<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
DATAWARE TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(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>
DATAWARE TECHNOLOGIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 1999 Annual Meeting of Stockholders of Dataware Technologies, Inc. will
be held at Boston Museum of Science, The D'Arbeloff Conference Suite, One
Science Park, Cambridge, Massachusetts, at 10:00 a.m. on Thursday, May 27,
1999, for the following purposes:
1. To elect two directors to hold office for a term of three years and
until their successors are elected and have qualified.
2. To transact such other business as may be in furtherance of or
incidental to the foregoing or as may otherwise properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 6, 1999, will
be entitled to vote at the meeting or any adjournment thereof. A list of such
stockholders will be open for examination by any stockholder for any purpose
germane to the meeting for ten days before the meeting during ordinary
business hours at the offices of the Company.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. THEREFORE,
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE YOUR PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES. IF YOU ATTEND THE MEETING AND WISH TO VOTE IN PERSON, YOUR
PROXY WILL NOT BE USED.
By order of the Board of Directors,
STEPHEN H. BEACH, Secretary
Dated: April 27, 1999
<PAGE>
DATAWARE TECHNOLOGIES, INC.
One Canal Park, Cambridge, Massachusetts 02141
(617) 621-0820
----------------
Proxy Statement
May 27, 1999
----------------
The enclosed proxy is solicited on behalf of the Board of Directors of
Dataware Technologies, Inc. (the "Company") for use at the 1999 Annual Meeting
of Stockholders to be held on Thursday, May 27, 1999, and at any adjournments
thereof. The approximate date on which this proxy statement and accompanying
proxy are first being sent or given to security holders is April 27, 1999.
The principal business expected to be transacted at the meeting, as more
fully described below, will be the election of two directors.
The authority granted by an executed proxy may be revoked at any time before
its exercise by filing with the Secretary of the Company a written revocation
or a duly executed proxy bearing a later date or by voting in person at the
meeting. If your shares are held in a brokerage or other account, you must
make arrangements with that firm to vote your shares in person or to revoke
your proxy.
The Company will bear the cost of the solicitation of proxies on behalf of
the Board of Directors, including the charges and expenses of brokerage firms
and others for forwarding solicitation material to beneficial owners of stock.
In addition to the use of mails, proxies may be solicited by officers and
employees of the Company in person or by telephone.
VOTING SECURITIES AND VOTES REQUIRED
Only stockholders of record at the close of business on April 6, 1999, will
be entitled to vote at the meeting. On that date, the Company had outstanding
9,561,291 shares of Common Stock, $0.01 par value (the "Common Stock"), each
of which is entitled to one vote. A majority in interest of the outstanding
Common Stock, represented at the meeting in person or by proxy, constitutes a
quorum for the transaction of business. A plurality of the votes cast is
required to elect the nominees for director. Broker non-votes will be
considered as present for quorum purposes but will not be counted as votes
cast in the election of directors. (A "broker non-vote" occurs when a
registered broker holding a customer's shares in the name of the broker has
not received voting instructions on the matter from the customer, is barred by
applicable rules from exercising discretionary voting authority in the matter,
and so indicates on the proxy.) In electing directors, abstentions and votes
withheld will not be treated as votes cast.
1
<PAGE>
ELECTION OF DIRECTORS
The number of directors is currently fixed at five, divided into three
classes. At the meeting, two directors will be elected to hold office for
three years and until their successors are elected and qualified. William R.
Lonergan and Jeffrey O. Nyweide, who are presently serving as directors, have
been nominated for re-election by the Board of Directors. Unless the enclosed
proxy withholds authority to vote for one or both of the nominees or is a
broker non-vote, the shares represented by such proxy will be voted for the
election as directors of Messrs. Lonergan and Nyweide. If either is unable to
serve, which is not expected, the shares represented by the enclosed proxy
will be voted for such other candidate as may be nominated by the Board of
Directors.
The following table contains certain information about the nominees for
director and each other person whose term of office as a director will
continue after the meeting.
<TABLE>
<CAPTION>
Present
Board Membership, Business Experience, and Term
Name and Age Other Directorships Expires
------------ ------------------------------------------ -------
<C> <S> <C>
William R. Lonergan* Mr. Lonergan has been a director of the Company 1999
Age: 74 since 1988. From 1983 to 1994, Mr. Lonergan was
a general partner of Oxford Partners, a venture
capital firm, where he continues as a
consultant. Mr. Lonergan is also a director of
Zitel Corporation.
Jeffrey O. Nyweide* Mr. Nyweide has served as Vice Chairman of the 1999
Age: 43 Board of Directors and Senior Executive Vice
President, Business Development since April
1997. He was President and Chief Operating
Officer of the Company from 1993 until 1997. He
was Vice President of Operations of the Company
from its inception until 1989 and Executive
Vice President of the Company from 1989 to
1993. Mr. Nyweide has also served as a member
of the Board of Directors since the inception
of the Company in 1988. From 1987 to 1988, Mr.
Nyweide was President of Dataware, Inc., a CD-
ROM distribution company, and from 1978 to 1987
he served in various sales, marketing and
management positions with The Service Bureau
Company, a subsidiary of Control Data
Corporation.
David Mahoney Mr. Mahoney has served as President and Chief 2000
Age: 53 Executive Officer since January 1999 and has
been a director of the Company since February
1999. Before joining the Company, he served as
President and CEO of Sovereign Hill Software,
Inc., a supplier of advanced information
retrieval software products that was acquired
by the Company on December 31, 1998.
Mr. Mahoney was the founder and, from 1983 to
1998, the Chairman and CEO of Banyan Systems
Incorporated, a provider of enterprise
networking software and services and Internet
directory services. Mr. Mahoney is a director
of Banyan Systems Incorporated and its
subsidiary, Switchboard Incorporated, Applix
Incorporated and several smaller early stage
software companies.
</TABLE>
2
<PAGE>
<TABLE>
<C> <S> <C>
Present
Board Membership, Business Experience, and Other Term
Name and Age Directorships Expires
------------ ------------------------------------------------ -------
Kurt Mueller Mr. Mueller has served as Chairman of the Board of 2001
Age: 42 Directors since the inception of the Company in
1988. He served as Chief Executive Officer of the
Company through December 1998. He was President of
the Company until 1993 and during 1997 and 1998. He
previously founded and served as General Manager of
Dataware 2000 GmbH from 1986 to 1988. From 1984 to
1986 he started up and was General Manager of Lotus
Development GmbH and before that was a consultant
with Bain & Company in the United States and
Europe.
Stephen H. Beach Mr. Beach has been a director and Secretary of the 2001
Age: 83 Company since its inception in 1988. Since 1985,
Mr. Beach has practiced law in Connecticut,
specializing in, among other fields, computer,
software and software licensing law. Mr. Beach also
served in several capacities for Control Data
Corporation from 1973 to 1985, most recently as
Senior Vice President and Secretary.
</TABLE>
- --------
* Nominee for election as director
Committees of the Board
The Audit Committee, which consists of Messrs. Beach and Lonergan, is
responsible for providing the Board of Directors with an independent review of
the financial health of the Company and its financial controls and reporting.
Its primary functions are to recommend independent auditors to the Board of
Directors, review the results of the annual audit and the auditors' reports,
and ensure the adequacy of the Company's financial controls and procedures.
The Audit Committee held one meeting in 1998. The Compensation Committee,
which currently consists of Messrs. Beach and Lonergan, acts for the Board of
Directors with respect to the Company's compensation practices and their
implementation. It sets and implements the compensation of the Company's
officers and administers the Equity Incentive Plan ("Equity Plan") and the
Employee Stock Purchase Plan. The members of the Compensation Committee until
December 1998 were Mr. Lonergan and Julie Donahue, who resigned in December
1998. The Compensation Committee held two meetings in 1998. The entire Board
of Directors functions as a nominating committee, considering nominations
submitted to the Chairman of the Board. The Board of Directors held eight
meetings during 1998.
Director Compensation
Each director who is not an employee of the Company and who is in office
following the Annual Meeting of Stockholders receives an annual retainer in
the form of nonstatutory options to purchase 6,000 shares of Common Stock, and
any director who is newly elected between Annual Meetings receives options for
1,500 shares for each calendar quarter beginning after such election and
before the next Annual Meeting. Through 1998, these options were granted under
the 1993 Director Stock Option Plan (the "Director Plan"), which has since
been merged with the Equity Plan. Beginning in 1999, directors will receive
such compensation under the Equity Plan on the same terms as the Director
Plan. Director options become exercisable in increments of 1,500 shares at the
beginning of each calendar quarter following the grant date, so long as the
director remains in office, and expire ten years from the grant date. The
exercise price of each option is the fair market value of the Common Stock on
the grant date. Non-employee directors also receive $1,250 for each meeting of
the Board of Directors that they attend and are reimbursed for expenses
incurred in attending meetings. Officers of the Company who are directors do
not receive additional compensation for their service as directors.
3
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table provides summary information on the cash compensation
and certain other compensation paid, awarded, or accrued by the Company and
its subsidiaries to or for the Chief Executive Officer of the Company for 1998
and each of the other four most highly compensated executive officers for
1998, as measured by their cash compensation and bonus.
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
------------------------------------- ------------
Other Securities
Name and Principal Annual Underlying
Position Year Salary($) Bonus($) Compensation($)(1) Options (#)
- ------------------ ---- --------- -------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
Kurt Mueller........... 1998 $181,808 $216,308 $12,821 50,000
Chairman of the Board, 1997 146,935 38,578 11,035 149,800
President and Chief 1996 140,270 -- 11,351 160,892
Executive Officer *
Jeffrey O. Nyweide..... 1998 167,306 192,274 11,478 45,000
Vice Chairman; Senior 1997 135,633 37,035 11,489 136,649
Executive Vice 1996 129,480 -- 12,435 146,837
President,
Business Development
Charles Rabie.......... 1998 129,280 118,969 7,800 15,000
Vice President, 1997 116,688 20,575 7,800 73,704
Software 1996 112,200 -- 7,800 80,227
Products
Howard York............ 1998 105,669 112,961 7,800 15,000
Vice President, 1997 88,400 20,575 7,800 21,120
Software 1996 85,000 -- 7,800 21,800
Solutions
Michael Gonnerman...... 1998 162,143 50,472 -- 61,500
Treasurer, Vice 1997 63,138 -- -- --
President,
Finance and
Administration,
and Chief Financial
Officer
</TABLE>
- --------
* Mr. Mueller resigned as President and Chief Executive Officer effective
December 31, 1998.
(1) Includes (i) automobile allowances for each officer with a value of (a)
$7,800 in each year for Messrs. Mueller, Nyweide, Rabie and York, (ii)
reimbursement of $3,221, $3,235 and $3,551 for Mr. Mueller and $3,678,
$3,689 and $4,635 for Mr. Nyweide of expenses for preparation of tax
returns in 1998, 1997 and 1996 respectively, and (iii) housing expenses of
$1,800 paid by the Company on behalf of Mr. Mueller in 1998.
4
<PAGE>
Stock Option Grants in Last Fiscal Year
The following table provides information on stock options issued during 1998
to the executive officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
Potential Realized Value at
Assumed Annual Rates of
Stock Price Appreciation
Number of % of Total for Option Term($)(1)
Securities Options ----------------------------
Underlying Granted to Exercise
Options Employees in Price Expiration
Name Granted(#) 1998 ($/share) Date 5% 10%
- ---- ---------- ------------ --------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Kurt Mueller............ 50,000(2) + 7.73 3.125 12/8/08 $ 98,265 $ 249,022
Jeffrey O. Nyweide...... 45,000(2) + 6.96 3.125 12/8/08 88,438 224,120
Charles Rabie........... 15,000(2) 2.32 3.125 12/8/08 29,479 74,707
Howard York............. 15,000(2) 2.32 3.125 12/8/08 29,479 74,707
Michael Gonnerman....... 7,500(2) 1.16 3.125 12/8/08 14,740 37,353
54,000(3) + 8.35 2.875 6/18/08 97,636 247,429
</TABLE>
- --------
(1) Represents hypothetical gains that could be achieved for each option if
exercised at the end of the full ten-year option term, based on assumed
rates of stock price appreciation over the exercise price of 5% and 10%
compounded annually from the date the respective option was granted, and
does not forecast possible future appreciation in the Company's Common
Stock. The actual gain, if any, on the exercise of a stock option will
depend on the future performance of the Common Stock and the date of
exercise. No gain to the optionees is possible without an increase in the
price of the Common Stock, which would, of course, benefit all
stockholders proportionately.
(2) Exercisable in increments of 25% on December 31st of each of 1998, 1999,
2000 and 2001.
(3) Exercisable as to 3,000 shares per month beginning July 30, 1998.
+ Any of these options that are unvested would become exercisable in full
upon a change in control of the Company.
5
<PAGE>
Aggregated Option Exercises in Last Fiscal Year and Year-End Stock Option
Values
The following table sets forth the total number of unexercised stock options
held at the end of 1998 by the executive officers named in the Summary
Compensation Table, as well as the value realized upon exercise of options by
Mr. Mueller, the only one of such officers who exercised options in 1998.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Year- In-The-Money Options
Shares end 1998(#) at Year-end 1998($)(2)
Acquired on Value ------------------------- -------------------------
Name Exercise(#) Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kurt Mueller............ 15,556 $13,667 174,800 75,000 $ 0 $ 0
Jeffrey O. Nyweide...... 0 0 193,852 67,500 47,586 0
Charles Rabie........... 0 0 78,954 24,750 0 0
Howard York............. 0 0 27,495 23,625 0 0
Michael Gonnerman....... 0 0 19,875 41,625 0 0
</TABLE>
- --------
(1) Based on the difference between the respective option exercise prices and
the closing price of the Common Stock on the date of exercise.
(2) Based on the difference between the respective option exercise prices and
the closing market price of the Common Stock on December 31, 1998.
Executive Employment and Severance Agreements
The Company has entered into employment agreements with Messrs. Mahoney,
Nyweide and Gonnerman. The agreements with Messrs. Mahoney and Nyweide have no
stated term and may be terminated by the Company at any time. The agreement
with Mr. Gonnerman is for a term of eighteen months ending December 31, 1999,
unless earlier terminated by either party. Upon termination without cause,
Messrs. Mahoney and Nyweide would each be entitled to continue to receive his
base salary, as provided in such agreement, for a period based on the length
of his service, but not more than twelve months, and Mr. Gonnerman would be
entitled to receive his base salary for three months.
The Company also has entered into an agreement with Mr. Mueller in
connection with the termination of his employment with the Company. Under the
agreement, Mr. Mueller agreed to work as a full-time consultant to the Company
through June 30, 1999, and as a voluntary part-time consultant to the Company
for one year thereafter. Through June 30, 1999, Mr. Mueller will be
compensated at his current salary rate of $200,000 per year and will receive
50% of the bonus that would have been allocated to him as Chief Executive
Officer in 1999, as well as employee and fringe benefits. From July 1, 1999
through June 30, 2000, Mr. Mueller will receive a monthly amount equal to his
monthly average total compensation earned during 1997 and 1998. Mr. Mueller
also will continue to serve as a director of the Company, and will become
eligible to receive stock options as an outside director effective upon the
2000 Annual Meeting of Stockholders. Under the agreement, all of Mr. Mueller's
stock options will remain exercisable until their respective expiration dates
and will continue to vest so long as Mr. Mueller remains with the Company as a
director.
In addition, any unvested stock options held by Messrs. Mueller, Mahoney,
Nyweide and certain options held by Mr. Gonnerman would become exercisable in
full upon a change in control of the Company, as defined in the Equity Plan.
6
<PAGE>
Transactions with Management
The Company has rescinded an agreement it entered into in 1990 under which
the Company had the right to repurchase up to 86,391 shares at $.33 per share
from six of its founding stockholders, including Mr. Mueller and his wife
(48,412 shares), and Mr. Nyweide (29,341 shares). The repurchase right was
originally implemented to provide equity compensation for key software
developers out of shares held by the founding stockholders. The Board approved
rescinding the repurchase agreement after concluding that the equity
compensation was more properly issued by the Company and that the amount
involved was not material to the Company as a whole, and the Company has
obtained a release of any claims arising out of this arrangement from each of
the shareholders involved.
Compensation Committee Report on Executive Compensation
Overall Policy. The Company's executive compensation program is designed to
be linked closely to corporate performance and returns to stockholders. To
this end, the Company has developed an overall compensation strategy and
specific compensation plan that tie a very significant portion of executive
compensation to the Company's success in meeting specified performance goals.
In addition, through the use of stock options, the company ensures that a part
of the executives' compensation is closely tied to appreciation in the
Company's stock price. The overall objectives of this strategy are to attract
and retain the best possible executive talent, to motivate these executives to
achieve the goals inherent in the Company's business strategy, to link
executive and stockholder interests through equity based plans and, finally,
to provide a compensation package that recognizes individual contributions as
well as overall business results.
The Compensation Committee determines the compensation of the senior
corporate executives, including the individuals named in the Summary
Compensation Table. The Compensation Committee takes into account the views of
the Company's chief executive officer in reviewing the individual performance
of the executives (other than the CEO) whose compensation is detailed in this
proxy statement.
The key elements of the Company's executive compensation consist of base
salary, annual bonus and stock options. The Compensation Committee's policies
with respect to each of these elements, including the bases for the
compensation awarded to Mr. Mueller, are discussed below. In addition, while
the elements of compensation described below are considered separately, the
Compensation Committee takes into account the full compensation package
afforded by the Company to the individual, including insurance and other
employee benefits, as well as the programs described below.
Base Salaries. Base salaries for new executive officers are initially
determined by evaluating the responsibilities of the position held and the
experience of the individual. In making determinations regarding base
salaries, the Compensation Committee considers generally available information
regarding salaries prevailing in the industry, but does not utilize any
particular indices or peer groups.
Annual salary adjustments are determined by evaluating the performance of
the Company and of each executive officer, and also taking into account new
responsibilities. Corporate financial performance that is taken into account
includes annual revenues and net income. Contribution to net income is
assigned greater importance than revenues. The Compensation Committee, where
appropriate, also considers non-financial performance measures. These non-
financial performance measures may include such factors as increase in market
share, efficiency gains, quality improvements, and improvements in relations
with customers, suppliers and employees. No particular weight is given to any
of these non-financial factors.
7
<PAGE>
Based on these factors, the Compensation Committee increased the salaries of
the executive officers between 10% and 24% over the 1997 scale. Considering
the Company's 1997 performance and industry comparisons, the Committee
approved a 24% increase for Mr. Mueller in 1998.
Annual Bonus. The Company's executive officers are eligible for an annual
cash bonus, which is based primarily on achievement of Company performance
objectives that are established at the beginning of each year. The Company's
performance measure for bonus payments is based on annual revenues and net
income before one-time charges, weighted equally. In some cases, a business
unit multiplier is applied, based on the achievement of a particular business
unit's performance objectives, relative to pre-established operating targets.
The Compensation Committee establishes a total bonus pool each year and
allocates a portion to each executive. The pool may be increased based on
preset multipliers if the company exceeds its performance targets. Based on
the Company's 1997 performance, the Committee increased the portion of the
pool allocable to Mr. Mueller over the portion allocated to him in 1997. Since
the Company substantially achieved its revenue and net income targets before
one-time charges for 1998, the executive officers -- including Mr. Mueller --
were paid a corresponding portion of their potential bonus targets, in the
amounts shown in the Summary Compensation Table.
Stock Options. Under the Company's Equity Plan which was approved by
stockholders, stock options are granted to the Company's executive officers.
Stock options are granted with an exercise price equal to the fair market
value of the Common Stock on the date of grant and vest over various periods
of time, normally four years. Stock option grants are designed to incentivize
the creation of stockholder value over the long term, since the full benefit
of the compensation package cannot be realized unless stock price appreciation
occurs over a number of years. In determining the amount of such grants, the
Compensation Committee evaluates the job level of the executive,
responsibilities to be assumed in the upcoming year, and responsibilities in
prior years, and also takes into account the size of the officer's awards in
the past. Based on these factors and on the level of his existing stock
ownership, in 1998, Mr. Mueller received options to purchase 50,000 shares.
Conclusion. Through the programs described above, a very significant portion
of the Company's executive compensation is linked directly to individual and
corporate performance and stock appreciation. In 1998, as in previous years, a
substantial portion of the Company's targeted executive compensation consisted
of performance-based variable elements. The Compensation Committee intends to
continue the policy of linking executives' compensation to Company performance
and returns to stockholders, recognizing that the ups and downs of the
business cycle from time to time may result in an imbalance for a particular
period.
By the Compensation Committee,
William R. Lonergan, Chairman
Stephen H. Beach
8
<PAGE>
Stock Performance Graph
The following graph shows the cumulative total stockholder return on the
Company's Common Stock over the period beginning December 31, 1993, and ending
December 31, 1998, as compared with that of the Nasdaq Market Index and an
Industry Index, based on an initial investment of $100 in each. Total
stockholder return is measured by dividing share price change plus dividends,
if any, for each period by the share price at the beginning of the respective
period, and assumes reinvestment of dividends. The Industry Index consists of
320 publicly traded computer software companies reporting under the same
Standard Industrial Classification Code (SIC 7372) as the Company.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
12/31/93 12/30/94 12/29/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Dataware Technologies,
Inc.................... 100.00 135.29 97.06 35.29 30.88 30.15
Industry Index.......... 100.00 130.98 196.94 261.76 333.18 559.86
NASDAQ Market Index..... 100.00 104.99 136.18 169.23 207.00 291.96
</TABLE>
9
<PAGE>
SHARE OWNERSHIP
The following table shows the amount of Common Stock of the Company
beneficially owned as of March 1, 1999 by (i) persons known by the Company to
be beneficial owners of more than 5% of its Common Stock, (ii) the executive
officers named in the Summary Compensation Table, (iii) the directors and
nominees for election as directors of the Company, and (iv) all current
executive officers and directors of the Company as a group:
<TABLE>
<CAPTION>
Shares of Common Stock
Beneficially Owned (1)
------------------------------
Beneficial Owner Shares Percent of Class
- ---------------- --------- ----------------
<S> <C> <C>
Brookside Capital Partners, Inc................ 775,700(2) 7.99%
Two Copley Place
Boston, MA 02116
Kurt Mueller................................... 687,636(3) 6.96%
One Canal Park
Cambridge, MA 02141
Capital Technology, Inc........................ 525,100(4) 5.41%
8314 Pineville Matthews Road
Charlotte, NC 28226
Jeffrey O. Nyweide............................. 479,845(5) 4.85%
Charles Rabie.................................. 80,654(6) *
Stephen H. Beach............................... 36,716(7) *
Michael Gonnerman.............................. 33,750(8) *
Howard York.................................... 32,173(9) *
William R. Lonergan............................ 26,561(10) *
David Mahoney.................................. 25,000(11) *
All current executive officers and directors as
a group (12 persons).......................... 1,459,948(12) 14.11%
</TABLE>
- --------
* Indicates less than 1%
(1) Unless otherwise indicated in these footnotes, each stockholder has sole
voting and investment power with respect to the shares listed in the
table.
(2) The shares are owned by Brookside Capital Partners Fund, L.P. which acts
by and through its general partner, Brookside Capital Investors, L.P,
which acts by and through its general partner, Brookside Capital
Investors, Inc., which is controlled by W. Mitt Rommey.
(3) Includes 287,408 shares owned by Mr. Mueller's wife or by a trust for the
benefit of his daughter, as to which Mr. Mueller disclaims beneficial
ownership, and options to purchase 174,800 shares that are exercisable as
of March 1, 1999 or within 60 days thereafter.
(4) Capital Technology, Inc. filed a Schedule 13G with the Securities and
Exchange Commission reporting the above stock ownership as of December
31, 1998 and stating that it has sole voting power over 417,000 of these
shares.
(5) Includes options to purchase 193,852 shares that are exercisable as of
March 1, 1999 or within 60 days thereafter.
(6) Includes options to purchase 78,954 shares that are exercisable as of
March 1, 1999 or within 60 days thereafter.
(7) Includes options to purchase 24,000 shares that are exercisable as of
March 1, 1999 or within 60 days thereafter.
10
<PAGE>
(8) Consists of options to purchase 33,750 shares that are exercisable as of
March 1, 1999 or within 60 days thereafter.
(9) Includes options to purchase 27,495 shares that are exercisable as of
March 1, 1999 or within 60 days thereafter.
(10) Includes options to purchase 26,000 shares that are exercisable as of
March 1, 1999 or within 60 days thereafter.
(11) Consists of options to purchase 25,000 shares that are exercisable as of
March 1, 1999 or within 60 days thereafter.
(12) Includes 287,408 shares owned by or in trust for members of the immediate
family of one director, who disclaims beneficial ownership thereof, and
options to purchase a total of 636,976 shares that are exercisable as of
March 1, 1999 or within 60 days thereafter.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's principal officers, directors, and 10% stockholders are
required by Section 16(a) of the Securities Exchange Act of 1934 to file
reports of ownership of, and transactions in, the Company's equity securities
with the Securities and Exchange Commission. A report of the exercise of two
stock options in 1998 by Mr. Mueller was filed after the time such filing was
required.
AUDITORS
The firm of PricewaterhouseCoopers LLP, independent accountants, has audited
the Company's financial statements for a number of years. The Board of
Directors has appointed PricewaterhouseCoopers LLP as the Company's auditors
for its fiscal year ending December 31, 1999. Representatives of
PricewaterhouseCoopers LLP are expected to attend the Annual Meeting, to be
available to respond to appropriate questions, and to have the opportunity to
make a statement if they so desire.
STOCKHOLDER PROPOSALS
In February 1999, the Company amended its Bylaws to require a stockholder
who wishes to bring business before or propose director nominations at an
annual meeting to give written notice to the Secretary of the Company not less
than 90 days before the anniversary of the previous year's annual meeting
date. However, if the meeting is called for a date that is not 30 days before
or after the anniversary of the previous year's annual meeting date, then the
stockholder's notice must be received within 10 days after the mailing of a
notice or public disclosure of the date of the annual meeting, whichever
occurs first. The notice must contain specified information about the proposed
business or nominee and the stockholder making the proposal or nomination. If
any stockholder intends to present a proposal at the 2000 Annual Stockholder
Meeting and desires that it be considered for inclusion in the Company's proxy
statement and form of proxy, it must be received by the Company at One Canal
Park, Cambridge, Massachusetts 02141; Attention: David Mahoney, President and
Chief Executive Officer, no later than December 29, 1999.
11
<PAGE>
OTHER MATTERS
The Board of Directors does not know of any business to come before the
meeting other than the matters described in the notice. If other business is
properly presented for consideration at the meeting, the enclosed proxy
authorizes the persons named therein to vote the shares in their discretion.
A COPY OF THE COMPANY'S FORM 10-K FOR THE FISCAL YEAR ENDING DECEMBER 31,
1998, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WAS INCLUDED IN
THE COMPANY'S ANNUAL REPORT, WHICH HAS BEEN MAILED TO STOCKHOLDERS. ANY HOLDER
OR BENEFICIAL OWNER OF THE COMPANY'S COMMON STOCK MAY OBTAIN ADDITIONAL COPIES
OF THE FORM 10-K UPON WRITTEN REQUEST ADDRESSED TO SUSAN WEINER, CONTROLLER,
DATAWARE TECHNOLOGIES, INC., ONE CANAL PARK, CAMBRIDGE, MASSACHUSETTS 02141.
12
<PAGE>
FORM OF PROXY CARD
DATAWARE TECHNOLOGIES, INC.
ANNUAL MEETING OF STOCKHOLDERS MAY 27, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints David
Mahoney, Michael Gonnerman and Jeffrey O. Nyweide, and each of them, with full
power of substitution to each, proxies to represent the undersigned at the
Annual Meeting of Stockholders of Dataware Technologies, Inc. to be held at the
Boston Museum of Science, The D'Arbeloff Conference Suite, One Science Park,
Cambridge, Massachusetts at 10:00 A.M. on May 27, 1999, and at any adjournment
thereof, and to vote as designated on the reverse all shares of stock Dataware
Technologies, Inc. that the undersigned would be entitled to vote at said
meeting. A majority of said proxies present and acting at the meeting (or, if
only one shall be present and acting, then that one) may exercise all the powers
granted hereby. SAID PROXIES ARE AUTHORIZED TO VOTE IN THEIR DISCRETION UPON ANY
OTHER MATTERS THAT MAY COME BEFORE THE MEETING.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
(REVERSE SIDE OF PROXY CARD)
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE
FOR WITHHELD
1. ELECTION [_] [_] NOMINEES: Jeffrey O. Nyweide
OF William R. Lonergan
DIRECTORS
[_] _____________________________________
For all nominees, except as noted above
Each stockholder should specify by a mark in the appropriate box how he wishes
his shares voted.
IF NO SPECIFICATION IS MADE, SHARES WILL BE VOTED FOR THE ELECTION OF THE
---
NOMINEES FOR DIRECTORS.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
_________________ __________ ________________ __________
Signature: Date: Signature: Date:
NOTE: Please sign, date, and return by May 27, 1999. If signing as attorney or
for an estate, trust or corporation, title or capacity should be stated.
