --
Robert A. Pocsik(3)(5)(6)..... 50,000 1.4% 4.88 10/01/08 153,720 387,960
Kerry P. Lamson(3)(4)(5)...... 225,000 6.2% 8.13 05/18/08 1,152,428 2,908,508
(3)(4)......... 60,000 1.7% 4.56 12/14/08 172,368 435,024
</TABLE>
- ----------------
- ----------------
(1) Options may terminate before their expiration upon the termination
of optionee's status as an employee or consultant or upon the
optionee's death or disability.
(2) Potential realizable value is based on the assumption that the
Common Stock of the Company appreciates at the annual rate shown
(compounded annually) from the date of grant until the expiration of
the option term. These potential realizable value numbers are
calculated based on Securities and Exchange Commission requirements
and do not reflect the Company's estimate of future stock price
growth.
(3) Options were granted under Indus International. Inc. 1997 Stock
Option Plan at an exercise price equal to the fair market value of
the Company's Common Stock on the date of grant.
(4) Options become exercisable as to 25% of the option shares on each
anniversary of the vesting commencement date, with full vesting
occurring on the fourth anniversary of the vesting commencement
date.
(5) In the case of a change of control of the Company, all outstanding
options shall vest immediately.
(6) Options become exercisable as to 25% of the option shares on the
employment date and 25% each anniversary date of the vesting
commencement date with full vesting occurring on the third
anniversary of the vesting commencement date.
AGGREGATE OPTION EXERCISES IN 1998 AND YEAR-END VALUES
The following table sets forth information concerning the shares
acquired and the value realized upon the exercise of stock options
during 1998, the number of shares of Common Stock underlying exercisable
and unexercisable options held by each of the Named Officers as of
December 31, 1998 and the values of unexercised "in-the-money" options
as of that date.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised in-the-Money Options
Acquired Options at at Fiscal Year-End($)(1)
on Value December 31, 1998(#) -------------------------
Exercise Realized ------------------------- Exercisable Unexercisable
Name (#) ($) Exercisable Unexercisable ($) ($)
- --------------------- --------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert W. Felton.... -- $ -- 67,500 132,500 $ -- $ --
William J. Grabske.. -- -- 187,500 812,500 -- 610,000
C. Jeffrey Simpson.. -- -- 201,173 562,500 49,496 --
Frank M. Siskowski.. -- -- -- -- -- --
Robert A. Pocsik.... -- -- 12,500 37,500 26,500 79,500
Kerry P. Lamson..... -- -- -- 285,000 -- 146,400
</TABLE>
- ----------------
(1) Represents the positive spread between the respective exercise prices
of outstanding stock options and the closing price of the Common
Stock on December 31, 1998 of $7.00 per share, as reported by the
Nasdaq National Stock Market at the close of business.
REPORT OF THE COMPENSATION COMMITTEE
Overview and Philosophy
The Compensation Committee (the "Committee") of the Board of Directors
regularly reviews and approves all executive officer pay plans and
develops recommendations for stock option grants for approval by the
Board of Directors. These include the following compensation elements:
base salaries, annual incentives, stock options and various benefit
plans.
The Committee is comprised of three independent, non-employee directors.
It is the Committee's objective that executive compensation be directly
determined by achievement of the Company's planned business performance.
Specifically, the Company's executive compensation program is designed
to reward exceptional executive performance that results in enhanced
corporate and stockholder values.
Published industry pay salary data is reviewed and relied upon in the
Committee's assessment of appropriate compensation levels, specifically
the analysis of proxies of certain public software companies and the
Culpepper High Tech Survey. The Committee also retains independent
compensation consultants to provide objective and expert advice in the
review of the Company's stock option plans.
The Committee recognizes that the industry sector in which the Company
operates is both highly competitive and undergoing significant
globalization with the result that there is substantial demand for
qualified, experienced executive personnel. The Committee considers it
crucial that the Company be assured of retaining and rewarding its top
caliber executives who are essential to the attainment of the Company's
ambitious long-term, strategic goals.
For these reasons, the Committee believes the Company's executive
compensation arrangements must remain competitive with those offered by
other companies of similar size, scope, performance levels and
complexity of operations, including some, but not all, of the companies
comprising the Nasdaq-100 Index and the Nasdaq Computer Index.
Annual Cash Compensation (Base Salary, Plus Performance Incentives)
The Committee believes that annual cash compensation should be paid
commensurate with attained performance. The Company's executive cash
compensation consists of base compensation (salary) and performance
incentives (bonuses). Base salaries for executive officers are
established by considering a number of factors, including the Company's
continued profitable growth; the executive's individual performance and
measurable contribution to the Company's success; and pay levels of
similar positions with comparable companies in the industry. The
Committee supports the Company's compensation philosophy of moderation
for elements such as base salary and benefits. Base salary decisions
are made as part of the Company's formal annual review process. A
majority of the Company's executive officers were hired in 1998.
Therefore, any raises in the base salary of the Company's executive
officers would be approved by the Committee in 1999. These raises
would be intended to ensure that the salary levels for similar
positions in the information technology industry and the anticipated
additional responsibilities of each executive officer in the upcoming
year are properly reflected.
Long-Term Incentive: Stock Options
The Committee recommends executive stock options under the Stock Plan
to foster executive officer ownership of the Company's Common Stock, to
stimulate a long-term orientation in decisions and to provide direct
linkage with stockholder interests. The Committee considers the total
compensation package, industry practices and trends, the executive's
accountability level, and assumed potential stock value in the future
when granting stock options. The Committee recommends option amounts to
provide retention considering projected earnings to be derived from
option gains based upon relatively conservative assumptions relating to
planned growth and earnings. Therefore, the stock option program is
intended to serve as an effective and competitive long-term incentive
and retention tool for the Company's executives, as well as other key
employees. The exercise prices of stock options granted to executive
officers are equal to the fair market value of the Company's Common
Stock on the date of grant. Therefore, stock options provide an
incentive to maximize the Company's profitable growth that ordinarily,
over time, should be reflected in the price of the Company's Common
Stock. The Committee believes that the Company's stock option plan has
been administered in a manner comparable to its peer group and other
high performing companies in the high technology sector.
Benefits
The Company provides benefits to the named executive officers that
are generally available to all employees of the Company. The amount of
executive level benefits and perquisites, as determined in accordance
with the rules of the Securities and Exchange Commission relating to
executive compensation, did not exceed 10% of total salary and bonus for
the calendar year 1998 for any executive officer.
Chief Executive Officer Compensation
Compensation for the Chief Executive Officer is determined by a
process similar to that discussed above for executive officers. In
June, 1998, the Compensation Committee approved the compensation package
of Mr. Grabske (hired as President and Chief Operating Officer on June
15, 1998 and appointed Chief Executive Officer on January 1, 1999).
This compensation package was designed to bring Mr. Grabske's salary in
line with other chief executive officers in the information technology
industry and included a bonus for achievement of Company's goals for
third and fourth quarters of 1998 in terms of revenues and earnings per
share.
It is the opinion of the Committee that the aforementioned
compensation policies and structures provide the necessary discipline to
properly align the Company's corporate economic performance and the
interest of the Company's stockholders with progressive, balanced and
competitive executive total compensation practices in an equitable
manner.
The Compensation Committee of the Board of Directors
William H. Janeway
Jeanne D. Wohlers
PERFORMANCE GRAPH
The following graph compares the cumulative total return for the
Company's Common Stock with the cumulative total return of The Stock
Market-U.S. Index and the Nasdaq Computer Index. The graph assumes that
$100 was invested on August 25, 1997 in the Company's Common Stock. The
Nasdaq Stock Market-U.S. Index and the Nasdaq Computer Index, including
reinvestment of dividends. No dividends have been declared or paid on
the Company's Common Stock. Note that historic stock price performance
is not necessarily indicative of future stock price performance.
PERFORMANCE GRAPH
[The following descriptive data is supplied in accordance with Rule 304(d)
of Regulation S-T]
Indus
International, Nasdaq Stock Nasdaq
Date Inc. Market Computer
- --------- -------------- ------------ ------------
08/26/97 100 100 100
09/10/97 106 103 101
09/24/97 108 106 103
10/08/97 102 109 105
10/22/97 115 107 101
11/11/97 85 100 92
11/25/97 92 100 94
12/09/97 93 102 95
12/23/97 46 95 85
01/15/98 47 99 102
01/29/98 53 103 109
02/12/98 67 109 117
02/26/98 65 113 124
03/12/98 59 112 119
03/26/98 68 116 124
04/09/98 65 116 123
04/23/98 64 120 130
05/07/98 59 117 126
05/21/98 52 116 124
06/04/98 58 113 120
06/18/98 69 113 124
07/02/98 50 121 136
07/16/98 51 127 148
07/30/98 42 122 143
08/13/98 38 115 136
08/27/98 32 107 133
09/10/98 36 101 126
09/24/98 37 110 139
10/08/98 23 90 112
10/22/98 35 108 134
11/05/98 35 117 144
11/19/98 32 122 155
12/03/98 30 124 160
12/17/98 26 130 172
12/31/98 46 140 183
CERTAIN TRANSACTIONS WITH MANAGEMENT
The Company loaned Mr. Blend $100,910 in June 1997, of which $50,000
remains outstanding for payment of taxes in conjunction with the
forgiveness of prior indebtedness. In August 1998 the Company loaned
Mr. Blend $491,771 bearing interest of 5.48% per annum. This note is
secured by a pledge of 100,000 shares of the Company's stock. The
largest aggregate amount of indebtedness outstanding at any time in
1998 was $592,681, and the amount of outstanding indebtedness as of
March 10, 1999 was $507,202. Mr. Blend paid off this debt in March
1999.
The Company loaned Mr. Lane $60,940 in June 1997, for payment of
taxes in conjunction with the forgiveness of prior indebtedness. Mr.
Lane paid off this debt in January 1999. The largest aggregate amount
of indebtedness outstanding at any time in 1997 was $60,940
In December 1997, the Board of Directors approved a contract with
Valour, Inc. to provide human resource consulting services for a monthly
fixed fee of $10,000. The services to be provided under the agreement
commenced in January 1998 and $120,000 was paid by the Company in fiscal
1998 pursuant to this arrangement. Robert W. Felton, Chairman of the
Board of the Company, is a director and shareholder of Valour, Inc.
SECURITY OWNERSHIP OF MANAGEMENT; PRINCIPAL STOCKHOLDERS
The table below sets forth, as of March 10, 1999, certain information
with respect to the beneficial ownership of the Company's Common Stock
by (i) each person known by the Company to own beneficially more than
five percent (5%) of the outstanding shares of Common Stock; (ii) each
Named Executive Officer; (iii) each director of the Company; and (iv)
all current directors and executive officers as a group.
<TABLE>
<CAPTION>
Approximate
Shares Percentage
Beneficially of
Name and Address Owned (1) Ownership
- ----------------------------------------------- ------------ ----------
<S> <C> <C>
Warburg, Pincus Investors, LP (2) 18,480,380 49.4%
William H. Janeway (2) (3) 18,482,880 49.4%
Joseph P. Landy (2) (3) 18,482,880 49.4%
Robert W. Felton (4) 4,515,061 12.2%
Jeanne D. Wohlers............................. -- *
William J. Grabske (6) 187,500 *
C. Jeffrey Simpson (6)......................... 201,173 *
Frank M. Siskowski ............................ -- *
Robert A. Pocsik (6)........................... 12,500 *
All current directors and executive officers
as a group (8 persons) ...................... 23,450,364 62.7%
</TABLE>
- -------------------------
*Less than 1%
(1) Beneficial ownership is determined in accordance with the rules of
the Securities and Exchange Commission that deem shares to be
beneficially owned by any person who has or shares voting power or
investment power with respect to such shares. Unless otherwise
indicated below, the persons and entities named in the table have
sole voting and sole investment power with respect to all shares
beneficially owned, subject to community property laws where
applicable. Shares of the Company's Common Stock that will be
issuable to the identified person or entity pursuant to assumed stock
options that are either immediately exercisable or exercisable within
sixty days of March 10, 1999 are deemed to be outstanding and to be
beneficially owned by the person holding such options for the purpose
of computing the percentage ownership of such person but are not
treated as outstanding for the purpose of computing the percentage
ownership of any other person.
(2) Represents shares held by Warburg, Pincus Investors, LP
("Warburg"). Warburg, Pincus & Co. is the sole General Partner of
Warburg and has a 20 % interest in the profits of Warburg. E.M.
Warburg, Pincus & Co. LLC manages Warburg. Lionel I. Pincus is the
managing partner of Warburg, Pincus & Co. and the managing member of
E.M. Warburg, Pincus & Co., LLC and may be deemed to control both
such entities. The members of E.M. Warburg, Pincus & Co., LLC are
substantially the same as the partners of Warburg, Pincus & Co., LLC
are substantially the same as the partners of Warburg, Pincus & Co.
Messrs. Janeway and Landy, who will be directors of the combined
company, are Managing Directors and members of E.M. Warburg, Pincus &
Co., LLC, and general partners of Warburg, Pincus & Co. Messrs. Landy
and Janeway may be deemed to have an indirect pecuniary interest
(within the meaning of Rule 16a-1 under the Exchange Act) in an
indeterminate portion of the shares beneficially owned by Warburg.
Messrs. Janeway and Landy each disclaim beneficial ownership, for
purposes of Section 16 of the Exchange Act or otherwise, of such
shares. The address of Warburg is 466 Lexington Avenue, New York, New
York 10017. Includes 3,702,877 shares issuable upon the exercise of
currently exercisable warrants held by Warburg.
(3) Includes 2,500 shares subject to options exercisable within 60 days
of March 10, 1999 granted to each of Messrs. Janeway and Landy in
their capacity as directors.
(4) Includes 67,500 shares subject to options exercisable within 60 days
of March 10, 1999. The address of Mr. Felton is c/o Indus
International, Inc., 60 Spear Street, San Francisco, CA 94105.
(5) Represents shares subject to options exercisable within 60 days of
March 10, 1999.
(6) The Company, Robert W. Felton and Warburg, Pincus Investors, L.P.
("WPI") entered into a Nomination Agreement that provides that for
so long as WPI continues to own more than 15% of the outstanding
shares of the Company's Common Stock, WPI will be permitted to
nominate two persons to the Company's Board of Directors, and that
for so long as WPI continues to own between 7% and 15% of the
outstanding shares of the Company's Common Stock, WPI will be
permitted to nominate one person to the Company's Board of
Directors. The Nomination Agreement also provides that for so long
as Mr. Felton continues to own more than 15% of the outstanding
shares of the Company's Common Stock, Mr. Felton will be permitted
to nominate two persons to the Company's Board of Directors, and
that for so long as Mr. Felton continues to own between 7% and 15%
of the outstanding shares of the Company's Common Stock, Mr. Felton
will be permitted to nominate one person to the Company's Board of
Directors, which nominees in each instance may include Mr. Felton.
(7) Robert W. Felton, the Company and Warburg, Pincus Investors, L.P.
("WPI") entered into a Stock Purchase Agreement dated January 13,
1999 (the "Felton Purchase Agreement"). Under the Felton Purchase
Agreement, WPI purchased 5,000,000 shares of the Company's Common
Stock from Mr. Felton and WPI agreed that with respect to any
proposal presented to the Company's stockholders it will exercise
its voting right with respect to any shares of capital stock of the
Company owned by it such that the votes of WPI and its affiliates
are limited to 50% or less of the votes eligible to be cast on such
proposal, except that WPI may vote its shares of capital stock in
excess of such 50% vote in the same proportions as the other
stockholders of the Company vote their shares of capital stock
entitled to vote on such proposal.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee currently consists of William
H. Janeway and Jeanne D. Wohlers. No interlocking relationship exists
between any member of the Company's Compensation Committee and any
member of the compensation committee of any other company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 ("Section 16
(a)") requires the Company's directors and executive officers, and
persons who own more than ten percent of a registered class of the
Company's equity securities, to file with the Securities and Exchange
Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the
Company. Officers, directors and persons who own greater than ten
percent of a registered class of the Company's equity securities (a "10%
Stockholders") are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that
no other reports were required, during the year ended December 31, 1998
all officers, directors and 10% Stockholders complied with all Section
16(a) filing requirements.
OTHER MATTERS
The Company knows of no other matters to be submitted to the Annual
Meeting. If any other matters properly come before the Annual Meeting,
it is the intention of the persons named in the enclosed Proxy to vote
the shares they represent as the Board of Directors may recommend.
THE BOARD OF DIRECTORS
San Francisco, California
April 2, 1999
APPENDIX A
Summary of Amended Stock Plan
The principal features of the Stock Plan are described below:
Purpose. The purposes of the Stock Plan are to attract and retain
the best available personnel for positions of substantial
responsibility, to provide additional incentive to employees and
consultants of the Company and its subsidiaries and to promote the
success of the Company's business.
Administration. With respect to grants of options or stock rights to
employees who are also officers or directors of the Company, the Stock
Plan shall be administered by (i) the Board of Directors of the Company
if the Board of Directors may administer the Stock Plan in compliance
with Rule 16b-3 with respect to a plan intended to qualify under Rule
16b-3 as a discretionary plan or (ii) a committee designated by the
Board of Directors to administer the Stock Plan, which committee shall
be constituted in such a manner as to permit the plan to comply with
Rule 16b-3 with respect to a plan intended to qualify thereunder as a
discretionary plan. With respect to grants of options or stock rights to
employees or consultants who are neither officers nor directors of the
Company, the Stock Plan shall be administered by (i) the Board of
Directors or (ii) a committee designated by the Board of Directors,
which committee shall be constituted in such a manner as to satisfy the
legal requirements relating to the administration of stock and option
plans, if any, of California corporate and securities laws and of the
Internal Revenue Code of 1986 as amended (the "Code"). If permitted by
Rule 16b-3, the Stock Plan may be administered by different bodies with
respect to directors, non-director officers and employees who are
neither officers nor directors and consultants who are not directors.
The administrator of the Stock Plan has full power to select, from
among the officers, employees, directors and consultants of the Company
eligible for awards, the individuals to whom awards will be granted, to
make any combination of awards to any participants and to determine the
specific terms of each grant, subject to the provisions of the Stock
Plan. The interpretation and construction of any provision of the Stock
Plan by the administrator is final and conclusive. Members of the Board
of Directors receive no additional compensation for their services in
connection with the administration of the Stock Plan.
Eligibility. The Stock Plan provides that non-statutory stock
options and stock rights may be granted to employees, including officers
and directors, and consultants of the Company or any subsidiary of the
Company. Directors of the Company who are not employees or consultants
are not eligible to participate in the Stock Plan. Incentive stock
options may be granted only to employees, including officers and
directors, of the Company or any subsidiary of the Company. No employee
can be granted options covering more than 500,000 shares under the Stock
Plan in any fiscal year, however in connection with his or her initial
service, an employee may be granted options to purchase an additional
500,000 Shares which shall not count against the limit stated
previously. In addition, there is a $100,000 limit on the total market
value of shares subject to all incentive stock options which are granted
by the Company or any parent or subsidiary of the Company to any
employee which are exercisable for the first time in any one calendar
year.
Reserved Shares. A total of 10,000,000 shares of Common Stock have
been reserved for issuance under the Stock Plan and also subject to
adjustment for future stock splits, stock dividends and similar events.
Subject to the provisions of the Stock Plan, if any shares of Common
Stock that have been optioned cease to be subject to an option, or if
any shares of restricted stock or shares that are subject to any stock
purchase right or incentive stock right granted under the Stock Plan are
forfeited or any such award otherwise terminates without a payment being
made to the participant in the form of Common Stock, such shares will
again be available for distribution in connection with future awards or
option grants under the Stock Plan.
Stock Options. The Stock Plan permits the granting of
nontransferable stock options that either qualify as incentive stock
options under Section 422 of the Code ("Incentive Stock Options" or
"ISOs") or do not so qualify ("Non-Statutory Stock Options" or "NSOs").
The term of each option will be fixed by the administrator but may
not exceed ten years from the date of grant in the case of ISOs, or five
years from the date of grant in the case of ISOs granted to the owner of
Common Stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or any subsidiary. The
administrator will determine the time or times each option may be
exercised. Options may be made exercisable in installments, and the
exercisability of options may be accelerated by the administrator.
The option exercise price for each share covered by a non-statutory
option shall be determined by the administrator of the Stock Plan. The
option exercise price of an ISO may not be less than 100% of the fair
market value of a share of Common Stock on the date of grant. In the
case of ISOs granted to the owner of Common Stock possessing more than
10% of the total combined voting power of all classes of stock of the
Company or any subsidiary, the option exercise price for each share
covered by such option may not be less than 110% of the fair market
value of a share of Common Stock on the date of grant of such option.
The administrator of the Stock Plan determines such fair market value.
As long as the Common Stock of the Company is traded on the National
Market System of the National Association of Securities Dealers, Inc.
Automated Quotation ("Nasdaq") System, the fair market value of a share
of Common Stock of the Company shall be the closing sales price for such
stock (or the closing bid, if no sales were reported, as quoted on such
system) for the last market trading date before the time of
determination, as reported in The Wall Street Journal or such other
source as is deemed reliable.
The consideration to be paid for shares issued upon exercise of
options granted under the Stock Plan, including the method of payment,
will be determined by the administrator (and, in the case of ISOs, such
determination shall be made at the time of grant) and may consist
entirely of cash, check, promissory note or shares of Common Stock
which, in the case of shares acquired upon exercise of an option, have
been beneficially owned for at least six months or which were not
acquired directly or indirectly from the Company, with a fair market
value on the exercise date equal to the aggregate exercise price of the
shares being purchased. The administrator may also authorize as payment
the delivery of a properly executed notice and irrevocable instructions
to a broker to deliver promptly to the Company the amount of sale or
loan proceeds required to pay the exercise price or the delivery of an
irrevocable subscription agreement for the shares which irrevocably
obligates the optionee to take and pay for the shares not more than 12
months after delivery of the subscription agreement. The administrator
may also authorize payments by any combination of the foregoing methods
or by any other method permitted by applicable laws.
Under the Stock Plan, in the event of termination of an optionee's
employment or consulting relationship for any reason (other than death
or permanent disability), an option may thereafter be exercised (to the
extent it was exercisable at the date of such termination) for thirty
days (or such other period as determined by the administrator not to
exceed six months or three months in the case of an ISO). If the
optionee's employment or consulting relationship is terminated as a
result of the optionee's permanent disability, the option may be
exercised for a period of six months after the date of termination. If
an optionee's employment or consulting relationship is terminated by
reason of the optionee's death, the options held by such individual can
be exercised by the optionee's estate or successor for twelve months
following death. However, in no case can an option be exercised after
the expiration of its term.
All options granted under the Stock Plan shall be evidenced by a
stock option agreement between the Company and the optionee to whom such
option is granted. Each agreement shall contain in substance the terms
and conditions described above.
Stock Purchase Rights. The Stock Plan permits the granting of stock
purchase rights to purchase Common Stock of the Company either alone, in
addition to, or in tandem with other awards under the Stock Plan. Upon
the granting of a stock purchase right under the Stock Plan, the offeree
is advised in writing of the terms, conditions and restrictions related
to the offer, including the number of shares of Common Stock that such
person is entitled to purchase, the price to be paid and the time within
which such person must accept such offer (which in no event may exceed
six months from the date the purchase right was granted). The offer
shall be accepted by execution of a restricted stock purchase agreement
between the Company and the offeree. Stock purchase rights granted to
persons subject to Section 16 of the Securities Exchange Act of 1934
shall be subject to any restrictions necessary to comply with Rule 16b-
3.
Nontransferability of Options and Stock Rights. Options and stock
rights granted pursuant to the Stock Plan are nontransferable by the
participant, other than by will or by the laws of descent and
distribution and may be exercised, during the lifetime of the
participant, only by the participant.
Withholding Under the Stock Plan. The administrator of the Stock
Plan may also permit participants to satisfy their withholding tax
obligations using Common Stock when appropriate.
Acceleration of Options and Stock Rights. In the event of a proposed
sale of all or substantially all of the assets of the Company, or the
Merger of the Company with or into another corporation, each outstanding
option and stock right shall be assumed or substituted by an equivalent
option or right by such successor corporation. In the event the
successor corporation refuses to assume or substitute the option or
stock purchase right, the participant will have the right to exercise
the option or stock right as to all shares subject to such option or
stock right, including shares as to which the option or stock right
would not otherwise be exercisable. If an option or stock purchase right
is exercisable in lieu of assumption or substitution, the Company shall
notify the participant that the option or stock right shall be fully
exercisable for a period of 15 days from the date of such notice and the
option or stock right will terminate upon the expiration of such period.
Adjustment upon Changes in Capitalization. In the event any change,
such as a stock split or dividend, is made in the Company's
capitalization which results in an increase or decrease in the number of
outstanding shares of Common Stock without receipt of consideration by
the Company, an appropriate adjustment shall be made in the number of
shares which have been reserved for issuance under the Stock Plan and
the price per share covered by each outstanding option or stock right.
In the event of the proposed dissolution or liquidation of the Company,
all outstanding options and stock rights will terminate immediately
before the consummation of such proposed action, unless otherwise
provided by the Board of Directors. The Board of Directors may, in its
discretion, make provision for accelerating the exercisability of shares
subject to options or stock rights under the Stock Plan in such event.
Amendment and Termination. The Board of Directors may amend, alter,
suspend or discontinue the Stock Plan at any time, but such amendment,
alteration, suspension or discontinuation shall not adversely affect any
incentive stock rights, stock options, stock appreciation rights or
stock purchase rights then outstanding under the Stock Plan, without the
participant's consent. To the extent necessary and desirable to comply
with Rule 16b-3 or Section 422 of the Code (or any other applicable law
or regulation), the Company will obtain stockholder approval of any
amendment to the Stock Plan in such a manner and to such a degree as
required. Subject to the specific terms of the Stock Plan, the
administrator may accelerate any award or option or waive any conditions
or restrictions pertaining to such award or option or shares of stock
relating thereto at any time. The administrator may also substitute new
stock options for previously granted stock options, including previously
granted stock options having higher option prices, and may reduce the
exercise price of any option to the then current fair market value if
the fair market value of the Common Stock covered by such option shall
have declined since the date the option was granted. The Stock Plan
shall continue in effect for a term of ten years unless sooner
terminated as described above.
Federal Income Tax Aspects of the Stock Plan
The following is a brief summary of the federal income tax
consequences of transactions under the Stock Plan. This summary is not
intended to be exhaustive and does not discuss the tax consequences of a
participant's death or provisions of the income tax laws of any
municipality, state or foreign country in which an optionee may reside.
Incentive Stock Options. An optionee who is granted an ISO will not
recognize taxable income either at the time the option is granted or
upon its exercise, although the exercise may subject the optionee to the
alternative minimum tax. Upon the sale or exchange of the shares more
than two years after grant of the option and one year after exercising
the option, any gain or loss will be treated as long-term capital gain
or loss. If these holding periods are not satisfied, the optionee will
recognize ordinary income at the time of sale or exchange equal to the
difference between the exercise price and the lower of (i) the fair
market value of the shares at the date of the option exercise or (ii)
the sale price of the shares. A different rule for measuring ordinary
income upon such a premature disposition may apply in the case of
optionees who are subject to Section 16 of the Securities Exchange Act
of 1934, as amended. The Company will be entitled to a deduction in the
same amount as the ordinary income recognized by the optionee. Any gain
or loss recognized on such a premature disposition of the shares in
excess of the amount treated as ordinary income will be characterized as
long-term or short-term capital gain or loss, depending on the holding
period.
Non-Statutory Stock Options. All other options, which do not qualify
as ISOs, are referred to as Non-Statutory Stock Options. An optionee
will not recognize any taxable income at the time he is granted a Non-
Statutory Stock Option. However, upon exercise of the option, the
optionee will recognize taxable income generally measured as the excess
of the then fair market value of the shares purchased over the purchase
price. Any taxable income recognized in connection with an option
exercise by an optionee who is also an employee of the Company will be
subject to tax withholding by the Company. Upon resale of such shares by
the optionee, any difference between the sales price and the optionee's
purchase price, to the extent not recognized as taxable income as
described above, will be treated as long-term or short-term capital gain
or loss, depending on the holding period.
The Company will be entitled to a tax deduction in the same amount as
the ordinary income recognized by the Optionee with respect to shares
acquired upon exercise of a Non-Statutory Stock Option.
Different rules may apply in the case of optionees who are subject to
Section 16 of the Securities Exchange Act of 1934, as amended.
Stock Purchase Rights. Stock purchase rights will generally be taxed
in the same manner as Non-Statutory Stock Options. However, restricted
stock is usually purchased upon exercise of a stock purchase right. At
the time of purchase, restricted stock is subject to a "substantial risk
of forfeiture" within the meaning of Section 83 of the Code. As a
result, the purchaser will not recognize ordinary income at the time of
purchase. Instead, the purchaser will recognize ordinary income on the
dates when the stock ceases to be subject to substantial risk of
forfeiture. The stock will generally cease to be subject to a
substantial risk of forfeiture when it is no longer subject to the
Company's right to repurchase the stock upon the purchaser's termination
of employment with the Company (i.e., as it "vests"). At such times, the
purchaser will recognize the ordinary income measured as the difference
between the purchase price and the fair market value of the stock on the
date the stock is no longer subject to a substantial risk of forfeiture.
However, a purchaser may accelerate to the date of purchase his or her
recognition of ordinary income, if any, and the beginning of any capital
gain holding period by timely filing an election pursuant to Section
83(b) of the Code. In such event, the ordinary income recognized, if
any, would be equal to the difference between the purchase price and the
fair market value of the stock on the date of purchase, and the capital
gain holding period would commence on the purchase date. The ordinary
income recognized by a purchaser who is an employee will be treated as
wages and will be subject to tax with holding by the Company. Generally,
the Company will be entitled to a tax deduction in the amount and at the
time the purchaser recognizes ordinary income.
Different rules may apply in the case of purchasers who are subject
to Section 16 of the Securities Exchange Act of 1934, as amended.
Payments in Respect of a Change in Control. The Stock Plan
authorizes the acceleration of options and stock purchase rights under
certain conditions in the event of a Merger or sale of substantially all
of the assets of the Company. Such acceleration or payment may cause
part or all of the consideration involved to be treated as a "parachute
payment" under the Code, which may subject the recipient thereof to a
20% excise tax and which may not be deductible by the participant's
employer.
The foregoing is only a summary of the effect of federal income
taxation upon optionees and the Company with respect to the grant and
exercise of options under the Stock Plan. It does not purport to be
complete, and does not discuss the tax consequences of the employee's or
consultant's death or the provisions of the income tax laws of any
municipality, state or foreign country in which the employee or
consultant may reside.
<PAGE>
APPENDIX B
Summary of Amended Director's Option Plan
The principal features of the Director's Plan are described below:
Purpose. The purposes of the Director's Plan are to attract and
retain the best available personnel for service as Outside Directors of
the Company, to provide additional incentive to Outside Directors of the
Company and to encourage their continued service on the Board.
Administration and Grants of Options under the Plan. All grants of
options to Outside Directors under this Plan shall be automatic and
nondiscretionary. Each Outside Director shall be automatically granted
an option to purchase 50,000 Shares (the "First Option") on the date on
which such person first becomes an Outside Director, however, an Inside
Director who ceases to be an Inside Director but who remains a Director
shall not receive a First Option. Each Outside Director shall be
automatically granted an option to purchase 10,000 Shares (a "Subsequent
Option") on the date of the Company's annual meeting of stockholders
upon such Outside Director's reelection to the Board, provided that on
such date the Outside Director shall have served as a Director for at
least the preceding six (6) months. The term of the options shall be
ten (10) years and shall be exercisable only while the Outside Director
remains a Director of the Company. The exercise price per share shall
be 100% of the fair market value per share on the date of grant. In the
event that the date of grant is not a trading day, the exercise price
per share shall be the fair market value on the next trading day
immediately following the date of grant. The options shall become
exercisable as to 25% percent of the Shares each anniversary of its date
of grant, provided that the optionee continues to serve as a Director on
such dates. In the event that any option granted under this Plan would
cause the number of shares subject to outstanding options plus the
number of shares previously purchased under options to exceed the
authorized pool, then the remaining shares available for option grant
shall be granted under options to the Outside Directors on a pro rata
basis. No further grants shall be made until such time, if any, as
additional shares become available for grant under this Plan through
action of the Board or the stockholders to increase the number of shares
which may be issued under the Plan or through cancellation or expiration
of options previously granted hereunder.
Form of Consideration. The consideration to be paid for the shares
to be issued upon exercise of an option, including the method of
payment, shall consist of (i)cash, (ii)check, (iii)other shares which
(x)in the case of shares acquired upon exercise of an option, have been
owned by the optionee for more than six (6) months on the date of
surrender, and (y)have a fair market value on the date of surrender
equal to the aggregate exercise price of the shares as to which said
Option shall be exercised, (iv)consideration received by the Company
under a cashless exercise program implemented by the Company in
connection with this Plan, or (v)any combination of the foregoing
methods of payment.
An option shall be deemed to be exercised when written notice of such
exercise has been given to the by the person entitled to exercise the
Option and full payment for the shares with respect to which the option
is exercised has been received by the Company.
Termination of Continuous Status as a Director. In the event an
optionee's status as a Director terminates (other than upon the
optionee's death or total and permanent disability , the optionee may
exercise his or her option, but only within three (3) months following
the date of such termination, and only to the extent that the optionee
was entitled to exercise it on the date of such termination (but in no
event later than the expiration of its ten (10) year term). To the
extent that the optionee was not entitled to exercise an Option on the
date of such termination, and to the extent that the optionee does not
exercise such Option (to the extent otherwise so entitled) within the
time specified herein, the Option shall terminate.
Non-Transferability of Options. An option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the optionee, only by the optionee.
Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale. In the event any change, such as a stock split, reverse
stock split or stock dividend, is made in the Company's capitalization
which results in the increase or decrease in the number of issued shares
without receipt of consideration by the Company, an appropriate
adjustment shall be made in the number of shares which have been
reserved for issuance under this Plan and the price per share covered by
each outstanding option. In the event of a proposed dissolution or
liquidation of the Company, to the extent that an Option has not been
previously exercised, it shall terminate immediately prior to the
consummation of such proposed action. In the event of a merger of the
Company with or into another corporation or the sale of substantially
all of the assets of the Company, outstanding options may be assumed or
equivalent options may be substituted by the successor corporation or a
Parent or Subsidiary thereof.
Amendment and Termination of the Plan. The Board may at any
time amend, alter, suspend, or discontinue this Plan, but no amendment,
alteration, suspension, or discontinuation shall be made which would
impair the rights of any optionee under any grant theretofore made,
without his or her consent. In addition, to the extent necessary and
desirable to comply with any applicable law, regulation or stock
exchange rule, the Company shall obtain stockholder approval of any
amendment to this Plan in such a manner and to such a degree as
required.
<PAGE>
PROXY INDUS INTERNATIONAL, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR 1999 ANNUAL MEETING OF STOCKHOLDERS
MAY 4, 1999
The undersigned stockholder(s) of Indus International, Inc., a Delaware
corporation, hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement, each dated April 2, 1999,
and hereby appoints William J. Grabske and Albert J. Wood as Proxies,
with full power to each of substitution, on behalf and in the name of
the undersigned, to represent the undersigned at the 1999 Annual
Meeting of Stockholders of Indus International, Inc. (the "Company")
to be held on May 4, 1999 at 2:00 p.m., local time, at the Company's
Headquarters, located at 60 Spear Street, San Francisco, California
94105 and at any adjournment or postponement thereof, and to vote all
shares of Common Stock which the undersigned would be entitled to vote
if personally present on any of the following matters and with
discretionary authority as to any and all other matters that may
properly come before the meeting.
(Continued, and to be signed on the other side)
<PAGE>
Please Mark your vote
with black ink as
indicated in this [X]
example
1. Election of Directors:
To withhold authority for any individual FOR WTIHHOLD
nominee, strike a line through the nominee's FOR ALL
name in the list below: [ ] [ ]
Robert W. Felton, William J. Grabske,
William H. Janeway, Joseph P. Landy, Jeanne D. Wohlers
2. To approve an amendment to the Company's 1997 Stock FOR AGAINST ABSTAIN
to increase the number of shares reserved for issuance
thereunder by 2,500,000 shares to 10,000,000 shares. [ ] [ ] [ ]
3. To approve an amendment to the Company's 1997 FOR AGAINST ABSTAIN
Director's Option plan to increase the number of shares
Of Common Stock granted as a First Option from 10,000 [ ] [ ] [ ]
to 50,000 and the shares granted as a Subsequent Option
under the Director's Plan from 5,000 to 10,000.
4. To ratify the appointment of Ernst & Young LLP FOR AGAINST ABSTAIN
as independent auditors of the Company
independent auditors of the for the year ending [ ] [ ] [ ]
December 31, 1999.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE
WITH THE SPECIFICATIONS MADE. IF NO SPECIFICATION IS MADE, THE
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR EACH OF THE
ABOVE PERSONS AND PROPOSALS, AND FOR SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING AS THE PROXY HOLDERS DEEM ADVISABLE.
Signature(s)_____________________________ Dated ________________, 1999
(This proxy should be marked, dated and signed by each stockholder
exactly as such stockholder's name appears hereon, and returned promptly
in the enclosed envelope. Persons signing in a fiduciary capacity should
so indicate. A corporation is requested to sign its name by its
President or other authorized officer, with the office held designated.
If shares are held by joint tenants or as community property, both
holders should sign.)
