DEF 14A
1
ddef14a.txt
NOTICE & PROXY STATEMENT
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
CLARUS CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[_] Fee paid previously with preliminary materials.
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
[Clarus Logo]
3970 Johns Creek Court
Suwanee, Georgia 30024
Dear Stockholder:
You are cordially invited to attend the Annual Stockholders' Meeting of
Clarus Corporation, to be held at Hilton Gardens Inn, 4025 Windward Plaza,
Alpharetta, Georgia 30005, on Tuesday, May 22, 2001 at 9:00 a.m., local time,
notice of which is enclosed.
The following proposals are to be presented at the meeting:
. to elect two Class III Directors to serve until the 2004 Annual
Stockholders' Meeting; and
. to ratify the appointment of KPMG LLP as our independent auditors for
the fiscal year ending December 31, 2001.
The proposals listed above have been approved unanimously by your Board of
Directors and are recommended by the Board to you for approval. Each member of
the Board of Directors has agreed to vote all shares of our common stock owned
by such Director in favor of the proposals.
A plurality of our outstanding common stock present in person or
represented by proxy and entitled to vote at the meeting will be required to
elect two Directors to serve as Class III directors until the 2004 Annual
Stockholders' Meeting. The affirmative vote of a majority of our common stock
present in person or represented by proxy and entitled to vote will be
required to ratify the appointment of KPMG LLP as our independent auditors for
the fiscal year ending December 31, 2001.
We hope that you will be able to join us and let us give you a review of
2000. Whether you own a few or many shares of stock and whether or not you
plan to attend in person, it is important that your shares be voted on matters
that come before the meeting. To make sure your shares are represented, we
urge you to complete and mail the enclosed proxy card promptly.
Your vote is very important and we appreciate your cooperation in
considering and acting on the matters presented.
Sincerely,
/s/ Stephen P. Jeffery
Stephen P. Jeffery, Chairman of the
Board, President and Chief
Executive Officer
Atlanta, Georgia
April 20, 2001
[Clarus Logo]
3970 Johns Creek Court
Suwanee, Georgia 30024
(770) 291-3900
NOTICE OF ANNUAL STOCKHOLDERS' MEETING
TO BE HELD MAY 22, 2001
Notice is hereby given that the Annual Stockholders' Meeting of Clarus
Corporation will be held at Hilton Gardens Inn, 4025 Windward Plaza,
Alpharetta, Georgia 30005, on Tuesday, May 22, 2001 at 9:00 a.m., local time,
for the following purposes:
1. Election of Directors. The election of two nominees for Class III
Directors of Clarus to serve until the 2004 Annual Stockholders' Meeting;
2. Ratification of Auditors. The ratification of the appointment of KPMG
LLP as our independent auditors for the fiscal year ending December 31, 2001;
and
3. Other Business. The transaction of such other business as may properly
come before the meeting, including adjourning of the meeting to permit, if
necessary, further solicitation of proxies.
A plurality of our outstanding common stock present in person or
represented by proxy at the meeting will be required to elect the Class III
Directors. The affirmative vote of a majority of the shares of our common
stock present in person or represented by proxy and entitled to vote at the
meeting will be required to approve the ratification of KPMG LLP. Only
stockholders of record at the close of business on March 31, 2001 are entitled
to receive notice of and to vote at the meeting or any adjournment or
postponement thereof.
The Board of Directors unanimously recommends that holders of our common
stock vote "FOR" the proposals listed above.
We urge you to sign and return the enclosed proxy as promptly as possible,
whether or not you plan to attend the meeting in person. You may revoke your
proxy by filing with our Secretary an instrument of revocation or a duly
executed proxy bearing a later date or by electing to vote in person at the
meeting.
By Order of the Board of Directors
/s/ Stephen P. Jeffery
Stephen P. Jeffery, Chairman
Atlanta, Georgia
April 20, 2001
[Clarus Logo]
Proxy Statement For
2001 Annual Stockholders' Meeting
TABLE OF CONTENTS
Page
Voting Information.......................................................... 1
Proposal 1--Election of Directors........................................... 2
Executive Officers.......................................................... 4
Executive Compensation...................................................... 6
Stock Performance Graph..................................................... 9
Compensation Committee Report............................................... 10
Audit Committee Report...................................................... 12
Proposal 2--Ratification of Appointment of Independent Auditors............. 12
Security Ownership of Principal Stockholders and Management................. 13
Section 16(a) Beneficial Ownership Reporting Compliance..................... 15
General Information......................................................... 15
Other Matters............................................................... 16
Exhibit A--Clarus Corporation Audit Committee Charter....................... A-1
[Clarus Logo]
PROXY STATEMENT FOR
2001 ANNUAL STOCKHOLDERS' MEETING
VOTING INFORMATION
Purpose
This Proxy Statement is being furnished to you in connection with the
solicitation by and on behalf of our Board of Directors of proxies for use at
our 2001 Annual Stockholders' Meeting, at which you will be asked to vote upon
proposals to:
. elect two Directors to serve as Class III Directors until our 2004
Annual Stockholders' Meeting (see Proposal 1); and
. ratify the appointment of KPMG LLP as our independent auditors for
the fiscal year ending December 31, 2001 (see Proposal 2).
The meeting will be held at 9:00 a.m., local time, on Tuesday, May 22,
2001, at Hilton Gardens Inn, 4025 Windward Plaza, Alpharetta, Georgia 30005.
This Proxy Statement and the enclosed proxy are first being mailed to
stockholders on or about April 20, 2001.
Proxy Card and Revocation
You are requested to promptly sign, date, and return the accompanying proxy
card to us in the enclosed postage-paid envelope. Any stockholder who has
delivered a proxy may revoke it at any time before it is voted by giving
notice of revocation in writing or submitting to us a signed proxy bearing a
later date, provided that such notice or proxy is actually received by us
prior to the taking of the stockholder vote or by electing to vote in person
at the meeting. Any notice of revocation should be sent to Clarus Corporation,
3970 Johns Creek Court, Suwanee, Georgia 30024, Attention: Michael W. Mattox,
Corporate Secretary. The shares of our common stock represented by properly
executed proxies received at or prior to the meeting and not subsequently
revoked will be voted as directed in such proxies. If instructions are not
given, shares represented by proxies received will be voted FOR election of
the nominees for Director and approval of Proposal 2. As of the date of this
Proxy Statement, we are unaware of any other matter to be presented at the
meeting.
Who Can Vote; Voting of Shares
Our Board of Directors has established the close of business on March 31,
2001, as the record date for determining our stockholders entitled to notice
of and to vote at the meeting. Only our stockholders of record as of the
record date will be entitled to vote at the meeting. The affirmative vote of a
plurality of our outstanding common stock present in person or represented by
proxy and entitled to vote at the meeting will be required to elect two
Directors to serve as Class III directors until the 2004 Annual Stockholders'
Meeting. A plurality means that more votes must be cast in favor of the
election of a Director than those cast against election of such Director.
Accordingly, the withholding of authority by a shareholder (including broker
non-votes) will not be counted in computing a plurality and thus will have no
effect on the results of the election of such nominees. The affirmative vote
of a majority of our outstanding common stock present in person or represented
by proxy and entitled to vote at the meeting will be required to ratify the
appointment of KPMG LLP as our independent auditors for the fiscal year ending
December 31, 2001 and to approve any other proposals considered at the
meeting. Under certain circumstances, brokers are prohibited from exercising
discretionary authority for beneficial owners who have not returned proxies to
the brokers (so-called "broker non-votes"). In such cases, those shares will
be counted for the purpose of determining if a quorum is present but will not
be included in the vote totals with respect to those matters for which the
broker cannot vote. If a stockholder abstains from voting on a matter, those
shares will be counted for the purpose of determining if a quorum is present
and will be counted as a vote against such proposal.
1
As of the record date, there were 15,511,009 shares of our common stock
outstanding and 152 holders of record of shares of our common stock
outstanding and entitled to vote at the meeting, with each share entitled to
one vote.
The presence, in person or by proxy, of a majority of the outstanding
shares of our common stock entitled to vote at the meeting is necessary to
constitute a quorum of the stockholders in order to take action at the
meeting. For these purposes, shares of our common stock that are present, or
represented by proxy, at the meeting will be counted for quorum purposes
regardless of whether the holder of the shares or proxy fails to vote on any
matter or whether a broker with discretionary authority fails to exercise its
discretionary voting authority with respect to any matter.
How You Can Vote
You may vote your shares by marking the appropriate boxes on the enclosed
proxy card. You must sign and return the proxy card promptly in the enclosed
self-addressed envelope. Your vote is important. Please return your marked
proxy card promptly so your shares can be represented, even if you plan to
attend the meeting in person.
PROPOSAL 1 -- ELECTION OF DIRECTORS
Number and Classification
Our Board of Directors currently consists of six Directors. Our bylaws
provide that our Board of Directors will consist of not less than two, nor
more than seven members, the precise number to be determined from time to time
by the Board of Directors. The number of Directors has been set at seven by
the Board. There is one vacant seat on our Board. The six members who comprise
our Board of Directors are divided into three classes of Directors: Class I
Directors, Class II Directors and Class III Directors, with each such class of
Directors serving staggered three-year terms.
Messrs. Stephen P. Jeffery and Said Mohammadioun serve in the class having
a term that expires in 2001; Messrs. Brady L. Rackley, III and Mark A. Johnson
serve in the class having a term that expires in 2002; and Messrs. Tench Coxe
and Donald L. House serve in the class having a term that expires in 2003.
Upon the expiration of the term of each class of Directors, Directors
comprising the class of Directors, if nominated, will be eligible to be
elected for a three-year term at the next succeeding annual meeting of
stockholders. In June 2000, Mr. William S. Kaiser resigned from the Board of
Directors and in September 2000, Mr. Norman N. Behar resigned from the Board.
Mr. Rackley was appointed to the Board in August 2000 to fill the vacancy in
Class I created by Mr. Kaiser's resignation. Mr. Behar's resignation created a
vacancy in Class I. This vacancy has not been filled as of the date of this
Proxy Statement and we do not intend to fill this vacancy.
Nominees
We have selected two nominees that we propose for election to our Board as
Class III Directors. The nominees for Class III Directors will be elected to
serve a three-year term that will expire at our 2004 Annual Stockholders'
Meeting. The two nominees for our Class III Directors are: Stephen P. Jeffery
and Said Mohammadioun, both of whom currently serve as Class III Directors.
Proxies cannot be voted at the meeting for a greater number of persons than
the number of nominees named.
Each of the nominees has consented to being named in this Proxy Statement
and to serve as a Director if elected. In the event that any nominee withdraws
or for any reason is not able to serve as a Director, the proxy will be voted
for such other person as may be designated by the Board of Directors (or to
reduce the number of persons to be elected by the number of persons unable to
serve), but in no event will the proxy be voted for more than two nominees.
The Board of Directors unanimously recommends that you vote FOR each
nominee.
2
Board of Directors
The following table sets forth the name and age of each of the two nominees
for election as Class III Directors and the remaining Directors who will
continue to serve on our Board of Directors, as well as his Director
classification and length of service on our Board.
Director Year First
Name Age Classification Elected
---- --- -------------- ----------
Mark A. Johnson............................... 48 I 1998
Brady L. Rackley, III......................... 30 I 2000
Tench Coxe.................................... 43 II 1993
Donald L. House............................... 59 II 1993
Stephen P. Jeffery............................ 45 III 1997
Said Mohammadioun............................. 53 III 1998
Meetings and Committees of the Board
Our Board of Directors held 20 meetings during 2000. Each Director attended
75% or more of the aggregate number of meetings held by the Board of Directors
and the committees on which he served. Our Board of Directors has two standing
committees: the Audit Committee and the Compensation Committee. During 2000,
the Board of Directors did not have a standing nominating committee, although
the functions of such committee were performed by the full Board of Directors.
The Audit Committee presently consists of Messrs. Coxe, House and Johnson.
All of the members of the Audit Committee are independent as defined in Rule
4200(a)(15) of the National Association of Securities Dealers' listing
standards. The Audit Committee has been assigned the principal functions of:
. appointing and meeting with the independent auditors;
. reviewing and approving the annual report of the independent
auditors;
. meeting with management regarding audit matters;
. approving the annual financial statements; and
. reviewing and approving summary reports of the auditor's findings and
recommendations.
The Audit Committee held four meetings during 2000. In 2000, the Board of
Directors adopted a written charter for the Audit Committee, a copy of which
is attached hereto as Exhibit A.
The Compensation Committee presently consists of Messrs. Rackley and
Mohammadioun. The Compensation Committee has been assigned the functions of
approving and monitoring the remuneration arrangements for senior management
and equity compensation awards under our stock-based plans. The Compensation
Committee held two meetings during 2000.
The functions of a nominating committee are performed by the full Board.
The Board will consider stockholder nominations for Director which are
presented in accordance with established procedures. See "General
Information--Stockholder Proposal for 2002 Annual Meeting," below.
Director Compensation
Directors who are not our employees ("Outside Directors") currently include
Messrs. Coxe, House, Johnson, Mohammadioun and Rackley. Our Directors do not
receive an annual retainer or any fees for attending regular meetings of the
Board of Directors. Directors may participate in our Stock Incentive Plan. On
June 13, 2000, we granted an option to purchase 7,500 shares of our common
stock to each of Messrs. Coxe, House, Johnson, and Mohammadioun and on August
29, 2000, we granted an option to purchase 2,500 shares of our common stock to
each of Messrs. Coxe, House, Johnson and Mohammadioun. On August 29, 2000, we
granted an option to purchase 21,250 shares of our common stock to Mr.
Rackley. Other than 18,750 options granted to Mr. Rackley in August 2000, all
options were granted with an exercise price equal to fair market value on the
date of grant. All of the options granted to our Directors in 2000 vest
quarterly, with the exception of Mr. Rackley's 11,250 options that fully vest
on June 13, 2001.
3
EXECUTIVE OFFICERS
The following table sets forth the name, age and position of each executive
officer.
Name Age Positions
---- --- ---------
Stephen P. Jeffery...... 45 Chairman, President and Chief Executive Officer
Steven M. Hornyak....... 35 Executive Vice President and General Manager, Americas
Michael W. Mattox....... 45 Senior Vice President, Operations and Corporate Secretary
James J. McDevitt....... 41 Chief Financial Officer
Our executive officers are appointed by the Board of Directors and serve
until their successors are duly elected and qualified. There are no family
relationships among any of our executive officers or Directors.
Biographies of Directors and Executive Officers
Stephen P. Jeffery joined us in November 1994 as Vice President of
Marketing and was elected Vice President of Sales and Marketing in June 1995.
He was elected President in October 1995, a Director in October 1997, Chairman
of the Board in December 1997 and Chief Executive Officer in February 1998.
Prior to joining us, Mr. Jeffery was employed by Hewlett-Packard Company,
where he served as the manager of Hewlett-Packard's client/server solutions
and partner programs, as well as in a variety of sales and marketing
management positions in the United States and Europe for 15 years. Mr. Jeffery
also served in sales with International Business Machines prior to joining
Hewlett-Packard. Mr. Jeffery also serves on the Board of Directors of eShare
Communications, Inc.
Steven M. Hornyak joined us in December 1994 as an Account Executive and
was promoted to Regional Sales Manager for our Northeast region in 1996. In
August 1997, Mr. Hornyak was elected Vice President of Marketing. In January
2000, Mr. Hornyak was elected as Vice President responsible for our strategy
and business development organization. In January 2001, Mr. Hornyak was
elected Executive Vice President and General Manager, Americas. Prior to
joining us, Mr. Hornyak served in a variety of sales and consulting roles for
Oracle Corporation from June 1992 until December 1994. Mr. Hornyak served as
management consultant with PricewaterhouseCoopers from 1990 to 1992.
Michael W. Mattox joined us in May 2000 as General Counsel and has served
as Senior Vice President, Corporate Planning and Operations since January
2001. Prior to joining us, Mr. Mattox served as President and Chief Executive
Officer of Premis, Inc. from 1996 to 1999. From 1995 to 1996 Mr. Mattox served
as President and Chief Operating Officer of Premis, Inc.
James J. McDevitt joined us in August 2000 as Vice President of Finance and
was promoted to Chief Financial Officer in January 2001. Prior to joining us,
Mr. McDevitt served in senior finance positions, including most recently as
Senior Vice President and Chief Financial Officer of Geac Computer Systems,
Inc. from 1997 to 2000. Prior to joining Geac, Mr. McDevitt served from 1996
to 1997 in the Corporate Finance department of the Georgia Pacific
Corporation.
Tench Coxe has served as a member of our Board of Directors since September
1993. Mr. Coxe has served as a managing director of the general partner of
Sutter Hill Ventures, a venture capital company located in Palo Alto,
California, since 1989. Mr. Coxe also serves on the board of directors of
eLoyalty Corporation, Copper Mountain Networks and Nvidia Corporation and on
the boards of directors of several privately-held companies.
Donald L. House has served as a member of our Board of Directors since
January 1993. Mr. House served as Chairman of our Board of Directors from
January 1994 until December 1997 and as our President from January 1993 until
December 1993. Mr. House also serves on the boards of directors of eShare
Communications, Inc., where he serves as chairman of its compensation
committee and as a member of its audit committee, Ockham Technologies, Inc.,
where he serves as chairman of the board, and Carreker Corporation, where he
is chairman of its audit committee. Mr. House also serves on the board of
directors of several privately-held companies.
4
Mark A. Johnson has served as a member of our Board of Directors since July
1998. Mr. Johnson has served as the Vice Chairman of CheckFree Corporation, a
supplier of financial e-commerce services, software and related products,
since 1997. He retired from CheckFree in July 2000. From 1982 to 1997 Mr.
Johnson served in various capacities with CheckFree. From 1996 until his
retirement, he served as President of CheckFree. From 1990 to 1996 Mr. Johnson
was Executive Vice President of Corporate Development for CheckFree. He has
been a member of the Board of Directors of CheckFree for the past 17 years.
Said Mohammadioun has served as a member of our Board of Directors since
March 1998. Mr. Mohammadioun has served as chairman and chief executive
officer of Synchrologic since October 1996. From March 1995 to September 1996,
he was a private investor in small technology companies. Mr. Mohammadioun was
vice president of Lotus Development Corp. from December 1990 to February 1995.
Brady L. ("Tripp") Rackley, III has served as a member of our Board of
Directors since August 2000. Mr. Rackley currently serves as a venture partner
of Noro-Moseley Partners. Mr. Rackley founded nFront, Inc. and served as
Chairman of the Board and Chief Executive Officer of nFront since its
inception in 1996 until February, 2000, when nFront was acquired in a merger
by Digital Insight Corporation. Prior to forming nFront, Mr. Rackley served as
Chief Operating Officer of LeapFrog Technologies, Inc, a software development
company, from October 1995 until February 1996, and as Vice President--
Development of Systeme Corp., a software development company, from December
1992 until September 1995.
5
EXECUTIVE COMPENSATION
The following table provides certain summary information for 2000, 1999 and
1998 concerning compensation paid or accrued by us to or on behalf of our
Chief Executive Officer and our other four most highly compensated executive
officers during 2000 (our "Named Executive Officers").
Summary Compensation Table
Long-Term
Annual Compensation(1) Compensation Awards(2)
----------------------- ----------------------
Name and Principal Securities Underlying All Other
Position Year Salary($) Bonus($) Options Granted(#) Compensation($)
------------------ ---- --------- -------- ---------------------- ---------------
Stephen P. Jeffery...... 2000 $250,000 $146,875 175,000 --
Chairman, Chief 1999 225,666 93,257 110,000 --
Executive Officer 1998 240,672 129,843 112,499 --
and President
Joseph E. Bibler........ 2000 227,754 105,950 -- --
Vice President, 1999 209,027 158,376 20,000 --
Customer Services 1998 180,451 130,187 40,000 --
William M. Curran, Jr.
(3).................... 2000 244,939 -- -- --
Vice President, Sales 1999 142,223 244,578 --
1998 142,586 388,512 80,500 --
Mark D. Gagne (4)....... 2000 196,282 398,500 160,000(4) $300,000(5)
Chief Financial Officer 1999 -- -- -- --
1998 -- -- -- --
Steven M. Hornyak....... 2000 191,667 263,158 5,000 --
Executive Vice 1999 175,666 94,558 100,000 --
President and 1998 156,177 90,143 40,000 --
General Manager,
Americas
--------
(1) In accordance with the rules of the Securities and Exchange Commission,
the compensation set forth in the table does not include medical
insurance, group life insurance or other benefits, securities or property
that do not exceed the lesser of $50,000 or 10% of the person's salary and
bonus shown in the table.
(2) We did not make any restricted stock awards, grant any stock appreciation
rights or make any long-term incentive payments to our executive officers
during 2000, 1999 or 1998. Options granted to the Named Executive
Officers, other than to Mr. Gagne in January 2000, were granted at fair
market value on the date of grant as determined by our Compensation
Committee.
(3) Mr. Curran ceased his employment with us in June 2000.
(4) Mr. Gagne's employment agreement expired January 12, 2001 and his
employment was terminated at that time. On Mr. Gagne's termination date,
the unvested option to purchase 136,000 shares terminated.
(5) Represents a one-time signing bonus.
6
Option Grants in 2000
The following table provides certain information concerning individual
grants of stock options made during 2000 to the Named Executive Officers.
Potential Realizable
Individual Grants Value at Assumed
------------------------------------------ Annual Rates of Stock
Number of Percent of Market Price
Securities Total Options Value at Appreciation for
Underlying Granted to Exercise Price Grant Date Option Term (2)
Options Employees In Per Share Expiration ---------- ---------------------
Name Granted(#)(1) Fiscal Year ($/sh) Date 0% 5% 10%
---- ------------- ------------- -------------- ---------- ---------- ---------- ----------
Stephen P. Jeffery...... 175,000 8.31% $35.38 6/12/07 -- $2,520,562 $5,873,982
Joseph E. Bibler........ -- -- -- -- -- -- --
William M. Curran, Jr... -- -- -- -- -- -- --
Mark D. Gagne........... 160,000 7.6% 35.00 1/13/07 $5,430,000 341,964 796,922
Steven M. Hornyak....... 5,000 * 39.50 8/17/07 -- 80,402 187,372
--------
* Less than 1%.
(1) Other than the stock option grant to Mr. Gagne on January 13, 2000 and the
stock option grant to Mr. Rackley in the third quarter of 2000, all
options were granted pursuant to our SQL 1992 Stock Plan or our Stock
Incentive Plan (formerly, the 1998 Stock Incentive Plan) at an exercise
price not less than fair market value on the date of grant based on our
closing sales prices as reported on the Nasdaq National Market. Of the
160,000 shares subject to Mr. Gagne's option, 24,000 vested immediately on
the date of grant and the remainder were not vested upon termination of
his employment in January 2001 and were therefore forfeited. Other than
the grant to Mr. Gagne, options granted generally vest over a 48 month
period. The options expire seven years after the date of grant.
(2) Amounts reported in this column represent hypothetical values that may be
realized upon exercise of the options immediately prior to the expiration
of their term, assuming that the stock price on the date of grant
appreciates at the specified annual rates of appreciation, compounded
annually over the term of the option. These numbers are calculated based
on rules of the Securities and Exchange Commission.
7
Aggregated Option Exercises in 2000
and Year-End Option Values
The following table provides certain information concerning the options
exercised in 2000 by the Named Executive Officers and the number and value of
exercised and unexercised options held by the Named Executive Officers as of
December 31, 2000.
Number of Securities
Underlying Unexercised Value of Unexercised
Number of Dollar Options at In-the-Money Options
Shares Value Fiscal Year End(#) at Fiscal Year End ($)(2)
Acquired On Realized ------------------------- -------------------------
Name Exercise(#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ---------- ----------- ------------- ----------- -------------
Stephen P. Jeffery...... 74,610 $1,412,851 171,445 308,944 $389,128 $484,845
Joseph E. Bibler........ 39,961 691,524 17,039 57,000 -- 71,955
William M. Curran, Jr... 9,900 460,101 -- -- -- --
Mark D. Gagne........... -- -- 24,000 -- -- --
Steven M. Hornyak....... 45,517 2,921,137 22,591 121,382 16,020 150,090
--------
(1) Dollar values were calculated based on the difference between the fair
market value of the underlying common stock on the date prior to exercise
date and the exercise price per share.
(2) Dollar values were calculated determining the difference between the fair
market value of the underlying securities at December 31, 2000 ($7.00 per
share), and the exercise price of the options.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee serves as a member of the Board of
Directors or Compensation Committee of any entity that has one or more
executive officers serving as a member of our Board or Compensation Committee.
Employment Agreements and Change in Control Arrangements
Effective January 1, 2000, we entered into a one-year employment, non-
disclosure, non-solicitation and non-competition agreement with Stephen P.
Jeffery, our President, Chief Executive Officer and Chairman of the Board. The
agreement automatically renewed for an additional one year term. Under his
employment agreement, Mr. Jeffery receives an annual base salary of $250,000
and an incentive bonus if certain revenue and earnings targets are met. If we
terminate Mr. Jeffery's employment agreement without cause, then Mr. Jeffery
will be entitled to receive severance pay in the form of continuation of his
annualized base salary for one year from the date of termination and a pro
rata portion of his incentive bonus, if any, for the quarter in which his
employment terminated. Mr. Jeffery may terminate his employment agreement at
any time three months after a change in control has occurred and we are
required to pay to Mr. Jeffery his base salary as of the date of the change in
control for a period of 12 months from the date of termination and the pro
rata portion of his incentive bonus for the quarter in which his employment
terminated.
Effective January 13, 2000, we also entered into a one-year employment non-
disclosure, non-solicitation and non-competition agreement with Mark D. Gagne,
our former Executive Vice President and Chief Financial Officer. Under this
employment agreement, Mr. Gagne received an annual base salary of $200,000 and
a signing bonus of $300,000. Mr. Gagne's employment agreement expired on
January 12, 2001 and was not renewed.
Limitation of Liability and Indemnification of Officers and Directors
Our Amended and Restated Articles of Incorporation provide that the
liability of our directors for monetary damages shall be eliminated to the
fullest extent permissible under Delaware law and that we may indemnify our
officers, employees and agents to the fullest extent permitted under Delaware
law.
8
Our Bylaws provide that we must indemnify our directors against all
liabilities to the fullest extent permitted under Delaware law and that we
must advance all reasonable expenses incurred in a proceeding where the
director was either a party or a witness because he or she was a director.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors pursuant to the provisions of our charter
documents, Delaware law or the agreements described above, we have been
advised that in the opinion of the Securities and Exchange Commission, this
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total stockholder return on our common stock to the cumulative
total return of the Russell 2000 Index and the Chase H&Q Technology Index for
the period commencing on May 27, 1998, and ending December 31, 2000 (the
"Measuring Period"). The graph assumes that the value of the investment in our
common stock and each index was $100 on May 27, 1998. The yearly change in
cumulative total return is measured by dividing (1) the sum of (i) the
cumulative amount of dividends for each fiscal year, assuming dividend
reinvestment, and (ii) the change in share price between the beginning and end
of the Measuring Period, by (2) the share price at the beginning of the
Measuring Period.
[GRAPH APPEARS HERE; GRAPH IS ALREADY AT THE FINANCIAL PRINTERS]
Comprehensive Total Return
---------------------------------------------------
5/27/98 5/98 6/98 7/98 8/98 9/98 10/98
CLARUS CORPORATION 100.00 94.12 107.35 100.74 62.50 41.54 66.91
RUSSELL 2000 100.00 101.41 101.62 93.39 75.26 81.15 84.46
JP MORGAN H&Q INTERNET 100 100.00 98.96 128.32 116.23 82.01 103.10 108.06
---------------------------------------------------
11/98 12/98 1/99 2/99 3/99 4/99 5/99
CLARUS CORPORATION 70.59 70.59 41.18 52.94 64.71 67.65 64.71
RUSSELL 2000 88.88 94.38 95.64 87.89 89.26 97.26 98.68
JP MORGAN H&Q INTERNET 100 147.71 178.08 264.59 237.09 301.28 340.99 287.04
---------------------------------------------------
6/99 7/99 8/99 9/99 10/99 11/99 12/99
CLARUS CORPORATION 58.82 126.47 139.71 111.03 220.59 540.45 776.47
RUSSELL 2000 103.14 100.31 96.60 96.62 97.01 102.81 114.44
JP MORGAN H&Q INTERNET 100 310.30 273.69 288.14 318.96 352.67 444.48 617.44
---------------------------------------------------
1/00 2/00 3/00 4/00 5/00 6/00 7/00
CLARUS CORPORATION 836.04 1372.06 830.88 472.80 308.82 457.35 435.29
RUSSELL 2000 112.61 131.20 122.55 115.18 108.46 117.92 114.12
JP MORGAN H&Q INTERNET 100 578.91 735.98 644.92 486.02 408.89 478.43 448.56
---------------------------------------------------
8/00 9/00 10/00 11/00 12/00
CLARUS CORPORATION 711.76 268.39 117.65 89.71 82.35
RUSSELL 2000 122.83 119.22 113.90 102.21 110.99
JP MORGAN H&Q INTERNET 100 520.42 460.25 357.38 260.03 237.57
9
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG CLARUS, RUSSELL 2000 INDEX AND
CHASE H&Q TECHNOLOGY INDEX
COMPENSATION COMMITTEE REPORT
During 2000, the Compensation Committee of the Board of Directors was
comprised of non-employee members of the Board. Messrs. Norman N. Behar,
William S. Kaiser and Said Mohammadioun served on the Compensation Committee
from January 2000 to August 2000. From August 2000 through the end of 2000,
our Compensation Committee consisted of Messrs. Brady L. Rackley, III and Said
Mohammadioun. The Compensation Committee is responsible for:
. setting our compensation philosophy and policies;
. establishing the compensation of our Chief Executive Officer and
approving the compensation of the other executive officers; and
. administering and awarding options and other awards under our stock
incentive plans.
Our compensation policies are designed to align the financial interests of
our management with those of our stockholders, and to take into account our
operating environment and expectations for continued growth and enhanced
profitability. Compensation for each of our executive officers consists of a
base salary, and the opportunity to receive stock options and a quarterly
bonus. We do not currently provide executive officers with other long-term
incentive compensation.
The Compensation Committee's current philosophy is that the predominate
portion of an executive's compensation should be based directly upon the value
of incentive compensation in the form of cash bonuses and stock option awards.
The Compensation Committee believes that providing executives with the
opportunity to acquire interests in our company through grants of stock
options, while maintaining our base salaries at competitive levels, will
enable us to attract and retain executives with the outstanding management
abilities and entrepreneurial spirit who are essential to our success.
Furthermore, the Compensation Committee believes that this approach to
compensation, as well as the opportunity to receive cash bonuses based on
performance, motivates executives to perform to their fullest potential.
Base Salary. At least annually, the Compensation Committee reviews salary
recommendations for our executives and then approves such recommendations,
with any modifications it considers appropriate. The annual salary
recommendations for such persons are made under the ultimate direction of the
Chief Executive Officer, based on total compensation packages for comparable
companies in our industry, as well as evaluations of the individual
executive's past and expected future performance. Similarly, the Compensation
Committee fixes the base salary of the Chief Executive Officer based on its
review of competitive compensation data from companies in our industry, the
Chief Executive Officer's overall compensation package, and the Compensation
Committee's assessment of his past performance and its expectation as to his
future performance in leading us.
Annual Bonuses. The Compensation Committee determined the bonus in 2000 to
be paid to our Chief Executive Officer based upon our 2000 bonus plan which
outlines certain revenue, profitability and other financial-related goals, as
well as other criteria designed to assess his contribution to our performance.
Quarterly bonus recommendations for Named Executive Officers, other than the
Chief Executive Officer, were made under the direction of the Chief Executive
Officer and were reviewed and approved by the Compensation Committee.
Stock Awards. Stock options represent a substantial portion of compensation
for our executive officers, including the Chief Executive Officer. Stock
options typically are granted at the fair market value on the date of grant,
and will only have value if our stock price increases. Stock option grants are
generally structured to vest over a 48 month period. In special circumstances,
however, the Compensation Committee has authority to accelerate vesting or
modify other restrictions on exercise. Grants of stock options generally are
based upon the level of the executive's position and an evaluation of the
executive's past and expected future performance. The Compensation Committee
believes that dependence on stock options for a significant portion of an
executive's compensation more closely aligns such executive's interests with
those of our stockholders, since the ultimate value of such compensation is
linked directly to stock price.
10
Compensation of Chief Executive Officer. The base salary paid to Mr.
Jeffery is reviewed annually by the Compensation Committee and may be adjusted
based on competitive compensation information available to the Compensation
Committee, his overall compensation package and the Compensation Committee's
assessment of his past experience and its expectation as to his future
contributions in leading us and our businesses. In June, 2000 the Compensation
Committee reviewed the compensation of our Chief Executive Officer and entered
into a one-year employment agreement with Mr. Jeffery effective January 1,
2000. The agreement provided for an annual base salary of $250,000 and
incentive bonus if certain revenue and earnings targets were met. Mr. Jeffery
received bonuses in the aggregate amount of $146,875 in 2000. On June 6, 2000,
Mr. Jeffery was granted a stock option to purchase 175,000 shares of our
common stock at a price of $35.38 per share.
The Compensation Committee evaluates our compensation policies and
procedures with respect to executives on an ongoing basis. Although the
Compensation Committee believes that current compensation policies have been
successful in aligning the financial interests of executive officers with
those of our stockholders and with our performance, it continues to examine
what modifications, if any, should be implemented to further link executive
compensation with both individual and our performance.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), generally limits amounts that can be deducted for compensation paid
to certain executives to $1,000,000 unless certain requirements are met. No
executive officer receives compensation in excess of $1,000,000 and therefore
there are no compensation amounts that are nondeductible at present. The
Compensation Committee will continue to monitor the applicability of Section
162(m) to the Company's compensation program.
Submitted by the Compensation Committee of the Board of Directors
Brady L. Rackley, III
Said Mohammadioun
11
AUDIT COMMITTEE REPORT
In accordance with its written charter adopted by the Board of Directors, a
copy of which is attached as Exhibit A, the Audit Committee assists the Board
in fulfilling its responsibility for oversight of the quality and integrity of
our accounting, auditing and financial reporting practices. The Audit
Committee recommends to the Board of Directors, subject to stockholder
approval, the selection of our independent accountants.
Management is responsible for our internal controls. Our independent
auditors are responsible for performing an independent audit of our
consolidated financial statements in accordance with generally accepted
auditing standards and to issue a report thereon. The Audit Committee has
general oversight responsibility with respect to our financial reporting, and
reviews the results and scope of the audit and other services provided by our
independent auditors.
In this context, the Audit Committee has met and held discussions with
management and our independent auditors. Management represented to the Audit
Committee that our consolidated financial statements were prepared in
accordance with the U.S. generally accepted accounting principles, and the
Audit Committee has reviewed and discussed the consolidated financial
statements with management and our independent auditors. The Audit Committee
discussed with our independent auditors matters required to be discussed by
Statement on Auditing Standards No. 61 (Communication with Audit Committees).
Our independent auditors also provided to the Audit Committee the written
disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Audit Committee
discussed with the independent auditors' their independence.
Based upon the Audit Committee's discussion with management and our
independent auditors and the Audit Committee's review of the representations
of management and the report of our independent auditors to the Audit
Committee, the Audit Committee recommended that the Board of Directors include
our audited consolidated financial statements in our Annual Report on Form 10-
K for the year ended December 31, 2000 filed with the Securities and Exchange
Commission.
Submitted by the Audit Committee of the Board of Directors:
Tench Coxe
Donald L. House
Mark A. Johnson
Notwithstanding anything to the contrary set forth in any of our previous
filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the foregoing
Compensation Committee Report on Executive Compensation, the Audit Committee
Report and the Stockholder Return Performance Graph shall not be incorporated
by reference into any such filings.
PROPOSAL 2--RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed KPMG LLP, independent auditors, to
audit our financial statements for the fiscal year ending December 31, 2001
and seeks ratification of such appointment. In the event of a negative vote on
such ratification, the Board will reconsider its appointment. KPMG LLP has
served as our independent auditor since June 2000.
We expect that one or more representatives of KPMG LLP will be present at
the annual meeting and will have the opportunity to make a statement if they
so desire to do so and to respond to appropriate questions.
12
Fees billed or to be billed to us by KPMG LLP for 2000 are as follows:
Audit Fees. The aggregate audit fees billed or to be billed to us by KPMG
LLP during 2000 for professional services rendered for the audit of our annual
financial statements and the reviews of the financial statements included in
our Form 10-Qs for 2000 totaled $256,000.
Financial Information Systems Design and Implementation Fees. KPMG LLP
provided no professional services to us regarding financial systems design and
implementation during 2000.
All Other Fees. The aggregate fees billed or to be billed to us for
services outside of the annual audit for tax related services totaled
$227,000.
Arthur Andersen LLP was our independent auditor for the fiscal years prior
to 2000. On June 6, 2000, we terminated Arthur Andersen LLP's appointment as
our independent auditor and KPMG LLP was appointed as our independent auditor.
The decision to change auditors was approved by the Audit Committee and our
full board of directors.
During the two fiscal years ended December 31, 1999, and the subsequent
interim period from January 1, 2000 through June 6, 2000, there were no
disagreements between us and Arthur Andersen LLP on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedures, which disagreements if not resolved to their satisfaction would
have caused them to make reference in connection with their opinion to the
subject matter of the disagreement. None of the "reportable events" described
under Item 304(a)(1)(v) of Regulation S-K occurred within 1998 and 1999 and
the subsequent interim period through June 6, 2000. The audit reports of
Arthur Andersen LLP on our financial statements as of and for the fiscal years
ended December 31, 1999 and 1998, did not contain any adverse opinion or
disclaimer of opinion, nor were they qualified or modified as to uncertainty,
audit scope, or accounting principles. During our fiscal years ended December
31, 1999 and December 31, 1998, and the subsequent interim period through June
6, 2000, we did not consult with KPMG LLP regarding any of the matters or
events set forth in Item 304 (a)(2)(i) and (ii) of Regulation S-K.
The Board of Directors unanimously recommends that you vote FOR the
ratification of KPMG LLP, as our independent auditors for the fiscal year
ending December 31, 2001. The affirmative vote of the holders of a majority of
the votes cast is required to ratify the appointment of KPMG LLP as our
independent auditors for the fiscal year ending December 31, 2001.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table provides information concerning beneficial ownership of
our common stock as of March 31, 2001, by:
. each stockholder that we know owns more than 5% of our outstanding
common stock;
. each of our named executive officers;
. each of our Directors; and
. all of our Directors and executive officers as a group.
The following table lists the applicable percentage of beneficial ownership
based on 15,511,009 shares of common stock outstanding as of March 31, 2001.
Except where noted, the persons or entities named have sole voting and
investment power with respect to all shares shown as beneficially owned by
them.
The second column shows separately shares which may be acquired by exercise
of stock options or warrants within 60 days after March 31, 2001, by the
Directors and executive officers individually and as a group. These
13
shares are included in the numbers shown in the first column. Shares of common
stock that may be acquired by exercise of stock options or warrants are deemed
outstanding for purposes of computing the percentage beneficially owned by the
persons holding these options but are not deemed outstanding for purposes of
computing the percentage beneficially owned by any other person.
Number of
Shares
Subject
to
Number of Options Percentage
Shares of or of Common
Name Common Stock Warrants Stock
---- ------------ --------- ----------
Franklin Resources, Inc. (1)
777 Mariners Island Boulevard
San Mateo, California 94404............ 1,887,529 -- 12.2%
Stephen P. Jeffery...................... 110,910 233,910 2.2
Joseph E. Bibler........................ 39,000 25,706 *
William M. Curran, Jr................... -- -- --
Mark D. Gagne........................... -- 24,000 *
Steven M. Hornyak....................... 47,816 52,954 *
Tench Coxe.............................. 95,174(2) 29,927(3) *
Donald L. House......................... 98,749 22,500 *
Mark A. Johnson......................... 33,075 33,750 *
Said Mohammadioun....................... 47,375 15,000 *
Brady L. Rackley, III................... -- 7,500 *
Directors and executive officers as a
group (10 persons)..................... 472,099 433,747 5.8%
--------
* Less than one percent.
(1) Based on a Form 13G/A filed by Franklin Resources, Inc. ("FRI") on
February 9, 2001. The shares of common stock reported above by FRI are
beneficially owned by one or more open or closed-end investment companies
or other managed accounts which are advised by direct and indirect
investment advisory subsidiaries (the "Adviser Subsidiares") of FRI. Such
advisory contracts grant to such Adviser Subsidiaries all investment
and/or voting power over the securities owned by such advisory clients.
Therefore, such Adviser Subsidiaries may be deemed to be, for purposes of
Rule 13d-3 under the Securities Exchange Act of 1934, the beneficial owner
of these shares of our common stock. The voting and investment powers held
by Franklin Mutual Advisers, LLC ("FMA"), an indirect wholly owned
investment advisory subsidiary of FRI, are exercised independently from
FRI and from all other investment advisory subsidiaries of FRI (FRI, its
affiliates and investment advisory subsidiaries other than FMA are
collectively referred to herein as "FRI affiliates"). Furthermore, FMA and
FRI internal policies and procedures establish informational barriers that
prevent the flow between FMA and the FRI affiliates of information that
relates to the voting and investment powers over the securities owned by
their respective advisory clients. Consequently, FMA and the FRI
affiliates are each reporting the securities over which they hold
investment and voting power separately from each other. Charles B. Johnson
and Rupert H. Johnson, Jr. (the "Principal Shareholders") each own in
excess of 10% of the outstanding common stock of FRI and are the principal
shareholders of FRI. FRI and the Principal Shareholders may be deemed to
be, for purposes of Rule 13d-3 under the 1934 Act, the beneficial owner of
securities held by persons and entities advised by FRI subsidiaries. FRI,
the Principal Shareholders and each of the Adviser Subsidiaries disclaim
any economic interest or beneficial ownership in any of the shares of
common stock provided above.
(2) Includes 28,478 shares held individually by Mr. Coxe, 46,929 shares held
by Sutter Hill Ventures, A California Limited Partnership, 5,596 shares
held by Sutter Hill Entrepreneurs Fund, (AI), L.P., and 14,171 shares held
by Sutter Hill Entrepreneurs Fund (QP), L.P. Mr. Coxe is one of six
managing directors of the general partner of each of Sutter Hill Ventures,
Sutter Hill Entrepreneurs Fund (AI), L.P. and Sutter Hill Entrepreneurs
Fund (QP), L.P. The six managing directors of the general partners of each
of the above limited partnerships share voting and investment powers of
the shares. Mr. Coxe disclaims beneficial interest in these shares except
to the extent of his pecuniary interest in each limited partnership.
14
(3) Includes warrants to purchase 7,427 shares of common stock and options to
purchase 22,500 shares of common stock.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
Directors, executive officers and persons who own more than 10% of our
outstanding common stock to file with the Securities and Exchange Commission
reports of their ownership and changes in ownership of our common stock held
by such persons. Officers, Directors and stockholders owning more than 10% of
our common stock are also required to furnish us with copies of all forms they
file under this provision. To our knowledge, based solely on a review of the
copies of such reports furnished to us and representations that no other
reports were required during 2000, other than late Form 4 filings by Messrs.
Hornyak, Clay, Bibler, Jeffery and Smith in April 2000, late Form 4 filings
for Messrs. Jeffery, Hornyak, Bibler and Clay in September 2000, and a late
Form 3 filing for Mr. Rackley in October 2000, all Section 16(a) filing
requirements applicable to our officers and Directors were met. To our
knowledge based on a Form 13G/A filed on February 9, 2001, Franklin Resources,
Inc., beneficially owns more than 10% of our common stock but has not filed a
Form 3.
GENERAL INFORMATION
Stockholder Proposals for 2002 Annual Meeting
In order to be considered for inclusion in the Proxy Statement and Proxy to
be used in connection with our 2002 Annual Meeting of Stockholders,
stockholder proposals must be received by our Secretary no later than January
22, 2002.
Our bylaws contain procedures that stockholders must follow in order to
present business at an annual or special meeting of stockholders. A
stockholder may obtain a copy of these procedures from our Secretary. In
addition to other applicable requirements, for business to be properly brought
before the 2002 Annual Meeting, a stockholder must have given timely notice of
the matter to be presented at the meeting in a proper written form to our
Secretary. To be timely, the Secretary must receive the notice at our
principal offices not less than 60 nor more than 90 days prior to the
anniversary date of the meeting. In the case where an annual meeting is called
for a date that is not within 30 days before or after the anniversary date of
the immediately preceding annual meeting of stockholders, or in the case of a
special meeting of stockholders, the Secretary must receive notice not later
than the close of business on the tenth day following the day on which the
notice of the meeting was mailed or public disclosure of the date of the
meeting was made, whichever first occurs. Only stockholder proposals which are
timely presented in accordance with established procedures will be eligible
for consideration at a meeting.
Financial Information
Detailed financial information regarding Clarus is included in our 2000
Annual Report that is being mailed to our stockholders together with this
Proxy Statement.
Form 10-K
Our Annual Report on Form 10-K for the fiscal year ended December 31, 2000,
which was filed with the Securities and Exchange Commission, is available
without charge to stockholders who make written request therefor to us at 3970
Johns Creek Court, Suwanee, Georgia 30024, Attention: Investor Relations.
Solicitations of Proxies
The cost of soliciting proxies will be paid by us. This solicitation is
being made by mail, but may also be made by telephone or in person by our
officers and employees. We will reimburse brokerage firms, nominees,
custodians, and fiduciaries for their out-of-pocket expenses for forwarding
proxy materials to beneficial owners.
15
OTHER MATTERS
The Board of Directors knows of no other matters to be presented for
stockholder action at the Annual Meeting. However, if other matters do
properly come before the Annual Meeting or any adjournments or postponements
thereof, the Board of Directors intends that the persons named in the proxies
will vote upon such matters in accordance with their best judgment.
By Order Of The Board Of Directors
/s/ Michael W. Mattox
Michael W. Mattox, Secretary
April 20, 2001
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE ANNUAL MEETING.
IF YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO CHANGE YOUR PROXY VOTE,
YOU MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE MEETING.
THANK YOU FOR YOUR ATTENTION TO THIS MATTER. YOUR PROMPT RESPONSE WILL GREATLY
FACILITATE ARRANGEMENTS FOR THE ANNUAL MEETING.
16
EXHIBIT A
CLARUS CORPORATION AUDIT COMMITTEE CHARTER
Effective as of April 19, 2000
Purpose. The purpose of the Audit Committee (or the "Committee") shall be
to assist the Board of Directors (or the "Board") in (1) oversight of the
Corporation's accounting and financial reporting policies, procedures and
practices and compliance with applicable legal and regulatory requirements,
and (2) monitoring the independence and performance of the Corporation's
independent accountants and internal auditors. In fulfilling the
responsibilities described in this Charter, the Audit Committee shall act with
a view toward preserving the integrity of the Corporation's financial
statements.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Corporation's financial statements are
complete and accurate and in accordance with generally accepted accounting
principles. Accordingly, in carrying out its oversight responsibilities, the
Committee shall not be responsible for providing any expert or special
assurance as to the Corporation's financial statements or any professional
certification as to the independent accountants' work.
The Audit Committee shall have the authority to retain special legal,
accounting or other consultants or experts to advise the Committee. The Audit
Committee may confer with any officer or employee of the Corporation and the
Corporation's outside counsel or independent accountants to the extent it may
deem necessary or appropriate to fulfill its duties.
Structure and Membership. The Audit Committee shall be comprised of three
or more Directors, each of whom shall be determined by the Board to be an
independent director or otherwise eligible to serve under the requirements of
Nasdaq or such other stock exchange or trading market on which the
Corporation's shares of Common Stock are principally traded. Each member of
the Committee shall be able to read and understand fundamental financial
statements (or shall attain such standard within a reasonable time after
appointment), and at least one member shall have accounting or related
financial management expertise. Members of the Audit Committee shall be
appointed by the Board or Directors and may be removed or replaced by the
Board. The Board, or in its absence, the Audit Committee, shall designate one
member of the Committee to serve as its Chairman. The Audit Committee shall
meet at least two times annually, or more frequently as circumstances dictate.
The Audit Committee shall have such additional authority as may be provided by
the Board, the bylaws and certificate of incorporation of the Corporation, or
applicable law. The Audit Committee or its Chairman shall make regular reports
to the Board.
Responsibilities and Functions. The primary responsibilities and functions
of the Audit Committee shall be as follows:
1. The Audit Committee shall periodically (and at least annually) review
this Charter and recommend appropriate changes to the Charter to the
Board.
2. The Audit Committee shall monitor the performance of, and make
recommendations to the Board of Directors with regard to the selection
of, the Corporation's independent accountants. The independent
accountants shall ultimately be accountable to the Board of Directors
and the Audit Committee, as representatives of the stockholders, and, as
such, the Audit Committee or the Board shall have authority and
responsibility to select, evaluate, and where appropriate, replace the
independent accountants (or to nominate the independent accountants to
be proposed for stockholder approval in the Corporation's proxy
statements).
3. The Audit Committee shall monitor and discuss with the independent
accountants the independence of the Corporation's independent
accountants, including any relationship or services that may impact the
A-1
objectivity and independence of the Corporation's independent
accountants. Without limiting the foregoing, the Audit Committee shall
receive from the Corporation's independent accountants reports
delineating all relationships between the independent accountant and the
Corporation, consistent with Independence Standards Board Standard 1,
and the Audit Committee shall have responsibility for discussing with
the independent accountants any disclosed relationships or services that
may impact the objectivity and independence of the independent
accountant and for taking, or recommending that the Board take,
appropriate action to oversee the independence of the independent
accountants.
4. The Audit Committee shall review the Corporation's annual audited
financial statements with management and the results of the independent
audit, including the adequacy of internal controls and financial
accounting policies and practices. The Committee shall report to the
Board whether, based on such review, it recommends to the Board that the
most recent year's audited financial statements be included in the
Corporation's annual report on Form 10-K to be filed with the SEC.
5. The Audit Committee shall review with management and the independent
accountants the Corporation's quarterly financial statements prior to
the filing of its quarterly reports on Form 10-Q. The Audit Committee
shall also review other relevant reports or financial information
regarding the Corporation submitted to the Securities and Exchange
Commission (the "SEC") or any other governmental body or to the public,
including any certification, report, opinion or review rendered by the
independent accounts and such other reports as may be required by the
Securities Exchange Act of 1934, as amended.
6. The Audit Committee shall also review major changes to the
Corporation's auditing and accounting principles and practices as
suggested by the independent accountants, internal auditors or
management.
7. The Audit Committee shall prepare the report required by the rules of
the SEC to be included in the Corporation's annual proxy statements.
8. The Audit Committee shall discuss with the independent accountants the
matters required to be discussed by Statement on Auditing Standards No.
61 (or any successor thereto) relating to the conduct of the audit.
9. The Audit Committee shall meet periodically with management to review
the Corporation's risk management policies and the steps management has
taken to monitor and control major financial risk exposures.
10. The Audit Committee shall, where appropriate, advise the Board with
respect to the Corporation's policies and procedures regarding
compliance with applicable laws, rules and regulations and the
Corporation's code of conduct.
11. The Audit Committee shall, where appropriate, meet with the
independent accountants prior to the audit and at least annually shall
meet separately with management, the internal auditors and the
independent accountants to discuss problems or issues including but
not limited to problems or issues related to the annual audit.
12. The Audit Committee shall review the appointment, performance and
replacement of the senior internal auditing executive and, where
appropriate, other members of the internal auditing staff.
13. The Audit Committee shall make recommendations to the Board of
Directors with regard to strategic financial planning matters.
14. The Audit Committee shall oversee or conduct special investigations or
other functions at the request of the Board of Directors.
A-2
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[X] Please mark your | DO NOT PRINT IN |
votes as in this THIS AREA |___
example using
dark ink only
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FOR WITHHOLD
all nominees listed AUTHORITY Nominees: Stephen P. Jeffery
to the right (except as to vote for Said Mohammadioun
marked to the contrary) all nominees
(1) ELECTION OF
CLASS III [ ] [ ]
DIRECTORS
Instruction: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name listed to
the right.
(2) Ratification of the appointment of KPMG FOR AGAINST ABSTAIN
LLP as our independent auditors for the [ ] [ ] [ ]
fiscal year ending December 31, 2001
In their discretion, the Proxies are authorized to vote on such other business
as may properly come before the meeting or adjournment(s), including adjourning
the Annual Meeting to permit, if necessary, further solicitation of proxies.
This proxy may be revoked at any time prior to voting hereof.
THIS PROXY, WHEN PROPERLY EXECUTED, DULY RETURNED AND NOT REVOKED WILL BE VOTED
IN ACCORDANCE WITH THE DIRECTIONS GIVEN BY THE UNDERSIGNED STOCKHOLDER. IF NO
DIRECTION IS MADE, IT WILL BE VOTED IN FAVOR OF THE ELECTION OF NOMINEES FOR
DIRECTOR LISTED ABOVE AND THE OTHER PROPOSAL LISTED ON THIS PROXY.
+------------------------------+
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_______________ Date:_______, 2001 _________________________ Date:_______, 2001
Signature Signature if held jointly
NOTE: Joint owners should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If the
signatory is a corporation, sign the full corporate name by a duly authorized
officer.
Clarus Corporation
Annual Meeting of Stockholders
To be held on May 22, 2001
PROXY
This Proxy is solicited on behalf of our Board of Directors. The undersigned
hereby constitutes and appoints Stephen P. Jeffery and Michael W. Mattox and
each of them, the true and lawful attorneys and proxies for the undersigned, to
act and vote all of the undersigned's capital stock of Clarus Corporation, a
Delaware corporation, at the Annual Meeting of Stockholders to be held at Hilton
Gardens Inn, 4025 Windward Plaza, Alpharetta, Georgia 30005, at 9:00 a.m. on
Tuesday, May 22, 2001, and at any and all adjournments thereof, for the purposes
of considering and acting upon the matters proposed by Clarus Corporation that
are identified below. This proxy when properly executed will be voted in
accordance with the specifications made herein by the undersigned stockholder.
If no direction is made, this proxy will be voted FOR the election of the
nominees for director listed below and the other Proposal.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE