<PAGE>
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 (S)240.14a-11(c) or (S)240.14a-12
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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF ACTUATE CORPORATION]
ACTUATE CORPORATION
701 Gateway Boulevard
South San Francisco, California 94080
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held May 24, 2000
The Annual Meeting of Stockholders (the "Annual Meeting") of Actuate
Corporation (the "Company") will be held at 701 Gateway Boulevard, South San
Francisco, California, on Wednesday, May 24, 2000, at 9:00 a.m. for the
following purposes:
1. To elect five directors of the Board of Directors to serve until the
next Annual Meeting or until their successors have been duly elected and
qualified;
2. To ratify the appointment of Ernst & Young LLP, Independent Auditors as
the Company's independent public accountants for the fiscal year ending
December 31, 2000; 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 March 29, 2000 are
entitled to notice of, and to vote at, the Annual 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 701 Gateway
Boulevard, South San Francisco, California, during ordinary business hours for
the ten-day period prior to the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Nicolas C. Nierenberg
Nicolas C. Nierenberg
Chairman of the Board and Chief
Executive Officer
South San Francisco, California
April 10, 2000
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND the Annual 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
annual meeting. If you decide to attend the Annual Meeting and wish to
change your proxy vote, you may do so automatically by voting in person at
the meeting.
<PAGE>
ACTUATE CORPORATION
701 Gateway Boulevard
South San Francisco, California 94080
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
To be held May 24, 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 the Annual Meeting of Stockholders (the
"Annual Meeting") to be held at the Company's principal executive offices
located at 701 Gateway Boulevard, South San Francisco, California, on
Wednesday, May 24, 2000, at 9:00 a.m., and at any adjournment or postponement
of the Annual Meeting. These proxy materials were first mailed to stockholders
on or about April 10, 2000.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Annual
Meeting are summarized in the accompanying Notice of Annual 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 Annual Meeting. On March 29, 2000, the record date for determination of
stockholders entitled to vote at the Annual Meeting, there were 28,129,055
shares of Common Stock outstanding. Each stockholder of record on March 29,
2000 is entitled to one vote for each share of Common Stock held by such
stockholder on March 29, 2000. All share numbers in this Proxy Statement
(including the number of shares outstanding on the record date for the Annual
Meeting) have been adjusted to reflect the two-for-one stock split effected by
the Company on December 2, 1999 (the "1999 Stock Split"). 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
Annual Meeting, present in person or represented by proxy, shall constitute a
quorum for the transaction of business at the Annual 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. Directors are elected by a plurality of the affirmative votes
cast by those shares present in person, or represented by proxy, and entitled
to vote at the Annual Meeting. The five (5) nominees for director receiving
the highest number of affirmative votes will be elected. Abstentions and
broker non-votes will not be counted toward a nominee's total. Stockholders
may not cumulate votes in the election of directors.
Proposal 2. Ratification of the appointment of Ernst & Young L.L.P,
Independent Auditors as the Company's independent public accountants for the
fiscal year ending December 31, 2000 requires the affirmative vote of a
majority of those shares present in person, or represented by proxy, and cast
either affirmatively or
<PAGE>
negatively at the Annual Meeting. Abstentions and broker non-votes will not be
counted as having been voted on the proposal.
Proxies
Whether or not you are able to attend the Company's Annual 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 the Nominees of the Board of Directors (as set forth
in Proposal 1), FOR Proposal 2, and in the discretion of the proxy holders as
to other matters that may properly come before the Annual Meeting. You may
also revoke or change your proxy at any time before the Annual 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 Annual Meeting. You may also automatically
revoke your proxy by attending the Annual Meeting and voting in person. All
shares represented by a valid proxy received prior to the Annual 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. In addition, the Company may reimburse
such persons for their costs of forwarding the solicitation material to such
beneficial owners. The original solicitation of proxies by mail may be
supplemented by solicitation by telephone, telegram, or other means by
directors, officers, employees, or at the Company's request, Corporate
Investor Communications, Inc. ("CIC"), a professional proxy solicitation firm.
No additional compensation will be paid to directors, officers or employees
for such services, but CIC will be paid its customary fee, estimated to be
about $5,000, if it renders solicitation services.
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The directors who are being nominated for reelection to the Board of
Directors (the "Nominees"), their ages as of April 1, 2000, their positions
and offices held with the Company and certain biographical information are set
forth below. The proxy holders intend to vote all proxies received by them in
the accompanying form FOR the Nominees listed below unless otherwise
instructed. In the event any Nominee is unable or declines to serve as a
director at the time of the Annual Meeting the proxies will be voted for any
nominee who may be designated by the present Board of Directors to fill the
vacancy. As of the date of this Proxy Statement, the Board of Directors is not
aware of any Nominee who is unable or will decline to serve as a director. The
five (5) nominees receiving the highest number of affirmative votes of the
shares entitled to vote at the Annual Meeting will be elected directors of the
Company to serve until the next Annual Meeting or until their successors have
been duly elected and qualified.
<TABLE>
<CAPTION>
Nominees Age Positions and Offices Held with the Company
- -------- --- -------------------------------------------
<S> <C> <C>
Nicolas C. Nierenberg... 43 Chairman of the Board and Chief Executive Officer
Peter I. Cittadini...... 44 Director, President and Chief Operating Officer
George B. Beitzel....... 71 Director
Arthur C. Patterson
(2).................... 56 Director
Steven D. Whiteman (1)
(2).................... 49 Director
</TABLE>
- --------
(1)Member of Compensation Committee
(2)Member of Audit Committee
Nicolas C. Nierenberg is a co-founder of the Company and has been its Chief
Executive Officer and Chairman of the Board of Directors since November 1993.
Mr. Nierenberg was also President of the Company until October 1998. Prior to
founding the Company, from April 1993 to November 1993, Mr. Nierenberg worked
as a consultant for Accel Partners, a venture capital firm, evaluating
investment opportunities in the enterprise software market. Mr. Nierenberg co-
founded Unify Corporation, which develops and markets relational database
development tools. Mr. Nierenberg held a number of positions at Unify
including, Chairman of the Board of Directors, Chief Executive Officer,
President, Vice President, Engineering and Chief Technical Officer.
Mr. Nierenberg attended the University of California, Los Angeles and the
University of California, San Diego where he studied computer science and
economics.
Peter I. Cittadini has been the President and Chief Operating Officer of
the Company since October 1998 and served as the Company's Executive Vice
President from January 1995 to October 1998. From 1992 to January 1995, Mr.
Cittadini held a number of positions at Interleaf, Inc., an enterprise
software publishing company, including Senior Vice President of Worldwide
Operations responsible for worldwide sales, marketing, customer support and
services. From 1985 to 1991, Mr. Cittadini held a number of positions at
Oracle Corporation, including Vice President, Northeast Division. Mr.
Cittadini currently serves as a director of Netbase Computing, a privately
held software consulting firm. Mr. Cittadini holds a B.A. in Liberal Arts from
Boston College.
George B. Beitzel has been a director of the Company since February 2000.
From 1955 until his retirement in 1987, Mr. Beitzel held numerous positions at
IBM, including serving as a senior vice president and as a member of the IBM
Board of Directors. During his career Mr. Beitzel has served as a director of
a number of companies including Datalogix, FlightSafety, Phillips Petroleum,
Roadway Express, Rohm & Haas and Square D. Mr. Beitzel currently serves as
director of Bankers Trust (a subsidiary of Deutsche Bank), Bitstream, Computer
Task Group and Staff Leasing. Mr. Beitzel holds a BA and an honorary Doctor of
Law degree from Amherst College and an M.B.A. from Harvard University. Mr.
Beitzel is also Chairman Emeritus of The Colonial Williamsburg Foundation and
Chairman Emeritus of the Amherst Board of Trustees.
3
<PAGE>
Arthur C. Patterson has been a director of the Company since November 1993.
Mr. Patterson is a general partner of Accel Partners, a venture capital firm,
which he founded in 1983. Mr. Patterson currently serves as a director of AIM
Funds, PageMart Wireless, Inc., Unify Corporation and Viasoft, Inc. and
several privately held enterprise software and communications companies. Mr.
Patterson holds an A.B. and an M.B.A. from Harvard University.
Steven D. Whiteman has been a director of the Company since April 1998.
Since May 1993, Mr. Whiteman has served as President of Viasoft, Inc., a
publicly traded software application and services company, and has served as
Chief Executive Officer and Director since February 1994 and Chairman of the
Board of Directors since April 1997. Mr. Whiteman currently serves as a
director of Unify Corporation. Mr. Whiteman holds a B.A. in Business
Administration from Taylor University and an M.B.A. from the University of
Cincinnati.
Current directors James W. Breyer and Nancy J. Schoendorf have decided not
to run for re-election to the Board of Directors. Mr. Breyer is currently a
member of the Compensation Committee and Ms. Schoendorf is currently a member
of the Audit Committee.
Board of Directors Meetings and Committees
During the fiscal year ended December 31, 1999, the Board of Directors held
six (6) meetings and acted by written consent three (3) times. For the fiscal
year, all of the directors except one attended or participated in at least 75%
of the aggregate of (i) the total number of meetings of the Board of Directors
and (ii) the total number of meetings held by all committees of the Board of
Directors on which each such director served. The Board of Directors has two
(2) standing committees: the Compensation Committee and the Audit Committee.
During the fiscal year ended December 31, 1999, the Compensation Committee
of the Board of Directors held no meetings. The Compensation Committee reviews
the performance of the executive officers of the Company and reviews the
compensation programs for other key employees, including salary and cash bonus
levels and option grants under the 1998 Equity Incentive Plan. The members of
the Compensation Committee are Messrs. Breyer and Whiteman.
During the fiscal year ended December 31, 1999, the Audit Committee of the
Board of Directors held one (1) meeting. The Audit Committee reviews, acts on
and reports to the Board of Directors with respect to various auditing and
accounting matters, including the selection of the Company's auditors, the
scope of the annual audits, fees to be paid to the Company's auditors, the
performance of the Company's auditors and the accounting practices of the
Company. The members of the Audit Committee are Messrs. Patterson and Whiteman
and Ms. Schoendorf.
Compensation of Directors
Except for grants of stock options, directors of the Company do not receive
compensation for services provided as a director although members are
reimbursed for certain expenses in connection with attendance at Board of
Directors and Committee meetings. The Company also does not pay compensation
for committee participation or special assignments of the Board of Directors.
Non-employee Board members are eligible for option grants pursuant to the
provisions of the 1998 Non-Employee Directors Option Plan. Each individual who
first joins the Board as a non-employee director, whether through election or
appointment will receive at that time, an automatic option grant for 40,000
shares of Common Stock. With respect to the initial automatic option grant,
the option will become exercisable as to 25% of the shares after one year of
Board service and in the balance of the shares in a series of 36 equal monthly
installments over the remaining period of optionee's Board service. In
addition, at each annual stockholders meeting, each non-employee director will
automatically be granted at that meeting, whether or not he or she is standing
for re-election at that particular meeting, a stock option to purchase 5,000
shares of Common Stock, which will become fully exercisable on the first
anniversary of such meeting. Each option will have an exercise price equal to
the
4
<PAGE>
fair market value of the Common Stock on the automatic grant date and a
maximum term of ten years, subject to earlier termination following the
optionee's cessation of Board service. However, vesting will automatically
accelerate in full upon (i) an acquisition of the Company by merger,
consolidation or asset sale, (ii) a tender offer for more than 50% of the
outstanding voting stock or proxy contest for Board membership or (iii) the
death or disability of the optionee while serving as a Board member.
In February 2000, Mr. Beitzel was granted an option to purchase 40,000
shares of the Company's Common Stock under the 1998 Non-Employee Directors
Stock Option Plan at an exercise price of $62.375 per share subject to a four
year vesting schedule in connection with his appointment to the Board.
Directors who are also employees of the Company are eligible to receive
options under the 1998 Equity Incentive Plan and are also eligible to
participate in the Company's 1998 Employee Stock Purchase Plan.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED HEREIN.
Other Executive Officers
The following are additional executive officers of the Company. All
executive officers serve at the discretion of the Board of Directors.
Daniel A. Gaudreau, age 52, has been Senior Vice President, Finance and
Administration and Chief Financial Officer since January 1999 and served as
Vice President, Finance and Administration and Chief Financial Officer from
February 1997 to January 1999. From January 1994 to February 1997, Mr.
Gaudreau served as Vice President, Finance and Chief Financial Officer of
Plantronics, Inc., a publicly traded telephone headset manufacturing company,
where he was responsible for all financial and administrative operations. From
January 1990 to January 1994, Mr. Gaudreau was Vice President, Finance and
Chief Financial Officer at Ready Systems, an operating systems software
company. Prior to that, Mr. Gaudreau spent two years at Apple Computer as the
Controller of Fremont Manufacturing Operations, prior to which he spent 18
years at General Electric where he held various financial management
positions. Mr. Gaudreau holds a B.S. in Industrial Management from Clarkson
University.
Hamid R. Bahadori, age 46, has been Senior Vice President, Engineering
since January 1999 and served as Vice President, Engineering from May 1998 to
January 1999. From June 1996 to May 1998, Mr. Bahadori served as Vice
President, Engineering for Envive Corp., a privately held applications
software company. Prior to that, Mr. Bahadori was a Senior Director of
Software Products Development for Oracle from 1989 to 1996. Mr. Bahadori holds
a B.S. in Applied Math and Electrical Engineering/Computer Science from Purdue
University and an M.S. and Ph.D. in Computer Science from the University of
California, Berkeley.
5
<PAGE>
PROPOSAL 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Company is asking the stockholders to ratify the appointment of Ernst &
Young LLP, Independent Auditors as the Company's independent public
accountants for the fiscal year ending December 31, 2000. The affirmative vote
of the holders of a majority of shares present or represented by proxy and
entitled to vote at the Annual Meeting will be required to ratify the
appointment of Ernst & Young LLP.
In the event the stockholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the appointment is ratified,
the Board of Directors, in its discretion, may direct the appointment of a
different independent accounting firm at any time during the year if the Board
of Directors feels that such a change would be in the Company's and its
stockholders' best interests.
Ernst & Young LLP has audited the Company's financial statements since
1994. Its representatives are expected to be present at the Annual Meeting,
will have the opportunity to make a statement if they desire to do so, and
will be available to respond to appropriate questions.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 2.
6
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 29, 2000, 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)
------------------------------------
Name of Beneficial Owner Number of Shares Percentage of Total
- ------------------------ ---------------- -------------------
<S> <C> <C>
Entities affiliated with Accel Partners
(2)..................................... 5,315,060 19.0%
428 University Avenue
Palo Alto, CA 94301
Pilgrim Baxter & Associates (3).......... 1,738,900 6.2%
825 Duportail Road
Wayne, PA 19087
Amerindo Investment Advisors Inc. (4).... 1,444,900 5.2%
One Embarcadero Center, Suite 2300
San Francisco, CA 94111
Nicolas C. Nierenberg (5)................ 2,564,759 9.1%
c/o Actuate Corporation
701 Gateway Boulevard South
San Francisco, CA 94404
Peter I. Cittadini (6)................... 694,092 2.5%
Daniel A. Gaudreau (7)................... 324,666 1.2%
Hamid R. Bahadori (8).................... 316,000 1.1%
George B. Beitzel (9).................... * *
James W. Breyer (2)...................... 5,199,740 18.6%
c/o Accel Partners
428 University Avenue
Palo Alto, CA 94301
Arthur A. Patterson (2).................. 5,422,866 19.4%
c/o Accel Partners
428 University Avenue
Palo Alto, CA 94301
Nancy Schoendorf (10).................... 89,030 *
Steven D. Whiteman (11).................. 60,000 *
All current directors and executive
officers as a group (9 persons) (12).... 9,471,413 33.1%
</TABLE>
- --------
* Less than 1%
7
<PAGE>
(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 27,931,595 shares
outstanding on February 29, 2000, adjusted as required by rules
promulgated by the Commission. Unless otherwise indicated, the business
address of each beneficial owner listed is 701 Gateway Boulevard, South
San Francisco, California, 94080.
(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.,
11,288 shares held by Accel V L.P., 1,506 shares held by Accel
Internet/Strategic Technology Fund L.P., 6,394 shares held by Accel
Investors 96(B) L.P. and 115,320 shares held by Ellmore C. Patterson
Partners. Messrs. Breyer and Patterson, directors of the Company, are
managing members of Accel IV Associates L.L.C., the general partner of
Accel IV L.P. Messrs. Breyer and Patterson are general partners of Accel
Investors '93 L.P. Messrs. Breyer and Patterson are officers of Accel
Partners & Co., the general partner of Accel Keiretsu L.P. Messrs. Breyer
and Patterson, are managing members of Accel V Associates L.L.C., the
general partner of Accel V L.P. Messrs. Breyer and Patterson, are
managing members of Accel Internet/Strategic Technology Fund Associates
L.L.C., the general partner of Accel Ineternet/Strategic Technology Fund
L.P. Messrs. Breyer and Patterson are general partners of Accel Investors
'96 (B) L.P..Mr. Patterson is the general partner of each 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, 1999. Of such shares, Pilgrim
Baxter & Associates has the sole power to vote or to direct the vote of
1,123,900 shares.
(4) Based on a Schedule 13G/A filed with the Securities and Exchange
Commission for the year ended December 31, 1999. Includes 1,171,100
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.
(5) Includes options exercisable into 218,333 shares of Common Stock within
60 days of February 29, 2000.
(6) Includes options exercisable into 110,666 shares of Common Stock within
60 days of February 29, 2000.
(7) Includes options exercisable into 28,666 shares of Common Stock within 60
days of February 29, 2000.
(8) Includes options exercisable into 308,000 shares of Common Stock within
60 days of February 29, 2000.
(9) Mr. Beitzel was granted an option to purchase 40,000 shares of Common
Stock on February 29, 2000.
(10) Includes 16,400 shares held by Ms. Schoendorf's spouse and 80 shares held
in custodial accounts for Ms. Schoendorf's children.
(11) Includes options exercisable into 60,000 shares of Common Stock within 60
days of February 29, 2000.
(12) Includes options exercisable into 725,665 shares of Common Stock within
60 days of February 29, 2000.
8
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The members of the Board of Directors, the executive officers of the
Company and persons who hold more than 10% of the Company's outstanding Common
Stock are subject to the reporting requirements of Section 16(a) of the
Securities Exchange Act of 1934, as amended, which require them to file
reports with respect to their ownership of the Company's Common Stock and
their transactions in such Common Stock. Based upon (i) the copies of Section
16(a) reports that the Company received from such persons for their 1999
fiscal year transactions in the Common Stock and their Common Stock holdings
and (ii) the written representations received from one or more of such persons
that no annual Form 5 reports were required to be filed by them for the 1999
fiscal year, the Company believes that all reporting requirements under
Section 16(a) for such fiscal year were met in a timely manner by its
executive officers, except that each of Messrs Gaudreau, Bahadori and Whiteman
and Ms. Schoendorf filed a Form 5 for 1999.
9
<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, 1999 paid by the Company for services to
the Company by the Company's Chief Executive Officer and the Company's three
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. Nierenbergg................. 1999 $200,000 $100,000 --
Chairman of the Board and 1998 $183,365 $181,576 200,000
Chief Executive Officer 1997 $174,350 $ 40,064 300,000
Peter I. Cittadini..................... 1999 $200,000 $100,000 --
President and Chief 1998 $183,461 $181,576 360,000
Operating Officer 1997 $180,000 $ 63,000 80,000
Daniel A. Gaudreau..................... 1999 $200,000 $120,000 80,000
Senior Vice President, 1998 $181,756 $ 95,209 90,000
Finance and Administration and 1997 $142,320(/1/) $ 36,045 250,000
Chief Financial Officer
Hamid R. Bahadori...................... 1999 $200,000 $120,000 80,000
Senior Vice President, 1998 $118,205(/2/) $ 62,951 330,000
Engineering 1997 -- -- --
</TABLE>
- --------
(1) Mr. Gaudreau commenced employment on February 24, 1997.
(2) Mr. Bahadori commenced employment on May 27, 1998.
10
<PAGE>
The following table contains information concerning the stock option grants
made to each of the Named Executive Officers for 1999. 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
Assumed
% of Total Annual Rates of
Number of Options Exercise Stock Price
Securities Granted to Price Appreciation for
Underlying Employees Per Option Term (4)
Options in Fiscal Share Expiration -------------------
Name Granted (1) 1999(2) (3) Date 5% 10%
- ---- ----------- ---------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Nicolas C. Nierenberg... 0 -- -- -- -- --
Peter I. Cittadini...... 0 -- -- -- -- --
Daniel A. Gaudreau...... 80,000 2.4% $15.188 9/8/09 $764,132 $1,936,461
Hamid R. Bahadori....... 80,000 2.4% $15.188 9/8/09 $764,132 $1,936,461
</TABLE>
- --------
(1) Such options vest as follows: 1/4 of the shares vest on the first
anniversary of the vesting commencement date and 1/48 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 3,346,450 options granted to employees of the
Company during fiscal 1999.
(3) 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.
11
<PAGE>
The following table sets forth for each of the Named Executive Officers the
number and value of securities underlying unexercised options that are held by
the Named Executive Officers as of December 31, 1999. None of the Named
Executive Officers exercised options in 1999.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options at
December 31, 1999 December 31, 1999 (1)
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Nicolas C. Nierenberg....... 340,000 160,000 $14,222,540 $ 5,730,000
Peter I. Cittadini.......... 86,666 273,334 $ 3,274,302 $10,063,201
Daniel A. Gaudreau.......... 34,000 136,000 $ 1,267,374 $ 4,220,502
Hamid R. Bahadori........... 306,000 104,000 $11,839,874 $ 3,074,500
</TABLE>
- --------
(1) Based on the fair market value of the Company's Common Stock as of
December 31, 1999 ($42.875 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.
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, (ii) 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.
12
<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 1999 fiscal year, the Compensation Committee determined executive
officer compensation. The process utilized by the Compensation Committee in
determining executive officer compensation levels was based on the subjective
judgment of the Committee. Among the factors considered by the Committee were
the recommendations of the CEO with respect to the compensation of the
Company's key executive officers. However, the Committee 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 1999, the Board, in its
discretion, made option grants to Messrs. Gaudreau and Bahadori under the
Company's 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.
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 four 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.
CEO Compensation. The annual base salary for Mr. Nierenberg, the Company's
Chief Executive Officer, was established by the Board on December 11, 1998.
The Board's decision was made primarily on the basis of Mr. Nierenberg's
personal performance of his duties.
13
<PAGE>
The remaining components of the Chief Executive Officer's 1999 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.
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 2000
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 1999, 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.
14
<PAGE>
STOCK PERFORMANCE GRAPH
The graph set forth below compares the cumulative total stockholder return
on the Company's Common Stock between July 17, 1998 (the date the Company's
Common Stock commenced public trading) and December 31, 1999 with the
cumulative total return of (i) the Nasdaq Stock Market (U.S.) Index and (ii)
the Hambrecht & Quist Computer Software Index, over the same period. This
graph assumes the investment of $100.00 on July 17, 1998 in the Company's
Common Stock, the Nasdaq Stock Market (U.S.) Index and the Hambrecht & Quist
Computer Software Index, and assumes the reinvestment of dividends, if any.
Comparison of Cumulative Total Return on Investment Since July 17, 1998
<TABLE>
<CAPTION>
7/17/98 12/31/98 12/31/99
------- -------- --------
<S> <C> <C> <C>
Actuate Corporation................................... $100 $180 $780
NASDAQ Stock Market (U.S.)............................ 100 111 200
Hambrecht & Quist Computer Software................... 100 95 217
</TABLE>
The Company effected its initial public offering of Common Stock on July
17, 1998 at a price of $5.50 per share. The closing stock price on December
31, 1999, was $42.875. These shares prices are adjusted to reflect the 1999
Stock Split.
The comparisons shown in the graph are based upon historical data. The
Company cautions that the stock price performance shown in the graph below is
not indicative of, nor intended to forecast, the potential future performance
of the Company's Common Stock.
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, that might incorporate this
Proxy Statement or future filings made by the Company under those statutes,
the Compensation Committee Report and Stock Performance Graph shall not be
deemed filed with the Securities and Exchange
15
<PAGE>
Commission and shall not be deemed incorporated by reference into any of those
prior filings or into any future filings made by the Company under those
statutes.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1996, the Company made an equity investment of approximately $95,000 in
Actuate Japan. This represented approximately 8.3% of the outstanding voting
stock of Actuate Japan. In 1999, the Company purchased additional shares from
an existing Actuate Japan shareholder raising our equity ownership to 16.7%.
During 1996, 1997 and 1999, the Company loaned a total of $160,000, $100,000
and $250,000 to Actuate Japan. In August 1998, the Company acquired the
Japanese version of the Actuate Reporting system and the Japanese trademark
"Actuate" from Actuate Japan at a cost of $350,000.
The Company has also entered into an agreement with Actuate Japan pursuant
to which Actuate Japan has the exclusive right (other than with respect to
value added resellers who are or will be granted worldwide distribution
rights) to distribute the Company's Products and use the Company's name in
Japan, in exchange for a 50% royalty on sales of the Company products by
Actuate Japan. The Company has a right of first refusal on any transfer of the
outstanding shares of Actuate Japan. In addition, beginning in April 1999,
Actuate Japan shareholders have the right to cause the Company to buy all of
their outstanding shares, and the Company has the right to cause the other
shareholders of Actuate Japan to sell their shares to the Company, in each
case pursuant to an pre-determined price formula, in exchange for (at the
election of the Company) cash, securities of the Company or through a
continuing royalty offset over a 30 month period.
The Company's Bylaws provide that the Company shall indemnify its directors
and officers to the fullest extent permitted by Delaware law, including in
circumstances in which indemnification is otherwise discretionary under
Delaware law. The Company's Certificate of Incorporation limits the liability
of its directors for monetary damages arising from a breach of their fiduciary
duty as directors, except to the extent otherwise required by the Delaware
General Corporation Law. Such limitation of liability does not affect the
availability of equitable remedies such as injunctive relief or rescission.
The Company has entered into indemnification agreements with its directors
containing provisions that may require the Company, among other things, to
indemnify such directors against certain liabilities that may arise by reason
of their status or service as directors (other than liabilities arising from
willful misconduct of a culpable nature) and to advance their expenses
incurred as a result of any proceeding against them as to which they could be
indemnified. The Company also maintains insurance policies covering officers
and directors under which the insurers agree to pay, subject to certain
exclusions, for any claim made against the directors and officers of the
Company for a wrongful act that they may become legally obligated to pay for
or for which the Company is required to indemnify the officers or directors.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 2001 Annual
Meeting of Stockholders of the Company must be received by the Company at its
offices at 701 Gateway Boulevard, South San Francisco, California 94080, Attn:
William P. Garvey, General Counsel and Secretary, not later than December 11,
2000 and satisfy the conditions established by the Securities and Exchange
Commission for stockholder proposals to be included in the Company's proxy
statement for that meeting. Pursuant to new amendments to Rule 14a-4(c) of the
Securities Exchange Act of 1934, as amended, a stockholder proposal intended
to be presented at the 2001 Annual Meeting of Shareholders of the Company must
be received by the Company at its offices at 701 Gateway Boulevard, South San
Francisco, California 94080, Attn: William P. Garvey, General Counsel and
Secretary, not later than February 24, 2001 in order for proxy holders to be
allowed to use their discretionary voting authority to vote on such proposal
when the proposal is raised at the 2001 Annual Meeting of Stockholders, even
through there is no discussion of such proposal in the Company's proxy
statement for that meeting.
16
<PAGE>
OTHER MATTERS
The Board knows of no other matters to be presented for stockholder action
at the Annual Meeting. However, if other matters do properly come before the
Annual 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.
The Company will mail without charge, upon written request, a copy of the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1999. Requests should be sent to Actuate Corporation, 701 Gateway Boulevard,
South San Francisco, California 94080, Attn: Investor Relations.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Nicolas C. Nierenberg
Nicolas C. Nierenberg
Chairman of the Board and Chief
Executive Officer
South San Francisco, California
April 10, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL 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
ANNUAL MEETING. IF YOU DECIDE TO ATTEND THE ANNUAL 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>
ACT28 B
DETACH HERE
PROXY
ACTUATE CORPORATION
701 Gateway Boulevard
South San Francisco, CA 94080
This Proxy is Solicited on Behalf of the Board of Directors of
Actuate Corporation for the Annual Meeting of Stockholders
to be held May 24, 2000
The undersigned holder of Common Stock, par value $0.001, of Actuate Corporation
(the "Company") hereby appoints Nicolas C. Nierenberg 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 the Annual Meeting of Stockholders (the "Annual
Meeting") to be held on Wednesday, May 24, 2000, at 9:00 a.m., local time, at
the Company's principal executive offices located at 701 Gateway Boulevard,
South San Francisco, California, and at any adjournments or postponements of the
Annual 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 THE ELECTION OF THE DIRECTORS AND FOR PROPOSAL 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 Annual Meeting and voting in person.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE DIRECTORS AND
"FOR" PROPOSAL 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.
SEE REVERSE (CONTINUED AND TO BE SIGNED ON REVERSE SIDE) SEE REVERSE
SIDE SIDE
<PAGE>
ACTUATE CORPORATION
c/o EquiServe
P.O. Box 9398
Boston, MA 02205-9398
ACT28A
DETACH HERE
[X] Please mark
votes as in
this example.
1. To elect the following directors to serve for a term ending upon the 2001
Annual Meeting of Stockholders or until their successors are elected and
qualified:
Nominees: (01) Nicolas C. Nierenberg, (02) Peter I. Cittadini, (03) George B.
Beitzel, (04) Arthur C. Patterson, and (05) Steven D. Whiteman
FOR ALL [_] [_] WITHHELD FROM
NOMINEES ALL NOMINEES
[_] ______________________________________________________
For all nominees except as noted above
2. To ratify the appointment of Ernst & Young LLP, FOR AGAINST ABSTAIN
Independent Auditors as the Company's independent [_] [_] [_]
public accountants for the fiscal year ending
December 31, 2000.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Annual Meeting.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT. [_]
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.
Signature:________________________________________ Date:___________________
Signature:________________________________________ Date:___________________
