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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
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
CLICK2LEARN.COM, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 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:
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(4) Date Filed:
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<PAGE>
[LOGO]
May 3, 2000
To Our Stockholders:
You are cordially invited to attend the 2000 Annual Meeting of Stockholders (the
"Meeting") of click2learn.com, inc. ("click2learn") to be held at click2learn's
headquarters, 110 - 110(th) Avenue NE, Bellevue, Washington, on Thursday,
May 25, 2000, at 10:00 a.m., Pacific Daylight Time. The matters expected to be
acted upon at the Meeting include the following: (1) the election of Class II
Directors and a Class I Director, (2) the amendment of click2learn's 1998 Equity
Incentive Plan, and (3) the ratification of KPMG LLP as click2learn's
independent accountants for 2000. Each of these proposals is described in detail
in the accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement.
Please use this opportunity to take part in click2learn's affairs by voting on
the business to come before this Meeting. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, PLEASE COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE PRIOR TO THE MEETING SO THAT YOUR SHARES WILL
BE REPRESENTED AT THE MEETING. Returning the proxy does not deprive you of your
right to attend the Meeting and to vote your shares in person. If you do plan to
attend the Meeting in person, please mark the appropriate box on the enclosed
proxy so that we can plan appropriately for the Meeting.
We hope to see you at the Meeting.
Sincerely,
/s/ Kevin Oakes
Kevin Oakes
President and Chief Executive Officer
<PAGE>
CLICK2LEARN.COM, INC.
110 - 110(TH) AVENUE NE
BELLEVUE, WASHINGTON 98004
------------------------
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
---------------------
To Our Stockholders:
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders (the
"Meeting") of click2learn.com, inc. ("click2learn") will be held at
click2learn's headquarters, 110 - 110(th) Avenue NE, Bellevue, Washington on
Thursday, May 25, 2000, at 10:00 a.m. Pacific Daylight Time.
At the Meeting, you will be asked to consider and vote upon the following
matters:
1. The election of three Class II directors and one Class I director of
click2learn, the Class II directors to serve until the Annual Meeting of
Stockholders held in 2003 and the Class I director to serve until the
Annual Meeting of Stockholders held in 2002, and until their successors
have been elected and qualified or until their earlier resignation, death
or removal. Click2learn's Board of Directors intends to present the
following nominees for election as directors:
<TABLE>
<CAPTION>
CLASS II DIRECTORS CLASS I DIRECTOR
- ------------------ ----------------
<S> <C>
Kevin Oakes Jonathan D. Klein
Ronald S. Posner
Shelley Harrison, Ph.D.
</TABLE>
2. A proposal to approve an amendment of click2learn's 1998 Equity
Incentive Plan to increase the number of shares of common stock reserved
for issuance thereunder from 2,500,000 shares to 4,000,000 shares.
3. A proposal to ratify the selection of KPMG LLP as click2learn's
independent accountants for 2000.
4. To transact such other business as may properly come before the Meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. Only stockholders of record at the close of
business on April 1, 2000 are entitled to notice of and to vote at the meeting
or any adjournment thereof.
By Order of the Board of Directors
/s/ Kevin Oakes
Kevin Oakes
President and Chief Executive Officer
Bellevue, Washington
May 3, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE SO
THAT YOUR SHARES MAY BE REPRESENTED AT THE MEETING.
<PAGE>
CLICK2LEARN.COM, INC.
110 - 110(TH) AVENUE NE
BELLEVUE, WASHINGTON 98004
------------------------
PROXY STATEMENT
MAY 2, 2000
------------------------
The accompanying proxy is solicited on behalf of the Board of Directors of
click2learn.com, inc. ("click2learn"), a Delaware corporation, for use at the
2000 Annual Meeting of Stockholders of click2learn to be held at the company's
headquarters, 110 - 110(th) Avenue NE, Bellevue, Washington 98004, on Thursday,
May 25, 2000, at 10:00 a.m., Pacific Daylight Time (the "Meeting"). This Proxy
Statement and the accompanying form of proxy were first mailed to stockholders
on or about May 2, 2000. An annual report for the year ended December 31, 1999
is enclosed with this Proxy Statement.
RECORD DATE; QUORUM
Only holders of record of click2learn's common stock at the close of
business on April 1, 2000 (the "Record Date") are entitled to vote at the
Meeting. A majority of the shares outstanding on the Record Date will constitute
a quorum for the transaction of business at the Meeting.
OUTSTANDING SHARES
At the close of business on the Record Date, click2learn had 16,707,342
shares of common stock outstanding and entitled to vote that were held of record
by approximately 224 stockholders. Click2learn has been informed that there are
approximately 6,700 beneficial owners of its common stock.
VOTING RIGHTS; REQUIRED VOTE
Holders of click2learn's common stock are entitled to one vote for each
share held as of the Record Date. Shares of common stock may not be voted
cumulatively. In the event that a broker, bank, custodian, nominee or other
record holder of click2learn common stock indicates on a proxy that it does not
have discretionary authority to vote certain shares on a particular matter (a
"broker non-vote"), then those shares will not be considered present and
entitled to vote with respect to that matter, although they will be counted in
determining whether or not a quorum is present at the Meeting.
With respect to Proposal 1, the three Class II directors and one Class I
director will be elected by a plurality of the votes of the shares of common
stock present in person or represented by proxy at the Meeting and entitled to
vote on the election of directors. Broker non-votes and abstentions will have no
effect on the election of directors.
Approval of Proposals 2 and 3 requires the affirmative vote of a majority of
shares of common stock present in person or represented by proxy at the Meeting
that are voted "for", "against" or "abstain" on the proposal. Broker non-votes
will not be counted as a vote "for", "against" or "abstain" on Proposal 2.
All votes will be tabulated by the inspector of elections appointed for the
Meeting, who will separately tabulate affirmative votes, negative votes,
abstentions and broker non-votes on each proposal.
<PAGE>
VOTING OF PROXIES
The proxy accompanying this Proxy Statement is solicited on behalf of the
click2learn Board of Directors (the "Board") for use at the Meeting and any
adjournment thereof. Stockholders are requested to complete, date and sign the
accompanying proxy card and promptly return it in the enclosed envelope or
otherwise mail it to click2learn. All executed, returned proxies that are not
revoked will be voted in accordance with the instructions contained therein.
Returned signed proxies that give no instructions as to how they should be voted
on a particular proposal at the Meeting will be counted as votes "for" such
proposal (or, in the case of the election of directors, as a vote "for" election
to the Board of all the nominees presented by the Board). So far as is known to
the Board, no other matters are to be brought before the Meeting. However, as to
any business that may properly come before the Meeting, it is intended that
proxies in the form enclosed will be voted in accordance with the judgment of
the persons holding such proxies.
In the event that sufficient votes in favor of the proposals are not
received by the date of the Meeting, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitations of
proxies. Any such adjournment would require the affirmative vote of the majority
of the outstanding shares present in person or represented by proxy at the
Meeting.
The expenses of soliciting proxies in the enclosed form will be paid by
click2learn. Following the original mailing of the proxies and other soliciting
materials, click2learn will request brokers, custodians, nominees and other
record holders to forward copies of the proxy and other soliciting materials to
persons for whom they hold shares of common stock and to request authority for
the exercise of proxies. In such cases, click2learn, upon the request of the
record holders, will reimburse such holders for their reasonable expenses.
Proxies may also be solicited by click2learn's directors, officers and regular
employees, without additional compensation, in person or by telephone.
REVOCABILITY OF PROXIES
Any person signing a proxy in the form accompanying this Proxy Statement has
the power to revoke it prior to the Meeting or at the Meeting prior to the vote
pursuant to the proxy. A proxy may be revoked by written notice delivered to
click2learn stating that the proxy is revoked, by a subsequent proxy that is
signed by the person who signed the earlier proxy and is presented at the
Meeting, or by attendance at the Meeting and voting in person. Please note that
if a stockholder's shares are held of record by a broker, bank or other nominee
and that stockholder wishes to vote at the Meeting, the stockholder must bring
to the Meeting a letter from the broker, bank or other nominee confirming such
stockholder's beneficial ownership of the shares and that such broker, bank or
other nominee is not voting such shares.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
Click2learn's Certificate of Incorporation and Bylaws divide the Board into
three classes. The members of each class of directors serve for staggered
three-year terms. Kevin Oakes, Ronald S. Posner and Shelley Harrison, Ph.D. are
the Class II directors whose terms expire at this Annual Meeting of
Stockholders. Mr. Oakes, Mr. Posner and Dr. Harrison are standing for
re-election to the Board.
On April 26, 2000, the Board approved a resolution increasing the size of
the Board to eight members by adding a third Class I director. The terms of the
Class I directors expire upon the election and qualification of directors at the
Annual Meeting of Stockholders to be held in 2002. Jonathan D. Klein is the
nominee for election as the third Class I director to fill the vacancy created
by the increase in the number of Class I directors. The Board is also currently
composed of two additional Class I directors (Joseph DiNucci and Sally Narodick)
and two Class III directors (James A. Billmaier and Bert Kolde) whose terms
expire upon the election and qualification of directors at the Annual Meeting of
Stockholders to be held in 2001.
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The Board has nominated and recommends that Kevin Oakes, Ronald S. Posner
and Shelley Harrison be elected as Class II directors to hold office until the
Annual Meeting of Stockholders to be held in the year 2003 and that Jonathan D.
Klein be elected as Class I director to hold office until the Annual Meeting of
Stockholders to be held in the year 2002, or until their respective successors
have been duly elected and qualified or until their earlier death, resignation
or removal. Shares represented by the accompanying proxy will be voted "for" the
election of the nominees recommended by the Board unless the proxy is marked in
such a manner as to withhold authority so to vote. If any nominee for any reason
is unable to serve, the proxies may be voted for such substitute nominee as the
proxy holder may determine. Click2learn is not aware of any nominee who is
unable or unwilling to serve as a director. Class I and Class II directors will
be elected by a plurality of the votes of the shares present in person or
represented by proxy at the Meeting and entitled to vote in the election of
directors. The nominees for election as Class I and Class II directors who
receive the greatest number of votes cast for the election of directors at the
Meeting with a quorum being present will become directors at the conclusion of
the tabulation of votes.
NOMINEES AND DIRECTORS
The following table sets forth the nominees for three Class II directors and
one Class I director recommended to be elected at the Meeting and each director
whose term of office will extend beyond or expire at the Meeting, the year such
nominee or director was first elected a director, the principal positions held
by the nominees and each director with click2learn, the year each nominee's or
director's term will expire, the class of each nominee and each director, and
certain additional biographical information regarding the four nominees:
<TABLE>
<CAPTION>
NAME OF DIRECTOR TERM
NOMINEE OR DIRECTOR AGE POSITION WITH CLICK2LEARN SINCE CLASS EXPIRES
------------------- -------- ------------------------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NOMINEES:
Kevin Oakes................... 36 President and Chief Executive 1997 II 2003
Officer and Director
Ronald S. Posner(1)........... 57 Director 1998 II 2003
Shelley Harrison, Ph.D.(2).... 57 Director 1997 II 2003
Jonathan D. Klein............. 39 None -- I 2002
CONTINUING DIRECTORS:
Sally Narodick................ 54 Director 1999 I 2002
Joseph DiNucci................ 57 Executive Vice President 1999 I 2002
Bert Kolde(1)(2).............. 44 Chairman of the Board 1984 III 2001
James A. Billmaier............ 44 Vice Chairman and Director 1995 III 2001
</TABLE>
- ------------------------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
Mr. Oakes was named President and Chief Executive Officer of click2learn in
January 2000. Mr. Oakes has served as President since he joined click2learn in
September 1997. Prior to that time, Mr. Oakes was the President of each of Oakes
Interactive, Acorn Associates and TopShelf Multimedia (the Oakes Companies)
which he founded in March 1993, January 1996 and March 1997, respectively, and
each of which click2learn acquired in September 1997. Prior to forming the Oakes
Companies, Mr. Oakes was a Senior Account Representative for The Minnesota
Mutual Life Insurance Company.
Mr. Posner became a director of click2learn in September 1998. Mr. Posner is
Chairman of NetCatalyst, an Internet investment firm, and a founding general
partner of PS Capital LLC, an angel venture capital firm. Mr. Posner has over
20 years experience in the technology industry, having held
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<PAGE>
executive positions with a number of high technology companies. He has been an
active investor and advisor to a number of Internet companies including
PrizeCentral.com (now part of Havas Interactive), Tunes.com (now part of
Emusic.com), Spinner.com (now part of America Online), STV.com (now part of
Sonic Foundry), Match.com (now part of TicketMaster City Search, Inc.),
Snickleways Interactive and Novatel Wireless. Mr. Posner is also a director of
Beyond.com, PNBC.net, and Smallworldwide plc.
Dr. Harrison has served as a director of click2learn since September 1997,
when click2learn acquired Aimtech Corporation. Dr. Harrison serves as Chairman
and Chief Executive Officer of SPACEHAB, Inc., a developer of habitable modules
for the United States space shuttle fleet. From 1987 until its dissolution in
December 1998, Dr. Harrison was a Managing General Partner of Poly Ventures,
Limited Partnership, a venture capital fund. Prior to that time, Dr. Harrison
co-founded and served as Chairman and Chief Executive Officer of Symbol
Technologies, Inc., a provider of bar code laser scanners and portable
terminals. Dr. Harrison is also a director of AppliedTheory Corporation,
Netmanage, Inc. and Information Resource Engineering, Inc., as well as several
private technology companies.
Mr. Klein is a co-founder of Getty Images LLC and has been its Chief
Executive Officer and a director since 1998. Mr. Klein served as Chief Executive
and a director of Getty Communications plc from 1996 to February 1998. From
March 1995 to April 1996, Mr. Klein served as the Joint Chairman of Getty
Communications plc. In 1993, Mr. Klein co-founded Getty Investment Holdings
L.L.C. and from 1993 to 1995, together with Mr. Mark Getty, formulated and
implemented its strategy. From 1983 to 1993, Mr. Klein held various positions at
Hambros Bank Limited. Mr. Klein serves on the board of Getty Investments L.L.C.
("Getty Investments") and The Conservation Corporation.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION
OF EACH OF THE NOMINEES NAMED ABOVE.
Additional biographical information regarding click2learn's continuing
directors and the Class II director whose term will expire at the Meeting and
who will not stand for re-election is available at pages 11 through 13 of this
Proxy Statement under "Directors and Executive Officers of click2learn."
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
BOARD OF DIRECTORS. During 1999, the Board met seven times, including
telephone conference meetings, and acted by unanimous written consent five
times. No current director attended fewer than 75% of the aggregate of the
number of meetings of the Board (held during the part of 1999 for which he or
she was a director) and the number of meetings held by all committees of the
Board on which such director served (during the part of 1999 that such director
served). Standing committees of the Board include an Audit Committee and a
Compensation Committee. The Board does not have a nominating committee or a
committee performing similar functions.
AUDIT COMMITTEE. Mr. Kolde and Dr. Harrison are the current members of the
Audit Committee. The Audit Committee was established in connection with
click2learn's initial public offering in June 1998. The Audit Committee meets
with click2learn's independent accountants to review the adequacy of
click2learn's internal control systems and financial reporting procedures;
reviews the general scope of click2learn's annual audit and the fees charged by
the independent accountants; reviews and monitors the performance of non-audit
services by click2learn's auditors; reviews the fairness of any proposed
transaction between click2learn and any officer, director or other affiliate of
click2learn (other than transactions subject to the review of the Compensation
Committee), and after such review, makes recommendations to the full Board; and
performs such further functions as may be required by any stock exchange or
over-the-counter market upon which click2learn's common stock may be listed. The
Audit Committee met once during 1999.
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COMPENSATION COMMITTEE. The Compensation Committee is currently comprised
of Mr. Kolde and Mr. Posner. The Compensation Committee reviews and approves
compensation and benefits for click2learn's executive officers, administers
click2learn's stock option, stock purchase and equity incentive plans, and makes
recommendations to the Board regarding such matters. Mr. Kolde and Mr. Posner
are both "non-employee directors" as defined in Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and "outside
directors" as defined pursuant to Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"). During 1999, the Compensation Committee met four
times (in conjunction with meetings of the full Board) and acted by written
consent eight times. Mr. Kolde was an executive officer of click2learn from
December 1984 until November 1994. No interlocking relationship exists between
the Board or Compensation Committee and the board of directors or compensation
committee of any other company, nor has any such interlocking relationship
existed in the past.
DIRECTOR COMPENSATION
Directors do not receive any cash fees for their service on the Board or any
Board committee, but they are entitled to reimbursement of all reasonable
out-of-pocket expenses incurred in connection with their attendance at Board and
Board committee meetings. In July 1995, click2learn granted to Mr. Kolde options
to purchase 90,000 shares of its common stock under its 1995 Combined Incentive
and Non-qualified Stock Option Plan, with an exercise price per share of $1.55,
equal to the fair market value on the date of grant.
In May 1998, the stockholders approved the 1998 Directors Stock Option Plan
(the "Directors Plan") and reserved a total of 187,500 shares of the common
stock for issuance thereunder. Members of the Board who are not employees of
click2learn or any parent, subsidiary or affiliate of click2learn are eligible
to participate in the Directors Plan. Option grants under the Directors Plan are
automatic and nondiscretionary, and the exercise price of such options is the
fair market value of the common stock on the date of grant. To date,
non-employee directors have received annual grants of options under the
Director's Plan to purchase 7,500 shares on either June 11, the effective date
of the Directors Plan, for non-employee directors who were serving on that date,
or on the date he or she first became a director and each anniversary thereof,
if the director has served continuously as a member of the Board since the date
of the initial grant. On April 18, 2000, the Board of Directors approved,
pursuant to the terms of the Directors Plan, an amendment to the Directors Plan
to increase the size of the of the initial grant for any new directors elected
after April 18, 2000 and the annual recurring grants for all directors from
7,500 to 15,000 shares. The increase will take effect with respect to current
directors on the date of their next annual grant. No other changes were made to
the Directors Plan.
The per share exercise price for such options is the fair market value of a
share of click2learn common stock on the grant date. The term of these options
is ten years, but they will terminate seven months following the date such
director ceases to be a member of the Board or a consultant to click2learn or
twelve months if the termination is due to death or disability. All options
granted under the Directors Plan will vest as to 2.77% of the shares each month
after the date of grant for so long as the recipient continues as a director or
a consultant of click2learn. Additionally, immediately prior to the dissolution
or liquidation of click2learn or a "change in control" transaction, all options
granted pursuant to the Directors Plan will accelerate and will be exercisable
for a period of up to six months following the transaction, after which any
unexercised options will expire.
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<PAGE>
PROPOSAL NO. 2--AMENDMENT OF 1998 EQUITY INCENTIVE PLAN
Stockholders are being asked to approve an amendment of click2learn's 1998
Equity Incentive Plan (the "Incentive Plan") to increase the number of shares of
common stock reserved for issuance thereunder from 2,500,000 shares to 4,000,000
shares. The Board believes that the increase in the number of shares reserved
for issuance under the Incentive Plan is in the best interests of click2learn
because of the continuing need to provide stock options to attract and retain
quality employees and remain competitive in the industry.
The granting of equity incentives under the Incentive Plan plays an
important role in click2learn's efforts to attract and retain employees of
outstanding ability. Competition for executives, skilled engineers and other key
employees in the software and Internet industries is intense and the use of
significant stock options for retention and motivation of such personnel is
pervasive in the high technology industries. The Board believes that the
additional reserve of shares with respect to which equity incentives may be
granted will provide click2learn with adequate flexibility to ensure that
click2learn can continue to meet those goals and facilitate click2learn's
continued growth in its employee base.
The Board approved the proposed amendment on April 26, 2000, to be effective
upon stockholder approval. Below is a summary of the principal provisions of the
Incentive Plan. The summary is not necessarily complete, and reference is made
to the full text of the Incentive Plan.
THE BOARD RECOMMENDS A VOTE FOR THE AMENDMENT OF THE
1998 EQUITY INCENTIVE PLAN.
SUMMARY OF THE 1998 EQUITY INCENTIVE PLAN
INCENTIVE PLAN HISTORY
The Incentive Plan replaced click2learn's 1995 Combined Incentive and
Non-qualified Stock Option Plan (the "1995 Plan"). There are currently 2,500,000
shares reserved for issuance under the Incentive Plan. In addition, any shares
available for grant under the 1995 Plan on the effective date of the Incentive
Plan as well as any shares subject to options granted under the 1995 Plan which
are canceled prior to exercise are available for grant under the Incentive Plan.
The purpose of the Incentive Plan is to offer eligible persons an opportunity to
participate in click2learn's future performance through awards of stock options,
restricted stock and stock bonuses, and to enable click2learn to recruit and
retain the highly skilled personnel necessary for its continued growth.
As of March 31, 2000, options to purchase an aggregate of 2,573,544 shares
of common stock were outstanding under the Incentive Plan, with exercise prices
ranging from $3.69 to $19.94 per share, and options to purchase 526,356 shares
were available for grant. As of March 31, 2000, options to purchase an aggregate
of 1,904,164 shares of common stock were outstanding under the 1995 Plan, with
exercise prices ranging from $1.55 to $11.00 per share, and no additional
options were available for grant. From the adoption of the 1995 Plan through
March 31, 2000, options to purchase a total of 8,867,499 shares had been granted
to all employees as a group (including all current executive officers) under
both the 1995 Plan and the Incentive Plan, of which options to purchase
2,855,626 shares had been canceled. As of March 31, 2000, click2learn's current
executive officers as a group (six persons) had been granted options under the
Incentive Plan and the 1995 Plan to purchase an aggregate of 1,171,369 shares
and options to purchase an aggregate of 3,072,947 shares had been granted to
current employees other than executive officers. For a list of options granted
to Named Executive Officers (as defined in "Executive Compensation") during
1997, 1998 and 1999 under both the Incentive Plan and the 1995 Plan, see the
chart on page 20.
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<PAGE>
SHARES
The stock subject to issuance under the Incentive Plan consists of shares of
click2learn's authorized but unissued common stock. The number of shares of
common stock currently reserved for issuance under the Incentive Plan is
2,500,000 shares, plus those shares not granted or becoming available as a
result of cancellations under the 1995 Plan (consisting of 729,738 shares as of
March 31, 1999). Proposal No. 2 seeks to increase the number of shares reserved
for issuance under the Incentive Plan from 2,500,000 shares to 4,000,000 shares
(plus any shares available or becoming available under the 1995 Plan). Shares
subject to an option granted pursuant to the Incentive Plan or 1995 Plan that
expires or terminates for any reason without being exercised, shares subject to
an award granted pursuant to the Incentive Plan that is forfeited or is
repurchased by click2learn at the original issue price, and shares subject to an
award granted pursuant to the Incentive Plan that otherwise terminates without
shares being issued will again become available for grant and issuance pursuant
to awards under the Incentive Plan. This number of shares is subject to
proportional adjustment to reflect stock splits, stock dividends and other
similar events.
ELIGIBILITY
Employees, officers, directors, consultants, independent contractors and
advisors of click2learn or any parent or subsidiary of click2learn are eligible
to receive awards under the Incentive Plan. No person will be eligible to
receive more than 500,000 shares in any calendar year pursuant to awards granted
under the Incentive Plan. Notwithstanding the foregoing, a new employee is
eligible to receive up to a maximum of 1,000,000 shares pursuant to the
Incentive Plan in the calendar year in which he or she commences employment. As
of March 31, 2000, approximately 363 persons were in the class of persons
eligible to participate in the Incentive Plan (not including consultants,
independent contractors and advisors), 1,770,936 shares had been issued upon
exercise of options under the Incentive Plan and the 1995 Plan, 4,477,708 shares
were subject to outstanding options under the Incentive Plan and the 1995 Plan,
and no shares had been issued pursuant to stock bonus awards. As of that date,
526,356 shares were available for future grant, including shares becoming
available as a result of cancellations under the 1995 Plan but not including the
proposed amendment to the Incentive Plan. If the proposed amendment had been
approved by the stockholders as of such date, there would have been 2,526,356
shares available under the Incentive Plan. The closing price of click2learn's
common stock on the Nasdaq National Market was $14.25 per share as of March 31,
2000, the last trading day before the Record Date.
ADMINISTRATION
The Incentive Plan is administered by the Compensation Committee, the
members of which are appointed by the Board. The Compensation Committee
currently consists of Bert Kolde and Ronald S. Posner, both of whom are
"non-employee directors," as defined in Rule 16b-3 promulgated under the
Exchange Act and "outside directors," as defined pursuant to Section 162(m) of
the Code.
Subject to the terms of the Incentive Plan, the Compensation Committee
determines the persons who are to receive awards, the number of shares subject
to each such award, and the terms and conditions of such awards. The
Compensation Committee also has the authority to construe and interpret any of
the provisions of the Incentive Plan or any awards granted thereunder.
STOCK OPTIONS
The Incentive Plan permits the granting of options that are intended to
qualify either as Incentive Stock Options ("ISOs") or Nonqualified Stock Options
("NQSOs"). ISOs may be granted only to employees (including officers and
directors who are also employees) of click2learn or any parent or subsidiary of
click2learn. The option exercise price for each ISO share must be no less than
100% of
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the "fair market value" (as defined in the Incentive Plan) of a share of common
stock at the time the ISO is granted. The per share exercise price of an ISO
granted to a 10% stockholder must be no less than 110% of the fair market value
of a share of common stock at the time the ISO is granted. The option exercise
price for each NQSO share must be no less than 85% of the fair market value of a
share of common stock at the time of grant. Click2learn has does not intend to
grant options under the Incentive Plan at less than fair market value in the
foreseeable future.
The exercise price of options granted under the Incentive Plan may be paid
(to the extent the following are approved by the Compensation Committee at the
time of grant): (1) in cash (by check); (2) by cancellation of indebtedness of
click2learn to the participant; (3) by surrender of shares of click2learn's
common stock owned by the participant for at least six months and having a fair
market value on the date of surrender equal to the aggregate exercise price of
the option; (4) by tender of a full recourse promissory note; (5) by waiver of
compensation due to or accrued by the participant for services rendered; (6) by
a "same-day sale" commitment from the participant and a National Association of
Securities Dealers, Inc. ("NASD") broker; (7) by a "margin" commitment from the
participant and a NASD broker; or (8) by any combination of the foregoing.
RESTRICTED STOCK AWARDS
The Compensation Committee may grant participants restricted stock awards to
purchase stock either in addition to, or in tandem with, other awards under the
Incentive Plan, under such terms, conditions and restrictions as the
Compensation Committee may determine. The purchase price for such awards must be
no less than 85% of the fair market value of click2learn's common stock on the
date of the award (and in the case of an award granted to a 10% stockholder, the
purchase price shall be 100% of fair market value) and can be paid for in any of
the forms of consideration listed in items (1) through (5) in "Stock Options"
above, as are approved by the Compensation Committee at the time of grant.
Click2learn has not granted any restricted stock awards under the Incentive Plan
to date, and does not intend to do so in the foreseeable future.
STOCK BONUS AWARDS
The Compensation Committee may grant participants stock bonus awards either
in addition to or in tandem with other awards under the Incentive Plan, under
such terms, conditions and restrictions as the Compensation Committee may
determine. Click2learn has not granted any stock bonus awards under the
Incentive Plan to date, and does not intend to do so in the foreseeable future.
MERGERS, CONSOLIDATIONS, CHANGE OF CONTROL
In the event of a merger, consolidation, dissolution or liquidation of
click2learn, the sale of substantially all of its assets, or any other similar
corporate transaction, the successor corporation may assume awards under the
Incentive Plan, substitute equivalent awards in exchange for those granted under
the Incentive Plan, or provide consideration substantially similar to that which
is provided to stockholders of click2learn in such transaction. In the event
that the successor corporation does not assume or substitute awards, then the
vesting of all awards granted pursuant to the Incentive Plan will accelerate
immediately prior to the transaction.
AMENDMENT OF THE INCENTIVE PLAN
The Board may at any time terminate or amend the Incentive Plan, including
amending any form of award agreement or instrument to be executed pursuant to
the Incentive Plan. However, the Board may not amend the Incentive Plan in any
manner that requires stockholder approval pursuant to the Code or the
regulations promulgated thereunder, or pursuant to the Exchange Act or
Rule 16b-3 (or its successor) promulgated thereunder.
8
<PAGE>
TERM OF THE INCENTIVE PLAN
Unless terminated earlier as provided in the Incentive Plan, the Incentive
Plan will expire in December 2007, ten years from the date it was adopted by the
Board.
FEDERAL INCOME TAX INFORMATION
THE FOLLOWING IS A GENERAL SUMMARY AS OF THE DATE OF THIS PROXY STATEMENT OF
THE FEDERAL INCOME TAX CONSEQUENCES TO CLICK2LEARN AND PARTICIPANTS UNDER THE
INCENTIVE PLAN. FEDERAL TAX LAWS MAY CHANGE AND THE FEDERAL, STATE AND LOCAL TAX
CONSEQUENCES FOR ANY PARTICIPANT WILL DEPEND UPON HIS OR HER INDIVIDUAL
CIRCUMSTANCES. EACH PARTICIPANT HAS BEEN AND IS ENCOURAGED TO SEEK THE ADVICE OF
A QUALIFIED TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF PARTICIPATION IN THE
INCENTIVE PLAN.
INCENTIVE STOCK OPTIONS. A participant will recognize no income upon grant
of an ISO and incur no tax on its exercise (unless the participant is subject to
the alternative minimum tax ("AMT")). If the participant holds shares acquired
upon exercise of an ISO (the "ISO Shares") for more than one year after the date
the option was exercised and for more than two years after the date the option
was granted, the participant generally will realize capital gain or loss (rather
than ordinary income or loss) upon disposition of the ISO Shares. This gain or
loss will be equal to the difference between the amount realized upon such
disposition and the amount paid for the ISO Shares.
If the participant disposes of ISO Shares prior to the expiration of either
required holding period (a "disqualifying disposition"), the gain realized upon
such disposition, up to the difference between the fair market value of the ISO
Shares on the date of exercise (or, if less, the amount realized on a sale of
such shares) and the option exercise price, will be treated as ordinary income.
Any additional gain will be long-term or short-term capital gain, depending upon
the amount of time the ISO Shares were held by the participant.
ALTERNATIVE MINIMUM TAX. The difference between the fair market value of
the ISO Shares on the date of exercise and the exercise price is an adjustment
to income for purposes of AMT. The AMT (imposed to the extent it exceeds the
taxpayer's regular tax) is 26% of the portion of an individual taxpayer's
alternative minimum taxable income that would otherwise be taxable as ordinary
income (28% in the case of alternative minimum taxable income in excess of
$175,000). A maximum 20% AMT rate applies to the portion of alternative minimum
taxable income that would otherwise be taxable as net capital gain. Alternative
minimum taxable income is determined by adjusting regular taxable income for
certain items, increasing that income by certain tax preference items (including
the difference between the fair market value of the ISO Shares on the date of
exercise and the exercise price), and reducing this amount by the applicable
exemption amount ($45,000 in case of a joint return, subject to reduction under
certain circumstances). If a disqualifying disposition of the ISO Shares occurs
in the same calendar year as exercise of the ISO, there is no AMT adjustment
with respect to those ISO Shares. Also, upon a sale of ISO Shares that is not a
disqualifying disposition, alternative minimum taxable income is reduced in the
year of sale by the excess of the fair market value of the ISO Shares at
exercise over the amount paid for the ISO Shares.
NONQUALIFIED STOCK OPTIONS. A participant will not recognize any taxable
income at the time an NQSO is granted. However, upon exercise of an NQSO, the
participant must include in income as compensation an amount equal to the
difference between the fair market value of the shares on the date of exercise
and the participant's exercise price. The included amount must be treated as
ordinary income by the participant and may be subject to withholding by
click2learn (either by payment in cash or withholding out of the participant's
salary). Upon resale of the shares by the participant, any
9
<PAGE>
subsequent appreciation or depreciation in the value of the shares will be
treated as capital gain or loss.
RESTRICTED STOCK AND STOCK BONUS AWARDS. Restricted stock and stock bonus
awards will generally be subject to tax at the time of receipt, unless there are
restrictions that enable the participant to defer tax. At the time the tax is
incurred, the tax treatment will be similar to that discussed above for NQSOs.
MAXIMUM TAX RATES. The maximum tax rate applicable to ordinary income and
short-term capital gains is 39.6%. Long-term capital gain will be taxed at a
maximum of 20%. For this purpose, in order to receive long-term capital gain
treatment, the shares must be held for more than 12 months. Capital gains may be
offset by capital losses and up to $3,000 of capital losses may be offset
annually against ordinary income.
TAX TREATMENT OF CLICK2LEARN. Click2learn generally will be entitled to a
deduction in connection with the exercise of an NQSO by a participant or the
receipt of restricted stock or stock bonuses by a participant to the extent that
the participant recognizes ordinary income and click2learn withholds tax.
Click2learn will be entitled to a deduction in connection with the disposition
of ISO Shares only to the extent that the participant recognizes ordinary income
on a disqualifying disposition of the ISO Shares.
ERISA. The Incentive Plan is not subject to any of the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA") and is not qualified
under Section 401(a) of the Code.
NEW PLAN BENEFITS
The amounts of future option grants under the Incentive Plan to
(1) click2learn's Chief Executive Officer; (2) the Named Executive Officers;
(3) all current executive officers as a group; (4) all current directors who are
not executive officers as a group; and (5) all employees, including all officers
who are not executive officers, as a group, are not determinable because under
the terms of the Incentive Plan such grants are made in the discretion of the
Compensation Committee or its designees. Future option exercise prices under the
Incentive Plan are not determinable because they are based upon the fair market
value of click2learn's common stock on the date of grant.
PROPOSAL NO. 3--RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
Click2learn has selected KPMG LLP as its independent accountants to perform
the audit of click2learn's financial statements for 2000, and the stockholders
are being asked to ratify such selection. KPMG LLP has been engaged as
click2learn's independent accountants since 1997. Representatives of KPMG LLP
will be present at the Meeting, will have the opportunity to make a statement at
the Meeting if they desire to do so, and will be available to respond to
appropriate questions.
THE BOARD RECOMMENDS A VOTE FOR THE RATIFICATION
OF THE SELECTION OF KPMG LLP.
10
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF CLICK2LEARN
The following table sets forth certain information regarding the executive
officers and directors of click2learn as of March 31, 2000:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- -------- --------
<S> <C> <C>
Kevin M. Oakes............................ 36 President, Chief Executive Officer and Director
Joseph DiNucci............................ 57 Executive Vice President and Director
Steven Martino............................ 41 Senior Vice President and Chief Operating Officer
John M. Kellum............................ 49 Vice President and Chief Technology Officer
John D. Atherly........................... 41 Vice President, Finance and Administration and
Chief Financial Officer
Steven Esau............................... 37 Vice President, General Counsel and Corporate
Secretary
Bert Kolde(1)(2).......................... 44 Chairman of the Board and Director
James A. Billmaier........................ 44 Vice Chairman and Director
Shelley Harrison, Ph.D.(2)................ 57 Director
Ronald S. Posner(1)....................... 57 Director
Sally Narodick............................ 54 Director
</TABLE>
- ------------------------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
Mr. Oakes was named President and Chief Executive Officer in January 2000.
Mr. Oakes has served as President since he joined click2learn in
September 1997. Prior to that time, Mr. Oakes was the President of each of Oakes
Interactive, Acorn Associates and TopShelf Multimedia (the Oakes Companies)
which he founded in March 1993, January 1996 and March 1997, respectively, and
each of which click2learn acquired in September 1997. Prior to forming the Oakes
Companies, Mr. Oakes was a Senior Account Representative for The Minnesota
Mutual Life Insurance Company.
Mr. DiNucci has served as Executive Vice President since July 1999 and as a
Director since May 1999. Mr. DiNucci joined click2learn in October 1998 as
Senior Vice President, Worldwide Sales. Prior to joining click2learn,
Mr. DiNucci was the Vice President of Business Development for E.piphany, Inc.,
which markets enterprise relationship management systems, where he recruited the
initial sales force and first customers. Previously, Mr. DiNucci spent five
years at Silicon Graphics, a graphics workstation company, as Vice President of
Marketing. Prior to that Mr. DiNucci was the Senior Vice President and General
Manager of MIPS Computer Systems, where he ran the systems business. Prior to
MIPS, Mr. DiNucci spent seventeen years at Digital Equipment Company, where he
held a variety of positions, including general manager of DEC's workstation
business. Mr. DiNucci is a director of Rand Technologies in Toronto, and Realax
in Frankfurt.
Mr. Martino was named Senior Vice President and Chief Operating Officer in
January 2000. Mr. Martino has held a number of executive positions with
click2learn since he joined click2learn in September 1995. He has served at
various times as Vice President, Marketing; Vice President, Strategic
Relationships; Vice President, Sales; and Vice President and General Manager,
Professional Services. From 1990 to September 1995, Mr. Martino was with Sun
Microsystems, most recently as the Senior Director of Marketing for SunSoft.
Prior to that time, he was a Senior Manager at Price Waterhouse, and held
various sales and marketing positions at Xerox Corporation.
Mr. Kellum was named Vice President and Chief Technology Officer in
January 2000. Mr. Kellum also served as Vice President and General Manager,
Online Learning Products from November 1995 until January 2000, and prior to
that was Senior Director of Business Development. From May 1993 to
11
<PAGE>
September 1995, he served as Director of Technology and Business Development at
SunSoft. From 1987 to May 1993, he served as Director of Engineering at
Intergraph Corporation, a graphics workstation company. Prior to that time, he
served as Director of Operating Systems at Fairchild Research Center and as a
Senior Research Scientist at Honeywell Research Center.
Mr. Atherly has served as Vice President, Finance and Administration and
Chief Financial Officer of click2learn since February 1995, and prior to that
was Director of Finance and Operations, Treasurer and Secretary from
February 1993 until February 1995. Mr. Atherly held various other positions
since he joined click2learn in June 1990, including controller from
February 1991 until February 1993. Prior to joining click2learn, Mr. Atherly was
a Finance and Operations Manager at MicroDisk Services, a software manufacturing
services company.
Mr. Esau has served as General Counsel of click2learn since October 1995 and
also as a Vice President and Secretary of click2learn since January 1997. Prior
to that time, Mr. Esau was the Director of Legal Affairs from February 1995
until October 1995, and before that he was counsel to click2learn since joining
click2learn in February 1994. From 1988 until February 1994, he was in private
law practice, first with Stoel Rives LLP in Seattle and then with his own law
firm, where he focused on advising software and technology startup companies.
Mr. Kolde was appointed Chairman of the Board of click2learn in July 1997,
and has been a director since click2learn was founded in December 1984.
Mr. Kolde served as Executive Vice President of click2learn from December 1984
until April 1993, and thereafter as President until November 1994. Mr. Kolde is
Vice Chairman of Trail Blazers Inc., Football Northwest LLC, First & Goal Inc.
and Oregon Arena Corporation and a Vice President of Vulcan Ventures, Inc.
Mr. Kolde serves as a director of Edison Schools, Inc. and CyberSource
Corporation. Prior to joining click2learn, Mr. Kolde was the Vice President of
Management Reporting of Seafirst Corporation.
Mr. Billmaier was appointed Vice Chairman in January 2000. Mr. Billmaier is
currently President and CEO of Broadband Partners. Mr. Billmaier served as Chief
Executive Officer from July 1995 until January 2000 and has been a director of
click2learn since July 1995. Mr. Billmaier also served as President from
July 1995 until September 1997. From January 1994 until July 1995, he was the
Vice President and General Manager of the Network Software Products Business of
Sun Microsystems, Inc. From February 1992 until January 1994, he was Vice
President of Marketing and Business Development for SunSoft, Sun Microsystems'
software business division. Prior to joining Sun Microsystems, Mr. Billmaier
served as the Vice President of Software Marketing and Business Development at
MIPS Technologies, Inc., a developer of computer microprocessors, and before
that he was responsible for UNIX workstation products and strategies at Digital
Equipment Corporation.
Dr. Harrison has served as a director of click2learn since September 1997,
when click2learn acquired Aimtech Corporation. Dr. Harrison serves as Chairman
and Chief Executive Officer of SPACEHAB, Inc., a developer of habitable modules
for the United States space shuttle fleet. From 1987 until its dissolution in
December 1998, Dr. Harrison was a Managing General Partner of Poly Ventures,
Limited Partnership, a venture capital fund. Prior to that time, Dr. Harrison
co-founded and served as Chairman and Chief Executive Officer of Symbol
Technologies, Inc., a provider of bar code laser scanners and portable
terminals. Dr. Harrison is also a director of AppliedTheory Corporation,
Netmanage, Inc. and Information Resource Engineering, Inc., as well as several
private technology companies.
Mr. Posner became a director of click2learn in September 1998. Mr. Posner is
Chairman of NetCatalyst, an Internet investment firm, and a founding general
partner of PS Capital LLC and angel venture capital firm. Mr. Posner has over
20 years experience in the technology industry, having held executive positions
with a number of high technology companies. He has been an active investor and
advisor to a number of Internet companies including PrizeCentral.com (now part
of Havas Interactive), Tunes.com (now part of Emusic.com), Spinner.com (now part
of America Online), STV.com (now part
12
<PAGE>
of Sonic Foundry), Match.com (now part of TicketMaster City Search, Inc.),
Snickleways Interactive and Novatel Wireless. Mr. Posner is also a director of
Beyond.com, PNBC.net, and Smallworldwide plc.
Ms. Narodick became a director of click2learn in September 1998.
Ms. Narodick has been President and CEO of APEX Online Learning, Inc., which
provides online distance learning courses to high achieving high school
students, since October 1998. Before joining APEX Online Learning, she was an
independent consultant on educational technology. Prior to that, she was
Chairman and CEO of Edmark Corporation, a publicly held educational software
company, from 1989 until Edmark was sold to IBM in December 1996. From
December 1996 through March 1998, she served as an educational technology
consultant to the Consumer Software Division of IBM. Ms. Narodick is on the
boards of Penford Corporation, a publicly held specialty chemical company; Puget
Sound Energy, a publicly held gas and electric utility; and APEX Online
Learning.
13
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to click2learn with
respect to the beneficial ownership of click2learn's common stock as of
March 31, 2000, by: (1) each person who is known by click2learn to own
beneficially more than 5% of click2learn's common stock, (2) each director of
click2learn, (3) each of the Named Executive Officers and (4) all directors and
executive officers of click2learn as a group.
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF SHARES COMMON STOCK
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED BENEFICIALLY OWNED(1)
- ------------------------ ------------------ ---------------------
<S> <C> <C>
Paul G. Allen(2).......................................... 6,828,216 39.94%
Marshall Capital Management, Inc.(3)...................... 1,340,839 7.75
Vulcan Ventures, Inc.(4).................................. 1,003,216 5.86
Capital Guardian Trust Company(5)......................... 962,000 5.76
Capital Group International, Inc.(6)...................... 962,000 5.76
Go2Net, Inc.(7)........................................... 857,142 5.00
Kevin M. Oakes(8)......................................... 478,761 2.86
James A. Billmaier(9)..................................... 388,904 2.27
Steven Martino(10)........................................ 120,933 *
John M. Kellum(11)........................................ 111,440 *
Bert Kolde(12)............................................ 87,082 *
Joseph DiNucci(13)........................................ 63,271 *
Ronald S. Posner(14)...................................... 45,832 *
Shelley Harrison, Ph.D.(15)............................... 8,069 *
Sally Narodick(16)........................................ 2,500 *
All officers and directors as a group (11 persons)(16).... 1,495,458 8.46
</TABLE>
- ------------------------
* Less than 1% of click2learn's outstanding common stock
(1) Percentage ownership is based on 16,707,342 shares outstanding as of
March 31, 2000. Shares of common stock subject to options or warrants
currently exercisable or exercisable within 60 days of March 31, 2000 are
deemed outstanding for the purpose of computing the percentage ownership of
the person holding such options or warrants but are not deemed outstanding
for computing the percentage ownership of any other person. The addresses
for each holder of more than 5% of click2learn common stock are as follows:
PAUL G. ALLEN
c/o Vulcan Ventures, Inc.
110 - 110(th) Avenue NE
Bellevue, Washington 98004
MARSHALL CAPITAL MANAGEMENT, INC.
11 Madison Avenue
New York, New York 10010
CAPITAL GUARDIAN TRUST COMPANY
CAPITAL GROUP INTERNATIONAL, INC.
11100 Santa Monica Blvd.
Los Angeles, California 90025
GO2NET, INC.
999 Third Avenue
Seattle, Washington 98104
14
<PAGE>
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.
(2) Includes 516,120 shares held of record by Vulcan Ventures, Inc. and 387,096
shares issuable upon exercise of a warrants issued to Vulcan
Ventures, Inc. Mr. Allen is the sole shareholder of Vulcan Ventures, Inc.
and may be deemed to have shared voting and investment power with respect
to such shares. Mr. Allen is the founder of click2learn.
(3) Includes 580,646 shares issuable upon exercise of a warrant.
(4) Includes 387,096 shares issuable upon exercise of a warrant.
(5) Represents shares held on behalf of institutional clients for which Capital
Guardian Trust Company serves as the investment manager. Capital Guardian
Trust Company disclaims beneficial ownership of such shares.
(6) Represents the shares beneficially held by Capital Guardian Trust Company.
Capital Group International, Inc. has no voting or investment power with
respect to such shares. Capital Group International, Inc. is the parent
company of Capital Guardian Trust Company and may be deemed to beneficially
own such shares by virtue of Rule 13d-3. Capital Group International, Inc.
disclaims beneficial ownership of such shares.
(7) Includes 428,571 shares issuable on exercise of a warrant.
(8) Includes 11,140 shares subject to stock options exercisable within 60 days
of March 31, 2000. Mr. Oakes is President and Chief Executive Officer and a
director of click2learn.
(9) Represents shares subject to stock options exercisable within 60 days of
March 31, 2000. Mr. Billmaier is the Vice Chairman and a director of
click2learn.
(10) Represents shares subject to stock options exercisable within 60 days of
March 31, 2000. Mr. Martino is Senior Vice President and Chief Operating
Officer of click2learn.
(11) Represents shares subject to stock options exercisable within 60 days of
March 31, 2000. Mr. Kellum is Vice President and Chief Technology Officer
of click2learn.
(12) Represents shares subject to stock options exercisable within 60 days of
March 31, 2000. Mr. Kolde is Chairman of the Board of click2learn.
(13) Includes 56,740 shares subject to stock options exercisable within
60 days of March 31, 2000. Mr. DiNucci is Executive Vice President and a
director of click2learn.
(14) Includes 5,832 shares subject to stock options exercisable within 60 days
of March 31, 2000. Mr. Posner is a director of click2learn.
(15) Includes 7,082 shares subject to stock options exercisable within 60 days
of March 31, 2000 and 144 shares held of record by Dr. Harrison's spouse.
Dr. Harrison is a director of click2learn.
(16) Represents 2,500 shares subject to stock options exercisable within
60 days of March 31, 2000. Ms. Narodick is a director of click2learn.
(17) Represents the shares described in footnotes (8) - (16), plus an
additional 188,686 shares beneficially owned by two other executive
officers, of which 179,279 shares were subject to stock options
exercisable within 60 days of March 31, 2000.
15
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning the
compensation awarded to, earned by, or paid for services rendered to click2learn
in all capacities during the year ended December 31, 1999 by click2learn's Chief
Executive Officer and the four most highly compensated executive officers, other
than the Chief Executive Officer, who were serving as executive officers at the
end of 1999 (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
------------
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (#)
- --------------------------- -------- -------- -------- ------------
<S> <C> <C> <C> <C>
James A. Billmaier ............................ 1999 $250,000 $26,923(3) --
Chief Executive Officer(1) 1998 259,616 47,343(4) --
1997 250,000 74,875(5) 187,499
Kevin Oakes ................................... 1999 150,000 14,135(3) 40,000
President(2) 1998 144,231 24,855(4) --
1997(6) 37,500 -- 17,250
Steven Martino ................................ 1999 150,000 12,115(3) 60,000
Vice President, Marketing 1998 155,769 35,507(4) 7,499
1997 133,404 36,075(5) 37,499
Joseph DiNucci, ............................... 1999 150,000 66,766(3) --
Executive Vice President 1998(7) 34,038 26,288(4) 250,000
1997(7) -- -- --
John M. Kellum, ............................... 1999 127,400 10,290(3) 65,000
Vice President and General Manager Online 1998 131,640 17,398(4) 7,499
Learning Products 1997 121,827 26,644(5) 37,499
</TABLE>
- ------------------------
(1) On January 19, 2000, Mr. Billmaier was named Vice Chairman of click2learn.
(2) On January 19, 2000, Mr. Oakes was named President and Chief Executive
Officer of click2learn.
(3) Does not include bonus or incentive compensation/commissions earned in 1999
but not paid in 1999.
(4) Includes certain bonus or incentive compensation/commissions earned in 1997
but not paid until 1998, and does not include bonus or incentive
compensation/commissions earned in 1998 but not paid in 1998.
(5) Includes certain bonus or incentive compensation/commissions earned in 1996
but not paid until 1997, and does not include bonus or incentive
compensation/commissions earned in 1997 but not paid in 1997.
(6) Mr. Oakes joined click2learn on September 30, 1997. Compensation paid in
1997 is limited to salary for the last three months of the fiscal year.
(7) Mr. DiNucci joined click2learn on October 6, 1998. No compensation was paid
during 1997 and compensation paid in 1998 is limited to salary and incentive
compensation for the last three months of the fiscal year.
16
<PAGE>
OPTION GRANTS IN FISCAL 1999
The following table sets forth certain information regarding stock options
granted to each of the Named Executive Officers during the year ended
December 31, 1999.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1) POTENTIAL REALIZABLE
---------------------------------------------------- VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF
SECURITIES TOTAL OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERMS(2)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION ---------------------
NAME GRANTED FISCAL YEAR(3) SHARE(4) DATE 5% 10%
- ---- ---------- -------------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
James A. Billmaier............... -- -- -- -- -- --
Kevin Oakes...................... 40,000 2.23% $8.41 10/8/09 211,560 536,135
Steven Martino................... 20,000 1.11% $4.75 1/28/09 59,745 151,406
Steven Martino................... 40,000 2.23% $8.41 10/8/09 211,560 536,135
Joseph DiNucci................... -- -- -- -- -- --
John M. Kellum................... 25,000 1.39% $4.75 1/28/09 74,681 189,257
John M. Kellum................... 40,000 2.23% $8.41 10/8/09 211,560 536,135
</TABLE>
- ------------------------
(1) Options granted in 1999 were granted under click2learn's 1998 Equity
Incentive Plan (the "1998 Plan"). These options become exercisable with
respect to 50% of the shares covered by the option on the first anniversary
of the date of grant and with respect to an additional 50% of these shares
on the second anniversary of the date of grant. These options have a term of
ten years.
(2) Potential realizable value is based on the assumption that the common stock
of click2learn appreciates at the annual rate shown (compounded annually)
from the date of grant until the expiration of the ten-year term. These
numbers are calculated based on Securities and Exchange Commission
requirements and do not reflect click2learn's projection or estimate of
future stock price growth.
(3) Click2learn granted options to purchase an aggregate of 1,795,093 shares of
common stock to all employees during 1999.
(4) Options were granted at an exercise price equal to the fair market value of
click2learn's common stock as determined by its closing price on the Nasdaq
National Market on the date of grant.
FISCAL YEAR END OPTION VALUES
The following table sets forth for each of the Named Executive Officers the
number and year-end value of exercisable and unexercisable options for the year
ended December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT 12/31/99(1) 12/31/99(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James A. Billmaier........ -- -- 543,749 93,750 $4,635,372 $ 324,375
Kevin Oakes............... -- -- 9,702 47,548 49,711 147,521
Steven Martino............ -- -- 105,621 81,877 890,732 329,363
Joseph DiNucci............ 7,000 $25,870 65,916 177,084 490,415 1,317,505
John M. Kellum............ -- -- 85,621 86,877 699,132 361,263
</TABLE>
- ------------------------
(1) Options shown were granted under both the 1998 Plan and the 1995 Combined
Incentive and Non-qualified Stock Option Plan (the "1995 Plan"). The 1998
Plan options are subject to vesting as described in footnote (1) to the
option grant table above. Options granted under the 1995 Plan become
exercisable with respect to 25% of the shares covered by the option on the
first anniversary of the date of grant and with respect to an additional
2.08% of theses shares each month thereafter, subject to acceleration upon
certain changes in control of click2learn. These options have a term of ten
years.
(2) Based on the closing price of click2learn common stock on the Nasdaq
National Market on December 31, 1999 of $11.13 per share, net of exercise
price.
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EMPLOYMENT AGREEMENTS
In connection with Mr. Oakes' becoming President and Chief Executive Officer
of click2learn and relocating to click2learn's office in Bellevue, Washington,
Mr. Oakes and click2learn entered into an Employment Agreement with a term of
two years Pursuant to the terms of this agreement, Mr. Oakes will receive an
annual salary of $250,000, have a target bonus of 40% of his annual salary, and
be eligible to receive a maximum bonus of 100% of his annual salary. In
addition, Mr. Oakes was granted an option to purchase 100,000 shares of the
click2learn's Common Stock at a price per share of $16.00, equal to the fair
market value on the date of grant, in accordance with the terms of click2learn's
1998 Equity Incentive Plan. If Mr. Oakes is terminated by click2learn without
cause prior to the end of the two year term, Mr. Oakes will be entitled to
receive severance pay equal to his salary for the greater of the remaining term
of the Employment Agreement or six months.
REPORT ON EXECUTIVE COMPENSATION
This Report of the Compensation Committee is required by the SEC and shall
not be deemed to be incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing under the
Securities Act, or under the Exchange Act, except to the extent that click2learn
specifically incorporates this information by reference, and shall not otherwise
be deemed soliciting material or filed under such acts.
Final decisions regarding executive compensation and stock option grants to
executives and employees are made by the Compensation Committee of the Board.
The Compensation Committee is composed of two independent non-employee
directors.
GENERAL COMPENSATION POLICY
The Compensation Committee acts on behalf of the Board to establish the
general compensation policy for executives officers of click2learn. The
Compensation Committee reviews and approves the general executive bonus plan and
individual incentive compensation plans for certain executive officers who do
not participate in the general executive bonus plan at or about the beginning of
each year. Executive salaries for 2000 were established in December 1999 and
became effective January 1, 2000, except that the salaries of Mr. Oakes and
Mr. Martino were adjusted as of January 19, 2000 in connection with their
promotions to President and Chief Executive Officer and Senior Vice President
and Chief Operating Officer, respectively. The Compensation Committee also
administers click2learn's incentive and equity plans, including the 1998 Equity
Incentive Plan (the "Incentive Plan"), the 1998 Directors Stock Option Plan (the
"Directors Plan") and the 1999 Employee Stock Purchase Plan (the "Purchase
Plan").
The Compensation Committee's general philosophy in compensating executive
officers, including the Chief Executive Officer, is to relate compensation to
corporate performance. Long-term equity incentives for executive officers are
accomplished through grants of stock options under the Incentive Plan. Stock
options generally have value for the executive only if the price of
click2learn's stock increases above the fair market value on the grant date and
the executive remains employed by click2learn for the period required for the
shares to vest. In addition, the executive bonus plan or individual incentive
compensation plans account for a significant portion of the target compensation
for executive officers. Bonuses are determined solely by corporate performance
targets, while executives with revenue generating responsibility have incentive
compensation plans tied to the recognition of revenue for which they are
responsible.
The base salaries and stock option grants of the executive officers are
determined in part by the Compensation Committee informally reviewing data on
prevailing compensation practices in technology companies with whom click2learn
competes for executive talent and by their evaluating such information in
connection with the click2learn's corporate goals. To this end, the Compensation
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<PAGE>
Committee attempts to compare the compensation of click2learn's executive
officers with the compensation practices of comparable companies to determine
base salary, target bonuses and target total cash compensation. With respect to
the compensation of executive officers other than the CEO, the Compensation
Committee also considers the recommendations of the CEO. In addition to their
base salaries, click2learn's executive officers, including the CEO, are each
eligible to participate in the Incentive Plan and the Purchase Plan.
In preparing the stock price performance graph included with this Proxy
Statement, click2learn used the Nasdaq Computer & Data Processing Services
Stocks Index as its published line of business index. However, the compensation
practices of most of the companies in the Nasdaq Computer & Data Processing
Services Stocks Index are not reviewed by the Compensation Committee when
setting executive salaries because such companies are not competitive with
click2learn for executive talent.
1999 EXECUTIVE COMPENSATION
BASE COMPENSATION. In 1999, the Compensation Committee reviewed the
recommendations, performance and market data outlined above to establish a base
salary level for each executive officer, including the CEO.
INCENTIVE COMPENSATION. Under the current executive bonus plan, bonuses are
paid in the quarter following a quarter in which corporate performance goals are
met. During 1999, click2learn paid cash bonuses to its executive officers in the
fourth quarter of 1999 with respect to corporate performance goals for the third
quarter of 1999. Bonuses were earned with respect to corporate performance goals
for the fourth quarter of 1999, but such bonuses were not paid until the first
quarter of 2000. Bonuses will be paid in 2000 only if corporate performance
goals are met. Certain executives with revenue generating responsibility do not
participate in the executive bonus plan, but have incentive compensation plans
tied to the revenue for which they are responsible.
STOCK OPTIONS. Stock options are granted to executive officers as
incentives to become employees or to aid in the retention of executive officers
and to align their interests with those of the stockholders. Stock options
typically have been granted to executive officers when the executive first joins
click2learn, in connection with a significant change in responsibilities and to
reward continued performance. The Compensation Committee may, however, grant
additional stock options to executives for other reasons. The number of shares
subject to each stock option granted is within the discretion of the
Compensation Committee and is based on anticipated future contribution and
ability to impact corporate and/or business unit results, past performance or
consistency within the executive's peer group. In the discretion of the
Compensation Committee, executive officers may also be granted stock options
under the Incentive Plan to provide a greater incentive to continue their
employment with click2learn and to strive to increase the value of click2learn's
common stock. In 1999, the Compensation Committee granted options to purchase a
total of 265,000 shares to executive officers.
COMPANY PERFORMANCE AND CEO COMPENSATION. Mr. Billmaier received bonus
compensation in 1999 based on corporate performance goals achieved during the
third quarter of 1999, and received bonus compensation in 2000 based on
corporate performance goals achieved during the fourth quarter of 1999. He did
not receive any grants of stock options in 1999.
COMPLIANCE WITH SECTION 162(M) OF THE INTERNAL REVENUE CODE OF
1986. Click2learn intends to comply with the requirements of Section 162(m) of
the Internal Revenue Code. The Incentive Plan is already in compliance with
Section 162(m) by limiting stock awards to Named Executive Officers. click2learn
does not expect cash compensation for any executive officer during 1999 to be in
excess of $1,000,000 or consequently to be affected by the requirements of
Section 162(m).
Bert Kolde and Ronald S. Posner (Members of the Compensation Committee)
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COMPANY STOCK PRICE PERFORMANCE
The stock price performance graph below is required by the SEC and shall not
be deemed to be incorporated by reference by any general statement incorporating
by reference this Proxy Statement into any filing under the Securities Act or
under the Exchange Act, except to the extent that click2learn specifically
incorporates this information by reference, and shall not otherwise be deemed
soliciting material or filed under such Acts.
The graph below compares the cumulative total stockholder return on (1) the
common stock of click2learn with (2) the Nasdaq US Stocks Index and (3) the
Nasdaq Computer and Data Processing Services Stocks Index from June 12, 1998
(the effective date of click2learn's registration statement with respect to the
click2learn initial public offering) to December 31, 1999 (assuming the
investment of $100 in the click2learn's common stock and in each of the other
indices on the date of click2learn's initial public offering, and reinvestment
of all dividends).
The comparisons in the graph below are based on historical data and are not
intended to forecast the possible future performance of click2learn's common
stock.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLICK2LEARN.COM NASDAQ US STOCKS INDEX NASDAQ COMPUTER AND DATA PROCESSING SERVICES STOCKS INDEX
<S> <C> <C> <C>
6/12/98 100 100 100
6/30/98 82 109 117
9/30/98 58 98 110
12/31/98 40 128 143
3/31/99 43 143 172
6/30/99 38 156 179
9/30/99 82 160 184
12/31/99 101 231 301
</TABLE>
Prior to June 12, 1998, click2learn's common stock was not publicly traded.
Comparative data is provided only for the period since that date. The stock
price performance shown on the graph above is not necessarily indicative of
future price performance. Information used in the graph was obtained from the
Nasdaq National Market, a source believed to be reliable, but click2learn is not
responsible for any errors or omissions in such information.
20
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since January 1, 1999, there has not been, nor is there currently proposed,
any transaction or series of similar transactions to which click2learn or any of
its subsidiaries was or is to be a party in which the amount involved exceeded
or will exceed $60,000 and in which any director, executive officer, holder of
more than 5% of the common stock of click2learn or any member of the immediate
family of any of the foregoing persons had or will have a direct or indirect
material interest other than (1) compensation agreements and other arrangements,
which are described where required in "Executive Compensation" and (2) the
transactions described below.
On August 18, 1999, click2learn sold 428,571 shares of common stock to
Go2Net, Inc. ("Go2Net") for an aggregate purchase price of $3,000,000 in cash,
and issued Go2Net warrants for the purchase of an additional 428,571 shares of
common stock at an exercise price of $7.00 per share. The warrants are
exercisable at any time prior to 5:00 p.m. Pacific time on August 18, 2004 in
whole or in part upon the payment of the exercise price for the number of shares
with respect to which the warrants are being exercised. In addition, the
warrants may be exercised on a net exercise basis, pursuant to which the
exercise price for an exercise of warrants is paid by the cancellation of a
portion of the shares being exercised having a fair market value equal to the
exercise price for all the shares being exercised. However, a net exercise may
only be made if there is not an effective registration statement in place on the
date of such exercise covering the resale of the warrant shares.
Also on August 18, 1999, and concurrently with the sale of shares and
warrants to Go2Net, click2learn and Go2Net entered a Co-Branding and Marketing
Agreement. Pursuant to this agreement, click2learn will host co-branded
e-learning web sites targeted at users of certain Internet portals operated by
Go2Net and Go2Net will advertise and promote click2learn's services on these
portals. The term of the Agreement is three years. Click2learn is required to
make payments of placement fees to Go2Net over the three-year term of the
Agreement and will share with Go2Net the revenues from the sales of any Internet
delivered e-learning materials sold through the co-branded sites to the extent
that those revenues exceed certain triggering amounts. Go2Net will not receive a
share of such revenues up to the triggering amounts. Click2learn and Go2Net will
also share revenues from advertising or sponsorships on the co-branded sites or
from the sale of other materials sold through the co-branded sites without
regard to the triggering amounts. During 1999, click2learn made payments to
Go2Net of $1,500,000 pursuant to the Agreement. Due to the time lag between the
execution of the Agreement and the implementation of the co-branded sites and
related marketing programs, click2learn did not receive any revenues from the
co-branded sites during 1999. The Agreement is such as ordinarily accompanies
the kind of business conducted by click2learn with other Internet portal sites.
On October 6, 1999, click2learn sold 6,000 shares of Series A Convertible
Preferred Stock (the "Series A Stock") to Marshall Capital Management, Inc., an
affiliate of Credit Suisse First Boston, and sold 4,000 shares of Series A Stock
to Vulcan Ventures, Inc. for an aggregate purchase price of $10,000,000 in cash.
In connection with the purchase of the Series A Stock, click2learn also issued
Marshall Capital Management, Inc. and Vulcan Ventures, Inc. warrants for the
purchase of 580,646 and 387,096 shares, respectively, of common stock at an
exercise price of $9.30 per share. The terms of the Series A Stock provided that
it would automatically convert into shares of common stock (conversion shares)
at such time as a registration statement on Form S-3 covering the resale of the
conversion shares and the shares issuable on exercise of the warrants was
declared effective by the SEC. On November 1, 1999, the Series A Stock held by
Marshall Capital Management, Inc. converted into 774,193 shares of common stock,
and the Series A Stock held by Vulcan Ventures, Inc. converted into 516,120
shares of common stock. The conversion price at which the Series A Stock was
converted into common stock was $7.75, and was determined accordance with the
Series A Stock terms.
The warrants are exercisable at any time prior to 5:00 p.m. Eastern time on
October 6, 2004 in whole or in part upon the payment of the exercise price for
the number of shares with respect to which
21
<PAGE>
the warrants are being exercised. In addition, the warrants may be exercised on
a net exercise basis, pursuant to which the exercise price for an exercise of
warrants is paid by the cancellation of a portion of the shares being exercised
having a fair market value equal to the exercise price for all the shares being
exercised. However, a net exercise may only be made if there is not an effective
registration statement in place on the date of such exercise covering the resale
of the warrant shares.
In March 1998, click2learn entered into a Directed Engineering Agreement
with Vulcan Northwest, d/b/a APEX, the predecessor in interest to APEX Online
Learning, Inc. ("APEX") and in May 1999 entered a second Directed Engineering
Agreement with APEX (collectively the "Engineering Agreements"). Pursuant to the
Engineering Agreement, click2learn agreed to develop customized extensions of
its Librarian product. The terms of the Engineering Agreements are similar to
other custom development arrangements which click2learn has entered into with
other third parties related to its Librarian product. Pursuant to the terms of
the Engineering Agreements, click2learn retains all intellectual property rights
to these extensions, subject to a non-exclusive license to APEX to use the
extension in connection with its use of the Librarian product. Click2learn
recognized aggregate revenue under the Engineering Agreements of $171,200 in
1999. Revenue under the Engineering Agreements was recognized based on the
percentage of completion method.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at click2learn's 2001
Annual Meeting of Stockholders must be received by click2learn at its principal
executive offices no earlier than February 26, 2001 and no later than March 26,
2001 in order to be included in click2learn's Proxy Statement and form of proxy
relating to that meeting, unless such meeting is held before April 25, 2001 or
after July 24, 2001, in which case such proposals must be received by
click2learn at its principal executive offices no earlier than the close of
business on the 90(th) day prior to meeting date and no later than the later of
(i) the close of business on the 60(th) day prior to the meeting date or
(ii) the close of business on the 10(th) day following the day click2learn first
makes a public announcement of the meeting date.
Notwithstanding the foregoing, if the number of Class III directors to be
elected at the meeting is increased and there is no public announcement by
click2learn made before March 16, 2001 (or if such meeting is held before
April 25, 2001 or after July 24, 2001, then before the 70(th) day prior to the
meeting date) naming all of the nominees for Class III directors or specifying
the increased number of Class III directors to be elected at the meeting, then
proposals for nominees for any new positions created by the increase in the
number of Class III directors (but not proposals for any other business) must be
received by click2learn at its principal executive offices no later than the
close of business on the 10(th) following the day click2learn first makes a
public announcement of the increase in the number of Class III directors.
CLICK2LEARN'S ANNUAL REPORT ON FORM 10-K AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION FOR THE YEAR ENDED DECEMBER 31, 1999 IS AVAILABLE WITHOUT
CHARGE BY WRITING TO OR CALLING CLICK2LEARN'S HEADQUARTERS. REQUESTS SHOULD BE
DIRECTED TO CLICK2LEARN'S INVESTOR RELATIONS DEPARTMENT AT 110 - 110(TH) AVENUE
NE, BELLEVUE, WASHINGTON 98004, OR [email protected].
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16 of the Exchange Act requires click2learn's directors and
officers, and persons who own more than 10% of click2learn's common stock, to
file initial reports of ownership and reports of changes in ownership with the
SEC and the Nasdaq National Market. Such persons are required by SEC regulation
to furnish click2learn with copies of all Section 16(a) forms they file. Based
solely on its review of the copies of such forms provided to click2learn,
click2learn believes that all Section 16(a) filing requirements were met during
1999.
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<PAGE>
OTHER BUSINESS
The Board does not presently intend to bring any other business before the
Meeting, and, so far as is known to the Board, no matters are to be brought
before the Meeting except as specified in the notice of the Meeting. As to any
business that may properly come before the Meeting, however, it is intended that
proxies, in the form enclosed, will be voted in respect thereof in accordance
with the judgment of the persons voting such proxies.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE
SO THAT YOUR SHARES WILL BE REPRESENTED AT THE MEETING.
23
<PAGE>
PROXY
CLICK2LEARN.COM, INC.
110-110TH AVENUE N.E., SUITE 700
BELLEVUE, WASHINGTON 98004
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE MAY 25, 2000
ANNUAL MEETING OF STOCKHOLDERS OF CLICK2LEARN.COM, INC.
The undersigned hereby appoints John D. Atherly and Steven Esau and each
of them as proxies, each with full powers of substitution, and hereby
authorizes them to represent and to vote, as designated below, all shares of
common stock of Click2Learn.Com, inc. held of record by the undersigned on
April 1, 2000, at the annual meeting of stockholders of Click2Learn.Com, inc. to
be held on May 25, 2000, and at any continuations or adjournments. This proxy,
when properly executed and returned in a timely manner, will be voted at the
meeting and any adjournments or postponements in the manner described in this
proxy. If no contrary indication is made, the proxy will be voted FOR the
proposal, and according to the judgment of the persons named as proxies on
any other matters that may properly come before the meeting.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed and dated on reverse side.)
- -------------------------------------------------------------------------------
- SEE REVERSE SIDE, FOLD AND DETACH HERE -
<PAGE>
Please mark /X/
your votes
as in this
example.
FOR WITHHOLD
1. Election of Directors / / / /
Directors recommend: a vote FOR
election of the following directors
01 -- Kevin Oakes, 02 -- Ronald S. Posner, 03 -- Shelly Harrison, Ph.D.
04 -- Jonathan D. Klein
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
the number(s) of nominee(s) in the space provided below.)
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Proposal to ratify the appointment of / / / / / /
KPMG LLP as independent auditors for 1999.
In accordance with their judgment, the proxies are authorized to vote upon
any other matters as may properly come before the meeting or any adjournment
or postponement.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, / /
DATE AND SIGN THIS PROXY CARD AND RETURN IT PRIOR TO THE MEETING
IN THE ENCLOSED ENVELOPE. PLEASE CHECK THE FOLLOWING BOX IF YOU
PLAN TO ATTEND THE MEETING IN PERSON SO CLICK2LEARN.COM CAN PLAN
APPROPRIATELY.
THIS PROXY MUST BE SIGNED EXACTLY AS YOUR NAME APPEARS. IF MORE THAN ONE NAME
APPEARS, ALL PERSONS SO DESIGNATED SHOULD SIGN. ATTORNEYS, EXECUTORS,
ADMINISTRATORS, TRUSTEES AND GUARDIANS SHOULD INDICATE THEIR CAPACITIES. IF
THE SIGNER IS A CORPORATION, PLEASE PRINT FULL CORPORATE NAME AND INDICATE
CAPACITY OF DULY AUTHORIZED OFFICER EXECUTING ON BEHALF OF THE CORPORATION.
IF THE SIGNER IS A PARTNERSHIP, PLEASE PRINT FULL PARTNERSHIP NAME AND
INDICATE CAPACITY OF DULY AUTHORIZED PERSON EXECUTING ON BEHALF OF THE
PARTNERSHIP.
Signature:
--------------------------------------------------------------
Date: , 2000
----------------------
Signature:
--------------------------------------------------------------
Date: , 2000
----------------------
- -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
