<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
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12
PERFICIENT, INC.
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(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:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
PERFICIENT, INC.
7600-B North Capital of Texas Highway, Suite 340
Austin, Texas 78731
--------------------------------------------------------------------
NOTICE OF ANNUL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 29, 2000
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NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of the Stockholders of
Perficient, Inc. ("Perficient") will be held at the Hyatt Regency Austin, 208
Barton Springs Road, Austin, Texas, 78704 on June 29, 2000 at 9:00 a.m., for the
following purposes:
(1) To elect six directors to hold office for a term of one year or
until their successors have been duly elected and qualified;
(2) To ratify the appointment of Ernst & Young LLP as Perficient's
independent auditors for the fiscal year ending December 31, 2000; and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors of Perficient has fixed the close of business on May 12,
2000 as the record date for the determination of stockholders of Perficient
entitled to notice of and to vote at the Annual Meeting. Only holders of record
of Perficient common stock at the close of business on that date will be
entitled to notice of and to vote at the Annual Meeting or any adjournments or
postponements thereof.
Your attention is directed to the accompanying Proxy Statement for further
information regarding each proposal to be made.
ALL STOCKHOLDERS ARE ASKED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT PROMPTLY BY MAIL IN THE ENCLOSED SELF-ADDRESSED ENVELOPE, WHICH DOES
NOT REQUIRE POSTAGE IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors
John A. Hinners
Secretary
June 6, 2000
Austin, Texas
<PAGE>
PERFICIENT, INC.
7600-B North Capital of Texas Highway, Suite 340
Austin, Texas 78731
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PROXY STATEMENT FOR ANNUAL MEETING
---------------------------------------------------------------------
This Proxy Statement is furnished by the Board of Directors (the "Board
of Directors") of Perficient, Inc., a Delaware corporation ("Perficient"), in
connection with the solicitation of proxies to be used at the Annual Meeting of
Stockholders (the "Meeting") to be held on June 29, 2000 at the Hyatt Regency
Austin, 208 Barton Springs Road, Austin, Texas, 78704 at 9:00 a.m., and at any
adjournment thereof. This Proxy Statement and the accompanying Notice and Proxy
are being mailed to stockholders on or about June 7, 2000. The principal
executive offices of Perficient are located at the address listed above.
Only stockholders of record at the close of business on the record
date, May 12, 2000 (the "Record Date"), will be entitled to vote at the Meeting
and at all adjournments thereof.
On the Record Date, there were outstanding and entitled to vote
6,070,538 shares of Perficient's common stock, $.001 par value per share. Each
outstanding share of Perficient common stock is entitled to one vote on each
matter to be voted upon. A majority of the shares of Perficient common stock
entitled to vote at the Meeting will constitute a quorum for the transaction of
business. Holders of Perficient common stock have no cumulative voting rights.
VOTING OF PROXIES
If a proxy is properly signed by a stockholder and is not revoked, the
shares represented thereby will be voted at the Meeting in the manner specified
on the proxy, or if no manner is specified with respect to any matter therein,
such shares will be voted by the person designated therein in accordance with
the recommendations of the Board of Directors as indicated in this Proxy
Statement. If any of the nominees for director is unable to serve or for good
cause will not serve, an event that is not anticipated by Perficient, the shares
represented by the accompanying proxy will be voted for a substitute nominee
designated by the Board of Directors or the Board of Directors may determine to
reduce the size of the Board of Directors.
A proxy may be revoked by the stockholder at any time prior to the
voting thereof by giving notice of revocation in writing to the Secretary of
Perficient, by duly executing and delivering to the Secretary of Perficient a
proxy bearing a later date, or by voting in person at the Meeting.
Directors of Perficient will be elected by a plurality of the vote of
the outstanding shares of Common Stock present, in person or by proxy, and
entitled to vote at the Meeting. The affirmative vote of the holders of at least
a majority of the shares of Common Stock present, in person or by proxy, and
entitled to vote at the Meeting, is required for the ratification and approval
of any and all other matters which are being put to a stockholder vote at the
Meeting. Votes will NOT be considered cast if the shares are not voted for any
reason, including an abstention indicated as such on a written proxy or ballot,
directions are given in a written proxy to withhold votes, or if the votes are
withheld by a broker. Accordingly, broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter has
been approved. Votes cast,
<PAGE>
either in person or by proxy, will be tabulated by Continental Stock Transfer &
Trust Company, our transfer agent.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth certain information regarding the
beneficial ownership of Perficient common stock as of May 12, 2000 for (i) each
person or entity who is known by us to own beneficially more than five percent
(5%) of Perficient common stock; (ii) each Named Executive Officer listed in the
Summary Compensation table below; (iii) each director of Perficient; and (iv)
all directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT OF CLASS(2)
OF SHARES -------------------
NAME AND ADDRESS OF BENEFICIAL OWNER(1) BENEFICIALLY OWNED
--------------------------------------- ------------------
<S> <C> <C>
Powershift Ventures, L.P.
7600-B North Capital of Texas Highway
Austin, TX, 78731 633,750 10.44%
Beekman Ventures, Inc.
2716 Barton Creek Boulevard
Austin, TX 78735-1670 512,892 8.45
Bryan R. Menell(3) 494,550 8.15
John T. McDonald(4) 674,192 10.84
Sam J. Fatigato 649,100 10.69
Eric Simone 649,100 10.69
Robert Anderson 373,584 6.15
John A. Hinners(5)(6) 80,000 1.31
Steven G. Papermaster(7) 828,750 13.65
David S. Lundeen 326,250 5.37
Dr. W. Frank King(8) 25,000 *
Philip J. Rosenbaum(8) 25,000 *
Directors and executive officers as a group (8 persons) 3,102,842 49.25%
</TABLE>
-----------
* Indicates less than 1% of the outstanding shares of Perficient common
stock.
2
<PAGE>
(1) Unless otherwise indicated, the address of each person or entity is
7600-B North Capital of Texas Highway, Austin, Texas 78731.
(2) Beneficial ownership is determined in accordance with the rules and
regulations of the Securities and Exchange Commission. In computing the
number of shares beneficially owned by a person and the percentage
ownership of that person, shares of common stock subject to options
held by that person that are currently exercisable or exercisable
within 60 days of the date hereof are deemed outstanding. Such shares,
however, are not deemed outstanding for the purposes of computing the
percentage ownership of any other person. Except as indicated in the
footnotes to this table and pursuant to applicable community property
laws, each stockholder named in the table has sole voting and
investment power with respect to the shares set forth opposite such
stockholder's name.
(3) Includes an aggregate of 200,000 shares of Perficient common stock that
are subject to options granted by Mr. Menell to certain employees and
officers of Perficient.
(4) Includes 512,892 shares owned by Beekman Ventures, Inc., of which Mr.
McDonald is president and sole stockholder. Mr. McDonald is deemed to
be the beneficial owner of such shares. Also includes 150,000 shares of
Perficient common stock that may be acquired from Mr. Menell upon the
exercise of a stock option granted to Mr. McDonald by Mr. Menell. Does
not include options to purchase 50,000 shares of Perficient common
stock that are not exercisable within 60 days of the date hereof.
(5) Includes 5,000 shares held in the name of the Aubry Smith Hinners
Section 2503(c) Trust.
(6) Includes options to purchase 30,000 shares of Perficient common stock
exercisable within 60 days of the date hereof. Does not include options
to purchase 80,000 shares of Perficient common stock that are not
exercisable within 60 days of the date hereof or 20,000 shares of
Perficient common stock that may be acquired from Mr. Menell upon the
exercise of a stock option granted to Mr. Hinners by Mr. Menell but
that is not exercisable within 60 days of the date hereof.
(7) Includes 633,750 shares owned by Powershift Ventures, L.P., of which
Mr. Papermaster is the sole general partner. Mr. Papermaster is deemed
to be the beneficial owner of such shares. Does not include 16,250
shares held in various family trusts over which Mr. Papermaster has
neither voting nor dispositive power.
(8) Includes options to purchase 25,000 shares of Perficient common stock
exercisable within 60 days of the date hereof.
3
<PAGE>
PROPOSAL 1. ELECTION OF DIRECTORS
At this year's Annual Meeting of Stockholders, six directors will be
elected to hold office for a term expiring at the next Annual Meeting of
Stockholders. Each director will be elected to serve until a successor is
elected and qualified or until the director's earlier resignation or removal.
The affirmative vote of the holders of a plurality of the shares of
Common Stock voted in person or by proxy at the Meeting is required for the
election of each director. Unless otherwise directed, each proxy executed and
returned by a stockholder will be voted for the election of each of the
following nominee directors: John T. McDonald, Steven G. Papermaster, David S.
Lundeen, Dr. W. Frank King, Philip J. Rosenbaum and Sam J. Fatigato. If any of
the nominee directors listed above becomes unable to serve or for good cause
will not serve, an event that is not anticipated by us, (i) the shares
represented by the proxies will be voted for a substitute nominee or substitute
nominees designated by the Board of Directors or (ii) the Board of Directors may
determine to reduce the size of the Board of Directors. At this time, the Board
of Directors knows of no reason why any of the persons listed above may not be
able to serve as directors if elected.
Bryan R. Menell, one of our founders, has resigned his positions as
Director and President of Perficient, effective May 1, 2000. Therefore, Mr.
Menell will not stand for election at this year's Annual Meeting of
Stockholders. Upon Mr. Menell's resignation, the Board of Directors appointed
Sam J. Fatigato to fill the resulting vacancy and to serve the remainder of Mr.
Menell's term. Mr. Fatigato also became our Chief Operating Officer on May 1,
2000 upon the consummation of our acquisition by way of merger of Compete Inc.,
an Illinois corporation. Mr. Fatigato has been nominated to stand for election
at this year's Annual Meeting of Stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
NOMINEE DIRECTORS.
The name and age of each of the nominee directors and executive officers
of Perficient, their respective positions with Perficient and the period during
which each such individual has served in that capacity are set forth below.
Additional biographical information concerning each of the nominee directors and
executive officers follows the table.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH PERFICIENT HELD POSITION SINCE
---- --- ------------------------ -------------------
<S> <C> <C> <C>
John T. McDonald 36 Chief Executive Officer and Director 1999
Steven G. Papermaster 41 Chairman of the Board 1998
Sam J. Fatigato 38 Chief Operating Officer and Director 2000
David S. Lundeen 38 Director 1998
Dr. W. Frank King 60 Director 1999
4
<PAGE>
NAME AGE POSITION WITH PERFICIENT HELD POSITION SINCE
---- --- ------------------------ -------------------
Philip J. Rosenbaum 50 Director 1999
John A. Hinners 43 Chief Financial Officer and Vice President 1999
</TABLE>
CERTAIN BIOGRAPHICAL INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS
JOHN T. MCDONALD joined Perficient in April 1999 as our Chief Executive
Officer. Since October 1998, Mr. McDonald has been the president of Beekman
Ventures, Inc., a New York-based firm specializing in private equity investments
in technology companies. From April 1996 to October 1998, Mr. McDonald was
president of VideoSite, Inc. ("VideoSite"), a multimedia software company that
is currently a subsidiary of GTECH Corporation ("GTECH"). GTECH acquired
VideoSite in October 1997, 18 months after Mr. McDonald became VideoSite's
president. From May 1995 to April 1996, Mr. McDonald was a Principal with Zilkha
& Co., a New York-based merchant banking firm. From June 1993 to April 1996, Mr.
McDonald served in various positions at Blockbuster Entertainment Group,
including Director of Corporate Development and Vice President, Strategic
Planning and Corporate Development of NewLeaf Entertainment Corporation, a joint
venture between Blockbuster and International Business Machines Corporation
("IBM"). From 1987 to 1993, Mr. McDonald was an attorney with Skadden, Arps,
Slate, Meagher & Flom in New York focusing on mergers and acquisitions and
corporate finance. Mr. McDonald received a B.A. in Economics from Fordham
University in 1984 and a J.D. from Fordham Law School in 1987.
STEVEN G. PAPERMASTER joined Perficient in April 1998 as a director and
became Chairman in May 1999. He is also the Chairman of Powershift Group, an
Austin-based technology venture development firm, and the general partner of
Powershift Ventures, L.P., one of our principal stockholders. Mr. Papermaster is
also a co-founder and the Chief Executive Officer of Agillion.com, Inc., an
Internet business service provider. He currently serves as a member of the Board
of Directors of Vignette Corporation ("Vignette") and various privately-held
companies. From 1987 to December 1997, Mr. Papermaster was the founder, chairman
and Chief Executive Officer of BSG Corporation ("BSG"). Mr. Papermaster received
a B.A. in Finance from the University of Texas at Austin in 1981 and began his
career as a consultant with Arthur Andersen & Co. in the Management Information
Consulting Division.
SAM J. FATIGATO was appointed to our Board of Directors and was named
our Chief Operating Officer on May 1, 2000 upon the consummation of our
acquistion by way of merger of Compete Inc. From 1996 until May 2000, Mr.
Fatigato served as Chief Executive Officer of Compete Inc. Prior to co-founding
Compete, Mr. Fatigato was employed by IBM for 12 years, where he held various
technical, sales and operational management positions. Mr. Fatigato received a
B.A. from Northwestern University in 1983.
DAVID S. LUNDEEN joined Perficient in April 1998 as a director. Since
March 1999, Mr. Lundeen has been a partner with Watershed Capital, a venture
capital firm in Mountain View, California. From June 1997 to February 1999, Mr.
Lundeen was self-employed, managed his personal investments and acted as a
consultant and advisor to various businesses, including Powershift Group. From
June 1995 to June 1997, he served as the chief financial officer and chief
5
<PAGE>
operating officer of BSG. Prior to that period, Mr. Lundeen served as president
of Blockbuster Technology and as vice president of finance of Blockbuster Video.
Mr. Lundeen received a B.S. in Engineering from the University of Michigan in
1984 and an M.B.A. from the University of Chicago in 1988.
DR. W. FRANK KING became a member of our Board of Directors in June
1999. He has served as a Director of PSW Technologies, Inc. ("PSW"), a
publicly-traded consulting services company, since October 1996. From 1992 to
August 1998, Dr. King served as President and Chief Executive Officer of PSW.
From 1988 to 1992, Dr. King was Senior Vice President of the Software Business
group of Lotus, a software publishing company. Prior to joining Lotus, Dr. King
was with IBM, a technology company, for 19 years, where his last position was
Vice President of Development for the Personal Computing Division. Dr. King
currently serves on the boards of directors of Auspex Systems, Inc., Eon
Communications, Inc., Excalibur Technologies Corporation and Natural
Microsystems Corporation. Dr. King earned a Ph.D. in electrical engineering from
Princeton University, an M.S. in electrical engineering from Stanford
University, and a B.S. in electrical engineering from the University of Florida.
PHILIP J. ROSENBAUM became a member of our Board of Directors in June
1999. Since May 1995, Mr. Rosenbaum has been a self-employed developer of new
businesses, investor and consultant. From February 1993 to May 1995, Mr.
Rosenbaum was Vice President of International Operations of Unify Corporation, a
software development tool supplier. Mr. Rosenbaum also serves on the board of
directors of a privately held software company. Mr. Rosenbaum received a B.S.
from Rutgers in 1972.
JOHN A. HINNERS joined Perficient in April 1999 as Chief Financial
Officer and Vice President. From March 1998 until joining Perficient, Mr.
Hinners independently provided financial consulting services primarily to
start-up software companies. From October 1994 to February 1998, he was Managing
Director-Finance and Administration of BSG Alliance/IT, Inc., a subsidiary of
BSG. During this period, Mr. Hinners was responsible for operational and
financial management of international subsidiaries and joint ventures, as well
as financial review and management of acquisitions and large transactions. From
August 1988 through September 1994, he served as Chief Financial Officer of such
subsidiary. Mr. Hinners received a B.B.A. in Finance in 1979 and an M.B.A. in
Accounting in 1981 from the University of Texas at Austin.
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE AND LIABILITY
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our executive officers and directors, and persons who beneficially own
more than ten percent of a registered class of our equity securities to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and Nasdaq SmallCap Market. Based solely on a review of the copies of
reports furnished to us and written representations from our executive officers,
directors and persons who beneficially own more than ten percent of our equity
securities, we believe that, during the preceding year, all filing requirements
applicable to our officers, directors and ten percent beneficial owners under
Section 16(a) were satisfied, except that David S. Lundeen, one of our
directors, filed a Form 4 that reflected one purchase transaction late and Bryan
R. Menell, one of our officers, filed a Form 4 covering one transaction late.
6
<PAGE>
Section 16(b) of the Securities and Exchange Act of 1934 provides that
any profits realized by a director, officer, or beneficial owner of more than
ten percent (10%) of a our equity securities as a result of sale and purchase or
purchase and sale transactions in our securities that have transpired within a
six month period must be disgorged to us. Certain of our directors and officers
have voluntarily disgorged certain imputed profits in accordance with Section
16(b) for certain sales of common stock or derivative securities during 2000.
Bryan R. Menell and John T. McDonald, each a director and officer of Perficient,
disgorged $53,920 and $38,812 respectively. Mr. Lundeen, one of our directors,
disgorged $10,250.
COMPOSITION AND MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
Our Board of Directors is currently comprised of six directors. In
connection with our acquisition by way of merger of Compete Inc., Bryan R.
Menell resigned his position as Director effective May 1, 2000. Sam Fatigato,
former Chief Executive Officer of Compete Inc. was appointed by the Board of
Directors to fill the seat vacated by Mr. Menell and to serve the remainder of
Mr. Menell's term. As a condition to our acquisition of Compete, we agreed to
nominate and recommend Mr. Fatigato as one of our directors so long as he and
the other shareholders and accelerated option holders of Compete and their
affiliates own more than ten percent (10%) of the shares of Perficient common
stock issued to them in the acquisition transaction. If Mr. Fatigato, however,
is not elected to the Board of Directors, he will continue to have a right to
attend and observe all meetings of the Board of Directors.
Gilford Securities Incorporated ("Gilford"), the underwriter of our
initial public offering and placement agent in our private placement, may also
designate one person for election to our Board of Directors for the next three
years. To date, Gilford has not designated any persons to the Board of
Directors. In the event Gilford does not elect to designate a nominee to the
Board of Directors, Gilford may designate one person to attend meetings of our
Board of Directors as an observer during such three year period.
During fiscal year 1999, the Board of Directors held two meetings. Each
of the directors attended at least 75% of the aggregate of all meetings of the
Board of Directors and the total number of meetings held by all committees of
the Board of Directors of which each respective director was a member during the
time he was serving as such during the fiscal year ended December 31, 1999.
The Board of Directors has created a Compensation Committee and an
Audit Committee. The Board of Directors has not created a Nominating or similar
Committee. Both the Compensation Committee and the Audit Committee are comprised
of Dr. W. Frank King and Philip J. Rosenbaum.
The Compensation Committee, which held one meeting during fiscal year
1999, makes recommendations to the Board of Directors concerning salaries and
incentive compensation for our officers and employees and administers our
Employee Stock Option/Stock Issuance Plan. The Audit Committee, which held no
meetings during fiscal year 1999, makes recommendations to the Board of
Directors regarding the selection of independent auditors, reviews the results
and scope of audits and other accounting-related services and reviews and
evaluates our internal control functions.
7
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information concerning the annual and
long-term compensation earned by the individuals who served as our Chief
Executive Officer and certain other executive officers (collectively, "Named
Executive Officers") during fiscal years 1998 and 1999 for services rendered in
all capacities during those years. Bryan R. Menell served as Perficient's Chief
Executive Officer from Perficient's inception until April 1999 and served as
Perficient's President from inception until May 2000. In connection with our
acquisition by way of merger with Compete Inc., however, Mr. Menell has resigned
from his position as President and has become a Managing Director of one of our
practices. John T. McDonald joined Perficient in April 1999 and assumed the
duties of Chief Executive Officer. Barry Demak joined Perficient in 1999 and
serves as a Vice President of Perficient. No other individual employed by
Perficient received a salary and bonus in excess of $100,000 during fiscal year
1999.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
NAME AND PRINCIPAL
POSITION YEAR SALARY ($) BONUS ($) SECURITIES UNDERLYING OPTIONS (#)
-------------------- ---- ---------- --------- ---------------------------------
<S> <C> <C> <C> <C>
John T. McDonald, Chief 1999 50,000 -- --
Executive Officer and 1998 -- -- --
Director
Bryan R. Menell, 1999 96,667 -- --
President 1998 80,000 -- --
Barry Demak, 1999 110,400 22,000 --
Vice President 1998 45,000 -- 150,000
</TABLE>
COMPENSATION OF DIRECTORS
Dr. W. Frank King and Philip J. Rosenbaum receive an annual retainer of
$15,000 to serve on the Board of Directors. Other directors receive no cash
remuneration for serving on the Board of Directors. Non-employee directors,
however, are granted options to purchase 20,000 shares of our common stock in
their first year of service and are granted additional options to purchase 5,000
shares of our common stock in each subsequent year of service. All directors are
reimbursed for reasonable expenses incurred by them in attending Board and
Committee meetings.
EMPLOYMENT ARRANGEMENTS
Mr. McDonald and Mr. Menell have employment agreements that each extend
for a one-year term. Mr. McDonald's employment agreement provides for a
monthly salary of $11,250 and three months' severance pay if we terminate him
without cause following a change in control. Mr. Menell's employment agreement
provides for a monthly salary of $10,000 and three months' severance pay if we
terminate him without cause following a change in control. Additionally,
8
<PAGE>
Mr. McDonald and Mr. Menell have agreed to refrain from competing with us for a
period of two years following the termination of their employment.
We have a letter agreement with John A. Hinners, Chief Financial
Officer and Vice President, concerning his employment. Under this agreement, if,
following a change in control of Perficient, Mr. Hinners is either terminated,
or his job responsibilities are significantly reduced, or he is required to
relocate, or our then current chief executive officer is terminated or not
offered the chief executive officer position in the surviving company, Mr.
Hinners' stock options to purchase 60,000 shares of Perficient common stock at
an exercise price of $0.50 per share, 25,000 of which have vested and the
remainder of which vest at a rate of 5,000 shares at the end of each three month
period following April 1, 2000, will become fully vested within six months after
the change-in-control event. Mr. Hinners will receive six months' severance pay
for any termination without cause.
401(k) PROFIT SHARING PLAN
We have adopted a 401(k) Profit Sharing Plan. Our 401(k) plan is
available to all employees who have attained age 21. An employee may contribute,
on a pre-tax basis, up to 20% of his or her wages, subject to limitations
specified under the Internal Revenue Code. Under the terms of our 401(k) plan,
we may make a discretionary matching contribution equal to a percentage of the
employee's contribution to our 401(k) plan and a discretionary amount determined
annually by us and divided among eligible participants based upon an employee's
annual compensation in relation to the aggregate annual compensation of all
eligible participants. Contributions are allocated to each employee's individual
account and are, at the employee's election, invested in one, all or some
combination of the investment funds available under our 401(k) plan. Employee
contributions are fully vested and non-forfeitable. Any matching or
discretionary contributions vest 25% for each year of service. To date, we have
not made any matching contributions under our 401(k) plan.
1999 STOCK OPTION/STOCK ISSUANCE PLAN
Our 1999 Stock Option/Stock Issuance Plan was adopted by the Board of
Directors and approved by our stockholders on May 3, 1999. The plan became
effective upon its adoption by the Board of Directors.
We originally reserved 700,000 shares of our common stock for issuance
under our 1999 stock option plan and the options granted prior to adoption of
the 1999 stock option plan. However, at the Special Meeting of Stockholders held
on May 1, 2000, the stockholders of Perficient approved an amendment to the 1999
Stock Option/Stock Issuance Plan which increased the number of shares authorized
under the plan to 1,850,000. Under the plan, in no event may any one participant
in our 1999 stock option plan receive option grants or direct stock issuances
for more than 75,000 shares in the aggregate per calendar year.
Our 1999 stock option plan has three separate programs: (i) the
discretionary option grant program under which eligible individuals in our
employ or service, including officers, non-employee board members and
consultants, may be granted options to purchase shares of our common stock, (ii)
the stock issuance program under which such individuals may be issued shares of
common stock directly, through the purchase of such shares or as a bonus tied to
the
9
<PAGE>
performance of services and (iii) the automatic option grant program under which
option grants will automatically be made at periodic intervals to eligible
non-employee board members.
The discretionary option grant and stock issuance programs will be
administered by the Compensation Committee of our Board of Directors. This
Committee will determine which eligible individuals are to receive option grants
or stock issuances, the time or times when such option grants or stock issuances
are to be made, the number of shares subject to each such grant or issuance, the
exercise or purchase price for each such grant or issuance, the status of any
granted option as either an incentive stock option or a non-statutory stock
option under the federal tax laws, the vesting schedule to be in effect for the
option grant or stock issuance and the maximum term for which any granted option
is to remain outstanding. Neither the Compensation Committee nor the Board of
Directors will exercise any administrative discretion with respect to option
grants made under the automatic option grant program for the non-employee board
members.
The exercise price for the options may be paid in cash or in shares of
our common stock valued at fair market value on the exercise date. The option
may also be exercised through a same-day sale program without any cash outlay by
the optionee. In addition, the Compensation Committee may allow a participant to
pay the option exercise price or direct issue price, and any associated
withholding taxes incurred in connection with the acquisition of shares, with a
full-recourse, interest-bearing promissory note.
In the event that we are acquired, whether by merger or asset sale or
board-approved sale by the stockholders of more than 50% of our voting stock,
each outstanding option under the discretionary option grant program which is
not to be assumed by the successor corporation or otherwise continued will
automatically accelerate in full, and all unvested shares under the
discretionary option grant and stock issuance programs will immediately vest,
except to the extent our repurchase rights with respect to those shares are to
be assigned to the successor corporation or otherwise continued in effect. The
Compensation Committee may grant options under the discretionary option grant
program which will accelerate in the acquisition even if the options are assumed
or which will accelerate if the optionee's service is subsequently terminated.
The Compensation Committee may grant options and issue shares which accelerate
in connection with a hostile change in control effected through a successful
tender offer for more than 50% of our outstanding voting stock or by proxy
contest for the election of board members or the options and shares may
accelerate upon a subsequent termination of the individual's service.
Stock appreciation rights may be issued under the discretionary option
grant program which will provide the holders with the election to surrender
their outstanding options for an appreciation distribution from us equal to the
fair market value of the vested shares subject to the surrendered option less
the aggregate exercise price payable for such shares. Such appreciation
distribution may be made in cash or in shares of our common stock.
The Compensation Committee has the authority to cancel outstanding
options under the discretionary option grant in return for the grant of new
options for the same or different number of option shares with an exercise price
per share based upon the fair market value of the common stock on the new grant
date.
Under the automatic option grant program, each individual who first
joins our Board of Directors after July 28, 1999, the effective date of our
initial public offering, as a non-employee
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board member will automatically be granted an option for 20,000 shares of our
common stock at the time of his or her commencement of board service. In
addition, on the date of each annual stockholders meeting, beginning with the
2000 meeting, each individual who is to continue to serve as a non-employee
board member and was not a member of our board prior to July 28, 1999 will
receive an option grant to purchase 5,000 shares of our common stock, provided
he or she has served on the board at least six months. Each of these options
will be fully-vested upon grant.
Limited stock appreciation rights will automatically be included as
part of each grant made under the automatic option grant program and may be
granted to one or more officers as part of their option grants under the
discretionary option grant program. Options with such a limited stock
appreciation right may be surrendered to us upon the successful completion of a
hostile tender offer for more than 50% of our outstanding voting stock. In
return for the surrendered option, the optionee will be entitled to a cash
distribution from us in an amount per surrendered option share equal to the
highest price per share of common stock paid in connection with the tender offer
less the exercise price payable for such share.
The Board of Directors may amend or modify our 1999 stock option plan
at any time, subject to any required stockholder approval. The 1999 stock option
plan will terminate no later than May 2, 2009.
OPTION GRANTS IN LAST FISCAL YEAR TO NAMED EXECUTIVE OFFICERS
None of the Named Executive Officers were granted stock options during
fiscal year ended December 31, 1999. However, John T. McDonald was granted
options to purchase 50,000 shares of Perficient Common Stock at $14.688 per
share in January 2000.
OPTION EXERCISES AND FISCAL YEAR END VALUES
None of the Named Executive Officers exercised stock options during the
fiscal year ended December 31, 1999.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
SALES OF SECURITIES
Within the last two years, we have made the following sales of our
common stock in transactions that were not registered under the Securities Act
of 1933:
- On April 15, 1998, we sold 221,000 shares to Powershift
Ventures, LLC for an aggregate purchase price of $22,100 and
119,000 shares to David S. Lundeen, a director, for an
aggregate purchase price of $11,900. Steven G. Papermaster,
our Chairman of the Board, is the president of Powershift
Ventures, LLC and a general partner of Powershift Ventures,
L.P. Mr. Papermaster became a director and Powershift
Ventures, LLC became a 5% stockholder in connection with this
April 1998 stock purchase. Mr. Lundeen became a director and
5% stockholder in connection with his April 1998 stock
purchase.
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- On June 10, 1998, we sold 214,500 shares to Powershift
Ventures, LLC for an aggregate purchase price of $21,450 and
115,500 shares to Mr. Lundeen for an aggregate purchase price
of $11,550.
- On July 15, 1998, we sold 214,500 shares to Powershift
Ventures, LLC for an aggregate purchase price of $21,450 and
115,500 shares to Mr. Lundeen for an aggregate purchase price
of $11,550.
- On January 12, 1999, we sold 350,000 shares to Beekman
Ventures, Inc., a 5% stockholder, for an aggregate purchase
price of $175,000, 50,000 shares to John A. Hinners, now our
Chief Financial Officer, for an aggregate purchase price of
$25,000 and 40,000 shares to Mr. Lundeen for an aggregate
purchase price of $20,000. John T. McDonald, our Chief
Executive Officer and a director, is the president and sole
stockholder of Beekman Ventures. However, Mr. McDonald did not
become an officer and director until April 1999. Mr. Hinners
did not become our Chief Financial Officer until April 1999.
- On February 7, 2000, we completed an $8.1 million private
placement of our common stock. We issued and sold a total of
400,000 shares of common stock resulting in gross proceeds of
$5.6 million. Mr. McDonald, one of our officers and directors,
Bryan R. Menell, at the time, one of our officers and
directors, and David S. Lundeen, one of our directors, sold
the remaining 180,000 shares of common stock in the private
placement. The private placement was priced at $14.00 per
share. Gilford Securities Incorporated acted as placement
agent in connection with the private placement. We granted
certain registration rights to the purchasers of all of the
shares.
- On May 1, 2000, we consummated the acquisition by way of
merger of Compete Inc., an Illinois corporation, with and into
our wholly-owned subsidiary, Perficient Compete, Inc., a
Delaware corporation. As part of the merger consideration we
issued an aggregate of 1,001,933 shares of common stock and
option to purchase 393,670 shares of common stock, and to the
shareholders of Compete Inc. at closing, of which 324,550
shares were issued to Sam Fatigato, Compete's Chief Executive
Officer. In connection with the Compete transaction, Mr.
Fatigato was appointed to our Board of Directors and named our
Chief Operating Officer. Additionally, we issued 1,001,933
shares of our common stock that are being held in escrow for
disposition by the escrow agent in accordance with the Escrow
Agreement dated as of May 1, 2000, of which 324,550 shares are
issued in the name of Mr. Fatigato. We granted certain
registration rights to the former shareholders of Compete to
whom shares of Perficient common stock were issued.
These sales were conducted in reliance upon exemptions from
registration under Section 4(2) of the Securities Act of 1933, as transactions
not involving a public offering.
POWERSHIFT SUBLEASE
From April 1998 until March 2000, we subleased office space on a
month-to-month basis from Powershift Ventures, LLC, of which Mr. Papermaster is
president and a beneficial owner.
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From August 1999 through April 2000, we had been paying rent of $4,500 a month,
which we believe was consistent with prevailing market rates. The monthly rental
amounts were arrived at by arms' length negotiations. We have terminated this
sublease, however, and as of April 8, 2000, we now lease approximately 5,900
square feet of office space at a total monthly rent of approximately $15,000
from HUB Properties Trust.
VIGNETTE RELATIONSHIP
Mr. Papermaster, the Chairman of our Board, has served on the board of
directors of Vignette Corporation, our largest partner, since September 1998.
During 1999, Vignette accounted for 96% of our revenue.
BEEKMAN VENTURE LOAN
In June 1999, Beekman Ventures, of which Mr. McDonald, our Chief
Executive Officer, is President and sole stockholder, loaned us $100,000 to
cover certain working capital requirements. This loan was subsequently repaid at
a market rate of interest.
FUTURE TRANSACTIONS
All future transactions, including loans, if any, between our officers,
directors, principal stockholders or their affiliates and us, are required by
the Board of Directors to be approved by a majority of the Board of Directors,
including a majority of the independent and disinterested outside directors on
the board, and will be on terms no less favorable to us than could be obtained
from unaffiliated third parties.
PROPOSAL 2. RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, subject to stockholder ratification, has
selected Ernst & Young LLP to serve as our independent auditors for the fiscal
year ending December 31, 2000. If the stockholders do not ratify the appointment
of Ernst & Young LLP, the Board of Directors may reconsider its selection. A
representative of Ernst & Young LLP is expected to be present at the Meeting to
respond to appropriate questions and will be given the opportunity to make a
statement if he or she desires to do so.
The affirmative vote of the holders of a majority of the shares of
Perficient common stock present, in person or by proxy, and entitled to vote at
the Meeting is required for the ratification and approval of the appointment of
auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION AND APPROVAL OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Any stockholder proposals intended to be presented at our next annual
meeting of stockholders must be received by Perficient at our offices at 7600-B
North Capital of Texas Highway, Austin, Texas 78731, on or before February 7,
2000, for consideration for inclusion in
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the proxy material for such annual meeting of stockholders.
EXPENSES OF SOLICITATION
The cost of the solicitation of proxies will be borne by us. In
addition to the use of the mails, proxies may be solicited by our regular
employees, either personally or by telephone or telegraph. We do not expect to
pay any compensation for the solicitation of proxies, but may reimburse brokers
and other persons holding shares in their names or in the names of nominees for
expenses in sending proxy material to beneficial owners and obtaining proxies of
such owners.
OTHER MATTERS
The Board of Directors does not intend to bring any matters before the
Meeting other than as stated in this Proxy Statement, and is not aware that any
other matters will be presented for action at the Meeting. If any other matters
come before the Meeting, the persons named in the enclosed form of proxy will
vote the proxy with respect thereto in accordance with their best judgment,
pursuant to the discretionary authority granted by the proxy. Whether or not you
plan to attend the Meeting in person, please complete, sign, date and return the
enclosed proxy card promptly.
EXPERTS
The audited consolidated financial statements and schedules of
Perficient have been audited and prepared by Ernst & Young LLP, independent
public accountants, as indicated in their reports thereto, and are included in
the 2000 Annual Report to Stockholders accompanying this Proxy Statement in
reliance upon the authority of that firm as experts in accounting and auditing.
FORM 10-KSB
WE WILL FURNISH, WITHOUT CHARGE TO EACH PERSON SOLICITED AND TO EACH
BENEFICIAL OWNER OF OUR SECURITIES, ON THE WRITTEN REQUEST OF SUCH PERSON, A
COPY OF OUR ANNUAL REPORT ON FORM 10-KSB, EXCEPT FOR THE EXHIBITS TO SUCH FORM
10-KSB BUT INCLUDING THE FINANCIAL STATEMENTS FILED WITH SUCH FORM 10-KSB. WE
WILL FURNISH ANY EXHIBIT TO THE FORM 10-KSB UPON THE PAYMENT OF A REASONABLE FEE
WHICH SHALL BE LIMITED TO OUR REASONABLE EXPENSES IN FURNISHING SUCH EXHIBIT.
REQUESTS SHOULD BE DIRECTED TO MR. JOHN A. HINNERS, PERFICIENT, INC., 7600-B,
NORTH CAPITAL OF TEXAS HIGHWAY, SUITE 340, AUSTIN, TEXAS, 78731, TELEPHONE
NUMBER (512) 531-6000.
By Order of the Board of Directors
John A. Hinners
Secretary
Dated: June 6, 2000
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PERFICIENT, INC.
The undersigned hereby appoints John T. McDonald, with full power of
substitution, as proxy for the undersigned, to attend the annual meeting of
stockholders of Perficient, Inc. ("Perficient"), to be held at the Hyatt Regency
Austin, 208 Barton Springs Road, Austin, Texas, 78704 on June 29, 2000, at 9:00
a.m., central time, or any adjournment thereof, and to vote the number of shares
of Common Stock of Perficient that the undersigned would be entitled to vote,
and with all the power the undersigned would possess, if personally present, as
follows:
1. / / FOR or / / WITHHOLD AUTHORITY to vote for the following nominees for
election as directors:
John T. McDonald
Steven G. Papermaster
Sam J. Fatigato
David S. Lundeen
Dr. W. Frank King
Philip J. Rosenbaum
(Instruction: To withhold authority to vote for an individual nominee, write the
nominee's name on the line provided below.)
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2. Approval of the appointment of Ernst & Young LLP as Perficient's independent
auditors for the fiscal year ending December 31, 2000.
FOR / / AGAINST / / ABSTAIN / /
3. Approval of such other matters that come before the annual meeting of
stockholders, or any adjournment thereof, that are required to be approved by
the stockholders of Perficient.
The Proxy will vote as specified herein or, if a choice is not
specified, he will vote "For" the proposals set forth in Items 1 and 2.
This Proxy is solicited by the Board of Directors of Perficient.
Receipt of the Notice of Annual Meeting
of Stockholders and Proxy Statement dated June 6, 2000 is
hereby acknowledged:
Date: ,
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(Signature)
(Please sign exactly as your name appears hereon, indicating, where proper,
official position or representative capacity).
