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
Registrant x
Filed
by
a Party other than the Registrant o
Check
the
appropriate box:
o
Preliminary Proxy Statement
o Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
x
Definitive Proxy Statement
o
Definitive
Additional Materials
o Soliciting
Material Pursuant to §240.14a-12
Clarus
Corporation
(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.
o Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1)
Title
of each class of securities to which transaction applies:
---------------------------------------------------------------------------------
2)
Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------------------
3)
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
---------------------------------------------------------------------------------
4)
Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------------------
5)
Total
fee paid:
---------------------------------------------------------------------------------
o
Fee paid previously
with preliminary materials:
o
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:
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CLARUS
CORPORATION
One
Landmark Square
Stamford,
Connecticut 06901
May
16,
2008
To
Our
Stockholders:
On
behalf
of the Board of Directors of Clarus Corporation, I cordially invite you to
attend the Annual Meeting of Stockholders to be held on Thursday, June 19,
2008,
at 9:30 a.m., Eastern Daylight Time, at our principal executive offices located
at One Landmark Square, 22nd
Floor,
Stamford, Connecticut 06901.
The
accompanying Notice of Meeting and Proxy Statement cover the details of the
matters to be presented.
A
copy of
the 2007 Annual Report is included in this mailing.
REGARDLESS
OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING, I URGE YOU TO VOTE BY
COMPLETING AND RETURNING YOUR PROXY CARD AS SOON AS POSSIBLE. YOUR VOTE IS
IMPORTANT AND WILL BE GREATLY APPRECIATED. RETURNING YOUR PROXY CARD WILL ENSURE
THAT YOUR VOTE IS COUNTED IF YOU LATER DECIDE NOT TO ATTEND THE ANNUAL
MEETING.
|
Cordially,
|
|
|
CLARUS
CORPORATION
|
|
|
Warren
B. Kanders
|
|
|
Executive
Chairman of the Board
of Directors
|
CLARUS
CORPORATION
Notice
of Annual Meeting of Stockholders
To
Be Held June 19, 2008
To
Our
Stockholders:
You
are
cordially invited to attend the Annual Meeting of Stockholders, and any
adjournments or postponements thereof (the “Meeting”), of Clarus Corporation,
which will be held Thursday, June 19, 2008, at 9:30 a.m. Eastern Daylight Time,
at our principal executive offices located at One Landmark Square,
22nd
Floor,
Stamford, Connecticut 06901, for the following purposes:
1. To
elect
the four nominees named in the accompanying Proxy Statement to serve on the
Board of Directors until the next Annual Meeting of Stockholders and until
their
successors are duly elected and qualified (Proposal 1); and
2. To
transact such other business as may properly come before the Meeting or any
postponements or adjournments thereof, including to consider any procedural
matters incident to the conduct of the Meeting, such as the postponement of
the
Meeting in order to solicit additional proxies to vote in favor of the matter
presented at the Meeting.
Stockholders
of record at the close of business on May 12, 2008 are entitled to notice of
and
to vote at the Meeting.
YOUR
VOTE
IS IMPORTANT. PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT
PROMPTLY IN THE ENCLOSED RETURN ENVELOPE, WHETHER OR NOT YOU EXPECT TO ATTEND
THE ANNUAL MEETING. RETURNING YOUR PROXY CARD WILL ENSURE THAT YOUR VOTE IS
COUNTED IF YOU LATER DECIDE NOT TO ATTEND THE ANNUAL MEETING.
|
By
order of the Board of Directors
|
|
|
Philip
A. Baratelli
Secretary
|
May
16,
2008
CLARUS
CORPORATION
One
Landmark Square
Stamford,
Connecticut 06901
____________________
PROXY
STATEMENT
____________________
ANNUAL
MEETING OF STOCKHOLDERS
TO
BE HELD ON
June
19, 2008
INTRODUCTION
Proxy
Solicitation And General Information
This
Proxy Statement and the enclosed form of proxy card (the “Proxy Card”) are being
furnished to the holders of common stock, par value $.0001 per share, of Clarus
Corporation, a Delaware corporation (which is sometimes referred to in this
Proxy Statement as “Clarus,” the “Company,” “we,” “our” or “us”), in connection
with the solicitation of proxies by our Board of Directors for use at the Annual
Meeting of Stockholders to be held on Thursday, June 19, 2008, at 9:30 p.m.
Eastern Daylight Time, at our principal executive offices located at One
Landmark Square, 22nd
Floor,
Stamford, Connecticut 06901, and at any adjournments or postponements thereof
(the “Meeting”). This Proxy Statement and the Proxy Card are first being sent to
stockholders on or about May 19, 2008.
At
the
Meeting, stockholders will be asked:
1. To
elect
the four nominees named in this Proxy Statement to serve on the Board of
Directors until the next Annual Meeting of Stockholders and until their
successors are duly elected and qualified (Proposal 1); and
2. To
transact such other business as may properly come before the Meeting or any
postponements or adjournments thereof, including to consider any procedural
matters incident to the conduct of the Meeting, such as the postponement of
the
Meeting in order to solicit additional proxies to vote in favor of the matter
presented at the Meeting.
The
Board
of Directors has fixed the close of business on May 12, 2008 as the record
date
for the determination of stockholders entitled to notice of and to vote at
the
Meeting. Each such stockholder will be entitled to one vote for each share
of
common stock held on all matters to come before the Meeting and may vote in
person or by proxy authorized in writing.
Stockholders
are requested to complete, sign, date and promptly return the enclosed Proxy
Card in the enclosed envelope. Proxy Cards which are not revoked will be voted
at the Meeting in accordance with instructions contained therein. If the Proxy
Card is signed and returned without instructions, the shares will be voted
FOR
the
election of each nominee for director named in this Proxy Statement (Proposal
1).
A
stockholder who so desires may revoke his previously submitted Proxy Card at
any
time before it is voted at the Meeting by: (i) delivering written notice to
us
at Clarus Corporation, One Landmark Square, 22nd
Floor,
Stamford, Connecticut 06901, Attention Philip A. Baratelli, Secretary; (ii)
duly
executing and delivering a Proxy Card bearing a later date; or (iii) casting
a
ballot at the Meeting. Attendance at the Meeting will not in and of itself
constitute a revocation of a Proxy Card.
A
stockholder may designate a person or persons other than those persons
designated on the Proxy Card to act as the stockholder's proxy. The stockholder
may use the Proxy Card to give another person authority by striking out the
names appearing on the Proxy Card, inserting the name(s) of another person(s)
and delivering the signed card to such person(s). The person(s) designated
by
the stockholder must present the signed Proxy Card at the Meeting in order
for
the shares to be voted.
Where
the
stockholder is not the record holder, such as where the shares are held through
a broker, nominee, fiduciary or other custodian, the stockholder must provide
voting instructions to the record holder of the shares in accordance with the
record holder's requirements in order to ensure that the shares are properly
voted.
The
Board
of Directors knows of no other matters that are to be brought before the Meeting
other than as set forth in the Notice of Meeting. If any other matters properly
come before the Meeting, the persons named in the enclosed form of Proxy Card
or
their substitutes will vote in accordance with their best judgment on such
matters.
Record
Date; Shares Outstanding And Entitled To Vote; Quorum
Only
stockholders as of the close of business on May 12, 2008 (the “Record Date”) are
entitled to notice of and to vote at the Meeting. As of April 25, 2008, there
were 17,366,747 shares of our common stock outstanding and entitled to vote,
with each share entitled to one vote. See “Beneficial Ownership of Company
Common Stock By Directors, Officers and Principal Stockholders” for information
regarding the beneficial ownership of our common stock by our directors,
executive officers and stockholders known to us to own or control 5% or more
of
our common stock. The presence at the Meeting, in person or by duly authorized
proxy, of the holders of a majority of the shares of common stock entitled
to
vote, constitute a quorum for this Meeting.
Our
common stock is quoted on the OTC Pink Sheets Electronic Quotation Service
under
the symbol “CLRS.PK”. As of April 25, 2008, the last full trading date prior to
the filing of this Proxy Statement with the Securities and Exchange Commission,
the reported closing price for the common stock as quoted on the OTC Pink Sheets
Electronic Quotation Service was $6.10. Stockholders are urged to obtain the
current market quotation for the shares of our common stock.
2
Required
Votes
The
presence at the Meeting, in person or by duly authorized proxy, of the holders
of a majority of the outstanding shares of stock entitled to vote constitutes
a
quorum for the transaction of business. Each share of Clarus common stock
entitles the holder to one vote on each matter presented for stockholder action.
The affirmative vote of a plurality of the votes cast in person or by proxy
is
necessary for the election of the four nominees named in this Proxy Statement
(Proposal 1).
All
votes
will be tabulated by the inspector of election appointed for the Meeting, who
will separately tabulate affirmative and negative votes, abstentions and broker
non-votes. Brokers who hold shares in street name for clients typically have
the
authority to vote on ‘‘routine’’ proposals when they have not received
instructions from beneficial owners. However, absent specific instructions
from
the beneficial owner of the shares, brokers are not allowed to exercise their
voting discretion with respect to the adoption of non-routine matters. Proxies
submitted without a vote by the brokers on these matters are referred to as
broker non-votes.
Abstentions
and broker non−votes are counted as present and are, therefore, included for
purposes of determining whether a quorum of shares is present at the Meeting.
Broker non−votes, and shares as to which proxy authority has been withheld with
respect to any matter, are not deemed to be entitled to vote for purposes of
determining whether stockholders’ approval of that matter has been obtained. As
a result, broker non-votes will have no effect on the outcome of Proposal
1.
Proxies
Our
Board
of Directors has selected Warren B. Kanders and Philip A. Baratelli, and each
of
them, to serve as “Proxyholders” for the Meeting. If a stockholder properly
signs and returns the enclosed form of proxy, the Proxyholders will vote the
shares represented by such proxy at the Meeting in accordance with the
instructions the stockholder writes on the proxy. If the proxy does not specify
how the shares are to be voted, the proxy will be voted FOR the approval of
Proposal 1 described in the accompanying Notice of Meeting of Stockholders
and
this Proxy Statement.
A
stockholder who so desires may revoke a proxy
previously submitted by him at any time before it is voted at the Meeting by:
(i) delivering written notice to us at Clarus Corporation, One Landmark Square,
22nd
Floor,
Stamford, Connecticut 06901 c/o Philip A. Baratelli, Chief Financial Officer,
Treasurer and Secretary; (ii) duly executing and delivering a proxy bearing
a
later date; or (iii) casting a ballot at the Meeting. Attendance at the Meeting
will not in and of itself constitute a revocation of a
proxy.
3
We
do not
know of other matters to be presented for consideration at the Meeting. However,
if any other matters properly come before the Meeting, it is the intention
of
the persons named in the enclosed Proxy Card to vote the shares they represent
as the Board of Directors may recommend. Discretionary authority with respect
to
such other matters is granted by the execution of the enclosed Proxy Card.
Proxy
Solicitation; Expenses
Clarus
will bear the costs of the solicitation of proxies for the Meeting. Our
directors, officers and employees may solicit proxies from stockholders by
mail,
telephone, telegram, e-mail, personal interview or otherwise. Such directors,
officers and employees will not receive additional compensation but may be
reimbursed for out-of-pocket expenses in connection with such solicitation.
Brokers, nominees, fiduciaries and other custodians have been requested to
forward soliciting material to the beneficial owners of our common stock held
of
record by them and such parties will be reimbursed for their reasonable
expenses.
List
of Stockholders
In
accordance with Delaware General Corporation Law (the “DGCL”), a list of
stockholders entitled to vote at the Meeting will be available for ten days
prior to the Meeting, for any purpose germane to the Meeting, between the hours
of 10:00 a.m. and 5:00 p.m., local time, at our offices at One Landmark Square,
22nd
Floor,
Stamford, Connecticut 06901.
Proxies,
ballots and voting tabulations are handled on a confidential basis to protect
your voting privacy. This information will not be disclosed to unrelated third
parties except as required by law.
IT
IS DESIRABLE THAT AS LARGE A PROPORTION AS POSSIBLE OF THE STOCKHOLDERS’
INTERESTS BE REPRESENTED AT THE MEETING. THEREFORE, EVEN IF YOU INTEND TO BE
PRESENT AT THE MEETING, PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD TO ENSURE
THAT YOUR STOCK WILL BE REPRESENTED. IF YOU ARE PRESENT AT THE MEETING AND
DESIRE TO DO SO, YOU MAY WITHDRAW YOUR PROXY CARD AND VOTE IN PERSON BY GIVING
WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY. PLEASE RETURN YOUR EXECUTED
PROXY CARD PROMPTLY.
4
BENEFICIAL
OWNERSHIP OF COMPANY COMMON STOCK BY
DIRECTORS,
OFFICERS AND PRINCIPAL STOCKHOLDERS
The
following table sets forth as of April 25, 2008 certain information regarding
the beneficial ownership of the common stock outstanding by (i) each person
known to us to own or control 5% or more of our common stock, (ii) each of
our
directors and nominees, (iii) each of our “Named Executive Officers” (as defined
in Item 402(a)(3) of Regulation S-K), set forth in the summary compensation
table on page 23, and (iv) our Named Executive Officers, directors and nominees
as a group. Unless otherwise indicated, each of the stockholders shown in the
table below has sole voting and investment power with respect to the shares
beneficially owned. Unless otherwise indicated, the address of each person
named
in the table below is c/o Clarus Corporation, One Landmark Square,
22nd
Floor,
Stamford, Connecticut 06901.
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Name
|
Common
Stock
Beneficially
Owned
(1)
|
Percentage
(%) of
Common Stock
(2)
|
||||
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Warren
B. Kanders
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3,234,200
|
(3)
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18.6
|
|||
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Ashford
Capital Management, Inc.
P.O.
Box 4172
|
||||||
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Wilmington,
DE 19807
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2,001,800
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(4)
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11.5
|
|||
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Dimensional
Fund Advisors Inc.
1299
Ocean Avenue, 11th Floor
|
||||||
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Santa
Monica, CA 90401
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909,251
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(5)
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5.2
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|||
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White
Rock Capital Management, L.P.
3131
Turtle Creek Boulevard, Suite 800
|
||||||
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Dallas,
TX 75219
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889,500
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(6)
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5.1
|
|||
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Nicholas
Sokolow
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315,100
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(7)(8)
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1.8
|
|||
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Burtt
R. Ehrlich
|
264,750
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(9)
(10)
|
1.5
|
|||
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Donald
L. House
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238,749
|
(11)
|
1.4
|
|||
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Philip
A. Baratelli
|
-
|
(12)
|
*
|
|||
|
All
directors, nominees for directors and named executive officers
as
a
group (5 persons)
|
4,052,799
|
(14)
|
23.3
|
|||
|
*
|
|
Less
than one percent.
|
|
(1)
|
As
used in this table, a beneficial owner of a security includes any
person
who, directly or indirectly, through contract, arrangement, understanding,
relationship or otherwise has or shares within 60 days of April 25,
2008
(a) the power to vote, or direct the voting of, such security or
(b)
investment power which includes the power to dispose, or to direct
the
disposition of, such security.
|
|
|
(2)
|
Percentage
of beneficial ownership is based on 17,366,747
shares
of common stock outstanding as of April 25, 2008.
|
|
|
(3)
|
|
Includes
Mr. Kanders’ options to purchase 1,021,250 shares of common stock that are
presently exercisable or exercisable within 60 days of April 25,
2008.
Includes 500,000 unvested shares of restricted common stock, which
have
voting, dividend and other distribution rights.
|
5
|
(4)
|
Based
on a Schedule 13G/A filed by Ashford Capital Management, Inc. and
certain
of its affiliates on February 14, 2008.
|
|
|
(5)
|
Based
on a Schedule 13G/A filed by Dimensional Fund Advisors Inc. on February
6,
2008.
|
|
|
(6)
|
Based
on a Schedule 13G/A filed by White Rock Capital Management, L.P.
and
certain of its affiliates on January 30, 2008.
|
|
|
(7)
|
|
Includes
Mr. Sokolow’s options to purchase 163,750 shares of common stock that are
presently exercisable or exercisable within 60 days of April 25,
2008, and
of which 15,000 will remain subject to lock-up restrictions after
60 days
from April 25, 2008; in addition, upon Mr. Sokolow’s voluntary termination
of service as a director with the Company or his termination by the
Company for cause, if any of the lock-up restrictions have not yet
expired, they shall each be extended for an additional five year
period.
Excludes
options to purchase 12,500 shares of common stock that are presently
unexercisable and unexercisable within the next 60
days.
|
|
(8)
|
Includes
151,350 shares of common stock held by ST Investors Fund, LLC, of
which
Mr. Sokolow is the Managing Member.
|
|
|
(9)
|
|
Includes
Mr. Ehrlich’s options to purchase 163,750 shares of common stock that are
presently exercisable or exercisable within 60 days of April 25,
2008, and
of which 15,000 will remain subject to lock-up restrictions after
60 days
from April 25, 2008; in addition, upon Mr. Ehrlich’s voluntary termination
of service as a director with
the Company or his termination by the Company for cause, if any of
the
lock-up restrictions have not yet expired, they shall each be extended
for
an additional five year period. Excludes
options to purchase 12,500 shares of common stock that are presently
unexercisable and unexercisable within the next 60
days.
|
|
(10)
|
|
Includes
13,000 shares of common stock held by a trust for the benefit of
Mr.
Ehrlich’s children, as to which Mr. Ehrlich disclaims beneficial
ownership.
|
|
(11)
|
|
Includes
Mr. House’s options to purchase 162,500 shares of common stock that are
presently exercisable or exercisable within 60 days of April 25,
2008, and
of which 15,000 will remain subject to lock-up restrictions after
60 days
from April 25, 2008; in addition, upon Mr. House’s voluntary termination
of service as a director with the Company or his termination by the
Company for cause, if any of the lock-up restrictions have not yet
expired, they shall each be extended for an additional five year
period.
Excludes
options to purchase 12,500 shares of common stock that are presently
unexercisable and unexercisable within the next 60
days.
|
|
(12)
|
Excludes
Mr. Baratelli’s options to purchase 100,000 shares of common stock that
are presently unexercisable or unexercisable within 60 days of April
25,
2008.
|
|
|
(13)
|
|
Includes
options to purchase 1,511,250 shares of common stock that are presently
exercisable or exercisable within 60 days of April 25, 2008, and
of which
45,000 will remain subject to lock-up restrictions after 60 days
from
April 25, 2008. Also includes 500,000 unvested shares of restricted
common
stock, which have voting, dividend and other distribution rights.
Excludes
options to purchase 137,500 shares of common stock that are presently
unexercisable and unexercisable within the next 60
days.
|
We
are
not aware of any material proceedings to which any of our directors, nominees
for director, executive officers, affiliates of the foregoing persons or any
security holder, including any owner of record or beneficially of more than
5%
of any class of our voting securities, is a party adverse to us or has a
material interest adverse to us.
6
PROPOSAL
1
ELECTION
OF DIRECTORS
Our
Certificate of Incorporation, as amended, and our Amended and Restated Bylaws
provide that our Board of Directors will consist of not less than two, nor
more
than seven members, with such number to be fixed by the Board of Directors.
The
number of directors has been fixed at seven by the Board of Directors. We
currently have three vacant seats on our Board. We do not intend to fill the
three vacant seats on our Board at this time.
Our
directors are elected annually at the Annual Meeting of Stockholders. Their
respective terms of office continue until the next Annual Meeting of
Stockholders and until their successors have been elected and qualified in
accordance with our Amended and Restated Bylaws. There are no family
relationships among any of our directors or executive officers.
Unless
otherwise specified, each Proxy Card received will be voted for the election
of
the four nominees for director named below to serve until the next Annual
Meeting of Stockholders and until their successors shall have been duly elected
and qualified. Each of the nominees has consented to be named a nominee in
this
Proxy Statement and to serve as a director if elected. Should any nominee
becomes unable or unwilling to accept a nomination for election, the persons
named in the enclosed Proxy Card will vote for the election of a nominee
designated by the Board of Directors or will vote for such lesser number of
directors as may be prescribed by the Board of Directors in accordance with
our
Amended and Restated Bylaws.
The
age
and principal occupation for the past five years of each person nominated as
a
director is set forth below:
Warren
B. Kanders,
50, has
served as one of our directors since June 2002 and as Executive Chairman of
our
Board of Directors since December 2002. Since May 2007, Mr. Kanders
has served as a director of Highlands Acquisition Corp., a publicly-held blank
check company formed with a focus on acquiring a business in the healthcare
industry. Since August 2007, Mr. Kanders has served as the Chairman of the
Board
and Chief Executive Officer of Kanders Acquisition Company, Inc., a blank check
company formed with a focus on acquiring a business in no particular industry
or
geography. Mr. Kanders has served as the President of Kanders & Company
since 1990. Prior to the completion of the acquisition of Armor Holdings, Inc.,
formerly a New York Stock Exchange-listed company and a manufacturer and
supplier of military vehicles, armed vehicles and safety and survivability
products and systems to the aerospace & defense, public safety, homeland
security and commercial markets, by BAE Systems plc on July 31, 2007,
he served as the Chairman of the Board of Armor Holdings, Inc. since
January 1996 and as its Chief Executive Officer since April 2003. From
April 2004 until October 2006, Mr. Kanders served as the
Executive Chairman, and since October 2006, has served as the Non-Executive
Chairman of the Board of Stamford Industrial Group, Inc., formerly known as
Net
Perceptions, Inc. (“SIG”), a publicly-held company that, through its subsidiary,
Concord Steel, is a leading independent manufacturer of steel counterweights.
Since November 2004, Mr. Kanders has served as the Chairman of the
Board of Directors of Langer, Inc., a Nasdaq-listed provider of orthotic and
skin-care products. From October 1992 to May 1996, Mr. Kanders
served as Founder and Vice Chairman of the Board of Benson Eyecare Corporation,
a distributor of eye care products and services. Mr. Kanders received a B.A.
degree in Economics from Brown University in 1979.
7
Burtt
R. Ehrlich,
68, has
served as one of our directors since June 2002. Prior to the completion of
the
acquisition of Armor Holdings, Inc., by BAE Systems plc on
July 31, 2007, Mr. Ehrlich served as a director of Armor Holdings,
Inc. since January 1996. Mr. Ehrlich has also served as a member of the Board
of
Directors of Langer, Inc. since February 2001. Mr. Ehrlich served as Chairman
and Chief Operating Officer of Ehrlich Bober Financial Corp. (the predecessor
of
Benson Eyecare Corporation) from December 1986 until October 1992, and as a
director of Benson Eyecare Corporation from October 1992 until November
1995.
Donald
L. House,
66, has
served as one of our 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 is a private investor
and he serves on the board of directors of several privately-held technology
companies.
Nicholas
Sokolow,
58, has
served as one of our directors since June 2002. Prior to the completion of
the
acquisition of Armor Holdings, Inc., by BAE Systems plc on
July 31, 2007, Mr. Sokolow served as a member of the Board of
Directors of Armor Holdings, Inc. since January 1996. Mr. Sokolow has also
served as a member of the Board of Directors of Stamford Industrial Group,
Inc.,
formerly known as Net Perceptions, Inc. (“SIG”) since April 2004. Since 2007,
Mr. Sokolow has been practicing in the law firm of Lebow & Sokolow LLP. From
1994 to 2007 Mr. Sokolow was a partner in the law firm of Sokolow, Carreras
& Partners. From June 1973 until October 1994, Mr. Sokolow was an associate
and partner in the law firm of Coudert Brothers.
The
affirmative vote of a plurality of the votes cast in person or by proxy at
the
Meeting is necessary for the election as directors of the four nominees named
in
this Proxy Statement (assuming a quorum of a majority of the outstanding shares
of common stock is present).
THE
BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH OF THE ABOVE-NAMED DIRECTOR
NOMINEES.
GOVERNANCE
OF THE COMPANY
Corporate
Governance
Our
Board
of Directors is committed to sound and effective corporate governance practices.
The Company’s management and our Board of Directors reviewed our corporate
governance practices in light of the Sarbanes-Oxley Act of 2002. Based on that
review, the Board of Directors maintains codes of ethics and conduct, corporate
governance guidelines, committee charters, complaint procedures for accounting
and auditing matters and an Audit Committee pre-approval policy. Although the
Company is not listed on the NASDAQ Global Stock Market (the
“NASDAQ”), it
has
modeled its corporate governance practices after the listing requirements of
the
NASDAQ.
8
Corporate
Governance Guidelines and Documents
The
Code
of Ethics for Senior Executive and Financial Officers, the Code of Business
Conduct and Ethics for Directors, Officers and Employees, Complaint Procedures
for Accounting and Auditing Matters, the Corporate Governance Guidelines, the
Audit Committee Pre-Approval Policy, and the Charters of our Audit, Compensation
and Nominating/Corporate Governance Committees were adopted by Clarus for the
purpose of promoting honest and ethical conduct, promoting full, fair, accurate,
timely and understandable disclosure in periodic reports required to be filed
by
Clarus, and promoting compliance with all applicable rules and regulations
that
apply to Clarus and its officers and directors. Our Codes of Ethics and Conduct,
the Complaint Procedures for Accounting and Auditing Matters, the Corporate
Governance Guidelines, and the Charters of our Audit, Compensation and
Nominating/Corporate Governance Committees are available at www.claruscorp.com,
our
Internet website, at the tab “Corporate Governance”. In addition, you may
request a copy of any such materials, without charge, by submitting a written
request to: Clarus Corporation, Attention the Secretary, One Landmark Square,
22nd
Floor,
Stamford, Connecticut 06901.
Board
of Directors
Our
Board
of Directors is currently comprised of the following four members: Warren B.
Kanders, Burtt R. Ehrlich, Nicholas Sokolow and Donald L. House. During fiscal
2007, the Board of Directors held four meetings and has standing Audit,
Compensation and Nominating/Corporate Governance Committees. During fiscal
2007,
all of the directors then in office attended at least 75% of the total number
of
meetings of the Board of Directors and the Committees of the Board of Directors
on which they served. All of the members of our Board of Directors, who was
also
a director at the time, attended last year’s Annual Meeting of Stockholders
meeting which was held on June 21, 2007.
Director
Independence
The
Board
of Directors has evaluated each of its directors’ independence from Clarus based
on the definition of “independence” established by the NASDAQ. Based on the
Board’s review and the NASDAQ definition of “independence”, the Board has
determined that the Board is currently comprised of a majority of independent
directors, consisting of each of the following directors: Messrs. Ehrlich,
Sokolow and House. The Board has also determined that each of the members of
our
Audit Committee is “independent” for purposes of Section 10A(m)(3) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).
9
Stockholder
Communications
Stockholders
may send communications to our Board of Directors or any committee thereof
by
writing to the Board of Directors or any committee thereof at Clarus
Corporation, Attention the Secretary, One Landmark Square, 22nd
Floor,
Stamford, Connecticut 06901. The Secretary will distribute all stockholder
communications to the intended recipients and/or distribute to the entire Board,
as appropriate.
In
addition, stockholders may also contact the non-management directors as a group
or any individual director by writing to the non-management directors or the
individual director, as applicable, at Clarus Corporation, One Landmark Square,
22nd
Floor,
Stamford, Connecticut 06901.
Complaint
Procedures
Complaints
and concerns about accounting, internal accounting controls or auditing or
related matters pertaining to the Company may be submitted by writing to the
Chairman of the Audit Committee as follows: Clarus Corporation, Attention
Chairman of the Audit Committee, One Landmark Square, 22nd
Floor,
Stamford, Connecticut 06901. Complaints may be submitted on a confidential
and
anonymous basis by sending them in a sealed envelope marked
“Confidential.”
Audit
Committee
The
Audit
Committee is responsible for the oversight and evaluation of (i) the
qualifications, independence and performance of our independent auditors; (ii)
the performance of our internal audit function; and (iii) the quality and
integrity of our financial statements and the effectiveness of our internal
control over financial reporting. In addition, the committee recommends to
the
Board of Directors the appointment of independent auditors and analyzes the
reports and recommendations of such auditors. The committee also prepares the
Audit Committee report required by the rules of Securities and Exchange
Commission, and the report is included in this proxy statement beginning on
page
14. Our Audit Committee is currently comprised of Messrs. House, Ehrlich and
Sokolow, with Mr. House serving as the Chairman. All of the members of our
Audit
Committee were determined by the Board to be independent of Clarus based on
the
NASDAQ’s definition of “independence”. Our Board of Directors currently does not
have an audit committee financial expert (as such term is defined under the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder)
serving on its Audit Committee. However, the Board of Directors is looking
for
and considering candidates to appoint to the Board of Directors and the Audit
Committee who will serve on the Audit Committee as an audit committee financial
expert. The Audit Committee met four times during fiscal 2007. The Board of
Directors has adopted a written Charter for the Audit Committee, a copy of
which
was attached to our Proxy Statement for the Annual Meeting of Stockholders
held
on June 24, 2004 and is available at www.claruscorp.com,
our
Internet website, at the tab “Corporate Governance”.
10
Compensation
Committee
The
Compensation Committee reviews recommendations for executive compensation,
including incentive compensation and stock incentive plans and makes
recommendations to the Board of Directors concerning levels of compensation
of
our executive officers and other key managerial personnel as well as the
adoption of incentive and stock plans. Pursuant to this Committee’s charter (a
copy of the Compensation Committee’s Charter is available on our Internet
website at www.claruscorp.com,
at the
tab “Corporate Governance”), this Committee’s authority generally includes the
authority to do each of the following:
| · |
To
assist the Board of Directors in developing and evaluating potential
candidates for executive positions, including the Executive Chairman,
and
to oversee the development of executive succession
plans.
|
| · |
To
review and approve corporate goals and objectives with respect to
compensation for the Company’s Executive Chairman, evaluate the Executive
Chairman’s performance in light of those goals and objectives, and, either
as a committee or together with the other independent directors,
determine
and approve the Executive Chairman’s compensation level based on this
evaluation. In determining the long-term incentive component of the
Executive Chairman’s compensation, the Committee shall consider the
Company’s performance and relative stockholder return, the value of
similar incentive awards to chief executive officers at comparable
companies, and the awards given to the Company’s Executive Chairman in
past years.
|
| · |
To
make recommendations to the Board of Directors with respect to non-
Executive Chairman compensation, incentive-compensation plans and
equity-based plans. The Committee shall also provide oversight of
management’s decisions concerning the performance and compensation of
other Company officers.
|
| · |
To
review the Company's incentive compensation and other stock-based
plans
and recommend changes in such plans to the Board of Directors as
needed.
The Committee shall have and shall exercise all the authority of
the Board
of Directors with respect to the administration of such
plans.
|
| · |
To
produce this compensation committee report on executive compensation
to be
included
in the Company’s proxy statement.
|
| · |
To
review on an annual basis director compensation and benefits.
|
The
Compensation Committee shall have authority to retain such compensation
consultants, outside counsel and other advisors as the Compensation Committee
may deem appropriate in its sole discretion.
Our
Compensation Committee is currently comprised of Messrs. Ehrlich and Sokolow,
with Mr. Sokolow serving as the Chairman, both of whom were determined by the
Board to be independent of Clarus.
The
Compensation Committee does not formally meet on a regular basis, but only
as
circumstances require. The Compensation Committee met once during fiscal 2007,
and also held numerous informal discussions during fiscal 2007.
11
Nominating/Corporate
Governance Committee
The
purpose of the Nominating/Corporate Governance Committee is to identify,
evaluate and nominate candidates for election to the Board of Directors as
well
as review Clarus’ corporate governance guidelines and other related documents
for compliance with applicable laws and regulations such as the Sarbanes-Oxley
Act of 2002 and the NASDAQ’s listing requirements. The Nominating/Corporate
Governance Committee will consider nominees recommended by stockholders.
Information with respect to a proposed nominee should be forwarded to Clarus
Corporation, Attention the Secretary at One Landmark Square, 22nd Floor,
Stamford, Connecticut 06901, who will submit them to the committee for its
consideration. Such information shall include the name of the nominee, and
such
information with respect to the nominee as would be required under the rules
and
regulations of the Securities and Exchange Commission to be included in our
Proxy Statement if such proposed nominee were to be included therein. In
addition, the stockholder shall include a statement to the effect that the
proposed nominee has no direct or indirect business conflict of interest with
us, and otherwise meets our standards set forth below. See “Requirements for
Submission of Stockholder Proposals, Nomination of Directors and Other Business
of Stockholders” for additional information on certain procedures that a
stockholder must follow to nominate persons for election as directors. Our
Nominating/Corporate Governance Committee is currently comprised of Messrs.
Ehrlich, House and Sokolow, with Mr. Ehrlich serving as the Chairman, all of
whom were determined by the Board to be independent of Clarus. The functions
of
the Nominating/Corporate Governance Committee were considered at and acted
upon
by the entire Board of Directors during its meetings in 2007. A copy of the
Nominating/Corporate Governance Committee’s Charter is available on our Internet
website at www.claruscorp.com,
at the
tab “Corporate Governance”.
The
Company believes that candidates for the Board of Directors should possess
fundamental qualities of intelligence, honesty, good judgment and high ethics;
have no conflict of interest or legal impediment which would interfere with
the
duty of loyalty owed to Clarus and its stockholders; and have the ability and
willingness to spend the time required to function effectively as a director
of
Clarus. The Nominating/Corporate Governance Committee may engage third-party
search firms from time to time to assist it in identifying and evaluating
nominees for director. The Nominating/Corporate Governance Committee evaluates
nominees recommended by stockholders, by other individuals and by the search
firms and reviews biographical information furnished by or about the potential
nominees to determine whether they have the experience and qualities discussed
above.
12
Director
Summary Compensation Table
The
following table summarizes the compensation paid to our non-employee directors
for the fiscal year ended December 31, 2007 and 2006:
|
Name
(1)
|
Year
|
Fees
Earned or
Paid
in Cash ($)
|
Stock
Awards ($)
|
Option
Awards ($)(2)
|
Non-Equity
Incentive Plan Compensation ($)
|
Change
in Pension Value and Nonqualified Deferred Compensation Earnings
($)
|
All
Other Compensation ($)
|
Total
($)
|
|
Burtt
R.Ehrlich
|
2007
|
$10,000
|
-
|
$55,410
(3)
|
-
|
-
|
-
|
$65,410
|
|
2006
|
10,000
|
-
|
-
|
-
|
-
|
-
|
$10,000
|
|
|
Donald
House
|
2007
|
10,000
|
-
|
55,410
(4)
|
-
|
-
|
-
|
$65,410
|
|
2006
|
10,000
|
-
|
-
|
-
|
-
|
-
|
$10,000
|
|
|
Nicholas
Sokolow
|
2007
|
10,000
|
-
|
55,410
(5)
|
-
|
-
|
-
|
$65,410
|
|
2006
|
10,000
|
-
|
-
|
-
|
-
|
-
|
$10,000
|
| (1) |
Warren
B. Kanders, the Company’s Chairman and Chief Executive Officer is not
included in this table as he is a Named Executive Officer of the
Company
and receives no compensation for his service as director. The compensation
earned by Mr. Kanders as a Named Executive Officer is described below
in
the Summary Compensation Table.
|
| (2) |
The
amounts in the “Option Awards” column are calculated based on FAS 123R
(excluding any estimate of forfeiture). They equal the aggregate
dollar
amount of compensation expense related to option awards to each of
the
Directors that was recognized in the Company’s 2007 financial statements.
Under FAS 123R, a pro rata portion of the total expense is based
on the
fair value of the stock option grant as estimated using the Black-Scholes
option-pricing model. See footnote 8, Stock Incentive Plan in the
financial statements contained in annual report on Form 10-K for
the year
ended December 31, 2007 for the assumptions used to arrive at the
Black-Scholes values.
|
| (3) |
Mr.
Ehrlich’s option award includes the grant of 50,000 options on December
13, 2007 valued at $2.22 amortized over a one year
period.
|
| (4) |
Mr.
House’s option award includes the grant of 50,000 options on December 13,
2007 valued at $2.22 amortized over a one year
period.
|
| (5) |
Mr.
Sokolow’s option award includes the grant of 50,000 options on December
13, 2007 valued at $2.22 amortized over a one year
period.
|
Discussion
of Director Compensation
Our
directors, other than Mr. Kanders who is compensated pursuant to his employment
agreement (which is described below under the heading “Employment Agreements”),
are entitled to receive a payment of $2,000 for each regular and special meeting
of the Board of Directors attended either in person or telephonically. From
time
to time, non-employee directors may also receive discretionary option or stock
grants under the 2005 Stock Incentive Plan. In 2007, each of our non-employee
directors were awarded options under the 2005 Stock Incentive Plan to purchase
50,000 shares of common stock at an exercise price of $5.98 of which 12,500
vested immediately with the remaining 37,500 options vest equally over three
consecutive quarters commencing December 31, 2007. Such options were the first
equity awards granted to our non-employee directors since 2005.
13
In
setting director compensation, the Company considers the significant amount
of
time that directors expend in fulfilling their duties on our Board and Board
committees as well as the skill-level required by the Company of members of
the
Board and the need to continue to attract highly qualified candidates to serve
on our Board. Director compensation arrangements are reviewed annually to
maintain such standards.
Involvement
in Certain Legal Proceedings
No
director, executive officer, or person nominated to become a director or
executive officer has, within the last five years: (i) had a bankruptcy petition
filed by or against, or a receiver, fiscal agent or similar officer appointed
by
a court for, any business of such person or entity with respect to which such
person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time; (ii) been convicted in a
criminal proceeding or is currently subject to a pending criminal proceeding
(excluding traffic violations or similar misdemeanors); (iii) been subject
to
any order, judgment or decree, not subsequently reversed, suspended or vacated,
of any court of competent jurisdiction, permanently or temporarily enjoining,
barring, suspending or otherwise limiting his involvement in any type of
business, securities or banking activities or practice; (iv) been found by
a
court of competent jurisdiction (in a civil action), the Securities and Exchange
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not been
reversed, suspended or vacated.
REPORT
OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The
Board
of Directors has appointed an Audit Committee consisting of three directors.
Each of the members of the Audit Committee is independent from Clarus and is
financially literate as that qualification is interpreted by the Board of
Directors. The Board of Directors has adopted a written charter with respect
to
the Audit Committee’s roles and responsibilities.
Management
is responsible for Clarus’ internal control and the financial reporting process.
The external auditor is responsible for performing an independent audit of
Clarus’ consolidated financial statements in accordance with generally accepted
auditing standards and to issue a report thereon. The Audit Committee’s
responsibility is to monitor and oversee these processes.
The
Audit
Committee has had various discussions with management and the independent
auditors. Management represented to us that Clarus’ consolidated financial
statements were prepared in accordance with generally accepted accounting
principles applied on a consistent basis, and we have reviewed and discussed
the
quarterly and annual earnings press releases and consolidated financial
statements with management and the independent auditors. The Audit Committee
has
also discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61 (Communication With Audit
Committees), as amended, and Rule 2-07 (Communication With Audit Committees)
of
Regulation S-X.
14
The
Audit
Committee has received the written disclosures from the independent auditors
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), and has discussed with the independent
auditors their independence from Clarus and its management. The Audit Committee
also considered whether the independent auditors’ provision of audit and
non-audit services to Clarus is compatible with maintaining the independent
auditors’ independence.
The
Audit
Committee discussed with the independent auditors the overall scope and plans
for its audit. The Audit Committee discussed with the independent auditors,
with
and without management present, the results of its examinations, the evaluations
of Clarus’ internal controls, and the overall quality and integrity of financial
reporting.
Based
on
the reviews and discussions referred to above, the Audit Committee recommended
to the Board of Directors, and the Board of Directors has approved, that the
audited financial statements be included in Clarus’ Annual Report on Form 10-K
for the fiscal year ended December 31, 2007 for filing with the Securities
and
Exchange Commission.
Submitted
by the Audit Committee of the Board of Directors:
Donald
House - Chairman
Nicholas
Sokolow
Burtt
Ehrlich
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
Aggregate
fees for professional services rendered for Clarus by KPMG LLP for the fiscal
years ended December 31, 2007 and 2006 were:
|
2007
|
2006
|
||||||
|
Audit
Fees
|
$
|
176,000
|
$
|
150,000
|
|||
|
Audit
Related Fees
|
--
|
10,000
|
|||||
|
Tax
Fees
|
--
|
1,100
|
|||||
|
All
Other Fees
|
--
|
--
|
|||||
|
Total
|
$
|
176,000
|
$
|
161,100
|
|||
Audit
Fees
The
Audit
Fees for the years ended December 31, 2007 and 2006, respectively, were for
professional services rendered for the audit of our consolidated financial
statements for the fiscal years ended December 31, 2007 and 2006, as applicable,
and for the review of our consolidated financial statements included in our
quarterly reports on Form 10-Q for fiscal 2007 and 2006, as applicable.
15
Audit
Related Fees
There
were no Audit Related Fees for the fiscal year ended December 31, 2007. The
Audit Related Fees as of the fiscal year ended December 31, 2006, were for
assurance and related services related to documents filed with the Securities
and Exchange Commission with respect to the Company’s employee benefit plan
audits.
Tax
Fees
There
were no Tax Fees for 2007. Tax Fees as of the fiscal year ended December 31,
2006 were for services related to tax compliance, including the preparation
of
tax returns and extensions, and claims for refund, including assistance with
tax
services for employee benefit plans, expatriate, net operating loss and sales
tax matters and requests for rulings or technical advice from tax
authorities.
All
Other Fees
There
were no fees incurred for All Other Fees for the fiscal years ended December
31,
2007 and 2006.
Auditor
Independence
The
Audit
Committee has considered the non-audit services provided by KPMG LLP and
determined that the provision of such services had no effect on KPMG LLP’s
independence from Clarus.
AUDIT
COMMITTEE PRE-APPROVAL POLICY AND PROCEDURES
The
Audit
Committee must review and pre-approve all audit and non-audit services provided
by KPMG LLP, our independent auditors, and has adopted a Pre-Approval Policy.
In
conducting reviews of audit and non-audit services, the Audit Committee will
determine whether the provision of such services would impair the auditor’s
independence. The term of any pre-approval is 12 months from the date of
pre-approval, unless the Audit Committee specifically provides for a different
period. Any proposed services exceeding pre-approved fee ranges or limits must
be specifically pre-approved by the Audit Committee.
Requests
or applications to provide services that require pre-approval by the Audit
Committee must be accompanied by a statement of the independent auditors as
to
whether, in the auditor’s view, the request or application is consistent with
the Securities and Exchange Commission’s rules on auditor independence. Each
pre-approval request or application must also be accompanied by documentation
regarding the specific services to be provided.
16
Since
the
adoption of the Pre-Approval Policy by the Audit Committee on March 11, 2004,
the Audit Committee has not waived the pre-approval requirement for any services
rendered by KPMG LLP to Clarus.
Appointment
of Independent Public Accountant
The
firm
of KPMG LLP, certified public accountants, has been the Company’s independent
public accountant since fiscal year 2001. Our Board of Directors has selected
KPMG LLP to audit our financial statements for fiscal year 2008. We are not
asking stockholders to ratify the appointment of KPMG LLP as our independent
accountants to audit our financial statements for fiscal year 2008. Ratification
of the independent accountant is not required by our Amended and Restated
Bylaws, our Charter of the Audit Committee or applicable law.
Representatives
of KPMG LLP are expected to be present at the Annual Meeting. They will have
the
opportunity to make a statement, if they so desire, and to respond to
appropriate questions from stockholders.
EXECUTIVE
OFFICERS
The
following table sets forth the name, age and position of each of our executive
officers as of the date hereof. Our executive officers are appointed by and
serve at the discretion of the Board of Directors of Clarus.
|
Name
|
Age
|
Position
|
|
Warren
B. Kanders
|
50
|
Executive
Chairman of the Board of Directors
|
|
Philip
A. Baratelli
|
40
|
Chief
Financial Officer, Secretary and
Treasurer
|
See
“Biographical Information for Directors” for biographical information with
respect to Warren B. Kanders.
Philip
A. Baratelli,
40, has
served as our Chief Financial Officer, Secretary and Treasurer since February
2007. Since February 2007, Mr. Baratelli has also served as Chief
Financial Officer for Kanders & Company, Inc., a private investment firm
principally owned and controlled by Mr. Warren B. Kanders that makes investments
in and provides consulting services to public and private entities. Since
April 2007, Mr. Baratelli has served as the Chief Financial Officer
for Highlands Acquisition Corp., a publicly-held blank check company formed
with
a focus on acquiring a business in the healthcare industry. Since August 2007,
Mr. Baratelli has served as the Chief Financial Officer of
Kanders Acquisition Company, Inc. a blank check company formed with a focus
on
acquiring a business in no particular industry or geography. From June 2001
until January 2007, Mr. Baratelli was employed by Armor Holdings, Inc., as
its
Corporate Controller and held the additional position of Treasurer of Armor
Holdings, Inc., from March 2003 until January 2007. Prior to joining Armor
Holdings, Inc., Mr. Baratelli was employed by PriceWaterhouseCoopers LLP from
1998 to 2001 in various positions ranging from Associate to Senior Associate.
From 1991 to 1997, Mr. Baratelli worked for Barnett Bank, Inc. in various
finance and credit analysis positions. Mr. Baratelli received a Bachelor of
Science in finance from Florida State University in 1989 and a Bachelor of
Business Administration in accounting from the University of North Florida
in
1995. Mr. Baratelli is a certified public accountant.
17
There
are
no family relationships between our Named Executive Officers and any director
of
the Company.
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Overview
The
Compensation Committee of the Board of Directors (the “Compensation Committee”)
assists the Board in establishing compensation packages for Clarus’ executive
officers and non-employee directors and administering Clarus’ incentive plans.
The Compensation Committee is generally responsible for setting and
administering the policies which govern annual executive salaries, raises and
bonuses and certain awards of stock options and common stock, and, where
applicable, compliance with the requirements of Section 162(m) of the Internal
Revenue Code of 1986, as amended (the “IRC”) and such responsibility is
generally limited to the actions taken by the Compensation Committee, although
at times the full Board has determined annual executive salaries, raises and,
where the Company has determined that compliance with the provisions of Section
162(m) is not required, bonuses as well as grants of stock options and common
stock without having first received recommendations from the Compensation
Committee. From time to time, the Compensation Committee reviews our
compensation
packages to ensure that they remain competitive with the compensation packages
offered by similarly-situated companies and continue to incentivize management
and align management’s interests with those of our stockholders.
The
Compensation Committee is comprised of two directors, each of whom has
considerable experience in executive compensation issues. Each member of the
Compensation Committee meets the independence requirements specified by the
NASDAQ and by Section 162(m) of the IRC.
Executive
Compensation Philosophy
The
general philosophy of our executive compensation program is to attract and
retain talented management while ensuring that our executive officers are
compensated in a way that advances the interests of our stockholders. In
pursuing these objectives, the Compensation Committee believes that it is
critical that a substantial portion of each executive officer’s compensation be
contingent upon our overall performance and the growth of the Company. The
Compensation Committee is also guided by the principle that our compensation
packages must be competitive, must support our overall strategy and objectives,
and must provide significant rewards for outstanding financial performance
while
establishing clear consequences for underperformance. Annual bonuses and
long-term awards for our executive officers should take into account not only
objective financial goals, but also individual performance goals that reinforce
our core values, which include leadership, accountability, ethics and corporate
governance. It is the Compensation Committee’s responsibility to determine the
performance goals for the performance-based compensation payable to our Named
Executive Officers identified on the Summary Compensation Table on page 23
in compliance with section 162(m) of the IRC, subject to ratification by the
Board, and to certify compliance with such goals before such compensation is
paid. Subject to this limitation, the Compensation Committee may also make
recommendations to the Board with respect to non-Executive Chairman compensation
and, either alone or with the other independent members of our Board, to
determine and approve our Executive Chairman’s compensation.
18
In
determining the compensation packages for our executive officers and
non-employee directors, the Compensation Committee and the Board of Directors
have evaluated the history and performance of Clarus, previous compensation
practices and packages awarded to Clarus’ executive officers and non-employee
directors, and compensation policies and packages awarded to executive officers
and non-employee directors at similarly-situated companies.
Use
of Outside Consultants
The
Compensation Committee has the authority to retain and terminate any independent
compensation consultant and to obtain independent advice and assistance from
internal and external legal, accounting and other advisors.
Compensation
Program Components
Our
executive compensation program emphasizes company performance, individual
performance and an increase in stockholder value over time in determining
executive pay levels. Our executive compensation program consists of three
key
elements: (i) annual base salaries; (ii) a performance-based annual bonus;
and (iii) periodic grants of stock options and restricted stock. The
Compensation Committee believes that this three-part approach best serves our
and our stockholders’ interests by motivating executive officers to improve our
financial position, holding executives accountable for the performance of the
organizations for which they are responsible and by attracting key executives
into our service. Under our compensation program, annual compensation for
executive officers are composed of a significant portion of pay that is “at
risk” -- specifically, the annual bonus, stock options and restricted
stock.
Annual
Cash Compensation
Base
Salary.
In
reviewing and approving the base salaries of our executive officers, the
Compensation Committee considers the scope of work and responsibilities, and
other individual-specific factors; the recommendation of the Executive Chairman
(except in the case of his own compensation) and; compensation for similar
positions at similarly-situated companies; and the executive's experience.
Except where an existing agreement establishes an executive’s salary, the
Compensation Committee reviews executive officer salaries annually at the end
of
the fiscal year and establishes the base salaries for the upcoming fiscal year.
In 2007, the salary for Mr. Kanders was established pursuant to his employment
agreement which is discussed below under the heading “Employment Agreements”.
Mr. Baratelli commenced employment as the Company’s Chief Financial Officer
effective February 1, 2007 and is paid a base salary of $200,000. As Mr.
Baratelli does not have an employment agreement, his employment with the Company
is “at-will”. In establishing Mr. Baratelli’s base salary, the Board considered
compensation for similar positions at similarly-situated companies in the New
York City metropolitan area and Mr. Baratelli’s prior experience as an
accountant as well as Corporate Controller and Treasurer of Armor Holdings,
Inc.
Our Named Executive Officers devote only as much of their time as is necessary
to the affairs of the Company and also serve in various capacities with other
public and private entities, including blank check companies and not-for-profit
entities affiliated with Kanders & Company.
19
Performance-Based
Annual Bonus.
With
regard to the compensation of the Named Executive Officers subject to Section
162(m) of the IRC, the Compensation Committee establishes the performance goals
and then certifies the satisfaction of such performance goals prior to the
payment of the performance-based bonus compensation. In reviewing and approving
the annual performance-based bonus for our executive officers, the Compensation
Committee may also consider an executive’s contribution to the overall
performance of Clarus as well as annual bonuses awarded to persons holding
similar positions at similarly-situated companies. In addition, cash bonuses
may
be awarded in the discretion of the Board, the Compensation Committee and the
executive management of the Company. In 2007, a cash bonus was awarded to Mr.
Baratelli in the amount of $75,000. In awarding the 2007 cash bonus to Mr.
Baratelli, the Board considered Mr. Baratelli’s individual contribution to the
Company in 2007 and noted that the aggregate amount of such cash bonus is less
than the aggregate amount provided for bonus compensation in the Company’s 2007
budget. Mr. Kanders was not awarded a cash bonus in 2007.
Equity-Based
Compensation
Executive
officers of Clarus and other key employees who contribute to the growth,
development and financial success of Clarus are eligible to be awarded stock
options to purchase our common stock, shares of restricted common stock, and
bonuses of shares of common stock under our equity incentive plans. Awards
under
this plan help relate a significant portion of an employee’s long-term
remuneration directly to stock price appreciation realized by all our
stockholders and aligns an employee’s interests with that of our stockholders.
The Compensation Committee believes equity-based incentive compensation aligns
executive and stockholder interests because (i) the use of a multi-year lock-up
or vesting schedule or milestone based vesting schedule for equity awards
encourages executive retention and emphasizes long-term growth, and (ii) paying
a significant portion of management’s compensation in our equity provides
management with a powerful incentive to increase stockholder value over the
long
term. The Compensation Committee determines appropriate individual long-term
incentive awards in the exercise of its discretion in view of the above criteria
and applicable policies. The timing of our equity award grants is not designed
to have any relationship with our release of material, non-public information.
Awards are generally granted at previously scheduled meetings of the Board
and
Compensation Committee and as required by our 2005 Stock Incentive Plan, options
and stock awards are granted with an exercise price and valued equal to the
fair
market value of the Company’s common stock which is the closing price on the
date of grant such awards.
20
In
December 2007, Mr. Baratelli was awarded options under the 2005 Stock Incentive
Plan to purchase 100,000 shares of common stock at an exercise price of $5.98
and vesting in equal annual installments over four years commencing December
13,
2008. In granting this stock option award to Mr. Baratelli, the Board noted
that
Mr. Baratelli had not previously received an equity award since he commenced
employment with the Company in February 2007. Mr. Kanders was not awarded any
equity compensation in 2007.
Perquisites
and Other Personal and Additional Benefits
Executive
officers participate in other employee benefit plans generally available to
all
employees on the same terms as similarly situated employees.
The
Company maintains a qualified 401(k) plan that provides for a Company
contribution based on a matching schedule of a maximum of 6% up to the
applicable IRS limits.
The
Company also provides Named Executive Officers with perquisites and other
personal benefits that the Company and the Compensation Committee believe are
reasonable and consistent with its overall compensation program to better enable
the Company to attract and retain superior employees for key positions. The
Compensation Committee periodically reviews the levels of perquisites and other
personal benefits provided to Named Executive Officers.
The
costs
to the Company associated with providing these benefits for executive officers
named in the Summary Compensation Table are reflected in the “All Other
Compensation” column of the Summary Compensation Table.
Accounting
and Tax Considerations
Section
162(m) of the IRC generally disallows a tax deduction to public corporations
for
compensation other than performance-based compensation over $1,000,000 paid
for
any fiscal year to an individual who, on the last day of the taxable year,
was
(i) the Chief Executive Officer or (ii) among the four other highest
compensated executive officers whose compensation is required to be reported
in
the Summary Compensation Table contained herein. Compensation programs generally
will qualify as performance-based if (1) compensation is based on
pre-established objective performance targets, (2) the programs’ material
features have been approved by stockholders, and (3) there is no discretion
to
increase payments after the performance targets have been established for the
performance period. The Compensation Committee desires to maximize deductibility
of compensation under Section 162(m) of the IRC to the extent practicable while
maintaining a competitive, performance-based compensation program. However,
the
Compensation Committee also believes that it must reserve the right to award
compensation which it deems to be in our best interest and our stockholders
but
which may not be tax deductible under Section 162(m) of the IRC.
21
Post-Employment
and Other Events
Retirement,
death, disability and change-in-control events trigger the payment of certain
compensation to the Named Executive Officers that is not available to all
salaried members. Such compensation is discussed under the headings “Employment
Agreements” and “Potential Payments Upon Termination or Change in
Control.”
Role
of Executive Officers in Compensation Decisions
The
Compensation Committee determines the total compensation of our Executive
Chairman and oversees the design and administration of compensation and benefit
plans for all of the Company’s employees. Certain executive officers, including
the Executive Chairman and Chief Financial Officer may attend a portion of
most
regularly scheduled Compensation Committee meetings, excluding executive
sessions. The Compensation Committee also obtains input from our legal, finance
and tax functions, as appropriate.
Summary
The
Compensation Committee believes that the total compensation package has been
designed to motivate key management to improve the operations and financial
performance of the Company, thereby increasing the market value of our Common
Stock. The tables in this Executive Compensation section reflect the
compensation structure established by the Compensation Committee.
Compensation
Committee Report
The
Company’s Compensation Committee of the Board has submitted the following report
for inclusion in this Proxy Statement:
Our
Compensation Committee has reviewed and discussed the Compensation Discussion
and Analysis contained in this Proxy Statement with management. Based on our
Compensation Committee’s review of and the discussions with management with
respect to the Compensation Discussion and Analysis, our Compensation Committee
recommended to the Board of Directors that the Compensation Discussion and
Analysis be included in this Proxy Statement for filing with the Securities
and
Exchange Commission.
MEMBERS
OF THE COMPENSATION COMMITTEE
Nicholas
Sokolow (Chairman)
Burtt
R.
Ehrlich
22
Summary
Compensation Table
The
following summary compensation table sets forth information concerning the
annual and long-term compensation earned for the periods presented below by
our
executive officers and persons as to whom disclosure is required under the
applicable rules of the Securities and Exchange Commission (collectively, the
“Named Executive Officers”).
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards ($)(1)
|
Option
Awards ($)(2)
|
All
Other Compensation ($)
|
Total
($)
|
|
Warren
B. Kanders (3)
Executive
Chairman of the Board of Directors
|
2007
|
$250,000
|
-
|
$268,000
(4)
|
-
|
$11,381
(5)
|
$529,381
|
|
2006
|
250,000
|
-
|
268,000
|
-
|
9,900
|
527,900
|
|
|
Philip
A. Baratelli (6)
Chief
Financial Officer
|
2007
|
170,833
|
$75,000(7)
|
-
|
$3,592
(8)
|
59,683
(9)
|
309,108
|
|
2006
|
-
|
-
|
-
|
-
|
-
|
-
|
(1) The
amounts in the “Stock Awards” column are calculated based on Statement of
Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payments”
(“FAS 123R”). They equal the aggregate dollar amount of compensation expense
related to stock awards that was recognized in the Company’s financial
statements contained on Form 10-K for the year ended December 31, 2007 and
2006.
Under FAS 123(R), a pro rata portion of the total expense at the time of grant
is recognized over the vesting schedule of the grant. The expense is equal
to
the stock award share price on the date of grant times the number of shares
granted amortized over the life of the grant. See footnote 8, Stock Incentive
Plan in the financial statements contained in annual report on Form 10-K for
the
year ended December 31, 2007 and 2006.
(2) The
amounts in the “Option Awards” column are calculated based on FAS 123R
(excluding any estimate of forfeiture). They equal the aggregate dollar amount
of compensation expense related to option awards to each of the Named Executive
Officers that was recognized in the Company’s 2007 financial statements. Under
FAS 123R, a pro rata portion of the total expense is based on the fair value
of
the stock option grant as estimated using the Black-Scholes option-pricing
model. See footnote 8, Stock Incentive Plan in the financial statements
contained in annual report on Form 10-K for the year ended December 31, 2007
for
the assumptions used to arrive at the Black-Scholes values.
(3) Mr.
Kanders is compensated pursuant to the terms of his employment agreement which
is discussed under the heading “Employment Agreements” in this Proxy Statement.
Mr. Kanders is required to devote only as much time as is necessary to perform
his duties for the Company.
(4)
Represents the aggregate dollar amount of compensation expense related to
500,000
shares of restricted common stock awarded to Mr. Kanders on
April
11, 2003.
(5)
“Other Compensation” for 2007 relates to $1,237 in health and life insurance
expenses and $10,144 for
401(k) matching contributions.
(6)
Philip A. Baratelli commenced employment as the Company’s Chief Financial
Officer, Secretary and Treasurer effective as of February 1, 2007. Mr.
Baratelli’s employment with the Company is “at-will” and is required to devote
only as much time as is necessary to perform his duties for the Company. The
Company pays Mr. Baratelli a base salary of $200,000 per year.
23
(7)
Discretionary cash bonus awarded by the Board of Directors.
(8)
Represents the value of options to purchase 100,000 shares of the Company’s
common stock at an exercise price of $5.98 pursuant to the 2005 Stock Incentive
Plan.
(9) “Other
Compensation” for 2007 relates to $47,014 for relocation expenses, $9,763 in
health expenses and $2,906 for 401(k) matching contributions.
Grants
of Plan-Based Awards
The
following table contains certain information regarding grants of plan based
awards in fiscal year 2007 be each of the Named Executive Officers.
|
All
Other Stock Awards: Number of Shares of Stock or Units (#)
|
All
Other Option Awards: Number of Securities Underlying Options
(#)
|
Exercise
or Base Price of Option Awards ($)
|
Grant
Date Fair Value of Stock and Option Awards ($)
|
||
|
Name
and Principal Position
|
Grant
Date
|
||||
|
Warren
B. Kanders
Executive
Chairman of the Board of Directors
|
-
|
-
|
-
|
-
|
|
|
Philip
A. Baratelli
Chief
Financial Officer
|
12/13/07
|
-
|
100,000
|
$5.98
(1)
|
$277,370
(2)
|
(1)
Mr.
Baratelli’s exercise price based on December 13, 2007 closing price of the
Company’s common stock of $5.98 per share.
(2)
Mr.
Baratelli’s option value based on a December 13, 2007 Black-Scholes value of
$2.77 per share.
24
Outstanding
Equity Awards at Fiscal Year End
The
following table sets forth information concerning stock options and stock awards
held by the Named Executive Officers at December 31, 2007:
|
Option
Awards
|
Stock
Awards
|
|||||||||||||||||
|
Name
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options (#)
|
Option
Exercise Price
($)
|
Option
Expiration Date
|
Number
of Shares or Units of Stock That Have Not Vested (#)
|
Market
Value of Shares or Units of Stock That Have Not Vested ($)
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other
Rights
That Have Not Vested (#)
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares,
Units or
Other Rights That Have Not Vested ($)
|
|||||||||
|
Warren
B. Kanders
|
21,250
(1)
200,000
(1)
400,000
(2)
400,000
(2)
|
--
--
--
--
|
--
--
--
--
|
5.99
5.35
7.50
10.00
|
5/28/09
12/20/12
12/20/12
12/20/12
|
--
500,000
(3)
|
2,950,000
|
--
--
--
--
--
|
2,950,000
|
|||||||||
|
Philip
A. Baratelli
|
--
|
100,000
(4)
|
--
|
5.98
|
12/13/17
|
--
|
--
|
--
|
--
|
|||||||||
| (1) |
Fully
vested stock option award granted pursuant to the 2000 Stock Incentive
Plan.
|
| (2) |
Fully
vested non-plan stock option award.
|
| (3) |
Shares
of restricted common stock which shall vest and become nonforfeitable
if
Mr. Kanders is an employee and/or a director of the Company or a
subsidiary or affiliate of the Company on the earlier of (i) the
date the
closing price of the Company’s common stock equals or exceeds $15.00 per
share for each of the trading days during a ninety consecutive day
period,
or (ii) the tenth anniversary of the date of grant, subject to
acceleration in certain
circumstances.
|
| (4) |
Options
granted pursuant to the 2005 Stock Incentive Plan vest and become
exercisable in
equal
annual installments over four years commencing December 13,
2008.
|
Option
Exercises and Stock Vested During Fiscal 2007
There
were no options exercised by or stock awards vesting to our Named Executive
Officers during the year ended December 31, 2007.
Pension
Benefits - Fiscal 2007
There
were no pension benefits earned by our Named Executive Officers during the
year
ended December 31, 2007.
Potential
Payments Upon Termination or Change of Control
The
tables below reflect the amount of compensation to each of the Named Executive
Officers of the Company in the event of termination of such executive’s
employment. The amount of compensation payable to each Named Executive Officer
upon voluntary termination; retirement; involuntary not-for-cause termination;
involuntary for cause termination; termination following a change of control;
retention following a change of control and in the event of disability or death
of the executive is shown below. The amounts shown assume that such termination
was effective as of December 31, 2007, and thus includes amounts earned through
such time and are estimates of the amounts which would be paid out to the
executives upon their termination. The actual amounts to be paid out can only
be
determined at the time of such executive’s separation from the Company.
25
Payments
Made Upon Termination
Regardless
of the manner in which a Named Executive Officer’s employment terminates, he may
be entitled to receive amounts earned during his term of employment.
Payments
Made Upon Retirement
In
the
event of the retirement of a Named Executive Officer, no additional benefits
are
paid.
Payments
Made Upon a Change of Control
Pursuant
to the terms of the Company’s employment agreement with Mr. Kanders, if Mr.
Kander’s employment with the Company is terminated following a change of control
(other than termination by the Company for cause or by reason of death or
disability) or if he terminates his employment in certain circumstances defined
in the agreement which constitute “good reason”, then Mr. Kanders will receive
the following benefits:
|
•
|
All
stock options and restricted stock held by Mr. Kanders will automatically
vest and become exercisable and lockup provisions will be released;
and
|
|
•
|
In
the event of a change in control which results in Mr. Kander’s involuntary
or voluntary termination, he will continue to receive his base
compensation, in accordance with Clarus’ normal payroll practices, for a
period of 24 months after the effective date of such termination.
|
Pursuant
to Mr. Kanders’ employment agreement, a change of control is deemed to occur in
the event that:
|
•
|
the
current members of the Board cease to constitute a majority of the
Board;
or
|
|
•
|
the
Company shall have been sold by either (i) a sale of all or substantially
all its assets, or (ii) a merger or consolidation, other than any
merger
or consolidation pursuant to which the Company acquires another entity,
or
(iii) a tender offer, whether solicited or unsolicited;
or
|
26
|
•
|
any
party, other than the Company, is or becomes the “beneficial owner” (as
defined in the Exchange Act), directly or indirectly, of voting securities
representing 50% or more of the total voting power of the
Company.
|
Warren
B. Kanders
The
following table shows the potential payments upon termination or a change of
control of the Company for Warren B. Kanders, the Company’s Executive Chairman.
|
Executive
Benefits upon Payments Upon Separation
|
Voluntary
Termination on 12/31/07
($)
|
For
Cause Termination on 12/31/07
($)
|
Without
Cause Termination on 12/31/07
($)
|
Change-in-Control
and Termination on 12/31/07 ($)
|
Disability
on 12/31/07
($)
|
Death
on 12/31/07
($)
|
|
(a)
|
(b)
|
(d)
|
(e)
|
(f)
|
(h)
|
(i)
|
|
Compensation
|
|
|
|
|
|
|
|
Cash
Severance - Salary
|
-
|
-
|
500,000
(1)
|
500,000
(1)
|
-
|
-
|
|
Stock
Options
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Restricted
Stock
|
-
|
-
|
2,950,000
(2)
|
2,950,000
(2)
|
-
|
-
|
|
Benefits
& Perquisites
|
|
|
|
|
|
|
|
Life
Insurance
|
-
|
-
|
-
|
-
|
-
|
2,200,000
(4)
|
|
Disability
Income
|
-
|
-
|
-
|
-
|
150,000
(3)
|
-
|
|
Total
|
-
|
-
|
4,093,000
|
4,093,000
|
150,000
|
2,200,000
|
| (1) |
Mr.
Kanders to receive two times annual base salary of $250,000 pursuant
to
the terms of his employment agreement which is discussed under the
heading
“Employment Agreements” in this Proxy
Statement.
|
| (2) |
The
unvested portion of 500,000 shares of restricted common stock awarded
to
Mr. Kanders on
April 11, 2003 will
be accelerated and valued using the December 31, 2007 market price
of
$5.90 per share.
|
| (3) |
Mr.
Kanders to receive $12,500 per month benefit or $150,000 annually
(until
he reaches normal Social Security retirement age), if as a result
of a
disability, he can no longer perform his duties as our Executive
Chairman
of the Board of Directors.
|
| (4) |
Upon
Mr. Kanders death his beneficiary will receive $2 million pursuant
to the
terms of his employment agreement which is discussed under the heading
“Employment Agreements” in this Proxy Statement. Mr. Kanders’ beneficiary
will also received $200,000 from a Company group term life policy
that is
maintained for the benefit of all of the Company’s
employees.
|
27
Philip
A. Baratelli
The
following table shows the potential payments upon termination or a change of
control of the Company for Philip A. Baratelli, the Company’s Chief Financial
Officer, Secretary and Treasurer.
|
Executive
Benefits upon Payments Upon Separation
|
Voluntary
Termination on 12/31/07
($)
|
For
Cause Termination on 12/31/07
($)
|
Without
Cause Termination on 12/31/07
($)
|
Change-in-Control
and Termination on 12/31/07 ($)
|
Disability
on 12/31/07
($)
|
Death
on 12/31/07
($)
|
|
Compensation
|
|
|
|
|
|
|
|
Cash
Severance - Salary
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Stock
Options
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Restricted
Stock
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Benefits
& Perquisites
|
|
|
|
|
|
|
|
Life
Insurance
|
-
|
-
|
-
|
-
|
-
|
250,000
(2)
|
|
Disability
Income
|
-
|
-
|
-
|
-
|
165,000
(1)
|
-
|
|
Total
|
-
|
-
|
-
|
-
|
165,000
|
250,000
|
| (1) |
Mr.
Baratelli to receive $13,750 per month benefit or $165,000 annually
(until
he reaches normal Social Security retirement age), if as a result of
a disability, he can no longer perform his duties as our Chief Financial
Officer, Secretary and Treasurer.
|
| (2) |
Upon
Mr. Baratelli’s death, his beneficiary will receive $250,000 from a
Company group term life policy that is maintained for the benefit
of all
of the Company’s employees.
|
EMPLOYMENT
AGREEMENTS
Warren
B. Kanders
In
December 2002, we entered into an employment agreement with Warren B. Kanders,
which provides that he will serve as Clarus’ Executive Chairman of the Board of
Directors and devote as much of his time as is necessary to perform such duties
for a three-year term that was extended on May 1, 2006 and is subject to
termination at anytime by the Company or Mr. Kanders. It is noted that Mr.
Kanders also serves in various capacities with other public and private
entities, including blank check companies and not-for-profit entities affiliated
with Kanders & Company. The agreement provides for an annual base salary of
$250,000. In addition, Mr. Kanders is entitled, at the discretion of our Board
of Directors, to performance bonuses which may be based upon a variety of
factors and to participate in our stock incentive plans and other bonus plans
adopted by us. We also maintain term life insurance on Mr. Kanders in the amount
of $2,000,000 for the benefit of his designees. In connection with his
employment agreement, in December 2002, Mr. Kanders received ten-year options
to
purchase up to (i) 200,000 shares of the Company’s common stock, at an exercise
price of $5.35 per share; (ii) 400,000 shares of the Company’s common stock, at
an exercise price of $7.50 per share; and (iii) 400,000 shares of the Company’s
common stock, at an exercise price of $10.00 per share. On April 11, 2003,
Mr.
Kanders received a grant of 500,000 restricted shares of the Company’s common
stock, with full voting, dividend, distribution and other rights, which vest
and
become nonforfeitable if Mr. Kanders is an employee and/or a director of the
Company or a subsidiary or affiliate of the Company on the earlier of (i) the
date the closing price of the Company’s common stock, as listed or quoted on any
national securities exchange or NASDAQ, shall have equaled or exceeded $15.00
per share for each of the trading days during a ninety (90) consecutive day
period, or (ii) the tenth (10th)
anniversary of the date of grant; provided however, that all of the restricted
shares immediately vest and become nonforfeitable upon a “change in control” or
in the event Mr. Kanders’ employment with the Company is terminated without
“cause”. Mr. Kanders’ employment agreement provides that if it shall be
determined that any payment or benefit provided to Mr. Kanders pursuant to
the terms of the employment agreement ( “Total Payment”) would be subject, in
whole or in part, to the excise tax imposed by Section 4999 of the Code
(the “Excise Tax”), then Mr. Kanders shall be entitled to receive from the
Company an additional payment (the “Gross-Up Payment”) in an amount such that
the net amount of the Total Payment and the Gross-Up Payment retained by
Mr. Kanders after the calculation and deduction of all Excise Taxes on the
Total Payments and all federal, state and local income tax, employment tax
and
Excise Tax on the Gross-Up Payment, shall be equal to the Total
Payments.
28
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
During
fiscal 2007, none of the members of our Compensation Committee (i) served as
an
officer or employee of Clarus or its subsidiaries, (ii) was formerly an officer
of Clarus or its subsidiaries or (iii) entered into any transactions with Clarus
or its subsidiaries. During fiscal 2007, none of our executive officers (i)
served as a member of the compensation committee (or other board committee
performing similar functions or, in the absence of any such committee, the
board
of directors) of another entity, one of whose executive officers served on
our
Compensation Committee, (ii) served as director of another entity, one of whose
executive officers served on our Compensation Committee, or (iii) served as
member of the compensation committee (or other board committee performing
similar functions or, in the absence of any such committee, the board of
directors) of another entity, one of whose executive officers served as a
director of Clarus.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
In
September 2003, the Company and Kanders & Company, an entity owned and
controlled by the Company's Executive Chairman, Warren B. Kanders, entered
into
a 15-year lease with a five-year renewal option, as co-tenants to lease
approximately 11,500 square feet in Stamford, Connecticut. The Company and
Kanders & Company have initially agreed to allocate the total lease payments
of $24,438 per month on the basis of Kanders & Company renting 2,900 square
feet initially for $6,163 per month, and the Company renting 8,600 square feet
initially for $18,275 per month, which are subject to increases during the
term
of the lease. Rent expense is recognized on a straight line basis. The lease
provides the co-tenants with an option to terminate the lease in years eight
and
ten in consideration for a termination payment. The Company and Kanders &
Company agreed to pay for their proportionate share of the build-out
construction costs, fixtures, equipment and furnishings related to preparation
of the space. In connection with the lease, the Company obtained a stand-by
letter of credit in the amount of $850,000 to secure lease obligations for
the
Stamford facility. Kanders & Company reimburses the Company for a pro rata
portion of the approximately $5,000 annual cost of the letter of
credit.
The
Company provides certain telecommunication, administrative and other office
services as well as accounting and bookkeeping services to Kanders & Company
that are reimbursed by Kanders & Company. Such services aggregated $304,600
during the year ended December 31, 2007.
As
of
December 31, 2007, the Company had outstanding a receivable of approximately
$46,000 from Kanders & Company which was paid in January 2008.
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During
the year ended December 31, 2007, Clarus was reimbursed by Stamford Industrial
Group, Inc., formerly known as Net Perceptions, Inc. (“SIG”), an entity it
shared office space with until October 1, 2007, an aggregate of $79,000 for
telecommunication, professional and general office expenses which Clarus
incurred on behalf of SIG. Warren B. Kanders, our Executive Chairman, also
serves as the Non-Executive Chairman of SIG. As of December 31, 2007, the
Company had outstanding a receivable of approximately $10,000 from SIG which
was
paid in March 2008.
In
the
opinion of management, the rates, terms and considerations of the transactions
with the related parties described above are at least as favorable as those
we
could have obtained in arms length negotiations or otherwise are at prevailing
market prices and terms.
The
Board
of Directors has a general practice of requiring directors interested in a
transaction not to participate in deliberations or to vote upon transactions
in
which they have an interest, and to be sure that transactions with directors,
executive officers and major shareholders are on terms that align the interests
of the parties to such agreements with the interests of the
stockholders.
OTHER
MATTERS
As
of the
date of this Proxy Statement, the Board of Directors does not intend to present
any other matter for action at the Meeting other than as set forth in the Notice
of Annual Meeting and this Proxy Statement. If any other matters properly come
before the Meeting, it is intended that the shares represented by the proxies
will be voted, in the absence of contrary instructions, in the discretion of
the
persons named in the Proxy Card.
SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Exchange Act, requires our directors and executive officers and
any
persons who own more than 10% of our capital stock to file with the Securities
and Exchange Commission (and, if such security is listed on a national
securities exchange, with such exchange), various reports as to ownership of
such capital stock. Such persons are required by the Securities and Exchange
Commission’s regulations to furnish us with copies of all Section 16(a) forms
they file.
Based
solely upon reports and representations submitted by the directors, executive
officers and holders of more than 10% of our capital stock, all Forms 3, 4
and 5
showing ownership of and changes of ownership in our capital stock during the
2007 fiscal year were timely filed with the Securities and Exchange Commission.
FORM
10-K
We
will provide, without charge, to each stockholder as of the Record Date, upon
our receipt of a written request of the stockholder, a copy of our Annual Report
on Form 10-K for the year ended December 31, 2007, including the financial
statements and schedules, as filed with the Securities and Exchange Commission.
Stockholders should direct the written request to Clarus
Corporation, One Landmark Square, 22nd
Floor, Stamford, Connecticut 06901, Attention Secretary.
30
REQUIREMENTS
FOR SUBMISSION OF STOCKHOLDER PROPOSALS, NOMINATION OF DIRECTORS AND OTHER
BUSINESS OF STOCKHOLDERS
Under
the
rules of the Securities and Exchange Commission, if a stockholder wants us
to
include a proposal in our Proxy Statement and Proxy Card for presentation at
our
2008 Annual Meeting, the proposal must be received by us at our principal
executive offices by January 17, 2009 (or, if the 2008 Annual Meeting is called
for a date not within 30 calendar days before or after June 19, 2008, within
a
reasonable time before we begin to print and mail our proxy materials for the
meeting). The proposal should be sent to the attention of: Clarus Corporation,
One Landmark Square, 22nd
Floor,
Stamford, Connecticut 06901, Attention Secretary and must include the
information and representations that are set out in Exchange Act Rule
14a-8.
Under
our
Amended and Restated Bylaws, and as permitted by the rules of the Securities
and
Exchange Commission, certain procedures are provided that a stockholder must
follow to nominate persons for election as directors or to introduce an item
of
business at a meeting of our stockholders outside of the requirements set forth
in Exchange Act Rule 14a-8. These procedures provide that nominations for
director nominees and/or an item of business to be introduced at a meeting
of
our stockholders must be submitted in writing to the Secretary of the Company
at
our principal executive offices. Any written submission by a stockholder
including a director nomination and/or item of business to be presented at
a
meeting of our stockholders must comply with the procedures and such other
requirements as may be imposed by our Amended and Restated Bylaws, Delaware
law,
the rules and regulations of the Securities and Exchange Commission and must
include the information necessary for the Board to determine whether the
candidate qualifies as independent.
We
must
receive notice of the intention to introduce a director nomination or to present
an item of business at our 2008 Annual Meeting (a) not less than sixty (60)
days
nor more than ninety (90) days prior to June 19, 2008 if our 2008 Annual Meeting
is held within thirty (30) days before or after June 19, 2008; or (b) not later
than the close of business on the tenth (10th)
day
following the day on which the notice of meeting was mailed or public disclosure
of the date of the meeting was made, whichever occurs first, in the event our
2008 Annual Meeting is not held within thirty (30) days before or after June
19,
2008. In the event we call a special meeting of our stockholders, we must
receive your intention to introduce a director nomination or to present an
item
of business at the special meeting of stockholders not later than the close
of
business on the tenth (10th)
day
following the day on which the notice of such special meeting of stockholders
was mailed or public disclosure of the date of the meeting was made, whichever
occurs first.
31
Assuming
that our 2008 Annual Meeting is held on schedule, we must receive notice of
your
intention to introduce a director nomination or other item of business at that
meeting not less than sixty (60) days nor more than ninety (90) days prior
to
June 19, 2008. If we do not receive notice within the prescribed dates, or
if we
meet other requirements of the Securities and Exchange Commission rules, the
persons named as proxies in the proxy materials relating to that meeting will
use their discretion in voting the proxies when these matters are raised at
the
meeting.
In
addition, nominations or proposals not made in accordance herewith may be
disregarded by the chairman of the meeting in his discretion, and upon his
instructions all votes cast for each such nominee or for such proposals may
be
disregarded.
| FOR THE BOARD OF DIRECTORS | |
| Philip A. Baratelli | |
| Secretary |
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