<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (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 Rule 14a-11(c) or Rule 14a-12
MANUGISTICS GROUP, 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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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> 2
[MANUGISTICS LOGO]
MANUGISTICS GROUP, INC.
2115 EAST JEFFERSON STREET
ROCKVILLE, MARYLAND 20852
June 20, 1996
Dear Shareholders:
It is my pleasure to invite you to the 1996 Annual Meeting of Shareholders
of Manugistics Group, Inc. to be held on Friday, July 26, 1996, at 9:00 a.m.,
Eastern Daylight Time, at the Bethesda Marriott, 5151 Pooks Hill Road, Bethesda,
Maryland.
Whether or not you plan to attend, and regardless of the number of shares
you own, it is important that your shares be represented at the Annual Meeting.
You are accordingly urged to complete, sign, date and return your proxy promptly
in the enclosed envelope. Your return of a proxy in advance will not affect your
right to vote in person at the Annual Meeting.
I hope that you will attend the Annual Meeting. The officers and directors
of the Company look forward to seeing you at that time.
Very truly yours,
/s/ WILLIAM M. GIBSON
------------------------
WILLIAM M. GIBSON
Chairman of the Board,
President and
Chief Executive Officer
<PAGE> 3
[MANUGISTICS LOGO]
MANUGISTICS GROUP, INC.
2115 EAST JEFFERSON STREET
ROCKVILLE, MARYLAND 20852
------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
FRIDAY, JULY 26, 1996
------------------------------
To our Shareholders:
The Annual Meeting of Shareholders (the "Meeting") of Manugistics Group,
Inc. (the "Company") will be held on Friday, July 26, 1996 at 9:00 a.m. E.D.T.
at the Bethesda Marriott, 5151 Pooks Hill Road, Bethesda, Maryland for the
following purposes:
1. To elect three Class I Directors, each for a term of three years and
until their respective successors have been elected and qualified;
2. To consider and vote upon a proposal to amend the Employee Stock Option
Plan;
3. To consider and vote upon a proposal to amend the Employee Incentive
Stock Option Plan; and
4. To transact such other business as may properly come before the
Meeting.
Shareholders of record at the close of business on May 24, 1996 are
entitled to receive notice of and to vote at the Meeting.
You are invited to attend the Meeting. Please carefully read the attached
Proxy Statement for information regarding the matters to be considered and acted
upon at the Meeting. We hope that you will attend the Meeting.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING IN PERSON, YOU ARE
URGED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED
RETURN POSTAGE-PAID ENVELOPE. No postage need be affixed to the return envelope
if mailed in the United States. If you attend the Meeting, you may withdraw your
proxy and vote in person by ballot.
By Order of the Board of Directors
/s/ HELEN A. NASTASIA
--------------------------
HELEN A. NASTASIA
General Counsel and Secretary
Rockville, Maryland
June 20, 1996
<PAGE> 4
MANUGISTICS GROUP, INC.
2115 EAST JEFFERSON STREET
ROCKVILLE, MARYLAND 20852
------------------------------
PROXY STATEMENT
This Proxy Statement and the accompanying Notice of Annual Meeting of
Shareholders and Proxy Card are being furnished in connection with the
solicitation by the Board of Directors of Manugistics Group, Inc. (the
"Company") of proxies to be voted at the Annual Meeting of Shareholders
scheduled to be held on Friday, July 26, 1996, at 9:00 a.m. E.D.T., at the
Bethesda Marriott, 5151 Pooks Hill Rd., Bethesda, Maryland, and any adjournment
or postponement thereof (the "Meeting"). This Proxy Statement and the enclosed
Proxy Card are being furnished on or about June 28, 1996, to all holders of
record of the Company's Common Stock (the "Common Stock") as of May 24, 1996. A
copy of the Company's 1996 Annual Report to Shareholders, including consolidated
financial statements for the fiscal year ended February 29, 1996, accompanies
this Proxy Statement.
At the Meeting, shareholders will elect three Class I directors, each to
serve for a term of three years. Shareholders will also act upon proposals to
amend two of the Company's existing employee stock option plans.
VOTING SECURITIES AND RECORD DATE
The Board of Directors has fixed the close of business on May 24, 1996 as
the record date (the "Record Date") for determination of shareholders entitled
to notice of and to vote at the Meeting. As of the Record Date, there were
10,540,852 shares of Common Stock issued and outstanding and there were no other
voting securities of the Company outstanding. Each outstanding share of Common
Stock entitles the record holder thereof to one vote. Abstentions and broker
non-votes are not counted as votes cast on any matter to which they relate.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Eligible shareholders of record may vote at the Meeting in person or by
means of the enclosed Proxy Card. You may specify your voting choices by marking
the appropriate boxes on the Proxy Card. The proxy solicited hereby, if properly
signed and returned to the Company and not revoked prior to or at the Meeting,
will be voted in accordance with the instructions specified thereon. If you
properly sign and return your Proxy Card, but do not specify your choices, your
shares will be voted by the proxy holders as recommended by the Board of
Directors.
The Board of Directors encourages you to complete and return the Proxy Card
even if you expect to attend the Meeting. You may revoke your proxy at any time
before it is voted at the Meeting by giving written notice of revocation to the
Secretary of the Company, by submission of a proxy bearing a later date or by
attending the Meeting and casting a ballot.
The proxy holders, William M. Gibson and Peter Q. Repetti, will vote all
shares of Common Stock represented by Proxy Cards that are properly signed and
returned by shareholders. The Proxy Card also authorizes the proxy holders to
vote the shares represented with respect to any matters not known at the time
this Proxy Statement was printed that may properly be presented for
consideration at the Meeting. YOU MUST RETURN A SIGNED PROXY CARD IF YOU WANT
THE PROXY HOLDERS TO VOTE YOUR SHARES OF COMMON STOCK.
The cost of soliciting proxies will be borne by the Company. Following the
mailing of proxy solicitation materials, proxies may be solicited by directors,
officers and employees of the Company and its subsidiaries personally, by
telephone or otherwise. Such persons will not receive any fees or other
compensation for such solicitation. In addition, the Company will reimburse
brokers, custodians, nominees and other persons holding
1
<PAGE> 5
shares of Common Stock for others for their reasonable expenses in sending proxy
materials to the beneficial owners of such shares and in obtaining their
proxies.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The By-Laws of the Company (the "By-Laws") provide that the Company's
business shall be managed by a Board of Directors of not less than five and not
more than nine directors, with the number of directors to be fixed by the Board
of Directors from time to time. The Board of Directors has fixed the number of
directors which shall constitute the entire Board of Directors at eight.
The By-Laws also provide that the Company's Board of Directors is divided
into three classes: Class I, Class II and Class III, each class being as nearly
equal in number as possible. The directors in each class serve terms of three
years and until their respective successors have been elected and have
qualified. There are presently three directors in Class I, three directors in
Class II and two directors in Class III.
The term of office of one class of directors expires each year in rotation
so that one class is elected at each annual meeting of shareholders for a three
year term. The term of the three Class I directors, Jack A. Arnow, Lynn C. Fritz
and Henry F. McCance, will expire at the Meeting. The other five directors will
remain in office for the remainder of their terms, as indicated below.
Director candidates are nominated by the Board of Directors. Shareholders
are also entitled to nominate director candidates for the Board of Directors in
accordance with the procedures set forth in the By-Laws.
At the Meeting, three Class I directors are to be elected. Two of the
director nominees are presently directors of the Company. The third Class I
director, Mr. McCance, has determined not to run for re-election, and the Board
of Directors has nominated Mr. J. Michael Cline to fill the resulting vacancy.
(Mr. McCance is a General Partner of Greylock Ventures Limited Partnership
("Greylock"). It is his frequent practice in connection with venture capital
investments made by Greylock to cease to serve on the boards of directors of
companies in which Greylock has invested upon the successful conclusion of the
relationship, which, with regard to the Company, occurred when Greylock
distributed the shares of Common Stock which it held to its partners in 1995.)
Each nominee has consented to being named as a nominee for director of the
Company and has agreed to serve if elected. The directors will be elected to
serve for three year terms and until their successors have been elected and have
qualified. In the event that any nominee should become unavailable or unable to
serve as a director, the persons named as proxies on the proxy card will vote
for the person(s) the Board of Directors recommends.
Mr. Robert J Lievense resigned from the Board of Directors effective as of
June 17, 1996. Mr. Lievense had been appointed as the representative of The Dun
& Bradstreet Corporation ("D&B") on the Board of Directors in connection with
the purchase by D&B of 490,000 shares of Common Stock from the Company in 1994.
Mr. Lievense resigned pursuant to provisions of the original stock purchase
agreement relating to the transfer of the shares acquired from the Company.
As a result of the resignation of Mr. Lievense, there is one vacancy in
Class II of the Board of Directors. Management of the Company is actively
considering potential candidates to recommend to the Board of Directors as
individuals suitable to fill the vacancy.
Set forth below is certain information regarding each nominee for Class I
director and each Class II and Class III director, each of whose term of office
will continue after the Meeting.
NOMINEES FOR CLASS I DIRECTORS
JACK A. ARNOW, 68, has served as a director of the Company since 1986. Mr.
Arnow is an independent investor.
2
<PAGE> 6
LYNN C. FRITZ, 54, has served as a director of the Company since January
1995. Since 1965, Mr. Fritz has been Chairman, President and Chief Executive
Officer of Fritz Companies, Inc., a publicly-held company that specializes in
freight forwarding and customhouse brokerage on a global basis.
J. MICHAEL CLINE, 36, has been a general partner with General Atlantic
Partners, a private investment firm with a primary focus on software and related
information technologies, since 1989. Prior to that time, Mr. Cline was an
associate with McKinsey & Company, Inc., a global strategic consulting firm. Mr.
Cline serves on a number of boards including Scopus Technologies, Inc., a
company that specializes in client server customer service management; Financial
Information Consulting Services Group, the leading company in electronic
banking; Management Information Technology, Inc., a company that focuses on
reporting tools; and Richter Systems International, a company that engages in
the retail systems business.
The affirmative vote of a majority of the outstanding shares of Common
Stock present or represented and entitled to vote at the Meeting is required to
elect each of the Class I Directors nominated above.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION
OF EACH OF THE NOMINATED CLASS I DIRECTORS.
INCUMBENT CLASS II DIRECTORS -- TO CONTINUE IN OFFICE FOR TERMS EXPIRING IN 1997
JOSEPH H. JACOVINI, 55, has served as a director of the Company since 1986.
He is a partner in Dilworth, Paxson, Kalish & Kauffman, LLP based in
Philadelphia, Pennsylvania, where he has practiced law since 1965. He has served
as Co-Chairman of that firm since 1995 and as Chairman of that firm's Corporate
Department since 1993. Mr. Jacovini has been a Trustee of Drexel University
since 1990. He also served as a member of the Board of the Philadelphia Regional
Port Authority from 1992 to early 1995 and as its Chairman.
THOMAS A. SKELTON, 48, has served as a director of the Company since April
1992. Mr. Skelton has served as President of Knowledge Systems Corporation, a
software company, since April 1996. From January 1995 to March 1996, he was the
Division President of Global Software, Inc. in Raleigh, North Carolina. From
1983 to 1994, Mr. Skelton worked in various management capacities with
Manugistics, Inc. In May 1983, he joined STSC, Inc. (now Manugistics, Inc., the
principal operating subsidiary of the Company) as Vice President of Sales; he
became Senior Vice President in 1986, Executive Vice President in March 1991 and
Chief Operating Officer in March 1992.
INCUMBENT CLASS III DIRECTORS -- TO CONTINUE IN OFFICE FOR TERMS EXPIRING IN
1998
WILLIAM M. GIBSON, 51, has served as President, Chief Executive Officer and
Chairman of the Board of Directors of the Company since its formation in 1986.
From 1983 until 1986, when it was purchased by the Company, Mr. Gibson served as
President, Chief Executive Officer and Chairman of the Board of Directors of
STSC, Inc. (now Manugistics, Inc., the principal operating subsidiary of the
Company). He joined STSC, Inc. as Executive Vice President and Chief Operating
Officer in 1982.
WILLIAM G. NELSON, 62, has served as a director of the Company since 1986.
Mr. Nelson has been Chief Executive Officer of Harrisdata, a company that
writes, manufactures and sells computer software and sells business products
since March 1990. He has been its Chairman since January 1995. From December
1991 to December 1994, Mr. Nelson was President and Chief Executive Officer of
Pilot Software, Inc. From April 1990 to December 1991, Mr. Nelson served in
several executive capacities at OnLine Software International, Inc., including
President, Chief Operating Officer and Chief Executive Officer. Mr. Nelson
serves as a Trustee of Hampton University and serves on the Board of Managers
for Swarthmore College.
Five of the current directors of the Company, Messrs. Arnow, Gibson,
Jacovini, McCance, and Nelson, initially were elected pursuant to the
Shareholders' Voting Agreement dated February 28, 1986, as amended, among the
Company, Greylock and certain shareholders of the Company. This Shareholders'
Voting Agreement terminated upon the closing of the initial public offering of
the Common Stock on August 20, 1993. The termination of the Shareholders' Voting
Agreement affected neither the current terms of such directors, nor their
ability to be renominated as directors.
3
<PAGE> 7
Mr. Cline, a general partner of General Atlantic Partners, is nominated as
a director to the Company's Board of Directors pursuant to the request of
General Atlantic Partners, which acquired an 8.8% ownership interest in the
Company in 1996. In connection with its acquisition, General Atlantic Partners
requested that a representative be appointed to the Company's Board of
Directors.
COMPENSATION OF DIRECTORS
To date, the Company, with the exception of a one-time stock grant in 1991,
has not paid fees to directors for serving on the Board of Directors or
Committees of the Board. Directors are reimbursed for their reasonable
out-of-pocket expenses incurred in connection with attendance at meetings of the
Board of Directors and committees thereof. The 1994 Outside Directors
Non-Qualified Stock Option Plan provides for the granting of options to purchase
5,000 shares of Common Stock to each outside, i.e., non-employee, director on an
annual basis based on their length of service for that fiscal year. In the
fiscal year ended February 29, 1996 ("fiscal year 1996"), options to purchase
shares under this plan were granted to Messrs. Arnow, Fritz, Nelson, McCance,
Jacovini, Lievense, for the benefit of D&B, and Skelton.
BOARD OF DIRECTORS' MEETINGS AND COMMITTEES
The Board of Directors held four regularly scheduled meetings during fiscal
year 1996. The Board of Directors has established standing Audit and
Compensation committees, each of which is composed of non-employee members of
the Board of Directors. The membership of each of these standing committees is
determined from time to time by the Board. The Board of Directors has not
established a nominating committee; the entire Board of Directors votes on
nominations of directors for the Company.
THE AUDIT COMMITTEE, which presently consists of Lynn C. Fritz, Joseph H.
Jacovini and Henry F. McCance, held one meeting during fiscal year 1996. The
committee selects, subject to approval of the Board of Directors, a firm of
independent certified public accountants to audit the books and accounts of the
Company and its subsidiaries for the fiscal year for which they are appointed.
In addition, the committee reviews and approves the scope and cost of all
services (including nonaudit services) provided by the firm selected to conduct
the audit. The committee also monitors the effectiveness of the audit effort and
the Company's financial reporting, and reviews the Company's financial and
operating controls.
THE COMPENSATION COMMITTEE, which presently consists of Jack A. Arnow,
William G. Nelson and Thomas A. Skelton held three meetings during fiscal year
1996. The committee is responsible for the approval and administration of the
compensation program for William M. Gibson, the Company's Chief Executive
Officer, President and Chairman of the Board of Directors. The committee also
reviews and approves compensation programs for the other officers of the Company
as recommended by Mr. Gibson. The committee is also responsible for the grant of
options to the Company's employees under the Company's various stock option
plans and administers the plans.
4
<PAGE> 8
OWNERSHIP OF MANUGISTICS GROUP, INC. STOCK
The following table sets forth certain information, as of April 30, 1996,
with respect to the beneficial ownership of shares of Common Stock by (i) each
shareholder known by the Company to be the beneficial owner of more than five
percent (5%) of the outstanding shares of Common Stock; (ii) each director of
the Company; (iii) each executive officer named in the Summary Compensation
Table appearing below under "Executive Compensation"; and (iv) all executive
officers and directors as a group. Except as indicated in the footnotes to the
table, the persons and entities named in the table have sole voting and
investment power with respect to all shares of Common Stock which they
respectively own beneficially.
The address of each person who is an officer or director of the Company is
2115 East Jefferson Street, Rockville, MD 20852.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED(1) OF CLASS
---------------------- --------------------- --------
<S> <C> <C>
American Express Company(2)............................... 600,000 5.7
General Atlantic Partners(3).............................. 919,000 8.8
William M. Gibson(4)...................................... 3,010,650 28.8
Kenneth S. Thompson(5).................................... 353,183 3.4
Joseph E. Broderick....................................... 0 *
Peter Q. Repetti(6)....................................... 3,863 *
Keith J. Enstice(7)....................................... 64,552 *
Mary Lou Fox(8)........................................... 88,100 *
Thomas A. Skelton(9)...................................... 427,715 4.1
Jack A. Arnow(10)......................................... 58,000 *
Henry F. McCance.......................................... 37,327 *
William G. Nelson(11)..................................... 123,000 1.2
Joseph H. Jacovini(12).................................... 31,000 *
Robert J Lievense(13)..................................... 0 *
Lynn C. Fritz(14)......................................... 2,500 *
Directors and executive officers as a group (13
persons)................................................ 4,220,880 40.4
</TABLE>
- ------------------------------
*Less than 1% of the outstanding Common Stock.
(1) Under applicable rules of the Securities and Exchange Commission (the
"SEC"), a person is deemed to be the beneficial owner of shares of Common
Stock if, among other things, he or she directly or indirectly has or
shares voting power or investment power with respect to such shares. A
person is also considered to beneficially own shares of Common Stock which
he or she does not actually own but has the right to acquire presently or
within the next sixty (60) days, by exercise of stock options or otherwise.
(2) Stock is owned jointly by American Express Company and American Express
Financial Corporation. The address of American Express Company is American
Express Tower, World Financial Center, New York, New York 10285 and the
address of American Express Financial Corporation is IDS Tower 10,
Minneapolis, Minnesota 55440.
(3) The address of General Atlantic Partners is 3 Pickwick Plaza, Greenwich,
Connecticut 08330.
(4) Includes 321,500 shares of Common Stock held by his wife.
(5) Includes 3,150 shares issuable upon exercise of options. Excludes 4,204
shares of Common Stock held by his wife.
(6) Includes 2,650 shares issuable upon exercise of options.
(7) All shares issuable upon exercise of options.
(8) Includes 71,100 shares issuable upon exercise of options.
(9) Includes 3,000 shares issuable upon exercise of options. Includes 50,000
shares held by his wife and 12,822 shares held by his wife as custodian for
his children.
(10) Includes 24,000 shares issuable upon exercise of options.
(11) Includes 24,000 shares issuable upon exercise of options.
(12) Includes 2,000 shares held by his wife and 19,000 shares of Common Stock
held by Prudential Bank & Trust Co. in a retirement savings plan for Mr.
Jacovini. Excludes 12,000 shares issuable upon exercise of options
beneficially owned by Dilworth, Paxson, Kalish & Kauffman, LLP of which Mr.
Jacovini is Co-Chairman and a partner, as to which shares Mr. Jacovini has
disclaimed any beneficial interest.
(13) Excludes 490,000 shares of Common Stock held by D&B, of which shares Mr.
Lievense disclaimed any beneficial interest. Mr. Lievense resigned as a
director effective June 17, 1996.
(14) Includes 2,500 shares issuable upon exercise of options.
5
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth summary information regarding compensation
paid by the Company for services during fiscal years 1996, 1995 and 1994 to the
Company's Chief Executive Officer and each of the four most highly compensated
executive officers other than the Chief Executive Officer whose individual total
salary and bonus on an annual basis exceeded $100,000 for fiscal year 1996 (the
"Named Executives").
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
--------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)(1)
- --------------------------------------- ---- --------- -------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
William M. Gibson 1996 $ 275,000 $46,500 -0- $2,248
President, Chief Executive 1995 262,000 21,000 -- 2,230
Officer and Chairman of 1994 253,000 37,350 2,279
the Board of Directors
Kenneth S. Thompson 1996 150,000 40,000 50,000 2,250
Executive Vice President, 1995 137,000 42,775 9,000 2,281
Supply Chain Products 1994 131,700 20,200 0 2,072
Business Unit
William J. Kaluza(2) 1996 126,000 20,600 -0- 2,228
Senior Vice President, 1995 119,250 24,000 9,000 1,978
Operations, Chief Financial 1994 110,500 18,600 0 2,085
Officer, Treasurer, and Assistant
Secretary
Mary Lou Fox 1996 125,000 40,000 30,000 2,240
Senior Vice President, 1995 109,333 42,250 9,000 1,976
Professional Services 1994 101,000 19,650 0 1,820
Keith J. Enstice 1996 130,000 42,000 20,000 2,290
Senior Vice President, 1995 120,000 29,000 9,000 2,264
Field Operations, 1994 94,792 63,497 (3) 0 2,083
Americas
</TABLE>
- ------------------------------
(1) The amount shown constitutes the Company's contributions to the respective
accounts of the named individuals under the Company's 1991 Amended and
Restated 401(k) Retirement Savings Plan.
(2) Mr. Kaluza resigned as an officer of the Company effective April 19, 1996.
(3) The amount shown constitutes bonus and commissions paid to Mr. Enstice in
fiscal year 1994.
6
<PAGE> 10
STOCK OPTIONS
No options were granted to the Chief Executive Officer during fiscal year
1996. The following table sets forth certain information concerning the grant of
options to the other Named Executives in fiscal year 1996. The Company has not
granted any stock appreciation rights ("SARs").
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
NUMBER OF PERCENT OF RATES OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE OR TERM
OPTIONS EMPLOYEES IN BASE EXPIRATION ------------------------
NAME GRANTED(#) FISCAL YEAR PRICE($/SH) DATE 5% 10%
- -------------------------- ---------- --------------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Kenneth S. Thompson....... 50,000(1) 8.28% $11.375 04/25/05 $ 358,250 $ 908,250
Mary Lou Fox.............. 30,000(1) 4.97% 11.375 04/25/05 214,950 544,950
Keith J. Enstice.......... 20,000(1) 3.31% 11.375 04/25/05 143,300 363,300
</TABLE>
- ------------------------------
(1) Each of the indicated options was granted pursuant to the Company's Employee
Incentive Stock Option Plan on April 25, 1995 and vests four years from the
date of grant. The option has an exercise price equal to the fair market
value of the Common Stock on the date of grant.
The following table summarizes the value realized upon exercise of
outstanding stock options and the value of the outstanding options held by the
Chief Executive Officer and the other Named Executives.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1996 AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
SHARES VALUE YEAR-END(#) AT FISCAL YEAR-END($)(2)
ACQUIRED ON REALIZED ---------------------------- ----------------------------
NAME EXERCISE(#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William M. Gibson.......... 0 $ 0 0 150 $ 0 $ 1,313
Kenneth S. Thompson........ 0 0 3,150 56,900 24,563 208,875
William J. Kaluza.......... 44,125 564,540 60,975 18,900 767,719 145,125
Mary Lou Fox............... 0 0 71,100 48,900 914,475 246,375
Keith J. Enstice........... 9,000 128,328 64,552 34,900 815,590 177,625
</TABLE>
- ------------------------------
(1) Computed by multiplying the number of shares of Common Stock acquired upon
exercise of options by the difference between (i) the per share fair market
value of the Common Stock on the date of exercise and (ii) the exercise
price per share.
(2) Computed by multiplying the number of options by the difference between (i)
the per share market value of the Common Stock on February 29, 1996 and (ii)
the exercise price per share.
7
<PAGE> 11
The information set forth in the following Report and Performance Graph
shall not be deemed incorporated by reference by anything incorporating by
reference this Proxy Statement or future filings generally into any filings
under the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, except to the extent that the Company specifically states that
it incorporates such information by reference.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Compensation Committee of the Board of Directors is directly
responsible for the approval and administration of the compensation program for
William M. Gibson, the Company's Chief Executive Officer, President and Chairman
of the Board of Directors. The Compensation Committee is also responsible for
the grant of options to the Company's employees under the Company's various
stock option plans and administers the plans. In fiscal year 1996, the
Compensation Committee consisted of three outside directors of the Company, Jack
A. Arnow, William G. Nelson and Thomas A. Skelton.
Mr. Gibson is responsible for the approval and administration of
compensation programs for the other executive officers of the Company, including
those named in the Summary Compensation Table, subject to review and approval by
the Compensation Committee and the Board of Directors.
Objectives and Policies
The objectives of the Company's executive compensation program, as
respectively implemented by the Compensation Committee and by Mr. Gibson, are
to:
- Attract and retain highly qualified executives to lead and manage the
Company by providing competitive total compensation packages;
- Reward executives based on the business performance of the Company;
- Provide executives with incentives designed to maximize the long-term
performance of the Company; and
- Assure that objectives for corporate and individual performance are
established and measured.
For fiscal year 1996, the components of the Company's executive
compensation program included annual base salary and short-term incentive bonus
plans. In fiscal year 1996, stock options to purchase shares of the Company's
Common Stock were awarded as a long-term incentive to executive officers of the
Company as follows: Joseph E. Broderick, 120,000 shares, upon his appointment as
the Company's Executive Vice President, Client Sales and Services Business Unit
in December 1995; Kenneth S. Thompson, 50,000 shares; Mary Lou Fox, 30,000
shares; and Keith J. Enstice, 20,000 shares.
Base Salaries
Base salaries for executive officers (including the Chief Executive
Officer) are determined by evaluating the responsibilities associated with their
respective positions and the experience of the officers and by reference to
salaries paid in the competitive marketplace to executive officers with
comparable ability and experience following review of compensation information
available in certain widely-known surveys and databases, including the
internationally recognized Information Technology Association of America
Compensation Survey. Individual salary increases, which are reviewed annually,
are based on the Company's financial performance in the prior fiscal year and
the attainment of individual objectives during the prior fiscal year. In the
case of operating executive officers, other factors considered include the
financial results of the officer's business unit as well as non-financial
performance measures, such as improvements in productivity, development and
introduction of new products, improvement of product quality, relationships with
customers and leadership and management development.
Base salaries are set by Mr. Gibson for the other executive officers. No
specific weight of relative importance is assigned to the various factors and
compensation information considered. Accordingly, the
8
<PAGE> 12
Company's executive compensation policies and practices may be deemed informal
and subjective, although they are based on such factors and detailed
investigation.
Short-Term Incentive Plans
During fiscal year 1996, the Company maintained a short-term incentive plan
for executive officers, the Executive Annual Incentive Plan (the "Executive
Plan"). That plan provides for the award of cash bonuses to participants based
on fiscal year 1996 performance.
The Executive Plan is intended to (i) recognize the contribution of members
of management toward attainment of the Company's objectives by granting awards
based on the contribution of individual employees in meeting the objectives of
the individual's specific business unit; (ii) give additional incentive to
executives covered by the Executive Plan to increase the profitability of the
Company; and (iii) assist in attracting and retaining highly talented
executives. Under the Executive Plan, executives may receive awards based on
individual performance or on the total Company performance. Discretionary awards
may also be made under the Executive Plan by the President of the Company in
amounts not greater than ten percent (10%) of the base salary of the
participant. Responsibility for the administration of the Executive Plan resides
with the President of the Company and is subject to the review and approval of
the Compensation Committee and the Board of Directors.
Long-Term Incentive Plans
The Company historically has provided long-term incentive compensation to
attract, motivate and retain executive officers and other employees through
grants of stock options under the Company's Employee Incentive Stock Option
Plan. The Compensation Committee believes that this form of compensation closely
aligns the interests of executive officers with those of the Company's
shareholders and provides a major incentive in building shareholder value. The
Compensation Committee designates the employees who shall be granted options and
the amount and terms of the options granted. The number of stock options granted
to each individual is based on his or her salary range, position, level of
responsibility, and performance during the relevant fiscal year. All grants are
made with an exercise price not less than the fair market value of the Common
Stock on the date of grant.
Chief Executive Officer's Compensation and Corporate Performance for Fiscal Year
1996
In determining the base salary for fiscal year 1996 of Mr. Gibson, the
Company's Chief Executive Officer, President and Chairman of the Board of
Directors, the Compensation Committee considered the overall performance of the
Company, Mr. Gibson's individual performance, his salary level relative to
salary ranges for comparable positions in other companies and his length of
service to the Company. The Compensation Committee also considered the
recommendation of Mr. Gibson as to his proposed compensation. The Compensation
Committee's determination was not subject to precise criteria or formulas.
Accordingly, the determination may be deemed informal and subjective although
based on such detailed considerations.
In determining Mr. Gibson's base salary for fiscal year 1996 the
Compensation Committee noted that the Company's financial results for fiscal
year 1995 were significantly stronger than those for the prior fiscal year. The
Compensation Committee took particular note of Mr. Gibson's contributions in
meeting those results. The Compensation Committee also noted that under Mr.
Gibson's leadership, the Company has become and continues to be the leading
provider of software and services for supply chain management.
Based on the foregoing considerations, the Compensation Committee increased
Mr. Gibson's annual base salary for fiscal year 1996 by approximately 5%, from
$262,000 to $275,000. This increase was reviewed and unanimously ratified by the
Board of Directors.
Under the Executive Plan applicable in fiscal year 1996, the Compensation
Committee awarded to Mr. Gibson an incentive cash bonus of $46,500, an amount
equal to approximately 17% of his base salary for fiscal year 1996. The
Compensation Committee based the award on Mr. Gibson's contributions to the
9
<PAGE> 13
achievement of specific Company earnings objectives targeted under the Executive
Plan. No stock options were awarded to Mr. Gibson for fiscal year 1996.
Compensation Committee
Jack A. Arnow
William G. Nelson
Thomas A. Skelton
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total return to shareholders of
the Common Stock with the cumulative total return of the NASDAQ Stock Market
(US) Index from the date of the Company's initial public offering (August 13,
1993) to fiscal year end (February 29, 1996). In addition, the graph also
compares the Company's performance to that for NASDAQ Computer and Data
Processing Stocks. The graph assumes that the value of the investment in the
Common Stock and each index was $100 on August 13, 1993 and that all dividends
were reinvested. The Company has not paid any dividends on its Common Stock and
does not intend to do so in the foreseeable future. The performance graph is not
necessarily indicative of future performance.
<TABLE>
<CAPTION>
NASDAQ
NASDAQ Stock Computer and
Measurement Period Market (US Data Processing
(Fiscal Year Covered) MANUGISTICS Companies) Stocks
<S> <C> <C> <C>
8/13/93 100.00 100.00 100.00
2/28/94 143.9 110.6 113.4
2/28/95 103.7 112.2 137.0
2/29/96 146.3 156.3 207.5
</TABLE>
10
<PAGE> 14
AGREEMENTS WITH EMPLOYEES
All employees of the Company and its subsidiaries, including executive
officers, are required to sign a Conditions of Employment Agreement upon joining
the Company and its subsidiaries. This agreement restricts the ability of the
employee to compete with the Company and its subsidiaries during his or her
employment with the Company and for a period of one (1) year thereafter, and
contains certain confidentiality and invention assignment provisions.
CERTAIN BUSINESS RELATIONSHIPS
Joseph H. Jacovini, a director of the Company, is a partner with Dilworth,
Paxson, Kalish & Kauffman, counsel to the Company, which firm rendered legal
services to the Company in fiscal year 1996. The Company believes that it
received such services on terms no less favorable than could have been obtained
from an unrelated firm.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, (the
"Exchange Act") requires the Company's executive officers, directors and persons
who own more than ten percent (10%) of the Common Stock (collectively,
"Reporting Persons") to file initial reports of ownership and changes of
ownership of the Common Stock with the SEC and the NASDAQ Stock Market.
Reporting Persons are required to furnish the Company with copies of all forms
that they file under Section 16(a). Based solely upon a review of the copies of
such forms received by the Company or written representations from Reporting
Persons, the Company believes that, with respect to fiscal year 1996, all
Reporting Persons complied with all applicable filing requirements under Section
16(a), except late filings were made on Form 3 for Joseph Broderick, Executive
Vice President, Client Sales and Services Business Unit, and on Form 4 for Mr.
Fritz.
PROPOSAL 2 -- APPROVAL OF AMENDMENTS TO THE
EMPLOYEE STOCK OPTION PLAN
In January and April 1996, the Board of Directors adopted proposals to
amend the Company's Employee Stock Option Plan (the "ESOP"), subject to
shareholder approval. The proposed amendments to the ESOP would (a) permit the
Company's Compensation Committee to determine the last day of work date for
purposes of determining when stock options for terminating employees shall vest
under the ESOP; (b) permit consultants, who are not employees of the Company,
who are specifically granted stock options by the Company's Boards of Directors,
to receive stock option grants; (c) allow employees to exercise vested stock
options under the ESOP in the event that the Company would not be a surviving
company in a merger; and (d) to increase the number of shares reserved for
issuance under the ESOP by 600,000 shares. The Board of Directors believes that
the proposed amendments to the ESOP will make the plan more favorable to
employees and will encourage employees of the Company to remain in the Company's
employment.
The description that follows is an overview of the material provisions of
the ESOP and is qualified in its entirety by reference to the ESOP. A copy of
the complete ESOP, as amended, is attached hereto as Appendix A.
DESCRIPTION OF THE ESOP AND OPTION TERMS
PURPOSE. The purpose of the ESOP is to provide employees with the
opportunity to own shares of the Company's stock and to provide incentive to
employees to remain employed with the Company. The Board of Directors believes
that the proposed amendment will help the Company attract and retain highly
qualified employees.
GENERAL; ELIGIBILITY. The ESOP provides for the granting of non-qualified
stock options to all full-time employees and consultants of the Company or its
subsidiaries. The purpose of the ESOP is to encourage stock ownership by
employees of the Company and its subsidiaries so that such employees can acquire
or increase their interest in the success of and be encouraged to remain in the
employ of the Company or its subsidiaries.
11
<PAGE> 15
All full-time employees (including officers whether or not they are directors)
are eligible to receive options under the ESOP upon employment with the Company
or its subsidiaries, certain individuals who were previously employees of the
Company and consultants who are not employees of the Company, who are
specifically granted stock options by the Company's Board of Directors.
Currently, there are approximately 525 employees eligible to participate in the
ESOP. The stock subject to options under the ESOP are shares of the authorized
but unissued or reacquired Common Stock. As proposed to be amended, the
aggregate number of shares which may be issued under options shall not exceed
2,782,119 shares of Common Stock. A participant is not required to exercise any
stock options which are granted to such participant pursuant to the ESOP.
ADMINISTRATION. The ESOP is administered by the Compensation Committee of
the Board of Directors, which Compensation Committee shall for purposes of
administering the ESOP consist of not less than two members of the Board who are
"disinterested persons" as defined in Rule 16(b)-3(c)(2)(i) of the Exchange Act.
As of the date of this Proxy Statement, Jack A. Arnow, William G. Nelson and
Thomas A. Skelton comprise the Compensation Committee. No person while a member
of the Compensation Committee shall receive a discretionary grant or award under
the ESOP or any other stock plan of the Company. The Compensation Committee
shall automatically award employees a specific number of options on the date of
employment depending upon their job title and upon attaining certain promotions.
In addition, the Compensation Committee may select employees of the Company to
whom discretionary grants of options are made, the times at which options are
granted and the number of shares which may be purchased upon the exercise of
options.
TERMS AND CONDITIONS OF GRANT. Options granted under the ESOP will have an
option price of not less than 100% of the fair market value of the Common Stock
on the day of the grant. As long as the Common Stock is traded in the
over-the-counter market, such fair market value shall be deemed to be the
average of the high and low prices of the Common Stock in the over-the-counter
market on the date previous to the date the option is granted, as reported by
the National Association of Securities Dealers, Inc. All options granted under
the ESOP shall vest and become exercisable in installments of twenty-five
percent (25%) per year commencing twelve (12) months after the date of the grant
of the option, so that the option will be fully exercisable four (4) years from
the date of the grant. During the lifetime of the optionee the option shall be
exercisable only by the optionee and shall not be assigned, pledged or otherwise
disposed of by the optionee and no other person shall acquire any rights
therein. Except as set forth below, options may be exercised by an optionee only
during the period in which the optionee is employed by the Company or its
subsidiaries, but in no event more than ten (10) years after the date of the
grant. Options are exercisable by payment in full for the shares of Common Stock
being purchased, such payment to be made in cash, by check, or at the discretion
of the Compensation Committee, in Common Stock or other property held by the
optionee.
If the optionee dies while in the employ of the Company or a subsidiary,
the option shall remain exercisable by the executors or administrators of the
optionee's estate, or by any person who shall have acquired the option directly
from the optionee by bequest or inheritance for a period of ninety (90) days
from the date of death to the extent that the options were currently exercisable
as of the date of death. Options are not transferable other than by will or the
laws of descent and distribution. If the optionee becomes disabled while in the
employ of the Company or a subsidiary, the option will remain exercisable by the
optionee for a period of ninety (90) days from the date of the event that is the
cause of the disability to the extent that the option was currently exercisable
as of the date of disability, at which time the option will terminate. However,
if the optionee returns to work within a one year period from the date of
disability the option will be restored for all vesting purposes as if the
disability had never occurred.
RECAPITALIZATION. Subject to any required action by the shareholders of
the Company, the number of shares of Common Stock covered by each outstanding
option, and the price per share thereof, shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Common Stock
resulting from a subdivision or consolidation of shares or the payment of a
stock dividend on the Common Stock or any other increase or decrease in the
number of such shares effected without receipt of consideration by the Company.
If the Company is the surviving company in a merger or consolidation, each
outstanding option shall pertain to and apply to the securities to which a
holder of the number of shares of Common Stock
12
<PAGE> 16
subject to the option would be entitled. A dissolution or liquidation of the
Company or a merger or consolidation in which the Company is not the surviving
corporation, shall cause each outstanding option to terminate, provided that
each optionee shall, in such event, if a period of twelve (12) months from the
date of the granting of the option shall have expired, have the right
immediately prior to such dissolution or liquidation, or merger or consolidation
in which the Company is not the surviving corporation, to exercise his option in
whole or in part without regard to the installment provisions of the ESOP.
Notwithstanding the above provisions, an option will not terminate if assumed by
the surviving or acquiring corporation, or its parent, upon a merger or
consolidation under circumstances which are not deemed a modification of the
option within the meaning of Section 424 of the Code.
To the extent that such adjustments relate to the Common Stock, such
adjustment shall be made by the Compensation Committee, whose determination
shall be conclusive.
RIGHTS AS A SHAREHOLDER. An optionee or a permitted transferee of an
option shall have no rights as a shareholder with respect to any shares of
Common Stock covered by the option until the date of the issuance of a stock
certificate to the optionee for such shares following the exercise of such
option.
EFFECTIVE DATE AND TERM OF PLAN; SHAREHOLDER APPROVAL. The effective dates
of the amendments to the ESOP are January 16, 1996 and April 30, 1996, and its
term is ten (10) years. However, no option granted after the effective date may
be exercised unless the amendment of the ESOP is approved by the vote of a
majority of the outstanding shares of the Common Stock present or represented
and entitled to vote at the Meeting.
MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the terms and
conditions and within the limitations of the ESOP, the Compensation Committee
may modify outstanding options granted under the ESOP, or accept the surrender
of outstanding options (to the extent not theretofore exercised). The
Compensation Committee shall not, however, modify any outstanding options so as
to specify a lower price or accept the surrender of outstanding options and
authorize the granting of new options in substitution therefor specifying a
lower price. Notwithstanding the foregoing, no modification of an option shall,
without the consent of the optionee, alter or impair any rights or obligations
under any option theretofore granted under the ESOP.
CONFIDENTIALITY AGREEMENT. As a condition of the optionee's acceptance of
the option, the Compensation Committee may provide that the optionee shall agree
to be bound by a confidentiality agreement with the Company containing such
terms as the Compensation Committee and Board of Directors shall deem advisable.
GRANT OF OPTIONS. Options may be granted pursuant to the ESOP from time to
time until such times as all shares of Common Stock available under the ESOP
have been made subject to an option grant. If any outstanding option granted
under the ESOP for any reason expires or is terminated, the shares of Common
Stock allocable to the option may again be subject to an option under the ESOP.
CONTINUED EMPLOYMENT. The grant of an option pursuant to the ESOP shall
not be construed to imply or to constitute evidence of any agreement, expressed
or implied, on the part of the Company or any subsidiary to continue to employ
an employee, or to affect the right of the Company or any subsidiary to
terminate the employment of any employee or to alter the responsibilities,
duties or authority of any employee.
TAX CONSEQUENCES. There are no tax consequences to the participant or the
Company upon the grant of a nonqualified stock option pursuant to the ESOP. On
exercising a nonqualified stock option, the optionee realizes ordinary income to
the extent that the market value of the Common Stock exceeds the exercise price,
and the Company may claim a tax deduction of like amount.
AMENDMENTS. The Board of Directors of the Company may, insofar as
permitted by law, from time to time, with respect to any shares at the time not
subject to options, suspend or discontinue the ESOP or revise or amend the ESOP,
except that, without approval of the shareholders, no such revision or amendment
shall materially increase the number of shares of Common Stock which may be
issued pursuant to the ESOP,
13
<PAGE> 17
materially increase the benefits accruing to participants under the ESOP, or
otherwise materially modify the requirements for eligibility.
PLAN BENEFITS
The table below shows the number of options granted under the ESOP during
fiscal year 1996 to the group listed. Outside directors are not eligible to
receive options under the ESOP. The number of options to be granted under the
ESOP during fiscal year 1997 cannot be determined at this time because the
number of options granted depends on the number of new employees that are hired
and the number of employees that are promoted, neither of which can be
determined at this time.
EMPLOYEE STOCK OPTION PLAN -- NUMBER OF OPTIONS GRANTED DURING FISCAL YEAR 1996
<TABLE>
<CAPTION>
OPTIONS
NAME AND POSITION GRANTED
------------------------------------------------------------------- -------
<S> <C>
All executive officers as a group (8 persons)...................... 600
Non-executive officer employees as a group (approximately 307
persons)......................................................... 348,550
</TABLE>
As of May 24, 1996 the aggregate market value of Common Stock underlying
the total number of options outstanding under the ESOP was approximately
$20,734,701, and the aggregate market value of the Common Stock underlying the
total number of options that remain to be issued under the ESOP was
approximately $2,709,000 based on a price per share of the Common Stock of
$15.75 as of such date. If the proposed amendment to the ESOP is approved by the
shareholders, the aggregate market value of the Common Stock underlying the
additional options that could be issued under the ESOP will be approximately
$9,450,000 based on a price per share of the Common Stock of $15.75 as of May
24, 1996.
The affirmative vote of a majority of the outstanding shares of the Common
Stock present, or represented and entitled to vote at the Meeting is required to
approve the amendment to the ESOP.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE PROPOSED
AMENDMENT TO THE ESOP.
PROPOSAL 3 -- APPROVAL OF AMENDMENTS TO THE
EMPLOYEE INCENTIVE STOCK OPTION PLAN
In January 1996, the Board of Directors adopted a proposal to amend the
Company's Employee Incentive Qualified Stock Option Plan (the "ISOP"), subject
to shareholder approval. The proposed amendments to the ISOP would (a) permit
employees whose employment is terminated to exercise any vested options for a
period of thirty days from his/her last day of employment and (b) permit the
Company's Compensation Committee to determine the last day of work date for
purposes of determining when stock options for terminating employees shall vest
under the ISOP. The Board of Directors believes that the proposed amendments to
the ISOP will make the plan more favorable to employees and will encourage
employees of the Company to remain in the Company's employment.
The description that follows is an overview of the material provisions of
the ISOP and is qualified in its entirety by reference to the ISOP. A copy of
the complete ISOP, as amended, is attached hereto as Appendix B.
DESCRIPTION OF THE ISOP AND OPTION TERMS
PURPOSE. The ISOP is intended to encourage stock ownership by certain
officers and key executive employees of the Company so that such employees may
acquire or increase their proprietary interest in the success of the Company and
its subsidiaries, and so that they may be encouraged to remain in the employ of
the Company or its subsidiaries. It is further intended that options granted
pursuant to the ISOP shall
14
<PAGE> 18
constitute incentive stock options within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), to the extent permitted
by the Code.
ADMINISTRATION. The ISOP shall be administered by the Compensation
Committee which, for purposes of administering the ISOP, shall consist of not
less than two members of the Company's Board of Directors who are "disinterested
persons" as such term is defined in the Exchange Act. As of the date of the
Proxy Statement, Jack A. Arnow, William G. Nelson and Thomas A. Skelton comprise
the Compensation Committee. No person while a member of the Compensation
Committee shall receive a discretionary grant or award under the ISOP or any
other stock plan of the Company. The Compensation Committee shall from time to
time in its discretion designate the employees who shall be granted options and
the amount of options to be granted to each. The Compensation Committee shall
have the final authority to determine these matters.
ELIGIBILITY. The persons who shall be eligible to receive options under
the ISOP shall be the key executive employees (including officers whether or not
they are directors) of the Company or its subsidiaries. Currently, there are
approximately 22 employees eligible to participate in the ISOP.
STOCK. The stock subject to the options shall be shares of the Company's
authorized but unissued or reacquired Common Stock. As proposed to be amended,
the aggregate number of shares which may be issued under options shall not
exceed 902,975 shares of Common Stock, subject to adjustment as provided for
below. In the event that any outstanding option under the ISOP for any reason
expires or is terminated, the shares of Common Stock allocable to the
unexercised portion of such option may again be subject to an option grant under
the ISOP.
OPTION PRICE. The option price shall not be less than 100% of the fair
market value per share of the Common Stock of the Company on the day of the
grant. As long as the Common Stock is traded in the over-the-counter market,
such fair market value shall be deemed to be the mean between the dealer "bid"
and "ask" prices of Common Stock in the over-the-counter market on the day the
option is granted, as reported by the National Association of Securities
Dealers, Inc. Subject to the foregoing, the Compensation Committee shall have
full authority and discretion in fixing the option price.
MEDIUM AND TIME OF PAYMENT. Unless otherwise permitted by the Compensation
Committee and the Board of Directors, the option price shall be payable in full
in cash or check.
TERM AND EXERCISE OF OPTIONS. No option shall be exercisable either in
whole or in part prior to twelve (12) months from the date it is granted or
after ten (10) years from the date on which it is granted. Options may only be
exercised by an optionee for so long as the optionee is employed by the Company
except as otherwise provided herein. The option shall be exercisable as
determined by the Compensation Committee. The Compensation Committee may
provide, in the case of an option not immediately exercisable in full, for the
acceleration of the time at which the option may be exercised. Not less than
1,000 shares may be purchased at any one time upon exercise of an option unless
the number purchased is the total number at the time purchasable under the
option. During the lifetime of the optionee, the option shall be exercisable
only by the optionee and shall not be assignable or transferable by the optionee
and no other person shall acquire any rights therein. To the extent not
exercised, installments shall accumulate and be exercisable, in whole or in
part, in any subsequent period but not later than ten years from the date the
option is granted.
PRIOR OUTSTANDING OPTION. No option (for purposes of this paragraph called
"New Option") shall be exercisable while there is outstanding any incentive
stock option (as defined in Section 422 of the Code), to purchase Common Stock
in the Company, which incentive stock option was granted, before the granting of
the New Option, to the person to whom the New Option is granted.
TERMINATION OF EMPLOYMENT EXCEPT BY DEATH OR DISABILITY. In the event that
the employment of an optionee by the Company or its subsidiaries shall terminate
for any reason other than death or disability, then as of the date the optionee
has notice of such termination, such optionee shall have no further right to
exercise any option.
DEATH OR DISABILITY OF OPTIONEE AND TRANSFER OF OPTION. If the optionee
shall die or become disabled while in the employ of the Company or a subsidiary,
and shall not have fully exercised an option, the option
15
<PAGE> 19
may be exercised, subject to the condition that no option shall be exercisable
after the expiration of ten years from the date it is granted, to the extent
that the optionee's right to exercise such option had accrued at the time of the
optionee's death or disability and had not previously been exercised, at any
time within three (3) months after the optionee's death or disability, by the
optionee, or in the case of death, by the executors or administrators of the
optionee or by any person or persons who shall have acquired the option directly
from the optionee by bequest or inheritance. No option shall be transferable by
the optionee otherwise than by will or the laws of descent and distribution.
RECAPITALIZATION. Subject to any required action by the shareholders of
the Company, the number of shares of Common Stock covered by each outstanding
option, and the price per share thereof in each such option, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock of the Company resulting from a subdivision or
consolidation of shares or the payment of a stock dividend (but only on the
Common Stock) or any other increase or decrease in the number of such shares
effected without receipt of consideration by the Company.
Subject to any required action by the shareholders of the Company, if the
Company shall be the surviving corporation in any merger or consolidation, each
outstanding option shall pertain to and apply to the securities to which a
holder of the number of shares of Common Stock subject to the option would have
been entitled. A dissolution or liquidation of the Company or a merger or
consolidation in which the Company is not the surviving corporation, shall cause
each outstanding option to terminate, provided that each optionee shall, in such
event, if a period of twelve (12) months from the date of the granting of the
option shall have expired, have the right immediately prior to such dissolution
or liquidation, or merger or consolidation in which the Company is not the
surviving corporation, to exercise his option in whole or in part without regard
to the installment provisions of the ISOP. Notwithstanding the above provisions,
an option will not terminate if assumed by the surviving or acquiring
corporation, or its parent, upon a merger or consolidation under circumstances
which are not deemed a modification of the option within the meaning of Section
424 of the Code.
To the extent that the foregoing adjustments relate to stock or securities
of the Company, such adjustments shall be made by the Compensation Committee,
whose determination in that respect shall be final, binding and conclusive,
provided that each option granted pursuant to this ISOP shall not be adjusted in
a manner that causes the option to fail to continue to qualify as an incentive
stock option within the meaning of Section 422 of the Code.
The grant of an option pursuant to the ISOP shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.
RIGHTS AS A SHAREHOLDER. An optionee or a transferee of an option shall
have no rights as a shareholder with respect to any shares of Common Stock
covered by his option until the date of the issuance of a stock certificate to
him for such shares.
EFFECTIVE DATE AND TERM OF PLAN; SHAREHOLDER APPROVAL. The effective date
of the amendment of the ISOP is January 16, 1996, and its term is ten (10)
years. However, no option granted after the effective date may be exercised
unless the amendments to the ISOP are approved by the vote of a majority of the
outstanding shares of the Common Stock present or represented and entitled to
vote at the Meeting.
MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the terms and
conditions and within the limitations of the ISOP, the Compensation Committee
may modify outstanding options granted under the ISOP, or accept the surrender
of outstanding options (to the extent not theretofore exercised). The
Compensation Committee shall not, however, modify any outstanding options so as
to specify a lower price or accept the surrender of outstanding options and
authorize the granting of new options in substitution therefor specifying a
lower price. Notwithstanding the foregoing, however, no modification of an
option shall, without the consent of the optionee, alter or impair any rights or
obligations under any option theretofore granted under the ISOP.
16
<PAGE> 20
CONFIDENTIALITY AGREEMENT AND COVENANT NOT TO COMPETE. The Compensation
Committee may provide that, as a condition of the employee's acceptance of the
option, the employee shall agree to be bound by a certain confidentiality
agreement of the Company which contains a covenant not to compete and containing
such other terms as the Compensation Committee and Board of Directors shall deem
advisable.
OTHER PROVISIONS. The option grant may provide for additional restrictions
upon the exercise of the option or the transfer of the shares of Common Stock
received upon exercise, as the Compensation Committee and the Board of Directors
shall deem advisable. Any such option grant shall contain such limitations and
restrictions upon the exercise of the option as shall be necessary in order that
such option will be an "incentive stock option" as defined in Section 422 of the
Code or to conform to any change in the law.
OPTIONS TO CERTAIN SHAREHOLDERS. Notwithstanding any other provision
herein, in any option granted to an individual who, at the time the option is
granted, possesses more than ten percent (10%) of the total combined voting
power of the Common Stock of the Company, the option price must be at least
one-hundred and ten percent (110%) of the fair market value of the Common Stock
subject to the option on the date of the option grant.
ANNUAL LIMITATION PER EMPLOYEE. The aggregate fair market value
(determined as of the time the option is granted under the ISOP) of the Common
Stock for which any employee may be granted incentive stock options which are
first exercisable in any calendar year (under all such plans of the Company and
the subsidiaries) shall not exceed $100,000. Any excess options granted pursuant
to the ISOP shall be nonqualified options under the Code.
AMENDMENT OF THE ISOP. The Board of Directors of the Company may, insofar
as permitted by law, from time to time, with respect to any shares at the time
not subject to options, suspend or discontinue the ISOP or revise or amend it in
any respect whatsoever except that, without approval of the shareholders, no
such revision or amendment shall change the number of shares of Common Stock
subject to the ISOP, change the designation of the class of employees eligible
to receive options, decrease the price at which options may be granted, or
remove the administration of the ISOP from the Compensation Committee.
Furthermore, the ISOP may not, without the approval of the stockholders, be
amended in any manner that will cause options issued under it to fail to meet
the requirements of incentive stock options as defined in Section 422 of the
Code.
CONTINUED EMPLOYMENT. The grant of an option pursuant to the ISOP shall
not be construed to imply or to constitute evidence of any agreement, expressed
or implied, on the part of the Company or any subsidiary to continue to employ
an employee.
PLAN BENEFITS
During fiscal year 1996, Joseph E. Broderick, an executive officer of the
Company, was granted an option under the ISOP to purchase 120,000 shares of
Common Stock; Kenneth S. Thompson was granted an option to purchase 50,000
shares of Common Stock; Mary Lou Fox was granted an option to purchase 30,000
shares of Common Stock; and Keith J. Enstice was granted an option to purchase
20,000 shares of Common Stock. Each of those option grants has a four year
vesting period. Because the grants of options under the ISOP are at the
discretion of the Compensation Committee, the number of options which will be
granted during fiscal year 1997 cannot presently be determined.
As of May 24, 1996 the aggregate market value of Common Stock underlying
the total outstanding options granted under the ISOP was approximately
$3,465,000, and the aggregate market value of the Common Stock underlying the
total number of options that remain to be issued under the ISOP was
approximately $1,543,106 based on a price per share of the Common Stock of
$15.75 as of that date.
The affirmative vote of a majority of the outstanding shares of Common
Stock present, or represented and entitled to vote at the Meeting is required to
approve the amendments to the ISOP.
THE BOARD DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE PROPOSED
AMENDMENTS TO THE ISOP.
17
<PAGE> 21
SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors, upon the recommendation of the Audit Committee, has
selected Deloitte & Touche LLP, independent accountants, as auditors of the
Company to examine and report to shareholders on the consolidated financial
statements of the Company and its subsidiaries for the fiscal year ending on
February 28, 1997 ("fiscal year 1997"). Deloitte & Touche LLP currently serves
as the Company's independent accountants, and has been the Company's independent
accountants since the fiscal year ended February 28, 1987. Representatives of
Deloitte & Touche LLP will be present at the Meeting and will be given an
opportunity to make a statement. They also will be available to respond to
appropriate questions from shareholders.
SHAREHOLDER PROPOSALS
Shareholder proposals submitted for inclusion in the proxy statement for
the 1997 Annual Meeting of Shareholders must be received by the Company at the
Company's corporate headquarters address on or before February 20, 1997 and must
be submitted in accordance with Rule 14a-8 of the Exchange Act.
OTHER BUSINESS
The Board of Directors does not intend to bring any other matter before the
Meeting and does not know of any other business which others will present for
consideration at the Meeting. Except as the Board of Directors may otherwise
permit, only the business set forth and discussed in the Notice of Annual
Meeting of Shareholders and this Proxy Statement may be acted on at the Meeting.
If any other business does properly come before the Meeting the proxy holders
will vote on such matters according to their discretion.
By Order of the Board of Directors
/s/ HELEN A. NASTASIA
-------------------------------
HELEN A. NASTASIA
General Counsel and Secretary
ALL SHAREHOLDERS ARE URGED TO COMPLETE, SIGN, DATE, AND RETURN THE
ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE. THANK YOU FOR
YOUR PROMPT ATTENTION TO THIS MATTER.
18
<PAGE> 22
APPENDIX A
MANUGISTICS GROUP, INC.
FIFTH AMENDED AND RESTATED
EMPLOYEE STOCK OPTION PLAN
1. PURPOSE. This Employee Stock Option Plan (the "Plan") is intended to
encourage stock ownership by employees of Manugistics Group, Inc. (the
"Corporation") or any of its subsidiary corporations as that term is defined in
Section 4 of the Internal Revenue Code of 1986, as amended (the "Code") (the
"Subsidiaries") so that such employees may acquire or increase their interest in
the success of the Corporation and Subsidiaries and so that they may be
encouraged to remain in the employ of the Corporation or its Subsidiaries.
2. ADMINISTRATION. The Plan shall be administered by a committee
appointed by the Board of Directors of the Corporation (the "Committee"). The
Committee shall consist of not less than two members of the Corporation's Board
of Directors, who are "disinterested persons" as such term is defined in Rule
16b-3(c)(2)(i) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The Board of Directors may from time to time remove members from, or add
members to, the Committee. Vacancies on the Committee, howsoever caused, shall
be filled by the Board of Directors; provided, however, that any individual
appointed to the Committee shall be a Director who is a "disinterested person."
The Committee shall hold meetings at such times and places as it may determine.
If the Committee consists of three or more members, the Committee shall select
one of its members as Chairman. Acts by a majority of the Committee at a meeting
at which a quorum is present, or acts reduced to or approved in writing by a
majority of the members of the Committee, shall be the valid acts of the
Committee. No person while a member of the Committee shall receive a
discretionary grant or award under any stock plan of the Corporation, other than
pursuant to a stock plan where such grant or award is determined under a formula
meeting the requirements of Rule 16b-3(c)(2)(ii) of the Exchange Act. The
Committee shall from time to time in its discretion designate the employees who
shall be granted options and the amount of stock to be issued upon exercise of
such options. The Committee shall have the final authority to determine these
matters. The interpretation and construction by the Committee of any provisions
of the Plan or of any option granted under it shall be final. No member of the
Board of Directors or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted
under it.
3. ELIGIBILITY. The persons who shall be eligible to receive options
shall be all full time employees (including officers, whether or not they are
directors) of the Corporation or its Subsidiaries and certain other individuals
who are or were employees of the Corporation or its Subsidiaries or consultants
of the Corporation or its Subsidiaries who are specifically granted options by
the Board. An optionee may hold more than one option but only on the terms and
subject to the restrictions hereinafter set forth.
4. STOCK. The stock subject to the options shall be shares of the
Corporation's authorized, but unissued or reacquired, common stock (the "Common
Stock"). The aggregate number of shares which may be issued under options
granted under the Plan shall not exceed 2,782,119 shares of Common Stock. The
limitation established by the preceding sentence shall be subject to adjustment
as provided in Article 6(b) of the Plan. In the event that any outstanding
option granted under the Plan for any reason expires or is terminated, the
shares of Common Stock allocable to such option may again be subject to an
option grant under the Plan.
5. TERMS AND CONDITIONS OF OPTIONS. When the Committee shall have granted
options to employees, a Notice of Grant of Stock Option (the "Notice") shall be
given to each employee in such form as the Committee shall from time to time
approve, which Notice shall comply with and be subject to the following terms
and conditions:
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<PAGE> 23
(a) NUMBER OF SHARES. Each Notice shall state the number of shares of
Common Stock to which it pertains. The Committee shall award employees options
for shares of Common Stock in accordance with the following:
(i) As of the date that each person becomes a full-time employee
("Employee") of the Corporation or its Subsidiaries, such Employee shall
receive an option for the number of shares of Common Stock specified below
for Employees having the titles designated below or their equivalent:
<TABLE>
<S> <C> <C>
A. All Full-Time Employees..................................... 200 Shares
B. Managers/Lead Specialists................................... 400 Shares
C. Senior Managers............................................. 500 Shares
D. Officers & Directors........................................ 600 Shares
</TABLE>
(ii) Any Employee who is promoted to the level of Manager/Lead
Specialist, Senior Manager or Officer and Director (or their equivalent)
shall receive an option at the time of such promotion for an additional
number of shares of Common Stock equal to the difference between the number
of shares previously granted under an option or options pursuant to this
Article 5(a)(i) and the number of shares which the Employee would have
received had such promotion been effective as of the date such person
became an Employee of the Corporation or its Subsidiaries.
(iii) Such other amounts as are determined by the Committee from time
to time in its discretion.
(b) OPTION PRICE. Each Notice shall state the option price, which
shall not be less than 100% of the fair market value per share of the Common
Stock on the date of the grant of the option. During such time as the Common
Stock is not listed upon an established stock exchange or traded in the
over-the-counter market, the fair market value per share shall be determined by
the Committee at least annually by relying upon whatever evidence it deems
appropriate which may include, but need not be limited to, recent sales of the
Common Stock, opinions of professional appraisers and recent sales of stock of
other comparable companies. If the Common Stock is traded in the
over-the-counter market, such fair market value per share shall be the average
of the high and low prices of the Common Stock in the over-the-counter market
on the date previous to the date that the option is granted, as reported by the
National Association of Securities Dealers, Inc. If the Common Stock is listed
upon an established stock exchange or exchanges such fair market value per
share shall be deemed to be the average of the high and the low price of the
Common Stock on such stock exchange or exchanges on the day previous to the
date that the option is granted or if no sale of the Common Stock shall have
been made on any stock exchange on that day, on the next preceding day on which
there was a sale of such Common Stock. Subject to the foregoing, the Committee
in fixing the option price shall have full authority and discretion.
(c) MEDIUM AND TIME OF PAYMENT. Each option shall be exercised by giving
written notice to the Corporation, addressed to the attention of its Secretary
at its principal corporate office, which notice shall specify the number of
shares of Common Stock to be purchased and shall be accompanied by payment in
full for the shares of Common Stock being purchased. Unless otherwise specified
in the Notice pursuant to Article 6 hereof, the option price shall be payable by
cash or check in United States dollars upon the exercise of the option.
(d) TERM AND EXERCISE OF OPTIONS.
(i) All options granted hereunder shall vest and become exercisable in
the following manner: twenty-five percent (25%) per year commencing twelve
(12) months after the date of the grant of the option.
(ii) Options may only be exercised by an optionee for so long as the
optionee is employed by the Corporation or its Subsidiaries except as
otherwise provided in Article 6(b) of the Plan. Notwithstanding the
foregoing, if an employee who was granted options on or after July 17, 1990
is terminated involuntarily without cause within one year after a
consolidation or merger in which the Corporation is not the surviving
Corporation, the options may be exercisable as of the date of such
consolidation or
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<PAGE> 24
merger. In no event shall an option granted under this Plan be exercisable
more than ten (10) years after the date of the grant of the option.
(iii) Not less than fifty (50) shares may be purchased upon exercise
of an option at any one time unless the number purchased is the total
number at the time purchasable under the option.
(iv) During the lifetime of the optionee the option shall be
exercisable only by the optionee and shall not be transferred, assigned,
pledged or otherwise disposed of by the optionee and no other person shall
acquire any rights therein.
6. TERMINATION OF EMPLOYMENT EXCEPT BY DEATH OR DISABILITY. In the event
that the employment of an optionee by the Corporation or its Subsidiaries shall
terminate for any reason other than the optionee's death or disability, the
optionee may exercise any options held by such optionee for a period of thirty
(30) days from the last day of work date to the extent that the optionee's right
to exercise such options had accrued pursuant to Article 5(d) on or before the
last day of work date. Notwithstanding the foregoing, the last day of work date
for purposes of the Plan, and the options which shall become fully vested on
that date, may be determined by the Committee, which determination, unless
overruled by the Board of Directors, shall be final and conclusive. An optionee
who with the approval of the Corporation takes leave without pay for up to
twelve (12) weeks for the purpose of caring for a member of his or her family
shall be permitted to retain options granted to such optionee prior to the first
day of such leave. The Committee shall determine whether such leave is taken for
the purpose of caring for a member of the employee's family, which
determination, unless overruled by the Board of Directors, shall be final and
conclusive. Whether any other authorized leave of absence or absence for
military or governmental service shall constitute termination of employment, for
the purposes of the Plan, shall be determined by the Committee, which
determination, unless overruled by the Board of Directors, shall be final and
conclusive. If the optionee converts from full-time employment to part-time
employment, such conversion shall not affect such optionee's right to exercise
any option.
(a) DEATH OR LONG-TERM DISABILITY OF OPTIONEE AND TRANSFER OF OPTION.
(i) Notwithstanding any provision contained herein to the contrary, if
the optionee shall die while in the employ of the Corporation or a
Subsidiary, the option shall remain exercisable by the executors or
administrators of the optionee or by any person or persons who shall have
acquired the option directly from the optionee by bequest or inheritance
for a period of ninety (90) days following the date of the optionee's death
to the extent that the optionee's right to exercise such option had accrued
pursuant to Article 5(d) as of the date of the optionee's death. No option
shall be transferable by the optionee other than by will or the laws of
descent and distribution.
(ii) Notwithstanding any provision contained herein to the contrary,
if the optionee shall become disabled while in the employ of the
Corporation or a Subsidiary, the option shall be exercisable by the
optionee for a period of ninety (90) days from the date of disability to
the extent that the optionee's right to exercise such option had accrued
pursuant to Article 5(d) as of the date of disability, and the expiration
of the option following such ninety (90) day period shall thereafter be
suspended until a date one (1) year from the date of disability, at which
time the option shall terminate, unless the optionee shall return to work
within such one (1) year period, in which case the option shall be restored
for all vesting purposes as if the disability of the optionee had not
occurred.
For purposes of this Plan, an optionee shall be considered disabled if the
optionee is considered disabled under the Corporation's or its Subsidiaries
regular long-term disability provisions. However, the determination of the
Committee as to whether an optionee is disabled shall be binding and conclusive
for purposes of this Plan.
(b) RECAPITALIZATION. Subject to any required action by the shareholders
of the Corporation, the number of shares of Common Stock covered by each
outstanding option, and the price per share thereof in each such option, shall
be proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock of the Corporation resulting from a subdivision or
consolidation of shares or the payment of a stock dividend (but only on the
Common Stock) or any other increase or decrease in the number of such
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<PAGE> 25
shares effected without receipt of consideration by the Corporation, so that the
optionee's percentage of ownership of the total number of shares of Common Stock
outstanding is neither increased nor decreased.
Subject to any required action by the shareholders of the Corporation, if
the Corporation shall be the surviving corporation in any merger or
consolidation, each outstanding option shall pertain to and apply to the
securities to which a holder of the number of shares of Common Stock subject to
the option would have been entitled. A dissolution or liquidation of the
Corporation or a merger or consolidation in which the Corporation is not the
surviving corporation, shall cause each outstanding option to terminate,
provided that each optionee shall, in such event, if a period of 12 months from
the date of the granting of the option shall have expired, have the right
immediately prior to such dissolution or liquidation, or merger or consolidation
in which the Corporation is not the surviving corporation, to exercise his
option in whole or in part without regard to the installment provisions of
Article 5(d) of the Plan.
Notwithstanding the above provisions, an option will not terminate if
assumed by the surviving or acquiring corporation, or its parent, upon a merger
or consolidation under circumstances which are not deemed a modification of the
option within the meaning of Sections 424 and 424(3)(A) of the Internal Revenue
Code.
In the event of a change in the Common Stock of the Corporation as
presently constituted, which is limited to a change of all of its authorized
shares with par value into the same number of shares with a different par value
or without par value, the shares resulting from any such change shall be deemed
to be the Common Stock within the meaning of the Plan.
To the extent that the foregoing adjustments relate to stock or securities
of the Corporation, such adjustments shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive.
Except as hereinbefore expressly provided in this Article 6(b), the
optionee shall have no rights by reason of any subdivision or consolidation of
shares of stock of any class or the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class or by reason
of any dissolution, liquidation, merger or consolidation or spin-off of assets
or stock of another corporation, and any issue by the Corporation of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall not affect, and no adjustment by reason thereof shall be made with respect
to, the number or price of shares of Common Stock subject to the option.
The grant of an option pursuant to the Plan shall not affect in any way the
right or power of the Corporation to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.
(c) RIGHTS AS A STOCKHOLDER. An optionee or a permitted transferee of an
option shall have no rights as a stockholder with respect to any shares covered
by the optionee's option until the date of the issuance of a stock certificate
to the optionee for such shares following the exercise of such option. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date such stock certificate is issued, except as
provided in Article 6(b) hereof.
(d) MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the terms
and conditions and within the limitations of the Plan, the Committee may modify
outstanding options granted under the Plan, or accept the surrender of
outstanding options (to the extent not theretofore exercised). The Committee
shall not, however, modify any outstanding options so as to specify a lower
price or accept the surrender of outstanding options and authorize the granting
of new options in substitution therefor specifying a lower price.
Notwithstanding the foregoing, however, no modification of an option shall,
without the consent of the optionee, alter or impair any rights or obligations
under any option theretofore granted under the Plan.
(e) INVESTMENT PURPOSE. Each option under the Plan shall be granted on
the condition that the purchases of stock thereunder shall be for investment
purposes and not with a view to resale or distribution,
A-4
<PAGE> 26
except that in the event the stock subject to such option is registered under
the Securities Act of 1933, as amended (the "Securities Act"), or in the event a
resale of such stock without such registration would otherwise be permissible,
such condition shall be inoperative if, in the opinion of counsel for the
Corporation, such condition is not required under the Securities Act or any
other applicable law, regulation or rule of any governmental agency.
(f) CONFIDENTIALITY AGREEMENT. The Notice may provide that, as a
condition of the employee's acceptance of the option, the employee shall agree
to be bound by a confidentiality agreement with the Corporation containing such
terms as the Committee and Board of Directors shall deem advisable.
(g) OTHER PROVISIONS. The Notice shall contain such other provisions,
including, without limitation, restrictions upon the exercise of the option or
the transfer of the shares received upon an exercise, as the Committee and the
Board of Directors shall deem advisable.
7. PERMISSIBLE PROVISIONS. In addition to the other powers granted to the
Committee and the Board of Directors under this Plan, the Committee and the
Board of Directors shall have the discretion to include in any option grant the
right of the optionee (i) to pay for the Common Stock upon exercise of the
option with Common Stock of the Corporation, and/or (ii) to receive property at
the time of exercise of the option if, in the case of property other than cash,
Section 83 of the Code applies to such property.
8. TERM OF PLAN. Options may be granted pursuant to the Plan from time to
time until such time as all shares available under the Plan as set forth in
Article 4 have been made subject to an option grant. If any outstanding option
under the Plan for any reason expires or is terminated, the shares of Common
Stock allocable to the option may again be subject to an option under the Plan.
9. INDEMNIFICATION OF COMMITTEE. In addition to such other rights of
indemnification as they may have as directors or as members of the Committee and
the Board of Directors, the members of the Committee and the Board of Directors
shall be indemnified by the Corporation against the reasonable expenses,
including attorneys' fees actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, in which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any option
granted thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Corporation) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such person is liable for gross
negligence or intentional misconduct in the performance of his or her duties;
provided that within sixty (60) days after institution of any such action, suit
or proceeding such person shall in writing offer the Corporation the
opportunity, at its own expense, to handle and defend the same.
10. AMENDMENT OF THE PLAN. The Board of Directors of the Corporation may,
insofar as permitted by law, from time to time, with respect to any shares at
the time not subject to options, suspend or discontinue the Plan or revise or
amend it in any respect whatsoever except that, without approval of the
shareholders of the Corporation, no such revision or amendment shall materially
increase the number of shares of Common Stock which may be issued pursuant to
the Plan, materially increase the benefits accruing to participants under the
Plan, or otherwise materially modify the requirements for eligibility.
11. APPLICATION OF FUNDS. The proceeds received by the Corporation from
the sale of Common Stock issued pursuant to options will be used for general
corporate purposes.
12. NO OBLIGATION TO EXERCISE OPTION. The granting of an option shall
impose no obligation upon the optionee to exercise such option.
13. CONTINUED EMPLOYMENT. The grant of an option pursuant to the Plan
shall not be construed to imply or to constitute evidence of any agreement,
expressed or implied, on the part of the Corporation or any Subsidiary to
continue to employ an employee, or to affect the right of the Corporation or any
Subsidiary to terminate the employment of any employee or to alter the
responsibilities, duties or authority of any employee.
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<PAGE> 27
14. EFFECTIVE DATE AND TERM OF PLAN; STOCKHOLDER APPROVAL. This Plan
shall have an effective date of April 30, 1996 and shall have a term of ten (10)
years. However, no option may be exercised unless this Plan is approved by the
vote of a majority of the outstanding shares of the Corporation's Common Stock
present, or represented, and entitled to vote, at a meeting of stockholders of
the Corporation held within twelve (12) months after the effective date of the
Plan.
15. WITHHOLDING TAXES. The exercise of each option shall be subject to
the condition that if at any time the Corporation shall determine in its
discretion that the satisfaction of withholding tax or other withholding
liabilities, is necessary or desirable as a condition of, or in connection with,
the exercise or the delivery or purchase of shares pursuant to the option, then
in any such event, the exercise shall not be effective unless such withholding
shall have been effective or obtained free of any conditions not acceptable to
the Corporation, including withholding from other fees or sums otherwise due to
the option holder from the Corporation.
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<PAGE> 28
APPENDIX B
MANUGISTICS GROUP, INC.
FOURTH AMENDED AND RESTATED
EMPLOYEE INCENTIVE STOCK OPTION PLAN
1. PURPOSE. This Employee Incentive Stock Option Plan (the "Plan") is
intended to be an incentive and to encourage stock ownership by certain officers
and key executive employees of Manugistics Group, Inc. (the "Corporation") or
any of its subsidiary corporations as that term is defined in Section 424 of the
Internal Revenue Code of 1986 (the "Subsidiaries") so that such employees may
acquire or increase their proprietary interest in the success of the Corporation
and Subsidiaries, and so that they may be encouraged to remain in the employ of
the Corporation or its Subsidiaries. It is further intended that options issued
pursuant to the Plan shall constitute incentive stock options within the meaning
of Section 422 of the Internal Revenue Code of 1986.
2. ADMINISTRATION. The Plan shall be administered by a committee
appointed by the Board of Directors of the Corporation (the "Committee"). The
Committee shall consist of not less than two members of the Corporation's Board
of Directors, who are "disinterested persons" as such term is defined in Rule
16b-3(c)(2)(i) of the Securities Exchange Act of 1934, as amended. The Board of
Directors may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, howsoever caused, shall be filled by the
Board of Directors; provided, however, that any individual appointed to the
Committee shall be a Director who is a "disinterested person." The Committee
shall hold meetings at such times and places as it may determine. If the
Committee consists of three or more members, the Committee shall select one of
its members as Chairman. Acts by a majority of the Committee at a meeting at
which a quorum is present, or acts reduced to or approved in writing by a
majority of the members of the Committee, shall be the valid acts of the
Committee. No person while a member of the Committee shall receive a
discretionary grant or award under any stock plan of the Corporation. The
Committee shall from time to time in its discretion designate the employees who
shall be granted options and the amount of stock to be optioned to each. The
Committee shall have the final authority to determine these matters. The
interpretation and construction by the Committee of any provisions of the Plan
or of any option granted under it shall be final. No member of the Board of
Directors or the Committee shall be liable for any action or determination made
in good faith with respect to the Plan or any option granted under it.
3. ELIGIBILITY. The persons who shall be eligible to receive options
shall be the key executive employees (including officers whether or not they are
directors) of the Corporation or its Subsidiaries who are selected by the
Committee from time to time. An optionee may hold more than one option but only
on the terms and subject to the restrictions hereinafter set forth.
4. STOCK. The stock subject to the options shall be shares of the
Corporation's authorized but unissued or reacquired common stock (hereinafter
sometimes called "Common Stock"). The aggregate number of shares which may be
issued under options shall not exceed 902,975 shares of Common Stock. The
limitation established by the preceding sentence shall be subject to adjustment
as provided in Article 5(h) of the Plan.
In the event that any outstanding option under the Plan for any reason
expires or is terminated, the shares of Common Stock allocable to the
unexercised portion of such option may again be subject to an option under the
Plan.
5. TERMS AND CONDITIONS OF OPTIONS. When the Committee shall have granted
options to employees, Notices of Grant of Stock Option shall be given to such
employees in such form as the Committee
B-1
<PAGE> 29
shall from time to time approve, which Notices shall comply with and be subject
to the following terms and conditions:
(a) NUMBER OF SHARES. Each Notice of Grant of Stock Option shall state
the number of shares to which it pertains.
(b) OPTION PRICE. Each Notice of Grant of Stock Option shall state the
option price, which shall not be less than 100% of the fair market value of the
shares of Common Stock of the Corporation on the date of the granting of the
option. During such time as such stock is not listed upon an established stock
exchange or traded in the over-the-counter market, the fair market value per
share shall be determined by the Committee at least annually by relying upon
whatever evidence it deems appropriate which may include, but need not be
limited to, recent sales of the Common Stock, opinions of professional
appraisers and recent sales of comparable share of other companies. If the
Common Stock is traded in the over-the-counter market, such fair market value
per share shall be the average of the high and low prices of the Common Stock in
the over-the-counter market on the date previous to the date that the option is
granted, as reported by the National Association of Securities Dealers, Inc. If
the Common Stock is listed upon an established stock exchange or exchanges, such
fair market value per share shall be deemed to be the average of the high and
the low price of the Common Stock on such stock exchange or exchanges on the day
previous to the date that the option is granted or if no sale of the Common
Stock shall have been made on any stock exchange on that day, on the next
preceding day on which there was a sale of such Common Stock. Subject to the
foregoing, the Committee in fixing the option price shall have full authority
and discretion.
(c) MEDIUM AND TIME OF PAYMENT. Unless otherwise specified in the option
grant pursuant to Section 8 hereof, the option price shall be payable in United
States dollars upon the exercise of the option and may be paid in cash or by
check.
(d) TERM AND EXERCISE OF OPTIONS. The Committee may vary the terms and
provisions of individual options on a case-by-case basis and shall not be
required to make all options uniform.
Each Notice of Grant of Stock Option shall state the date on which the
option shall become exercisable and that date on which the option shall expire.
No option shall be exercisable after ten years from the date on which it is
granted. The Committee shall have the authority to grant options exercisable in
whole or in part at any time during their term, or exercisable in cumulative or
noncumulative installments, as may be determined by the Committee, provided that
the option meets the requirements of Sections 6 and 7 hereof. Options may only
be exercised by an optionee for so long as he is employed by the Corporation
except as otherwise provided in Articles 5(f) and 5(g) of the plan.
Not less than 1,000 shares may be purchased at any one time unless the
number purchased is the total number at the time purchasable under the option.
During the lifetime of the optionee, the option shall be exercisable only by him
and shall not be assignable or transferable by him and no other person shall
acquire any rights therein. To the extent not exercised, installments shall
accumulate and be exercisable, in whole or in part, in any subsequent period but
not later than ten years from the date the option is granted.
(e) PRIOR OUTSTANDING OPTION. No option (for purposes of this Article
5(e) called "New Option") shall be exercisable while there is outstanding any
incentive stock option (as defined in Section 422 of the 1986 Internal Revenue
Code), which incentive stock option was granted, before the granting of the New
Option, to the person to whom the New Option is granted, to purchase stock in
the Corporation or in a Corporation which, at the time the New Option is
granted, is a parent or subsidiary corporation (as those terms are defined in
Section 424 of the 1986 Internal Revenue Code) of the Corporation, or is a
predecessor corporation of the Corporation, or such parent or subsidiary
corporation.
(f) TERMINATION OF EMPLOYMENT EXCEPT BY DEATH OR DISABILITY. In the event
that the employment of an optionee by the Corporation or Subsidiaries shall
terminate for any reason other than his death or disability, the optionee may
exercise any options held by such optionee for a period of thirty (30) days from
the last day of work date to the extent that the optionee's right to exercise
such options has accrued pursuant to section 5(d) on or before the last day of
work date. Notwithstanding the foregoing, the last day of work date, and the
options which shall become vested on that date, may be determined by the
Committee, which
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determination, unless overruled by the Board of Directors, shall be final and
conclusive. Whether authorized leave of absence or absence for military or
governmental service shall constitute termination of employment, for the
purposes of the Plan, shall be determined by the Committee, which determination,
unless overruled by the Board of Directors, shall be final and conclusive.
(g) DEATH OR DISABILITY OF OPTIONEE AND TRANSFER OF OPTION. If the
optionee shall die or become disabled while in the employ of the Corporation or
a Subsidiary, and shall not have fully exercised an option, the option may be
exercised, subject to the condition that no option shall be exercisable after
the expiration of ten years from the date it is granted, to the extent that the
optionee's right to exercise such option had accrued pursuant to Article 5(d) of
the Plan at the time of his death or disability and had not previously been
exercised, at any time within 3 months after the optionee's death or disability,
by the optionee, or in the case of death, by the executors or administrators of
the optionee or by any person or persons who shall have acquired the option
directly from the optionee by bequest or inheritance. No option shall be
transferable by the optionee otherwise than by will or the laws of descent and
distribution.
Disability shall be defined as when an optionee is employed by the
Corporation or Subsidiaries on a full-time basis and such optionee is unable to
perform his usual services for the Corporation or Subsidiaries by reason of
mental or physical illness or other disability for a continuous period of one
hundred and eighty (180) days or for a period of one hundred and eighty (180)
days in any twelve month period. Whether or not an optionee meets the definition
of a disability shall be made in the sole determination of the Committee and the
Board of Directors.
(h) RECAPITALIZATION. Subject to any required action by the stockholders,
the number of shares of Common Stock covered by each outstanding option, and the
price per share thereof in each such option, shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Stock of
the Corporation resulting from a subdivision or consolidation of shares or the
payment of a stock dividend (but only on the Common Stock) or any other increase
or decrease in the number of such shares effected without receipt of
consideration by the Corporation.
Subject to any required action by the stockholders, if the Corporation
shall be the surviving corporation in any merger or consolidation, each
outstanding option shall pertain to and apply to the securities to which a
holder of the number of shares of Common Stock subject to the option would have
been entitled. A dissolution or liquidation of the Corporation or a merger or
consolidation in which the Corporation is not the surviving corporation, shall
cause each outstanding option to terminate, provided that each optionee shall,
in such event, if a period of 12 months from the date of the granting of the
option shall have expired, have the right immediately prior to such dissolution
or liquidation, or merger or consolidation in which the Corporation is not the
surviving corporation, to exercise his option in whole or in part without regard
to the installment provisions of Article 5(d) of the Plan. Notwithstanding the
above provisions, an option will not terminate if assumed by the surviving or
acquiring corporation, or its parent, upon a merger or consolidation under
circumstances which are not deemed a modification of the option within the
meaning of Sections 424 and 424(3)(A) of the Internal Revenue Code.
In the event of a change in the Common Stock of the Corporation as
presently constituted, which is limited to a change of all of its authorized
shares with par value into the same number of shares with a different par value
or without par value, the shares resulting from any such change shall be deemed
to be the Common Stock within the meaning of the Plan.
To the extent that the foregoing adjustments relate to stock or securities
of the Corporation, such adjustments shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive, provided
that each option granted pursuant to this Plan shall not be adjusted in a manner
that causes the option to fail to continue to qualify as an incentive stock
option within the meaning of Section 422 of the 1986 Internal Revenue Code.
Except as hereinbefore expressly provided in this Article 5(h), the
optionee shall have no rights by reason of any subdivision or consolidation of
shares of stock of any class or the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class or by reason
of any dissolution,
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<PAGE> 31
liquidation, merger or consolidation or spin-off of assets or stock of another
corporation, and any issue by the Corporation of shares of stock of any class,
or securities convertible into shares of stock of any class, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number or
price of shares of Common Stock subject to the option.
The grant of an option pursuant to the Plan shall not affect in any way the
right or power of the Corporation to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.
(i) RIGHTS AS A STOCKHOLDER. An optionee or a transferee of an option
shall have no rights as a stockholder with respect to any shares covered by his
option until the date of the issuance of a stock certificate to him for such
shares. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the date such stock certificate is issued,
except as provided in Article 5(h) hereof.
(j) MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the terms
and conditions and within the limitations of the Plan, the Committee may modify,
outstanding options granted under the Plan, or accept the surrender of
outstanding options (to the extent not theretofore exercised). The Committee
shall not, however, modify any outstanding options so as to specify a lower
price or accept the surrender of outstanding options and authorize the granting
of new options in substitution therefor specifying a lower price.
Notwithstanding the foregoing, however, no modification of an option shall,
without the consent of the optionee, alter or impair any rights or obligations
under any option theretofore granted under the Plan.
(k) INVESTMENT PURPOSE. Each option under the Plan shall be granted on
the condition that the purchases of stock thereunder shall be for investment
purposes and not with a view to resale or distribution, except that in the event
the stock subject to such option is registered under the Securities Act of 1933,
as amended, or in the event a resale of such stock without such registration
would otherwise be permissible, such condition shall be inoperative if, in the
opinion of counsel for the Corporation, such condition is not required under the
Securities Act of 1933 or any other applicable law, regulation or rule of any
governmental agency.
(l) OPTIONEE'S STOCKHOLDER AGREEMENT. Each optionee shall agree, as a
condition of his right to exercise an option granted to him pursuant to the
Plan, that all shares received by him pursuant to any and every exercise of such
option will be subject to all of the provisions of the Corporation's Stockholder
Agreement in effect at the time of any exercise of such option. Accordingly,
each optionee shall at the time of exercise of any option granted hereunder,
execute and agree to be bound by the Corporation's Stockholder Agreement then in
effect.
(m) CONFIDENTIALITY AGREEMENT AND COVENANT NOT TO COMPETE. The Notice of
Grant of Stock Option may provide that, as a condition of the employee's
acceptance of the option, the employee shall agree to be bound by the
Confidentiality Agreement of the Corporation which contains a covenant not to
compete and containing such other terms as the Committee and Board of Directors
shall deem advisable.
(n) OTHER PROVISIONS. The Notice of Grant of Stock Option shall contain
such other provisions, including, without limitation, restrictions upon the
exercise of the option or the transfer of the shares received upon exercise, as
the Committee and the Board of Directors shall deem advisable. Any such Notice
shall contain such limitations and restrictions upon the exercise of the option
as shall be necessary in order that such option will be an "incentive stock
option" as defined in Section 422 of the Internal Revenue Code of 1986 or to
conform to any change in the law.
(o) RIGHT OF FIRST REFUSAL UPON TRANSFER. The Notice of Grant of Stock
Option shall provide that the optionee will grant the Corporation a right of
first refusal on any sale of stock purchased pursuant to the exercise of an
option by agreeing that he may sell or transfer any shares acquired pursuant to
the exercise of an option to a third party only pursuant to a bona fide offer by
such third party and only after first offering such shares to the Corporation on
the same terms and conditions as those offered by the third party to the
optionee. If the Corporation does not elect to purchase such shares, then the
right of first refusal shall be forfeited and the sale may be consummated with
the third party.
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(p) REPURCHASE RIGHTS. The Notice of Grant of Stock Option shall provide
that if the employment of an optionee by the Corporation or Subsidiaries shall
terminate for any reason, the following repurchase rights shall apply:
(i) In the event that the employment of an optionee by the Corporation
or subsidiaries shall terminate within four years from the date of the
granting of the option for any reason other than his death or disability,
then the Corporation shall have the right to repurchase the shares
purchased by such employee pursuant to the option at a price equal to the
book value of the stock as determined by the Corporation's independent
certified public accountants as of the last day of the immediately
preceding fiscal year of the Corporation. If the termination of the
employment of the optionee occurs after four years from the date the option
was granted, there shall be no rights of repurchase for the stock. However,
the provisions of Section 5(o) shall continue to apply to such stock.
During the time which any stock is covered by the provisions of this
Section 5(p), no transfer of such stock shall be made.
(ii) If the optionee shall die or become disabled while in the employ
of the Corporation or Subsidiaries, the Corporation shall buy and the
employee or his estate shall sell, all stock purchased by the employee
pursuant to the option at a price equal to the higher of the fair market
value or the book value of the stock as determined by the Corporation's
independent certified public accountants as of the last day of the fiscal
year of the Corporation immediately preceding the date of death or
disability. If an optionee dies or becomes disabled after his employment by
the Corporation or Subsidiaries has terminated for any reason, the
Corporation shall have no right to buy and the optionee or his estate shall
have no right to sell, any stock purchased pursuant to the option. However,
all stock owned by the employee or his estate shall continue to be subject
to the provisions of Section 5(o) hereof.
6. OPTIONS TO CERTAIN STOCKHOLDERS. Notwithstanding any other provision
herein, in any option granted to an individual who, at the time the option is
granted, possesses more than 10 percent of the total combined voting power of
all classes of stock of the Corporation or of its parent or any subsidiary
corporation, the option price must be at least 110 percent of the fair market
value of the stock subject to the option and such option by its terms must not
be exercisable after the expiration of 5 years from the date such option is
granted.
7. ANNUAL LIMITATION PER EMPLOYEE. The aggregate fair market value
(determined as of the time the option is granted under the Plan) of the stock
for which any employee may be granted incentive stock options which are first
exercisable in any calendar year (under all such plans of his employer
corporation and its parent and all subsidiary corporations) shall not exceed
$100,000. Any excess options granted pursuant to the Plan shall be nonqualified
options under the Code.
8. PERMISSIBLE PROVISIONS. In addition to the other powers granted to the
Committee and the Board of Directors under this Plan, the Committee and the
Board of Directors shall have the discretion to include in any option grant the
right of the optionee (i) to pay for the stock with stock of the corporation
granting the option, and/or (ii) to receive property at the time of exercise of
the option if, in the case of property other than cash, Section 83 of the
Internal Revenue Code of 1986 applies to such property, and/or (iii) to receive
a loan from the Corporation to pay for the stock, with such terms as shall not
cause the option to become disqualified as an "incentive stock option" as
defined in Section 422 of the Internal Revenue Code of 1986 or amendments
thereto, and/or (iv) to receive such assistance from the Corporation in
obtaining a loan from a financial institution as is necessary in the sole
discretion of the Committee and the Board of Directors.
9. TERM OF PLAN. This Plan may be abandoned or terminated at any time by
the Board except with respect to any options then outstanding under this Plan.
No option shall be granted hereunder after 10 years from the effective date of
this Plan.
10. INDEMNIFICATION OF COMMITTEE. In addition to such other rights of
indemnification as they may have as directors or as members of the Committee,
the members of the Committee shall be indemnified by the Corporation against the
reasonable expenses, including attorneys' fees actually and necessarily incurred
in connection with the defense of any action, suit or proceeding, or in
connection with any
B-5
<PAGE> 33
appeal therein, to which they or any of them may be a party by reason of any
action taken or failure to act under or in connection with the Plan or any
option granted thereunder, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by independent legal counsel
selected by the Corporation) or paid by them in satisfaction of a judgment in
any such action, suit or proceeding except in relation to matters as to which it
shall be adjudged in such action, suit or proceeding that such Committee member
is liable for negligence or misconduct in the performance of his duties;
provided that within 60 days after institution of any such action, suit or
proceeding the Committee member shall in writing offer the Corporation the
opportunity, at its own expense, to handle and defend the same.
11. AMENDMENT OF THE PLAN. The Board of Directors of the Corporation may,
insofar as permitted by law, from time to time, with respect to any shares at
the time not subject to options, suspend or discontinue the Plan or revise or
amend it in any respect whatsoever except that, without approval of the
stockholders, no such revision or amendment shall change the number of shares
subject to the Plan, change the designation of the class of employees eligible
to receive options, decrease the price at which options may be granted, or
remove the administration of the Plan from the Committee. Furthermore, the Plan
may not, without the approval of the stockholders, be amended in any manner that
will cause options issued under it to fail to meet the requirements of incentive
stock options as defined in Section 422 of the 1986 Internal Revenue Code.
12. APPLICATION OF FUNDS. The proceeds received by the Corporation from
the sale of Common Stock pursuant to options will be used for general corporate
purposes.
13. NO OBLIGATION TO EXERCISE OPTION. The granting of an option shall
impose no obligation upon the optionee to exercise such option.
14. EFFECTIVE DATE OF PLAN AND STOCKHOLDER APPROVAL. This Plan shall have
an effective date of January 16, 1996. However, no option may be exercised
unless this Plan is approved by the vote of the majority of the outstanding
shares of the Corporation's Common Stock present, or represented and entitled to
vote, at a meeting of stockholders of the Corporation held within twelve (12)
months after the Plan is adopted by the Board of Directors.
15. CONTINUED EMPLOYMENT. The grant of an option pursuant to the Plan
shall not be construed to imply or to constitute evidence of any agreement,
expressed or implied, on the part of the Corporation or any subsidiary to
continue to employ an employee.
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DETACH HERE MAN F
MANUGISTICS GROUP, INC.
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
MANUGISTICS GROUP, INC. FOR THE ANNUAL MEETING OF SHAREHOLDERS TO
R BE HELD ON JULY 26, 1996
O
X The undersigned, hereby revoking any contrary proxies previously
given relating to these shares, hereby acknowledges receipt of the
Y Notice of Annual Meeting of Shareholders and Proxy Statement dated June
20, 1996 in connection with the 1996 Annual Meeting of Shareholders of
Manugistics Group, Inc. (the "Annual Meeting") to be held on Friday,
July 26, 1996 at 9:00 AM E. D. T. at the Bethesda Marriott Hotel, 5151
Pooks Hill Road, Bethesda, Maryland, and hereby appoints William M.
Gibson and Peter Q. Repetti, and each of them (with full power to act
alone), the attorneys and proxies of the undersigned, with power of
substitution to each, to vote all shares of the Common Stock of
MANUGISTICS GROUP, INC. registered in the name provided herein which the
undersigned is entitled to vote at the Annual Meeting, and at any
adjournment(s) or postponement(s) thereof, with all the powers the
undersigned would have if personally present. Without limiting the
general authorization hereby given, said proxies are, and each of them
is, instructed to vote or act as follows on the reverse side on the
proposals set forth in said Proxy Statement. In their discretion, the
proxies are authorized to vote upon such other matters as may properly
come before the Annual Meeting.
CONTINUED AND TO BE COMPLETED, SIGNED AND DATED ON REVERSE SIDE
SEE REVERSE
SIDE
<PAGE> 35
DETACH HERE MAN 21-
/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THIS PROXY WHEN EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE THIS PROXY WILL BE VOTED FOR THE ELECTION OF
THE THREE (3) NOMINEES FOR CLASS I DIRECTORS LISTED BELOW AND FOR
PROPOSALS 2 AND 3.
<TABLE>
<S> <C> <C> <C> <C>
FOR AGAINST ABSTAIN
1. Election of Class I Directors 2. Approval of amendments to / / / / / /
NOMINEES: Jack A. Arnow, Lynn C. Fritz the Employee Stock Option
and J. Michael Cline Plan.
FOR WITHHELD 3. Approval of amendments to / / / / / /
/ / / / the Employee Incentive Stock
Option Plan.
/ /
For nominee(s) except as noted above
</TABLE>
MARK HERE
FOR ADDRESS / /
CHANGE AND
NOTE AT LEFT
Please sign exactly as name appears hereon.
Joint owners should each sign. When signing as
attorney, executor, administrator, trustee or
guardian, please give full title as such.
Signature: Date: Signature: Date:
--------------- ---------- ---------------- --------
