PTC INC. DEF 14A 2007
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant x Filed by a Party other than the Registrant ¨
Check the appropriate box:
PARAMETRIC TECHNOLOGY CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
PARAMETRIC TECHNOLOGY CORPORATION
140 KENDRICK STREET
NEEDHAM, MASSACHUSETTS 02494
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on March 7, 2007
We will hold the Annual Meeting of Stockholders of Parametric Technology Corporation (PTC) at our offices, 140 Kendrick Street, Needham, Massachusetts 02494, on Wednesday, March 7, 2007 at 9:00 a.m., local time. At this years Annual Meeting, we will ask you to:
You may vote at the Annual Meeting if you were a PTC stockholder at the close of business on January 8, 2007. With the Proxy Statement, we are sending you PTCs 2006 Annual Report to Stockholders, including our Annual Report on Form 10-K with our financial statements.
January 25, 2007
Directions to our offices are as follows:
From the North:
Route 128 South to Exit 19B, to Highland Avenue. At the first traffic light, take a left onto Hunting Road. Left onto Kendrick Street. PTC entrance is on the right hand side.
From the South:
Route 128 North to Exit 18, right onto Great Plain Avenue. Right onto Greendale Avenue. Right onto Kendrick Street. PTC entrance is on the right hand side.
From either the East or West:
Mass Pike to Route 128 South to Exit 19B, to Highland Avenue. At the first traffic light, take a left onto Hunting Road. Left onto Kendrick Street. PTC entrance is on the right hand side.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE, OR VOTE BY TELEPHONE OR ON THE INTERNET, IN ORDER TO ENSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE IS REQUIRED IF THE PROXY IS MAILED IN THE UNITED STATES.
TABLE OF CONTENTS
2007 ANNUAL MEETING OF STOCKHOLDERS
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Why Did We Send You this Proxy Statement?
As a stockholder, you have the right to attend and vote at the Parametric Technology Corporation (PTC) 2007 Annual Meeting of Stockholders. If you attend the Annual Meeting, you may vote your shares directly. Whether or not you attend, you may vote by proxy, by which you direct another person to vote your shares at the meeting on your behalf. The PTC Board of Directors is soliciting your proxy to encourage your participation in voting at the meeting and to obtain your support for the proposals presented.
There are two parts to our proxy solicitation: this proxy statement and the enclosed voting instruction form (which is also called a proxy card). The proxy statement explains the proposals to be voted on at the Annual Meeting. You use the voting instruction form to authorize your shares to be voted as you wish.
We will begin mailing this proxy statement on January 25, 2007 to all stockholders entitled to vote. If you owned our common stock at the close of business on January 8, 2007, you are entitled to vote. On that date, there were 113,948,077 shares of common stock outstanding. Common stock is our only class of voting stock.
Reverse Stock Split
On February 28, 2006, we effected the two-for-five reverse split of our common stock approved at the 2005 Annual Meeting of Stockholders. All stock related data in this Proxy Statement has been restated to reflect the reverse stock split.
How Many Votes Do You Have?
You have one vote for each share of common stock that you owned at the close of business on January 8, 2007. Your proxy card or other voting instruction form indicates the number of shares you owned at the close of business on that day.
How May You Vote by Proxy?
To vote, simply complete, sign and return the form before the meeting, and your shares will be voted as you direct. If you wish, in most cases you may vote by telephone or the Internet instead.
When you vote, you are giving your proxy to the individuals we have designated to vote your shares as you direct at the meeting. If you sign the form but do not make specific choices, they will vote your shares to:
If any matter not listed in the Notice of Meeting is properly presented at the Annual Meeting, they will vote your shares in accordance with their best judgment. At the time we began printing this proxy statement, we knew of no matters that needed to be acted on at the meeting other than as discussed in this proxy statement.
Whether you plan to attend the Annual Meeting or not, we urge you to complete, sign and date the enclosed voting instruction form and to return it promptly in the envelope provided. Returning the form will not affect your right to attend the Annual Meeting. If you wish to vote at the meeting despite having returned the form, see below under May You Revoke Your Proxy and How May You Vote in Person.
How May You Vote by Telephone or the Internet?
Instead of submitting your vote by mail on the enclosed voting instruction form, you may vote by telephone or the Internet. Please note that there may be separate telephone and Internet arrangements depending on whether you are a registered stockholder (that is, if you hold your stock in your own name) or you hold your shares in street name (that is, in the name of a brokerage firm or bank that holds your securities account). In either case, you must follow the procedures described on your voting instruction form.
In order to vote online or via telephone, have the voting instruction form in hand, and call the number or go to the website listed on the enclosed voting instruction form and follow the instructions. The telephone and Internet voting procedures are designed to authenticate stockholders identities, to allow stockholders to give their voting instructions and to confirm that stockholders instructions have been recorded properly.
We encourage you to vote by the Internet. If you do so, please authorize us to deliver future annual reports and proxy statements to you by e-mail. This lowers costs and speeds delivery.
May You Revoke Your Proxy?
Yes. You may change your vote after you send in your voting instructions. A registered stockholder may revoke a proxy by following any of these procedures:
A holder of stock in street name must follow the procedures required by the brokerage firm or bank to revoke a proxy. You should contact that firm directly for more information on these procedures.
How May You Vote in Person?
If you attend the Annual Meeting and wish to vote in person, we will give you a ballot when you arrive. If your shares are held in street name, you must bring an account statement or letter from the brokerage firm or bank showing that you were the beneficial owner of the shares on January 8, 2007 in order to be admitted to the meeting. If you are not the holder of record, you will need to obtain a legal proxy from the holder of record in order to be able to vote at the Annual Meeting.
What Are the Votes Required? How Are They Affected by Abstentions and Broker Non-Votes?
The directors elected at the meeting will be those receiving the highest number of votes. The other proposals may be approved by the affirmative vote of a majority of the votes cast. Accordingly, if you abstain from voting, or if your broker or bank does not vote on any proposal because it has not received instructions from you and does not have the authority to vote in its discretion (a broker non-vote), it will not count as a vote for or against a proposal.
Is Voting Confidential?
We keep all the proxies, ballots and voting tabulations confidential. The Inspectors of Election will forward to management any written comments that you make on the proxy card without providing your name.
What Are the Costs of Soliciting Proxies?
PTC will pay all the costs of soliciting proxies. In addition to mailing these proxy materials, our directors and employees may solicit proxies by telephone, fax or other electronic means of communication, or in person.
The Proxy Advisory Group, LLC is assisting us with the solicitation of proxies for a fee of $7,500, plus customary disbursements. We will reimburse banks, brokers, nominees and other fiduciaries for the expenses they incur in forwarding the proxy materials to you.
Stockholders Sharing the Same Surname and Address.
In some cases, stockholders holding their shares in a brokerage or bank account who share the same surname and address and have not given contrary instructions receive only one copy of our annual report and proxy statement. This practice is designed to reduce duplicate mailings and save significant printing and postage costs as well as natural resources. In other cases, stockholders receiving multiple copies at the same address may wish to receive only one. If you would like to have additional copies of our annual report and/or proxy statement mailed to you, to receive separate copies of future mailings, or to receive only one copy if you now receive more than one, please submit your request to the address or phone number that appears on your voting instruction form.
How May You Obtain Our Annual Report on Form 10-K?
A copy of our Annual Report on Form 10-K for the year ended September 30, 2006 was included with this proxy statement. If you would like another copy, it is available on our website at www.ptc.com. We will also send you one without charge if you call (781) 370-5000, e-mail to IR@ptc.com, or write to:
Parametric Technology Corporation
140 Kendrick Street
Needham, MA 02494-2714
Where Can You Find the Voting Results?
We will publish the voting results on our website at www.ptc.com following the Annual Meeting and in our Form 10-Q for the second quarter of fiscal 2007, which we will file with the Securities and Exchange Commission in May 2007.
Whom Should You Call if You Have any Questions?
If you have any questions about the Annual Meeting or your ownership of PTC common stock, please contact PTC Investor Relations by telephone at (781) 370-5000 or e-mail at IR@ptc.com.
DISCUSSION OF PROPOSALS
The first proposal on the agenda for the Annual Meeting is to elect two Class II directors for three-year terms beginning at this Annual Meeting and expiring at the 2010 Annual Meeting. For a description of the three classes of directors, see Information About Our Directors beginning on page 11.
Upon the recommendation of the Nominating & Corporate Governance Committee, the Board of Directors has nominated two current directorsNoel G. Posternak and Michael E. Porterfor new, three-year terms and recommends that you vote for their election. The nominations of Messrs. Posternak and Porter were based on consideration of their individual credentials and experience, the contributions each has made to the work of the Board of Directors and its committees, their expected future contributions, and their exemplary prior service and attendance records as directors and board committee members.
In the case of Mr. Posternak, this included his experience and knowledge of corporate law and governance matters, his contributions as Chairman of the Board, as Chairman of the Nominating & Corporate Governance Committee, and as a member of the Audit Committee, and his 100% board and committee meeting attendance record over his current three-year term.
In the case of Mr. Porter, this included his expertise in the area of corporate strategy, his contributions as Chairman of the Corporate Development Committee, his contributions to the discussions of matters at board and committee meetings, and his 100% board and committee meeting attendance record over his current three-year term.
The Nominating & Corporate Governance Committees process for selecting and evaluating director nominees is described under Information About the Nominating Functions of the Nominating & Corporate Governance Committee on page 33. There were no nominees for director proposed by PTC stockholders.
The following table contains background information about each of the nominees. For a description of their holdings of PTC stock, see How Much Stock is Owned by Directors and Officers? beginning on page 15.
The Board of Directors recommends that you vote FOR the election of Noel G. Posternak and Michael E. Porter as Class II directors.
We are seeking stockholder approval of an amendment to our 2000 Equity Incentive Plan (the 2000 EIP) increasing the number of shares authorized for issuance by 5,000,000 shares (from 9,800,000 to 14,800,000). If approved, PTC expects to use the shares for periodic equity grants to employees (including executive officers), directors and consultants.
We last obtained stockholder approval to increase the number of shares authorized for issuance under the 2000 EIP at the 2005 Annual Meeting of Stockholders when the stockholders approved an amendment to increase the number of shares available for issuance under the 2000 EIP by 5,200,000 shares. In connection with that amendment, we terminated share issuances under all other equity incentive plans, including non-stockholder approved plans.
The Board of Directors believes that the amendment to the 2000 EIP promotes important corporate goals and is therefore in the best interests of PTCs stockholders.
Why the 2000 EIP is Important
Our ability to attract, motivate and retain high-performing employees is vital to our ability to compete successfully in the market and to increase stockholder value. We believe our ability to grant equity incentives as an element of employee compensation is essential for us to remain competitive in attracting and retaining such employees. We believe equity incentives motivate high levels of performance and provide an effective means of recognizing employee contributions to the success of PTC. Moreover, equity incentives align the interests of the employees with the interests of our stockholderswhen PTC performs well, employees are rewarded along with other stockholders. Because the 2000 EIP is the only plan under which we can grant equity incentives, maintaining its viability by increasing the number of shares available for grant is essential for us to be able to continue to use equity incentives to attract, motivate and retain the employees necessary for our future success.
Through 2004, we generally used stock options as our equity incentive. In 2005, in connection with our efforts to reduce the amount (overhang) and rate of shareholder dilution resulting from equity grants, we began granting restricted stock and restricted stock units rather than stock options as our principal equity awards. We did not grant any stock options in either 2005 or 2006. Restricted stock and restricted stock units differ from stock options in that they enable us to issue fewer shares of restricted stock or restricted stock units than stock options to deliver comparable value, which reduces overhang and potential stockholder dilution. They also have a significant retention effect, since they retain value even if the stock price declines. We describe the features of restricted stock and restricted stock units below under Summary of 2000 EIP. We have also increased the percentage of equity incentives for executive officers that are performance-based, under which the amount received is conditioned on achievement of PTCs important business objectives. For 2005, 2006 and 2007, 50% of the annual equity incentive awards issued to executive officers were issued as performance-based restricted stock and, for 2006 and 2007, the annual short-term incentive for our executive officers was also issued in the form of performance-based restricted stock.
Potential Effects of the Amendment
The 2000 EIP is our sole vehicle for granting equity awards. As of January 8, 2007, only 571,890 shares remained available for grant under the 2000 EIP. The proposed amendment would make an additional 5,000,000 shares available for issuance under the 2000 EIP, which would enable us to continue to offer equity incentives to our employees (including executive officers), directors and consultants. With the additional shares, our potential voting power dilution (on a fully-diluted basis) would be 15%.
The Board of Directors believes that the amendment to the 2000 EIP is in the best interest of stockholders and PTC as it will provide us with the shares necessary to offer effective equity incentives, which are essential for us to attract, motivate and retain employees and to align our compensation needs with our stockholders interests.
The Board of Directors recommends that you vote FOR the proposed amendment to the 2000 EIP.
Summary of 2000 EIP
The principal features of the 2000 EIP are summarized below.
U.S. Federal Income Tax Consequences Relating to Awards under the 2000 EIP
Incentive Stock Options. A participant does not realize taxable income upon the grant or exercise of an ISO under the 2000 EIP. If a participant does not dispose of shares received upon exercise of an ISO for at least two years from the date of grant and one year from the date of exercise, then (a) upon sale of the shares, any amount realized in excess of the exercise price is taxed to the participant as long-term capital gain and any loss sustained will be a long-term capital loss and (b) we may not take a deduction for Federal income tax purposes. The exercise of ISOs gives rise to an adjustment in computing alternative minimum taxable income that may result in alternative minimum tax liability for the participant.
If shares of common stock acquired upon the exercise of an ISO are disposed of before the end of the one and two-year periods described above (a disqualifying disposition), the participant realizes ordinary income in
the year of disposition in an amount equal to the excess (if any) of the fair market value of the shares at exercise (or, if less, the amount realized on a sale of such shares) over the exercise price. We would be entitled to a tax deduction for the same amount. Any further gain realized by the participant would be taxed as a short-term or long-term capital gain and would not result in any deduction for us. A disqualifying disposition in the year of exercise will generally avoid the alternative minimum tax consequences of the exercise of an ISO.
Nonstatutory Stock Options. No income is realized by the participant at the time a nonstatutory option is granted. Upon exercise, the participant realizes ordinary income in an amount equal to the difference between the exercise price and the fair market value of the shares on the date of exercise. We would receive a tax deduction for the same amount. Upon disposition of the shares, appreciation or depreciation after the date of exercise is treated as a short-term or long-term capital gain or loss and will not result in any further tax deduction by us.
Restricted Stock. Generally, a participant will be taxed at the time the restrictions on the shares lapse. The excess of the fair market value of the shares at that time over the amount paid, if any, by the participant for the shares will be treated as ordinary income. The participant may instead elect at the time of grant to be taxed (as ordinary income) on the excess of the then fair market value of the shares over the amount paid, if any, for the shares. In either case, we would receive a tax deduction for the amount reported as ordinary income to the participant. Upon the participants disposition of the shares, any subsequent appreciation or depreciation is treated as a short or long-term capital gain or loss and will not result in any further tax deduction by us.
Restricted Stock Units. A participant will generally realize ordinary income in an amount equal to the fair market value of the shares (or the amount of cash) distributed to settle the restricted stock units at the time of settlement, which is generally upon vesting of the restricted stock units. In certain limited circumstances, a settlement date may be later than the vesting date, in which case the settlement would be made in a manner intended to comply with the rules governing non-qualified deferred compensation arrangements. In either case, we would receive a corresponding tax deduction at the time of settlement. If the restricted stock units are settled in shares, then upon sale of those shares any subsequent appreciation or depreciation would be treated as short-term or long-term capital gain or loss to the participant and would not result in any further tax deduction by us.
Other Tax Matters. United States tax laws generally do not allow publicly-held companies to obtain tax deductions for compensation of more than $1 million paid in any year to any of the five most highly paid executive officers (each, a covered person) unless the compensation is performance-based as defined in Section 162(m) of the tax code. Stock options and SARs granted under the 2000 EIP are performance-based compensation if they have exercise prices not less than the fair value of common stock on the date of grant. In the case of restricted stock and restricted stock units, Section 162(m) requires that the general business criteria of any performance goals that are established by the Committee be approved (as they have been in the 2000 EIP) and periodically reapproved by stockholders in order for such awards to be considered performance-based and deductible by us. Generally, the performance goals must be established before the beginning of the relevant performance period. Furthermore, satisfaction of any performance goals during the relevant performance period must be certified by the Committee.
A participant who receives any accelerated vesting or exercise of options or stock appreciation rights or accelerated lapse of restrictions on restricted stock or restricted stock units in connection with a change in control might be deemed to have received an excess parachute payment under federal tax law. In such cases, the participant may be subject to an excise tax and we may be denied a tax deduction.
2000 EIP Grants
PTCs stockholders have previously approved the issuance of 9,800,000 shares under the 2000 EIP. As of January 8, 2006:
All of our executive officers and directors are potential recipients under the 2000 EIP. If the amendment is approved, we plan to make the annual equity awards of restricted stock to our directors (as described in How We Compensate Our Directors on page 13) and the time-based restricted stock awards to our executive officers as part of their annual award for fiscal 2007 (as further described in Long-Term Incentives and Timing of Equity Grants on pages 23 and 25, respectively). Any awards in future years to our directors and executive officers will be determined in accordance with our then current grant practices. Our current grant practices are described in How We Compensate Our Directors on page 13 and in Annual Incentive and Long-Term Incentives on pages 22 and 23, respectively. The following table sets forth the stock options, restricted stock, and restricted stock units granted through the date of this proxy statement under the 2000 EIP to the executive officers named in the Summary Compensation Table of this Proxy Statement, all current executive officers as a group, all current non-employee directors as a group, and all current employees excluding the foregoing individuals.
The closing price of our common stock on December 29, 2006, as reported by the Nasdaq Global Select Market, was $18.02.
The third proposal on the agenda for the Annual Meeting is to confirm the selection by the Audit Committee of the Board of Directors of PricewaterhouseCoopers LLP, an independent registered public accounting firm, as PTCs independent registered public accounting firm for the fiscal year ending September 30, 2007. PricewaterhouseCoopers LLP served as our independent auditors for the fiscal year ended September 30, 2006. Further information about PricewaterhouseCoopers LLP appears under Information about our Independent Registered Public Accounting Firm on page 31. Although stockholder confirmation of the selection of PricewaterhouseCoopers LLP is not required by law or our by-laws, and this vote will not be binding on PTC, the Board of Directors believes that it is advisable to give stockholders an opportunity to provide guidance on this selection. If this confirmation is not received, the Board will request that the Audit Committee reconsider its selection of PricewaterhouseCoopers LLP.
The Board of Directors recommends that you CONFIRM the selection of PricewaterhouseCoopers LLP as PTCs independent registered public accounting firm.
The Board of Directors does not know of any other matters to come before the meeting. If any other matters are properly presented to the Annual Meeting, the persons named in the accompanying voting instruction form will vote, or otherwise act, in accordance with their judgment on such matters.
Who Are Our Directors?
Our Board of Directors is divided into three classes with staggered three-year terms. There are currently two Class I directors, two Class II directors and three Class III directors, whose terms expire, respectively, at the 2009, 2007 and 2008 Annual Meetings of Stockholders. The Class II directors, who are described on page 4, have been nominated for re-election at this Annual Meeting. The Class I and III directors will continue in office following the Annual Meeting. The following table contains information about each of the Class I and III directors. You will find information on director holdings of PTC stock in the section called How Much Stock is Owned by Directors and Officers? beginning on page 15.
All of our directors except Mr. Harrison (our Chief Executive Officer and President) and Mr. Porter (who has a consulting agreement with the Company as described in Information About Certain Insider Relationships on page 14) are independent directors as defined in the NASDAQ Stock Market listing standards.
Certain Relationships and Transactions
Mr. Harrison and Paul J. Cunningham, PTCs Executive Vice President, Worldwide Sales, are first cousins.
Board Meetings and Attendance at the Annual Meeting
PTCs Board currently schedules five regular meetings during each fiscal year, but will meet more often if necessary. The Board met nine times during fiscal 2006 and all directors attended all meetings held. We expect that each director will attend the Annual Meeting of Stockholders each year, barring other significant commitments or special circumstances. All directors attended the 2006 Annual Meeting of Stockholders.
Communications with the Board
Stockholders may send communications to the Board of Directors in the manner described on the Investor Relations page of our website, www.ptc.com. Currently, such communications should be sent to:
Parametric Technology Corporation
Board of Directors Communication
c/o Director of Investor Relations
140 Kendrick Street
Needham, MA 02494
The Committees of the Board
The Board has four standing committees:
The Audit Committee
The Audit Committee assists our Board in fulfilling its oversight responsibilities for accounting and financial reporting compliance, including reviewing the financial information provided to the stockholders and others, PTCs accounting policies, disclosure controls and procedures and internal accounting and financial controls, and the audit process. In undertaking these responsibilities, the Committee meets with management and with the independent auditor (including meeting privately, without PTC management present) to discuss our financial reporting policies and procedures and our internal control over financial reporting. The Committee reports on such matters to our Board. The Committee reviews the performance of the independent auditor in the annual financial statement audit and audit of the Companys assessment of internal control over financial reporting, assesses the independence of the auditor, and reviews the auditors fees. The Committee is also responsible for pre-approving audit and non-audit related services that may be performed by the independent auditor.
The Committee is directly responsible for the appointment (and where appropriate, replacement), evaluation and compensation of the independent auditor. At least once every three years, the Committee evaluates the independent auditors tenure, the quality of its engagements and the associated costs to determine if rotation to a different independent auditor is advisable.
The Audit Committee operates under a written charter, which is available on the Investor Relations page of our website at www.ptc.com.
Messrs. Marx (Chairman), Goldman and Posternak currently serve as members of the Audit Committee. All committee members are independent directors under both SEC rules and the listing requirements of the NASDAQ Stock Market governing the qualifications of members of the Audit Committee, and none of them has ever been an employee of PTC or any of its subsidiaries. During fiscal 2006, Oscar B. Marx, Chairman of the Audit Committee, qualified as an Audit Committee Financial Expert, as defined by the SEC.
The Audit Committee met eleven times during fiscal 2006 and all members attended each meeting. The Committees report for 2006 appears on page 31.
The Compensation Committee
The Compensation Committee establishes the compensation levels for PTCs executive officers (including equity awards to executive officers) and oversees employee compensation programs, including PTCs corporate bonus programs and its stockholder approved equity incentive plan. The Committee acts under a written charter, which is available on the Investor Relations page of our website at www.ptc.com. Each year, the Committee reports to you on executive compensation. The Committees report for fiscal 2006 appears on page 19.
Messrs. Goldman (Chairman) and Grierson currently serve as members of the Compensation Committee. Both Messrs. Goldman and Grierson qualify as independent directors under the Nasdaq Global Select Market listing requirements. The Committee met nine times during fiscal 2006 and all members attended each meeting.
The Nominating & Corporate Governance Committee
The Nominating & Corporate Governance Committee is appointed by the Board to assess Board membership, make recommendations regarding potential candidates for election to the Board and membership on committees of the Board, develop and recommend policies and processes regarding corporate governance matters and maintain a CEO succession plan in order to ensure continuity of leadership for PTC. The Committee acts under a written charter, which is available on the Investor Relations page of our website at www.ptc.com. Further information about the operation of the Committee appears on page 33.
Messrs. Posternak (Chairman), Goldman and Grierson currently serve as members of the Nominating & Corporate Governance Committee. All Committee members qualify as independent directors under the Nasdaq Global Select Market listing requirements. The Committee met twice during fiscal 2006 and all members attended each meeting.
The Corporate Development Committee
The Corporate Development Committee is appointed by the Board to evaluate corporate development opportunities, including mergers and acquisitions, and to assist management in developing strategies and processes regarding such initiatives. The Committee is authorized to approve transactions having a price below a threshold established by the Board from time to time. The Committee acts under a written charter, which is available on the Investor Relations page of our website at www.ptc.com.
Messrs. Porter (Chairman) and ODonnell, each of whom has extensive business expertise (including in the area of corporate strategy), currently serve as members of the Corporate Development Committee. Due to the nature and size of the transactions contemplated and completed during the year, which were considered and approved by the full Board, the Committee did not meet during fiscal 2006.
How We Compensate Our Directors
Information About Certain Insider Relationships
Michael E. Porter, one of our directors, performs certain services for us under an Amended and Restated Consulting Agreement dated as of July 28, 2005. Under the agreement, Mr. Porter consults with our executives on strategic matters and participates in preparing and presenting executive management seminars sponsored by us. In consideration for providing these consulting services, we made a one-time grant of 40,000 shares of restricted stock to Mr. Porter, the restrictions on which lapse in three equal annual installments. The first installment lapsed on July 28, 2006 and the remaining installments lapse on each of July 28, 2007 and 2008. He will also receive a fee of $15,000 for each executive management seminar in which he participates. During fiscal 2006, Mr. Porter did not participate in any executive management seminars and, accordingly, received no such fees.
Howard Heppelmann, PTCs Vice PresidentWorldwide Indirect Sales Business Development, is the brother of James Heppelmann, our Executive Vice President and Chief Product Officer. For fiscal 2006, Howard Heppelmann received a salary of $153,600 and earned sales commissions of $247,650. Howard Heppelmann is also eligible to participate in PTCs standard employee benefits packages, including receiving equity grants under PTCs equity incentive plans.
Matthew Cohen, PTCs Vice PresidentCustomer Education, is the son of Barry Cohen, PTCs Executive Vice President, Strategic Services and Partners. For fiscal 2006, Matthew Cohen received a salary of $146,900 and earned commissions of $107,171 based on educational products and services bookings and margin. Matthew Cohen is also eligible to participate in PTCs standard employee benefits packages, including receiving equity grants under PTCs equity incentive plans.
Brian Cunningham, a Strategic Accounts Sales Representative for PTC, is the brother of Paul Cunningham, PTCs Executive Vice President, Worldwide Sales. For fiscal 2006, Brian Cunningham received a salary of $88,600 and a bonus of $1,000 and earned commissions of $180,010. Brian Cunningham is also eligible to participate in PTCs standard employee benefits packages, including receiving equity grants under PTCs equity incentive plans.
Our Related Party Transaction Policy requires that all related party transactions be reviewed, approved and ratified, as applicable, by the Audit Committee. The Audit Committee reviews each transaction to ensure that there is a legitimate business reason for the transaction and that the terms of the transaction are no less favorable to PTC than PTC could obtain from an unrelated party.
Which Stockholders Own at Least 5% of PTC?
The following table shows all persons we know to be beneficial owners of at least 5% of PTC common stock as of November 30, 2006. Beneficial owners of PTC common stock are those who have the power to vote or to sell that stock. Our information is based in part on reports filed with the SEC by the firm listed in the table below. If you wish, you may obtain these reports from the SEC.
The footnotes for this table appear below the next table.
How Much Stock is Owned by Directors and Officers?
The following table shows the PTC common stock beneficially owned by PTCs directors and the executive officers named in the Summary Compensation Table, as well as all current directors and executive officers as a group, as of November 30, 2006.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires that our insidersour directors, executive officers and 10%-or-greater stockholdersfile reports with the SEC on their initial beneficial ownership of PTC common stock and any subsequent changes (in this case, beneficial ownership means a pecuniary interest in the shares).
Based on our review of all reports filed by our insiders, we believe that all of our insiders filed on a timely basis all reports required by Section 16(a) for fiscal 2006.
INFORMATION ABOUT EXECUTIVE COMPENSATION
The tables on pages 17 through 19 show salaries, bonuses and other compensation paid for the last three fiscal years, including restricted stock awards granted for the relevant period, options exercised in fiscal 2006 and option values as of year-end fiscal 2006 for the Chief Executive Officer and our four other most highly compensated executive officers during fiscal 2006.
Summary Compensation Table
We did not grant any options to our executive officers in fiscal 2006.
Aggregated Option Exercises During Fiscal 2006 and Fiscal Year-End Option Values
Compensation Philosophy & Objectives
Our philosophy is to provide executive compensation that is commensurate with PTCs performance. Our overall principle guiding executive compensation is to reward executives with total direct compensation at the market percentile that approximates PTCs performance relative to its peer group.
In order to implement this philosophy, we use both quantitative and qualitative measures to measure performance. Our executive compensation program is designed to consider objective performance based on one- and three-year comparisons to a selected peer group and internal quantitative factors, including revenue growth, an earnings before income tax, depreciation and amortization (EBITDA) measure, and earnings per share (EPS) growth. We have determined these measures to be of primary importance to the success and growth of PTC. These measures may change in the future based on the strategic importance of these and other measures to PTC.
To ensure a balanced approach against these objective measures, we also consider intangible factors such as tenure, business disruption due to turnover, industry/market forces beyond the control of the executives and institutional knowledge when evaluating how our compensation plans align with our compensation philosophy.
Our philosophy is designed to reward executives for the contributions that they each make toward PTCs value, both in the marketplace (as represented by the stock price) and in other measures of success such as intellectual capital and progress against PTCs short- and long-term business plans, and for their dedication to PTC. We have determined that the level of reward should be determined by the representative objective and subjective performance measures outlined above.
The objectives of our compensation plans are to:
Components of Compensation
Total direct compensation at PTC is comprised of three main components:
Mix of Pay Components
We use these particular elements of compensation because we believe that they provide a balanced mix of fixed compensation and at-risk compensation that produces short-term and long-term performance incentives and rewards. With this balanced portfolio, we provide the executive with a competitive base salary while motivating the executive to focus on the business metrics that will produce a high level of performance for PTC and provide the executive with additional compensation through short- and long-term incentives.
The mix of compensation for our executives is heavily weighted toward at-risk pay (annual incentives and long-term incentives). Maintaining this pay mix results in a pay-for-performance orientation for all our executives, which aligns to our compensation philosophy of paying total direct compensation that is competitive with peer group levels based on relative company performance.
Decisions regarding the pay mix reflect our belief that long-term incentives, and particularly equity compensation, provide a very important motivational and retentive aspect to the executives overall compensation package. Our typical compensation mix for executives provides more than 60% of total compensation through equity incentives. To further our pay for performance philosophy, 50% of each executives annual equity grant is subject to performance-based criteria. Cash compensation, consisting of base salary and annual bonus (which annual bonus was structured as an equity award subject to forfeiture in fiscal 2006 and 2007), makes up the remainder of the total compensation provided. Except for the CEO, base salary makes up a greater portion of an executives total cash compensation than the annual bonus, which provides balance as such a large portion of total compensation is made up of equity. The CEOs base salary is the smallest portion of his total potential compensation.
How the Total Amount of Compensation is Determined
We make decisions with regard to the actual amount or value of compensation awarded to each executive based on objective data provided by our external compensation consultant, Pearl Meyer & Partners. The data is gathered from proxy statements filed by a selected peer group of companies. We commission a competitive assessment of executive compensation from our compensation consultant each year that provides the data necessary to make our compensation decisions.
The peer group is made up of companies within PTCs industry that have revenues and market capitalizations in a range closest to PTC. We review the peer group frequently to ensure that the companies contained in the peer group remain relevant and provide meaningful comparisons. For fiscal 2007, the peer group consisted of the companies listed below and was fundamentally the same as for fiscal 2006:
We compare the compensation data to our executives compensation by similarity of position. While objective data is a good starting point for determining appropriate compensation, we recognize that there may be circumstances that warrant an adjustment or deviation from the market data. For example, an executive at PTC may have broader or narrower duties than the position to which he is being compared in the compensation assessment. We take this into consideration and make appropriate judgments with regard to compensation levels. Other considerations may include individual performance, difficulty of replacing the executive, special retention requirements, tenure or importance of institutional knowledge held by the executive.
Our external consultant also provides a tally sheet analysis that summarizes each executives annual and accrued compensation so that we may better understand the full compensation package available to the executives under several scenarios, including continued employment, termination absent a change-in-control with and without cause, and termination in connection with a change-in-control or for good reason.
The amount and mix of compensation finally decided upon is considered within the context of both the objective market data from the competitive compensation assessment and the subjective factors outlined above. We believe each executives compensation package is within the competitive range when compared to the objective comparative data for total direct compensation at the comparable percentile, even where subjective factors may have influenced the final compensation decisions. We provide a summary of the total compensation paid to Mr. Harrison and each of the named executive officers with respect to fiscal 2006 on page 24.
We set the base salary for each executive within the context of the market data provided by our compensation consultant. We review the base salary each year and adjust it to reflect performance, market conditions for the particular position, changes in the status or duties associated with particular positions, and general economic conditions. For example, an executive may undertake additional duties that are not reflected in the executives title, but the executives compensation is compared to the market compensation based on standard duties for the executives title. When such a situation exists, we would consider providing the executive with additional base salary, bonus amounts or long-term incentive grants to compensate the executive for the additional duties.
Base salaries for the named executive officers have remained unchanged for the past two years, although Mr. Heppelmanns base salary was increased by $72,000 for fiscal 2007 in exchange for his giving up a $72,000 annual cost of living adjustment he was otherwise entitled to receive. This change represents a 17% increase to his base salary, offset by the corresponding elimination of his cost of living adjustment.
The annual incentive is intended to focus the executives on achieving specific goals related to PTCs business plan. We believe the annual incentive is an effective tool for motivating our executives to achieve PTCs goals and create stockholder value.
Fiscal 2006. For fiscal 2006, the annual target incentive was awarded in restricted stock at a value equal to 110% of the executives incentive target (the 2006 Bonus Amount). The additional 10% of value provided to the executives was in consideration of the executives not receiving a merit increase in fiscal 2006 and to address the stock price volatility risk. The 2006 Bonus Amount was converted into the number of shares granted on November 9, 2005 based on the $15.48 closing price of PTCs common stock on that date. The restricted stock was subject to forfeiture based on the metrics stated below. Amounts earned under the plan above target performance amounts were payable in cash.
The incentive targets, which have remained unchanged since fiscal 2004, are stated as specific targets in dollars for each individual executive, and were as follows for fiscal 2006:
The metrics used to determine the amount of the actual payout under the 2006 annual incentive plan were revenue, operating margin and an aggregate company expense metric. Threshold amounts for revenue and operating margin were required to be achieved before any payout would be made. If both of those threshold criteria were achieved, 40% of the target bonus for each executive would be earned. No bonus amounts would be earned if only one of the threshold metrics was achieved. Up to an additional 40% of the executives target bonus would be earned on a linear scale for performance above the threshold up to the plan revenue and operating margin target and the remaining 20% of the executives target bonus would be earned based on the achievement of an aggregate company operating expense metric.
Performance above target levels would result in cash payouts above target, with an upside payout of up to 50% of the target incentive for each executive. The upside payment required that a minimum operating margin metric be met and was earned on a linear scale for revenue performance above target.
Based on the achievement of target performance on all of the metrics, the target bonus was earned in full and the restrictions on the shares issued to each executive, including the chief executive officer, in connection with the fiscal 2006 plan lapsed in full on November 9, 2006. Each executive also earned a cash upside payment equal to 40% of the executives target incentive.
Payout decisions under the annual bonus plan were made based solely on the performance of PTC with regard to specific metrics determined at the beginning of the fiscal year. No discretion was exercised by the Committee or the chief executive officer with regard to whether the performance criteria had been achieved.
Fiscal 2007. For fiscal 2007, the annual target incentive was awarded in restricted stock at a value equal to 100% of the executives incentive target. The annual target incentive bonus for each of the executive officers for fiscal 2007 was the same as for fiscal 2006. The additional 10% in value granted in 2006 was not provided under the 2007 plan. The value was converted into the number of shares granted on November 3, 2006 based on the $18.61 closing price of PTCs common stock on that date. This restricted stock is subject to forfeiture based on the metrics described below. To the extent that the performance metrics are achieved, the restrictions on the shares will lapse on November 9, 2007.
The fiscal 2007 metrics that will determine the amount of the actual target payout under the annual incentive plan are revenue and operating margin. There is a threshold amount of revenue and operating margin that must be achieved prior to any payout under the plan. No payments will result if only one of the threshold metrics is achieved. The award is scaled so that at threshold revenue and operating margin performance, 50% of the target bonus for each executive is earned. Once threshold performance is achieved, up to an additional 25% of the executives bonus target may be earned on a linear scale for target revenue growth and up to an additional 25% of the executives target bonus may be earned on a linear scale for target operating margin.
Performance above the target metrics will result in payouts above the target incentive amounts, with a maximum payout of 150% of the target incentive amount for each executive. The upside payment requires that a minimum operating margin be met and is earned on a linear scale for revenue performance above the target metrics.
We provide long-term incentive compensation to the executives in the form of restricted stock. We use restricted stock to encourage stock ownership by executives and to provide a retention incentive. We began issuing restricted stock rather than stock options in 2005 as a result of a detailed consideration of methods for decreasing stock overhang and stock-based compensation expense.
As a result of the analysis of long-term incentive alternatives, we determined that our goal would be to decrease PTCs total equity compensation overhang to approximately 15% of total shares outstanding and target total annual long-term incentive grants to all employees at approximately 2% of total outstanding shares per year.
Our annual executive grants under the long-term incentive plan are made up of two components. The first component is a grant of time-based restricted stock which makes up 50% of the total grant. The restrictions on the time-based shares lapse over a three-year period, with the restrictions on one-third of the shares lapsing on each anniversary of the grant. In fiscal 2006, the time-based equity grants to our executives were made on November 9, 2005 at a stock price of $15.48, the closing price of PTC common stock on that date.
The second component is a grant of performance-based restricted stock, which makes up the other half of the total annual grant. The performance criteria used to determine whether the restrictions on the shares will lapse are the same as the annual incentive plan metrics. The performance measurement period is PTCs fiscal year, and the performance goals are set at the beginning of the period. The shares are earned to the extent the performance criteria are achieved. Once earned, the restrictions on one-third of the shares lapse and the restrictions on the remaining two-thirds of the shares lapse in equal installments on the following two anniversaries of the grant as long as the executive remains employed by PTC. In fiscal 2006, the performance-based equity grants were also made on November 9, 2005.
In fiscal 2006, the target performance metrics were met in full and the restrictions on one-third of the performance-based shares lapsed on November 9, 2006. The restrictions on the remaining two-thirds will lapse in two equal installments on November 9, 2007 and November 9, 2008 as long as the executive remains employed by PTC.
No discretion was exercised by the Committee or the chief executive officer as to the number of performance-based shares that were earned. The number of shares earned was based solely on the performance of PTC against the pre-established metrics.
We believe our use of performance-based restricted stock as half of each years annual grant gives the executives additional motivation to achieve the companys goals and increase stockholder value. Once earned upon achievement of the performance criteria, the additional time-based vesting schedule provides a strong retention tool.
The number of shares granted each year is based on the competitive assessment of executive compensation provided by our compensation consultant and the value we intend to provide. Based upon where we position our mix of compensation components, the target grant typically represents a greater portion of the executives overall total direct compensation than base salary and annual bonus.
Severance and Related Benefits
In fiscal 2006, we entered into new executive agreements with our executive officers, including our chief executive officer. These agreements replaced similar agreements that had expired or were scheduled to expire in 2007. The agreements are designed to motivate and encourage the executives to remain with PTC in the case of a change in control and were updated in consideration of current corporate governance and executive compensation practices. We believe the terms of the agreements are reasonable and fair to both PTC and the executives and are within norm when compared to similar companies.
As part of the process, in order to gain perspective on the range of practices regarding termination and change-in-control provisions in such agreements, we retained our external compensation consultant to research the terms of such agreements among the peer group companies. The research included terms such as severance arrangements associated with several different types of termination, including termination with and without cause, resignation with and without good reason, termination in connection with a change-in-control, death and disability.
The chief executive officers agreement is structured differently than the agreements with the other executive officers due to the different nature of his position. The agreements are described under Agreements with Executive Officers on page 27.
Other Benefits and Perquisites
Our executives are eligible to participate in the standard benefits and programs available to all PTC employees on the same terms and conditions as all employees. In addition, we provide Mr. Harrison, our chief executive officer, with supplemental long-term disability coverage. We provide no other benefits or perquisites to our executives.
Chief Executive Officer and Named Executive Officer Compensation for Fiscal 2006
The tally sheet below shows the total compensation received by Mr. Harrison and each named executive officer with respect to fiscal 2006.
Timing of Equity Grants
We generally make equity grants to our executives at the beginning of the fiscal year after financial results for the prior year have been reported. As a result, we typically make those grants in November. However, we may make those grants at different times during some years if we are limited at that time by the number of shares available for grant under our equity incentive plan or if circumstances occur during the year, such as a new hire or a need to retain an executive.
In fiscal 2006, all of the executive restricted stock grants were made in November. For fiscal 2007, we intend to make the executive restricted stock grants in two tranches: November 2006 and March 2007. The main reason for this split is that we had insufficient shares available for issuance under the 2000 Equity Incentive Plan in November 2006 to fully fund executive and employee grants. We will have additional shares available for issuance under that plan in March 2007 if stockholders approve our proposed amendment to that plan to increase the number of shares available for issuance. We made the performance-based restricted stock grants to our executives on November 3, 2006, the performance-criteria for which are the same as for the 2007 annual executive incentive plan. If the proposed amendment to the 2000 Equity Incentive Plan is approved, we will make the fiscal 2007 time-based restricted stock awards to the executives in March 2007, the restrictions on which will lapse in three equal installments beginning on the anniversary date of the grant.
We make the annual awards to directors, executives and employees on scheduled dates and do not time awards either to take advantage of a depressed stock price or in anticipation of an increase in stock price.
Tax and Accounting Considerations
We consider the tax (individual and corporate) and accounting consequences of the executive compensation plans when designing the plans. Section 162(m) of the Internal Revenue Code (the Code) limits deduction of compensation paid to the chief executive officer and the other four most highly compensated executive officers of PTC to $1,000,000 unless the compensation is performance-based. In PTCs case, base salary and time-vested restricted stock are not considered performance-based compensation. Therefore, any amount transferred or paid to the executives attributable to base salary or vesting on time-based restricted stock that is over $1,000,000 is not a deductible compensation expense. Because base salaries for our executives are not more than $1,000,000, any non-deductibility of compensation amounts would be attributable to vesting of time-based restricted stock. Annual bonuses are considered performance-based compensation under the Code and amounts paid under our annual bonus plan are considered deductible. Similarly, performance-based restricted stock is considered performance-based compensation and any taxable amount associated with the vesting of this stock is deductible. We believe that any cost associated with vesting of the time-based restricted stock in excess of the deductible amount is justified by the incentive and retention value provided by the stock.
In addition to tax considerations, when determining amounts of long-term incentive grants to executives and employees, we consider the accounting impact of the grants. Under Statement of Financial Accounting Standards 123(R), grants of stock options, restricted stock, restricted stock units and other share-based payments result in a stock-based compensation charge to PTC. The charge is equal to the fair value of the instruments being issued. For restricted stock and restricted stock units (our predominant instruments), fair value is the closing price of the stock on the date of grant times the number of shares or units granted. This expense is amortized over the vesting period of the instruments.
Equity Ownership by Executives
PTC does not currently have a formal stock ownership requirement for executives. However, we encourage stock ownership by executives on a voluntary basis. Our named executives hold stock, restricted stock and vested and unvested stock options. Each year we examine the vested and unvested holdings by our named executives and evaluate whether there is sufficient ownership or potential ownership to appropriately align the interests of the executives with those of our stockholders. We may consider adopting a minimum ownership requirement or mandatory holding period for shares received under our equity compensation plans if we determine that our executives no longer hold sufficient amounts of equity.
Interaction with Compensation Consultants
We use the services of an external compensation consultant to assist us with various aspects of compensation decisions. In fiscal year 2006, the Compensation Committee retained the services of Pearl Meyer & Partners to assist with the review of overall executive compensation programs. In addition, Pearl Meyer was retained for several special projects, including preparation of executive compensation tally sheets, research regarding executive employment agreement provisions, and calculation of Section 280G golden parachute liabilities.
Although the Committee retains the compensation consultant, the consultant interacts with members of the management team when necessary. Specifically, the Senior Vice President of Human Resources and the Director of Executive Compensation and Global Benefits work with the compensation consultant to provide compensation and performance data for the executives and PTC. In addition, those individuals review the consultants work product prior to presentation to the Committee. This review and comment process enables the consultant to identify data problems prior to presentation to the Committee.
Although the Committee makes decisions regarding the CEOs compensation with input from our compensation consultant and the Senior Vice President of Human Resources and makes decisions regarding compensation of other executives with the additional input of the CEO, all compensation decisions are made solely by the Committee.
Stock Performance Graph
The stock performance graph below compares the cumulative stockholder return on our common stock from September 28, 2001 to September 30, 2006 with the cumulative total return of the S&P 500 Index, the Nasdaq (U.S. Companies) Index and the Nasdaq Computer & Data Processing Index over the same period. The graph assumes that the value of the investment in PTC common stock and each of the comparison groups was $100 on September 28, 2001 and assumes the reinvestment of dividends. We have never declared or paid a dividend on our common stock. The stock price performance depicted in the graph is not necessarily indicative of future price performance.
Agreements with Executive Officers
On August 29, 2006, we entered into agreements with our senior executives that provide them with certain compensation and benefits if their employment is terminated under specified circumstances or if a change in control of PTC occurs. The agreements replace similar agreements with those executives that expired in 2006 or were due to expire in 2007 and were approved by the Compensation Committee of our Board of Directors. The agreements are designed to encourage those executives to remain with PTC, especially while a change in control of PTC is pending. In connection with entering each of the agreements, each executive officer was required to execute a new non-compete agreement with PTC and to agree to execute and deliver a general release of claims against PTC and its affiliates in order to receive severance benefits under the agreement.
Mr. Harrisons Agreement
Termination without Cause; Resignation for Good Reason
If we terminate Mr. Harrisons employment without cause or if he resigns for good reason (as defined in the agreement), Mr. Harrison will be entitled to payment of his salary (excluding bonuses) over the two year period
following such event, paid at the highest rate in effect during the six months preceding such event. In addition, he will be entitled to continued participation in PTCs medical, dental, vision and basic life insurance benefit plans (or payment in lieu thereof) for up to the two year period following such event.
Change in Control
Effective upon a change in control (as defined in the agreement), all performance criteria applicable to all equity awards held by Mr. Harrison will be deemed to have been met in full, all equity awards held by him will immediately become vested and exercisable in full and the restrictions on any shares of restricted stock held by him will lapse. In addition, the option exercise period for each stock option held by him will, following termination of his employment, be extended as provided in the agreement, but in no event beyond the original term of such option. These provisions are not applicable to any equity interests issued in connection with PTCs executive incentive plan or other short-term incentive plans (bonus equity).
In addition, with respect to any annual cash incentive award in effect for the year in which the change in control occurs and any bonus equity, all performance criteria will be deemed met in full and Mr. Harrison will be entitled to a lump sum payment of a pro-rata portion of any such annual cash incentive award and a pro-rata portion of any such bonus equity held by him will vest (such pro-rata portions to be based on the number of days elapsed in the applicable fiscal year).
The agreement provides that Mr. Harrisons employment will terminate 30 days following a change in control if not earlier terminated in connection with such change in control. Effective upon the date Mr. Harrisons employment is so terminated, he will be entitled to the benefits he would receive upon a termination without cause or for good reason described above plus payment of his target bonus over the two year period following such termination, paid at the highest rate in effect in the six months preceding the change in control or such termination.
The amounts payable and benefits provided to Mr. Harrison under the agreement may be reduced by up to 15% of the value thereof if such reduction would cause the amounts payable and benefits provided to not be subject to the excise tax under Section 4999 of the U.S. Internal Revenue Code. If such a reduction is not made and the amounts payable and benefits provided to Mr. Harrison are subject to such excise tax, Mr. Harrison is entitled to a gross-up payment that, on an after-tax basis, is equal to the taxes imposed on such payments made or benefits provided.
Death or Disability
If Mr. Harrisons employment terminates by reason of his death or disability, all performance criteria applicable to all equity awards held by him will be deemed to have been met in full, all equity awards held by him will immediately become vested and exercisable in full and the restrictions on any shares of restricted stock held by him will lapse. These provisions are not applicable to any bonus equity held by him, which would terminate on such event if the restrictions with respect thereto had not lapsed before such event.
Agreements with Barry F. Cohen, Paul J. Cunningham, James E. Heppelmann and Cornelius F. Moses
Termination without Cause
If we terminate any of these executives employment without cause, the executive will be entitled to a lump sum payment in an amount equal to one times the highest annual salary (excluding bonuses) in effect with respect to the executive during the six-month period immediately preceding the termination date and continued participation in PTCs medical, dental, vision and basic life insurance benefit plans (or payment in lieu thereof) for up to the one year period following such termination.
Change in Control
Effective upon a change in control: all performance criteria applicable to any equity award held by the executive will be deemed to have been met in full; the vesting schedule applicable to any equity award held by the executive, including restricted stock, will be amended to vest any portion of such award scheduled to vest after the second anniversary of the change in control (unless the agreement is not assumed or replaced, in which case the equity award will become vested and exercisable in full); and, each equity award held by the executive will be amended to provide that it may not, except in certain circumstances, be terminated without the executives written consent. These provisions are not applicable to any bonus equity held by the executive.
In addition, with respect to any annual cash incentive award in effect for the year in which the change in control occurs and any bonus equity, all performance criteria will be deemed met in full and each executive will be entitled to a lump sum payment of a pro-rata portion of any such annual cash incentive award and a pro-rata portion of any such bonus equity held by the executive will vest (such pro-rata portions to be based on the number of days elapsed in the applicable fiscal year).
Termination in Connection with a Change in Control
If within the two years following a change in control the executive is terminated without cause or resigns for good reason, the executive will be entitled to the benefits he would have received if his employment was terminated without cause as described above plus a lump sum payment equal to his annual target bonus (such target bonus amount to be equal to the highest target bonus in effect with respect to the executive for the year in which the change in control occurred or after the change in control).
In addition, upon such termination, all equity awards held by the executive will immediately become vested and exercisable in full and all restrictions applicable to restricted stock held by the executive will immediately lapse. This provision is not applicable to any bonus equity held by the executive.
The amounts payable and benefits provided to any executive under the agreement may be reduced by up to 15% of the value thereof if such reduction would cause the amounts payable and benefits provided to not be subject to the excise tax under Section 4999 of the U.S. Internal Revenue Code. If such a reduction is not made and the amounts payable and benefits provided to any executive are subject to such excise tax, such executive is entitled to a gross-up payment that, on an after-tax basis, is equal to the taxes imposed on such payments made or benefits provided.
Termination upon Death or Disability
If an executives employment terminates due to his death or disability, all performance criteria applicable to any equity awards held by the executive will be deemed to have been met in full, all equity awards held by the executive will immediately become vested and exercisable in full, and all restrictions applicable to restricted stock held by the executive will immediately lapse. These provisions are not applicable to any bonus equity held by the executive, which would terminate on such event if the restrictions with respect thereto had not lapsed before such event.
EQUITY COMPENSATION PLANS
As of January 8, 2007:
The following table sets forth information regarding our equity compensation plans as of September 30, 2006:
Non-Stockholder Approved Plan
PTC maintained the 1997 Non-Statutory Stock Option Plan until March 10, 2005, at which time, in connection with stockholder approval of certain amendments to the 2000 EIP, we terminated all future offerings under that plan.
Plans Assumed in Connection with a Merger or Other Acquisition Transaction
PTC has also assumed stock options under certain equity plans in connection with certain mergers and acquisitions. These plans are all inactive and no future options or other equity awards may be granted under them.
INFORMATION ABOUT OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP, an independent registered public accounting firm, served as PTCs independent auditors for fiscal 2006 and has reported on our 2006 consolidated financial statements and internal control over financial reporting. The Audit Committee of the Board of Directors has re-appointed PricewaterhouseCoopers LLP for fiscal year 2007 and, as described above, the Board is seeking your confirmation of PricewaterhouseCoopers LLPs appointment. Representatives of PricewaterhouseCoopers LLP are expected to be present at our Annual Meeting. They will have the opportunity to make a statement if they so desire and will also be available to respond to appropriate questions from stockholders.
Report of the Audit Committee
The Audit Committee assists the board in fulfilling its oversight responsibilities for accounting and financial reporting compliance, including reviewing the financial information provided to the stockholders and others, PTCs accounting policies, disclosure controls and procedures, internal accounting and financial controls, and the audit process. In fulfilling its responsibilities, the Committee has reviewed and discussed the audited financial statements for fiscal 2006 with management and with PricewaterhouseCoopers LLP, our independent registered public accounting firm. In this process, the Committee met with PricewaterhouseCoopers LLP, with and without management present, to discuss the results of their examinations, PTCs critical accounting policies and the overall quality of PTCs financial reporting, as well as PTCs internal control over financial reporting.
The Committee has also discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, as amended. In addition, the Committee has discussed with PricewaterhouseCoopers LLP their independence from PTC and its management, including the matters in the letter and written disclosures received from PricewaterhouseCoopers LLP as required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees. The Audit Committee also considered whether the independent auditors provision of the other, non-audit related services to PTC, which are referred to in Independent Registered Public Accounting Firm Services and Fees below, is compatible with maintaining independence.
Based on the Committees discussions with management and the independent auditors, and the Committees review of PricewaterhouseCoopers LLPs report to the Committee, the Committee recommended to the Board of Directors that the audited financial statements be included in PTCs Annual Report on Form 10-K for fiscal 2006 for filing with the Securities and Exchange Commission.
Independent Registered Public Accounting Firm Services and Fees
The Audit Committee is responsible for the engagement of our independent auditors and for approving, in advance, all auditing services and permitted non-audit services to be provided by the independent auditors. The Audit Committee maintains a policy for the engagement of the independent auditors that is intended to maintain the independent auditors independence from PTC. In adopting the policy, the Audit Committee considered the various services that the independent auditors have historically performed or may be asked to perform in the future. The policy, which is to be reviewed and re-adopted at least annually by the Audit Committee:
Any approval required under the policy must be given by the Audit Committee, by the Chairman of the Committee in office at the time, or by any other Committee member to whom the Committee has delegated that authority. The Audit Committee does not delegate its responsibilities to approve services performed by the independent auditors to any member of management.
The standard applied by the Audit Committee in determining whether to grant approval of any engagement of the independent auditors is whether the services to be performed, the compensation to be paid therefor and other related factors are consistent with the independent auditors independence under guidelines of the Securities and Exchange Commission, the Public Company Accounting Oversight Board, and applicable professional standards. Relevant considerations include, but are not limited to, whether the work product is likely to be subject to, or implicated in, audit procedures during the audit of PTCs financial statements; whether the independent auditors would be functioning in the role of management or in an advocacy role; whether performance of the service by the independent auditors would enhance PTCs ability to manage or control risk or improve audit quality; whether performance of the service by the independent auditors would increase efficiency because of their familiarity with PTCs business, personnel, culture, systems, risk profile and other factors; and whether the amount of fees involved, or the proportion of the total fees payable to the independent auditors in the period that is for tax and other non-audit services, would tend to reduce the independent auditors ability to exercise independent judgment in performing the audit.
The following table states the fees for professional services rendered during fiscal 2006 and fiscal 2005 by our independent registered public accounting firm, PricewaterhouseCoopers LLP.
NOMINATING & CORPORATE GOVERNANCE COMMITTEE
The Nominating & Corporate Governance Committees responsibilities regarding director nominations are to:
In selecting nominees for director, the Nominating & Corporate Governance Committee reviews candidates recommended by stockholders in the same manner and using the same general criteria as candidates recruited by the Committee and/or recommended by the Board.
The Nominating & Corporate Governance Committee does not rely on a fixed set of qualifications for director nominees. The Committees primary mandate with respect to director nominees is to create a Board with a broad range of skills and attributes that is aligned with our strategic needs. The minimum qualifications for director nominees are that they:
Additionally, PTCs Corporate Governance Guidelines require that at least a majority of members of the Board of Directors must qualify as independent directors in accordance with NASDAQ independence rules.
The Nominating & Corporate Governance Committees process for evaluating nominees for director, including nominees recommended by stockholders, is to consider an individuals skills, character and professional ethics, judgment, leadership experience, business experience and acumen, familiarity with relevant industry issues, national and international experience, and such other relevant criteria as may contribute to PTCs success. This evaluation is performed in light of the Committees views as to what skill set and other characteristics would most complement those of the current directors, including the diversity, age, skills and experience of the Board as a whole. With respect to identifying potential candidates, the Committee does not foreclose any sources.
If you wish to recommend a director candidate for consideration by the Committee, you should provide the following information to our Clerk at the address listed below:
Parametric Technology Corporation
140 Kendrick Street
Needham, Massachusetts 02494
The Committee may seek further information from or about you, the candidate, or any such other beneficial owner, including information about all business and other relationships between the candidate and you and between the candidate and any such other beneficial owner.
INFORMATION ABOUT STOCKHOLDER PROPOSALS
If you wish to make a proposal for consideration at the 2008 Annual Meeting of Stockholders, you must give written notice to us between September 27, 2007 and October 27, 2007, including the information required by our by-laws.
Under SEC rules, if you desire that such proposal be included in our proxy statement and proxy card, you must give written notice to us no later than September 27, 2007.
In order to curtail controversy as to the date on which PTC receives a proposal, you should submit your proposal by Certified Mail-Return Receipt Requested.
By Order of the Board of Directors,
AARON C. VON STAATS
January 25, 2007
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE ANNUAL MEETING OF STOCKHOLDERS. WHETHER OR NOT YOU PLAN TO ATTEND, WE URGE YOU TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE OR VOTE BY TELEPHONE OR ON THE INTERNET. A PROMPT RESPONSE WILL GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE APPRECIATED.
PARAMETRIC TECHNOLOGY CORPORATION
2000 EQUITY INCENTIVE PLAN
The purpose of the Parametric Technology Corporation 2000 Equity Incentive Plan (the Plan) is to attract and retain directors and key employees and consultants of the Company and its Affiliates, to provide an incentive for them to achieve performance goals, and to enable them to participate in the growth of the Company by granting Awards with respect to the Companys Common Stock. Certain capitalized terms used herein are defined in Section 9 below.
The Plan shall be administered by the Committee; provided, that the Board may in any instance perform any of the functions of the Committee hereunder. The Committee shall select the Participants to receive Awards and shall determine the terms and conditions of the Awards. The Committee shall have authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the operation of the Plan as it shall from time to time consider advisable, and to interpret the provisions of the Plan. The Committees decisions shall be final and binding. To the extent permitted by applicable law, the Committee may delegate to one or more executive officers of the Company the power to make Awards to Participants who are not Reporting Persons or Covered Employees and all determinations under the Plan with respect thereto, provided that the Committee shall fix the maximum amount of such Awards for all such Participants and a maximum for any one Participant.
All directors and all employees and consultants of the Company or any Affiliate capable of contributing to the successful performance of the Company are eligible to be Participants in the Plan. Incentive Stock Options may be granted only to persons eligible to receive such Options under the Code.
4. Stock Available for Awards.
(a) Amount. Up to an aggregate of 14,800,000 shares of Common Stock, subject to adjustment under subsection (b) may be issued pursuant to Awards, including Incentive Stock Options, under the Plan. If any Award expires or is terminated unexercised or is forfeited, the shares subject to such Award, to the extent of such expiration, termination, or forfeiture, shall again be available for award under the Plan. Common Stock issued through the assumption or substitution of outstanding grants from an acquired company shall not reduce the shares available for Awards under the Plan. Shares issued under the Plan may consist of authorized but unissued shares or treasury shares.
(b) Adjustment. In the event of any equity restructuring, whether a stock dividend, recapitalization, split-up or combination of shares, or otherwise, affects the Common Stock such that an adjustment is required in order to preserve the benefits intended to be provided by the Plan, the Committee (subject in the case of Incentive Stock Options to any limitation required under the Code) shall equitably adjust any or all of (i) the number and kind of shares in respect of which Awards may be made under the Plan, (ii) the number and kind of shares subject to outstanding Awards and (iii) the exercise price with respect to any of the foregoing, provided that the number of shares subject to any Award shall always be a whole number.
(c) Limit on Individual Grants. Subject to adjustment under subsection (b) above, the maximum number of shares of Common Stock that are either subject to Options and Stock Appreciation Rights or are granted as Restricted Stock Units, Restricted Stock or unrestricted stock Awards with respect to which Performance Goals apply under Section 7 below that may be granted to any Participant in the aggregate in any fiscal year shall not exceed 800,000.
5. Stock Options.
(a) Grant of Options. Subject to the provisions of the Plan, the Committee may grant options (Options) to purchase shares of Common Stock (i) complying with the requirements of Section 422 of the Code or any successor
provision and any regulations thereunder (Incentive Stock Options) and (ii) not intended to comply with such requirements (Nonstatutory Stock Options). The Committee shall determine the number of shares subject to each Option and the exercise price therefor, which shall not be less than 100% of the Fair Market Value of the Common Stock on the date of grant, provided that a Nonstatutory Stock Option granted to a new employee or consultant in connection with the hiring of such person may have a lower exercise price so long as it is not less than 100% of Fair Market Value on the date the person accepts the Companys offer of employment or the date employment commences, whichever is lower. No Incentive Stock Option may be granted hereunder more than ten years after the effective date of the Plan.
(b) Terms and Conditions. Each Option shall be exercisable at such times and subject to such terms and conditions as the Committee may specify in the applicable grant or thereafter. The Committee may impose such conditions with respect to the exercise of Options, including conditions relating to applicable federal or state laws, as it considers necessary or advisable.
(c) Payment. No shares shall be delivered pursuant to any exercise of an Option until payment in full of the exercise price therefor is received by the Company. Such payment may be made in whole or in part in cash or, to the extent permitted by the Committee at or after the grant of the Option, by delivery of shares of Common Stock owned by the optionee valued at their Fair Market Value on the date of delivery, or such other lawful consideration, including a payment commitment of a financial or brokerage institution, as the Committee may determine.
6. Stock Appreciation Rights.
(a) Grant of SARs. Subject to the provisions of the Plan, the Committee may grant rights to receive any excess in value of shares of Common Stock over the exercise price (Stock Appreciation Rights or SARs). The Committee shall determine at the time of grant or thereafter whether SARs are settled in cash, Common Stock or other securities of the Company, Awards or other property, and may define the manner of determining the excess in value of the shares of Common Stock.
(b) Exercise Price. The Committee shall fix the exercise price of each SAR or specify the manner in which the price shall be determined. An SAR may not have an exercise price less than 100% of the Fair Market Value of the Common Stock on the date of the grant, provided that an SAR granted to a new employee or consultant in connection with the hiring of such person may have a lower exercise price so long as it is not less than 100% of Fair Market Value on the date the person accepts the Companys offer of employment or the date employment commences, whichever is lower.
7. Stock and Stock Unit Awards.
(a) Grant of Restricted or Unrestricted Stock Awards. The Committee may grant shares of Common Stock subject to forfeiture (Restricted Stock) and determine the duration of the period (the Restricted Period) during which, and the conditions under which, the shares may be forfeited to the Company and the other terms and conditions of such Awards. Shares of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered, except as permitted by the Committee, during the Restricted Period. Shares of Restricted Stock shall be evidenced in such manner as the Committee may determine. Any certificates issued in respect of shares of Restricted Stock shall be registered in the name of the Participant and unless otherwise determined by the Committee, deposited by the Participant, together with a stock power endorsed in blank, with the Company. At the expiration of the Restricted Period, the Company shall deliver such certificates to the Participant or if the Participant has died, to the Participants Designated Beneficiary. The Committee also may make Awards of shares of Common Stock that are not subject to restrictions or forfeiture, on such terms and conditions as the Committee may determine from time to time.
(b) Grant of Restricted Stock Units. The Committee may grant the right to receive in the future shares of Common Stock subject to forfeiture (Restricted Stock Units) and determine the duration of the Restricted Period during which, and the conditions under which, the Award may be forfeited to the Company and the other terms and conditions of such Awards. Restricted Stock Unit Awards shall constitute an unfunded and unsecured obligation of the Company, and shall be settled in shares of Common Stock or cash, as determined by the Committee at the time
of grant or thereafter. Such Awards shall be made in the form of units with each unit representing the equivalent of one share of Common Stock.
(c) Performance Goals; Consideration. The Committee may establish Performance Goals for the granting of Restricted Stock, unrestricted stock Awards, Restricted Stock Units or the lapse of risk of forfeiture of Restricted Stock or Restricted Stock Units. Shares of Restricted Stock or unrestricted stock or Restricted Stock Units may be issued for no cash consideration, such minimum consideration as may be required by applicable law or such other consideration as the Committee may determine.
8. General Provisions Applicable to Awards.
(a) Documentation. Each Award under the Plan shall be evidenced by a writing delivered to the Participant or agreement executed by the Participant specifying the terms and conditions thereof and containing such other terms and conditions not inconsistent with the provisions of the Plan as the Committee considers necessary or advisable to achieve the purposes of the Plan or to comply with applicable tax and regulatory laws and accounting principles. No Award to any Participant subject to United States income taxation shall provide for the deferral of compensation that does not comply with Section 409A of the Code.
(b) Committee Discretion. Each type of Award may be made alone, in addition to or in relation to any other Award. The terms of each type of Award need not be identical, and the Committee need not treat Participants uniformly. Except as otherwise provided by the Plan or a particular Award, any determination with respect to an Award may be made by the Committee at the time of grant or at any time thereafter.
(c) Dividends and Cash Awards. In the discretion of the Committee, any Award under the Plan may provide the Participant with (i) dividends or dividend equivalents payable (in cash or in the form of Awards under the Plan) currently or deferred with or without interest and (ii) cash payments in lieu of or in addition to an Award.
(d) Termination of Service. The Committee shall determine the effect on an Award of the disability, death, retirement or other termination of service of a Participant and the extent to which, and the period during which, the Participants legal representative, guardian or Designated Beneficiary may receive payment of an Award or exercise rights thereunder.
(e) Change in Control. In order to preserve a Participants rights under an Award in the event of a change in control of the Company (as defined by the Committee), the Committee in its discretion may, at the time an Award is made or at any time thereafter, take such actions, including without limitation one or more of the following: (i) providing for the acceleration of any time period relating to the exercise or payment of the Award, (ii) providing for payment to the Participant of cash or other property with a Fair Market Value equal to the amount that would have been received upon the exercise or payment of the Award had the Award been exercised or paid upon the change in control, whereupon the Award shall terminate, (iii) adjusting the terms of the Award in a manner determined by the Committee to reflect the change in control, or (iv) causing the Award to be assumed, or new rights substituted therefor, by another entity, as the Committee may consider equitable to Participants and in the best interests of the Company.
(f) Transferability. In the discretion of the Committee, any Award may be made transferable upon such terms and conditions and to such extent as the Committee determines, provided that Incentive Stock Options may be transferable only to the extent permitted by the Code. The Committee may in its discretion waive any restriction on transferability.
(g) Withholding Taxes. The Participant shall pay to the Company, or make provision satisfactory to the Committee for payment of, any taxes required by law to be withheld in respect of Awards under the Plan no later than the date of the event creating the tax liability. The Company and its Affiliates may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind due to the Participant hereunder or otherwise. In the Committees discretion, the minimum tax obligations required by law to be withheld in respect of Awards may be paid in whole or in part in shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value on the date of retention or delivery.
(h) Foreign Nationals. Awards may be made to Participants who are foreign nationals or employed outside the United States on such terms and conditions different from those specified in the Plan as the Committee considers necessary or advisable to achieve the purposes of the Plan or to comply with applicable laws.
(i) Amendment of Award. The Committee may amend, modify or terminate any outstanding Award, including without limitation changing the date of exercise or realization, causing the Award to be assumed by another entity, and converting an Incentive Stock Option to a Nonstatutory Stock Option, provided that the Participants consent to such action shall be required (a) if such action would terminate, or reduce the number of shares issuable under, an Option, unless any time period relating to the exercise of such Option or the eliminated portion, as the case may be, is accelerated before such termination or reduction, in which case the Committee may provide for the Participant to receive cash or other property equal to the net value that would be received upon exercise of the terminated Option or the eliminated portion, as the case may be, and (b) in any other case, unless the Committee determines that the action, taking into account any related action, would not materially and adversely affect the Participant. The Committee shall not, without further approval of the stockholders of the Company, authorize the amendment of any outstanding Option to reduce the exercise price. Furthermore, no Option shall be canceled and replaced with Options having a lower exercise price without approval of the stockholders of the Company.
9. Certain Definitions.
Affiliate means any business entity in which the Company owns directly or indirectly 50% or more of the total voting power or has a significant financial interest as determined by the Committee.
Award means any Option, Stock Appreciation Right, Restricted Stock or Restricted Stock Unit granted under the Plan.
Board means the Board of Directors of the Company.
Code means the Internal Revenue Code of 1986, as amended from time to time, or any successor law.
Committee means one or more committees each comprised of not less than two members of the Board appointed by the Board to administer the Plan or a specified portion thereof. Unless otherwise determined by the Board, if a Committee is authorized to grant Awards to a Reporting Person or a Covered Employee, each member shall be a non-employee director within the meaning of Rule 16b-3 under the Exchange Act or an outside director within the meaning of Section 162(m) of the Code, respectively.
Common Stock or Stock means the Common Stock, $.01 par value, of the Company.
Company means Parametric Technology Corporation, a Massachusetts corporation.
Covered Employee means a covered employee within the meaning of Section 162(m) of the Code.
Designated Beneficiary means the beneficiary designated by a Participant, in a manner determined by the Committee, to receive amounts due or exercise rights of the Participant in the event of the Participants death. In the absence of an effective designation by a Participant, Designated Beneficiary means the Participants estate.
Exchange Act means the Securities Exchange Act of 1934, as amended from time to time, or any successor law.
Fair Market Value means, with respect to Common Stock or any other property, the fair market value of such property as determined by the Committee in good faith or in the manner established by the Committee from time to time.
Participant means a person selected by the Committee to receive an Award under the Plan.
Performance Goals means one or more objective performance goals based on one or more of the following criteria established by the Committee: revenue; revenue growth; sales; expenses; margins; net income; earnings or earnings
per share; cash flow; shareholder return; return on investment; return on invested capital, assets, or equity; profit before or after tax; operating profit; return on research and development investment; market capitalization; new product releases; quality improvements; market share; cycle time reductions; customer satisfaction measures; strategic positioning or marketing programs; business/information systems improvements; expense management; infrastructure support programs; human resource programs; customer programs; technology development programs; or any combination of any of the foregoing, and may be particular to a Participant or may be based, in whole or in part, on the performance of the division, department, line of business, subsidiary, or other business unit, whether or not legally constituted, in which the Participant works or on the performance of the Company generally.
Reporting Person means a person subject to Section 16 of the Exchange Act.
(a) No Right To Employment. No person shall have any claim or right to be granted an Award. Each employee of the Company or any of its Affiliates is an employee-at-will (that is to say that either the Participant or the Company or any Affiliate may terminate the employment relationship at any time for any reason or no reason at all) unless and only to the extent provided in a written employment agreement for a specified term executed by the chief executive officer of the Company or his duly authorized designee or the authorized signatory of any Affiliate. Neither the adoption, maintenance, nor operation of the Plan nor any Award hereunder shall confer upon any employee or consultant of the Company or of any Affiliate any right with respect to the continuance of his/her employment by or other service with the Company or any such Affiliate nor shall they interfere with the rights of the Company (or Affiliate) to terminate any employee at any time or otherwise change the terms of employment, including, without limitation, the right to promote, demote or otherwise re-assign any employee from one position to another within the Company or any Affiliate.
(b) No Rights As Stockholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be issued under the Plan until he or she becomes the holder thereof. A Participant to whom Common Stock is awarded shall be considered the holder of the Stock at the time of the Award except as otherwise provided in the applicable Award.
(c) Effective Date. The effective date of the Plan, from time to time, shall be the most recent date that the Plan was adopted or that it was approved by the stockholders, if earlier (as such terms are used in the regulations under Section 422 of the Code).
(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time, subject to such stockholder approval as the Board determines to be necessary or advisable to comply with any tax or regulatory requirement.
(e) Governing Law. The provisions of the Plan shall be governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts.
PARAMETRIC TECHNOLOGY CORPORATION
140 KENDRICK STREET
NEEDHAM, MA 02494
AUTO DATA PROCESSING
INVESTOR COMM SERVICES
51 MERCEDES WAY
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