<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
File by the Registrant [X]
File by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Information Statement [_] Confidential, for Use of the
Commission Only (as permitted
by Rule 14c-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Commission File No. 0-24607
- --------------------------------------------------------------------------------
ACTUATE CORPORATION
(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):
--------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------
(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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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGO OF ACTUATE CORPORATION APPEARS HERE]
999 Baker Way, Suite 200
San Mateo, California 94404
December 10, 1999
Dear Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders of
Actuate Corporation (the "Company"), to be held at 999 Baker Way, Suite 200,
San Mateo, California, on Friday January 14, 2000, at 9:00 a.m.
At the Special Meeting you will be asked to vote to increase the authorized
number of shares of the Company's Common Stock from 35,000,000 to 100,000,000;
and to increase the number of shares authorized to be issued under the 1998
Equity Incentive Plan by 2,800,000. The accompanying material contains the
Notice of Special Meeting, the Proxy Statement, which includes information
about the matters to be acted upon at the Special Meeting, and the related
proxy card.
Whether or not you are able to attend the Special Meeting in person, I urge
you to sign and date the enclosed proxy card and return it promptly in the
enclosed envelope.
Very truly yours,
ACTUATE CORPORATION
/s/ NICOLAS C. NIERENBERG
Nicolas C. Nierenberg
Chairman of the Board and Chief
Executive Officer
<PAGE>
[LOGO OF ACTUATE CORPORATION APPEARS HERE]
999 Baker Way, Suite 200
San Mateo, California 94404
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be held January 14, 2000
A Special Meeting of Stockholders (the "Special Meeting") of Actuate
Corporation (the "Company") will be held at 999 Baker Way, Suite 200, San
Mateo, California, on Friday January 14, 2000, at 9:00 a.m. for the following
purposes:
1. To approve an amendment to the Company's Certificate of Incorporation
to increase the authorized number of shares of Common Stock from 35,000,000
to 100,000,000;
2. To approve an amendment to the Company's 1998 Equity Incentive Plan
(the "EIP") to increase the number of shares authorized to be issued under
the EIP by 2,800,000; and
3. To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
The foregoing items of business are more fully described in the attached
Proxy Statement.
Only stockholders of record at the close of business on December 6, 1999 are
entitled to notice of, and to vote at, the Special Meeting and at any
adjournments or postponements thereof. A list of such stockholders will be
available for inspection at the Company's headquarters located at 999 Baker
Way, Suite 200, San Mateo, California, during ordinary business hours for the
ten-day period prior to the Special Meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ NICOLAS C. NIERENBERG
Nicolas C. Nierenberg
Chairman of the Board
and Chief Executive Officer
San Mateo, California
December 10, 1999
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE,
SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE
SPECIAL MEETING. IF YOU DECIDE TO ATTEND THE SPECIAL MEETING AND WISH TO
CHANGE YOUR PROXY VOTE, YOU MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT
THE MEETING.
<PAGE>
ACTUATE CORPORATION
999 Baker Way
San Mateo, California 94404
PROXY STATEMENT
FOR SPECIAL MEETING OF STOCKHOLDERS
To be held January 14, 2000
These proxy materials are furnished in connection with the solicitation of
proxies by the Board of Directors of Actuate Corporation, a Delaware
corporation (the "Company"), for a Special Meeting of Stockholders (the
"Special Meeting") to be held at the Company's principal executive offices
located at 999 Baker Way, Suite 200, San Mateo, California, on Friday, January
14, 2000, at 9:00 a.m., and at any adjournment or postponement of the Special
Meeting. These proxy materials were first mailed to stockholders on or about
December 10, 1999.
All share numbers and share prices provided in this Proxy Statement have
been adjusted to reflect the 2-for-1 stock split of Common Stock effected on
December 2, 1999.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Special
Meeting are summarized in the accompanying Notice of Special Meeting of
Stockholders. Each proposal is described in more detail in this Proxy
Statement.
VOTING RIGHTS AND SOLICITATION OF PROXIES
The Company's Common Stock is the only type of security entitled to vote at
the Special Meeting. On December 6, 1999, the record date for determination of
stockholders entitled to vote at the Special Meeting, there were 27,735,679
shares of Common Stock outstanding. Each stockholder of record on December 6,
1999 is entitled to one vote for each share of Common Stock held by such
stockholder on December 6, 1999. Shares of Common Stock may not be voted
cumulatively. All votes will be tabulated by the inspector of election
appointed for the meeting, who will separately tabulate affirmative and
negative votes, abstentions and broker non-votes.
Quorum Required
The Company's bylaws provide that the holders of a majority of the Company's
Common Stock issued and outstanding and entitled to vote at the Special
Meeting, present in person or represented by proxy, shall constitute a quorum
for the transaction of business at the Special Meeting. Abstentions and broker
non-votes will be counted as present for the purpose of determining the
presence of a quorum.
Votes Required
Proposal 1. Approval of an amendment to the Company's Certificate of
Incorporation to increase the authorized number of shares of Common Stock from
35,000,000 to 100,000,000 requires the affirmative vote of a majority of the
Company's Common Stock issued and outstanding and entitled to vote at the
Special Meeting.
Proposal 2. Approval of an amendment to the Company's 1998 Equity Incentive
Plan to increase the number of shares authorized to be issued under the EIP by
2,800,000 requires the affirmative vote of a majority of the outstanding voting
shares of the Company present or represented and entitled to vote at the
Special Meeting together with the affirmative vote of a majority of the
required quorum.
<PAGE>
Proxies
Whether or not you are able to attend the Company's Special Meeting, you are
urged to complete and return the enclosed proxy, which is solicited by the
Company's Board of Directors and which will be voted as you direct on your
proxy when properly completed. In the event no directions are specified, such
proxies will be voted FOR Proposals 1 and 2, and in the discretion of the proxy
holders as to other matters that may properly come before the Special Meeting.
You may also revoke or change your proxy at any time before the Special
Meeting. To do this, send a written notice of revocation or another signed
proxy with a later date to the Secretary of the Company at the Company's
principal executive offices before the beginning of the Special Meeting. You
may also automatically revoke your proxy by attending the Special Meeting and
voting in person. All shares represented by a valid proxy received prior to the
Special Meeting will be voted.
Solicitation of Proxies
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing, and mailing of this Proxy Statement, the
proxy, and any additional soliciting material furnished to stockholders. Copies
of solicitation material will be furnished to brokerage houses, fiduciaries,
and custodians holding shares in their names that are beneficially owned by
others so that they may forward this solicitation material to such beneficial
owners. The Company will reimburse such persons for their costs of forwarding
the solicitation material to such beneficial owners. In addition, the Company
has retained Corporate Investor Communications, Inc. ("CIC"), to act as proxy
solicitor for the Special Meeting. Under the terms of an agreement, the Company
has agreed to pay $6,500, plus reasonable out of pocket expenses, to CIC for
proxy solicitation services. The original solicitation of proxies by mail may
be supplemented by solicitation by telephone, telegram, or other means by
directors, officers, or employees of the Company. No additional compensation
will be paid to directors, officers or employees for such services. Except as
described above, the Company does not presently intend to solicit proxies other
than by mail.
2
<PAGE>
PROPOSAL 1
APPROVAL OF AMENDMENT TO THE
COMPANY'S CERTIFICATE OF INCORPORATION
The present capital structure of the Company authorizes 35,000,000 shares of
Common Stock and 5,000,000 shares of Preferred Stock. The Board of Directors
believes that this capital structure is inadequate for the present and future
needs of the Company. Therefore, the Board of Directors has approved the
amendment of the Company's Certificate of Incorporation (the "Certificate") to
increase the authorized number of shares of Common Stock from 35,000,000 to
100,000,000 shares. The Board believes this capital structure more
appropriately reflects the present and future needs of the Company and
recommends such amendment to the Company's stockholders for adoption. The
undesignated Preferred Stock may be issued from time to time in one or more
series with such rights, preferences and privileges as may be determined by the
Board of Directors. On December 6, 1999, 27,735,679 shares of Common Stock and
no shares of Preferred Stock were outstanding. The proposed amendment of the
Certificate was approved by the Board on November 5, 1999, subject to
stockholder approval at the Special Meeting.
Purpose of Authorizing Additional Common Stock
The 2-for-1 stock split completed by the Company on December 2, 1999, which
was effected as a stock dividend, accounted for much of the Company's
authorized shares of Common Stock and has not left a sufficient number of
shares available to the Board of Directors to issue for future acquisition
transactions, equity financings, stock dividends or distributions without
stockholder approval. Authorizing an additional 65,000,000 shares of Common
Stock would give the Board of Directors the authority, without further action
of the stockholders, to issue such Common Stock from time to time as the Board
of Directors deems necessary. The Board of Directors believes it is necessary
to have the ability to issue such additional shares of Common Stock for general
corporate purposes. Potential uses of the additional authorized shares may
include acquisition transactions, equity financings, stock dividends or
distributions, in each case without further action by the stockholders, unless
such stockholder action is specifically required by applicable laws or the
rules of the Nasdaq National Market or any stock exchange on which the
Company's securities may then be listed. The Company has no current plans to
issue such additional authorized shares of Common Stock. Since the Company does
not have a sufficient number of currently authorized shares of Common Stock,
the approval of Proposal 2 regarding the increase of Common Stock authorized
for issuance under the EIP is contingent upon approval of this Proposal 1.
The proposed increase in the authorized number of shares of Common Stock
could have a number of effects on the Company's stockholders depending upon the
exact nature and circumstances of any actual issuances of authorized but
unissued shares. The increase could have an anti-takeover effect, in that
additional shares could be issued (within the limits imposed by applicable law)
in one or more transactions that could make a change in control or takeover of
the Company more difficult. For example, additional shares could be issued by
the Company so as to dilute the stock ownership or voting rights of persons
seeking to obtain control of the Company. Similarly, the issuance of additional
shares to certain persons allied with the Company's management could have the
effect of making it more difficult to remove the Company's current management
by diluting the stock ownership or voting rights of persons seeking to cause
such removal. The Board of Directors is not aware of any attempt, or
contemplated attempt, to acquire control of the Company, and this proposal is
not being presented with the intent that it be utilized as a type of anti-
takeover device.
Stockholders do not have any preemptive or similar rights to subscribe for
or purchase any additional shares of Common Stock that may be issued in the
future, and therefore, future issuances of Common Stock may, depending on the
circumstances, have a dilutive effect on the earnings per share, voting power
and other interests of the existing stockholders.
3
<PAGE>
Stockholder Approval
The affirmative vote of a majority of the Company's outstanding voting
shares is required for approval of the amendment to the Certificate.
Abstentions and broker non-votes will be counted towards the tabulation of
votes cast on this proposal and will have the same effect as negative votes. If
this proposal is approved at the Special Meeting, the proposed amendment would
become effective upon filing a certificate of amendment to the Certificate with
the Secretary of State of Delaware, which filing is expected to take place
shortly after such stockholder approval.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 1.
PROPOSAL 2
APPROVAL OF AMENDMENT TO 1998 EQUITY INCENTIVE PLAN
The Company's stockholders are being asked to approve an amendment to the
1998 Equity Incentive Plan (the "EIP") that will increase the number of shares
of Common Stock available for issuance under the EIP from 3,977,934 shares to
6,777,934 shares. The 2,800,000-share increase was approved by the Board on
November 5, 1999, subject to stockholder approval at the Special Meeting. The
Board does not intend to re-price any options granted under the EIP without
first obtaining prior stockholder approval. The Board believes it is in the
best interest of the Company to increase the share reserve so that the Company
can continue to attract and retain the services of those persons essential to
the Company's growth and financial success.
Description of the 1998 Equity Incentive Plan
Structure and Eligibility. Under the EIP, employees, members of the Board
and consultants may be awarded options to purchase shares of Common Stock,
stock appreciation rights ("SARs"), restricted shares or stock units
(collectively, the "Awards"). Options under the EIP may be incentive stock
options designed to satisfy Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code") or nonstatutory stock options not designed to meet such
requirements. If restricted shares or shares issued upon the exercise of
options granted under the EIP are forfeited, then such shares will again become
available for awards under the EIP. If stock units, options or SARs granted
under the EIP are forfeited or terminate for any other reason before being
exercised, then the corresponding shares will again become available for Awards
under the EIP. As of October 31, 1999, approximately 260 persons (including
executive officers) were eligible to participate in the EIP.
Administration. The EIP is administered by the Company's Compensation
Committee (the "Committee"). The Board has appointed a committee (the "Sub-
Committee") to administer that program with respect to non-officer employees of
the Company. The term "Plan Administrator" as used in this summary means the
Committee and the Sub-Committee. The Plan Administrator has the complete
discretion to determine which eligible individuals are to receive any Award,
determine the type, number, vesting requirements and other features and
conditions of such Award, interpret the EIP and make all other decisions
relating to the operation of the EIP.
Reserve. The initial share reserve under the EIP was 2,600,000 shares, plus
the aggregate number of shares remaining available for grant under the
Company's 1994 Stock Option Plan (the "Predecessor Plan"). As of January 1 of
each year, commencing with the year 1999, the number of shares reserved for
issuance under the EIP is increased automatically by the lesser of (i) 5% of
the total number of shares of Common Stock then outstanding or (ii) 1,400,000
shares. As a result of the automatic share increase that occurred on January 1,
1999, the share reserve has been increased by an additional 1,377,934 shares to
a total reserve of 3,977,934, plus shares that may become available for grant
as a result of the expiration or cancellation of options granted under the
Predecessor Plan.
4
<PAGE>
As of October 31, 1999, options covering 3,568,150 shares of Common Stock
were outstanding under the EIP, 401,852 shares remained available for future
option grants and 7,932 shares have been issued under the EIP.
The shares issuable under the EIP may be made available either from the
Company's authorized but unissued Common Stock or from Common Stock reacquired
by the Company, including shares purchased in the open market. In addition,
shares subject to any outstanding options under the EIP (including options
transferred from the Predecessor Plan) which expire or terminate prior to
exercise and any unvested shares reacquired by the Company pursuant to its
repurchase rights under the EIP will be available for subsequent issuance.
No existing participant in the EIP may receive stock option grants or
separately exercisable stock appreciation rights for more than 1,000,000 shares
of Common Stock in the aggregate per calendar year and no new participant in
the EIP may receive stock option grants or separately exercisable stock
appreciation rights for more than 2,000,000 shares of Common Stock in the
aggregate per calendar year. Stockholder approval of this Proposal will also
constitute re-approval of that limit for purposes of Internal Revenue Code
Section 162(m).
Valuation. For purposes of establishing the option price and for all other
valuation purposes under the EIP, the fair market value per share of Common
Stock on any relevant date under the EIP is the closing sales price per share
of Common Stock on that date, as such price is reported on the Nasdaq National
Market. The closing sales price of the Common Stock on November 15, 1999 was
$26.125 per share.
General Provisions
Vesting Acceleration. If the Company is acquired by merger or asset sale,
each outstanding option under the EIP which is not to be assumed or replaced by
the successor corporation will automatically accelerate in full. In the event
of an involuntary termination of a participant within 12 months following a
merger or asset sale, the vesting of an option will also accelerate in full.
The Committee also has the discretion to accelerate outstanding options
and/or terminate the Company's outstanding repurchase rights upon a Corporate
Transaction or Change in Control, which acceleration or termination may or may
not be conditioned upon the subsequent termination of the optionee's service
within a specified period following the transaction. The acceleration of
options in the event of a Corporate Transaction or Change in Control may be
seen as an anti-takeover provision and may have the effect of discouraging a
merger proposal, a takeover attempt, or other efforts to gain control of the
Company
Financial Assistance. The Plan Administrator may institute a loan program to
assist one or more participants in financing the exercise of outstanding
options under the EIP through full-recourse interest-bearing promissory notes.
However, the maximum amount of financing provided any optionee may not exceed
the cash consideration payable for the issued shares plus all applicable taxes
incurred in connection with the acquisition of the shares.
Changes in Capitalization. In the event any change is made to the
outstanding shares of Common Stock by reason of any recapitalization, stock
dividend, stock split, combination of shares, exchange of shares or other
change in corporate structure effected without the Company's receipt of
consideration, appropriate adjustments will be made to (i) the maximum number
and/or class of securities issuable under the EIP, (ii) the limitation on the
maximum number and/or class of securities by which the share reserve is to
increase automatically each year, (iii) the maximum number and/or class of
securities for which any one person may be granted stock options or separately
exercisable stock appreciation rights under the EIP per calendar year and (iv)
the number and/or class of securities and the exercise price per share in
effect under each outstanding option in order to prevent the dilution or
enlargement of benefits thereunder.
Each outstanding option which is assumed in connection with an acquisition
will be appropriately adjusted to apply and pertain to the number and class of
securities which would otherwise have been issued, in consummation of such
acquisition to the option holder had the option been exercised immediately
prior to the acquisition. Appropriate adjustments will also be made to the
option price payable per share and to the class and number of securities
available for future issuance under the EIP on both an aggregate and a per-
participant basis.
5
<PAGE>
Special Tax Election. The Plan Administrator may, in its discretion, provide
one or more holders of outstanding options under the EIP with the right to have
the Company withhold a portion of the shares of Common Stock otherwise issuable
to such individuals in satisfaction of the income and employment withholding
taxes to which they become subject in connection with the exercise of those
options. Alternatively, the Plan Administrator may allow such individuals to
deliver existing shares of Common Stock in satisfaction of such withholding tax
liability.
Amendment and Termination. The Board may amend or modify the EIP in any or
all respects whatsoever. However, certain amendments may require stockholder
approval pursuant to applicable laws and regulations. The EIP may be terminated
by the Board at any time, for any reason. Any options outstanding at the time
of such termination will remain in force in accordance with the provisions of
the instruments evidencing such grants.
Predecessor Plan. All outstanding options under the Predecessor Plan which
were transferred to the EIP continue to be governed solely by the terms of the
documents evidencing such options, and no provisions of the EIP affect or
otherwise modify the rights or obligations of the holders of those transferred
options with respect to their acquisition of shares of Common Stock. However,
the Plan Administrator has complete discretion to extend one or more provisions
of the EIP to the transferred options to the extent those options do not
otherwise contain such provisions.
Option Grants
For each of the executive officers of the Company and the various indicated
groups, the table below shows (i) the number of shares of Common Stock subject
to options granted under the EIP during the period from November 1, 1998 to
October 31, 1999 and (ii) the weighted average exercise price payable per share
under such options.
<TABLE>
<CAPTION>
Weighted
Average
Number of Exercise Price
Option of Granted
Name and Position Shares Options
----------------- --------- --------------
<S> <C> <C>
Nicolas C. Nierenberg............................. 200,000 $ 7.0625
Chairman of the Board and Chief Executive Officer
Peter I. Cittadini................................ 280,000 $ 7.0625
President and Chief Operating Officer
Daniel A. Gaudreau................................ 150,000 $11.3958
Senior Vice President, Finance and Administration
and Chief Financial Officer
Hamid R. Bahadori................................. 110,000 $12.9716
Senior Vice President, Engineering
All current executive officers as a group (4 740,000 $ 8.8193
persons).........................................
All employees, including current officers who are
not
executive officers, as a group (268 persons)..... 3,031,650 $24.3645
</TABLE>
New Plan Benefits
As of October 31, 1999, no options have been granted on the basis of the
proposed 2,800,000 share increase of this Proposal 2.
6
<PAGE>
Federal Income Tax Consequences of Options Granted under the EIP
Options granted under the EIP may be either incentive stock options which
satisfy the requirements of Section 422 of the Internal Revenue Code or non-
statutory options which are not intended to meet such requirements. The Federal
income tax treatment for the two types of options differs as follows:
Incentive Options. No taxable income is recognized by the optionee at the
time of the option grant, and no taxable income is generally recognized at the
time the option is exercised. The optionee will, however, recognize taxable
income in the year in which the purchased shares are sold or otherwise made the
subject of a taxable disposition. For Federal tax purposes, dispositions are
divided into two categories: (i) qualifying and (ii) disqualifying. A
qualifying disposition occurs if the sale or other disposition is made after
the optionee has held the shares for more than two (2) years after the option
grant date and more than one (1) year after the exercise date. If either of
these two holding periods is not satisfied, then a disqualifying disposition
will result.
Upon a qualifying disposition of the shares, the optionee will recognize
long-term capital gain in an amount equal to the excess of (i) the amount
realized upon the sale or other disposition of the purchased shares over (ii)
the exercise price paid for those shares. If there is a disqualifying
disposition of the shares, then the excess of (i) the fair market value of the
shares on the exercise date over (ii) the exercise price paid for those shares
will be taxable as ordinary income to the optionee. Any additional gain or loss
recognized upon the disposition will be taxable as a capital gain or loss.
If the optionee makes a disqualifying disposition of the purchased shares,
then the Company will be entitled to an income tax deduction, for the taxable
year in which such disposition occurs, equal to the excess of (i) the fair
market value of such shares on the option exercise date over (ii) the exercise
price paid for the shares. In no other instance will the Company be allowed a
deduction with respect to the optionee's disposition of the purchased shares.
Non-Statutory Options. No taxable income is recognized by an optionee upon
the grant of a non-statutory option. The optionee will in general recognize
ordinary income, in the year in which the option is exercised, equal to the
excess of the fair market value of the purchased shares on the exercise date
over the exercise price paid for the shares, and the optionee will be required
to satisfy the tax withholding requirements applicable to such income.
If the shares acquired upon exercise of the non-statutory option are
unvested and subject to repurchase by the Company in the event of the
optionee's termination of service prior to vesting in those shares, then the
optionee will not recognize any taxable income at the time of exercise but will
have to report as ordinary income, as and when the Company's repurchase right
lapses, an amount equal to the excess of (i) the fair market value of the
shares on the date the repurchase right lapses over (ii) the exercise price
paid for the shares. The optionee may, however, elect under Section 83 (b) of
the Internal Revenue Code to include as ordinary income in the year of exercise
of the option an amount equal to the excess of (i) the fair market value of the
purchased shares on the exercise date over (ii) the exercise price paid for
such shares. If the Section 83(b) election is made, the optionee will not
recognize any additional income as and when the repurchase right lapses.
The Company will be entitled to an income tax deduction equal to the amount
of ordinary income recognized by the optionee with respect to the exercised
non-statutory option. The deduction will in general be allowed for the taxable
year of the Company in which such ordinary income is recognized by the
optionee.
Stock Appreciation Rights
No taxable income is recognized upon the receipt of a stock appreciation
right. The holder will recognize ordinary income, in the year in which the
right is exercised, equal to the excess of the fair market value of the
underlying shares of Common Stock on the exercise date over the base price in
effect for the exercised right, and the holder will be required to satisfy the
tax withholding requirements applicable to such income.
7
<PAGE>
The Company will be entitled to an income tax deduction equal to the amount
of ordinary income recognized by the holder in connection with the exercise of
the stock appreciation right. The deduction will be allowed for the taxable
year of the Company in which such ordinary income is recognized.
Deductibility of Executive Compensation
The Company anticipates that any compensation deemed paid by it in
connection with disqualifying dispositions of incentive stock option shares or
exercises of non-statutory options will qualify as performance-based
compensation for purposes of Code Section 162(m) and will not have to be taken
into account for purposes of the $1 million limitation per covered individual
on the deductibility of the compensation paid to certain executive officers of
the Company. Accordingly, all compensation deemed paid with respect to those
options will remain deductible by the Company without limitation under Code
Section 162(m).
Accounting Treatment
Option grants with an exercise price per share equal to 100% of the fair
market value of the shares at the time of grant will not result in any direct
charge to the Company's earnings. However, the fair value of those options must
be disclosed in the notes to the Company's financial statements, in the form of
pro-forma statements to those financial statements, the impact those options
would have upon the Company's reported earnings were the value of those options
at the time of grant treated as compensation expense. In addition, the number
of outstanding options may be a factor in determining the Company's earnings
per share on a diluted basis.
On March 31, 1999, the Financial Accounting Standards Board issued an
Exposure Draft of a proposed interpretation of APB Opinion 25, "Accounting for
Stock Issued to Employees." Under the proposed interpretation, as modified on
August 11, 1999, option grants made to non-employee consultants (but not non-
employee Board members) after December 15, 1998 will result in a direct charge
to the Company's reported earnings based upon the fair value of the option
measured initially as of the grant date and then subsequently on the vesting
date of each installment of the underlying option shares. Such charge will
accordingly include the appreciation in the value of the option shares over the
period between the grant date of the option and the vesting date of each
installment of the option shares.
Should one or more optionees be granted stock appreciation rights under the
EIP that have no conditions upon exercisability other than a service or
employment requirement, then such rights would result in a compensation expense
to be charged against the Company's reported earnings. Accordingly, at the end
of each fiscal quarter, the amount (if any) by which the fair market value of
the shares of Common Stock subject to such outstanding stock appreciation
rights has increased from the prior quarter-end would be accrued as
compensation expense, to the extent such fair market value is in excess of the
aggregate exercise price in effect for those rights.
Stockholder Approval
The affirmative vote of a majority of the outstanding voting shares of the
Company present or represented and entitled to vote at the Special Meeting,
together with the affirmative vote of a majority of the required quorum, is
required for approval of this Proposal. Abstentions will be counted towards the
tabulation of votes cast on this Proposal and will have the same effect as
negative votes, whereas broker non-votes will not be counted for purposes of
determining whether or not the proposal has been approved. Should such
stockholder approval not be obtained, then the share reserve will not be
increased. The EIP will continue to remain in effect and option grants will
continue to be made pursuant to the provisions of the EIP prior to its
amendment until the available reserve of Common Stock under the EIP Plan has
been issued.
8
<PAGE>
Recommendation of the Board of Directors
Stock options are granted to all Actuate employees and are one of the
primary incentives used to attract and retain the most qualified people. During
1999, Actuate expects to increase its employee population by over 80% to manage
our growth. The number of shares available under the EIP is now insufficient to
meet the Company's growth plans over the next couple of years, especially in
the extremely competitive hiring environment in Silicon Valley. The Board of
Directors urges you to vote FOR the increase in shares available for issuance
under the EIP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 2.
9
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of October 31, 1999, certain information
with respect to shares beneficially owned by (i) each person who is known by
the Company to be the beneficial owner of more than five percent of the
Company's outstanding shares of Common Stock, (ii) each of the Company's
directors, (iii) each of the Company's Named Executive Officers and (iv) all
current directors and executive officers as a group. Beneficial ownership has
been determined in accordance with Rule 13d-3 under the Exchange Act. Under
this rule, certain shares may be deemed to be beneficially owned by more than
one person (if, for example, persons share the power to vote or the power to
dispose of the shares). In addition, shares are deemed to be beneficially owned
by a person if the person has the right to acquire shares (for example, upon
exercise of an option or warrant) within sixty (60) days of the date as of
which the information is provided; in computing the percentage ownership of any
person, the amount of shares is deemed to include the amount of shares
beneficially owned by such person (and only such person) by reason of such
acquisition rights. As a result, the percentage of outstanding shares of any
person as shown in the following table does not necessarily reflect the
person's actual voting power at any particular date.
<TABLE>
<CAPTION>
Shares Beneficially
Owned(1)
---------------------
Number of Percentage
Name of Beneficial Owner Shares of Total
------------------------ ---------- ----------
<S> <C> <C>
Entities affiliated with Accel Partners(2)............. 5,353,532 19.3%
428 University Avenue
Palo Alto, CA 94301
Amerindo Investment Advisors Inc.(3)................... 1,922,800 6.9%
One Embarcadero Center, Suite 2300
San Francisco, CA 94111
Nicolas C. Nierenberg(4)............................... 2,694,426 9.6%
c/o Actuate Corporation
999 Baker Way, Suite 200
San Mateo, CA 94404
Peter I. Cittadini(5).................................. 804,426 2.9%
Daniel A. Gaudreau(6).................................. 338,000 1.2%
Hamid R. Bahadori(7)................................... 312,000 1.1%
Albert R. Campa(8)..................................... 166,844 *
James W. Breyer(2)..................................... 5,180,552 18.7%
c/o Accel Partners
426 University Avenue
Palo Alto, CA 94301
Arthur A. Patterson(2)................................. 5,353,532 19.3%
c/o Accel Partners
426 University Avenue
Palo Alto, CA 94301
Nancy Schoendorf(9).................................... 924,646 3.3%
Steven D. Whiteman(10) ................................ 60,000 *
All current directors and executive officers as a group
(9 persons)(11)....................................... 10,593,874 37.1%
</TABLE>
- --------
*Less than 1%
(1) This table is based upon information supplied by officers, directors and
principal stockholders and Schedules 13D and 13G filed with the Securities
and Exchange Commission (the "Commission"). Beneficial ownership has been
determined in accordance with the rules of the Commission and includes
voting or investment power with respect to securities. Except as indicated
in the footnotes to this table and pursuant to applicable community
property laws, the persons named in the table have sole voting and
investment power with respect to all shares of Common Stock. Applicable
percentages are based on
10
<PAGE>
27,710,060 shares outstanding on October 31, 1999, adjusted as required by
rules promulgated by the Commission. Unless otherwise indicated, the
business address of each beneficial owner listed is 999 Baker Way, Suite
200, San Mateo, California, 94404.
(2) Includes 4,887,006 shares held by Accel IV L.P., 193,950 shares held by
Accel Investors '93 L.P., 99,596 shares held by Accel Keiretsu L.P., and
172,980 shares held by Ellmore C. Patterson Partners, Messrs. Breyer and
Patterson, directors of the Company, are general partners of Accel IV
Associates L.P., the general partner of Accel IV L.P. Messrs, Breyer and
Patterson are officers of Accel Partners & Co., the general partner of
Accel Keiretsu L.P. Mr. Patterson is the general partner of Ellmore C.
Patterson Partners. Each of Messrs. Breyer and Patterson disclaim
beneficial ownership of such shares except to the extent of his pecuniary
interest therein.
(3) Based on a Schedule 13G/A filed with the Securities and Exchange
Commission for the year ended December 31, 1998. Includes 1,649,000
shares held by Amerindo Investment Advisors Inc., a California
corporation and 273,800 shares held by Amerindo Investment Advisors Inc.,
a Panama corporation (the "Advisor Entities"). Mr. Albert W. Villar and
Mr. Gary A. Tanaka are the sole shareholders and directors of the Advisor
Entities and share with each other investment and dispositive power as to
all of the shares held by the Advisor Entities.
(4) Includes options exercisable into 340,000 shares of Common Stock within
60 days of October 31, 1999.
(5) Includes options exercisable into 136,000 shares of Common Stock within
60 days of October 31, 1999.
(6) Includes options exercisable into 34,000 shares of Common Stock within 60
days of October 31, 1999.
(7) Includes the options exercisable into 306,000 shares of Common Stock
within 60 days of October 31, 1999.
(8) Mr. Campa's employment with the Company terminated in March 1999.
(9) Includes 899,558 shares held by Mohr Davidow Ventures III. Ms.
Schoendorf, a director of the Company, is a general partner of WLPJ
Partners, the general partner of Mohr, Davidow Ventures III. Ms.
Schoendorf disclaims beneficial ownership of such shares except to the
extent of her pecuniary interest therein.
(10) Includes options exercisable into 60,000 shares of Common Stock within 60
days of October 31, 1999.
(11) Includes options exercisable into 876,000 shares of Common Stock within
60 days of October 31, 1999.
11
<PAGE>
EXECUTIVE COMPENSATION AND RELATED INFORMATION
Compensation of Executive Officers
Summary of Compensation
The following table sets forth information with respect to compensation for
the fiscal year ended December 31, 1998 paid by the Company for services to the
Company by the Company's Chief Executive Officer and the Company's four other
highest paid executive officers whose total salary and bonus for such fiscal
year exceeded $100,000 (collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>
Long-Term
Annual Compensation
Compensation Awards
-------------------- ------------
Number of
Securities
Underlying
Name and Principal Position Year Salary $ Bonus $ Options
--------------------------- ---- -------- -------- ------------
<S> <C> <C> <C> <C>
Nicolas C. Nierenberg................... 1998 $183,365 $181,576 200,000
Chairman of the Board and Chief 1997 $174,350 $ 40,064 300,000
Executive Officer
Peter I. Cittadini...................... 1998 $183,461 $181,576 360,000
President and Chief Operating Officer 1997 $180,000 $ 63,000 80,000
Daniel A. Gaudreau...................... 1998 $181,756 $ 95,209 90,000
Senior Vice President, Finance and 1997 $142,320(1) $ 36,045 250,000
Administration and Chief Financial
Officer
Hamid R. Bahadori....................... 1998 $118,205(2) $ 62,951 330,000
Senior Vice President, Engineering 1997 -- -- --
Albert R. Campa......................... 1998 $132,211 $ 20,343 40,000
Vice President, Marketing 1997 $115,000 $ 26,683 30,000
</TABLE>
- --------
(1) Mr. Gaudreau commenced employment on February 24, 1997.
(2) Mr. Bahadori commenced employment on May 27, 1998.
The following table contains information concerning the stock option grants
made to each of the Named Executive Officers for 1998. No stock appreciation
rights were granted to these individuals during such year.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
----------------------------------
Potential Realizable Value at
Number of % of Total Assumed Annual Rates of
Securities Options Exercise Stock Price Appreciation for
Name Underlying Granted to Price Option Term(4)
---- Options Employees in Per Expiration ------------------------------
Granted(1) Fiscal 1998(2) Share(3) Date 5% 10%
---------- -------------- -------- ---------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Nicolas C. Nierenberg... 200,000 7.6% $ 7.0625 12/10/08 $ 888,314 $ 2,251,161
Peter I. Cittadini...... 80,000 3.0 1.50 2/11/08 75,467 191,249
280,000 10.6 7.0625 12/10/08 1,243,639 3,151,626
Daniel A. Gaudreau...... 20,000 * 4.125 5/26/08 51,884 131,484
70,000 2.6 7.0625 12/10/08 310,910 787,906
Hamid R. Bahadori....... 300,000 11.3 4.125 5/26/08 778,257 1,972,256
30,000 1.1 7.0625 12/10/08 133,247 337,674
Albert R. Campa......... 40,000 1.5 4.125 5/26/08 103,768 262,968
</TABLE>
- --------
* Less than one percent
12
<PAGE>
(1) Such options vest as follows: 1/5 of the shares vest on the first
anniversary of the vesting commencement date and 1/60 of the shares vest on
each monthly anniversary of the vesting commencement date thereafter. Each
of the options has a ten year term, subject to earlier termination in the
event of the optionee's cessation of service with the Company.
(2) Based on an aggregate of 2,648,850 options granted to employees of the
Company during fiscal 1998.
(3) For options granted prior to the Company's initial public offering of its
securities on July 17, 1998, the exercise price is equal to the deemed fair
market value of the Company's Common Stock as estimated by the Board of
Directors on the date of grant. For options granted after the Company's
initial public offering of its securities, the exercise price is equal to
the closing price of the Company's Common Stock as reported on the Nasdaq
Stock Market on the date of grant.
(4) The potential realizable value is calculated based on the term of the
option at the time of grant (ten years). Stock price appreciation and
potential realizable values at 5% and 10% appreciation are calculated in
accordance with Section 402 of Regulation S-K under the Securities Act of
1933, as amended, and do not represent the Company's prediction of its
stock price performance
The following table sets forth for each of the Named Executive Officers
options exercised during fiscal 1998 and the number and value of securities
underlying unexercised options that are held by the Named Executive Officers as
of December 31, 1998.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Number Underlying Unexercised In-the-Money Options
Name of Shares Value Options at December 31, 1998 at December 31, 1998(2)
---- Acquired Realized -------------------------------- -------------------------
on Exercise $(1) Exercisable Unexercisable Exercisable Unexercisable
----------- -------- -------------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Nicolas C. Nierenberg... -- -- 300,000 200,000 $2,869,500 $562,500
Peter I. Cittadini...... -- -- 80,000 280,000 $ 670,000 $787,500
Daniel A. Gaudreau...... -- -- 20,000 70,000 $ 115,000 $196,875
Hamid R. Bahadori....... -- -- 300,000 30,000 $1,725,000 $ 84,375
Albert R. Campa......... 16,000 $31,200 40,000 -- $ 230,000 --
</TABLE>
- --------
(1) Equal to the fair market value of the purchased shares on the option
exercise date, less the exercise price paid for such shares.
(2) Based on the fair market value of the Company's Common Stock as of December
31, 1998 ($9.88 per share), less the exercise price payable for such
shares.
Employment Agreements and Change of Control and Severance Arrangements
Pursuant to an agreement entered into between the Company and Daniel A.
Gaudreau, the Company's Senior Vice President, Finance and Administration and
Chief Financial Officer, upon a merger or acquisition Mr. Gaudreau will
automatically vest in 50% of his remaining unvested options to purchase shares
of the Company's Common Stock. Pursuant to an agreement entered into between
the Company and Hamid Bahadori, the Company's Senior Vice President,
Engineering, if Mr. Bahadori's employment is terminated by the Company within
the first 24 months following May 27, 1998 other than for cause, he will
automatically be vested in options to purchase not less than 120,000 shares of
the Company's Common Stock.
Under the Company's 1998 Equity Incentive Plan, upon a Change in Control, an
award will become fully vested as to all shares subject to such award if such
award is not assumed by the surviving corporation or its parent and the
surviving corporation or its parent does not substitute such award with another
award of substantially the same terms. In the event of an involuntary
termination of a participant within 12 months following a Change in Control,
the vesting of an award will accelerate in full. Options granted under the 1994
Stock Option Plan become fully vested upon a Change in Control unless assumed
or replaced with a comparable option by the acquiring entity.
13
<PAGE>
A Change in Control includes (i) a merger or consolidation of the Company
after which the Company's then current stockholders own less than 50% of the
surviving corporation, (ii) sale of all or substantially all of the assets of
the Company, (iii) a proxy contest that results in replacement of more than one
third of the directors over a 24 month period or (iv) acquisition of 50% or
more of the Company's outstanding stock by a person other than a trustee of any
of the Company's employee benefit plans or a corporation owned by the
stockholders of the Company in substantially the same proportions as their
stock ownership in the Company.
14
<PAGE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Company's Board of Directors (the
"Compensation Committee" or the "Committee") has the exclusive authority to
establish the level of base salary payable to the Chief Executive Officer
("CEO") and certain other executive officers of the Company and to administer
the Company's 1998 Equity Incentive Plan, 1998 Employee Stock Purchase Plan and
1998 Non-Employee Directors Option Plan. In addition, the Committee has the
responsibility for approving the individual bonus programs to be in effect for
the CEO and certain other executive officers and other key employees each
fiscal year.
For the 1998 fiscal year, the Board of Directors determined executive
officer compensation. The process utilized by the Board in determining
executive officer compensation levels was based on the subjective judgment of
the Board. Among the factors considered by the Board were the recommendations
of the CEO with respect to the compensation of the Company's key executive
officers. However, the Board made the final compensation decisions concerning
such officers.
General Compensation Policy. The Committee's fundamental policy is to offer
the Company's executive officers competitive compensation opportunities based
upon overall Company performance, their individual contribution to the
financial success of the Company and their personal performance. It is the
Committee's objective to have a substantial portion of each officer's
compensation contingent upon the Company's performance, as well as upon his or
her own level of performance. Accordingly, each executive officer's
compensation package consists of: (i) base salary, (ii) cash bonus awards and
(iii) long term stock based incentive awards.
Base Salary. The base salary component of total compensation is primarily
designed to attract, motivate, reward and retain highly skilled executives and
to compensate executives competitively within the industry and the marketplace.
Each individual's base pay is positioned relative to the total compensation
package, including cash incentives and long-term incentives.
Annual Cash Bonuses. Each executive officer has an established cash bonus
target. The annual bonuses for executive officers are distributed on the basis
of the Company's achievement of the financial performance targets established
at the start of the fiscal year and personal objectives established for each
executive. Actual bonuses paid reflect an individual's accomplishment of both
corporate and functional objectives.
Long Term Incentive Compensation. During fiscal 1998, the Board, in its
discretion, made option grants to Messrs. Nierenberg, Cittadini, Gaudreau,
Bahadori and Campa under the Company's 1994 Stock Option Plan and 1998 Equity
Incentive Plan. Generally, a significant grant is made in the year that an
officer commences employment. Thereafter, option grants may be made at varying
times and in varying amounts in the discretion of the Committee. Generally, the
size of each grant is set at a level that the Committee deems appropriate to
create a meaningful opportunity for stock ownership based upon the individual's
position with the Company, the individual's potential for future responsibility
and promotion, the individual's performance in the recent period and the number
of unvested options held by the individual at the time of the new grant. The
relative weight given to each of these factors will vary from individual to
individual at the Committee's discretion. Applying these principles, a
significant grant was made to Mr. Bahadori in connection with his commencement
of employment. In addition, a significant grant was made to Mr. Cittadini in
connection with his promotion to President and Chief Operating Officer.
Each grant allows the officer to acquire shares of the Company's Common
Stock at a fixed price per share (the market price on the grant date) over a
specified period of time. The option vests in installments over a five year
period, contingent upon the executive officer's continued employment with the
Company. The vesting schedule and the number of option shares granted are
established to ensure a meaningful incentive in each year following the year of
grant. Accordingly, the option will provide a return to the executive officer
only if he or she remains in the Company's employ, and then only if the market
price of the Company's Common Stock appreciates over the option term.
15
<PAGE>
CEO Compensation. The annual base salary for Mr. Nierenberg, the Company's
Chief Executive Officer, was established by the Board on April 14, 1998. The
Board's decision was made primarily on the basis of Mr. Nierenberg's personal
performance of his duties.
The remaining components of the Chief Executive Officer's 1998 fiscal year
incentive compensation were entirely dependent upon the Company's financial
performance and provided no dollar guarantees. The bonus paid to the Chief
Executive Officer for the fiscal year was based on the same incentive plan for
all other officers. Specifically, a target incentive was established at the
beginning of the fiscal year using an agreed upon formula based on Company
bookings. Each year; the annual incentive plan is reevaluated with a new
achievement threshold and new targets for bookings. The option grant made to
the Chief Executive Officer during the 1998 fiscal year was intended to reflect
his years of service with the Company and to place a significant portion of Mr.
Nierenberg's total compensation at risk, because the bonus will provide little
or no compensation unless Company performance achieves agreed-upon thresholds
and the options will have no value unless there is appreciation in the value of
the Company's Common Stock over the option term.
Tax Limitation. Under the Federal tax laws, a publicly-held company such as
the Company will not be allowed a federal income tax deduction for compensation
paid to certain executive officers to the extent that compensation exceeds $1
million per officer in any year. To qualify for an exemption from the $1
million deduction limitation, the stockholders were asked to approve a
limitation under the Company's 1998 Equity Incentive Plan on the maximum number
of shares of Common Stock for which any one participant may be granted stock
options per calendar year. Because this limitation was adopted, any
compensation deemed paid to an executive officer when he exercises an
outstanding option under the 1998 Equity Incentive Plan with an exercise price
equal to the fair market value of the option shares on the grant date will
qualify as performance based compensation that will not be subject to the $1
million limitation. Since it is not expected that the cash compensation to be
paid to the Company's executive officers for the 1999 fiscal year will exceed
the $1 million limit per officer, the Committee will defer any decision on
whether to limit the dollar amount of all other compensation payable to the
Company's executive officers to the $1 million cap.
COMPENSATION COMMITTEE
James W. Breyer
Steven D. Whiteman
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company's Board of Directors was formed in
July 1998, and the members of the Compensation Committee are Messrs. Breyer and
Whiteman. Neither of these individuals was at any time during 1998, or at any
other time, an officer or employee of the Company. No executive officer of the
Company serves as a member of the board of directors or compensation committee
of any entity that has one or more executive officers serving as a member of
the Company's Board of Directors or Compensation Committee.
16
<PAGE>
OTHER MATTERS
The Board knows of no other matters to be presented for stockholder action
at the Special Meeting. However, if other matters do properly come before the
Special Meeting or any adjournments or postponements thereof, the Board intends
that the persons named in the proxies will vote upon such matters in accordance
with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ NICOLAS C. NIERENBERG
Nicolas C. Nierenberg
Chairman of the Board
and Chief Executive Officer
San Mateo, California
December 10, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE,
SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE
SPECIAL MEETING. IF YOU DECIDE TO ATTEND THE SPECIAL MEETING AND WISH TO
CHANGE YOUR PROXY VOTE, YOU MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT
THE MEETING.
THANK YOU FOR YOUR ATTENTION TO THIS MATTER. YOUR PROMPT RESPONSE WILL
GREATLY FACILITATE ARRANGEMENTS FOR THE ANNUAL MEETING.
17
<PAGE>
1791-SMPS-99
<PAGE>
PROXY ACTUATE CORPORATION PROXY
999 Baker Way, San Mateo, CA 94404
This Proxy is Solicited on Behalf of the Board of Directors
of Actuate Corporation
for the Special Meeting of Stockholders to be held January 14, 2000
This undersigned holder of Common Stock, par value $0.001, of Actuate
Corporation (the "Company") hereby appoints Peter I. Cittadini and Daniel A.
Gaudreau, or either of them, proxies for the undersigned, each with full power
of substitution, to represent and to vote as specified in this Proxy all Common
Stock of the Company that the undersigned stockholder would be entitled to vote
if personally present at a Special Meeting of Stockholders (the "Special
Meeting") to be held on Friday January 14th, 2000 at 9:00 a.m. local
time, at the Company's principal executive offices located at 999 Baker Way,
Suite 200, San Mateo, California, and at any adjournments or postponements of
the Special Meeting. The undersigned stockholder hereby revokes any proxy or
proxies heretofore executed for such matters.
This proxy, when properly executed, will be voted in the manner as directed
herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1 AND 2, AND IN THE DISCRETION OF THE PROXIES AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING. The undersigned
stockholder may revoke this proxy at any time before it is voted by delivering
to the Corporate Secretary of the Company either a written revocation of the
proxy or a duly executed proxy bearing a later date, or by appearing at the
Special Meeting and voting in person.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY USING THE ENCLOSED
RETURN ENVELOPE. If you receive more than one proxy card, please sign and return
ALL cards in the enclosed envelope.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
(Reverse)
ACTUATE CORPORATION
[_] Please mark votes
as in this example
<TABLE>
<S> <C>
1. To approve the amendment 2. To approve the amendment to the FOR AGAINST ABSTAIN
to the Company's Certificate Company's 1998 Equity Incentive [ ] [ ] [ ]
of Incorporation as set Plan as set forth in the
forth in the accompanying accompanying Proxy Statement.
Proxy Statement.
</TABLE>
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
In their discretion, the proxies are authorized
to vote upon such other business as may properly
come before the Special Meeting.
The undersigned acknowledges receipt of the accompanying Notice of Special
Meeting of Stockholders and Proxy Statement.
Signature: _____________________ Signature (if held jointly): _______________
Date: __________________, 1999
Please date and sign exactly as your name(s) is (are) shown on the share
certificate(s) to which the Proxy applies. When shares are held as
joint-tenants, both should sign. When signing as an executor, administrator,
trustee, guardian, attorney-in-fact or other fiduciary, please give full title
as such. When signing as a corporation, please sign in full corporate name by
President or other authorized officer. When signing as a partnership, please
sign in partnership name by an authorized person.
