SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. 1)
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.
__________, 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 by the board of directors on or since March 14, 2003; 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 __________,
_________, 2003 at ______ a.m. Eastern Daylight Time at the __________________,
located at _________________. Mercator has set ________, 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 _______, 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.
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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.
In accordance with Mercator's amended and restated by-laws dated August
27, 1998 (the "By-laws"), Strategic Software has provided written notice to the
secretary of Mercator 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 shareholder in Mercator, with
beneficial ownership of 1,672,500 shares, more than twice the total number of
shares held directly by the current Directors of Mercator. 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 shareholders.
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 $1.33 per share as of March 12, 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 market position collapsed from 3rd to 10th between 1999 and
2001, and its Enterprise Application Integration (EAI) market share fell
from 10% to 4.7% over the same period;
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o Mercator's revenue has declined dramatically, down from $138.3 million to
$111.9 million in 3 years;
o Yet Mercator's research and development spend has been wasted, increasing
from 15% to 19% of revenue over the same time from 2000 to 2002.
[PERFORMANCE GRAPH 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
The board of directors and management of Mercator have watched and not
acted as the Company has wasted away. They are not focused on restoring
stockholder value. SSH, as Mercator's largest shareholder, asked company
directors in January 2003 to appoint an investment bank to explore options to
salvage value for Mercator stockholders, including the sale of the business.
Mercator's current board of directors refused.
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
shareholders 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.
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NAME AND BUSINESS ADDRESS AGE PRESENT PRINCIPAL OCCUPATION AND FIVE YEAR BUSINESS EXPERIENCE
Rodney Bienvenu 37 Mr. Bienvenu is currently Chairman and CEO of Strategic Software.
1465 Post Road East Prior to his current position, he served as Chief Planning Officer and
Westport, CT 06880 President, divine Software Services, a division of divine, inc., a
publicly traded software company. He was President and CEO of
SageMaker, Inc., a digital asset management provider, for more than
five years prior to 2001.
Peter J. Boni 57 Mr. Boni is currently Chairman & CEO of Surebridge, Inc., an outsourcer
10 Maguire Road, Suite 332 of software applications, IT infrastructure and business processes. He
Lexington, MA 02421 has over 20 years' experience as a high technology CEO. 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 until its acquisition by Sterling Software.
Previously, Mr. Boni served as president of the Software and
Information Services Group of Paramount Communications, Inc. (now
Viacom, Inc.).
Daniel Hoogterp 43 Mr. Hoogterp is founder and CEO of TQuist. Mr. Hoogterp also presently
3 Cherry Hill Circle, Suite serves as a technology advisor to several firms, including GlobalNet
102, Monroe, CT 06468 Venture Partners, LLC and ECS Energy, Inc. Prior to TQuist, he served
as EVP and Chief Technology Officer of Enamics, Inc., a provider of
Business Technology Management software. Prior to Enamics, he served as
CTO of SageMaker, Inc., an enterprise portal software firm. Prior to
SageMaker, Mr. Hoogterp was founder and CEO of Retrieval Technologies
Inc. (RTI), a real time news and multimedia product firm, which 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.
Edward Sanchez, Jr. 37 Mr. Sanchez wholly owns and controls ES Advisors LLC, a Delaware
150 E. 52nd St. 2nd Floor limited liability company established in 2001. ES Advisors LLC is the
New York, NY 10022 General Partner for ES Capital Partners LLP, a technology investment
fund. For more than five years prior to the formation of ES Advisors
LLC, 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 President and Chief Executive
TD Centre Officer of abridean, inc., a privately held software company that he
1791 Barrington St., 4th Floor founded. From 1998 through 2000, Mr. Sears was president of Ogden Pong
Halifax, Nova Scotia B3J 3K9 Venture Management, a private investment firm that he founded.
Canada Previously, he co-founded and was President of Cycor Communications, a
national internet service provider.
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NAME AND BUSINESS ADDRESS AGE PRESENT PRINCIPAL OCCUPATION AND FIVE YEAR BUSINESS EXPERIENCE
Michael R. Wodopian 50 Mr. Wodopian is currently the Director of Marketing, Optical Products
9750 Goethe Road, Sacramento, Group with Intel Corporation, the world's largest chip maker, and a
CA 95827 leading manufacturer of computer, networking and communications
products, and he has held a number of general management, business
development and marketing positions within Intel since 1999, when he
joined Intel through its acquisition of Level One Communications. At
Level One Communications, Mr. Wodopian was the Vice President of
Business Development and Strategic Planning.
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 4.84%
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 4.96%
*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 34,528,560 shares of common stock outstanding as of
November 8, 2002, as reported in the Company's Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2002, filed with the
SEC on November 13, 2002.
(4) Consists of 1,672,500 shares of common stock owned by Broken Arrow I,
L.P., of which Strategic Software is the managing partner. 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.
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(5) Includes warrants to purchase 17,410 shares 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.
To the best knowledge of Strategic Software, none of the Strategic
Software nominees is employed by the Company. All of the Strategic Software
nominees are citizens of the United States.
To the best knowledge of Strategic Software, 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,
to the best knowledge of the Strategic Software, 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, to the
best knowledge of the Strategic Software, 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,
to the best knowledge of Strategic Software, 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.
To the best knowledge of Strategic Software, 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,
6
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 proxy statement with respect
to the 2002 Annual Meeting of Stockholders of the Company filed by the Company
on April 15, 2002.
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. 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 as a result
of any change of control.
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!
* * * * * *
7
VOTING PROCEDURES
HOW DO I VOTE IN PERSON?
If you owned Mercator common stock on the record date, _______, 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 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
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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, _________,
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 preliminary 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.
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.
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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 by the board of directors on
or since March 14, 2003. 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.
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. Strategic
Software is not aware of any other matters to be brought before the Company's
2003 annual meeting, but the Company has not yet filed its proxy statement
relating to the 2003 Annual Meeting. Should other matters be brought before the
2003 annual meeting, by having signed and returned the enclosed BLUE proxy card,
you will have authorized the persons named as proxies in the enclosed BLUE proxy
card to vote on all such matters in their discretion.
Strategic Software expects that the Company's proxy statement relating
to the 2003 Annual Meeting, once filed, will 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, web page publication and other similar means. 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.
10
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 $207,000.
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
11
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 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: March __, 2003 By:
-----------------------------------------
Rodney Bienvenu
Chairman and CEO
12
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 4.84%
(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 34,528,560 shares of common stock outstanding as of
November 8, 2002, as reported in the Company's Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2002, filed with the
SEC on November 13, 2002.
(4) Represents shares beneficially owned by Broken Arrow I, L.P.. Strategic
Software has the power to determine how to vote and whether or not to
dispose of such shares in its capacity as the general partner of Broken
Arrow I and thus may be deemed to be the beneficial owner of such
shares..
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
13
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. Mr. Sanchez
manages shares of c
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
14
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
15
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
16
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
17
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
18
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
19
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
20
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."
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ANNEX B
INFORMATION REGARDING THE COMPANY
Based upon Mercator's annual report on Form 10-K for the fiscal year
ended December 31, 2001, 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 proxy statement on Schedule 14A with respect to
its 2002 annual meeting of stockholders, the following table sets forth certain
information with respect to the beneficial ownership of Mercator common stock as
of April 8, 2002 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 AMOUNT AND NATURE OF PERCENT OF OUTSTANDING
OWNER (1) BENEFICIAL OWNERSHIP COMMON STOCK (2)
------------------------------------------- -------------------------------- --------------------------------
Brookside Capital Partners Fund, L.P 1,901,384 (3) 5.6%
Ernest E. Keet 1,636,867 (4) 4.8%
Vanguard Atlantic Ltd
Bear Stearns Asset Management Inc. 1,612,700 (5) 4.8%
Constance F. Galley 953,804 (6) 2.8%
Roy C. King 685,548 (7) 2.0%
James P. Schadt 557,957 (8) 1.6%
Kenneth J. Hall 210,081 (9) *
David S. Linthicum 158,033 (10) *
David M. Raye 91,998 (11) *
Dennis G. Sisco 80,000 (12) *
Mark W. Register 69,054 (13) *
Mark C. Stevens 38,000 (14) *
Michael E. Lehman 20,000 (15) *
All executive officers and directors as a 4,999,382 (16) 13.6%
group (18 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) 33,824,000 shares of Common Stock outstanding as
of April 8, 2002, and (ii) shares of Common Stock issuable pursuant to options
and warrants held by the respective person or group which may be exercised
within 60 days of April 8, 2002. Shares of Common Stock subject to options and
warrants that are currently exercisable or exercisable within 60 days of April
8, 2002 are deemed to be outstanding and to be beneficially owned by the person
holding such options or warrants 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) Based upon a Schedule 13G dated February 14, 2002. The address of Brookside
Capital Partners Fund, L.P. is 111 Huntington Avenue, Boston, MA 02199. Mr. Roy
Edgar Brakeman III has voting and investment control over the Company's
securities owned by Brookside Capital Partners Fund, L.P.
(4) Consists of 68,000 shares of Common Stock subject to options currently
exercisable or exercisable within 60 days of April 8, 2002, 250,000 shares of
Common Stock held of record by Vanguard Atlantic Ltd. ("Vanguard"), 50,000
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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, 734,020 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 Vanguard is P. O. Box 1360, Saranac
Lake, NY 12983 and the address of M. Keet is c/o Vanguard, P.O. Box 1360,
Saranac Lake, NY 12983.
(5) Based upon a Schedule 13G dated February 6, 2002. Includes 1,606,300 shares
over which Bear Stearns reports having sole voting power and 6,400 shares over
which Bear Stearns reports having shared voting power. The address of Bear
Stearns Asset Management Inc. is 383 Madison Avenue, 27th Floor, New York, NY
10179.
(6) Consists of 423,922 shares of Common Stock subject to options currently
exercisable or exercisable within 60 days of April 8, 2002, 50,010 shares of
Common Stock issuable upon exercise of warrants, and 472,872 shares of Common
Stock held of record by Ms. Galley. Also includes approximately 7,000 shares of
Common Stock owned by Ms. Galley's husband, Richard Galley, with respect to
which Ms. Galley disclaims beneficial ownership.
(7) Consists of 651,562 shares of Common Stock subject to options currently
exercisable or exercisable within 60 days of April 8, 2002 and 33,986 shares of
Common Stock held of record by Mr. King.
(8) Consists of 503,000 shares of Common Stock subject to options currently
exercisable or exercisable within 60 days of April 8, 2002 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.
(9) Consists of 199,915 shares of Common Stock subject to options currently
exercisable or exercisable within 60 days of April 8, 2002 and 10,166 shares of
Common Stock held of record by Mr. Hall.
(10) Consists of 158,033 shares of Common Stock subject to options currently
exercisable or exercisable within 60 days of April 8, 2002.
(11) Consists of 88,625 shares of Common Stock subject to options currently
exercisable or exercisable within 60 days of April 8, 2002 and 3,373 shares of
Common Stock held of record by Mr. Raye.
(12) Consists of 65,000 shares of Common Stock subject to options currently
exercisable or exercisable within 60 days of April 8, 2002 and 15,000 shares of
Common Stock held of record by Mr. Sisco.
(13) Consists of 65,703 shares of Common Stock subject to options currently
exercisable or exercisable within 60 days of April 8, 2002 and 3,351 shares of
Common Stock held of record by Mr. Register.
(14) Consists of 37,500 shares of Common Stock subject to options currently
exercisable or exercisable within 60 days of April 8, 2002 and 500 shares of
Common Stock held of record by The Stevens-Murphy Living Trust, of which Mr.
Stevens and his wife are Trustees. Mr. Stevens transferred his outstanding
options to The Stevens-Murphy Living Trust on February 25, 2002.
(15) Mr. Lehman was appointed to the board of directors on April 12, 2002. His
holdings are as of such date and consist of 20,000 shares of Common Stock held
of record by Mr. Lehman.
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(16) Includes an aggregate of 2,809,310 shares of Common Stock subject to
options and warrants currently exercisable or exercisable within 60 days of
April 8, 2002.
24
APPENDIX C
PROXY SOLICITED ON BEHALF OF
STRATEGIC SOFTWARE HOLDINGS, LLC
PRELIMINARY COPY SUBJECT TO COMPLETION
DATED MARCH 14, 2003
The undersigned stockholder of Mercator Software, Inc., a Delaware
corporation (the "Company"), on _____________, 2003 (the "record date"), hereby
appoints ________________, with full power of substitution to act as proxy for
the undersigned, and to vote all shares of common stock of the Company, which
the undersigned would be entitled to vote if personally present at the 2003
Annual Meeting of Stockholders of the Company to be held on _________, 2003, and
at any and all postponements, adjournments and reschedulings thereof as
indicated on this proxy.
IF YOU SIGN, DATE AND RETURN THIS CARD WITHOUT INDICATING YOUR VOTE ON
ONE OR MORE OF THE FOLLOWING PROPOSALS, YOU WILL BE DEEMED TO HAVE VOTED IN
FAVOR OF EACH OF THE PROPOSALS. IF YOU VOTE OR ABSTAIN WITH RESPECT TO ONE OR
MORE OF THE FOLLOWING PROPOSALS, THIS PROXY CARD WILL REVOKE ANY PREVIOUSLY
EXECUTED REVOCATION OF PROXY WITH RESPECT TO SUCH PROPOSALS.
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.
STRATEGIC SOFTWARE STRONGLY RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR
OF PROPOSALS NOS. 1 AND 2.
Proposal No. 1 -- Election of Rodney Bienvenu, Peter J. Boni, Daniel
Hoogterp, Edward Sanchez, Jr., Sean P. Sears and Michael R. Wodopian as
directors
FOR [ ] AGAINST [ ] ABSTAINS [ ]
(Instruction: If you wish to vote for the election of certain of the
nominees, but not all of them, check the "FOR" box above and write the name of
each such person you do not wish elected in the following
space:____________________________________. If no box is marked above with
respect to this Proposal, the undersigned will be deemed to vote for such
Proposal, except that the undersigned will not be deemed to vote for the
election of any candidate whose name is written in the space provided above.)
Proposal No. 2 - Repeal of any new by-laws or amendments to existing
By-laws adopted by the board of directors on or since March 14, 2003
FOR [ ] AGAINST [ ] ABSTAINS [ ]
And in the discretion of the proxies appointed hereunder, on such other
business as may properly come before the meeting.
Dated:
--------------------------------
Signature:
-------------------------------------
Signature (if held jointly):
----------------------------
Title or Authority:
-------------------------------------
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Please sign exactly as name appears hereon. If shares are registered in more
than one name, the signature of all such persons should be provided. A
corporation should sign in its full corporate name by a duly authorized officer,
stating his or her title. Trustees, guardians, executors and administrators
should sign in their official capacity, giving their full title as such. If a
partnership, please sign in the partnership name by an authorized person. The
proxy card votes all shares in all capacities.
PLEASE MARK, SIGN AND DATE THIS PROXY BEFORE MAILING THE PROXY IN THE ENCLOSED
ENVELOPE.
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.
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