<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
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 Under 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/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
[manugistics logo]
MANUGISTICS GROUP, INC.
2115 East Jefferson Street
Rockville, Maryland 20852
June 28, 2000
Dear Shareholders:
It is my pleasure to invite you to the 2000 Annual Meeting of Shareholders
of Manugistics Group, Inc. to be held on Friday, July 28, 2000 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/ Gregory J. Owens
------------------------------
Gregory J. Owens
Chief Executive Officer and President
<PAGE>
[manugistics logo]
MANUGISTICS GROUP, INC.
2115 East Jefferson Street
Rockville, Maryland 20852
-------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Friday, July 28, 2000
-------------------------
To our Shareholders:
The Annual Meeting of Shareholders (the "Meeting") of Manugistics Group,
Inc. (the "Company") will be held on Friday, July 28, 2000 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 II Directors, each for a term of three years and
until their respective successors have been elected and qualified; and
2. To transact such other business as may properly come before the
Meeting.
Shareholders of record at 5:00 p.m. E.D.T. on June 9, 2000 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/ Timothy T. Smith
-----------------------------------
Timothy T. Smith
Senior Vice President,
General Counsel and Secretary
Rockville, Maryland
June 28, 2000
<PAGE>
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 28, 2000, 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 30, 2000, to all holders of
record of the Company's Common Stock (the "Common Stock") as of 5:00 p.m.
E.D.T. on June 9, 2000. A copy of the Company's 2000 Annual Report to
Shareholders, including consolidated financial statements for the fiscal year
ended February 29, 2000, accompanies this Proxy Statement.
At the Meeting, shareholders will elect three Class II directors, each to
serve for a term of three years.
VOTING SECURITIES AND RECORD DATE
The Board of Directors has fixed 5:00 p.m. E.D.T. on June 9, 2000 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
29,216,371 shares of Common Stock issued and outstanding and there were no
other voting securities of the Company outstanding. The presence at the
Meeting, in person or by proxy, of a majority of the outstanding shares of
Common Stock, or 14,608,186 shares, shall constitute a quorum for the Meeting.
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, but are counted in determining the presence of a
quorum.
Assuming the presence of a quorum, directors shall be elected by a
plurality of the votes cast at the Annual Meeting for the election of
directors. The three nominees who receive the most votes will be elected.
Abstentions and broker non-votes will not be taken into account in determining
the outcome of the election.
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 in person and casting a ballot.
The proxy holders, William M. Gibson and Raghavan Rajaji, 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 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.
<PAGE>
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Amended and Restated 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 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.
In April 2000, the Board of Directors increased the number of directors
which shall constitute the entire Board of Directors from eight to nine. The
Board of Directors then appointed Hau L. Lee as a Class III director to fill
the newly created vacancy. There are presently three directors in Class I,
three directors in Class II and three 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 II directors, Gregory J. Owens,
Joseph H. Jacovini and Thomas A. Skelton, will expire at the Meeting. The other
six directors will remain in office for the remainder of their respective
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 II directors are to be elected. Each of the
director nominees is presently a director of the Company. 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.
Set forth below is certain information regarding each nominee for Class II
director and each Class III and Class I director, each of whose term of office
will continue after the Meeting.
Nominees for Class II Directors
Gregory J. Owens, 40, has served as a director of the Company since June
1999. He was appointed Chief Executive Officer and President of the Company in
April 1999. From 1993 to 1999, Mr. Owens served as the Global Managing Partner
for the Andersen Consulting Supply Chain Practice, the largest supply chain
consulting practice with over $1.4 billion in revenue. Mr. Owens joined
Andersen Consulting in 1990.
Joseph H. Jacovini, 59, has served as a director of the Company since
1986. He is a partner in Dilworth Paxson LLP, based in Philadelphia,
Pennsylvania, where he has practiced law since 1965. He has served as Chairman
of that firm since 1997, having served as Co-Chairman since 1995. Mr. Jacovini
also served as Chairman of that firm's Corporate Department during 1993-97. Mr.
Jacovini has been a Trustee of Drexel University since 1990. He also serves on
a number of boards of privately-held companies in technology and manufacturing
industries.
Thomas A. Skelton, 52, has served as a director of the Company since 1992.
Mr. Skelton is a management consultant to computer software and internet
start-up companies. He served as President and Chief Operating Officer of
Cambar Software, Inc. in Charleston, South Carolina from August 1997 to
November 1999. From April 1996 to April 1997, he was President of Knowledge
Systems Corporation. From January 1995 to March 1996, he was Division President
of Global Software, Inc. in Raleigh, North Carolina. From 1983 to 1994, Mr.
Skelton worked in various management capacities with Manugistics, Inc.
(formerly STSC, Inc.), the principal operating subsidiary of the Company, where
he last served as Chief Operating Officer. He also serves on a number of boards
of privately-held companies in the computer software and internet industries.
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 II Directors nominated above.
The Board of Directors recommends that shareholders vote FOR the election
of each of the nominated Class II Directors.
2
<PAGE>
Incumbent Class III Directors -- to Continue in Office for Terms Expiring in
2001
William M. Gibson, 55, has served as Chairman of the Board of Directors of
the Company since its formation in 1986. From 1986 until April 1999, Mr. Gibson
also served as Chief Executive Officer and President of the Company. 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.). He joined STSC, Inc. as Executive Vice
President and Chief Operating Officer in 1982.
William G. Nelson, 66, has served as a director of the Company since 1986.
Since September 1996, Mr. Nelson has served as the Chairman of the Board of
Directors of Geac Computer Corporation, Limited; from September 1996 until
April 1999, he also served as its Chief Executive Officer and President. From
March 1994 until December 1998, Mr. Nelson also served as a director of Project
Software & Development, Inc. 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.
Hau L. Lee, 47, has served as a director of the Company since April 2000.
Mr. Lee has been a member of the faculty at Stanford University since 1983,
serving as a Thomas Ford Faculty Scholar from 1993 through 1996, and as the
Kleiner Perkins, Mayfield, Sequoia Capital Professor in the School of
Engineering since 1996 and as a Professor of Operations, Information and
Technology Management in the Graduate School of Business since 1998. He also
served as an Adjunct Professor in the Department of Industrial Engineering and
Engineering Management at Hong Kong University of Science and Technology in
1996. Mr. Lee has also undertaken numerous independent consulting engagements
since 1995.
Incumbent Class I Directors -- to Continue in Office for Terms Expiring in 2002
Jack A. Arnow, 72, has served as a director of the Company since 1986. Mr.
Arnow is an independent investor.
Lynn C. Fritz, 58, has served as a director of the Company since 1995.
Since 1986, Mr. Fritz has been Chairman and Chief Executive Officer of Fritz
Companies, Inc., a publicly-held company that specializes in freight forwarding
and customhouse brokerage on a global basis. Mr. Fritz has been employed by
Fritz Companies, Inc. since 1965.
J. Michael Cline, 40, has served as a director of the Company since 1996.
Since December 1999, Mr. Cline has served as Managing Partner of Accretive
Technology Partners LLC, a private investment firm, which he founded, with a
primary focus on e-commerce businesses. From 1989 until December 1999, Mr.
Cline was a managing member of General Atlantic Partners, LLC (or its
predecessor in interest) ("GAP LLC"), a private investment firm with a primary
focus on software and related information technologies. Prior to 1989, Mr.
Cline was an associate with McKinsey & Company, Inc., a global strategic
consulting firm. Mr. Cline serves on the boards of Brio Technology, Inc. and
FirePond Inc., which are publicly held technology companies. Mr. Cline also
serves on a number of boards of privately-held software and information
technology companies.
Compensation of Directors
To date, the Company, with the exception of a one-time stock grant in
1991, has not paid fees or other compensation 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. Under the 1998
Stock Option Plan (the "SOP"), outside, i.e., non-employee directors receive an
annual option grant. The SOP was amended in January 2000 to increase from 5,000
to 16,000 the number of options to purchase shares of Common Stock granted
annually to each outside director. Any director who is appointed or elected to
the Board at any time other than an Annual Meeting of Shareholders will receive
a percentage of the annual grant on the date of his or her election based on
the number of fiscal quarters ending from the date of the appointment or
election until the next Annual Meeting. The options granted annually to
directors (including any options granted to new directors based on a percentage
of the annual grant) vest quarterly over a four year period.
3
<PAGE>
The SOP was further amended in January 2000 to provide for a one-time
grant of options to purchase 8,000 shares of Common Stock to each outside
director serving on January 13, 2000, which options vest quarterly over four
years, and to provide that any director who thereafter shall be newly appointed
or elected to the Board may, at the discretion of the Board, receive a grant to
purchase up to 16,000 shares of Common Stock. Any such option so granted at the
discretion of the Board shall vest and become exercisable, with respect to 25%
of the shares, one year from the date of grant, and with respect to the
remaining 75% of the shares, quarterly over the following 12 quarters.
In the fiscal year ended February 29, 2000 ("fiscal 2000"), options to
purchase 13,000 shares under this plan were granted to each of Messrs. Gibson,
Arnow, Cline, Fritz, Jacovini, Nelson, and Skelton.
Board of Directors' Meetings and Committees
The Board of Directors held four regularly scheduled meetings during
fiscal 2000. 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 Joseph H. Jacovini,
Chairman, Lynn C. Fritz and J. Michael Cline, held five meetings during fiscal
2000. 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 William G. Nelson,
Chairman, Jack A. Arnow and Thomas A. Skelton, held four meetings during fiscal
2000. The committee was responsible for recommending to the Board of Directors
for approval a compensation program for Gregory J. Owens, the Company's Chief
Executive Officer and President. The committee thereafter was responsible for
the administration of Mr. Owens' compensation program. The committee and the
Board of Directors review the compensation programs for the other executive
officers of the Company, for which programs Mr. Owens is responsible. The
committee is also responsible for the grant of options to the Company's
employees under the Company's various stock option plans as well as the
administration of the plans.
4
<PAGE>
OWNERSHIP OF MANUGISTICS GROUP, INC. STOCK
The following table sets forth certain information, as of May 31, 2000,
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>
Number of Shares Percent
Name and Address of Beneficial Owner Beneficially Owned(1) of Class
------------------------------------ ---------------------- ---------
<S> <C> <C>
William M. Gibson (2) ............................................ 5,315,818 18.6
Gregory J. Owens (3) ............................................. 621,983 2.1
Richard F. Bergmann (4) .......................................... 141,658 *
Terrence A. Austin (5) ........................................... 54,500 *
Eric J. Hughey (6) ............................................... -0- *
Jeffery L. Holmes (7) ............................................ 39,763 *
Jack A. Arnow (8) ................................................ 108,000 *
J. Michael Cline (9) ............................................. 31,000 *
Lynn C. Fritz (10) ............................................... 46,700 *
Joseph H. Jacovini (11) .......................................... 93,000 *
William G. Nelson (12) ........................................... 224,000 *
Thomas A. Skelton (13) ........................................... 584,246 2.1
Hau L. Lee (14) .................................................. 250 *
Directors and executive officers as a group (16 persons) ......... 7,440,148 25.0
</TABLE>
------------
*Less than 1% of the outstanding Common Stock.
(1) Beneficial ownership is based on 28,456,286 outstanding shares of Common
Stock as of May 31, 2000. Under applicable rules promulgated under the
Securities Exchange Act of 1934, as amended, 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) Includes 101,068 shares issuable upon exercise of options, 532,500 shares
held by his wife, 380,000 shares held in a non-profit corporation, with
respect to which Mr. Gibson shares voting and dispositive control, and
4,302,250 shares held in a family limited partnership. Mr. Gibson serves
as the sole general partner of the limited partnership and, in such
capacity, has sole voting and dispositive control of the shares held in
the partnership.
(3) Includes 621,333 shares issuable upon exercise of options and 650 shares
held in a retirement plan.
(4) Includes 141,458 shares issuable upon exercise of options.
(5) Includes 54,000 shares issuable upon exercise of options.
(6) Mr. Hughey resigned as an executive officer effective in March, 2000.
(7) Includes 39,050 shares issuable upon exercise of options and 713 shares
held in an employee stock purchase plan.
(8) Includes 41,000 shares issuable upon exercise of options.
(9) Includes 31,000 shares issuable upon exercise of options.
(10) Includes 46,000 shares issuable upon exercise of options.
(11) Includes 1,336 shares held by his wife, 28,000 shares held in a retirement
savings plan and 33,664 shares issuable upon exercise of options.
(12) Includes 16,000 shares issuable upon exercise of options.
(13) Includes 41,000 shares issuable upon exercise of options, 12,701 shares
held by his wife and 10,848 shares held by his brother as trustee for his
children.
(14) Includes 250 shares issuable upon exercise of options.
5
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth summary information regarding compensation
paid or accrued by the Company for services during fiscal 2000 to the Company's
Chief Executive Officers and each of the four most highly compensated executive
officers other than the Chief Executive Officers whose individual total salary
and bonus on an annual basis exceeded $100,000 for fiscal 2000 (the "Named
Executives"). Each of the Named Executives, other than Mr. Gibson, first became
an executive officer of the Company during fiscal 2000. Also included is
summary information regarding compensation paid by the Company for services
during fiscal 1999 and 1998 to Mr. Gibson.
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
-------------
Annual Securities
Compensation
------------------------- Underlying All Other
Name and Principal Position Year Salary Bonus Options(#) Compensation
------------------------------------- ------ ----------- ----------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Gregory J. Owens .................... 2000 $318,270 $288,531 3,000,000 $ 57,235(1)
Chief Executive Officer and President
Terrance A. Austin .................. 2000 141,667 212,836 240,000 662(2)
Executive Vice President,
Electronics and High Technology
Richard F. Bergmann ................. 2000 177,083 250,000 430,000 1,947(3)
Executive Vice President,
Global Sales and Services
Jeffrey L. Holmes ................... 2000 189,167 169,350 115,000 2,284(4)
Senior Vice President,
Strategic Solutions and Alliances
Eric J. Hughey(6) ................... 2000 198,000 155,430 115,000 2,445(5)
Former Senior Vice President,
Product Development
William M. Gibson(8) ................ 2000 -0- -0- -0- -0-
Former Chief Executive 1999 173,333 -0- 11,473 850(7)
Officer and President 1998 305,000 305,000 127,620 3,796(7)
</TABLE>
------------
(1) This amount constitutes housing and relocation expenses paid by the Company
in the amount of $51,047, the value of additional life and disability
insurance premiums paid by the Company in the amount of $5,250 and a $938
contribution by the Company to Mr. Owens' account under the Company's 1991
Amended and Restated 401(k) Retirement Savings Plan (the "401(k) Plan").
(2) This amount constitutes the value of additional life and disability
insurance premiums paid by the Company.
(3) This amount constitutes the value of additional life and disability
insurance premiums paid by the Company in the amount of $1,322 and a $625
contribution by the Company to Mr. Bergmann's account under the 401(k)
Plan.
(4) This amount represents a contribution by the Company to Mr. Holmes' account
under the 401(k) Plan.
(5) This amount represents a contribution by the Company to Mr. Hughey's
account under the 401(k) Plan.
(6) Mr. Hughey resigned as an executive officer effective in March 2000.
(7) These amounts represent contributions by the Company to Mr. Gibson's
account under the 401(k) Plan for fiscal 1999 and 1998.
(8) Mr. Gibson resigned as an executive officer effective in April 1999.
6
<PAGE>
Stock Options
The following table sets forth certain information concerning the grant of
options to the Chief Executive Officers and other Named Executives in fiscal
2000. The Company has not granted any stock appreciation rights ("SARs").
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable Value
Number of Percent of at Assumed Annual
Securities Total Options Rate of Stock Price
Underlying Granted to Exercise or Appreciation for Option Term
Options Employees in Base Expiration -----------------------------
Name Granted(#) Fiscal Year Price($/sh) Date 5% 10%
------------------------- ------------------ --------------- ------------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Gregory J. Owens ........ 2,000,000(1) 33.40% $ 7.81 4/27/09 $9,823,334 $24,894,257
500,000(2) 8.35% 18.63 12/01/09 5,858,153 14,845,711
500,000(2) 8.35% 26.44 12/17/09 8,313,987 21,069,275
Terrance A. Austin ...... 240,000(2) 4.01% 9.72 6/16/09 1,467,085 3,717,882
Richard F. Bergmann ..... 400,000(2) 6.68% 9.72 6/16/09 2,445,142 6,196,471
30,000(3) 0.50% 21.19 12/06/09 399,788 1,013,142
Jeffrey L. Holmes ....... 15,000(4) 0.25% 7.97 3/01/09 75,184 190,532
100,000(5) 1.67% 14.06 7/22/09 884,226 2,240,802
Eric J. Hughey .......... 15,000(4) 0.25% 7.97 3/01/09 75,184 190,532
100,000(5) 1.67% 14.06 7/22/09 884,226 2,240,802
William M. Gibson ....... -0- 0.00% -- -- -- --
</TABLE>
------------
(1) Each option was granted pursuant to stock option grants made outside of the
SOP and vests in 60 equal monthly installments over a five year period
beginning on the date of grant. The options have an exercise price equal
to the fair market value of the Common Stock on the date of grant.
(2) Each option was granted pursuant to stock option grants made outside of the
SOP and vests in 48 equal monthly installments over a four year period
beginning on the date of grant. The options have an exercise price equal
to the fair market value of the Common Stock on the date of grant.
(3) Each option was granted pursuant to stock option grants made outside of the
SOP and vests immediately on the date of grant. The options have an
exercise price equal to the fair market value of the Common Stock on the
date of grant.
(4) Each option was granted pursuant to the SOP and vests in equal annual
installments over a four year period beginning on the date of grant. The
options have an exercise price equal to the fair market value of the
Common Stock on the date of grant.
(5) Each option was granted pursuant to the SOP and vests in 48 equal monthly
installments over a four year period beginning on the date of grant. The
options have an exercise price equal to the fair market value of the
Common Stock on the date of grant.
7
<PAGE>
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 Officers and the other Named Executives.
Aggregated Option Exercises in Fiscal 2000 and
Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal In-the-Money Options at
Value Year-End Fiscal Year-End($)(2)
Shares Acquired Realized ------------------------------ -----------------------------
Name on Exercise(#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
----------------------------- ----------------- ---------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Gregory J. Owens ............ 0 $0 375,000 2,625,000 $15,757,831 $100,492,319
Terrance A. Austin .......... 0 0 40,000 200,000 1,670,000 8,350,000
Richard F. Bergmann ......... 0 0 96,667 333,333 3,691,772 13,916,667
Jeffrey L. Holmes ........... 0 0 24,883 131,317 985,512 5,167,632
Eric J. Hughey .............. 0 0 23,233 126,367 915,026 4,956,174
William M. Gibson ........... 0 0 84,466 91,243 1,701,392 1,587,919
</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, 2000 and
(ii) the exercise price per share.
8
<PAGE>
Employment Agreements
In April 1999, the Company and Gregory J. Owens entered into an employment
agreement whereby he became the Chief Executive Officer and President of each
of the Company and Manugistics, Inc. Under the employment agreement, Mr. Owens
receives an annual base salary of $375,000, and he may receive a bonus of up to
100% of his annual base salary. Fifty percent of Mr. Owens' bonus is based upon
the financial performance of the Company, and fifty percent is based upon
satisfaction of management objectives. In addition, the Company paid to Mr.
Owens an additional first year bonus of $50,000. The Company also granted to
Mr. Owens an option to purchase two million shares of Common Stock which vests
in equal monthly increments over a five-year period. Some or all of Mr. Owens'
options may immediately vest in the event of a change of control of the
Company. Pursuant to Mr. Owens' employment agreement, the Company also granted
to Mr. Owens two options when the market price of the Common Stock met
specified levels. Each such option gives him the right to purchase 500,000
shares of Common Stock, which vest in equal monthly increments over a four-year
period.
Under the employment agreement, the Company also provides to Mr. Owens
certain benefits, including medical, life and disability insurance, relocation
and travel expenses, participation in the Employee Stock Purchase Plan, and
fringe benefits. If the Company terminates Mr. Owens' employment other than for
cause, the Company will make severance payments to Mr. Owens in the amount of
his base salary and benefits during the twelve month period commencing on the
termination date. The severance payments to Mr. Owens will cease if he obtains
alternative employment during the twelve month period commencing on the
termination date. In addition, for a period of six months beginning on the date
of the Company's termination of Mr. Owens' employment for any reason other than
cause, the Company will continue the monthly vesting of Mr. Owens' options.
In June 1999, the Company and Richard F. Bergmann entered into an
employment agreement whereby he became an Executive Vice President of the
Company and Manugistics, Inc. Under the employment agreement, Mr. Bergmann
receives an annual base salary of $250,000, and he may receive a bonus of up to
100% of his annual base salary. Fifty percent of Mr. Bergmann's bonus is based
upon the financial performance of the Company, and fifty percent is based upon
satisfaction of management objectives. In addition, the Company paid to Mr.
Bergmann an additional first year bonus of $62,500, based upon his significant
participation in revenue generation. The Company also granted to Mr. Bergmann
an option to purchase 400,000 shares of Common Stock. This stock option vests
in equal monthly increments over a four year period. Pursuant to Mr. Bergmann's
employment agreement, the Company also granted to Mr. Bergmann an option to
purchase 30,000 shares of Common Stock when the market price of the Common
Stock met specified levels. The option vested immediately on the date of grant.
Mr. Bergmann will also receive a stock option to purchase an additional 30,000
shares of Common Stock if certain revenue targets are attained by the Company
in fiscal 2001. Some or all of Mr. Bergmann's options may immediately vest in
the event of a change of control of the Company.
Under the employment agreement, the Company also provides to Mr. Bergmann
certain benefits, including medical, life and disability insurance,
participation in the Employee Stock Purchase Plan, and fringe benefits. If the
Company terminates Mr. Bergmann's employment other than for cause, the Company
will make severance payments to Mr. Bergmann in the amount of his base salary
and benefits during the six month period commencing on the termination date.
The severance payments to Mr. Bergmann will cease if he obtains alternative
employment during the six month period commencing on the termination date. In
addition, for a period of six months beginning on the date of the Company's
termination of Mr. Bergmann's employment for any reason other than cause, the
Company will continue the monthly vesting of Mr. Bergmann's options.
In June 1999, the Company and Terrance A. Austin entered into an
employment agreement whereby he became an Executive Vice President of the
Company and Manugistics, Inc. Under the employment agreement, Mr. Austin
receives an annual base salary of $200,000, and he may receive a bonus of up to
100% of his annual base salary. Fifty percent of Mr. Austin's bonus is based
upon the financial performance of the Company, and fifty percent is based upon
satisfaction of management objectives. In addition, the Company paid to Mr.
Austin a signing bonus of $25,000. The Company also granted to Mr. Austin an
option to
9
<PAGE>
purchase 240,000 shares of Common Stock. This stock option vests in equal
monthly increments over a four year period. Mr. Austin will also receive a
stock option to purchase an additional 30,000 shares of Common Stock if certain
revenue targets are attained by the Company in fiscal 2001. Some or all of Mr.
Austin's options may immediately vest in the event of a change of control of
the Company.
Under the employment agreement, the Company also provides to Mr. Austin
certain benefits, including medical, life and disability insurance,
participation in the Employee Stock Purchase Plan, and fringe benefits. If the
Company terminates Mr. Austin's employment other than for cause, the Company
will make severance payments to Mr. Austin in the amount of his base salary and
benefits during the six month period commencing on the termination date. The
severance payments to Mr. Austin will cease if he obtains alternative
employment during the six month period commencing on the termination date. In
addition, for a period of six months beginning on the date of the Company's
termination of Mr. Austin's employment for any reason other than cause, the
Company will continue the monthly vesting of Mr. Austin's options. Mr. Austin
will have the option to terminate his employment and receive the severance
benefits described above under certain circumstances if his job status is
diminished.
The information set forth in the following Report and Performance Graph
shall not be deemed incorporated by reference into any existing or future
filings under the Securities Act of 1933, as amended (the "Securities Act"), or
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which
incorporate by reference this Proxy Statement, except to the extent that the
Company specifically incorporates such information by reference.
Report of the Compensation Committee of the Board of Directors on Executive
Compensation
In fiscal 2000, the Compensation Committee of the Board of Directors was
directly responsible for recommending to the Board of Directors for approval a
compensation program for Gregory Owens, who became the Company's Chief
Executive Officer and President. The Compensation Committee thereafter was
responsible for the administration of Mr. Owens' compensation program. The
Compensation Committee was also responsible for the grant of options to the
Company's employees under the Company's various stock option plans and
administered the plans. In fiscal 2000, the Compensation Committee consisted of
three outside directors of the Company, William G. Nelson, Chairman, Jack A.
Arnow and Thomas A. Skelton.
In fiscal 2000, Mr. Owens was 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. Owens, were
to:
o Attract and retain highly qualified executives to lead and manage the
Company by providing competitive total compensation packages;
o Reward executives based on the business performance of the Company;
o Provide executives with incentives designed to maximize the long-term
performance of the Company; and
o Assure that objectives for corporate and individual performance are
established and measured.
For fiscal 2000, the components of the Company's executive compensation program
included annual base salary, option grants and cash bonuses.
New Executive Management Team
As previously reported by the Company, during fiscal 1999 and the first
half of fiscal 2000, the Company experienced various operational difficulties.
The resulting poor financial performance of the Company in fiscal 1999 led to
the Company's decision to restructure its business. The restructuring included
the hiring of a new executive management team, commencing with the hiring in
April 1999 of Gregory J. Owens as Chief
10
<PAGE>
Executive Officer and President. At the close of fiscal 2000, the Company had a
total of nine executive officers, of whom seven, including Mr. Owens, joined
the Company in fiscal 2000 and two were officers of the Company who were
appointed as executive officers in fiscal 2000. Each of the seven executive
officers who joined the Company in fiscal 2000 entered into an employment
agreement with the Company.
Compensation of Executive Officers
Base salaries for executive officers of the Company (including the Chief
Executive Officer) historically have been 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 Culpepper and Associates Survey and the
Information Technology Association of America Compensation Survey. Individual
salary increases, which are reviewed annually, generally have been 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.
In fiscal 2000, annual base salaries, bonuses and certain performance
awards were negotiated by Mr. Owens for the other executive officers, subject
to the approval of the Compensation Committee and the Board. The base salaries
for the executive officers who joined the Company in fiscal 2000 were
determined by evaluating the factors referred to above in the determination of
base salaries of executive officers historically. In addition, the base
salaries of each individual also reflected the individual's accomplishments and
performance at his previous employer and his compensation at his previous
employer. Mr. Owens and the Compensation Committee also considered the then
poor financial performance of the Company, which necessitated that the Company
seek out and hire the most qualified candidates as promptly as possible. No
specific weight of relative importance was assigned to the various factors and
compensation information considered. Accordingly, the Company's executive
compensation policies and practices relating to base salaries may be deemed
informal and subjective, although they were based on such factors and detailed
investigation.
The executive officers who joined the Company in fiscal 2000 were eligible
to receive an annual incentive bonus payable 50% based on the financial
performance of the Company and 50% based upon management objectives. The
bonuses based on management objectives were payable under a plan submitted by
the executive officer and approved by Mr. Owens. The executive officers also
were eligible to receive performance awards in the form of stock option grants
based on formulas relating variously to the market performance of the Company's
stock or the Company's revenues during specified periods.
In fiscal 2000, stock options to purchase a total of 4,565,000 shares of
Common Stock were awarded as a long-term incentive to executive officers of the
Company. In addition, options to purchase a total of 100,000 shares of Common
Stock were granted to executive officers of the Company to reward them on the
performance of the Company.
Chief Executive Officer's Compensation and Corporate Performance for Fiscal
2000
In determining the compensation program of Mr. Owens, the Company's Chief
Executive Officer and President, including base salary and other cash
compensation and stock option grants for fiscal 2000, the Compensation
Committee considered Mr. Owens' experience, recognition level in his field, his
individual accomplishments and performance as Global Managing Partner for the
Andersen Consulting Supply Chain Practice and his salary level relative to
salary ranges for comparable positions in other companies, including companies
of similar financial condition. The Compensation Committee took into account
the then poor financial performance of the Company and the Company's need to
attract a new Chief Executive Officer and President to develop and implement a
turnaround strategy for the Company with the objective of returning the Company
to sustainable profitability. The Compensation Committee was assisted in its
task by Ramsey Beirne Associates, LLC, an executive recruiting and consulting
firm of recognized standing, William M. Gibson, the Company's Chairman, and J.
Michael Cline, a member of the Company's Board of Directors. 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.
11
<PAGE>
Mr. Owens was eligible to receive an annual incentive bonus of up to 100%
of his annual base salary, payable 50% based on the financial performance of
the Company and 50% based upon management objectives. The bonus based on
management objectives was payable under a plan submitted by Mr. Owens and
approved by the Board of Directors. During Mr. Owens' first 12 months of
employment with the Company, a bonus equal to 50% of Mr. Owens' annual base
salary was guaranteed. Mr. Owens also received performance awards in the form
of two stock option grants based on formulas relating to the market performance
of the Common Stock.
Mr. Gibson, Chairman of the Board, also served as President and Chief
Executive Officer of the Company until April 1999. As previously reported, the
Compensation Committee had set Mr. Gibson's annual base salary for fiscal 1999
at $320,000. Commencing in September 1998, Mr. Gibson voluntarily elected not
to receive his base salary, and no salary nor cash bonus was paid to Mr. Gibson
from that time through his resignation as Chief Executive Officer and President
in April 1999.
Compensation Committee
Jack A. Arnow
William G. Nelson
Thomas A. Skelton
12
<PAGE>
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 February 28, 1995 to fiscal year end (February 29, 2000). 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 February 28, 1995 and
that all dividends were reinvested. The Company has not paid any cash 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.
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Manugistics Group, Inc. $100 $141 $296 $751 $148 $1,069
Nasdaq Stock Market (U.S. Companies) $100 $139 $166 $227 $296 $ 603
Nasdaq Computer and Data Processing Stocks $100 $152 $179 $268 $420 $ 899
</TABLE>
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 six months thereafter, and
contains certain confidentiality and invention assignment provisions.
Certain Business Relationships
Joseph H. Jacovini, a director of the Company, is a partner and Chairman
of Dilworth Paxson LLP, counsel to the Company, which firm rendered legal
services to the Company in fiscal 2000.
13
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of 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 reports of changes of ownership of the Common Stock with the
Securities and Exchange Commission ("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 2000, all Reporting
Persons complied with all applicable filing requirements under Section 16(a),
with the following exceptions: Each of Messrs. Jeter, Rajaji, Smith and Stoks
failed to file a Form 3 in connection with his appointment as an executive
officer. Mr. Skelton failed to file one Form 4 relating to a total of two
sales; Mr. Gibson failed to file one Form 4 relating to a total of two
transactions; and Mr. Nelson failed to file one Form 4 relating to the exercise
of four stock options on the same date. However, each such reporting person
subsequently timely filed a Form 5 to report the required information.
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, 2001. 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 29, 2000. 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.
SUBMISSION OF SHAREHOLDER PROPOSALS FOR THE
2001 ANNUAL MEETING OF SHAREHOLDERS
Shareholder proposals submitted for inclusion in the Proxy Statement for
the 2001 Annual Meeting of Shareholders must be received by the Company at the
Company's corporate headquarters address and must be submitted in accordance
with Rule 14a-8 of the Exchange Act on or before March 2, 2001.
Under the Company's By-Laws, shareholder proposals which are not submitted
for inclusion in the Company's proxy Statement for the 2001 Annual Meeting of
Shareholders must be received by the Secretary of the Company: (i) 60 days in
advance of such meeting if the meeting is to be held on a day which is within
30 days preceding the anniversary of the 2000 Meeting, or (ii) 90 days in
advance of such meeting if the meeting is to be held on a day which is on or
after the anniversary of the 2000 Meeting.
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/ Timothy T. Smith
----------------------------------
Timothy T. Smith
Senior Vice President,
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.
14
<PAGE>
1216-PS-00
<PAGE>
DETACH HERE
PROXY
MANUGISTICS GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
MANUGISTICS GROUP, INC. FOR THE ANNUAL MEETING OF SHAREHOLDERS TO
BE HELD ON JULY 28, 2000
The undersigned, hereby revoking any contrary proxies previously given
relating to these shares, hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement in connection with the 2000 Annual
Meeting of Shareholders of Manugistics Group, Inc. (the "Annual Meeting") to be
held on Friday, July 28, 2000 at 9:00 A.M. E.D.T. at the Bethesda Marriott
Hotel, 5151 Pooks Hill Road, Bethesda, Maryland, and hereby appoints William M.
Gibson and Raghavan Rajaji, and each of them (with full power to act alone), the
attorneys and proxies of the undersigned, with full 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 hereby is, instructed to vote or act as follows on the reverse side hereof
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 -----------
SEE REVERSE ON REVERSE SIDE SEE REVERSE
SIDE SIDE
----------- -----------
<PAGE>
DETACH HERE
----- Please mark
| X | vote 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 II Directors listed below.
<TABLE>
<CAPTION>
<S> <C>
1. Election of Class II Directors
Nominees: (01) Gregory J. Owens (02) Joseph H. Jacovini
and (03) Thomas A. Skelton MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW / /
FOR WITHHELD
/ / / /
/ /
--------------------------------------
For all nominees except as noted above
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:
--------------------------------- ---------- -------------------------------------- -----------
</TABLE>
