SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. 2)
Filed by the Registrant
Filed by a Party other than the Registrant |X|
Check the appropriate box:
|X| Preliminary Proxy Statement
CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-12
Mercator Software, Inc.
(Name of Registrant as Specified In Its Charter)
Strategic Software Holdings, LLC
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
ANNUAL MEETING OF STOCKHOLDERS OF
MERCATOR SOFTWARE, INC.
MAY 14, 2003
--------------------
PROXY STATEMENT OF
STRATEGIC SOFTWARE HOLDINGS, LLC
--------------------
This proxy statement and the enclosed BLUE proxy card are being
furnished to you, the stockholders of Mercator Software, Inc. ("Mercator or the
"Company"), in connection with the solicitation of proxies by Strategic Software
Holdings, LLC ("Strategic Software") for use at the 2003 annual meeting of
stockholders of Mercator, and at any adjournments, postponements or
reschedulings thereof (the "2003 Annual Meeting").
Strategic Software is soliciting proxies to take the following actions
at the 2003 Annual Meeting:
(1) to elect Rodney Bienvenu, Peter J. Boni, Daniel Hoogterp,
Edward Sanchez, Jr., Sean P. Sears and Michael R. Wodopian to the board
of directors of Mercator, each to serve until the 2004 annual meeting
of stockholders of Mercator and until their respective successors are
duly elected;
(2) to repeal any new by-laws or amendments to existing By-laws
adopted without a stockholder vote by the board of directors on or
since March 14, 2003, and before the 2003 Annual Meeting; and
(3) to transact any other business that is properly brought before
the 2003 Annual Meeting.
The 2003 Annual Meeting is scheduled to be held on Wednesday, May 14,
2003 at 9:00 a.m. Eastern Time at the __________________, located at
_________________. Mercator has set April 7, 2003, as the record date for
determining stockholders entitled to notice of and to vote at the 2003 Annual
Meeting.
Information concerning Strategic Software, its nominees and other
persons who are participants in its solicitation of proxies is provided in this
proxy statement under the headings "Strategic Software's Nominees" and
"Information About the Participants" and in Annex A.
* * * * * * *
A PROXY MAY BE GIVEN BY ANY PERSON WHO HELD SHARES OF MERCATOR COMMON
STOCK ON APRIL 7, 2003, THE RECORD DATE FOR THE 2003 ANNUAL MEETING. WHETHER OR
NOT YOU PLAN TO ATTEND THE 2003 ANNUAL MEETING, YOU ARE URGED TO SIGN AND DATE
THE ENCLOSED BLUE PROXY CARD AND RETURN IT IN THE POSTAGE-PAID ENVELOPE
PROVIDED. YOUR LATEST-DATED PROXY IS THE ONLY ONE THAT COUNTS, SO YOU MAY RETURN
THE BLUE PROXY CARD EVEN IF YOU HAVE ALREADY DELIVERED A PROXY. WE URGE YOU NOT
TO RETURN ANY PROXY SENT TO YOU BY MERCATOR.
IF YOU HAVE ANY QUESTIONS ABOUT OUR SOLICITATION, OR NEED ANY
ASSISTANCE IN VOTING YOUR SHARES, PLEASE CONTACT OUR PROXY SOLICITOR, INNISFREE
M&A INCORPORATED, TOLL-FREE, AT 1-888-750-5834.
* * * * * * *
The date of this proxy statement is ______, 2003. This proxy statement
and the enclosed BLUE proxy card are first being sent or given to stockholders
of Mercator on or about ________, 2003.
INTRODUCTION
At the 2003 Annual Meeting, seven persons will be elected as directors
of Mercator to hold office until the 2004 annual meeting and until their
successors have been elected and qualified or until their earlier death,
resignation or removal. Strategic Software has nominated persons to fill six of
the seven directorships that will be filled at the 2003 Annual Meeting. While
voting in favor of the Strategic Software nominees means that a stockholder will
vote for a partial slate, there should not be a meaningful effect on the
stockholder franchise because there are no provisions in the By-laws or
Certificate of Incorporation requiring a unanimous vote by the Board of
Directors. In practice, a partial slate of six directors will be as effective as
if all seven directorships were filled by Strategic Software.
In accordance with the By-laws, directors are elected by a plurality
vote, and, therefore, the election of Strategic Software's nominees would result
in the seventh directorship being filled by the Mercator nominee receiving the
greatest number of votes. In the event that the Mercator elected nominee decided
not to serve, the resulting vacancy would be filled by a majority vote of the
newly elected Board of Directors in accordance with the By-laws.
In accordance with Mercator's By-laws, Strategic Software provided
written notice to the secretary of Mercator on March 14, 2003, of its intent to
nominate for election to the board of directors at the 2003 Annual Meeting, and
is soliciting your proxy in support of the election of, Rodney Bienvenu, Peter
J. Boni, Daniel Hoogterp, Edward Sanchez, Jr., Sean P. Sears and Michael R.
Wodopian and to repeal any new by-laws or amendments to existing By-laws adopted
by the board of directors on or since March 14, 2003. We believe the Strategic
Software nominees are highly qualified individuals based on their extensive
business and professional experience. For more information regarding the
Strategic Software nominees, see "Strategic Software's Nominees."
Strategic Software is a significant stockholder in Mercator, with
beneficial ownership of 1,672,500 shares, representing approximately 4.76% of
the issued and outstanding shares. Strategic Software is an investment firm that
makes equity investments and acquisitions on behalf of itself and its investors.
Based in Westport, Connecticut, the firm draws on its partners' extensive
knowledge of all aspects of the enterprise software industry to execute
strategic transactions.
Strategic Software is concerned by what it considers to be Mercator's
poor performance in recent years and has decided to seek the election of its
slate of directors in an attempt to deliver greater value to the stockholders.
YOUR VOTE IS IMPORTANT SO PLEASE SIGN, DATE AND MAIL YOUR BLUE PROXY
CARD AT YOUR EARLIEST CONVENIENCE.
If you wish to communicate with us regarding Mercator and the matters
discussed in this proxy statement you can also contact us through our website,
www.savemercator.com.
If you have any questions concerning this proxy statement or need help
voting your shares, please call:
INNISFREE M&A INCORPORATED
501 MADISON AVENUE
20TH FLOOR
NEW YORK, NY 10022
TOLL-FREE: 1-888-750-5834
* * * * * * *
WHY THE CURRENT BOARD OF
DIRECTORS OF MERCATOR MUST GO
It is time to change the board of directors and senior management at
Mercator. The reasons for this change are numerous. Under the current board of
directors and senior management:
o Mercator's stock price has plummeted from a high of $142 per
share on March 7, 2000, to just $1.50 per share as of April 9,
2003;
o Over the same period, Mercator's stock has underperformed its
peers and the NASDAQ Composite, as shown in the chart below.
o Mercator's share of the Enterprise Application Integration (EAI)
market fell from 10% to 3.5% from 1999 to 2002;
o Mercator's revenue has declined dramatically, down almost 20%
from $138.3 million to $111.9 million in 3 years;
o Yet Mercator's research and development spend has increased from
15% to 19% of revenue over the same time.
RELATIVE STOCK PERFORMANCE
MCTR
[GRAPHIC OMITTED]
Date MCTR NASDAQ Peer Group
---- ---- ------ ----------
1-Mar-00 0 0 0
5-Sep-00 -83.2 -19.05 -34
5-Mar-01 -94.53 -58.23 -83.28
4-Sep-01 -98.04 -65.66 -92.13
4-Mar-02 -94.54 -60.73 -82.30
3-Sep-02 -98.57 -73.64 -96.07
3-Mar-03 -98.69 -73.44 -95.77
HISTORICAL STOCK PRICE MCTR
3/01/200- - PRESENT
The following companies were included in the "peer group" calculation:
TIBCO, SeeBeyond, webMethods, Vitria, IBM, Sun Microsystems, Sybase and BEA
Systems. TIBCO, SeeBeyond, webMethods and Vitria were chosen because they are
pure-play enterprise application integration vendors like Mercator. IBM, Sun
Microsystems, Sybase and BEA Systems were chosen because they, too, have a
robust enterprise application integration offering in addition to other
functionality. Taken together, these players comprise most of the public
companies in the enterprise application integration market and, when viewed on a
combined basis, provide a better understanding of the marketplace and the
relative position of each company.
When analyzing the stock price performance, as well as other metrics,
stockholders should note that the companies with added functionality - above and
beyond enterprise application integration -- tend to be larger in scale than
Mercator and possess a greater menu of offerings.
BACKGROUND TO THE PROXY SOLICITATION
Starting on December 5, 2002, representatives of Strategic Software had
several conversations with management of Mercator concerning ways in which to
maximize stockholder value. In particular, Strategic Software requested that
management retain an investment bank to advise management on the best course of
action to maximize stockholder value after evaluating all alternatives.
Strategic Software and Mercator agreed to meet on January 10, 2003, to
discuss these issues. Kenneth Hall, Mercator's Exectuive Vice President, Chief
Financial Officer and Treasurer, however, notified Rodney Bienvenu, the Chief
Executive Officer of Strategic Software, on January 9, 2003, that Mercator was
cancelling the meeting. Mr. Hall supplied no reason for the cancellation and did
not reschedule the meeting.
Mercator's refusal to meet with Strategic Software and seriously
discuss our strategic plan and vision for Mercator, despite our substantial
ownership stake, led us to the conclusion that our only option to obtain a voice
in Mercator was to nominate a slate of directors and launch a proxy
solicitation. Accordingly, on March 14, 2003, in accordance with Mercator's
By-laws, Strategic Software provided written notice to the secretary of Mercator
of its intent to nominate seven persons for election to the board of directors
at the 2003 Annual Meeting. Our notice was provided within the time frame set
forth in the By-laws and described in Mercator's proxy statement with respect to
its 2002 annual meeting. We included with our notice all of the information
required by the By-laws by simultaneously delivering to Mercator a copy of our
preliminary proxy statement on Schedule 14A, which was filed with the SEC on the
same date. Subsequently, we amended our preliminary proxy statement on March 18,
2003, after one of our nominees, Michael J. Turillo, Jr., informed us that for
personal reasons he no longer desired to be nominated to be a director.
On March 20, 2003 Mr. Bienvenu and another representative of Strategic
Software met with Constance F. Galley and James P. Schadt, directors of
Mercator, who had requested such a meeting following our nomination of
candidates for director. Mr. Bienvenu stated at that meeting that we believed
that current management was incapable of producing increased value for the
stockholders and that we would like to reach an agreement with Mercator's board
that would result in the election of a majority of our nominees to the board and
changes in executive management, rather than pursue a disruptive proxy fight
that could expose the stockholders to considerable expense. Mr. Bienvenu also
stated that we would like to begin discussions with the current board concerning
a possible all-cash acquisition of Mercator by Strategic Software.
Ms. Galley and Mr. Schadt indicated that discussion of these issues
should continue.
On March 24, 2003, Kenneth Hall, CFO and Executive Vice President of
Mercator, wrote Mr. Bienvenu proposing a meeting on April 1, 2003, at which two
members of Mercator's board of directors, Dennis Sisco and Mark Stevens, as well
as an outside consultant and Mr. Hall, would "collect the information needed for
the board to make an informed decision" concerning our proposals. The letter
requested an advance copy of the of a "detailed presentation" of our proposed
strategy in order to determine whether it would be a "a waste of our time and
yours" to proceed further.
The March 24, 2003, letter also warned Mr. Bienvenu that Mercator's
attorneys would be present at the meeting and stated "we expect that they will
take written notes of the meeting."
On March 25, 2003, Mr. Bienvenu wrote Mr. Hall suggesting a conference
call on March 27, 2003, among the outside directors of Mercator, Strategic
Software and a firm that Mr. Bienvenu had previously advised Ms. Galley and Mr.
Schadt was interested in supplying the financing for a possible
acquisition of Mercator by Strategic Software. Mr. Bienvenu noted in his letter
that the outcome of such a call would "determine the nature and substance of the
proposed meeting on April 1, 2003."
On March 26, 2003, Mr. Hall wrote to Mr. Bienvenu reiterating
Mercator's position that any proposal by Strategic Software would have to be
presented in detail and in advance to the group described in his March 24, 2003
letter before being presented to the full board.
On March 28, 2003, Mr. Bienvenu again wrote to Mr. Hall expressing
frustration concerning Mercator's inability to arrange a conference call with
Mercator's outside directors. The letter noted that the purpose of the call was
to discuss "what we deem to be a fair price to sell the company", as well as
other matters. Nevertheless, Mr. Bienvenu accepted Mercator's proposal to meet
on April 1, 2003, "to discuss our position and reach a common ground that is
beneficial for all stockholders."
After receipt of Mr. Bienvenu's March 28, 2003, letter Mr. Hall wrote
Mr. Bienvenu and noted that he was "encouraged" that Strategic Software had
accepted the offer to meet on April 1, 2003, but noted that the meeting was
"contingent upon receipt of a written proposal." Mr. Hall required that
Strategic Software submit to Mercator no later than 5:00 p.m. Sunday, March 30,
2003, a written proposal "that must include a reasonable degree of specificity
as to your anticipated strategy for [Mercator] or potential transaction
structure... [A]n agenda or outline will not be acceptable." The letter further
noted that "Upon my [Mr. Hall's] receipt of materials from you that we deem to
be satisfactory, we will confirm Tuesday's meeting with you."
After determining that further efforts to meet with the outside members
of Mercator's board to discuss a proposed acquisition by Strategic Software of
Mercator and other matters would be fruitless, on March 31, 2003, Strategic
Software submitted a written proposal directly to the board of directors of
Mercator pursuant to which Strategic Software would acquire all of the
outstanding shares of common stock not already beneficially owned by it for
$2.17 per share in cash. The proposal was subject to negotiation, preparation
and execution of a definitive merger agreement containing customary
representations, warranties and closing conditions including, but not limited
to, approval by the requisite number of the directors and stockholders of
Mercator, the satisfaction of all applicable regulatory requirements and the
receipt of financing.
On April 1, 2003, Strategic Software and its representatives met with
Messrs. Hall, Sisco and Stevens, and legal counsel for Mercator, in an effort to
discuss the terms of the proposal to acquire Mercator contained in Strategic
Software's letter to the board of directors. Strategic Software had hoped to
have a meaningful, collaborative discussion on all elements of the proposal and
to discuss the basis on which the parties could come to a friendly agreement.
Messrs. Sisco and Stevens refused to discuss such terms or to discuss the basis
on which the parties could come to a friendly agreement. Instead of discussing
such matters, Messrs. Sisco and Stevens repeatedly attempted to probe the
strategy that Strategic Software would implement following an acquisition of
Mercator by Strategic Software. Mr. Bienvenu explained that Strategic Software's
strategy for a privately-held Mercator should not concern the board of
directors. Rather, the board should focus on whether the price proposed by
Strategic Software was in the best interest of Mercator's stockholders.
On April 4, 2003, Mercator's board rejected Strategic Software's
proposal to acquire Mercator. The board appeared to base their rejection on the
uncertainty of whether or not Strategic Software could get the proposal funded.
However, as indicated above, Mercator had earlier refused even to have a
telephone conversation with Strategic Software's proposed funding sources to
discuss this issue. Mercator's board also based their rejection on the "risky"
nature of Strategic Software's strategic plan for Mercator after Strategic
Sofrware acquires it, even though only Strategic Software would be subject to
risk at that time. It is not clear from Mercator's public comments that the
board even considered whether the price at which Strategic Software proposed to
acquire Mercator is fair to and in the best interests of Mercator's
stockholders.
STRATEGIC SOFTWARE'S NOMINEES
Strategic Software has put together a slate of highly qualified
nominees whom we believe have the expertise necessary to restore value to the
stockholders of Mercator, the true owners of the Company.
Our nominees are wholly independent of Mercator's current management
and are committed to exploring all alternatives to increase stockholder value.
If elected, Strategic Software's nominees are committed to acting in the best
interest of Mercator's stockholders and, subject to their fiduciary duties as
directors of Mercator, will pursue their efforts diligently and promptly.
CERTAIN INFORMATION ABOUT OUR NOMINEES
Set forth below are the name, age, business address, present principal
occupation, employment history and directorships of publicly-held companies of
each of the Strategic Software group nominees for at least the past five years.
This information has been furnished to Strategic Software by the respective
nominees. Each of the Strategic Software nominees has consented to serve as a
director of the Company. Each of the Strategic Software group nominees is at
least 18 years of age. None of the entities referenced below is a parent or
subsidiary of the Company.
PRESENT PRINCIPAL OCCUPATION AND
NAME AND BUSINESS ADDRESS AGE FIVE YEAR BUSINESS EXPERIENCE
------------------------- --- -----------------------------
Rodney Bienvenu 37 Mr. Bienvenu founded Strategic Software in
1465 Post Road East 2002 and is currently Chairman and CEO.
Westport, CT 06880 From 2001 until 2002, he served as Chief
Planning Officer and President, divine
Software Services, a division of divine,
inc., a publicly traded software company.
Previously, he was President and CEO of
SageMaker, Inc., a digital asset
management provider, from 1993 until 2001.
Peter J. Boni 57 Mr. Boni is currently Chairman & CEO of
10 Maguire Road, Suite 332 Surebridge, Inc., an outsourcer of
Lexington, MA 02421 software applications, IT infrastructure
and business processes. He has over 20
years' experience as a high technology
CEO. From 1999 to 2001, Mr. Boni was
previously CEO of Prime Response, an
applications software company. Prior to
his employment with Prime Response, Mr.
Boni was President and CEO of Cayenne
Software from 1993 until its acquisition
by Sterling Software in 1998. From 1990 to
1993, Mr. Boni served as president of the
Software and Information Services Group of
Paramount Communications, Inc. (now
Viacom, Inc.).
Daniel Hoogterp 43 Mr. Hoogterp founded Tquist, LLC and has
3 Cherry Hill Circle, Suite served as its Managing Partner and CEO
102, Monroe, CT 06468 since August 2002. Mr. Hoogterp also
presently serves as a technology advisor
to several firms, including GlobalNet
Venture Partners, LLC and ECS Energy, Inc.
From January 2001 until August 2002, he
served as Executive Vice President and
Chief Technology Officer of Enamics, Inc.,
a provider of Business Technology
Management software. From August 1999
until January 2001, he served as CTO of
SageMaker, Inc. Mr. Hoogterp was founder
and CEO of Retrieval Technologies Inc.
(RTI), a real time news and multimedia
product firm, from 1990 until it merged
with SageMaker in 1999. Prior to RTI, he
had instrumental roles in technology
development for products of IBM, MCI,
Sprint, and Industrial Network Solutions.
PRESENT PRINCIPAL OCCUPATION AND
NAME AND BUSINESS ADDRESS AGE FIVE YEAR BUSINESS EXPERIENCE
------------------------- --- -----------------------------
Edward Sanchez, Jr. 37 Mr. Sanchez wholly owns and controls ES
150 E. 52nd St. 2nd Floor Advisors LLC, a Delaware limited liability
New York, NY 10022 company he established in 2001. ES
Advisors LLC is the General Partner for ES
Capital Partners LLP, a technology
investment fund. From 1998 to June 2001,
Mr. Sanchez served as a fund manager for
Travelers Insurance (a division of
CitiGroup).
Sean P. Sears 42 Since 2000, Mr. Sears has served as
TD Centre President and Chief Executive Officer of
1791 Barrington St., 4th Floor abridean, inc., a privately held software
Halifax, Nova Scotia B3J 3K9 company that he founded. From 1998 through
Canada 2000, Mr. Sears was president of Ogden
Pong Venture Management, a private
investment firm that he founded.
Previously, he co-founded and was
President of Cycor Communications, a
national internet service provider.
Michael R. Wodopian 50 Mr. Wodopian is currently the Director of
9750 Goethe Road, Sacramento, Marketing, Optical Products Group with
CA 95827 Intel Corporation, the world's largest
chip maker, and a leading manufacturer of
computer, networking and communications
products. He has been with Intel since
1999 holding a number of general
management, business development and
marketing positions. From 1998 to 1999,
Mr. Wodopian was the Vice President of
Business Development and Strategic
Planning at Level One Communications.
The number of shares of the Company's common stock beneficially owned
by and the percentage beneficial ownership of each of Strategic Software's
nominees as of the date of this proxy statement are as follows:
NUMBER OF SHARES PERCENTAGE
STRATEGIC SOFTWARE NOMINEE BENEFICIALLY OWNED (1),(2) OWNERSHIP(3)
-------------------------- -------------------------- ------------
Rodney Bienvenu (4) 1,672,500 4.76%
Peter J. Boni 0 0
Daniel Hoogterp 0 0
Edward Sanchez, Jr.(5) 36,610 *
Sean P. Sears 3,450 *
Michael R. Wodopian 0 0
Total 1,712,560 4.87%
*Less than 1% of the outstanding shares of common stock of the Company.
(1) Beneficial ownership is determined in accordance with the rules of the
SEC and generally includes voting or investment power with respect to
securities. Shares of common stock subject to stock options and
warrants currently exercisable or exercisable within 60 days are deemed
outstanding for purposes of computing the percentage ownership of any
group of which the holder is a member, but are not deemed outstanding
for computing the percentage ownership of any other person. Except as
indicated by footnote, and subject to community property laws where
applicable, the persons named in the table have sole voting and
investment power with respect to all shares of common stock shown as
beneficially owned by them.
(2) Under the rules of the SEC, the Strategic Software nominees may be
deemed to be members of a group and, as a result, each Strategic
Software nominee may be deemed to beneficially own shares of common
stock beneficially owned by each of the other Strategic Software
nominees. Each of the Strategic Software nominees disclaims beneficial
ownership of the shares of common stock beneficially owned by any of
the other Strategic Software nominees.
(3) Calculated based on 35,143,082 shares of common stock outstanding as of
March 23, 2003, as reported in the Company's preliminary proxy
statement filed with the SEC on March 27, 2003
(4) Consists of 1,672,500 shares of common stock owned by Broken Arrow I,
L.P., of which Strategic Software is the general partner and has a
right to appoint a member of the Investment Committee. Mr. Bienvenu is
the Chairman and Chief Executive Officer of Strategic Software and has
shared voting and dispositive power with respect to the 1,672,500
shares of common stock owned by Broken Arrow I, L.P.
(5) Includes warrants to purchase 17,410 share of common stock which are
currently exercisable for $8.98 per share held by ES Capital Partners
LLP, of which ES Advisors LLC is the general partner. Mr. Sanchez
wholly owns and controls ES Advisors LLC and would have sole voting and
dispositive power with respect to shares of common stock issued
pursuant to the warrant owned by ES Capital Partners LLP. Also includes
19,200 shares of common stock in an account owned by First New York
Securities, L.L.C. and managed by Mr. Sanchez . Mr. Sanchez has shared
voting and dispositive power with respect to such shares of common
stock owned by First New York Securities, L.L.C.
None of the Strategic Software nominees is employed by the Company. All
of the Strategic Software nominees are citizens of the United States.
None of Strategic Software, any of the persons participating in this
proxy solicitation on behalf of Strategic Software and the Strategic Software
nominees within the past five years (i) has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors); (ii) has been
a party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree, or final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws, or finding any violation with
respect to such laws; (iii) were parties to a civil proceeding which ultimately
mandated activities that were subject to federal securities laws.
Except as set forth in this proxy statement or in the annexes hereto,
none of Strategic Software, any of the persons participating in this proxy
solicitation on behalf of the Strategic Software, the Strategic Software
nominees and, with respect to items (i), (vii) and (viii) of this paragraph, any
associate (within the meaning of Rule 14a-1 of the Securities Exchange Act of
1934) of the foregoing persons (i) owns beneficially, directly or indirectly,
any securities of the Company, (ii) owns beneficially, directly or indirectly,
any securities of any parent or subsidiary of the Company, (iii) owns any
securities of the Company of record but not beneficially, (iv) has purchased or
sold any securities of the Company within the past two years, (v) has incurred
indebtedness for the purpose of acquiring or holding securities of the Company,
(vi) is or has within the past year been a party to any contract, arrangement or
understanding with respect to any securities of the Company, (vii) since the
beginning of the Company's last fiscal year has been indebted to the Company or
any of its subsidiaries in excess of $60,000 or (viii) has any arrangement or
understanding with respect to future employment by the Company or with respect
to any future transactions to which the Company or any of its affiliates will or
may be a party. In addition, except as set forth in this proxy statement or in
the annexes hereto, none of Strategic Software, any of the persons participating
in this proxy solicitation on behalf of the Strategic Software, the Strategic
Software nominees and any associates of the foregoing persons, has had or is to
have a direct or indirect material interest in any transaction or proposed
transaction with the Company in which the amount involved exceeds $60,000, since
the beginning of the Company's last fiscal year.
Except as set forth in this proxy statement or in the annexes hereto,
none of the Strategic Software nominees, since the beginning of the Company's
last fiscal year, has been affiliated with (i) any entity that made or received,
or during the Company's current fiscal year proposes to make or receive,
payments to or from the Company or its subsidiaries for property or services in
excess of five percent of either the Company's or such entity's consolidated
gross revenues for its last full fiscal year, or (ii) any entity
to which the Company or its subsidiaries were indebted at the end of the
Company's last full fiscal year in an aggregate amount exceeding five percent of
the Company's total consolidated assets at the end of such year. None of the
Strategic Software nominees is or during the Company's last fiscal year has been
affiliated with any law or investment banking firm that has performed or
proposes to perform services for the Company.
None of the corporations or organizations in which the Strategic
Software nominees have conducted their principal occupation or employment was a
parent, subsidiary or other affiliate of the Company, and the Strategic Software
nominees do not hold any position or office with the Company or have any family
relationship with any executive officer or director of the Company or have been
involved in any proceedings, legal or otherwise, of the type required to be
disclosed by the rules governing this solicitation.
Strategic Software has agreed to pay each Strategic Software nominee
any out-of-pocket expenses and/or losses incurred by such nominee that arise
from investigating or defending any claim brought against him with respect to
actions taken in connection with the solicitation of proxies to which this proxy
statement relates, other than claims resulting from the nominee's bad faith,
willful misconduct or gross negligence.
Each of the Strategic Software nominees, if elected, will be entitled
to receive compensation customarily paid by the Company to its independent
directors, which compensation is described in the preliminary proxy statement
with respect to the 2003 Annual Meeting of Stockholders of the Company filed by
the Company on March 27, 2003.
We have no reason to believe that any of the Strategic Software
nominees will be disqualified or unwilling or unable to serve if elected.
Strategic Software reserves the right to nominate substitute persons if Mercator
makes or announces any changes to its By-laws or takes or announces any other
action that has, or if consummated would have, the effect of disqualifying any
of the Strategic Software nominees. In addition, if any additional directorships
are to be voted upon at the 2003 Annual Meeting, Strategic Software reserves the
right to nominate additional persons to fill the added positions. In any event,
Strategic Software will nominate persons to fill, at most, one fewer than the
total number of directorships up for election at the 2003 Annual Meeting. Shares
represented by proxies given to us will be voted for any substitute or
additional nominees of Strategic Software.
Pursuant to documents previously filed with the Securities and Exchange
Commission, the election of the Strategic Software nominees at the 2003 Annual
Meeting may trigger certain change of control provisions. There can be no
assurance that the Company will not experience adverse consequences in the event
that four or more of the Strategic Software nominees are elected.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
No Strategic Software nominee has failed to file reports related to
Mercator that are required by Section 16(a) of the Securities Exchange Act of
1934, as amended.
WE URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED BLUE PROXY CARD (AND
NOT TO RETURN ANY PROXY CARD SENT TO YOU BY MERCATOR) TO HELP US PURSUE THE
STRATEGIC SOFTWARE PLAN.
* * * * * * *
STRATEGIC SOFTWARE STRONGLY BELIEVES THAT IT IS IN THE BEST INTEREST OF
STOCKHOLDERS TO ELECT THE STRATEGIC SOFTWARE NOMINEES AT THE 2003
ANNUAL MEETING.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
WE STRONGLY RECOMMEND THAT YOU VOTE "FOR" THE ELECTION OF THE
STRATEGIC SOFTWARE NOMINEES AND TO REPEAL ANY NEW BY-LAWS OR
AMENDMENTS TO EXISTING BY-LAWS ADOPTED BY THE BOARD OF DIRECTORS ON
OR SINCE MARCH 14, 2003 BY SIGNING, DATING AND RETURNING THE BLUE PROXY
CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE TODAY!
* * * * * *
VOTING PROCEDURES
HOW DO I VOTE IN PERSON?
If you owned Mercator common stock on the record date, April 7, 2003,
you may attend the 2003 Annual Meeting and vote in person. If you are not the
record holder of your shares, please refer to the discussion following the
question "What if I am not the record holder of my shares?" If you hold your
shares in the name of a bank or broker, you will not be able to vote in person
at the Annual Meeting, unless you have previously specially requested and
obtained a `legal proxy" from your bank or broker and present it at the Annual
Meeting.
HOW DO I VOTE BY PROXY?
To vote by proxy, you should complete, sign and date the enclosed BLUE
proxy card and return it to Innisfree M&A Incorporated promptly in the enclosed
postage-paid envelope.
To be able to vote your shares in accordance with your instructions at
the 2003 Annual Meeting, we must receive your proxy as soon as possible but in
any event prior to their being voted at the meeting.
WHAT IF I AM NOT THE RECORD HOLDER OF MY SHARES?
If your shares are held in the name of a brokerage firm, bank nominee
or other institution ("Custodian"), only it can give a proxy with respect to
your shares. You may have received either a blank, executed proxy card from your
Custodian (which you can complete and send directly to Strategic Software) or an
instruction card (which you can complete and return to the Custodian to direct
its voting of your shares). If your Custodian has not sent you either a blank,
executed proxy card or an instruction card, you may contact the Custodian
directly to provide it with instructions. If you need assistance, please contact
our solicitor, Innisfree M&A Incorporated, toll-free at 1-888-750-5834.
If your shares are held in the name of a Custodian, and want to vote in
person at the 2003 Annual Meeting, you may specially request a document called a
"legal proxy" from the Custodian and bring it to the 2003 Annual Meeting. If you
need assistance, please contact our solicitor, Innisfree M&A Incorporated,
toll-free at 1-888-750-5834.
WHAT SHOULD I DO IF I RECEIVE A WHITE PROXY CARD?
Proxies on the white proxy card are being solicited by the incumbent
board of directors of Mercator. If you submit a proxy to us by signing and
returning the enclosed BLUE proxy card, do not sign or return the white proxy
card or follow any voting instructions provided by Mercator unless you intend to
change your vote, because only your latest-dated proxy will be counted.
If you have already sent a white proxy card to Mercator, you may revoke
it and provide your support to the Strategic Software nominees by signing,
dating and returning the enclosed BLUE proxy card.
WHAT IF I WANT TO REVOKE MY PROXY?
If you give a proxy, you may revoke it at any time before it is voted
on your behalf. You may do so in three ways:
o By delivering a later-dated proxy to either Innisfree M&A
Incorporated or the secretary of Mercator; or
o By delivering a written notice of revocation to either Innisfree
M&A Incorporated or the secretary of Mercator; or
o By voting in person at the 2003 Annual Meeting.
If you choose to revoke a proxy by giving written notice or a
later-dated proxy to the secretary of Mercator, we would appreciate if you would
assist us in representing the interests of stockholders on an informed basis by
sending us a copy of your revocation of proxy or by calling Innisfree M&A
Incorporated toll-free at 1-888-750-5834. REMEMBER, YOUR LATEST-DATED PROXY IS
THE ONLY ONE THAT COUNTS.
IF I PLAN TO ATTEND THE 2003 ANNUAL MEETING, SHOULD I STILL SUBMIT A PROXY?
Whether you plan to attend the 2003 Annual Meeting or not, we urge you
to submit a BLUE proxy. Returning the enclosed proxy card will not affect your
right to attend the 2003 Annual Meeting and vote.
WHO CAN VOTE?
You are eligible to vote or to execute a proxy only if you owned
Mercator common stock on the record date for the 2003 Annual Meeting, April 7,
2003. Even if you sell your shares after the record date, you will retain the
right to execute a proxy in connection with the 2003 Annual Meeting. It is
important that you grant a proxy regarding shares you held on the record date,
or vote those shares in person, even if you no longer own those shares. Based
upon the proxy statement filed by Mercator on _____ , 2003, shares of Mercator
common stock were outstanding on the record date for the 2003 Annual Meeting.
HOW MANY VOTES DO I HAVE?
With respect to each matter to be considered at the 2003 Annual
Meeting, each stockholder will have one vote for each share of Mercator common
stock held by it on the record date. Based on documents publicly filed by the
Company, the Company has no outstanding voting securities other than its common
stock.
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HOW WILL MY SHARES BE VOTED?
If you give a proxy on the accompanying BLUE proxy card, your shares
will be voted as you direct. If you submit a proxy to us without instructions,
our representatives will vote your shares in favor of our nominees. Submitting a
BLUE proxy card will entitle our representatives to vote your shares in
accordance with their discretion on matters not described in this proxy
statement that may arise at the 2003 Annual Meeting.
Unless a proxy specifies otherwise, it will be presumed to relate to
all shares held of record on the record date by the person who submitted it.
WHAT IS A QUORUM AND WHY IS IT NECESSARY?
Conducting business at the 2003 Annual Meeting requires a quorum. For a
quorum to exist, stockholders representing a majority of the votes eligible to
be cast must be present in person or represented by proxy. Under the Delaware
General Corporation Law, Mercator's certificate of incorporation and By-laws,
abstentions and broker non-votes are treated as present for purposes of
determining whether a quorum exists.
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL AND HOW WILL VOTES BE COUNTED?
If a quorum is present, directors will be elected by a plurality of the
votes cast. This means that the seven nominees receiving the highest number of
votes will be elected as directors. Accordingly, abstentions and broker
non-votes do not have the effect of a vote against the election of any nominees.
Stockholders do not have the right to cumulate their votes.
Each proposal other than the election of directors will be adopted if
a majority of the shares represented at the meeting and entitled to vote on the
proposal are voted in its favor. Accordingly, abstentions on each such proposal
will have the same effect as a vote against the proposal. Broker non-votes will
not have the effect of a vote for or against any such proposal.
HOW CAN I RECEIVE MORE INFORMATION?
If you have any questions about giving your proxy or about our
solicitation, or if you require assistance, please call Innisfree M&A
Incorporated, toll-free at 1-888-750-5834.
REPEAL OF BY-LAW PROVISIONS
Strategic Software urges you to vote for the proposal to repeal any new
by-laws or amendments to existing By-laws adopted without a stockholder vote by
the board of directors on or since March 14, 2003, and before the 2003 Annual
Meeting. The purpose of this proposal is to restrain the board of directors from
using new by-laws or amended By-laws to prevent the stockholders from
accomplishing the objectives described in this proxy statement.
While the purpose of this proposal is only to prevent the frustration
of the objectives described in this proxy statement, the approval of this
proposal may result in the unintentional, temporary repeal of by-laws that are
beneficial to or favored by stockholders. However, such a consequence is
unlikely because Mercator, in its preliminary proxy statement filed with the
Commission on March 27, 2003, indicated that it did not intend to amend any of
its By-laws before the 2003 Annual Meeting. In the event that the passing of
this proposal results in the unintended repeal of any by-law that is unrelated
to preventing stockholders from accomplishing the objectives described in this
Proxy Statement, the Strategic Software nominees, upon their election, will, in
their sole discretion, reinstate such by-law.
OTHER MATTERS TO BE VOTED ON
This proxy solicitation is being made by Strategic Software and not on
behalf of the board of directors or management of the Company. The Company has
indicated in its preliminary proxy statement filed with the SEC on March 27,
2003, that it intends to ask stockholders at the Annual Meeting to consider and
vote upon a proposal to ratify the selection of KPMG LLP as the Company's
independent accountants for the fiscal year ending December 31, 2003. Strategic
Software recommends a vote "FOR" the proposal to ratify the selection of KPMG
LLP as the Company's independent accountants. Strategic Software is not aware of
any other matters to be brought before the Company's 2003 annual meeting.
The Company's proxy statement relating to the 2003 Annual Meeting
contains information regarding (1) securities ownership of certain beneficial
owners and management of the Company; (2) the committees of the board of
directors; (3) the meetings of the board of directors and all committees
thereof; (4) the business background and employment biographies of the Company's
nominees for election to the board of directors; (5) the compensation and
remuneration paid and payable to the Company's directors and management; and (6)
the Company's stock price performance in relation to an assumed group of "peers"
or market-based indices. The Company's stockholders are referred to the
Company's definitive proxy statement in connection with the 2003 Annual Meeting
for this information.
SOLICITATION OF PROXIES
The solicitation to which this proxy statement relates is being made by
Strategic Software. Strategic Software may solicit proxies in person and by
mail, press release, advertisement, telephone, telecopier, telegraph, electronic
mail and web page publication. No person identified above has or will receive
compensation for soliciting proxies.
Strategic Software will ask banks, brokers, custodians, nominees, other
institutional holders and other fiduciaries to forward all soliciting materials
to the beneficial owners of the shares that those institutions hold of record.
Strategic Software will reimburse those institutions for reasonable expenses
that they incur in connection with forwarding our materials.
Strategic Software has retained Innisfree M&A Incorporated to solicit
proxies on its behalf in connection with the 2003 Annual Meeting. Innisfree M&A
Incorporated may solicit proxies from individuals, banks, brokers, custodians,
nominees, other institutional holders and other fiduciaries and will employ
approximately 40 people in its efforts. Strategic Software has agreed to
reimburse Innisfree M&A Incorporated for its reasonable expenses, to indemnify
it against certain losses, costs and expenses, and to pay it fees not to exceed
$115,000. The agreement between Strategic Software and Innisfree M&A
Incorporated may be extended for an additional fee.
The entire expense of our proxy solicitation is being borne by
Strategic Software. Strategic Software may, particularly if the Strategic
Software nominees are elected to the Company's board of directors, seek
reimbursement of our expenses from the Company. Strategic Software does not
intend to seek stockholder approval of any such reimbursement.
In addition to the costs related to the engagement of Innisfree M&A
Incorporated, costs related to our solicitation of proxies include expenditures
for printing, postage, legal services and other related items. Total
expenditures are expected to be approximately $475,000. Total payment of costs
to date in furtherance of our proxy solicitation is approximately $225,000.
STOCKHOLDER PROPOSALS FOR 2004 ANNUAL MEETING
To be included in Mercator's proxy statement for the 2004 annual
meeting of Mercator stockholders (the "2004 Meeting"), a proposal by a
stockholder must generally be received at the Company's principal executive
offices not less than 120 calendar days before the anniversary of the date on
which the Company mails its proxy statement in connection with the 2003 Annual
Meeting. However, if the 2004 Meeting is more than 30 days from the first
anniversary of the 2003 Annual Meeting, the deadline for submitting a proposal
is a reasonable time before the Company begins to print and mail its proxy
materials for the 2004 Meeting.
In addition, the Company's By-laws require advance notice for any
stockholder nomination or proposal in connection with any annual or special
meeting of stockholders. Under the Company's By-laws, proposals for the 2004
Meeting generally must be received by the Company at its principal executive
offices not fewer than 60 or more than 90 days before the first anniversary of
the 2003 Annual Meeting. However, if the 2004 Meeting is more than 30 days
before or 60 days after the first anniversary of the 2003 Annual Meeting, such
proposal must be delivered not earlier than the close of business on the 90th
day prior to the 2004 Meeting and not later than the close of business on the
60th day prior to the 2004 Meeting or the close of business on the 10th day
following the date that the 2004 Meeting is publicly disclosed.
INFORMATION REGARDING THE PARTICIPANTS
Strategic Software and the Strategic Software nominees are participants
in Strategic Software's solicitation of proxies for the 2003 Annual Meeting
within the meaning of the federal securities laws. Additional information
related to Strategic Software, including its beneficial ownership of Mercator
common stock, is set forth on Annex A to this proxy statement and is
incorporated into this proxy statement by reference. None of the participants is
party to any commercial dealing with Mercator or its subsidiaries that is
required to be discussed in this proxy statement by the federal securities laws.
Information in this proxy statement about each participant was provided by that
participant.
INFORMATION REGARDING THE COMPANY
The information concerning the Company contained in this proxy
statement and the annexes hereto has been taken from or is based upon documents
and records on file with the SEC and other publicly available information.
Strategic Software has no knowledge that would indicate that statements relating
to the Company contained in this proxy statement in reliance upon publicly
available information are inaccurate or incomplete. Strategic Software, however,
has not been given access to the books and records of the Company, was not
involved in the preparation of such information and statements, and is not in a
position to verify, or make any representation with respect to the accuracy or
completeness of, any such information or statements.
Annex B sets forth information obtained from Mercator's public filings
related to the beneficial ownership of Mercator common stock and is incorporated
in this proxy statement by reference.
* * * * * *
WE URGE YOU TO VOTE YOUR SHARES IN FAVOR OF THE STRATEGIC SOFTWARE
NOMINEES BY SIGNING, DATING AND RETURNING TO INNISFREE M&A INCORPORATED THE
ENCLOSED BLUE PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
Questions or requests for additional copies of this proxy statement
should be directed to:
INNISFREE M&A INCORPORATED
501 MADISON AVENUE
20TH FLOOR
NEW YORK, NY 10022
TOLL FREE: 1-888-750-5834
Date: April __, 2003 By:
-----------------------
Rodney Bienvenu
Chairman and CEO
ANNEX A
INFORMATION REGARDING STRATEGIC SOFTWARE AND OTHER
PARTICIPANTS IN ITS SOLICITATION OF PROXIES
Strategic Software, Broken Arrow I, L.P. and the Strategic Software
nominees are participants (the "Participants" and, each, a "Participant") in the
solicitation of proxies in support of electing the Strategic Software nominees
to the board of directors of Mercator. The Strategic Software nominees are
Rodney Bienvenu, Peter J. Boni, Daniel Hoogterp, Edward Sanchez, Jr., Sean P.
Sears and Michael R. Wodopian.
Strategic Software is a Connecticut limited liability company and an
investment firm that makes equity investments and acquisitions on behalf of
itself and its investors. Strategic Software is the general partner of Broken
Arrow I, L.P., a Delaware limited partnership, which is principally engaged in
the business of investing and holding securities in various entities. The
principal place of business of both Strategic Software and Broken Arrow I, L.P.
is 1465 East Post Road, Second Floor, Westport, Connecticut 06880.
SECURITY OWNERSHIP
The number of shares of the Company's common stock beneficially owned
and percentage beneficial ownership of each Participant, other than the
Strategic Software nominees whose common stock ownership is set forth in the
proxy statement to which this annex is attached, as of the date of this proxy
statement are as follows:
NAME NUMBER OF SHARES PERCENTAGE
BENEFICIALLY OWNED (1), (2) OWNERSHIP(3)
--------------------------- ------------------------------- ----------------
Strategic Software (4) 1,672,500 4.76%
(1) Beneficial ownership is determined in accordance with the rules of the
SEC and generally includes voting or investment power with respect to
securities. Shares of common stock subject to stock options and
warrants currently exercisable or exercisable within 60 days are deemed
outstanding for purposes of computing the percentage ownership of any
group of which the holder is a member, but are not deemed outstanding
for computing the percentage ownership of any other person. Except as
indicated by footnote, and subject to community property laws where
applicable, the persons named in the table have sole voting and
investment power with respect to all shares of common stock shown as
beneficially owned by them.
(2) Under the rules of the SEC, the Strategic Software nominees may be
deemed to be members of a group and, as a result, each Strategic
Software nominee may be deemed to beneficially own shares of common
stock beneficially owned by each of the other Strategic Software
nominees. Each of the Strategic Software nominees disclaims beneficial
ownership of the shares of common stock beneficially owned by any of
the other Strategic Software nominees.
(3) Calculated based on 35,143,082 shares of common stock outstanding as of
March 23, 2003, as reported in the Company's preliminary proxy
statement filed with the SEC on March 27, 2003.
(4) Represents shares beneficially owned by Broken Arrow I, L.P. Strategic
Software shares the power to determine how to vote and whether or not
to dispose of such shares, along with Empire Capital Partners, L.P., a
Delaware limited partnership ("Empire Capital"), due to its right to
appoint a member of the Investment Committee of Broken Arrow I, and
thus may be deemed to be the beneficial owner of such shares. Empire
Capital is the majority limited partner of Broken Arrow I and also owns
25% of Strategic Software. Empire Capital is not soliciting any proxies
in connection with this proxy solicitation, nor is it providing any
support for this proxy solicitation. In addition to the shares held
beneficially by Strategic Software, which may also be deemed to be
beneficially held by Empire Capital, Empire Capital beneficially owns
906,900 shares held by Charter Oak Partners, L.P, a private investment
limited partnership, a portion of whose assets Empire Capital manages
pursuant to a discretionary investment management agreement.
No Participant and no associate of any Participant (within the meaning
of the federal proxy rules) beneficially owns any securities of Mercator other
than common stock (and the accompanying rights under Mercator's rights
agreement) and the options described above or in the proxy statement to which
this annex is attached. No Participant beneficially owns any securities of any
parent or subsidiary of Mercator. No Participant has record but not beneficial
ownership with respect to any securities of Mercator.
TRANSACTIONS IN MERCATOR SECURITIES
Other than the transactions described below, no Participant has
purchased or sold any securities of Mercator in the past two years.
TRANSACTIONS IN MERCATOR
COMMON STOCK BY PARTICIPANTS
----------------------------
DATE OF NATURE OF NUMBER OF SHARES OF
NAME OF PARTICIPANT TRANSACTION TRANSACTION MERCATOR COMMON STOCK
------------------- ----------- ----------- ---------------------
Broken Arrow I 11/19/02 Purchase 2,000,000
Broken Arrow I 12/13/02 Purchase 25,000
Broken Arrow I 12/13/02 Purchase 7,800
Broken Arrow I 12/13/02 Purchase 5,000
Broken Arrow I 12/13/02 Purchase 12,200
Broken Arrow I 12/23/02 Purchase 30,000
Broken Arrow I 01/23/03 Sell 10,000
Broken Arrow I 01/23/03 Sell 15,000
Broken Arrow I 01/24/03 Sell 3,200
Broken Arrow I 01/24/03 Sell 3,700
Broken Arrow I 01/24/03 Sell 6,300
Broken Arrow I 01/24/03 Sell 10,000
Broken Arrow I 01/24/03 Sell 10,000
Broken Arrow I 01/24/03 Sell 10,000
Broken Arrow I 01/24/03 Sell 15,000
Broken Arrow I 01/24/03 Sell 20,900
Broken Arrow I 01/24/03 Sell 20,900
Broken Arrow I 01/28/03 Sell 7,500
Broken Arrow I 01/29/03 Sell 5,000
Broken Arrow I 01/30/03 Sell 3,000
Broken Arrow I 01/30/03 Sell 10,000
Broken Arrow I 01/30/03 Sell 17,000
Broken Arrow I 01/30/03 Sell 80,000
Broken Arrow I 01/31/03 Sell 200
Broken Arrow I 01/31/03 Sell 1,100
Broken Arrow I 01/31/03 Sell 2,300
Broken Arrow I 01/31/03 Sell 4,100
Broken Arrow I 01/31/03 Sell 4,200
Broken Arrow I 01/31/03 Sell 5,000
Broken Arrow I 01/31/03 Sell 5,000
Broken Arrow I 01/31/03 Sell 5,100
Broken Arrow I 01/31/03 Sell 5,400
Broken Arrow I 01/31/03 Sell 7,500
Broken Arrow I 01/31/03 Sell 16,300
Broken Arrow I 01/31/03 Sell 26,300
Broken Arrow I 02/03/03 Sell 40,000
Broken Arrow I 02/03/03 Sell 34,500
Edward Sanchez, Jr. -- 10/16/2001 Sell 19,000
First New York Securities
Edward Sanchez, Jr. -- 10/17/2001 Sell 20,000
First New York Securities
Edward Sanchez, Jr. -- 10/18/2001 Sell 32,500
First New York Securities
Edward Sanchez, Jr. -- 10/19/2001 Sell 30,100
First New York Securities
Edward Sanchez, Jr. -- 10/24/2001 Sell 10,000
First New York Securities
Edward Sanchez, Jr. -- 10/25/2001 Sell 9,900
First New York Securities
Edward Sanchez, Jr. -- 10/26/2001 Sell 25,000
First New York Securities
Edward Sanchez, Jr. -- 10/30/2001 Sell 7,000
First New York Securities
Edward Sanchez, Jr. -- 11/08/2001 Sell 3,600
First New York Securities
Edward Sanchez, Jr. -- 11/08/2001 Sell 7,200
First New York Securities
Edward Sanchez, Jr. -- 11/08/2001 Sell 7,200
First New York Securities
Edward Sanchez, Jr. -- 11/16/2001 Purchase 20,000
First New York Securities
Edward Sanchez, Jr. -- 11/19/2001 Sell 10,000
First New York Securities
Edward Sanchez, Jr. -- 11/20/2001 Purchase 10,000
First New York Securities
Edward Sanchez, Jr. -- 11/26/2001 Purchase 10,000
First New York Securities
Edward Sanchez, Jr. -- 11/28/2001 Purchase 10,000
First New York Securities
Edward Sanchez, Jr. -- 11/29/2001 Sell 30,000
First New York Securities
Edward Sanchez, Jr. -- 11/30/2001 Purchase 15,000
First New York Securities
Edward Sanchez, Jr. -- 12/06/2001 Sell 5,500
First New York Securities
Edward Sanchez, Jr. -- 12/07/2001 Sell 9,500
First New York Securities
Edward Sanchez, Jr. -- 12/18/2001 Purchase 7,500
First New York Securities
Edward Sanchez, Jr. -- 12/20/2001 Purchase 4,000
First New York Securities
Edward Sanchez, Jr. -- 12/27/2001 Purchase 4,500
First New York Securities
Edward Sanchez, Jr. -- 12/28/2001 Purchase 5,000
First New York Securities
Edward Sanchez, Jr. -- 12/31/2001 Purchase 19,000
First New York Securities
Edward Sanchez, Jr. -- 01/03/2002 Sell 25,000
First New York Securities
Edward Sanchez, Jr. -- 01/07/2002 Purchase 6,000
First New York Securities
Edward Sanchez, Jr. -- 01/07/2002 Sell 6,000
First New York Securities
Edward Sanchez, Jr. -- 01/09/2002 Sell 25,000
First New York Securities
Edward Sanchez, Jr. -- 02/13/2002 Purchase 24,900
First New York Securities
Edward Sanchez, Jr. -- 02/13/2002 Sell 24,900
First New York Securities
Edward Sanchez, Jr. -- 01/06/2003 Purchase 10,000
First New York Securities
Edward Sanchez, Jr. -- 01/09/2003 Purchase 16,500
First New York Securities
Edward Sanchez, Jr. -- 01/10/2003 Sell 10,100
First New York Securities
Edward Sanchez, Jr. -- 01/17/2003 Sell 9,200
First New York Securities
Edward Sanchez, Jr. -- 02/05/2003 Sell 12,400
First New York Securities
Edward Sanchez, Jr. -- 02/05/2003 Purchase 35,000
First New York Securities
Edward Sanchez, Jr. -- 02/06/2003 Sell 3,000
First New York Securities
Edward Sanchez, Jr. -- 02/07/2003 Sell 7,600
First New York Securities
Edward Sanchez, Jr. -- 09/10/2001 Purchase 50,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 09/17/2001 Purchase 10,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 09/18/2001 Purchase 15,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 09/19/2001 Purchase 5,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 09/19/2001 Purchase 75,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 11/02/2001 Sell 125,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 11/05/2001 Sell 25,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 11/06/2001 Sell 5,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 11/08/2001 Sell 52,800
ES Capital Partners LP
Edward Sanchez, Jr. -- 11/09/2001 Sell 22,700
ES Capital Partners LP
Edward Sanchez, Jr. -- 11/13/2001 Sell 52,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 11/14/2001 Sell 10,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 11/15/2001 Sell 21,400
ES Capital Partners LP
Edward Sanchez, Jr. -- 11/15/2001 Purchase 100
ES Capital Partners LP
Edward Sanchez, Jr. -- 11/19/2001 Purchase 18,800
ES Capital Partners LP
Edward Sanchez, Jr. -- 11/21/2001 Purchase 12,500
ES Capital Partners LP
Edward Sanchez, Jr. -- 11/26/2001 Purchase 35,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 11/30/2001 Purchase 15,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 12/04/2001 Sell 25,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 12/05/2001 Sell 47,500
ES Capital Partners LP
Edward Sanchez, Jr. -- 12/06/2001 Purchase 15,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 12/12/2001 Sell 15,100
ES Capital Partners LP
Edward Sanchez, Jr. -- 12/13/2001 Sell 19,400
ES Capital Partners LP
Edward Sanchez, Jr. -- 12/14/2001 Sell 90,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 12/28/2001 Sell 500
ES Capital Partners LP
Edward Sanchez, Jr. -- 12/31/2001 Purchase 15,400
ES Capital Partners LP
Edward Sanchez, Jr. -- 01/03/2002 Sell 25,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 01/08/2002 Sell 10,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 01/09/2002 Sell 35,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 01/11/2002 Sell 35,400
ES Capital Partners LP
Edward Sanchez, Jr. -- 04/04/2002 Sell 69,600
ES Capital Partners LP
Edward Sanchez, Jr. -- 04/11/2002 Sell 38
ES Capital Partners LP
Edward Sanchez, Jr. -- 04/25/2002 Purchase 25,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 04/26/2002 Purchase 2,500
ES Capital Partners LP
Edward Sanchez, Jr. -- 04/29/2002 Purchase 7,500
ES Capital Partners LP
Edward Sanchez, Jr. -- 05/08/2002 Sell 15,700
ES Capital Partners LP
Edward Sanchez, Jr. -- 05/09/2002 Sell 800
ES Capital Partners LP
Edward Sanchez, Jr. -- 05/23/2002 Sell 6,800
ES Capital Partners LP
Edward Sanchez, Jr. -- 05/28/2002 Sell 3,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 06/28/2002 Sell 5,800
ES Capital Partners LP
Edward Sanchez, Jr. -- 10/10/2002 Purchase 10,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 10/15/2002 Sell 12,900
ES Capital Partners LP
Edward Sanchez, Jr. -- 01/06/2003 Purchase 10,000
ES Capital Partners LP
Edward Sanchez, Jr. -- 01/13/2003 Sell 10,000
ES Capital Partners LP
Edward Sanchez, Jr. 07/26/2001 Purchase 10,500
Edward Sanchez, Jr. 07/26/2001 Purchase 3,500
Edward Sanchez, Jr. 07/27/2001 Purchase 3,500
Edward Sanchez, Jr. 07/27/2001 Purchase 2,000
Edward Sanchez, Jr. 07/27/2001 Purchase 500
Edward Sanchez, Jr. 07/27/2001 Purchase 3,000
Edward Sanchez, Jr. 07/27/2001 Purchase 600
Edward Sanchez, Jr. 07/30/2001 Purchase 1,400
Edward Sanchez, Jr. 07/31/2001 Purchase 13,400
Edward Sanchez, Jr. 07/31/2001 Purchase 3,500
Edward Sanchez, Jr. 07/31/2001 Purchase 1,000
Edward Sanchez, Jr. 07/31/2001 Purchase 100
Edward Sanchez, Jr. 08/29/2001 Purchase 2,000
Edward Sanchez, Jr. 08/29/2001 Purchase 5,900
Edward Sanchez, Jr. 08/29/2001 Purchase 1,100
Edward Sanchez, Jr. 08/29/2001 Purchase 500
Edward Sanchez, Jr. 08/29/2001 Purchase 500
Edward Sanchez, Jr. 08/31/2001 Purchase 6,100
Edward Sanchez, Jr. 08/31/2001 Purchase 3,000
Edward Sanchez, Jr. 08/31/2001 Purchase 2,000
Edward Sanchez, Jr. 09/04/2001 Purchase 5,900
Edward Sanchez, Jr. 09/04/2001 Purchase 5,000
Edward Sanchez, Jr. 09/05/2001 Purchase 7,900
Edward Sanchez, Jr. 09/05/2001 Purchase 1,100
Edward Sanchez, Jr. 09/05/2001 Purchase 500
Edward Sanchez, Jr. 09/05/2001 Purchase 500
Edward Sanchez, Jr. 09/07/2001 Purchase 9,500
Edward Sanchez, Jr. 09/07/2001 Purchase 3,000
Edward Sanchez, Jr. 09/07/2001 Purchase 1,200
Edward Sanchez, Jr. 09/07/2001 Purchase 800
Edward Sanchez, Jr. 09/07/2001 Purchase 500
Edward Sanchez, Jr. 09/17/2001 Purchase 11,400
Edward Sanchez, Jr. 09/17/2001 Purchase 6,100
Edward Sanchez, Jr. 09/17/2001 Purchase 2,000
Edward Sanchez, Jr. 09/17/2001 Purchase 500
Edward Sanchez, Jr. 10/11/2001 Sell 10,500
Edward Sanchez, Jr. 10/11/2001 Sell 3,500
Edward Sanchez, Jr. 10/11/2001 Sell 3,500
Edward Sanchez, Jr. 10/11/2001 Sell 2,000
Edward Sanchez, Jr. 10/11/2001 Sell 500
Edward Sanchez, Jr. 10/16/2001 Sell 3,000
Edward Sanchez, Jr. 10/16/2001 Sell 600
Edward Sanchez, Jr. 10/16/2001 Sell 1,400
Edward Sanchez, Jr. 10/16/2001 Sell 13,400
Edward Sanchez, Jr. 10/16/2001 Sell 3,500
Edward Sanchez, Jr. 10/16/2001 Sell 1,000
Edward Sanchez, Jr. 10/16/2001 Sell 100
Edward Sanchez, Jr. 10/16/2001 Sell 2,000
Edward Sanchez, Jr. 10/23/2001 Purchase 6,100
Edward Sanchez, Jr. 10/23/2001 Purchase 1,000
Edward Sanchez, Jr. 10/23/2001 Purchase 500
Edward Sanchez, Jr. 10/23/2001 Purchase 9,900
Edward Sanchez, Jr. 10/23/2001 Purchase 3,700
Edward Sanchez, Jr. 10/23/2001 Purchase 1,400
Edward Sanchez, Jr. 10/23/2001 Purchase 1,400
Edward Sanchez, Jr. 10/23/2001 Purchase 1,000
Edward Sanchez, Jr. 10/25/2001 Sell 5,900
Edward Sanchez, Jr. 10/25/2001 Sell 1,100
Edward Sanchez, Jr. 10/25/2001 Sell 500
Edward Sanchez, Jr. 10/25/2001 Sell 500
Edward Sanchez, Jr. 10/25/2001 Sell 6,100
Edward Sanchez, Jr. 10/25/2001 Sell 3,000
Edward Sanchez, Jr. 10/25/2001 Sell 2,000
Edward Sanchez, Jr. 10/25/2001 Sell 5,900
Edward Sanchez, Jr. 10/26/2001 Sell 5,000
Edward Sanchez, Jr. 10/26/2001 Sell 7,900
Edward Sanchez, Jr. 10/26/2001 Sell 1,100
Edward Sanchez, Jr. 10/26/2001 Sell 500
Edward Sanchez, Jr. 10/26/2001 Sell 500
Edward Sanchez, Jr. 10/26/2001 Sell 9,500
Edward Sanchez, Jr. 10/26/2001 Sell 3,000
Edward Sanchez, Jr. 10/26/2001 Sell 1,200
Edward Sanchez, Jr. 10/26/2001 Sell 800
Edward Sanchez, Jr. 10/26/2001 Sell 500
Edward Sanchez, Jr. 10/26/2001 Sell 11,400
Edward Sanchez, Jr. 10/26/2001 Sell 6,100
Edward Sanchez, Jr. 10/26/2001 Sell 2,000
Edward Sanchez, Jr. 10/26/2001 Sell 500
Edward Sanchez, Jr. 10/29/2001 Purchase 4,500
Edward Sanchez, Jr. 10/29/2001 Purchase 1,500
Edward Sanchez, Jr. 10/29/2001 Purchase 600
Edward Sanchez, Jr. 10/29/2001 Purchase 400
Edward Sanchez, Jr. 10/30/2001 Sell 6,100
Edward Sanchez, Jr. 10/30/2001 Sell 1,000
Edward Sanchez, Jr. 10/30/2001 Sell 500
Edward Sanchez, Jr. 11/06/2001 Purchase 600
Edward Sanchez, Jr. 11/06/2001 Purchase 7,400
Edward Sanchez, Jr. 11/06/2001 Purchase 2,600
Edward Sanchez, Jr. 11/06/2001 Purchase 4,400
Edward Sanchez, Jr. 11/06/2001 Purchase 5,600
Edward Sanchez, Jr. 11/06/2001 Purchase 400
Edward Sanchez, Jr. 11/06/2001 Purchase 1,900
Edward Sanchez, Jr. 11/06/2001 Purchase 1,000
Edward Sanchez, Jr. 11/06/2001 Purchase 900
Edward Sanchez, Jr. 11/06/2001 Purchase 800
Edward Sanchez, Jr. 11/09/2001 Sell 9,900
Edward Sanchez, Jr. 11/09/2001 Sell 3,700
Edward Sanchez, Jr. 11/09/2001 Sell 1,400
Edward Sanchez, Jr. 11/13/2001 Sell 1,400
Edward Sanchez, Jr. 11/13/2001 Sell 1,000
Edward Sanchez, Jr. 11/13/2001 Sell 4,500
Edward Sanchez, Jr. 11/13/2001 Sell 1,500
Edward Sanchez, Jr. 11/13/2001 Sell 600
Edward Sanchez, Jr. 11/13/2001 Sell 400
Edward Sanchez, Jr. 11/13/2001 Sell 600
Edward Sanchez, Jr. 11/16/2001 Purchase 17,950
Edward Sanchez, Jr. 11/16/2001 Purchase 3,050
Edward Sanchez, Jr. 11/16/2001 Purchase 3,000
Edward Sanchez, Jr. 11/16/2001 Purchase 500
Edward Sanchez, Jr. 11/16/2001 Purchase 400
Edward Sanchez, Jr. 11/16/2001 Purchase 100
Edward Sanchez, Jr. 11/19/2001 Purchase 18,900
Edward Sanchez, Jr. 11/19/2001 Purchase 3,100
Edward Sanchez, Jr. 11/19/2001 Purchase 1,900
Edward Sanchez, Jr. 11/19/2001 Purchase 100
Edward Sanchez, Jr. 11/19/2001 Purchase 400
Edward Sanchez, Jr. 11/19/2001 Purchase 100
Edward Sanchez, Jr. 11/19/2001 Purchase 200
Edward Sanchez, Jr. 11/19/2001 Purchase 200
Edward Sanchez, Jr. 11/19/2001 Purchase 100
Edward Sanchez, Jr. 12/04/2001 Sell 7,400
Edward Sanchez, Jr. 12/04/2001 Sell 2,600
Edward Sanchez, Jr. 12/04/2001 Sell 4,400
Edward Sanchez, Jr. 12/04/2001 Sell 5,600
Edward Sanchez, Jr. 12/05/2001 Sell 400
Edward Sanchez, Jr. 12/05/2001 Sell 1,900
Edward Sanchez, Jr. 12/05/2001 Sell 1,000
Edward Sanchez, Jr. 12/05/2001 Sell 900
Edward Sanchez, Jr. 12/05/2001 Sell 800
Edward Sanchez, Jr. 12/12/2001 Sell 17,950
Edward Sanchez, Jr. 12/12/2001 Sell 3,050
Edward Sanchez, Jr. 12/12/2001 Sell 3,000
Edward Sanchez, Jr. 12/12/2001 Sell 500
Edward Sanchez, Jr. 12/12/2001 Sell 400
Edward Sanchez, Jr. 12/12/2001 Sell 100
Edward Sanchez, Jr. 12/28/2001 Sell 18,900
Edward Sanchez, Jr. 12/28/2001 Sell 3,100
Edward Sanchez, Jr. 12/28/2001 Sell 1,900
Edward Sanchez, Jr. 12/28/2001 Sell 100
Edward Sanchez, Jr. 12/28/2001 Sell 400
Edward Sanchez, Jr. 12/28/2001 Sell 100
Edward Sanchez, Jr. 12/28/2001 Sell 200
Edward Sanchez, Jr. 12/28/2001 Sell 200
Edward Sanchez, Jr. 12/28/2001 Sell 100
Edward Sanchez, Jr. 01/04/02 Sell 7,600
Edward Sanchez, Jr. 01/04/02 Sell 4,000
Edward Sanchez, Jr. 01/04/02 Sell 1,200
Edward Sanchez, Jr. 01/04/02 Sell 500
Edward Sanchez, Jr. 01/04/02 Sell 500
Edward Sanchez, Jr. 01/04/02 Sell 400
Edward Sanchez, Jr. 01/04/02 Sell 300
Edward Sanchez, Jr. 01/04/02 Sell 300
Edward Sanchez, Jr. 01/04/02 Sell 100
Edward Sanchez, Jr. 01/04/02 Sell 100
Edward Sanchez, Jr. 01/08/02 Sell 8,200
Edward Sanchez, Jr. 01/08/02 Sell 1,800
Edward Sanchez, Jr. 01/09/02 Sell 10,000
Edward Sanchez, Jr. 01/11/02 Sell 8,000
Edward Sanchez, Jr. 01/15/02 Sell 7,000
Edward Sanchez, Jr. 01/16/02 Sell 9,100
Edward Sanchez, Jr. 01/16/02 Sell 8,900
Edward Sanchez, Jr. 01/16/02 Sell 5,100
Edward Sanchez, Jr. 01/16/02 Sell 800
Edward Sanchez, Jr. 01/16/02 Sell 600
Edward Sanchez, Jr. 01/16/02 Sell 500
Edward Sanchez, Jr. 01/1702 Sell 14,200
Edward Sanchez, Jr. 01/17/02 Sell 800
Edward Sanchez, Jr. 01/24/02 Sell 6,500
Edward Sanchez, Jr. 01/24/02 Sell 1,200
Edward Sanchez, Jr. 01/24/02 Sell 800
Edward Sanchez, Jr. 01/24/02 Sell 600
Edward Sanchez, Jr. 01/24/02 Sell 500
Edward Sanchez, Jr. 01/24/02 Sell 400
Edward Sanchez, Jr. 02/27/02 Sell 5,000
Edward Sanchez, Jr. 04/30/02 Sell 5,900
Edward Sanchez, Jr. 04/30/02 Sell 1,500
Edward Sanchez, Jr. 04/30/02 Sell 1,300
Edward Sanchez, Jr. 04/30/02 Sell 800
Edward Sanchez, Jr. 04/30/02 Sell 500
Edward Sanchez, Jr. 04/30/02 Sell 100
Sean Sears 11/06/2002 Sell 3,000
Sean Sears 11/08/2002 Sell 2,500
Sean Sears 11/26/2002 Sell 1,400
Sean Sears 12/27/2002 Sell 550
Sean Sears 01/28/2003 Sell 4,000
-----
ARRANGEMENTS, INTERESTS AND TRANSACTIONS
No Participant is, or was within the past year, a party to any
contract, arrangement or understanding with any person with respect to any
securities of Mercator, including, but not limited to, joint ventures, loan or
option arrangements, puts or calls, guarantees against loss or guarantees of
profit, division of losses or profits, or the giving or withholding of proxies.
No Participant, no associate of any Participant and no person who is a
party to any arrangement or understanding pursuant to which a Strategic Software
nominee is proposed to be elected has any arrangement or understanding with any
person with respect to any future employment by Mercator or its affiliates or
with respect to any future transactions to which Mercator or any of its
affiliates will or may be a party.
Participants who are Strategic Software nominees are expected to
receive customary compensation from Mercator in exchange for their services as
directors, if elected. The Strategic Software nominees also have an interest in
the solicitation through the agreements described in Strategic Software's proxy
statement under the heading "Strategic Software's Nominees -- Certain
Information About Our Nominees."
ANNEX B
INFORMATION REGARDING THE COMPANY
Based upon Mercator's annual report on Form 10-K for the fiscal year
ended December 31, 2002, the mailing address of the principal executive offices
of Mercator is 45 Danbury Road, Wilton, Connecticut 06897.
STOCK OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGMENT
Based upon Mercator's preliminary proxy statement on Schedule 14A with
respect to the 2003 annual meeting of stockholders, the following table sets
forth certain information with respect to the beneficial ownership of Mercator
common stock as of April 7, 2003 by: (i) each stockholder known by Strategic
Software to be the beneficial owner of more than 5% of the Company's common
stock; (ii) each director; (iii) the Company's current Chief Executive Officer,
each of the Company's four other most highly compensated executive officers; and
(iv) all directors and executive officers as a group. Except as otherwise
indicated in the footnotes to the table, the beneficial owners have sole voting
and investment power (subject to community property laws where applicable) as to
all of the shares beneficially owned by them.
NAME AND ADDRESS OF BENEFICIAL OWNER (1) AMOUNT AND NATURE OF PERCENT OF OUTSTANDING
BENEFICIAL OWNERSHIP COMMON STOCK (2)
------------------------------------------------- ------------------------------ ----------------------------
Ernest E. Keet 1,666,867 (3) 4.7%
Roy C. King 1,019,276 (4) 2.8%
Constance F. Galley 963,304 (5) 2.7%
James P. Schadt 598,457 (6) 1.7%
Kenneth J. Hall 408,486 (7) 1.1%
David S. Linthicum 339,979 (8) *
Mark W. Register 234,706 (9) *
Jill M. Donohoe 201,557 (10) *
Dennis G. Sisco 110,000 (11) *
Mark C. Stevens 60,000 (12) *
Michael E. Lehman 37,500 (13) *
Robert J. Farrell. -- --
Michael E. Wheeler -- --
All executive officers and directors as a group 5,982,524 (14) 15.4%
(17 persons)
* Less than 1%
(1) Except as otherwise noted, the address of record is c/o Mercator Software,
Inc., 45 Danbury Road, Wilton, CT 06897.
(2) Based upon a total of (i) 35,143,082 shares of common stock outstanding as
of March 25, 2003, and (ii) shares of common stock issuable pursuant to options
held by the respective person or group which may be exercised within 60 days of
April 7, 2003. Shares of common stock subject to options that are exercisable
within 60 days of April 7, 2003 are deemed to be outstanding and beneficially
owned by the person holding such options for the purpose of computing the
percentage ownership of such person but are not treated as outstanding for the
purpose of computing the percentage ownership of any other person.
(3) Consists of 98,000 shares of common stock subject to options currently
exercisable or exercisable within 60 days of April 7, 2003 held by Ernest E.
Keet, 250,000 shares of common stock held of record by Vanguard Atlantic Ltd.
("Vanguard"), 284,884 shares of common stock held of record by the Ernest E. &
Nancy R. Keet Foundation, 413,761 shares of common stock held of record by the
Ernest E. Keet Grantor Retained Annuity Trust, 499,136 shares of common stock
held of record by the Ernest E. & Nancy R. Keet Family Trust, and 121,086 shares
of common stock held of record by Mr. Keet. Mr. Keet exercises voting and
investment power with respect to the shares held by the Ernest E. & Nancy R.
Keet Foundation, the Ernest E. Keet Grantor Retained Annuity Trust, and the
Ernest E. & Nancy R. Keet Family Trust. Mr. Keet is the President of Vanguard
and exercises voting and investment power with respect to its shares of the
Company's common stock and may be deemed to beneficially own the shares owned by
such entity. Mr. Keet disclaims beneficial ownership of the shares held by
Vanguard, the Ernest E. & Nancy R. Keet Foundation, the Ernest E. & Nancy R.
Keet Family Trust, and by the Ernest E. Keet Grantor Retained Annuity Trust,
except to the extent of his pecuniary interest therein. The address of Mr. Keet
is c/o Vanguard, P.O. Box 1360, Saranac Lake, NY 12983.
(4) Consists of 931,249 shares of common stock subject to options currently
exercisable or exercisable within 60 days of April 7, 2003 and 88,027 shares of
common stock held of record by Mr. King.
(5) Includes 432,500 shares of common stock subject to options currently
exercisable or exercisable within 60 days of April 7, 2003, and 523,804 shares
of common stock held of record by Ms. Galley. Also includes 7,000 shares of
common stock owned by Ms. Galley's husband, Richard Galley, with respect to
which Ms. Galley disclaims beneficial ownership.
(6) Includes 543,500 shares of common stock subject to options currently
exercisable or exercisable within 60 days of April 7, 2003 and 47,957 shares of
common stock held of record by Mr. Schadt. Also includes 7,000 shares of common
stock held by Mr. Schadt's wife, Barbara Schadt, with respect to which Mr.
Schadt disclaims beneficial ownership.
(7) Consists of 382,353 shares of common stock subject to options currently
exercisable or exercisable within 60 days of April 7, 2003 and 26,133 shares of
common stock held of record by Mr. Hall.
(8) Consists of 332,693 shares of common stock subject to options currently
exercisable or exercisable within 60 days of April 7, 2003 and 7,286 shares of
common stock held of record by Mr. Linthicum.
(9) Consists of 223,669 shares of common stock subject to options currently
exercisable or exercisable within 60 days of April 7, 2003 and 11,037 shares of
common stock held of record by Mr. Register.
(10) Consists of 201,557 shares of common stock subject to options currently
exercisable or exercisable within 60 days of April 7, 2003.
(11) Consists of 95,000 shares of common stock subject to options currently
exercisable or exercisable within 60 days of April 7, 2003 and 15,000 shares of
common stock held of record by Mr. Sisco.
(12) Consists of 59,500 shares of common stock subject to options currently
exercisable or exercisable within 60 days of April 7, 2003 and 500 shares of
common stock held of record by The Stevens-Murphy Living Trust, of which Mr.
Stevens and his wife are Trustees.
(13) Consists of 17,500 shares of common stock subject to options currently
exercisable or exercisable within 60 days of April 7, 2003, and 20,000 shares of
common stock held of record by Mr. Lehman.
(14) Includes an aggregate of 3,647,317 shares of common stock subject to
options currently exercisable or exercisable within 60 days of April 7, 2003.