<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
Segue Software, Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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:
________________________________________________________________________
<PAGE>
SEGUE SOFTWARE, INC.
1320 CENTRE STREET
NEWTON CENTRE, MASSACHUSETTS 02159
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 2, 1997
----------------
To the Stockholders of Segue Software, Inc.
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders (the
"Annual Meeting") of Segue Software, Inc., a Delaware corporation (the
"Company"), will be held on Friday, May 2, 1997 at 10:00 a.m. at the
Conference Center of Goodwin, Procter & Hoar LLP, Exchange Place, 53 State
Street, Boston, Massachusetts 02109 for the following purposes:
1. To elect eight members to the Board of Directors to hold office until
the 1998 Annual Meeting of Stockholders and until their respective
successors are duly elected and qualified;
2. To consider and act upon a proposal to approve an amendment to the
Company's Amended and Restated Incentive and Non-Qualified Stock Option
Plan;
3. To consider and act upon a proposal to ratify the appointment of Coopers
& Lybrand L.L.P. as the Company's independent public accountants for the
fiscal year ending December 31, 1997; and
4. To consider and act upon any other matters that may be properly brought
before the Annual Meeting and at any adjournments or postponements
thereof.
Any action may be taken on the foregoing matters at the Annual Meeting on
the date specified above, or on any date or dates to which, by original or
later adjournment, the Annual Meeting may be adjourned, or to which the Annual
Meeting may be postponed.
The Board of Directors has fixed the close of business on March 26, 1997 as
the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and at any adjournments or postponements thereof.
Only stockholders of record of the Company's common stock, par value $.01 per
share, at the close of business on that date will be entitled to notice of and
to vote at the Annual Meeting and at any adjournments or postponements
thereof. A complete list of the stockholders entitled to vote at the Annual
Meeting will be open to the examination of any stockholder, for any purpose
germane to the Annual Meeting, during ordinary business hours, for a period of
at least 10 days prior to the Annual Meeting at the offices of Goodwin,
Procter & Hoar LLP, Exchange Place, 53 State Street, Boston, Massachusetts
02109.
All Stockholders are cordially invited to attend the Annual Meeting. Whether
you plan to attend the Annual Meeting or not, you are requested to complete,
sign, date and return the enclosed proxy card, which is being solicited by the
Board of Directors of the Company, and to mail it promptly in the enclosed
pre-addressed, postage prepaid envelope. Any proxy may be revoked by delivery
of a later dated proxy. Stockholders of record who attend the Annual Meeting
may vote in person, even if they have previously delivered a signed proxy.
By Order of the Board of Directors
Jeffrey C. Hadden
Secretary
Newton Centre, Massachusetts
April 2, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE
AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE
PROVIDED. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU
WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
SEGUE SOFTWARE, INC.
1320 CENTRE STREET
NEWTON CENTRE, MASSACHUSETTS 02159
----------------
PROXY STATEMENT
----------------
FOR 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 2, 1997
April 2, 1997
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors (the "Board") of Segue Software, Inc., a Delaware
corporation (the "Company"), of proxies, in the accompanying form, to be used
at its 1997 Annual Meeting of Stockholders to be held at the Conference Center
of Goodwin, Procter & Hoar LLP, Exchange Place, 53 State Street, Boston,
Massachusetts 02109 on Friday, May 2, 1997 at 10:00 a.m., and at any
adjournments or postponements thereof (the "Annual Meeting"). At the Annual
Meeting, stockholders will be asked to vote upon the election of eight members
of the Board, to consider and act upon a proposal to approve an amendment (the
"Plan Amendment") to the Company's 1996 Amended and Restated Incentive and
Non-Qualified Stock Option Plan (the "Option Plan"), to consider and act upon
a proposal to ratify the appointment of Coopers & Lybrand L.L.P. as the
Company's independent public accountants, and to consider and act upon any
other matters properly brought before them.
This Proxy Statement and the accompanying Notice of Annual Meeting and Proxy
Card are first being sent to the stockholders of the Company on or about April
2, 1997. The Board has fixed the close of business on March 26, 1997 as the
record date for the determination of stockholders entitled to notice of and to
vote at the Annual Meeting (the "Record Date"). Only stockholders of record of
the Company's common stock, par value $.01 per share (the "Common Stock"), at
the close of business on the Record Date will be entitled to notice of and to
vote at the Annual Meeting. Holders of Common Stock outstanding as of the
close of business on the Record Date will be entitled to one vote for each
share held by them. As of the Record Date, there were 7,262,799 shares of
Common Stock outstanding and entitled to vote at the Annual Meeting.
The presence, in person or by proxy, of holders of at least a majority of
the total number of shares of Common Stock outstanding and entitled to vote is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting. Both abstentions and broker non-votes (as defined below) will be
counted as present in determining the presence of a quorum. The affirmative
vote of a majority of the shares present or represented and entitled to vote
at the Annual Meeting is required to approve each proposal, other than the
election of directors, which requires a plurality of votes cast at the Annual
Meeting. Abstentions and broker non-votes will be disregarded in determining
the "votes cast" for purposes of electing directors and will not affect the
election of the candidates receiving a plurality of votes. A "broker non-vote"
is a proxy from a broker or other nominee indicating that such person has not
received instructions from the beneficial owner or other person entitled to
vote the shares which are the subject of the proxy on a particular matter with
respect to which the broker or other nominee does not have discretionary
voting power.
STOCKHOLDERS OF THE COMPANY ARE REQUESTED TO COMPLETE, SIGN, DATE AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED, POSTAGE-PREPAID
ENVELOPE. SHARES REPRESENTED BY A PROPERLY EXECUTED PROXY RECEIVED PRIOR TO
THE VOTE AT THE ANNUAL MEETING AND NOT REVOKED WILL BE VOTED AT THE ANNUAL
MEETING AS DIRECTED ON THE PROXY. IF A PROPERLY EXECUTED PROXY IS SUBMITTED
AND NO INSTRUCTIONS ARE GIVEN, THE PROXY WILL BE VOTED FOR THE ELECTION OF THE
EIGHT NOMINEES FOR DIRECTOR OF THE COMPANY NAMED IN THIS PROXY STATEMENT, FOR
THE PROPOSAL TO APPROVE THE PLAN AMENDMENT, AND FOR THE RATIFICATION OF THE
APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1997. IT IS NOT
ANTICIPATED THAT ANY MATTERS OTHER THAN
<PAGE>
THOSE SET FORTH IN THE PROXY STATEMENT WILL BE PRESENTED AT THE ANNUAL
MEETING. IF OTHER MATTERS ARE PRESENTED, PROXIES WILL BE VOTED IN ACCORDANCE
WITH THE DISCRETION OF THE PROXY HOLDERS.
A stockholder of record may revoke his or her proxy at any time before its
use by delivering to the Company a written notice of revocation or a duly
executed proxy bearing a later date. A stockholder of record who has executed
a proxy but is present at the Annual Meeting, and who wishes to vote in
person, may do so by revoking his or her proxy as described in the preceding
sentence. The presence (without further action) of a stockholder at the Annual
Meeting will not constitute a revocation of a previously given proxy.
The Company's 1997 Annual Report to Stockholders (the "Annual Report"),
including financial statements for the fiscal year ended December 31, 1996
("Fiscal 1996"), is being mailed to stockholders with this Proxy Statement,
but does not constitute a part hereof.
PROPOSAL 1: ELECTION OF DIRECTORS
INTRODUCTION
The Company's By-Laws (the "By-laws") provide for the Company's business to
be managed by or under the direction of the Board. On February 28, 1997, the
Board unanimously voted to increase the number of directors on the Board from
seven directors to eight directors and, in accordance with the By-laws,
appointed Ronald D. Fisher as a director to fill the vacancy created thereby.
Directors serve in office until the next annual meeting of stockholders and
until their successors have been elected and qualified. In connection with the
Annual Meeting, the Board has nominated James H. Simons, Elisabeth Elterman,
Leonard E. Baum, John J. Cullinane, Ronald D. Fisher, John R. Levine, Milton
E. Mohr and Howard L. Morgan to serve as directors (the "Nominees"). Each of
the Nominees is currently serving as a director of the Company. The Board
anticipates that each of the Nominees will serve, if elected, as a director.
However, if any person nominated by the Board is unable to accept election,
the proxies will be voted for the election of such other person or persons as
the Board may recommend. The Board will consider a nominee for election to the
Board recommended by a stockholder of record if the stockholder submits the
nomination in compliance with the requirements of the By-laws. See "Other
Matters--Stockholder Proposals" for a summary of these requirements.
VOTE REQUIRED FOR APPROVAL
A quorum being present, the affirmative vote of a plurality of the votes
cast is necessary to elect a nominee as a director of the Company.
RECOMMENDATION
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE NOMINEES.
INFORMATION REGARDING THE NOMINEES AND EXECUTIVE OFFICERS
The following biographical descriptions set forth certain information with
respect to the Nominees for election as directors at the Annual Meeting and
the executive officers who are not directors, based on information furnished
to the Company by each director and officer. The following information is as
of March 1, 1997.
Nominees for Election as Directors
JAMES H. SIMONS has been Chairman of the Board since 1992 and a director
since 1988. Since 1982, Dr. Simons has been the President and Chairman of
Renaissance Technologies Corp. Dr. Simons also is a member of the Board of
Directors of the following publicly held companies: Cylink Corp., Franklin
Electronic Publishers, Inc., Numar Corp. and Kentek Information Systems, Inc.
He is 58 years old.
2
<PAGE>
ELISABETH ELTERMAN has served as President, Chief Executive Officer and as a
director of the Company since July 1995. Ms. Elterman joined the Company in
April 1992 as an Executive Vice President and was promoted to Chief Operating
Officer in October 1993. Ms. Elterman held a senior management position at
Softbridge Microsystems, Inc., a software company, prior to joining the
Company from April 1984 through April 1992. She is 45 years old.
LEONARD E. BAUM has been a director of the Company since 1992. Dr. Baum is
currently an officer of three investment firms, Curfin International and
Rieton Corporation, of which he has served as President since 1983 and 1993,
respectively, and Lebam Advisers, Inc., of which he has served as Vice
President and a director since 1979. In addition, Dr. Baum has been a
securities and commodities trader for Zeta Partners since 1993. He is 65 years
old.
JOHN J. CULLINANE has been a director of the Company since 1994. Mr.
Cullinane has been the President of The Cullinane Group, Inc., a high
technology venture investment firm, since 1989. Mr. Cullinane founded Cullinet
Software, Inc., a computer software company. Mr. Cullinane serves on the Board
of Directors of IONA Technologies PLC, a software company. He is 62 years old.
RONALD D. FISHER has been a director of the Company since March 1997. Since
October 1995, Mr. Fisher has been the Vice Chairman of Softbank Holdings,
Inc., an investment firm. From January 1990 to September 1995, he was the
Chief Executive Officer of Phoenix Technologies Ltd., a software company. He
is 49 years old.
JOHN R. LEVINE has been a director of the Company since 1992. Since 1991,
Dr. Levine has been employed by I.E.C.C., an Internet and computer services
consulting company. He is 42 years old.
MILTON E. MOHR has been a director of the Company since 1989. Mr. Mohr is
the retired President and Chief Executive Officer of Quotron Systems, Inc., a
company that distributes financial information to third parties. He is 81
years old.
HOWARD L. MORGAN has been a director of the Company since 1992. Since June
1989, Dr. Morgan has been the President of The Arca Group, Inc., a high
technology consulting and investment management firm. Dr. Morgan serves on the
Board of Directors of the following publicly held companies: Cylink Corp.,
Franklin Electronic Publishers, Inc., HDS Network Systems, Inc., MetaTools,
Inc., Quarterdeck Corp., Unitronix Corp., Infonautics Inc. and Kentek
Information Systems, Inc. He is 51 years old.
Executives Officers Who Are Not Directors
J. JEFFREY BINGENHEIMER has served as Vice President, Chief Financial
Officer and Assistant Secretary of the Company since September 1995 and as
Treasurer since February 1996. Prior to joining the Company, Mr. Bingenheimer
served as Vice President-Finance and Administration and Treasurer of
CenterLine Software, Inc., a software company, from April 1991 to September
1995. From April 1985 to March 1991, Mr. Bingenheimer served as Vice
President-Finance and Administration, Senior Vice President of Finance and
Administration and Treasurer of Index Technology Corporation, a software
company. He is 53 years old.
BRIAN J. LESUER joined the Company in September 1992 to establish the
Training, Consulting and Quality Assurance Departments. He has served as
Executive Vice President of Research and Development since November of 1995.
From May 1991 to September 1992, he was a senior quality assurance engineer
for Datalogix International Inc., a software company. Prior to 1991, he held
various positions in quality assurance at People's Bank, the NASD and The
Traveler's Insurance Companies. He is 37 years old.
DAVID C. LAROCHE has served as the Company's Chief Technical Officer since
October 1991. In March 1991, Mr. Laroche co-founded Software Quality
Management to assist companies in the implementation and usage of automated
testing technology. From October 1988 to March 1991, Mr. Laroche held various
positions at Softbridge Microsystems, Inc., most recently as an architect of
the Automated Testing Facility. He is 31 years old.
3
<PAGE>
PAUL R. MAGUIRE has served as Vice President of Channel Development since
January 1997. He served as Vice President of Sales from January 1994 to
January 1997. From November 1992 to December 1993, Mr. Maguire was the Vice
President of Sales and Marketing for Software Partners/32, a software company.
From 1985 to November 1992, Mr. Maguire served as Vice President of Sales of
V.I. Corporation, a software company. He is 37 years old.
STEPHEN L. ADAMS joined the Company as Vice President, International Sales
in March 1996. From April 1993 to March 1996, Mr. Adams was the Director of
International Sales for Atria Software, Inc., a software company. From
September 1988 to February 1993, Mr. Adams was a Regional Sales Manager for
NeXT Computer, Inc., a software company. He is 46 years old.
KENT BRADFORD joined the Company as Vice President, World-Wide Sales in
December 1996. Prior to joining the Company, Mr. Bradford was the Vice
President of Sales for UniKix Technologies, a software company, from July 1994
to December 1996. Mr. Bradford also held similar positions at Corex
Technologies, Corp., a software company, and OpenBooks Software, Inc., a
software company, from January 1994 to June 1994 and January 1991 to December
1993, respectively. He is 51 years old.
MICHAEL D. MAGGIO has served as Marketing Manager since January 1997. He
served as Vice President of Business Development for the Company from January
1995 to January 1997. From June 1993 to December 1994, Mr. Maggio served as
the Director, Eastern Region in the Company's sales organization. Mr. Maggio
joined the Company in October 1991 and served as the Vice President of
Development until June 1993. From June 1991 to October 1991, Mr. Maggio was
the Manager of the User Environments Group at Honeywell Bull, a computer
manufacturer. Mr. Maggio was the Principal Software Engineer and Manager at
Siemens-Nixdorf Information Systems from June 1988 to June 1991. He is 35
years old.
BETSY R. RUDNICK has served as Vice President of Human Resources and
Administration since January 1995. Prior to her full-time employment at the
Company, Ms. Rudnick was a consultant to the Company. From August 1987 to
January 1995, Ms. Rudnick worked as an independent consultant to several
software companies in the areas of organizational development, human resource
management and facilities planning and leasing. She is 46 years old.
GARETH S. TAUBE joined the Company as Vice President of Marketing in
November 1996. From November 1993 to November 1996, Mr. Taube served as the
Vice President of Marketing of Praxis International, Inc., a software company.
Prior to 1993, Mr. Taube held various marketing and sales positions at Digital
Equipment Corporation, a computer manufacturing company. He is 47 years old.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
Meeting Attendance. During Fiscal 1996, there were six meetings of the
Board, and the various committees of the Board met a total of five times. No
director attended fewer than 75% of the total number of meetings of the Board
and of committees of the Board on which he or she served during Fiscal 1996.
Audit Committee. The Board has established an Audit Committee which met on
one occasion in Fiscal 1996. The current members of the Audit Committee are
Mr. Levine and Dr. Morgan. The Audit Committee reviews the engagement of the
Company's independent accountants, reviews annual financial statements,
considers matters relating to accounting policy and internal controls and
reviews the scope of annual audits.
4
<PAGE>
Compensation Committee. The Board has also established a Compensation
Committee which met four times during Fiscal 1996. The current members of the
Compensation Committee are Dr. Simons, Mr. Cullinane and Dr. Morgan, who are
all non-employee directors. The Compensation Committee reviews, approves and
makes recommendations on the Company's compensation policies, practices and
procedures. The Compensation Committee also administers the Company's Option
Plan and 1996 Employee Stock Purchase Plan (the "Stock Purchase Plan"). In
administering the Option Plan, the Compensation Committee determines the
options to be issued to eligible persons under the Option Plan and prescribes
the terms and provisions of such options. In addition, the Compensation
Committee construes and interprets the Option Plan and issuances thereunder,
and establishes, amends and revokes rules and regulations for administration
of the Option Plan.
The Board does not have a standing nominating committee. The full Board
performs the function of such a committee.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Directors. No directors of the Company receive compensation for their
services as directors or as members of any of the committees of the Board. All
non-employee directors are reimbursed for travel and other related expenses
incurred in attending meetings of the Board or meetings of any of the
committees of the Board. Pursuant to the Option Plan, each non-employee
director who becomes a member of the Board after April 2, 1996 receives a non-
qualified stock option to purchase up to 12,000 shares of Common Stock, which
option will vest over three years with 2,000 shares vesting after an initial
six months of service and 1,000 shares vesting every three months thereafter
assuming such non-employee director continues to serve on the Board. After
serving on the Board for three years, such director shall receive on each
anniversary of such director's appointment to the Board, a non-qualified stock
option to purchase up to 4,000 shares of Common Stock, with 2,000 shares
vesting after six months and 1,000 shares every three months thereafter
assuming continued Board membership.
Non-employee directors who were serving on the Board as of April 2, 1996
received, and will receive on each anniversary of such date, a non-qualified
stock option to purchase up to 4,000 shares of Common Stock, with 2,000 shares
vesting after six months and 1,000 shares every three months thereafter
assuming such non-employee director continues to serve on the Board. Non-
qualified stock options granted to non-employee directors pursuant to the
Option Plan will have an exercise price equal to the fair market value of
shares of Common Stock on the date of grant and will have a ten-year term.
5
<PAGE>
Executive Officers. The following table provides certain information for the
fiscal years ended December 31, 1995 and 1996 concerning compensation awarded
to the Company's Chief Executive Officer and each of the four other most
highly compensated persons who were serving as executive officers of the
Company as of December 31, 1996 (collectively, the "Named Executive Officers")
for services rendered to the Company in all capacities.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
-------------------- ------------
COMMISSIONS
AND UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUSES OPTIONS COMPENSATION
- --------------------------- ---- -------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Elisabeth Elterman....... 1996 $165,000 $ 60,000 25,000 $ --
President and Chief
Executive Officer 1995(1) 140,000 40,000 130,000 --
J. Jeffrey Bingenheimer.. 1996 135,000 35,000 55,000 --
Vice President and Chief 1995(2) 36,346 5,000 50,000 --
Financial Officer
Brian J. LeSuer.......... 1996 135,000 35,000 70,000 --
Executive Vice 1995 110,000 41,005 -- --
President,
Research & Development
David C. Laroche......... 1996 126,263 15,000 85,000 4,775(3)
Chief Technical Officer 1995 121,754 10,000 5,000 4,443(3)
Paul R. Maguire.......... 1996 105,000 120,192 5,000 6,000(4)
Vice President, Sales 1995 105,000 122,715 50,000 6,000(4)
</TABLE>
- --------
(1) Ms. Elterman was appointed President and Chief Executive Officer of the
Company on July 1, 1995.
(2) Mr. Bingenheimer was appointed Vice President and Chief Financial Officer
of the Company in September 1995.
(3) Amount represents reimbursements for certain estimated taxes owed by Mr.
Laroche in connection with the Company's forgiveness of a portion of a
certain promissory note in favor of the Company issued by Mr. Laroche.
(4) Amount represents car allowance payments for Mr. Maguire paid by the
Company at a rate of $500 per month.
6
<PAGE>
Option Grants in Last Fiscal Year. The following table sets forth
information regarding each stock option granted during Fiscal 1996 to each of
the Named Executive Officers. The potential realizable values that would exist
for the respective options are based on assumed rates of annual compound stock
price appreciation of 5% and 10% from the date of grant over the full term of
the option. Actual gains, if any, on stock options, exercises and Common Stock
holdings are dependent on the future performance of the Common Stock.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL
NUMBER OF PERCENT OF TOTAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES IN OR BASE PRICE EXPIRATION ---------------------------
GRANTED(1) FISCAL YEAR PER SHARE(2) DATE 5% 10%
---------- ---------------- ------------- ---------- -------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Elisabeth Elterman...... 25,000 3.1% $ 9.00 1/22/06 $ 141,501 $ 358,592
J. Jeffrey
Bingenheimer........... 5,000 0.6 9.00 1/22/06 28,300 71,718
50,000 6.2 21.25 4/4/06 668,201 1,693,351
Brian J. LeSuer......... 20,000 2.5 9.00 1/22/06 113,201 286,873
50,000 6.2 21.25 4/4/06 668,201 1,693,351
David C. Laroche........ 10,000 1.2 9.00 1/22/06 56,600 143,436
75,000(3) 9.3 14.875 11/25/06 701,611 1,778,019
Paul R. Maguire......... 5,000 0.6 9.00 1/22/06 28,300 71,718
</TABLE>
- --------
(1) Unless otherwise indicated, the options become exercisable in four equal
annual installments, commencing on the first anniversary of the grant
date. Options are subject to the employee's continued employment. The
options terminate ten years after the grant date, subject to earlier
termination in accordance with the Option Plan and the applicable option
agreement.
(2) The exercise price is equal to the market value on the date of the grant.
The amounts shown as potential realizable value illustrate what might be
realized upon exercise immediately prior to expiration of the option term
using the 5% and 10% appreciation rates established in regulations of the
Securities and Exchange Commission, compounded annually. The potential
realizable value is not intended to predict future appreciation of the
price of the Company's Common Stock. The values shown do not consider
nontransferability, vesting or termination of the options upon termination
of employment.
(3) This option becomes fully vested on the fourth anniversary of the grant
date, subject to the employee's continued employment.
7
<PAGE>
Option Exercises and Year-End Holdings. The following table sets forth the
shares of Common Stock acquired and the value realized upon exercise of stock
options during Fiscal 1996 by each of the Named Executive Officers and certain
information concerning stock options held by the Named Executive Officers as
of December 31, 1996.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END (1)
ACQUIRED ON VALUE -------------------------- -------------------------
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- ----------- -------------------------- -------------------------
<S> <C> <C> <C> <C>
Elisabeth Elterman...... 30,000 $470,255.00 103,750/131,250 $1,664,688/$1,999,063
J. Jeffrey
Bingenheimer........... 1,500 16,312.50 12,250/ 91,250 173,813/ 587,813
Brian J. LeSuer......... -- -- 36,363/ 86,787 563,899/ 492,789
David C. Laroche........ -- -- 15,000/ 95,000 236,250/ 535,625
Paul R. Maguire......... 17,000 186,812.50 34,250/ 53,750 547,813/ 847,188
</TABLE>
- --------
(1) Based on the fair market value of the Common Stock of $18.25 per share,
the price of the last reported trade of the Common Stock on the Nasdaq
National Market on December 31, 1996, less the option exercise price per
share. Options are in-the-money if the fair market value of the shares
covered thereby is greater than the option exercise price.
EMPLOYMENT CONTRACTS AND CHANGE OF CONTROL ARRANGEMENTS
Each of the Named Executive Officers has entered into a non-competition,
non-solicitation, non-disclosure and assignment of inventions agreement with
the Company (the "Non-Compete Agreement"), which restricts such officer from
competing with the Company and from soliciting, diverting or attempting to
solicit or divert any customers or employees of the Company during the term of
the officer's employment and for one year after termination of such
employment. The Non-Compete Agreement also obliges the Named Executive Officer
not to reveal any trade secrets or confidential information of the Company
during the term of the officer's employment and for five years after
termination of such employment. The Non-Compete Agreement requires the Named
Executive Officers to assign to the Company all right and interest in any
intellectual property related to the business of the Company and developed by
the officer during the term of the officer's employment with the Company.
In February 1997, the Board adopted a policy that provides for the payment
of severance benefits to, and the acceleration of the vesting of stock options
held by, certain executive officers of the Company, including certain of the
Named Executive Officers, in the event that such officer's employment with the
Company or any successor entity is terminated either by the Company without
cause (as defined) or by the officer for good reason (as defined) within the
first year after a change in control (as defined) of the Company.
8
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph provides a comparison of cumulative total stockholder
return for the period from March 28, 1996 (the date on which the Common Stock
was first publicly traded) through December 31, 1996, among the Company, the
Nasdaq National Market-US Companies Index (the "Nasdaq-US Index") and the
Center for Research in Security Prices ("CRSP") Computer and Data Processing
Stocks Index (the "Peer Group Index," an index of Nasdaq National Market
traded companies (both domestic and foreign) with Standard Industrial
Classification Code Numbers from 7370 to 7379). The Stock Performance Graph
assumes an investment of $100 in each of the Company and the two indices, and
the reinvestment of any dividends. The historical information set forth below
is not necessarily indicative of future performance. Data for the Nasdaq-US
Index and the Peer Group Index was provided to the Company by CRSP.
[CHART]
<TABLE>
<CAPTION>
03/28/96 06/28/96 09/30/96 12/31/96
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Segue Software, Inc. 100.00 138.4 64.0 84.9
Nasdaq Stock Market
(US Companies) 100.00 108.9 112.8 118.3
Nasdaq Computer and Data
Processing Stocks SIC
7370-7379 US & Foreign 100.00 111.9 114.1 118.7
</TABLE>
9
<PAGE>
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Compensation Committee of the Board consists of James H. Simons,
Chairman, John J. Cullinane and Howard L. Morgan. Dr. Simons, Mr. Cullinane
and Dr. Morgan are all non-employee directors.
The Compensation Committee establishes salaries, incentives and other forms
of compensation for officers of the Company and administers the incentive
compensation and benefit plans of the Company. These plans include the Option
Plan and the Stock Purchase Plan. The members of the Compensation Committee
have prepared the following report on the Company's executive compensation
policies and philosophy for Fiscal 1996.
GENERAL
The Compensation Committee (the "Committee") of the Board is composed of
three independent outside directors. There are no insiders on the Committee
and there are no Committee members with interlocking relationships with the
Company. The Chief Executive Officer ("CEO") and the Chief Financial Officer
("CFO") of the Company are invited to attend and participate in Committee
meetings from time to time, except when their compensation is being discussed.
The CEO makes recommendations to the Committee regarding compensation for all
other executive officers and for any incentive bonuses for all other
employees. Base pay, discretionary year-end bonus payments and commission
payments to sales employees are determined by the CEO in conjunction with the
Vice President of Human Resources and Administration. The Compensation
Committee considers the CEO's recommendations, approves or revises them, and
submits it's conclusions to the Board. The Board has final authority regarding
executive compensation and any incentive bonus compensation for all other
employees.
COMPENSATION PHILOSOPHY
In recognition that the recruitment of personnel in the computer software
industry is highly competitive, the Company's compensation policies, both for
executive and non-executive employees, are structured to attract and retain
highly skilled technical, marketing, sales and management personnel. The
Committee and the Board believe that the compensation of the Company's
executive officers should be significantly influenced by the Company's
performance. Accordingly, the Company's practice has been to establish base
cash salaries at levels deemed appropriate by the Committee based on historic
Company compensation levels and the Committee's experience and knowledge as to
compensation levels at other companies. In assessing compensation levels, the
Committee has periodically reviewed industry specific compensation surveys and
consulted with the Company's Vice President of Human Resources and
Administration.
Although there is no formal incentive bonus program in place, the executive
officers, whom are not subject to sales commissions, have been awarded
discretionary year-end bonuses over the last several years. The bonus pool
allocated to the executive officers is based on the Committee's evaluation of
historical performance and discussions with the CEO.
The Company also maintains the Option Plan to provide long-term incentives
to maximize stockholder value by rewarding employees for the long-term
appreciation of the Company's share price. Stock options are typically subject
to four-year vesting. Generally, option grants are made to employees in
connection with their initial hire. The Board has also approved option grants
in connection with a significant change in responsibilities, as a reward for
outstanding performance, and to provide incentives for continued employment.
The number of shares subject to each stock option granted is based on
anticipated future contribution and the ability of the individual to affect
corporate results.
The total compensation for the Named Executive Officers is described in this
Proxy Statement starting on page 7 and the compensation for the CEO is also
discussed below.
10
<PAGE>
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The CEO of the Company had a base salary of $165,000 in Fiscal 1996, which
was determined by reference to competitive compensation survey data as well as
the Company's historical practices and internal salary structures. The
Committee has voted to increase the base salary of the CEO to $180,000
effective January 1, 1997, which increase has been ratified by the entire
Board.
The CEO's performance bonus is tied directly to the Company's achievement of
financial goals and agreed objectives for the year. For the year ended
December 31, 1995, the CEO received a cash bonus of $40,000 which represented
29% of her salary for 1995. For the year ended December 31, 1996, the CEO was
awarded a bonus of $60,000 which represented 36% of her salary for 1996. These
bonuses reflect the strong contribution and leadership that the CEO has
demonstrated in growing the Company.
INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code of 1986, as amended, places a
per-person limit of $1,000,000 on the amount of compensation that may be
deducted by the Company in any year with respect to certain of the Company's
most highly compensated officers. Section 162(m) does not, however, disallow a
deduction for the qualified "performance based compensation" the material
terms of which are disclosed to and approved by stockholders. The Company does
not anticipate that the compensation for any of the Named Executive Officers
will exceed $1,000,000 in the current taxable year, but intends to take
appropriate action to comply with such regulations, if applicable, in the
future.
James H. Simons
John J. Cullinane
Howard L. Morgan
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION; CERTAIN TRANSACTIONS
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 Board or the Committee.
11
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of March 1, 1997
concerning the ownership of Common Stock by (i) each person or "group" (as
that term is defined in Section 13(d)(3) of the Exchange Act) known by the
Company to be the beneficial owner of more than 5% of the Common Stock, (ii)
each of the Named Executive Officers, (iii) each director and nominee for
director of the Company and (iv) all directors and executive officers as a
group (17 persons). Except as otherwise indicated, each person listed below
has sole voting and investment power over the shares of Common Stock shown as
beneficially owned.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED(1)
-------------------------------
NAME AND ADDRESS** NUMBER PERCENT
------------------ ---------------- --------------
<S> <C> <C>
Robert Day(2)............................. 828,900 11.5%
200 Park Avenue
Suite 2200
New York, New York, 10016
James H. Simons(3)........................ 822,639 11.4
Renaissance Technology Corp.
800 Third Avenue
New York, New York 10022
Elisabeth Elterman(4)..................... 113,750 1.6
Leonard E. Baum(5)........................ 161,836 2.2
John J. Cullinane(6)...................... 327,630 4.5
Ronald D. Fisher(7)....................... 29,925 *
John R. Levine(8)......................... 155,118 2.1
Milton E. Mohr(9)......................... 291,144 4.0
Howard L. Morgan(10)...................... 64,000 *
J. Jeffrey Bingenheimer(11)............... 24,751 *
Brian J. LeSuer(12)....................... 51,863 *
David C. Laroche(13)...................... 177,150 2.4
Paul R. Maguire(14)....................... 47,119 *
Stephen L. Adams(15)...................... 14,196 *
Michael D. Maggio(16)..................... 35,375 *
Betsy R. Rudnick(17)...................... 28,900 *
All Directors and Executive Officers as a
group
(17 Persons)............................. 2,345,396 30.7%
</TABLE>
- --------
* Represents beneficial ownership of less than 1% of the Company's
outstanding shares of Common Stock.
** Addresses are given for beneficial owners of more than 5% of the
outstanding Common Stock only.
(1) The calculation of percentage ownership for each listed beneficial owner
is based upon the number of shares of Common Stock issued and outstanding
at March 1, 1997 (7,224,840 shares), plus shares of Common Stock subject
to stock options held by each Stockholder that are currently exercisable
or exercisable within 60 days following March 1, 1997.
(2) Based solely on a Schedule 13G, as amended, filed on behalf of The TCW
Group, Inc. ("TCW") and Mr. Robert Day with the Securities and Exchange
Commission on February 12, 1997. According to such Schedule 13G, TCW was
the beneficial owner of 572,400 shares of Common Stock and Mr. Day, an
individual who may be deemed to control TCW and other holders of Common
Stock, was the beneficial owner of 828,900 shares of Common Stock.
(3) Includes (i) 14,000 shares of Common Stock which may be purchased within
60 days of March 1, 1997 upon the exercise of stock options and (ii)
706,973 shares of Common Stock owned by Bermuda Trust Company, as Trustee
of the Lord Jim Trust (a trust of which Dr. Simons and the members of his
family are the beneficiaries).
12
<PAGE>
(4) Shares of Common Stock which may be purchased within 60 days of March 1,
1997 upon the exercise of stock options.
(5) Includes (i) 14,000 shares of Common Stock which may be purchased within
60 days of March 1, 1997 upon the exercise of stock options, (ii) 87,836
shares of Common Stock held by Lebam Advisors Pension Plan, of which Dr.
Baum is a trustee and (iii) 30,000 shares of Common Stock held by the
Baum Family Irrevocable Trust, of which Dr. Baum's children are trustees,
but as to which Dr. Baum disclaims beneficial ownership.
(6) Includes (i) 4,000 shares of Common Stock which may be purchased within
60 days of March 1, 1997 upon the exercise of stock options, and (ii)
212,750 shares of Common Stock held by The Charles River Charitable
Foundation, of which Mr. Cullinane is a trustee, but as to which Mr.
Cullinane disclaims beneficial ownership.
(7) Includes (i) 5,000 shares of Common Stock held by Mr. Fisher's spouse as
to which Mr. Fisher disclaims beneficial ownership, and (ii) 11,500
shares of Common Stock held by the Fisher Family Trust, of which Mr.
Fisher's wife is the trustee, but as to which Mr. Fisher also disclaims
beneficial ownership.
(8) Includes 14,000 shares of Common Stock which may be purchased within 60
days of March 1, 1997 upon the exercise of stock options.
(9) Includes (i) 277,144 shares of Common Stock held by the Milton E. Mohr
Trust and (ii) 14,000 shares of Common Stock which may be purchased
within 60 days of March 1, 1997 upon the exercise of stock options.
(10) Includes (i) 24,000 shares of Common Stock which may be purchased within
60 days of March 1, 1997 upon the exercise of stock options, and (ii)
5,000 shares of Common Stock held by the Eleanor Howard Morgan Family
Foundation, of which Mr. Morgan is a trustee, but as to which Mr. Morgan
disclaims beneficial ownership.
(11) Shares of Common Stock which may be purchased within 60 days of March 1,
1997 upon the exercise of stock options.
(12) Shares of Common Stock which may be purchased within 60 days of March 1,
1997 upon the exercise of stock options.
(13) Includes 20,000 shares of Common Stock which may be purchased within 60
days of March 1, 1997 upon the exercise of stock options.
(14) Includes 46,750 shares of Common Stock which may be purchased within 60
days of March 1, 1997 upon the exercise of stock options.
(15) Includes 12,501 shares of Common Stock which may be purchased within 60
days of March 1, 1997 upon the exercise of stock options.
(16) Shares of Common Stock which may be purchased within 60 days of March 1,
1997 upon the exercise of stock options.
(17) Includes 28,750 shares of Common Stock which may be purchased within 60
days of March 1, 1997 upon the exercise of stock options.
PROPOSAL 2: APPROVAL OF AN AMENDMENT
TO THE OPTION PLAN
INTRODUCTION
In February 1996, the Board and the stockholders of the Company approved the
Option Plan. The Option Plan authorizes the issuance of up to 2,450,000 shares
of Common Stock. At a meeting of the Board on February 5, 1997, the Board
unanimously voted to amend the Option Plan, subject to approval by the
affirmative vote of a majority of the shares present or represented and
entitled to vote at a duly called and held meeting of the stockholders of the
Company, to increase the maximum number of shares of Common Stock available
for issuance under the Option Plan to 3,000,000 shares of Common Stock.
The Board believes that the Company's growth and long-term success depend in
large part upon retaining and motivating key management personnel and that
this can be achieved in part through the design and
13
<PAGE>
implementation of effective compensation policies and practices. The Board
also believes that stock options and other share-based incentive awards can
play an important role in the success of the Company by encouraging and
enabling the officers and other employees of the Company, upon whose judgment,
initiative and efforts the Company largely depends for sustained growth and
profitability, to acquire a proprietary interest in the long-term performance
of the Company. The Board anticipates that providing such persons with a
direct stake in the Company will assure a closer identification of the
interests of the participants in the Option Plan with those of the Company,
thereby stimulating their efforts to promote the Company's future success and
strengthen their desire to remain with the Company. The Board believes that
the proposed increase in the number of shares of Common Stock issuable under
the Option Plan will help the Company accomplish these goals and will keep the
Company's share-based incentive compensation competitive with that of its
competitors.
At the Annual Meeting, the stockholders of the Company will be asked to
approve the Plan Amendment described above. Approval by the stockholders of
the Company is required for the Option Plan, as so amended, to qualify for
favorable treatment under the Internal Revenue Code of 1986, as amended (the
"Code"). Under the Code, stockholder approval is necessary for stock options
relating to the additional shares of Common Stock issuable under the Option
Plan to qualify as incentive stock options under Section 422 of the Code.
VOTE REQUIRED FOR APPROVAL
A quorum being present, the affirmative vote of a majority of the votes cast
is necessary to amend the Option Plan.
RECOMMENDATION
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF AN AMENDMENT TO
THE OPTION PLAN.
SUMMARY OF THE OPTION PLAN
Number of Shares Issuable. Subject to adjustment for stock splits, dividends
and similar events, the total number of shares of Common Stock that may be
issued under the Option Plan is currently 2,450,000 shares of Common Stock. If
adopted, the Plan Amendment would increase the number of shares of Common
Stock by 550,000 to 3,000,000 shares of Common Stock.
Plan Administration; Eligibility. The Option Plan is administered by the
Compensation Committee which is composed of non-employee directors of the
Company. Subject to the provisions of the Option Plan, the Compensation
Committee has the authority to select the optionees and determine the terms of
the options granted, including: (i) the number of shares subject to each
option, (ii) when the option becomes exercisable, (iii) the exercise price of
the options (which in the case of an incentive stock option cannot be less
than the market price of the Common Stock as of the date of grant or, in the
case of employees holding more than 10% of the voting power of the Company,
110% of the market price of the Common Stock as of the date of grant), (iv)
the duration of the option, and (v) the time, manner and form of payment upon
exercise of an option.
Persons eligible to receive stock options under the Option Plan include
those employees, consultants, directors and officers of the Company who are
responsible for or contribute to the management, growth or profitability of
the Company, as selected from time to time by the Compensation Committee.
Stock Options. The Option Plan provides for the grant of incentive stock
options under Section 422 of the Code to employees and the grant of non-
qualified stock options to employees, consultants, directors and officers of
the Company.
Amendments. The Option Plan may be amended by the stockholders of the
Company. The Option Plan may also be amended by the Board or the Compensation
Committee, provided that any amendment approved by the Board or the
Compensation Committee which is a scope that requires stockholder approval in
order to ensure favorable federal income tax treatment for any incentive stock
options under Section 422 of the Code.
14
<PAGE>
Transferability. Generally, under the Option Plan, a stock option is not
transferable by the optionholder except by will or by the laws of descent and
distribution. No stock option may be exercised more than 90 days following
termination of employment or service as a director unless the termination is
due to death or disability, in which case the stock option is exercisable for
a maximum of 180 days after such termination, in the case of a non-employee
director, and one year after such termination, in all other instances. Stock
options granted under the Option Plan expire ten years from the date of grant
or five years from the date of grant in the case of incentive stock options
issued to employees holding more than 10% of the total voting power of the
Company.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a description of certain U.S. federal income tax
consequences of the issuance and exercise of stock options under the Option
Plan:
Incentive Stock Options. An incentive stock option does not result in
taxable income to the optionee or deduction to the Company at the time it is
granted or exercised, provided that no disposition is made by the optionee of
the shares acquired pursuant to the option within two years after the date of
grant of the option nor within one year after the date of issuance of shares
to him (the "ISO holding period"). However, the difference between the fair
market value of the shares of the date of exercise and the option price will
be an item of tax preference includible in "alternative minimum taxable
income." Upon disposition of the shares before the expiration of the ISO
holding period (a "disqualifying disposition"), the optionee generally will
recognize taxable compensation, and the Company will have a corresponding
deduction, in the year of the disqualifying disposition, equal to the excess
of the fair market value of the shares on the date of exercise of the option
over the option price. Any additional gain realized on the disqualified
disposition will normally constitute capital gain. If the amount realized upon
such a disqualifying disposition is less than the fair market value on the
shares on the date of exercise, the amount of compensation income will be
limited to the excess of the amount realized over the optionee's adjusted
basis in the shares.
Non-Qualified Stock Options. The grant of a non-qualified option will not
result in taxable income to the optionee or deduction to the Company at the
time of grant. The optionee will recognize taxable compensation, and the
Company will have a corresponding deduction, at the time of exercise in the
amount of the excess of the then fair market value of the shares acquired over
the option price. Upon disposition of the shares, the optionee will generally
realize capital gain or loss, and his basis for determining gain or loss will
be the sum of the option price paid for the shares plus the amount of
compensation income recognized on exercise of the option.
OPTION PLAN BENEFITS
The Compensation Committee has not granted any stock options covering the
additional 550,000 shares of Common Stock issuable under the Option Plan if
the Plan Amendment is adopted by the stockholders. Accordingly, the benefits
or amounts that will be received by or allocated to any individual or group of
individuals under the Option Plan as amended by the Plan Amendment are not
determinable.
PROPOSAL 3: APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS
The Company has appointed the accounting firm of Coopers & Lybrand L.L.P. to
serve as the Company's independent public accountants for the fiscal year
ending December 31, 1997. Coopers & Lybrand L.L.P. has served the Company in
such capacity since 1992. The Company expects that representatives of Coopers
& Lybrand L.L.P. will be present at the Annual Meeting, with the opportunity
to make a statement if they so desire, and will be available to respond to
appropriate questions.
In the event that ratification of the appointment of Coopers & Lybrand
L.L.P. as the Company's independent public accountants is not obtained at the
Annual Meeting, the Board will reconsider its appointment.
15
<PAGE>
VOTE REQUIRED FOR APPROVAL
A quorum being present, the affirmative vote of a majority of the votes cast
is necessary to ratify the appointment of the independent public accountants.
RECOMMENDATION
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPOINTMENT OF COOPERS &
LYBRAND L.L.P. AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than 10% of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the "SEC") and the
Nasdaq National Market, Inc. Officers, directors and greater than 10%
stockholders are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file. Based solely upon a review of
Forms 3 and 4 and amendments thereto furnished to the Company pursuant to Rule
16a-3(e) of the Exchange Act during Fiscal 1996 and Form 5 and amendments
thereto furnished to the Company with respect to Fiscal 1996, the following
persons failed to file on timely basis, as disclosed in the above forms,
reports required by Section 16(a) of the Exchange Act during Fiscal 1996:
James H. Simons inadvertently failed to file a report on a timely basis
relating to two transactions in December 1996; Elisabeth Elterman
inadvertently failed to file a report on a timely basis relating to eight
transactions in December 1996; John R. Levine inadvertently failed to file a
report on a timely basis relating to two transactions in December 1996; Milton
E. Mohr inadvertently failed to file a report on a timely basis relating to
two transactions in December 1996; Howard L. Morgan inadvertently failed to
file a report on a timely basis relating to two transactions in December 1996;
J. Jeffrey Bingenheimer inadvertently failed to file a report on a timely
basis relating to two transactions in December 1996; Paul R. Maguire
inadvertently failed to file two reports on a timely basis relating to a total
of six transactions in November and December 1996; Stephen L. Adams
inadvertently failed to file a report on a timely basis relating to one
transaction in July 1996; Michael D. Maggio inadvertently failed to file two
reports on a timely basis relating to a total of four transactions in October
and December 1996; and the Bermuda Trust Company, as trustee of the Lord Jim
Trust, inadvertantly failed to file a report on a timely basis relating to two
transactions in December 1996. Gareth Taube inadvertantly failed to file an
initial report on a timely basis relating to becoming an executive officer of
the Company in November 1996. Kent Bradford inadvertantly failed to file an
initial report on a timely basis relating to becoming an executive officer of
the Company in December 1996.
OTHER MATTERS
EXPENSES OF SOLICITATION
The cost of soliciting proxies, including expenses in connection with
preparing and mailing this Proxy Statement, will be borne by the Company. In
addition, the Company will reimburse brokerage firms and other persons
representing beneficial owners of Common Stock of the Company for their
expenses in forwarding proxy material to such beneficial owners. Solicitation
of proxies by mail may be supplemented by telephone, telegram, telex and
personal solicitation by the directors, officers or employees of the Company.
No additional compensation will be paid for such solicitation.
STOCKHOLDER PROPOSALS
Any stockholder proposals submitted pursuant to Exchange Act Rule 14a-8 and
intended to be presented at the Company's 1998 Annual Meeting of Stockholders
must be received by the Company on or before December 3, 1997 to be eligible
for inclusion in the proxy statement and form of proxy to be distributed by
the Board in connection with such meeting.
16
<PAGE>
Any stockholder proposals intended to be presented at the Company's 1998
Annual Meeting, other than a stockholder proposal submitted pursuant to
Exchange Act Rule 14a-8, must be received in writing by the Secretary of the
Company at the principal executive office of the Company no later than the
close of business on March 3, 1998, nor prior to February 1, 1998, together
with all supporting documentation required by the Company's By-laws.
OTHER MATTERS
The Board does not know of any matters other than those described in this
Proxy Statement which will be presented for action at the Annual Meeting. If
other matters are presented, proxies will be voted in accordance with the best
judgment of the proxy holders.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR FISCAL 1996
(INCLUDING FINANCIAL STATEMENTS AND SCHEDULES THERETO), WHICH WILL BE FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION ON OR BEFORE MARCH 31, 1997, WILL
BE PROVIDED WITHOUT CHARGE TO ANY PERSON TO WHOM THIS PROXY STATEMENT IS
MAILED UPON THE WRITTEN REQUEST OF ANY SUCH PERSON TO J. JEFFREY BINGENHEIMER,
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, SEGUE SOFTWARE, INC., 1320 CENTRE
STREET, NEWTON CENTRE, MASSACHUSETTS 02159.
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS IMPORTANT TO THE
COMPANY. PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY
CARD TODAY.
By order of the Board of Directors:
Jeffrey C. Hadden
Secretary
Newton Centre, Massachusetts
April 2, 1997
17
<PAGE>
LOGO
SEGUE SOFTWARE, INC.
1320 CENTRE STREET
NEWTON CENTRE, MASSACHUSETTS 02159
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 2, 1997
The undersigned hereby constitutes and appoints Elisabeth Elterman, J.
Jeffrey Bingenheimer and Jeffrey C. Hadden, and each of them, as proxies of the
undersigned (the "Proxies"), with full power to substitute, and authorizes each
of them to represent and to vote all shares of common stock, par value $.01 per
share, of Segue Software, Inc. (the "Company") held by the undersigned at the
close of business on March 26, 1997, at the 1997 Annual Meeting of Stockholders
(the "Annual Meeting") of the Company to be held at the Conference Center of
Goodwin, Procter & Hoar LLP, Exchange Place, 53 State Street, Boston,
Massachusetts 02109 on Friday, May 2, 1997 at 10:00 a.m., and at any
adjournments or postponements thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
FOR THE PROPOSALS IN PARAGRAPHS 1, 2 AND 3, AND IN THE DISCRETION OF THE
PROXIES, FOR ANY MATTER DESCRIBED IN PARAGRAPH 4. A stockholder wishing to vote
in accordance with the recommendation of the Board of Directors of the Company
need only sign and date this Proxy and return it to the Company.
1. To elect eight members to the Board of Directors to hold office until the
1998 Annual Meeting of Stockholders and until their respective successors are
duly elected and qualified.
[_] FOR [_] AGAINST [_] ABSTAIN
2. To approve an amendment to the Company's Amended and Restated Incentive and
Non-Qualified Stock Option Plan (the "Plan") to increase the maximum number of
shares of Common Stock available for issuance under the Plan from 2,450,000 to
3,000,000 shares.
[_] FOR [_] AGAINST [_] ABSTAIN
3. To ratify the appointment of Coopers & Lybrand L.L.P. as the Company's
independent public accountants for the fiscal year ending December 31, 1997.
[_] FOR [_] AGAINST [_] ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon any other
matters that may be properly brought before the Annual Meeting and at any
adjournments or postponements thereof.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
LOGO
The undersigned hereby
acknowledge(s) receipt of a copy of
the Notice of Annual Meeting of
Stockholders, and hereby revoke(s) any
proxy or proxies heretofore given.
This Proxy may be revoked at any time
before it is exercised.
___________________________________________
Signature
___________________________________________
Print Name
___________________________________________
Date
