UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [/]
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Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[/] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-12
PERFICIENT, INC.
________________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)
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PERFICIENT, INC.
1120 South Capital of Texas Highway, Building 3, Suite 220
Austin, Texas 78746
Notice of Annual Meeting of Stockholders
To Be Held October 12, 2006
NOTICE IS HEREBY GIVEN that the 2006 Annual Meeting of the Stockholders of
Perficient, Inc. ("Perficient" or the "Company") will be held at the Company's
headquarters located at 1120 South Capital of Texas Highway, Building 3, Suite
220, Austin, Texas 78746 on October 12, 2006 at 10:00 a.m. Central Time, for the
following purposes:
1. To elect five directors to hold office for a term of one year or until
their successors have been duly elected and qualified; and
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors of Perficient has fixed the close of business on
August 31, 2006 as the record date for the determination of stockholders of
Perficient entitled to notice of and to vote at the Annual Meeting. Only holders
of record of Perficient common stock at the close of business on that date will
be entitled to notice of and to vote at the Annual Meeting or any adjournments
or postponements thereof. A list of such stockholders will be available for
inspection at the Company's headquarters located at 1120 South Capital of Texas
Highway, Building 3, Suite 220, Austin, Texas 78746, during ordinary business
hours for the ten-day period prior to the 2006 Annual Meeting.
Your attention is directed to the accompanying Proxy Statement for further
information regarding each proposal to be made.
Whether or not you plan to attend the 2006 Annual Meeting, you are asked to
complete, sign and date the enclosed proxy and return it promptly by mail in the
enclosed self-addressed envelope, which does not require postage if mailed in
the United States. You may revoke your proxy at any time prior to the 2006
Annual Meeting. If you decide to attend the 2006 Annual Meeting and wish to
change your proxy vote, you may do so automatically by voting in person at the
2006 Annual Meeting.
By Order of the Board of Directors
/s/ Paul E. Martin
__________________________________
Paul E. Martin
Secretary
PERFICIENT, INC.
1120 South Capital of Texas Highway, Building 3, Suite 220
Austin, Texas 78746
Proxy Statement for Annual Meeting of Stockholders
This Proxy Statement is furnished by the Board of Directors (the "Board of
Directors") of Perficient, Inc., a Delaware corporation ("Perficient" or the
"Company"), in connection with the solicitation of proxies to be used at the
Annual Meeting of Stockholders (the "Meeting") to be held on October 12, 2006 at
the Company's headquarters located at 1120 South Capital of Texas Highway,
Building 3, Suite 220, Austin, Texas 78746 at 10:00 a.m. Central Time, and at
any adjournment thereof. This Proxy Statement and the accompanying Notice and
Proxy are being mailed to stockholders on or about September 18, 2006. The
principal executive offices of Perficient are located at the address listed
above.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Meeting are
summarized in the accompanying Notice of Annual Meeting of Stockholders. Each
proposal is described in more detail in this Proxy Statement.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Only holders of record of Perficient common stock, $.001 par value per
share (the "Common Stock"), at the close of business on the record date, August
31, 2006 (the "Record Date"), will be entitled to vote at the Meeting and at all
adjournments thereof. On the Record Date, there were outstanding and entitled to
vote 26,884,011 shares of Common Stock. Each outstanding share of Common Stock
is entitled to one vote on each matter to be voted upon. Votes cast, either in
person or by proxy, will be tabulated by Continental Stock Transfer & Trust
Company, the Company's transfer agent.
Quorum Required
The Company's bylaws provide that the holders of a majority of the
Company's outstanding shares of stock entitled to vote at the Meeting, present
in person or represented by proxy, shall constitute a quorum for the transaction
of business at the Meeting. Abstentions and broker non-votes will be counted as
present for the purpose of determining the presence of a quorum.
Votes Required
Proposal 1. Election of Directors. Directors of Perficient will be elected
by a plurality of the vote of the outstanding shares of Common Stock, in person
or by proxy, and entitled to vote at the Meeting. The nominees for director
receiving the highest number of affirmative votes will be elected. Abstentions
and broker non-votes will not be counted toward a nominee's total.
A broker "non-vote" occurs on an item when shares held by a bank, broker or
other nominee are present or represented at the meeting but such nominee is not
permitted to vote on that item without instructions from the beneficial owner of
the shares and no instruction is given.
Abstentions have the same effect as negative votes. Broker non-votes and
shares as to which proxy authority has been withheld with respect to any matter
are not entitled to vote for purposes of
1
determining whether stockholder approval of that matter has been obtained and,
therefore, will have no effect on the outcome of the vote on any such matter.
Proxies
If a proxy is properly signed by a stockholder and is not revoked, the
shares represented thereby will be voted at the Meeting in the manner specified
on the proxy, or if no manner is specified with respect to any matter therein,
such shares will be voted by the person designated therein in accordance with
the recommendations of the Board of Directors as indicated in this Proxy
Statement. If any of the nominees for director are unable to serve or for good
cause will not serve, an event that is not anticipated by Perficient, the shares
represented by the accompanying proxy will be voted for a substitute nominee
designated by the Board of Directors or the Board of Directors may determine to
reduce the size of the Board of Directors. A proxy may be revoked by the
stockholder at any time prior to the voting thereof by giving notice of
revocation in writing to the Secretary of Perficient, by duly executing and
delivering to the Secretary of Perficient a proxy bearing a later date, or by
voting in person at the Meeting.
Solicitation of Proxies
Perficient will bear the entire cost of solicitation, including the
preparation, assembly, printing, and mailing of this Proxy Statement, the Proxy,
and any additional soliciting material furnished to stockholders. Copies of
solicitation material will be furnished to brokerage houses, fiduciaries, and
custodians holding shares in their names that are beneficially owned by others
so that they may forward this solicitation material to such beneficial owners.
Perficient may reimburse such persons for their costs of forwarding the
solicitation material to such beneficial owners. The original solicitation of
proxies by mail may be supplemented by solicitation by telephone, telegram, or
other means by directors, officers, employees or agents of Perficient. No
additional compensation will be paid to these individuals for any such service.
In addition, Perficient has hired Morrow & Co., Inc. to assist Perficient with
the solicitation of proxies from stockholders for a fee of approximately $3,500
plus costs and expenses to aid in the solicitation of proxies and to verify
records relating to the solicitation.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of our Common Stock as of August 31, 2006 for (i) each person or
entity who is known by us to own beneficially more than five percent (5%)
of the outstanding shares of our Common Stock; (ii) each executive officer
listed in the summary compensation table below; (iii) each of our directors
and nominees; and (iv) all directors and executive officers as a group.
Amount and Nature of
Name and Address of Beneficial Owner (1) Shares Beneficially Owned Percent of Class (2)
_______________________________________ _________________________ ____________________
John T. McDonald (3) 1,548,655 5.6%
Jeffrey S. Davis (4) 208,645 *
Paul E. Martin (5) 50,000 *
Michael D. Hill (6) 24,986 *
Richard T. Kalbfleish (7) 19,986 *
David S. Lundeen (8) 428,962 1.6%
Max D. Hopper (9) 55,000 *
Kenneth R. Johnsen (10) 21,250 *
Ralph C. Derrickson (11) 26,250 *
Morton H. Meyerson (12) 2,008,013 7.5%
Robert H. Drysdale (13) 1,731,176 6.4%
2M Technology Ventures, L.P. (14) 1,816,500 6.8%
All executive officers and directors as a group (9 persons) 2,383,734 8.5%
Total (15) 6,122,923 21.7%
(1) Unless otherwise indicated, the address of each person or entity is 1120 South Capital of Texas Highway, Building 3, Suite 220,
Austin, Texas 78746.
(2) The percentage of Common Stock owned is based on total shares outstanding of 26,884,011 as of August 31, 2006.
(3) Includes 935,294 shares of Common Stock issuable upon the exercise of options. Does not include options to purchase 493,751
shares of common stock that are not exercisable within 60 days of the date hereof. Mr. McDonald's total share ownership,
including options that are not exercisable within 60 days of the date hereof, is 2,042,406.
(4) Includes 57,436 shares of Common Stock issuable upon the exercise of options. Does not include options to purchase 239,063
shares of Common Stock that are not exercisable within 60 days of the date hereof. Mr. Davis's total share ownership,
including options that are not exercisable within 60 days of the date hereof, is 447,708. Mr. Davis's address is One City Place
Drive, Suite 190, St. Louis, Missouri 63141.
(5) Mr. Martin's address is One City Place Drive, Suite 190, St. Louis, Missouri 63141.
(6) Includes 13,750 shares of common stock issuable upon the exercise of options.
(7) Includes 8,750 shares of Common Stock issuable upon the exercise of options. Mr. Kalbfleish's address is One City Place Drive,
Suite 190, St. Louis, Missouri 63141.
(8) Includes 125,000 shares of Common Stock issuable upon the exercise of options.
(9) Includes 55,000 shares of Common Stock issuable upon the exercise of options.
(10) Includes 21,250 shares of Common Stock issuable upon the exercise of options.
(11) Includes 26,250 shares of Common Stock issuable upon the exercise of options.
(12) Includes 1,816,500 shares of Common Stock beneficially owned by 2M Technology Ventures, L.P. Mr. Meyerson's address is 3401
Armstrong Avenue, Dallas, Texas 75205.
(13) Mr. Drysdale's address is 142 Hanapepe Loop, Honolulu, Hawaii 96825.
(14) 2M Technology Ventures, L.P.'s address is 3401 Armstrong Avenue, Dallas, Texas 75205.
(15) Includes 1,228,980 shares of Common Stock issuable upon the exercise of options.
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Proposal 1. Election of Directors.
At this year's Meeting, five directors will be elected to hold office for a
term expiring at the next Annual Meeting of Stockholders:
John T. McDonald
Ralph C. Derrickson
Max D. Hopper
Kenneth R. Johnsen
David S. Lundeen
Each director will be elected to serve until a successor is elected and
qualified or until the director's earlier resignation or removal.
If any of the Nominee Directors listed above becomes unable to serve or for
good cause will not serve, an event that is not anticipated by us, (i) the
shares represented by the proxies will be voted for a substitute nominee or
substitute nominees designated by the Board of Directors or (ii) the Board of
Directors may determine to reduce the size of the Board of Directors. At this
time, the Board of Directors knows of no reason why any of the persons listed
above may not be able to serve as directors if elected.
The name and age of each of the executive officers, current directors and
Nominee Directors of Perficient, and their respective positions with Perficient.
Additional biographical information concerning each of the Nominee Directors and
executive officers, including the period during which each such individual has
served Perficient, follows the table.
Name Age Position
____ ___ ________
John T. McDonald 43 Chairman of the Board and Chief Executive Officer
Jeffrey S. Davis 42 President and Chief Operating Officer
Paul E. Martin 46 Chief Financial Officer, Treasurer and Secretary
Richard T. Kalbfleish 50 Controller and Vice President of Finance and Administration
Ralph C. Derrickson 47 Director
Max D. Hopper 71 Director
Kenneth R. Johnsen 53 Director
David S. Lundeen 44 Director
John T. McDonald joined us in April 1999 as Chief Executive Officer and was
elected Chairman of the Board in March 2001. From April 1996 to October 1998,
Mr. McDonald was President of VideoSite, Inc., a multimedia software company
that was acquired by GTECH Corporation in October 1997, 18 months after Mr.
McDonald became VideoSite's president. From May 1995 to April 1996, Mr. McDonald
was a Principal with Zilkha & Co., a New York-based merchant banking firm. From
June 1993 to April 1996, Mr. McDonald served in various positions at Blockbuster
Entertainment Group, including Director of Corporate Development and Vice
President, Strategic Planning and Corporate Development of NewLeaf Entertainment
Corporation, a joint venture between Blockbuster and IBM. From 1987 to 1993, Mr.
McDonald was an attorney with Skadden, Arps, Slate, Meagher & Flom in New York,
focusing on mergers and acquisitions and corporate finance. Mr. McDonald
currently serves as a member of the board of directors of Interstate
Connections, Inc. Mr. McDonald received a B.A. in Economics from Fordham
University and a J.D. from Fordham Law School.
4
Jeffrey S. Davis became our Chief Operating Officer upon the closing of the
acquisition of Vertecon in April 2002 and was named our President in 2004. He
previously served the same role since October 1999 at Vertecon prior to its
acquisition by Perficient. Mr. Davis has 13 years of experience in technology
management and consulting. Prior to Vertecon, Mr. Davis was a Senior Manager and
member of the leadership team in Arthur Andersen's Business Consulting Practice
starting in January 1999 where he was responsible for defining and managing
internal processes, while managing business development and delivery of
products, services and solutions to a number of large accounts. Prior to Arthur
Andersen, Mr. Davis worked at Ernst & Young LLP for two years, Mallinckrodt,
Inc. for two years, and spent five years at McDonnell Douglas in many different
technical and managerial positions. Mr. Davis has a M.B.A. from Washington
University and a B.S. degree in Electrical Engineering from the University of
Missouri.
Paul E. Martin joined us in August 2006 as Chief Financial Officer,
Treasurer and Secretary. From August 2004 until February 2006, Mr. Martin was
the Interim co-Chief Financial Officer and Interim Chief Financial Officer of
Charter Communications, Inc. ("Charter"), a publicly traded multi-billion dollar
revenue domestic cable television multi-system operator. From April 2002 through
April 2006, Mr. Martin was the Senior Vice President, Principal Accounting
Officer and Corporate Controller of Charter and was Charter's Vice President and
Corporate Controller from March 2000 to April 2002. Prior to Charter, Mr. Martin
was Vice President and Controller for Operations and Logistics for Fort James
Corporation, a manufacturer of paper products with multi-billion dollar
revenues. From 1995 to February 1999, Mr. Martin was Chief Financial Officer of
Rawlings Sporting Goods Company, Inc., a publicly traded multi-million dollar
revenue sporting goods manufacturer and distributor. Mr. Martin received a B.S.
degree with honors in accounting from the University of Missouri - St. Louis.
Richard T. Kalbfleish joined us as Controller in November 2004 and became
Vice President of Finance and Administration and Assistant Treasurer in May
2005. Prior to joining us, Mr. Kalbfleish served as Vice President of Finance
and Administration with IntelliMark/Technisource, a national IT staffing
company, for 11 years. Mr. Kalbfleish has over 21 years of experience at the
Controller level and above in a number of service industries with an emphasis on
acquisition integration and accounting, human resources and administrative
support. Mr. Kalbfleish has a B.S.B.A. in Accountancy from the University of
Missouri - Columbia.
Ralph C. Derrickson became a member of our Board of Directors in July 2004.
In 2001, he founded the RCollins Group, LLC, a management company that
specializes in early stage technology companies, and is currently its Managing
Director. Mr. Derrickson was managing director of venture investments at Vulcan
Inc., an investment management firm with headquarters in Seattle, Washington
from October 2001 to July 2004. Mr. Derrickson has more than 20 years of
technology management experience in a wide range of settings including start-up,
interim management and restructuring situations. He served as a board member of
Metricom, Inc., a publicly traded company, from April 1997 to November 2001 and
as Interim Chief Executive Officer of Metricom from February 2001 to August
2001. Metricom, Inc. voluntarily filed a bankruptcy petition in US Bankruptcy
Court for the Northern District of California in July of 2001. Mr. Derrickson
was also a founding partner of Watershed Capital, a private equity investment
management company established August in 1998. Prior to Watershed, Mr.
Derrickson managed venture investments at Vulcan Ventures. He served as vice
president of product development at Starwave Corporation, one of the pioneers of
the Internet. Earlier, Mr. Derrickson held senior management positions at NeXT
Computer, Inc. and Sun Microsystems, Inc. He has served on the boards of
numerous start-up technology companies. Mr. Derrickson is active in the business
and entrepreneurship programs at the University of Washington and is a member of
the advisory board of the Center for Technology Entrepreneurship. He also serves
on the board of directors of the Northwest Entrepreneur Network, or NWEN. Mr.
Derrickson holds a B.T. in systems software from the Rochester Institute of
Technology.
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Max D. Hopper became a member of our Board of Directors in September 2002.
Mr. Hopper began his information systems career in 1960 at Shell Oil and served
with Electronic Data Systems, United Airlines and Bank of America prior to
joining American Airlines. During Mr. Hopper's twenty-year tenure at American
Airlines, he served as Chief Information Officer and as Chief Executive Officer
of several business units. Most recently, he founded Max D. Hopper Associates,
Inc., a consulting firm that specializes in the strategic use of information
technology and eBusiness. Mr. Hopper currently serves on the board of directors
for several companies such as Gartner Group, and several other private
corporations.
Kenneth R. Johnsen became a member of our Board of Directors in July 2004.
He is the President and Chief Executive Officer of Parago, Inc., a marketing
services transaction processor. Before joining Parago, Inc. in 1999, he served
as President, Chief Operating Officer and director of Metamor Worldwide Inc., a
multi-million dollar public technology services company specializing in
information technology consulting and implementation. Metamor was later acquired
by PSINet for $1.7 billion. At Metamor, Mr. Johnsen grew the IT Solutions Group
revenue from $20 million to over $300 million within two years. His experience
also includes 22 years at IBM where he held general management positions,
including Vice President of Business Services for IBM Global Services and
General Manager of IBM China/Hong Kong Operations. He achieved record revenue,
profit and customer satisfaction levels in both business units.
David S. Lundeen became a member of our Board of Directors in April 1998.
From March 1999 through 2002, Mr. Lundeen was a partner with Watershed Capital,
a private equity firm based in Mountain View, California. From June 1997 to
February 1999, Mr. Lundeen was self-employed, managed his personal investments
and acted as a consultant and advisor to various businesses. From June 1995 to
June 1997, he served as the Chief Financial Officer and Chief Operating Officer
of The BISYS Group, Inc. From January 1990 until June 1995, Mr. Lundeen served
as President of Blockbuster Technology and as Vice President of Finance of
Blockbuster Entertainment Corporation. Prior to that time, Mr. Lundeen was an
investment banker with Drexel Burnham Lambert in New York City. Mr. Lundeen
currently serves as a member of the board of directors of Parago, Inc., and as
Chairman of the Board of Interstate Connections, Inc. Mr. Lundeen received a
B.S. in Engineering from the University of Michigan in 1984 and an M.B.A. from
the University of Chicago in 1988. Our Board of Directors has determined that
Mr. Lundeen is an audit committee financial expert, as such term is defined in
the rules and regulations promulgated by the Securities and Exchange Commission.
All directors hold office until the next annual meeting of our stockholders
and until their respective successors have been duly elected and qualified or
until their earlier death, resignation or removal. There are no family
relationships between any of our directors and executive officers.
The affirmative vote of the holders of a plurality of the shares of Common
Stock voted in person or by proxy at the Meeting is required for the election of
each director. Accordingly, abstentions and "broker non-votes" will have no
effect on the outcome of the election of directors assuming a quorum is present
or represented by proxy at the Meeting. Unless otherwise directed, each proxy
executed and returned by a stockholder will be voted for the election of each of
the Nominee Directors.
The Board of Directors recommends a vote "FOR" the election of each of the
Nominee Directors.
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SECTION 16 BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
executive officers and directors, and persons who beneficially own more than ten
percent of a registered class of our equity securities to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the Nasdaq Stock Market. Based solely on a review of the copies of reports
furnished to us and written representations from our executive officers,
directors and persons who beneficially own more than ten percent of our equity
securities, we believe that, during the preceding year, all filing requirements
applicable to our officers, directors and ten percent beneficial owners under
Section 16(a) were satisfied except that the following individual failed to
timely file an Initial Statement of Beneficial Ownership on Form 3:
Richard T. Kalbfleish VP of Finance and Administration
and, except that the following individuals failed to timely file a
Statement of Change in Beneficial Ownership on Form 4:
John T. McDonald Chairman of the Board and Chief Executive Officer
David S. Lundeen Director
Max D. Hopper Director
Robert Pickering, Jr. Former Director
COMPOSITION AND MEETINGS OF THE
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors is currently comprised of five directors. The Board
of Directors has affirmatively determined that a majority of the directors
qualify as independent directors as defined by Securities and Exchange
Commission regulations and Nasdaq Stock Market listing standards. The
independent directors are Ralph C. Derrickson, Max D. Hopper, Kenneth R. Johnsen
and David S. Lundeen. Robert E. Pickering, Jr. also served as a director through
the completion of his term, which ended in November 2005.
During fiscal year 2005, the Board of Directors held six meetings and acted
by unanimous written consent nine times. Each of the directors attended at least
85% of the aggregate of all meetings of the Board of Directors and the total
number of meetings held by all committees of the Board of Directors of which
each respective director was a member during the time he was serving as such
during the fiscal year ended December 31, 2005. All members of the Board of
Directors are encouraged to attend the annual meetings of stockholders.
Committees of the Board of Directors
The Board of Directors has created a Compensation Committee, a Nominating
Committee and an Audit Committee. Each member of the committees is independent
as defined by Securities and Exchange Commission regulations and Nasdaq Stock
Market listing standards.
7
Compensation Committee
The Compensation Committee establishes salaries, incentives and other forms
of compensation for Perficient's directors, executive officers and key employees
and administers its equity incentive plans and other incentive and benefit
plans. This committee held one meeting and acted eight times by unanimous
written consent during fiscal year 2005. The members of the Compensation
Committee are Max D. Hopper, Kenneth R. Johnsen, and David S. Lundeen. Mr.
Lundeen serves as chairman of the Compensation Committee.
Audit Committee
The Board of Directors has created an Audit Committee. Each member of the
Audit Committee is independent as defined by Nasdaq Stock Market listing
standards.
The Audit Committee has the sole authority to appoint, retain and terminate
the Company's independent accountants and is directly responsible for the
compensation, oversight and evaluation of the work of the independent
accountants. The independent accountants report directly to the Audit Committee.
The Audit Committee also has the sole authority to approve all audit engagement
fees and terms and all non-audit engagements with our independent accountants
and must pre-approve all auditing and permitted non-audit services to be
performed for us by the independent accountants, subject to certain exceptions
provided by the Securities Exchange Act of 1934. A copy of the current Audit
Committee Charter was attached to the proxy statement for our 2004 Annual
Meeting of Stockholders and is available in print upon request by any
stockholder.
This committee held five meetings during fiscal year 2005. The members of
the Audit Committee are Max D. Hopper, David S. Lundeen and Ralph C. Derrickson.
Robert E. Pickering, Jr. served as a member of the Audit Committee through the
completion of his term, which ended in November 2005. Upon Mr. Pickering's
departure, Mr. Derrickson was elected to fill the vacancy on the Audit
Committee. Mr. Lundeen serves as chairman of the Audit Committee. The Board of
Directors has determined that Mr. Lundeen is qualified as our Audit Committee
financial expert within the meaning of Securities and Exchange Commission
regulations and that he has accounting and related financial management
expertise within the meaning of the listing standards of the Nasdaq Stock
Market. The Board of Directors has affirmatively determined that Mr. Lundeen
qualified as an independent director as defined by the Nasdaq Stock Market
listing standards.
Nominating Committee
The Nominating Committee is responsible for advising the Board of Directors
on appropriate composition of the board and its committees, evaluating potential
director nominees and nominating directors for election, approving the
compensation for non-employee directors, advising the Board of Directors on
corporate governance practices and overseeing new director orientation and the
annual review of the performance of the Board of Directors. The Nominating
Committee was created by resolution of the Board of Directors and does not have
a formal charter.
This committee held no meetings and acted one time by unanimous written
consent during fiscal year 2005. The members of the Nominating Committee are
David S. Lundeen and Max D. Hopper. Robert E. Pickering, Jr. served as a member
of the Nominating Committee through the completion of his term, which ended in
November 2005. Upon Mr. Pickering's departure, Mr. Hopper was elected to serve
in his stead.
8
Identification of Director Candidates
The Nominating Committee is responsible for evaluating potential or
suggested director nominees and identifying individuals qualified to become
members of the Board of Directors. This committee will also evaluate persons
suggested by stockholders and conduct the appropriate inquiries into the
backgrounds and qualifications of all possible nominees. The Nominating
Committee will establish criteria for selecting new director nominees and will
determine each proposed nominee's qualifications for service on the Board of
Directors. Each nominee should be a person of integrity and be committed to
devoting the time and attention necessary to fulfill his or her duties to the
Company.
Pursuant to the bylaws of Perficient, nominations of persons for election
to the Board of Directors may be made at a meeting of stockholders by or at the
direction of the Board of Directors or by any stockholder entitled to vote in
the election of Directors at the meeting who complies with the notice procedures
set forth in this paragraph. Such nominations, other than those made by or at
the direction of the Board of Directors, shall be made pursuant to timely notice
in writing to the Secretary of the corporation. Such stockholder's notice shall
set forth:
(A) the name, age, business address and residence address of such person;
(B) the principal occupation or employment of such person;
(C) the class and number of shares of the corporation which are
beneficially owned by such person;
(D) a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nominations are to be
made by the stockholder; and
(E) any other information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or is
otherwise required in each case pursuant to Regulation 14A under the
1934 Act (including without limitation such person's written consent to
being named in the proxy statement, if any, as a nominee and to serve
as a director if elected).
Any nominations received from stockholders must be in full compliance with
applicable laws and with the bylaws of Perficient.
Communications with the Board
Communications by stockholders or by other parties may be sent to the Board
of Directors by U.S. mail or overnight delivery and should be addressed to the
Board of Directors c/o Secretary, Perficient, Inc., 1120 South Capital of Texas
Highway, Building 3, Suite 220, Austin, Texas 78746. Communications directed to
the Board of Directors, or one or more directors, will be forwarded directly to
the designated director or directors and may be made anonymously.
9
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information concerning the annual and
long-term compensation earned by the individuals who served as our Chief
Executive Officer and all other executive officers during fiscal year 2005 for
services rendered in all capacities during the years presented.
Annual Compensation(1) Long Term Compensation Awards
Other Restricted Securities
Annual Stock Underlying All Other
Name and Principal Position Year Salary($) Bonus($) Compensation($) Awards($)(2) Options(#)(3) Compensation ($)(4)
John T. McDonald 2005 $ 250,000 $ 338,359 $ 16,273 - - $ 420
Chief Executive Officer 2004 $ 237,500 $ 355,408 $ 12,959 $ 1,104,250 400,000 420
and Chairman of the 2003 $ 225,000 $ 200,048 $ 3,000 - 425,000
Board
Jeffrey S. Davis 2005 $ 228,000 $ 197,301 $ 9,489 - - $ 420
President and 2004 $ 216,629 $ 161,992 $ 15,324 $ 552,125 200,000 $ 420
Chief Operating Officer 2003 $ 205,000 $ 145,813 $ 3,000 $ - 250,000
Michael D. Hill 2005 $ 110,000 $ 41,696 $ - $ 100,000 - $ 183
Chief Financial Officer(5) 2004 $ 96,250 $ 43,210 $ - - 50,000 $ 160
Richard T. Kalbfleish 2005 $ 130,000 $ 42,227 $ - $ 100,000 - $ 580
VP of Finance and
Administration(6)
____________________
(1) Mr. McDonald's previous employment agreement, which was approved by the Board of Directors on March 29, 2004 and was in effect
until December 31, 2005, specified a salary increase to $250,000 per annum if our net revenue per quarter equals or exceeds ten
million dollars at any time following January 1, 2004.
(2) In December 2004, Mr. McDonald was granted 175,000 shares of restricted stock and Mr. Davis was granted 87,500 shares of
restricted stock, the fair market value of which was $6.31 per share. The restricted stock shall vest over seven years in the
following increments: 15% on December 15, 2006; 10% on each of December 15, 2007 and December 15, 2008; 15% on December 15,
2009; 25% on December 15, 2010; and 25% on December 15, 2011. This vesting schedule includes certain accelerated vesting
provisions that provide for conversion to pro-rata or straight-line vesting over the seven year period in the event certain
performance targets are met.
In December 2005, Mr. Hill and Mr. Kalbfleish were each granted 11,236 shares of restricted stock, the fair market price of
which was $8.90 per share. The restricted stock shall vest over six years in the following increments: 15% on December 15,
2006; 10% on each of December 15, 2007 and December 15, 2008; 15% on December 15, 2009; 25% on December 15, 2010; and 25% on
December 15, 2011. This vesting schedule includes certain accelerated vesting provisions that provide for conversion to
pro-rata or straight-line vesting over the six year period in the event certain performance targets are met.
There have been no dividends paid with respect to the restricted stock. The value of the restricted stock disclosed above as
of December 31, 2005 was: Mr. McDonald, $1,559,250; Mr. Davis, $779,625; Mr. Hill, $100,113; Mr. Kalbfleish, $100,113. This
amount was calculated by multiplying the number of shares subject to each award by the $8.91 closing price of our Common Stock
on December 30, 2005 as reported by the Nasdaq Stock Market.
(3) In December 2004, Mr. McDonald was granted options to purchase 400,000 shares of our Common Stock with an exercise price of
$6.31. In December 2004, Mr. Davis was granted options to purchase 200,000 shares of our Common Stock with an exercise price of
$6.31 per share. In January 2004, Mr. Hill was granted options to
10
purchase 50,000 shares of our Common Stock with an exercise price of $3.00 per share.
(4) Value of benefit from the Company match portion of contributions to the Company's 401(k) Plan.
(5) Mr. Hill joined us in February 2004 as our Chief Financial Officer. Effective August 21, 2006, Mr. Hill became our Vice
President of Strategic Finance and Paul E. Martin became our Chief Financial Officer.
(6) Mr. Kalbfleish was promoted to Vice President of Finance and Administration in March 2005.
Option Grants in Last Fiscal Year to Named Executive Officers
There were no grants of stock options by us during the year ended December
31, 2005 to the named executive officers.
Option Exercises and Fiscal Year End Values
The following table sets forth information concerning the fiscal year-end
number and value of unexercised options (market price of our Common Stock less
the exercise price with respect to the named executive officers). No stock
appreciation rights were outstanding as of December 31, 2005.
Shares Number of
Acquired on Value Securities Underlying Value of Unexercised
Exercise Realized Unexercised Options in-the-Money Options
Name (#) ($) at December 31, 2005(#) at December 31, 2005($)(1)
Exercisable Unexercisable Exercisable Unexercisable
John T. McDonald 36,316 $ 280,145 1,008,978 560,417 $ 6,769,662 $ 2,122,107
Jeffrey S. Davis 120,300 $ 830,050 238,582 272,917 $ 1,825,464 $ 1,021,982
Michael D. Hill - $ - 21,875 28,125 $ 129,281 $ 166,219
Richard T. Kalbfleish - $ - 5,000 15,000 $ 13,350 $ 40,050
____________________
(1) Based on the fair market value of Perficient's Common Stock at December 30, 2005 ($8.91 per share), as reported
on the Nasdaq Stock Market.
Compensation of Directors
The director compensation plan provides for the following:
o Each new member of the Board of Directors will receive an option for
15,000 shares, vesting ratably over a three-year period.
o Each non-employee member of the Board of Directors will receive $500 for
each meeting of the Board of Directors attended.
o Each Audit Committee member will receive $1,250 for each Audit Committee
meeting.
o Each Compensation Committee member will receive $500 for each
Compensation Committee meeting.
o The chairman of the Audit Committee will receive an additional $5,000
quarterly and 5,000 vested options annually.
11
o The chairman of the Compensation Committee will receive an additional
$2,500 quarterly.
o Each non-employee member of the Board of Directors will receive 5,000
vested options annually.
o Each member of the Board of Directors who serves on any committees of the
Board of Directors will receive an additional 5,000 vested options
annually.
In 2005, Mr. Derrickson received $1,500, Mr. Lundeen received $28,750, Mr.
Hopper received $6,250, Mr. Pickering received $5,750, and Mr. Johnsen received
$2,500 in Board of Directors fees for fiscal 2005. In addition, in 2005, Mr.
Derrickson received 10,000 options, fully vested, for being a non-employee
member of the Board of Directors and for serving on the Audit Committee, Mr.
Hopper received 35,000 options, fully vested, for being a non-employee member of
the Board of Directors and for serving on the Compensation, Audit and Nominating
Committees, Mr. Johnsen received 10,000 options, fully vested, for being a
non-employee member of the Board of Directors and for serving on the
Compensation Committee, Mr. Pickering received 10,000 options, fully vested, for
being a non-employee member of the Board of Directors and for serving on the
Nominating Committee, and Mr. Lundeen received 45,000 options, fully vested, for
being a non-employee member of the Board of Directors, for serving on the
Compensation and Nominating Committees, and for chairing and serving on the
Audit Committee. All directors are reimbursed for reasonable expenses incurred
by them in attending Board and Committee meetings. In March 2005, the director
compensation plan was amended to increase the cash compensation payable to the
chairman of the Audit Committee and the Compensation Committee to $5,000 and
$2,500 per quarter, respectively.
Employment Arrangements
We had a two-year employment agreement with Mr. McDonald that expired on
December 31, 2005. This employment agreement provided for the following
compensation:
o an annual salary of $225,000 with an increase to $250,000 per annum if
the Company's net revenue per quarter equaled or exceeded ten million
dollars at any time following January 1, 2004;
o the grant of options to purchase 150,000 shares of our Common Stock for
each year of service under the agreement, vesting over a four-year
period and all granted at the beginning of the employment agreement;
o an annual performance bonus equal to 100% of Mr. McDonald's annual salary
in the event we achieved certain performance targets approved by our
Board of Directors; and
o 24 months' severance pay plus bonus, option vesting acceleration and
benefits and the use of his office and administrative assistance if Mr.
McDonald was terminated without cause (or if he voluntarily terminated
his employment following a change in control).
Mr. McDonald achieved his entire annual performance bonus in each of 2004
and 2005 in accordance with the terms of his previous employment agreement with
us.
On March 28, 2006, we entered into a new three-year employment agreement
with Mr. McDonald, to be effective as of January 1, 2006, which will expire
December 31, 2008. Mr. McDonald's new employment agreement provides for the
following compensation:
12
o an annual salary of $250,000;
o an annual performance bonus of up to 200% of Mr. McDonald's annual salary
in the event we achieve certain performance targets approved by our Board
of Directors;
o death benefits of a lump-sum payment equal to two years' annual salary
and maximum target bonus;
o disability benefits of two years' annual salary and maximum target bonus,
paid over 24 months;
o severance benefits of a lump-sum payment equal to two years' annual
salary and maximum target bonus, option and restricted stock vesting
acceleration, and welfare benefits and the use of his office and
administrative assistance for 24 months if Mr. McDonald is terminated
without cause; and
o severance benefits as specified above if Mr. McDonald's employment is
terminated for any reason at any time within the two-year period
following a change in control, as well as compensation for any excise
taxes paid as a result of excess parachute payments arising from the
change in control.
Mr. McDonald has agreed to refrain from competing with us for a period of
five years following the termination of his employment.
We had a two-year employment agreement with Mr. Davis that expired on
June 30, 2006. This employment agreement provided for the following
compensation:
o an annual salary of $205,000;
o an annual performance bonus equal to 50% of his annual salary in the
event we achieved certain performance targets approved by our Board of
Directors;
o 12 months' severance pay, option vesting acceleration and other health
and medical benefits if Mr. Davis was terminated without cause, and if
the termination followed a change in control, he would also have received
the performance bonus of 50% of his annual salary.
Mr. Davis's salary was increased to $228,000 in 2004 as a result of the
Company's net revenue per quarter exceeding ten million dollars. Mr. Davis
achieved his entire annual performance bonus in each of 2004 and 2005 in
accordance with the terms of his employment agreement with us.
Mr. Davis's salary was increased to $250,000 effective January 1, 2006 as
approved by our Chief Executive Officer.
On August 3, 2006, we entered into a new three-year employment agreement
with Mr. Davis, President and Chief Operating Officer, to be effective as of
July 1, 2006, which will expire June 30, 2009. Mr. Davis's new employment
agreement provides for the following compensation:
o an annual salary of $250,000;
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o an annual performance bonus of up to 200% of Mr. Davis's annual salary in
the event we achieve certain performance targets approved by our Chief
Executive Officer;
o death benefits in the form of a lump-sum payment equal to one year's
annual salary and maximum target bonus;
o disability benefits equal to one year's annual salary and maximum target
bonus to be paid over a twelve-month period;
o severance benefits in the form of a lump-sum payment equal to one year's
annual salary and maximum target bonus, option and restricted stock
acceleration, and welfare benefits if Mr. Davis is terminated without
cause or voluntarily resigns within 30 days after the appointment of a
new Chief Executive Officer;
o immediate vesting of 50% of all unvested stock option grants and
restricted stock grants previously awarded to Mr. Davis upon the
occurrence of a change in control; and
o severance benefits as specified above if Mr. Davis's employment is
terminated without cause in connection with or at any time following a
change in control.
Mr. Davis has agreed to refrain from competing with us for a period of
five years following the termination of his employment.
On July 19, 2006, our Board of Directors appointed Mr. Martin to the
position of Chief Financial Officer and on July 20, 2006, we entered into an
offer letter with Mr. Martin pursuant to which Mr. Martin became our Chief
Financial Officer on August 21, 2006. The offer letter, as amended, provides for
the following compensation:
o an annual salary of $215,000;
o a restricted stock grant of 50,000 shares of our Common Stock, vesting
over five years, subject to approval by the Board;
o immediate vesting of 50% of Mr. Martin's restricted stock grant upon the
occurrence of a change of control with the immediate vesting of the
remainder of such restricted stock if Mr. Martin is terminated without
cause or resigns with good reason in connection with or within the first
year after a change of control;
o an annual performance bonus equal to 40% of Mr. Martin's base salary in
the event we achieve certain performance targets approved by
the Chief Executive Officer;
o severance benefits equal to six months' annual salary if Mr. Martin is
terminated without cause or resigns with good reason after 270 days of
service with us, with such benefits increasing to one year's annual
salary after 450 days of service; and
o severance benefits if Mr. Martin is terminated without cause or resigns
with good reason in connection with or within the first year after a
change of control equal to (i) six months' annual salary if the change of
control occurs within the first 270 days of Mr. Martin's service with us,
or (ii) one year's annual salary if the change of control occurs
thereafter.
14
Mr. Martin's compensation is subject to review and adjustment on an
annual basis in accordance with the Company's compensation policies as in effect
from time to time.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consists of Messrs. Hopper, Johnsen and Lundeen.
None of these committee members was an officer or employee of our company or any
of our subsidiaries at any time during fiscal 2005 or at any other time. None of
our executive officers served on the board of directors of any company of which
one of our directors was an executive officer.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors (the "Compensation
Committee") has responsibility for overseeing all compensation arrangements
affecting executive officers. The Compensation Committee's duties include
reviewing and approving officers' salaries and benefits, setting the executive
bonus plan, and administering the executive bonus plan, the stock incentive plan
and the employee stock purchase plan. The Compensation Committee advises and
consults with management regarding benefits and significant compensation
policies and practices. The Compensation Committee also considers nominations of
candidates for officer positions.
General Compensation Philosophy
The Compensation Committee believes that executive officers' salaries and
overall compensation should be competitive with its peer companies, but with an
emphasis on incentive compensation based upon the Company's overall performance.
Accordingly, compensation for executives is comprised of relatively low base
salaries, as compared to peer companies, with participation in an executive
bonus plan with target bonuses based upon the Company's annual operating plan.
In addition, the Compensation Committee uses stock options and restricted stock
to help retain and motivate executives and other employees with the goal of
improving long-term performance and aligning employees' interests with those of
the stockholders. The Compensation Committee engaged its own independent
executive compensation consultant in December 2004 to advise and consult with
the Compensation Committee as to compensation practices and strategies. The
Compensation Committee also adopted a policy of using restricted stock grants
with long-term, back-end loaded vesting restrictions in lieu of stock option
grants in December 2004, and in 2005 implemented an employee stock purchase
plan.
Components of Compensation
The key elements of executive compensation are salary, bonus and equity
compensation awards. In determining each component of compensation, the
Compensation Committee considers an executive's total compensation package,
recommendations of the Company's Chief Executive Officer, and other objective
and subjective criteria that the Compensation Committee deems appropriate.
15
Salaries
The Compensation Committee reviews the salary of each executive annually
and makes adjustments when the Committee thinks they are appropriate. The
Compensation Committee considers each executive's responsibilities, specific
experience and performance, compensation practices of similarly situated
companies and the executive's overall contribution to the Company. As noted
above, the Compensation Committee has tried to keep salaries at the low end as
compared to peer companies, with emphasis on providing incentive compensation
through the executive bonus plan and the long-term stock incentive plan.
Bonuses
The 2005 executive bonus plan provided for target bonus percentages based
on the participants' annual salaries as in effect on January 1, 2005. The bonus
payments were contingent upon meeting certain goals based on the 2005 operating
plan as approved by the Board of Directors and meeting the fully diluted
earnings per share targets discussed and agreed by the Compensation Committee
and management. Of the bonus potential, 80% of the target bonus was based on
achieving EBITDA goals, and the remaining 20% of the target bonus was based on
achieving revenue goals. Executive bonuses are discretionary and based on each
executive's specific performance during the year taken in context of the
Company's overall performance. The Compensation Committee may, at its
discretion, make adjustments to the executive bonus plan.
Stock Options and Restricted Stock Grants
In 2005, the Board of Directors adopted the Amended and Restated 1999 Stock
Option/Stock Issuance Plan (the "Plan"), which was approved by the stockholders
at the 2005 Annual Meeting. Employees, consultants and non-employee directors
may receive awards under the Plan. The Compensation Committee uses the Plan to
help attract, motivate and retain personnel and to reward them for contributions
to the Company. The Compensation Committee administers the Plan in full
compliance with Rule 16b-(3) under the Securities Exchange Act of 1934. The
Compensation Committee determines the incentive awards granted to each
participant and the terms, conditions and limitations applicable to each award.
During 2005, after a review of peer companies and taking into consideration
changes in the accounting for stock options, the Compensation Committee
determined that future incentive grants under the Plan should be made pursuant
to a long-term equity incentive plan that uses restricted stock with long-term
vesting requirements in lieu of more traditional stock option grants.
2005 Employee Stock Purchase Plan
In 2005, the Compensation Committee approved the 2005 Employee Stock
Purchase Plan (the "ESPP"), which was approved by the stockholders at the 2005
Annual Meeting. A total of 500,000 shares of Common Stock are reserved for
issuance under the ESPP.
The ESPP is a broadly-based stock purchase plan in which any eligible
employee may elect to participate by authorizing the Company to make payroll
deductions in a specific amount or designated percentage to pay the exercise
price of an option. In no event will an employee be granted an option under the
ESPP that would permit the purchase of Common Stock with a fair market value in
excess of $25,000 in any calendar year.
16
There are four three-month offering periods in each calendar year beginning
on January 1, April 1, July 1, and October 1, respectively. The exercise price
of options granted under the ESPP is an amount equal to 95% of the fair market
value of the Common Stock on the date of exercise (occurring on, respectively,
March 31, June 30, September 30, and December 31). The ESPP is designed to
comply with Section 423 of the Code and thus is eligible for the favorable tax
treatment afforded by Section 423.
Non-Employee Board of Directors Compensation Plan
In 2005, the Compensation Committee approved certain changes to the
non-employee Board of Directors Compensation Plan previously approved in 2004.
Under this compensation plan, non-employee directors received stock option
grants for service on the Board of Directors and service on one or more
committees of the Board during 2005. Stock options for a total of 75,000 shares
of Common Stock were issued to the non-employee directors in 2005. In addition,
the Compensation Committee increased the cash compensation payable to the
chairperson(s) of the Audit and Compensation Committees in 2005, in recognition
of the increased workload such positions entail given the Company's substantial
growth over the past two years and in light of the current regulatory
environment.
Compensation of our Chief Executive Officer
The Compensation Committee considered the Company's overall performance in
determining our Chief Executive Officer's 2005 bonus and reviewing his salary.
Our CEO's target bonus was set at 125% of his salary in effect on January 1,
2005 of $250,000. Based on having achieved the EBITDA and revenue goals of the
Company in 2005 set by the Compensation Committee, the CEO received a bonus of
$338,359. In addition, on December 15, 2004, our CEO was granted 175,000 shares
of restricted stock under the long-term equity incentive plan. This equity grant
vests over seven years, with a vesting schedule that is back-end loaded but
includes certain accelerated vesting provisions that provide for conversion to
pro-rata or straight-line vesting over the seven-year period in the event
certain performance targets are met. The performance targets are defined as when
and if the Company's trailing four quarters of revenue exceeds $150 million in
aggregate by December 15, 2007 with target EBITDA margins equal to or greater
than 15%.
In addition to salary, bonus and stock incentive grants, our Chief
Executive Officer is eligible to participate in benefit plans generally
available to our other employees, including the employee stock purchase plan,
health, dental and disability benefits, and our 401(k) plan.
Compensation of our other Executive Officers
As outlined above, the Compensation Committee determines the bonus targets
for the other executive officers participating in the executive bonus plan and
approves all grants of restricted stock and stock options under the Plan. The
Compensation Committee has authorized our Chief Executive Officer to make all
other decisions regarding the compensation of the other executive officers of
the Company, subject to the terms of any applicable employment agreements, under
the direction and supervision of the Compensation Committee.
In addition to salary, bonus and stock incentive grants, each of our other
executive officers is eligible to participate in benefit plans generally
available to our other employees, including the employee stock purchase plan,
health, dental and disability benefits, and our 401(k) plan.
17
Section 162 of the Internal Revenue Code
The Company attempts to take all proper tax deductions while maintaining
the ability to pay compensation which is deemed to be in the Company's interest,
but which may not be deductible. Section 162 of the Internal Revenue Code
generally imposes a $1 million per person annual limit on the amount of
compensation paid to its officers unless the compensation is performance based.
The 2005 executive bonus plan and the long-term equity incentive plan provide
for performance based criteria which are intended to comply with Section 162.
Each of the members of the Compensation Committee is independent within
the meaning of the Company's Corporate Governance Guidelines and the listing
standards of the Nasdaq Stock Market.
This report has been furnished by the members of the Compensation
Committee.
David S. Lundeen, Chair
Max D. Hooper
Kenneth R. Johnsen
CERTAIN RELATIONSHIPS AND
RELATED PARTY TRANSACTIONS
In November 2005, John T. McDonald, our Chairman of the Board and Chief
Executive Officer, exercised a warrant for 38,350 shares of Common Stock. This
warrant was originally purchased by Mr. McDonald in connection with his purchase
of Series A Preferred Stock of the Company in 2001.
18
AUDIT COMMITTEE REPORT
The following is the report of the Audit Committee (the "Committee") with
respect to the audit of our fiscal 2005 audited consolidated financial
statements:
Management is responsible for the Company's internal controls and the
financial reporting process. The independent auditors are responsible for
performing an independent audit of the Company's consolidated financial
statements in accordance with auditing standards generally accepted in the
United States and to issue a report thereon. The Committee's responsibility is
to monitor and oversee these processes.
In this context, the Committee has met and held discussions with management
and the independent auditors. Management represented to the Committee that the
Company's consolidated financial statements in the Annual Report on Form 10-K
for the fiscal year ended December 31, 2005, were prepared in accordance with
accounting principles generally accepted in the United States, and the Committee
has reviewed and discussed the consolidated financial statements in the Annual
Report with management and the independent auditors. The Committee discussed
with the independent auditors matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication with Audit Committees).
The Company's independent auditors also provided to the Committee the
written disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Committee discussed
with the independent auditors that firm's independence. The Audit Committee
reviewed nonaudit services provided by its independent auditors for the last
fiscal year, and determined that those services are not incompatible with
maintaining the auditors' independence.
Based upon the Committee's discussion with management and the independent
auditors and the Committee's review of the representation of management and the
report of the independent auditors to the Committee, the Committee recommended
that the Board of Directors include the audited consolidated financial
statements in the Company's Annual Report on Form 10-K for the year ended
December 31, 2005 filed with the Securities and Exchange Commission.
Submitted by the Audit Committee of the Board of Directors:
David S. Lundeen (Chairman)
Max D. Hopper
Ralph Derrickson
External Auditors
A representative of BDO Seidman, LLP is expected to be present at the
Meeting to respond to appropriate questions and will be given the opportunity to
make a statement if he or she desires to do so.
19
The following table discloses the approximate fees paid to BDO Seidman, LLP
for the fiscal years ending December 31, 2005, and December 31, 2004.
Year Ended December 31,
________________________
2005 2004
____________ __________
Audit fees........................... $ 1,056,000 $ 145,000
Audit-related fees................... $ 5,000 $ 4,000
Tax fess............................. $ - $ -
All other fees....................... $ - $ -
Audit fees represent fees for professional services provided in connection
with the audit of our annual financial statements and of management's assessment
and the operating effectiveness of internal control over financial reporting
included in our Annual Report on Form 10-K, the quarterly reviews of financial
statements included in our Quarter Reports on Form 10-Q, other statutory or
regulatory filings, and services that are normally provided in connection with
such filings.
Audit-related fees are fees for assurance and related services that are
reasonably related to the performance of the audit or review of our annual or
quarterly financial statements.
Although there were none in 2005 and 2004, tax fees would primarily include
professional services performed with respect to review of our original and
amended tax returns and those of our consolidated subsidiaries, and for state,
local and international tax consultation.
Although there were none in 2005 and 2004, all other fees would represent
fees for other permissible work performed that does not meet the above category
descriptions.
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee has adopted policies and procedures relating to the
pre-approval of all audit services, and non-audit services that are permitted by
applicable laws and regulations, that are to be performed by our independent
auditors. As part of those policies and procedures, the Audit Committee has
pre-approved specific audit and audit-related services that may be provided by
our independent auditors subject to certain maximum dollar amounts. No further
approval by the Audit Committee is required in advance of services falling
within the specific types of services and cost-levels included in the
pre-approved services. Any proposed services not specifically pre-approved or
exceeding pre-approved cost levels require specific pre-approval by the Audit
Committee. No services of any kind were approved pursuant to a waiver permitted
pursuant to 17 CFR 210.2-01(c)(7)(i)(C).
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Any stockholder proposals intended to be presented at Perficient's next
annual meeting of stockholders must be received by Perficient at its offices at
1120 South Capital of Texas Highway, Building 3, Suite 220, Austin, Texas 78746,
on or before January 31, 2007, for consideration for inclusion in the proxy
material for such annual meeting of stockholders.
For any proposal that is not submitted for inclusion in next year's Proxy
Statement, but is instead sought to be presented directly at the 2007 Annual
Meeting, Securities and Exchange Commission rules permit management to vote
proxies in its discretion if: (1) management receives notice of the proposal
before the close of business on January 31, 2007, and advises stockholders in
the 2007 Proxy Statement about the nature of the matter and how management
intends to vote on such matter; or (2) management does not receive notice of the
proposal prior to the close of business on January 31, 2007. Notices of
20
intention to present proposals at the 2007 Annual Meeting should be addressed to
Perficient at its offices at 1120 South Capital of Texas Highway, Building 3,
Suite 220, Austin, Texas 78746.
COMPARATIVE STOCK PERFORMANCE
The following graph compares the cumulative five-year total stockholder
return on our Common Stock from December 31, 2000 through December 31, 2005,
with the cumulative total return on (i) the Nasdaq Composite Index and (ii) the
Goldman Sachs Technology Index - Computer Services Index. The comparison
assumes the investment of $100 on December 29, 2000, in our Common Stock and in
each of the indices and, in each case, assumes reinvestment of all dividends.
[COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN GRAPH]
12/29/00 12/31/01 12/31/02 12/31/03 12/31/04 12/30/05
___________________________________________________________________________________________________________________________________
Perficient, Inc. $ 100 $ 19.17 $ 16.67 $ 37.33 $ 109.33 $ 148.50
___________________________________________________________________________________________________________________________________
Nasdaq Composite Index $ 100 $ 78.95 $ 54.06 $ 81.09 $ 88.06 $ 89.27
___________________________________________________________________________________________________________________________________
GSTI Computer Services Index $ 100 $ 105.89 $ 66.56 $ 82.31 $ 88.69 $ 93.99
OTHER MATTERS
The Board of Directors does not intend to bring any matters before the
Meeting other than as stated in this Proxy Statement, and is not aware that any
other matters will be presented for action at the Meeting. If any other matters
come before the Meeting, the persons named in the enclosed form of proxy will
vote the proxy with respect thereto in accordance with their best judgment,
pursuant to the discretionary authority granted by the proxy. Whether or not you
plan to attend the Meeting in person, please complete, sign, date and return the
enclosed proxy card promptly.
21
FORM 10-K, AS AMENDED
Perficient will furnish, without charge to each person solicited and to
each beneficial owner of its securities, on the written request of such person,
a copy of its Annual Report on Form 10-K, as amended, except for the exhibits to
such Form 10-K but including the financial statements filed with such Form 10-K.
Perficient will furnish any exhibit to the Form 10-K upon the payment of a
reasonable fee which shall be limited to its reasonable expenses in furnishing
such exhibit. Requests should be directed to Mr. Paul E. Martin, Perficient,
Inc., 1120 South Capital of Texas Highway, Building 3, Suite 220, Austin, Texas
78746, telephone number (512) 531-6000.
By Order of the Board of Directors
/s/ Paul E. Martin
________________________________
Paul E. Martin
Secretary
September 18, 2006
22
_________________________________________
VOTE BY TELEPHONE
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_________________________________________
PERFICIENT, INC.
[_] You can now vote your shares through the telephone.
[_] This eliminates the need to return the proxy card.
[_] Your telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed,
dated and returned the proxy card.
TO VOTE YOUR PROXY BY MAIL
__________________________
Mark, sign and date your proxy card below, detach it and return it in the postage-paid envelope provided.
TO VOTE YOUR PROXY BY PHONE
___________________________
1-866-894-0537
Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. You will be prompted to
enter the company number, proxy number and account number. Follow the voting instructions to vote your shares.
PLEASE DO NOT RETURN THE ABOVE CARD IF VOTED
____________________________________________
BY TELEPHONE
____________
v FOLD AND DETACH HERE AND READ THE REVERSE SIDE v
-----------------------------------------------------------------------------------------------------------------------------------
This Proxy is solicited by the Board of Directors of Perficient. Please mark [X]
your vote
The proxy will vote as specified herein or, if a choice is not specified, like this
he will vote "For" the proposals set forth in items 1 and 2.
FOR WITHHOLD
all AUTHORITY
nominees to vote for
all nominees FOR AGAINST ABSTAIN
1. Nominee: John T. McDonald, 2. Approval of such other matters that [ ] [ ] [ ]
Ralph C. Derrickson, Max D. Hopper, come before the annual meeting of
Kenneth R. Johnsen, David S. Lundeen. [ ] [ ] stockholders, or any adjournment thereof,
that are required to be approved by the
stockholders of Perficient.
(To withhold authority to vote for an individual
nominee, write the nominee's name on the
line provided below.)
[] For all nominees except:_____________________
COMPANY ID:
PROXY NUMBER:
ACCOUNT NUMBER:
Signature __________________________ Signature, if held jointly __________________________ Date ______________, 2006
Date and sign exactly as name(s) appear(s) on this proxy. If signing for estates, trusts, corporations or other entities, title or
capacity should be stated. If shares are held jointly, each holder should sign.
Date: September 18, 2006
v FOLD AND DETACH HERE AND READ THE REVERSE SIDE v
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PROXY
PERFICIENT, INC.
The undersigned hereby appoints John T. McDonald, with full power of substitution, as proxy for the undersigned, to attend
the annual meeting of stockholders of Perficient, Inc. ("Perficient"), to be held at Perficient's headquarters at 1120 South
Capital of Texas Highway, Suite 220, Building 3, Austin, Texas 78746 on October 12, 2006, at 10:00 a.m., Central Time, or any
adjournment thereof, and to vote the number of shares of Common Stock of Perficient that the undersigned would be entitled to
vote, and with all the power the undersigned would possess, if personally present, as follows.
(Continued and to be signed and dated on the reverse side)