(1)
| Represents the expense incurred by us for the year ended December 31, 2007, as determined under Financial Accounting Standard No 123R, for outstanding awards granted to non-employee directors. The corresponding grant-date fair value of the options granted for 2007 were $330,000 for each of the directors. See Note 10 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2007
(1) Represents the expense incurred by us for the year ended December 31, 2008, as determined under Financial Accounting Standard No. 123R, for outstanding awards granted to non-employee directors. See Note 8 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2008 regarding assumptions underlying valuation of equity awards. (2) Mr. Gruner resigned from the Board of Directors on November 20, 2008. The resignation of Mr. Gruner was solely for personal reason and did not involve any disagreements with the Company, the Company’s management or the Board of Directors. (3) Mr. Jaggers resigned from the Board of Directors on March 4, 2009. The resignation of Mr. Jaggers was solely for personal reason and did not involve any disagreements with the Company, the Company’s management or the Board of Directors. (4) The corresponding grant-date fair value of the options granted in 2007 was $172,200 for each of the directors. (5) The corresponding grant-date fair value of the options granted in 2008 was $103,500 for the director. (6) The corresponding grant-date fair value of the restricted stock units awarded in 2008 was $82,650 for the director. The table below presents the aggregate number of shares of stock option and restricted stock units held by our directors as of December 31, 2008.
|
| Stock |
| Option |
| Name |
| Awards (#) (1) |
| Awards (#) (2) |
| Kurt R. Jaggers (3) | | | | 30,000 | | Ellen Keszler | | — | | 30,000 | | Greg B. Petersen | | — | | 30,000 | | William Russell | | 15,000 | | — | | Timothy V. Williams | | — | | 30,000 | | Mariette M. Woestemeyer | | — | | 30,000 | |
(1) Restricted stock unit represents the contingent right to receive one share of PROS Holdings, Inc. common stock and vests annually in equal installments over a three year period with the first vesting period ending November 20, 2009. (2) Represents option to purchase 30,000 shares of our common stock. Option awards are immediately exercisable and vest on a monthly basis over a three year period. Messrs. Petersen and Williams and Mrs. Woestemeyer’s option to purchase our common stock began vesting on June 27, 2007 and Mrs. Keszler’s option to purchase our common stock began vesting on August 21, 2008. (3) Mr. Jaggers resigned from the Board of Directors on March 4, 2009. The resignation of Mr. Jaggers was solely for personal reason and did not involve any disagreements with the Company, the Company’s management or the Board of Directors. 11
Table of Contents Information regarding meetingsCorporate governance guidelines
During 2007,We believe in sound corporate governance practices and have adopted formal Corporate Governance Guidelines to enhance our effectiveness. Our Board of Directors adopted these Corporate Governance Guidelines in order to ensure that it has the necessary authority and practices in place to review and evaluate our business operations as needed and to make decisions that are independent of our management. The Corporate Governance Guidelines are also intended to align the interests of directors and management with those of our stockholders. The Corporate Governance Guidelines set forth the practices our Board of Directors held 25 meetings, the audit committee held five meetings, the compensation committee held six meetings, and the nominating and corporate governance committee didfollows, including, but not meet in 2007. No director attended fewer than 75% of the aggregate of all meetings of ourlimited, with respect to Board of Directors and committee composition and selection, director responsibilities, director access to officers and employees and Chief Executive Officer performance evaluation and succession planning. A printed copy of our Corporate Governance Guidelines may be obtained by any stockholder upon sending a written request to PROS Holdings, Inc., 3100 Main Street, Suite 900, Houston, Texas 77002, Attn: Corporate Communications. A copy of our Corporate Governance Guidelines is also available under the committees on which he or she served, during 2007. The BoardCorporate Governance — Investor Relations section of Directors encourages all directors to attend meetings of the stockholders. Our independent directors regularly meet outside the presence of management.our website at www.prospricing.com.
Code of business conduct and code of ethics Our Board of Directors has adopted a codeCode of business conductBusiness Conduct and ethicsEthics that applies to all of our directors and employees. We will provide copies of our codeCode of business conductBusiness Conduct and code of ethicsEthics without charge upon request. To obtain aA printed copy of our codeCode of business conductBusiness Conduct and code of ethics, please send yourEthics may be obtained by any stockholder upon sending a written request to PROS Holdings, Inc., 3100 Main Street, Suite 900, Houston, Texas 77002, Attn: Corporate Communications. Our codeCode of business conductBusiness Conduct and code of ethics areEthics is also available under the Corporate Governance –— Investor Relations section of our website at www.prospricing.com. Communications with our board of directors Stockholders who wish to communicate with members of our Board of Directors, including the independent directors individually or as a group, may send correspondence to them in care of our Corporate Secretary at our principal executive offices.3100 Main Street, Suite 900, Houston, TX 77002. Such communication will be forwarded to the intended recipient(s). We currently do not intend to have our Corporate Secretary screen this correspondence, but we may change this policy if directed by our Board of Directors due to the nature or volume of the correspondence. 9Communications that are intended specifically for the Lead Independent Director should be sent to the street address noted above, to the attention of the Lead Independent Director.
12
Table of Contents PROPOSAL TWO The audit committeeAudit Committee of our Board of Directors has selected the independent registered public accounting firm of PricewaterhouseCoopers LLP to audit our consolidated financial statements for the fiscal year ending December 31, 20082009 and recommends that stockholders vote for ratification of such appointment. Notwithstanding the selection and ratification, the audit committee,Audit Committee, in its discretion, may appoint a different independent registered public accounting firm at any time, if it believes doing so would be in our best interests and the best interests of our stockholders. In the event of a negative vote on ratification, the audit committeeAudit Committee will reconsider, but might not change, its selection. PricewaterhouseCoopers LLP has audited our financial statements annually since 2002. Representatives of PricewaterhouseCoopers LLP are expected to be present at the meeting with the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions. Vote required Approval of the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm requires the affirmative vote of the holders of at least a majority of the outstanding shares of our common stock entitled to vote and present or represented at the meeting. A properly executed proxy marked “ABSTAIN” with respect to this matter is considered entitled to vote and thus, will have the effect of a vote against a matter. In accordance with Delaware law, abstentions will be counted for purposes of determining both whether a quorum is present at the meeting and the total number of shares represented and voting on this proposal. While broker non-votes will be counted for purposes of determining the presence or absence of a quorum, broker non-votes will not be counted for purposes of determining the number of shares represented and voting with respect to the particular proposal on which the broker has expressly not voted and, accordingly, will not affect the approval of this proposal. The Board of Directors unanimously recommends that stockholders vote “FOR”“FOR��� the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2008.2009. Summary of fees The audit committeeAudit Committee has adopted a policy for the pre-approval of all audit and permitted non-audit services that may be performed by our independent registered public accounting firm. Under this policy, each year, at the time it engages the independent registered public accounting firm, the audit committeeAudit Committee pre-approves the audit engagement terms and fees and may also pre-approve detailed types of audit-related and permitted tax services, subject to certain dollar limits, to be performed during the year. All other permitted non-audit services are required to be pre-approved by the audit committeeAudit Committee on an engagement-by-engagement basis. The following table summarizes the aggregate fees billed for professional services rendered to us by PricewaterhouseCoopers LLP in 20072008 and 2006.2007. A description of these various fees and services follows the table. | | 2007 | | 2006 | | | 2008 | | 2007 | | Audit fees | | $ | 853,834 | | $ | 165,000 | | | $ | 556,798 | | $ | 853,834 | | Tax fees | | 29,500 | | 25,000 | | | 35,000 | | 29,500 | | Total fees | | $ | 883,334 | | $ | 190,000 | | | $ | 591,798 | | $ | 883,334 | |
Audit fees The aggregate fees billed to us by PricewaterhouseCoopers LLP in connection with the annual audit of our financial statements, for the reviews of our financial statements included in the quarterly reports on Form 10-Q, consents related to documents filed with the SEC and accounting and financial reporting consultations and research necessary to comply with generally accepted audit standards, were $318,484$556,798 and $165,000$318,484 for the years ended December 31, 20072008 and 2006,2007, respectively. For the year ended December 31, 2007, we incurred $535,350 of audit fees related to our initial public offering and follow-on offering. Tax Fees The aggregate fees billed to us by PricewaterhouseCoopers LLP in connection with tax services were $29,500$35,000 and $25,000$29,500 for the years ended December 31, 20072008 and 2006,2007, respectively. Tax Feesfees are fees for tax compliance, tax advice and tax planning. 13
Table of Contents The audit committeeAudit Committee is authorized by its charter to pre-approve all auditing and permitted non-audit services to be performed by our independent registered public accounting firm. The audit committeeAudit Committee reviews and approves the independent registered public accounting firm’s retention to perform attest services, including the associated fees. The audit committeeAudit Committee also evaluates other known potential engagements of the independent registered public accounting firm, including the scope of the proposed work and the proposed fees, and approves or rejects each service, taking into account whether the services are permissible under applicable law and 10
the possible impact of each non-audit service on the independent registered public accounting firm’s independence from management. At subsequent meetings, the Committee will receive updates on the services actually provided by the independent registered public accounting firm, and management may present additional services for approval. The Committee has delegated to the Chairman of the Audit Committee the authority to evaluate and approve engagements on behalf of the Committee in the event that a need arises for pre-approval between Committee meetings. If the Chairman so approves any such engagements, he will report that approval to the full audit committeeAudit Committee at its next meeting. During fiscal 2007,2008, all such services were pre-approved in accordance with the procedures described above. Our audit committeeAudit Committee has reviewed the fees described above and believes that such fees are compatible with maintaining the independence of PricewaterhouseCoopers LLP. Stockholder ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm is not required by our bylaws or other applicable legal requirement. However, the appointment of PricewaterhouseCoopers LLP is being submitted to the stockholders for ratification. If the stockholders fail to ratify the appointment, the audit committeeAudit Committee will reconsider whether or not to retain the firm. Even if the appointment is ratified, the Audit committeeCommittee at its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be appropriate. OTHER MATTERS We do not know of any other matters to be submitted at the annual meeting. If any other matters properly come before the annual meeting, it is the intention of the persons named in the enclosed form of proxy to vote the shares they represent as our Board of Directors recommends. EXECUTIVE OFFICERS Certain information concerning our executive officers as of the date of this proxy statement is set forth below, except that information concerning Messrs. Winemiller and Woestemeyer is set forth above under “PROPOSAL ONE.” Name |
| Age |
| Position |
| Charles H. Murphy | | 64 | | Executive Vice President and Chief Financial Officer | | Andres D. Reiner | | 38 | | Senior Vice President – Product Development | | Jeffrey E. Robinson | | 42 | | Senior Vice President – Pricing Solutions | |
Charles H. Murphy joined PROS Holdings, Inc. in 1998 and has served as our Executive Vice President and Chief Financial Officer since March 2001. Prior to joining the Company, Mr. Murphy spent 13 years in Chief Financial Officer positions with Expert Software, a publicly traded software company, Merchant International, a software company, and Packaging Machinery Company, a publicly traded manufacturer of packaging machinery. Mr. Murphy was Vice President-Treasurer with Coleco Industries, a publicly traded toy and video game company, and began his career with Coopers & Lybrand where he was a certified public accountant. Mr. Murphy holds a BS degree from Bentley College. Andres D. Reiner joined PROS Holdings, Inc. in 1999 and serves as our Senior Vice President of Product Development. As Senior Vice President of Product Development, Mr. Reiner is responsible for product management, architecture, and development of the next generation Pricing and Revenue Optimization software products. Mr. Reiner led, and continues to contribute to, the development of the PROS Pricing Revenue Optimization (PRO) Platform, which is a set of Pricing, Forecasting, and Optimization engines that are configured to form the component-based architecture that is the foundation of the Company’s products. Prior to joining the Company, Mr. Reiner held various technical and management positions in technology companies including Platinum Technology, ADAC Healthcare Information Systems, and Kinesix. Mr. Reiner received a BS in Computer Science with a minor in Mathematics from the University of Houston. 14
Table of Contents Jeffrey E. Robinson joined PROS Holdings, Inc. in 2000 and serves as Senior Vice President of Pricing. Mr. Robinson is responsible for sales of the pricing solutions for manufacturing, distribution, and services industries. Prior to joining the Company, Mr. Robinson held management positions in sales operations, finance, and professional services in the Software Division of ADAC Laboratories, winner of the 1996 Malcolm Baldrige National Quality Award. Mr. Robinson also brings experience from GroupLogix, an Internet start-up, and the NASA Technology Commercialization Center. Mr. Robinson brings over 15 years of management in sales, marketing, product management, and implementation services. Mr. Robinson received his MBA from Rice University, with concentrations in Finance and Marketing, and he holds a BA degree in Economics from Brigham Young University. CERTAIN RELATIONSHIPS AND REALTEDRELATED PARTY TRANSACTIONS Since January 1, 2007, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which we were or are a party in which the amount involved exceeded or exceeds $120,000 and in which any of our directors, executive officers, holders of more than 5% of any class of our voting securities, or any member of the immediate family of any of the foregoing persons, had or will have a direct or indirect material interest, other than compensation arrangements with directors and executive officers, and the transactions described below. Relationship with management, founders and investors Ownership. Albert E. Winemiller, our chief executive officer, presidentChief Executive Officer, President and director,Director, and Ronald F. Woestemeyer, our executive vice president, directorExecutive Vice President, Director and one of our founders, and Mariette Woestemeyer, who is married to Mr. Woestemeyer and serves on our Board of Directors along with her husband, each hold more than 5% of our common stock. Mariette Woestemeyer, who is married to Mr. Woestemeyer, serves on our Board of Directors along with her husband. In addition, the funds affiliated with TA Associates are considered holders of more than 5% of our common stock. Kurt Jaggers, who is a managing director of TA Associates, serves on our Board of Directors. Committees. Mr. Jaggers and Mrs. Woestemeyer each serve on our nominating and governance committee. Mr. Jaggers also serves on our compensation committee.
Registration rights. TA Associates and Mr. and Mrs. Woestemeyer have piggyback registration rights with respect to shares of common stock that they respectively hold. In addition, TA Associates has demand and other registration rights for their shares of our common stock under the Stock Purchase and Stockholders Agreement described further below.
Stock Purchase and Stockholders Agreement. In June 1998, we entered into a Stock Purchase and Stockholders Agreement with TA Associates and other individuals to whom we issued our convertible preferred stock. This agreement provides the investors with registration rights and other rights relating to their investment in us.
Redemption of preferred stock. On August 15, 2005, TA Associates and JMI Equity converted the outstanding shares of our convertible preferred stock into 9,750,000 shares of our common stock and 3,921,312 shares of our redeemable preferred stock. In 2006, TA Associates and JMI Equity, as holders of approximately 75% and 24%, respectively, of our redeemable preferred stock, elected to have us redeem 1,294,030, or 33%, of the then outstanding redeemable preferred stock in accordance with the rights of the redeemable preferred stock. We redeemed those shares for $8.4 million. In March 2007, we redeemed all 2,627,282 shares of our remaining redeemable preferred stock for a total redemption price of $17.4 million, including $5.6 million in accrued and unpaid
11
dividends on our redeemable preferred stock, in accordance with a redemption agreement between us and the holders of our redeemable preferred stock. In connection with the redemption in 2006, TA Associates and JMI Equity received $6.4 million and $2.0 million, respectively. In connection with the redemption in 2007, TA Associates and JMI Equity received $13.0 million and $4.0 million, respectively.
Dividend. On March 30, 2007, we declared and paid a one-time cash dividend of $2.00 per share on our common stock. As a result of such dividend, Messrs. Winemiller, Charles H. Murphy and Mr. and Mrs. Woestemeyer (their relatives and trusts for the benefit of their relatives) and entities associated with TA Associates and JMI Equity received a total of $3.9 million, $1.2 million, $12.3 million, $14.7 million and $4.6 million, respectively.
Warrants. On October 16, 2007, Mr. and Mrs. Woestemeyer exercised warrants to purchase an aggregate of 200,000 shares of our common stock at a price of $2.05 per share.
Indemnification agreements. We have entered into indemnification agreements with each of our current directorsDirectors and executive officers. These agreements require us, among other things, to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. We also intend to enter into indemnification agreements with our future directors and executive officers. Employment arrangements. We have entered into an employment agreement with each of Messrs. Winemiller, Murphy, Woestemeyer, Reiner and Woestemeyer,Robinson, our executive officers, which address, among other things, the terms of their employment. Procedures for related party transactions Under our codeCode of business conductBusiness Conduct and ethics,Ethics, our employees and officers are discouraged from entering into any transaction that may cause a conflict of interest for us. In addition, they must report any potential conflict of interest, including related party transactions, to their managers or our compliance officer who then reviews and summarizes the proposed transaction for our audit committee.Audit Committee. Pursuant to its charter, our audit committeeAudit Committee must then approve any related-partyrelated party transactions, including those transactions involving our directors. In approving or rejecting such proposed transactions, the audit committeeAudit Committee considers the relevant facts and circumstances available and deemed relevant to the audit committee,Audit Committee, including the material terms of the transactions, risks, benefits, costs, availability of other comparable services or products and, if applicable, the impact on a director’s independence. Our audit committeeAudit Committee will approve only those transactions that, in light of known circumstances, are in, or are not inconsistent with, our best interests, as our audit committeeAudit Committee determines in the good faith exercise of its discretion. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS The following table sets forth information regarding the beneficial ownership of our common stock as of March 18, 2008,April 9, 2009, unless otherwise noted below, for the following: · each person or entity known to own beneficially more than 5% of the outstanding common stock as of the date indicated in the corresponding footnote; · each director;director and director nominee; · each of the named executive officers named in the Summary Compensation table; and 15
Table of Contents · all directors and executive officers as a group. Applicable percentage of ownership is based on 26,169,80825,692,558 shares of our common stock outstanding as of March 18, 2008,April 9, 2009, unless otherwise noted below, together with applicable options for each stockholder. Beneficial ownership is determined under the rules and regulations of the Securities and Exchange CommissionSEC and does not necessarily indicate beneficial ownership for any other purpose. Under these rules, beneficial ownership includes those shares of common stock over which the stockholder has sole or shared voting or investment power. It also includes shares of common stock that the stockholder has a right to acquire within 60 days of March 18, 2008April 9, 2009 through the exercise of any option or other right. 12
Unless otherwise indicated, the principal address of each of the stockholders below is c/o PROS Holdings, Inc., 3100 Main Street, Suite 900, Houston, Texas 77002. | | | | Share | | Total Shares | | Percentage | | | | Shares | | Under Exercisable | | Beneficially | | Beneficially | | Name of Beneficial Owner | | Number | | Options (1) | | Owned | | Owned | | Albert E. Winemiller (2) | | 1,520,100 | | 250,000 | | 1,770,100 | | 6.8 | % | Charles H. Murphy (3) | | 355,100 | | 250,000 | | 605,100 | | 2.3 | % | Ronald F. Woestemeyer (4) | | 4,645,643 | | 30,000 | | 4,675,643 | | 17.9 | % | Harry S. Gruner (5) | | 70,246 | | 30,000 | | 100,246 | | 0.4 | % | Kurt R. Jaggers (6) | | 3,360,671 | | 30,000 | | 3,390,671 | | 13.0 | % | Mariette M. Woestemeyer (7) | | 4,645,643 | | 30,000 | | 4,675,643 | | 17.9 | % | Greg B. Petersen (8) | | 5,000 | | 30,000 | | 35,000 | | 0.1 | % | Timothy V. Williams (9) | | — | | 30,000 | | 30,000 | | 0.1 | % | | | | | | | | | | | TA Associates (10) | | 3,360,671 | | — | | 3,360,671 | | 12.8 | % | | | | | | | | | | | All executive officers and directors as a group (8 people) (11) | | 9,956,760 | | 650,000 | | 10,606,760 | | 40.5 | % |
| | | | Share | | Total Shares | | Percentage | | | | Shares | | Under Exercisable | | Beneficially | | Beneficially | | Name of Beneficial Owner | | Number | | Options (1) | | Owned | | Owned | | Albert E. Winemiller (2) | | 1,520,100 | | 150,000 | | 1,670,100 | | 6.5 | % | Charles H. Murphy (3) | | 236,100 | | 150,000 | | 386,100 | | 1.5 | % | Ronald F. Woestemeyer (4) | | 4,798,043 | | — | | 4,798,043 | | 18.7 | % | Andres Reiner (5) | | 66,062 | | 77,499 | | 143,561 | | 0.6 | % | Jeff Robinsn (6) | | 12,007 | | 61,041 | | 73,048 | | 0.3 | % | Ellen Keszler (7) | | — | | 30,000 | | 30,000 | | 0.1 | % | Greg B. Petersen (8) | | 5,000 | | 30,000 | | 35,000 | | 0.1 | % | William Russell (9) | | — | | — | | — | | 0.0 | % | Timothy V. Williams (10) | | — | | 30,000 | | 30,000 | | 0.1 | % | Mariette M. Woestemeyer (11) | | 4,798,043 | | 30,000 | | 4,828,043 | | 18.8 | % | | | | | | | | | | | Brown Capital Management, Inc. (12) | | 2,802,955 | | — | | 2,802,955 | | 10.9 | % | FMR, LLC (13) | | 1,937,242 | | — | | 1,937,242 | | 7.5 | % | RS Investments Management Co, LLC (14) | | 1,376,144 | | — | | 1,376,144 | | 5.4 | % | | | | | | | | | | | All executive officers and directors as a group (10 people) | | 6,637,312 | | 528,540 | | 7,165,852 | | 27.9 | % |
(1) Includes only optionsequity awards exercisable within 60 days of March 18, 2008.April 9, 2009. (2) Consists of (a) 1,500,000 shares held of record by Albert E. Winemiller Jr. 2006 Irrevocable Trust; (b) 20,000 shares held of record by Debra Ann Winemiller; (c) stock options to acquire 150,000 shares of our common stock, which were granted to Mr. Winemiller on April 2, 2007, which are immediately exercisable and which vest as tovested at 25% on April 2, 2008 and the remainder will vest monthly thereafter based on continued employment through April 2, 2011, (d) stock options to acquire 100,000 shares of our common stock, which were granted on February 14, 2008 which are immediately exercisable and vest monthly, in equal installments, over a four year period and (e)(d) 100 shares held of record by Albert E. Winemiller. Mr. Winemiller disclaims beneficial ownership of the shares held of record by Albert E. Winemiller Jr. 2006 Irrevocable Trust and Debra Ann Winemiller, except to the extent of his pecuniary interest therein. (3) Consists of (a) 312,250209,350 shares held of record by Charles H. Murphy; of which 20,830 shares are subject to a repurchase option we hold as of March 18, 2008; (b) 42,75026,750 shares held of record by Emily L. Murphy, and (c) stock options to acquire 150,000 shares of our common stock, which were granted on April 2, 2007, which are immediately exercisable and which vest as tovested at 25% on April 2, 2008 and the remaining will vest monthly thereafter based on continued employment through April 2, 2011, (d) stock options to acquire 100,000 shares of our common stock, which were granted on February 14, 2008 which are immediately exercisable and vest monthly, in equal installments, over a four year period and (e) 100 shares held of record by Charles H. Murphy.2011. (4) Consists of (a) 625,5431,673,936 shares held of record by Ronald F. Woestemeyer and Mariette M. Woestemeyer;Woestemeyer, (b) 1,500,000962,464 shares held of record by Ronald F. Woestemeyer as Trustee of the Ronald F. Woestemeyer 2007 Annuity Trust;Trust, of which Mr. Woestemeyer is the sole trustee, (c) 1,000,000641,643 shares held of record by Mariette M. Woestemeyer as Trustee of the Mariette M. Woestemeyer 2007 Annuity Trust;Trust, of which Mrs. Woestemeyer is the sole trustee, (d) 1,000,000 shares held of record by Deutsche BankDB Trust Company, Trustee of theCo. — Woestemeyer 1999 Gift Trust;Trust, of which DB Trust Company NA is the sole trustee (e) 520,000 shares held of record by Karoma LLC;LLC, of which Mr. and Mrs. Woestemeyer are the sole managers, and (f) stock options held by Mrs. Woestemeyer to acquire 30,000 shares, which are immediately exercisable. On March 13, 2009, Mrs. Woestemeyer was granted 5,000 restricted stock units, which vest on January 1, 2010. In the event of a change in control, the restricted stock units fully vest. Mr. Woestemeyer disclaims beneficial ownership of the shares held of record by Mariette M. Woestemeyer 2007 Annuity Trust and Woestemeyer 1999 Gift Trust, the shares issuable upon the exercise of the stock options held by Mrs. Woestemeyer and the restricted stock units held by Mrs. Woestemeyer. (5) Consists of (a) 66,562 shares held of record by Andres D. Reiner, (b) 6,250 shares issuable upon the exercise of stock options granted to Mr. Reiner on February 10, 2005, which are immediately exercisable and fully vested, (c) 10,782 shares issuable upon the exercise of stock options granted to Mr. Reiner on December 30, 2005, which are exercisable upon vesting. As of April 9, 2009, 7,500 stock options are exercisable and vested. The remaining stock options vest monthly over a three year period ending December 30, 2009, (d) 50,000 shares issuable upon the exercise of stock options granted to Mr. Reiner on March 26, 2007, which are exercisable upon vesting. As of April 9, 2009, 27,083 stock options are exercisable and vested. The remaining stock options vest 16
Table of Contents monthly over a three year period ending March 26, 2011 (e) 100,000 shares issuable upon the exercise of stock options granted to Mr. Reiner on November 15, 2007, which are exercisable upon vesting. As of April 9, 2009, 3,333 stock options are exercisable and vested. The remaining stock options vest monthly over a thirty month period beginning June 1, 2009, (f) 50,000 shares issuable upon the exercise of stock options granted to Mr. Reiner on May 14, 2008, which are exercisable upon vesting. As of April 9, 2009, 33,333 stock options are exercisable and vested. The remaining stock options vest monthly over an eighteen month period beginning May 14, 2008 and (g) 50,000 Restricted Stock Units granted to Mr. Reiner on November 11, 2008 which vest one third on January 1, 2010 with the remaining two thirds vesting annually in equal installments over the next two years. On March 13, 2009, Mr. Reiner was granted 25,000 restricted stock units, which vest annually over a three year period, in equal installments. Each restricted stock unit represents the contingent right to receive one share of PROS Holdings, Inc. common stock. (6) Consists of (a) 12,007 shares held of record by Jeffrey E. Robinson, (b) 6,250 shares issuable upon the exercise of stock options granted to Mr. Robinson on February 10, 2005, which are immediately exercisable and fully vested, (c) 8,907 shares issuable upon the exercise of stock options granted to Mr. Robinson on December 30, 2005, which are exercisable upon vesting. As of April 9, 2009, 5,625 stock options are exercisable and vested. The remaining stock options vest monthly over a three year period ending December 30, 2009, (d) 35,417 shares issuable upon the exercise of stock options granted to Mr. Robinson on March 26, 2007, which are exercisable upon vesting. As of April 9, 2009, 12,500 stock options are exercisable and vested. The remaining stock options vest monthly over a three year period ending March 26, 2011 (e) 100,000 shares issuable upon the exercise of stock options granted to Mr. Robinson on November 15, 2007, which are exercisable upon vesting. As of April 9, 2009, 3,333 stock options are exercisable and vested. The remaining stock options vest monthly over a thirty month period beginning June 1, 2009, (f) 50,000 shares issuable upon the exercise of stock options granted to Mr. Robinson on May 14, 2008, which are exercisable upon vesting. As of April 9, 2009, 33,333 stock options are exercisable and vested. The remaining stock options vest monthly over an eighteen month period beginning May 14, 2008 and (g) 50,000 Restricted Stock Units granted to Mr. Robinson on November 11, 2008 which vest one third on January 1, 2010 with the remaining two thirds vesting annually in equal installments over the next two years. On March 13, 2009, Mr. Robinson was granted 25,000 restricted stock units, which vest annually over a three year period, in equal installments. Each restricted stock unit represents the contingent right to receive one share of PROS Holdings, Inc. common stock. (7) Consists of 30,000 shares issuable upon the exercise of stock options granted to Mrs. WoestemeyerKeszler on June 27, 2007,August 21, 2008, which are immediately exercisable and which vest in equal monthly installments over a three year period and (g) 100 shares held of record by Ronald F. Woestemeyer. Mr. Woestemeyer disclaims beneficial ownership of the shares held of record by Deutsche Bank Trust Company, Trustee of the Woestemeyer 1999 Gift Trust, Mariette M. Woestemeyer, as Trustee of the Mariette M. Woestemeyer 2007 Annuity Trust andperiod. On March 13, 2009, Mrs. Woestemeyer. (5) Consists of (a) 70,246 shares held of record by Harry S. Gruner, and (b) 30,000 shares issuable upon the exercise ofKeszler was granted 5,000 restricted stock options granted to Mr. Gruner on June 27, 2007, which are immediately exercisable andunits, which vest on January 1, 2010. In the event of a change in equal monthly installments over a three year period.
(6) Consists of (a) 30,000 shares issuable uponcontrol, the exercise ofrestricted stock options granted to Mr. Jaggers on June 27, 2007, which are immediately exercisable and which vest in equal monthly installments over a three year period and (b) 3,360,671 shares held by entities affiliated with TA Associated as disclosed in footnote 10 of this table. Mr. Jaggers is the managing director and a limited partner of such entities. Mr. Jaggers disclaims beneficial ownership of these shares, except to the extent of his pecuniary interest therein of 13,986 shares.
(7) Consists of (a) 625,543 shares held of record by Ronald F. Woestemeyer and Mariette M. Woestemeyer; (b) 1,500,000 shares held of record by Ronald F. Woestemeyer, as Trustee of the Ronald F. Woestemeyer 2007 Annuity Trust; (c) 1,000,000 shares held of record by Mariette M. Woestemeyer, as Trustee of the Mariette M. Woestemeyer 2007 Annuity Trust; (d) 1,000,000 shares held of record by Deutsche Bank Trust Company, Trustee of the Woestemeyer 1999 Gift Trust; (e) 520,000 shares held of record by Karoma, LLC; (f) 30,000 shares issuable upon the exercise of stock options granted to Mrs. Woestemeyer on June 27, 2007, which are immediately exercisable and which vest in equal monthly installments over a three year period and (g) 100 shares held of record by Ronald F. Woestemeyer. Mrs. Woestemeyer disclaims beneficial ownership of the shares held of record by Deutsche Bank Trust
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Company, Trustee of the Woestemeyer 1999 Gift Trust, and Ronald F. Woestemeyer, as Trustee of the Ronald F. Woestemeyer 2007 Annuity Trust.units fully vest.
(8) Includes (a) 30,000 shares issuable upon the exercise of stock options granted to Mr. Petersen on June 27, 2007, which are immediately exercisable and which vest in equal monthly installments over a three year period. On March 13, 2009, Mr. Petersen was granted 7,500 restricted stock units, which vest on January 1, 2010. In the event of a change in control, the restricted stock units fully vest. (9) Mr. Russell was granted 15,000 Restricted Stock Units on November 11, 2008 which vest annually in equal installments over a three year period. Each restricted stock unit represents the contingent right to receive one share of PROS Holdings, Inc. common stock. On March 13, 2009, Mr. Russell was granted 10,000 restricted stock units, which vest on January 1, 2010. In the event of a change in control, the restricted stock units fully vest. (10) Consists of 30,000 shares issuable upon the exercise of stock options granted to Mr. Williams on June 27, 2007, which are immediately exercisable and which vest in equal monthly installments over a three year period. On March 13, 2009, Mr. Williams was granted 10,000 restricted stock units, which vest on January 1, 2010. In the event of a change in control, the restricted stock units fully vest. (10)(11) Consists of (a) 3,236,4241,673,936 shares held of record by TA/Advent VIII, L.P.;Ronald F. Woestemeyer and Mariette Woestemeyer, (b) 59,520962,464 shares held of record by TA Executives Fund LLC; andRonald F. Woestemeyer 2007 Annuity Trust, of which Mr. Woestemeyer is the sole trustee, (c) 64,727641,643 shares held of record by TA Investors LLC (such entities, collectively, the “TA Funds”). Investment and voting controlMariette M. Woestemeyer 2007 Annuity Trust, of each of the TA Funds is held by TA Associates, Inc. No stockholder, director or officer of TA Associates, Inc. has voting or investment power with respect to our shares of common stock held by the TA Associates Funds. Mr. Jaggers is a Managing Director of TA Associates, Inc. TA Associates, Inc. is also the manager of TA Associates VIII LLC, which Mrs. Woestemeyer is the general partner of our stockholders; TA/Advent VIII L.P. TA Associates, Inc. is the manager of our stockholders, TA Executives Fund LLC and TA Investors LLC. Mr. Jaggers disclaims beneficial ownership held by the TA Funds. The address for each of the TA Funds is John Hancock Tower, 56th floor, 200 Clarendon Street, Boston, MA 02116.
(11) Consists of 10,606,760sole trustee, (d) 1,000,000 shares held of record by our current directors and executive officers, 20,830DB Trust Co. — Woestemeyer 1999 Gift Trust, of which DB Trust Company NA is the sole trustee (e) 520,000 shares held of record by Karoma LLC, of which Mr. and Mrs. Woestemeyer are subjectthe sole managers, and (f) stock options held by Mrs. Woestemeyer to repurchase rights we holdacquire 30,000 shares, which are immediately exercisable. On March 13, 2009, Mrs. Woestemeyer was granted 5,000 restricted stock units, which vest on January 1, 2010. In the event of a change in control, the restricted stock units fully vest. Mrs. Woestemeyer disclaims beneficial ownership of the shares held of record by Ronald F. Woestemeyer 2007 Annuity Trust and Woestemeyer 1999 Gift Trust.
(12) According to information contained in the Schedule 13G/A filed by Brown Capital Management, Inc. with the SEC on February 4, 2009, Brown Capital Management, Inc. reported that as of March 18, 2008.December 31, 2008, it had (a) sole voting power to direct the vote of 1,552,707 shares of our common stock and (b) sole dispositive power with respect to 2,802,955 shares of our common stock. (13) According to information contained in the Schedule 13G filed by FMR LLC with the SEC on February 17, 2009, FMR LLC reported that it or certain of its affiliates beneficially owned 1,937,242 shares of our common stock as of December 31, 2008 and that 17
Table of Contents they had (a) sole voting power to direct the vote of 828,360 shares of our common stock and (b) sole dispositive power with respect to 1,937,242 shares of our common stock. (14) According to information contained in the Schedule 13G filed by RS Investments Management Co. LLC with the SEC on February 10, 2009, RS Investments Management Co. LLC reported that it or certain of its affiliates beneficially owned 1,376,144 shares of our common stock as of December 31, 2008 and that they had (a) sole voting power to direct the vote of 1,376,144 shares of our common stock and (b) sole dispositive power with respect to 1,376,144 shares of our common stock. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act, of 1934, as amended, requires our directors and executive officers, among others, to file with the SEC and the NYSE an initial report of ownership of our common stock on a Form 3 and reports of changes in ownership on a Form 4 or a Form 5. Persons subject to Section 16 are required by SEC regulations to furnish us with copies of all Section 16(a) forms that they file related to transactions in our common stock. Under SEC rules, certain forms of indirect ownership and ownership of our common stock by certain family members are covered by these reporting requirements. As a matter of practice, our administrative staff assists our directors and executive officers in preparing initial ownership reports and reporting ownership changes and typically files these reports on their behalf. Based on a review of the copies of such forms in our possession, and on written representations from reporting persons, we believe that during 2007,2008, all of our executive officers and directors filed the required reports on a timely basis under Section 16(a)., except a late Form 4 report was filed by Albert Winemiller and Charles Murphy on February 28, 2008 to report the grant of options by PROS Holdings Inc.; a late Form 4 report was filed by Jeffrey E. Robinson on May 12, 2008 to report the sale of shares pursuant to a Rule 10b5-1 plan; a late Form 4 report was filed by Andres D. Reiner and Jeffrey E. Robinson on November 11, 2008 to report the grant of Restricted Stock Units by PROS Holdings Inc. and a late Form 4 report was filed by Ronald Woestemeyer and Mariette Woestemeyer on November 26, 2008 to report the purchase of PROS Holdings Inc. common stock pursuant to a Rule 10b5-1 plan. COMPENSATION DISCUSSION AND ANALYSIS Our mission is to help our customers improve business and financial performance by providing them with our pricing and revenue optimization software products. Implementing our mission relies on delivering these software products successfully and competitively, as well as our ability to help our customers address their pricing and revenue optimization needs. As a result, it is critical that we are able to attract, motivate and retain highly talented individuals who are committed to us and our mission and are willing to identify and exploit opportunities to grow our business. Consequently, the goals of our executive compensation program are to align our executive officers’ compensation with our mission and the interests of our stockholders, to provide incentives and rewards to our executive officers for our success and to reflect the teamwork philosophy of our executive management team. Our compensation committeeCompensation Committee did not rely on any benchmark studies of comparable companies in establishing executive compensation. Rather, we relied upon the experience and expertise of management and the members of our compensation committeeCompensation Committee to adopt executive compensation programs. In particular, Messrs. Jaggers and Gruner, each of whom were members of our compensation committee prior to our initial public offering, are partners with venture capital and private equity firms and have served on the Boards of Directors and compensation committees of numerous private technology companies across the country. The compensation committeeCompensation Committee took into consideration our financial condition and operating results, our operating plan, our geographic location and the objectives of our executive compensation policies described below, and established an executive compensation program that the compensation committeeCompensation Committee members believed, based on their experience, is the most appropriate to motivate, retain and reward our executive officers. 14
The objectives of our executive compensation policy Our executive compensation programs are designed to achieve the following objectives: · attract and retain talented and experienced executives in the highly competitive and dynamic pricing and revenue software market; · motivate and reward executives whose knowledge, skills and performance are critical to our success; · align the interests of our executive officers and stockholders by motivating executive officers to increase stockholder value; 18
Table of Contents · provide a competitive compensation package which is weighted heavily towards pay for performance, and in which total compensation is primarily determined by company/team and individual results and the creation of stockholder value; · ensure fairness among the executive management team by recognizing the contributions each executive makes to our success; · foster a shared commitment among our management team by coordinating their respective teams and individual goals; and · compensate our executives to manage our business to meet our long-range objectives. Role of the compensation committeeCompensation Committee in setting executive compensation The responsibility for establishing, administering and interpreting our policies governing the compensation and benefits for our executive officers lies with our compensation committee,Compensation Committee, which consists entirely of non-employee directors. Our compensation committeeCompensation Committee has taken the following steps to ensure that our executive compensation and benefit policies are consistent with both our compensation philosophy and our corporate governance guidelines: · evaluated our compensation practices and assisted in developing and implementing the executive compensation policy; · established a practice, in accordance with the rules of the New York Stock Exchange,NYSE, of reviewing the performance and determining the compensation earned, paid or awarded to our chief executive officer independent of input from him; and · established a policy, in accordance with the rules of the New York Stock Exchange,NYSE, to review on an annual basis the performance of our other executive officers with assistance from our chief executive officer and determining what we believe to be appropriate total compensation for these executive officers. Basis of executive compensation Based on our goals and the experience of our board and management, we established the following elements of executive compensation: base salary, cash incentive bonuses and long-term incentive awards, each as further described below. We have chosen these components of our executive compensation program because we believe that they reward both long-term and short-term success while providing retention value. We also believe that these components are fairly standard for technology companies generally. We haveThe Compensation Committee elected not retainedto retain a compensation consultant in connection with its executive compensations activities. The Compensation Committee elected to review our policiesrely on the experience of the Compensation Committee members, the process undertaken by the Compensation Committee as discussed in this proxy and procedures with respect to executive compensation.the deliberation of the Compensation Committee members. Our compensation committeeCompensation Committee typically considers the recommendations of our chief executive officer and/or other members of management and determines the use and weight of each compensation element based on the subjective importance of each element in meeting our overall objectives. We elect to put a significant amount of each executive’s total potential compensation “at risk” based on our financial and the executive’s performance, which is reflected in our mix of short-term and long-term incentive components.
As we continue to evolve and have different priorities, we will evaluate our compensation packages and these components on a quantitative and qualitative basis to determine if they are still appropriate on at least a yearly basis or as circumstances dictate. We anticipate making new awards and adjustments to our compensation elements on an annual basis in connection with our yearly review and the recommendations of our chief executive officer and/or other members of management. 15
Components of executive compensation Base salaries Base salaries for our executive officers are reviewed on a yearly basis. For 2007,2008, our executive officers’ base salaries were set by reviewing their then current salaries in light of 20062007 company performance and individual performance, scope of their responsibilities, the experience of the members of our compensation committeeCompensation Committee with similar stage companies and general economic factors. We use base salaries primarily to retain our executives. 19
Table of Contents In April 2007, our boardFebruary 2008, the Compensation Committee reviewed the responsibilities and performance of Messrs. Winemiller, Murphy and Woestemeyer, their tenure with us, their existing compensation packages and their expected contributions and responsibilities for 2007.2008. Based on this review and the additional responsibilities of these executives in connection with our plans to become a publicly-traded company, our boardCompensation Committee approved an increase in the base salary for Mr. Winemiller from $275,000$300,000 to $300,000$340,000 and for Mr. Murphy from $245,000$275,000 to $275,000$300,000 effective January 1, 2007.2008. The base salary for Mr. Woestemeyer was not revised. In May 2008, the Board of Directors appointed Jeffrey E. Robinson, as our Senior Vice President — Pricing Solutions and Andres D. Reiner, as our Senior Vice President — Product Development. In connection with such appointment, the Compensation Committee reviewed Messrs. Robinson and Reiner’s existing compensation packages and expected contributions and responsibilities for 2008. Based on that review the Compensation Committee approved an increase in the base salary of Mr. Robinson from $182,000 to $210,000 and for Mr. Reiner from $182,000 to $210,000, effective January 1, 2008. Cash incentive bonus We have an annual cash incentive bonus plan for our executive officers under which bonuses may be paid shortly after the end of each year based on our performance against meeting our corporate objectives for the year. Bonuses are intended to compensate our executive officers for achievement of our corporate financial goals. The bonuses are paid in cash and are generally paid in the first quarter following completion of a given year. Our compensation committeeCompensation Committee does not have the discretion to increase the targets or decrease the amounts payable to any of our executives, but it does have the discretion to lower the targets and increase the amounts payable under this cash incentive plan. Traditionally, the committee has not exercised this discretion nor did it exercise it in 2007.2008. Each component of this bonus is independent of the other components and has minimum target and maximum target levels. The target bonus amounts are payable under this cash bonus plan if we hit our target levels for each component. Actual results between the minimum, target and the maximum goal levels would be pro-rated. We use our annual cash incentive bonus plan to align our executive’s performance with our financial results and to motivate our executives to achieve annual goals. Long-term incentive award programs Our base salary and cash incentive bonus plans are intended to compensate and motivate for the short-term. We believe that providing our executive officers with an ownership stake through participation in our long-term incentive plans will encourage long-term performance and help align their interests with those of our stockholders. We have granted stock options and restricted stock units since we believe that these types of equity awards are competitive in our industry and are best understood by our executives and employees. 1999 equity incentive plan. Our The Company’s 1999 equity incentive plan authorized usthe Company to grant options to purchase shares of common stock to ourits employees, directors and consultants. Our compensation committee wasconsultants at the administrator of this plan.Company’s discretion. Stock option grants under this plan were usually made at the commencement of employment and, occasionally, following a significant change in job responsibilities or to meet other special retention or performance objectives. The compensation committee reviewed and approved stock option awards to executive officers based upon a review of competitive compensation data, its assessment of individual performance, a review of each executive’s existing long-term incentives and retention considerations. Periodic stock option grants were made at the discretion of the compensation committeeCompensation Committee to eligible employees and, in appropriate circumstances, the compensation committeeCompensation Committee of the Board of Directors considered the recommendations of our Chief Executive OfficerCEO and other members of management. No options were awarded in 2006 since the Compensation Committee had determined there was sufficient retention value in the outstanding options and common stock subject to restrictions held by the Company’s executive officers. Stock options granted by usthe Company have an exercise price equal to the fair market value of ourits common stock on the day of grant. The compensation committee, as plan administrator, can determine vesting for option grants whichgrant, typically vest 25% on the first anniversary and monthly thereafter, based upon continued employment over a four-year period, and generally expire ten years after the date of grant. Incentive stock options also include certain other terms necessary to assure compliance with the Internal Revenue Code. OurThe Company’s 1999 equity incentive plan was terminated in March 2007 for purposes of granting any future equity awards under this plan.awards. There were issued and outstanding stock options to purchase 306,242154,114 shares of ourthe Company’s common stock under this plan on December 31, 2007.2008. None of these options were held by ourthe Company’s executive officers. 2007 equity incentive plan. OurThe Company’s 2007 equity incentive plan or (“2007 plan,plan”) was adopted in March 2007. The purpose of the 2007 plan is to promote ourthe Company’s long-term growth and profitability. The 2007 plan is intended to make available incentives that will help usthe Company to attract, retain and reward employees whose contributions are essential to ourits success. WeUnder the 2007 plan, the Company’s employees, officers, directors and other individuals providing services to the Company or any of its affiliates are eligible to receive awards. The 2007 plan has an evergreen provision that allows for an annual increase equal to the lesser of (i) 3.5% of the Company’s outstanding shares (ii) 900,000 shares or (iii) any lesser amount determined by the Compensation Committee of the Board of Directors. The Company may provide these incentives through the grant of: (i) restricted stock awards; (ii) restricted stock unit awards; (iii) stock options; (iv) stock appreciation rights; (v) phantom stock; and (vi)(vii) performance awards. 16
A total of 1,870,0002,770,000 shares have been reserved for issuance under the 2007 plan with an evergreen provision that allows for an annual increase equal to the lesser of (a) 3.5% of our outstanding shares (b) 900,000 shares or (c) any lesser amount determined by our Board of Directors.plan. As of December 31, 2008, the Company had outstanding equity awards to acquire 2,732,488 shares of its common stock held by the Company’s employees, directors and consultants under the 2007 114,000plan. Included in the outstanding equity awards is 350,000 restricted stock units held by the Company’s employees, directors and consultants. As of December 31, 2008, 8,451 shares remain available for grant or award under the 2007 20
Table of Contents plan. The compensation committeeAs of our boardDecember 31, 2008, there has not been designated to administerany issuance of restricted stock awards, stock appreciation rights, phantom stock or performance awards under this plan. On February 26, 2009, the 2007 plan. Under the 2007 plan, our employees, officers, directors and other individuals providing services to us or any of our affiliates are eligible to receive awards. The committee has the authority, consistent with the provisions of the 2007 plan, to determine which eligible participants will receive awards, the form of the awards andCompany increased the number of shares available by 898,000 under the evergreen provision in the Company’s 2007 equity incentive plan increasing the number of our common stock covered by each award. The committee may impose terms, limits, restrictions and conditions upon awards, and may modify, amend, extend or renew awards, accelerate or change the timing of exercise of awards or waive any restrictions or conditions of an award.shares reserved for issuance to 3,668,000. As of December 31, 2007, we had outstanding equity awards to acquire 1,756,000 shares of our common stock held by our executive officers, employees and consultantsApril 9, 2009, 407,951 remain available for grant or award under the 2007 plan. In February Options generally have a ten-year term and typically vest over three-four years. At December 31, 2008, thethere were an estimated $13.1 million of total unrecognized compensation committee approved an increase in the total shares reservedcosts related to share-based compensation arrangements for issuance by 900,000 shares in accordance with the evergreen provision.options and restricted stock units granted. These costs will be recognized over a weighted average period of 2.6 years.
Stock options. Our 2007 plan permits the granting of options to purchase shares of our common stock intended to qualify as incentive stock options, under Section 422 of the Internal Revenue Code, and nonqualified stock options. The option exercise price and the term of each option are determined by the compensation committee.Compensation Committee. The compensation committeeCompensation Committee also determines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment during which options may be exercised. The compensation committee,Compensation Committee, as plan administrator, can determine vesting for grants which generally expire ten years after the date of the grant. Stock appreciation rights. The compensation committeeCompensation Committee may grant a right to receive a number of shares or, in the discretion of the compensation committee,Compensation Committee, an amount in cash or a combination of shares and cash, based on the increase in the fair market value of the shares underlying the right during a stated period specified by the compensation committee.Compensation Committee. Restricted stock awards and units. The compensation committeeCompensation Committee may award shares of our common stock to participants at no cost or for a purchase price or restricted stock units that are settled in shares of our common stock. These restricted stock and restricted stock unit awards may be subject to restrictions or may be free from any restrictions under our 2007 plan. The purchase price of the shares, if any, and any applicable restrictions, are determined by the compensation committee.Compensation Committee. Phantom stock. The compensation committeeCompensation Committee may grant stock equivalent rights, or phantom stock, which entitles the recipient to receive credits which are ultimately payable in the form of cash, shares of our common stock or a combination of both. Phantom stock does not entitle the holder to any rights as a stockholder. Performance awards. The compensation committeeCompensation Committee may grant performance awards to participants entitling the participants to receive cash, shares of our common stock or a combination of both, upon the achievement of performance goals and other conditions determined by the compensation committee.Compensation Committee. The performance goals may be based on our operating income or on one or more other business criteria selected by the compensation committee.Compensation Committee. In the event of any stock split, stock dividend or similar transaction, the shares subject to the 2007 plan and any outstanding awards will automatically be adjusted. The 2007 plan will continue in effect until the tenth anniversary of its approval by our board, unless earlier terminated earlier. The compensation committeeCompensation Committee may amend, terminate or modify the plan at any time. In the event of certain significant corporate transactions, including a change in control of the Company, any then-outstanding equity award or option under the 2007 plan may be assumed, continued or substituted for by any surviving or acquiring entity (or its parent company). If the surviving or acquiring entity (or its parent company) elects to assume, continue or substitute for such awards or options and the holder of such award or option is terminated without cause or resigns for good reason within 18 months of a change of control of the Company, such awards or options shall vest in full. If the surviving or acquiring entity (or its parent company) elects not to assume, continue or substitute for the equity awards or options under the 2007 plan, all outstanding equity awards and options under the 2007 plan will vest in full and become fully exercisable. The compensation committeeCompensation Committee believes that the use of stock options and equity awards offers the best approach to achieve our compensation goals with respect to long-term incentives and currently provides tax and other advantages to our employees relative to other forms of equity compensation. We believe that our equity incentive program is an important retention tool for our employees. At the beginning of 2007,2008, the compensation committeeCompensation Committee conducted an annual review of the compensation packages of our executive officers, including the retention value of their compensation components, their contributions to our business and their ability to continue to provide leadership to us and to maintain our success. The compensation committeeCompensation Committee believed it was in our best interests to provide additional stock options to our executive officers to incentivize them and to provide additional retention value. We issued no stock options in 2006 and only Mr. Murphy had stock options that remained subject to vesting. In April 2007,February 2008, we granted to each of our Chief Executive Officer and Chief Financial Officer a stock option under our 2007 plan to purchase 150,000100,000 shares of our 17
common stock at $6.00$14.93 per share. Mr. Woestemeyer was not granted any stock options at this time because the compensation committeeCompensation Committee believed that his significant equity ownership was sufficient for motivation and retention. These stockIn November 2008, Messrs. Winemiller and Murphy surrendered options provide for the full accelerationheld to acquire 100,000 shares each of the vesting upon our change in control,Company’s common stock. Messrs. Winemiller and Murphy made the officer’s termination without cause or resignation for good reason and otherwise vest asrequest to 25% of the shares in April 2008 and monthly thereafter based on continued employment over the following three years. These stock options also allow our executives to exercise them prior to the vesting of such options, which allows our executives to beginsurrender their tax holding period. If the executive officer exercises and holds the underlying shares for over a year after such exercise and over two years after the date of grant, the executive officer may be able to take advantage of the long-term capital gain tax rate. The long-term capital gain rate is lower than the short-term capital gain tax rate that may otherwise be applicable. Our standard stock options to our non-executiveenable the Compensation
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Table of Contents Committee to grant employees do not contain(other than Mr. Winemiller and Mr. Murphy) more shares than would have otherwise been available for grant under the immediate exercise feature. We believe2007 plan. Upon surrender, the practice of granting immediately exercisable options for executive officers is fairly standard across our industry and, as a result, is another mechanism to assist us in retaining our executives and ensure that their compensation packages are competitive. These grants were made because our compensation committee believes it is an appropriate incentive mechanism to encourage retention for the long-term. In determining the number of shares subject to stockthese options grantedreturned to the executive officers,plan as available to grant. Messrs. Winemiller and Murphy requested that no additional compensation be paid to them in connection with the compensation committee took into accountsurrender. Messrs. Winemiller and Murphy did not receive any value for the surrender of these options and did not receive a new grant of restricted stock units or any additional compensation. The Compensation Committee granted the following equity awards under the 2007 plan to each executive officer’s position, scopein 2008, Messrs. Reiner and Robinson (i) a stock option to purchase 50,000 shares of responsibility, abilityour common stock at $12.72 per share was granted on May 14, 2008, and (ii) 50,000 restricted stock units was granted on November 11, 2008. On March 13, 2009, the Compensation Committee granted each, Messrs. Reiner and Robinson 25,000 restricted stock units under the 2007 plan. Each restricted stock unit represents the contingent right to affect stockholder value and historic and recent performance.receive one share of PROS Holdings, Inc. Benefits. We provide our executive officers the following benefits, generally on the same terms as we provide our other employees. ·health, dental, travel, accident insurance and vision;
·life insurance;
·employee assistance plan;
·medical and dependantdependent care flexible spending account;
·short-and long-term disability, accidental death and dismemberment;
·a 401(k) plan;
·paid time off and vacations;
·sick days; and
·tuition reimbursement.
We believe these benefits are consistent with companies with which we compete for employees. 401(k) Plan.Plan. In May 1996, we adopted a tax-qualified employee savings and retirement plan, or 401(k) plan, which generally covers our full-time employees. The plan is intended to qualify under Section 401(a) of the Internal Revenue Code. Contributions, and income earned thereon, are not taxable to employees until withdrawn from this plan. Under this plan, employees may elect to reduce their current compensation up to the statutorily prescribed annual limit and have the amount of the reduction contributed to the plan. This plan also permits us to make matching contributions to the plan on behalf of participants. Since January 2000, we have matched up to 50% of an employee’s contribution up to 6% of the employee’s eligible income contributed to our 401(k) plan.
Severance and termination provisions We provide our executive officers severance packages if they are terminated without “cause” (as defined in their employment or severance agreements) in order to attract and retain them. The amount of severance benefits is described below. The Compensation committeeCommittee reviews the potential payouts to ensure their market-competitiveness in order to incentivize our executive officers to maintain focus on both daily and long-term efforts. On March 24, 2009, the Company entered into a First Amendment of Employment Agreement with Messrs. Reiner and Robinson. The First Amendment of Employment Agreement with Messrs. Reiner and Robinson would provide for payment of (i) any unpaid bonus earned prior to the termination, and (ii) the payment of a bonus at one hundred percent of performance targets, including discretionary components, within the bonus plan in effect as if employed by the Company for twelve months. The unpaid bonus described in subsection (i) shall be paid on or about termination and the bonus as described in subsection (ii) shall be payable in equal installments during the twelve month period following termination. Such bonuses are payable if Messrs. Reiner or Robinson are terminated by us without cause, as defined in the agreement or by the Named Executive Officer for Good Reason, as defined in the agreement. On March 24, 2009, the Company entered into a Second Amendment of Employment Agreement with Messrs. Winemiller and Murphy. The Second Amendment of Employment Agreement will provide Messrs. Winemiller and Murphy with payment of (i) any unpaid bonus earned prior to the termination, and (ii) the payment of a bonus at one hundred percent of performance targets, including discretionary components, within the bonus plan in effect as if employed by the Company for twelve months. The unpaid 22
Table of Contents bonus described in subsection (i) shall be paid on or about termination and the bonus as described in subsection (ii) shall be payable in equal installments during the twelve month period following termination. Such bonuses are payable if Messrs. Winemiller and Murphy are terminated by us without cause, as defined in the agreement or by the Named Executive Officer for Good Reason, as defined in the agreement. In addition, the amended employment agreements provides for the payment of (i) any unpaid bonus earned prior to the termination, and (ii) the payment of a bonus at one hundred percent of performance targets, including discretionary components, within the bonus plan in effect as if employed by the Company for eighteen months if such officer is terminated without “cause” or if such officer resigns for “good reason” within six months prior to or any time after a change in control transaction of the Company. Messrs. Winemiller and Murphy are subject to non-competition and non-solicitation restrictions during the term of their employment and for the 12-month period following the termination of their employment. We entered into employment agreements with Mr. Robinson, our Senior Vice President, Pricing, and Mr. Reiner, our Senior Vice President, Product Development, on April 24, 2008. Both of these agreements are for a two year term and automatically renew for one year terms unless the Company decides not to renew them. The base salaries payable to each of Messrs. Robinson and Reiner are subject to periodic review by our Compensation Committee. Both Messrs. Robinson and Reiner are entitled to 12 months of severance, up to 12 months of health benefits and acceleration of the vesting on their stock options or other equity awards with respect to shares comprising fifty percent of the unvested shares under such stock options or other equity awards as of the date of termination. Messrs. Robinson and Reiner are subject to non-competition and non-solicitation restrictions during the term of their employment and for the 12-month period following the termination of their employment. We entered into employment agreements with Mr. Winemiller, our Chief Executive Officer, and Mr. Murphy, our Chief Financial Officer, on September 30, 2005. Both of these agreements were originally for a two year term and automatically renew for one year terms unless the Company decides not to renew them. The base salaries payable to each of Messrs. Winemiller and Murphy are subject to periodic review by our compensation committee.Compensation Committee. Both Messrs. Winemiller and Murphy are entitled to 12 months of severance, up to 12 months of health benefits and 12 months of acceleration of the vesting on their stock options granted prior to April 2, 2007 if their employment with us is terminated without “cause” or they resign with “good reason” as defined in those agreements. On April 2, 2007, our board amended these employment agreements to also provide for the full acceleration of vesting, or lapse of all 18
repurchase rights, of any options or other equity awards granted to these executive officers on or after April 2, 2007, if any of these officers is terminated without “cause,” resigns for “good reason” or if a change of control of the Company occurs. In addition, the amended employment agreements provide for 18 months of severance and 18 months of health benefits if such officer is terminated without “cause” or if such officer resigns for “good reason” within six months prior to or any time after a change in control transaction of the Company. Messrs. Winemiller and Murphy are subject to non-competition and non-solicitation restrictions during the term of their employment and for the 12-month period following the termination of their employment. In January 1999, we entered into an employment agreement with Mr. Woestemeyer, our Executive Vice President. This agreement was originally for a two-year term and automatically renews for one year terms unless the Company decides not to renew. Under this agreement, Mr. Woestemeyer’s salary is subject to periodic review by our compensation committee,Compensation Committee, and he is entitled to 12 months of severance if he is terminated without “cause” as defined in his agreement or we decide not to renew his agreement without giving him notice. If we decide not to renew this agreement and we provide 60-days notice of non-renewal to Mr. Woestemeyer, he is entitled to 10 months of severance. In addition, Mr. Woestemeyer is subject to non-competition and non-solicitation restrictions during the term of his employment and for the severance period following the termination of his employment. “Cause” is defined in these employment agreements as a breach by our officer of his duties of confidentiality which causes a material harm to us, his conviction of, or a plea of guilty or no contest to, a felony or his failure to perform his duties after notice and a cure period. In addition, for Messrs. Winemiller, Murphy, Robinson, and Murphy,Reiner, “cause” also includes an intentional wrongdoing by them that adversely affects us. Messrs. Winemiller, Murphy, Robinson and MurphyReiner can resign for “good reason” and be entitled to severance. “Good reason” is defined in their employment agreements as the assignment of duties to them that are substantially inconsistent with their current roles with us, the relocation of their offices to more than 50 miles from our present location, a material reduction in their base salaries and our failure to provide them with similar benefits that we provide to our other employees. Components of executive compensation for 20072008 and 20082009 Executive compensation activities in 2007.2008. In April 2007,February 2008, our compensation committeeCompensation Committee adopted our 20072008 Executive and Key Employee Incentive Plan (“2008 Bonus Plan”) cash incentive bonus plan and applied an analysis to setting components and targets similar to the analysis the committeeCompensation Committee applied in 2006.2007 under our 2007 Executive and Key Employees Incentive Plan (“2007 Bonus Plan”). The committee2008 Bonus Plan was intended to compensate participants for achieving company financial and operational goals. The Compensation Committee reviewed our financial performance for the prior year, management’s performance against prior year targets, our plan for the next fiscal year and the total compensation potential afforded the executive officers considering all elements of the executive officers’ compensation. The compensation committee replaced the year end sales backlog component with sales during the period because year end sales backlog can include prior period sales, and the committee believed that focusing the bonus plan on sales during the relevant period was a more accurate measurement23
Table of our executive officers’ performance during the period. Sales are contracted license and implementation service fees.Contents The potential payouts under the bonus plan2008 Bonus Plan were based on our performance as a company within a range of each component’s target. No bonus was to be earned below the target threshold and the maximum bonus was to be earned at the target maximum. The ranges for each component are set forth in the following table: Component | | Target threshold | | Target maximum | | | | | | (in millions) | | Revenue | | 90% of Target | | $ | 62.0 | | Operating income | | 90% of Target | | 10.5 | | Sales | | 90% of Target | | 48.0 | | | | | | | | |
Sales has a higher maximum target range than revenue and operating income because the committee believed that emphasizing sales growth is critically important to building the long-term growth of our business.
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Component | | Target threshold | | Target maximum (in millions) | | Revenue | | 90% of Target | | $ | 79.5 | | Non GAAP operating income | | 90% of Target | | 15.8 | | Sales | | 90% of Target | | 60.0 | | | | | | | | |
Following the growth of our business in 2006 versus 2005,and 2007, the committeeCompensation Committee sought to set 20072008 targets consistent with our operating plan for the 20072008 fiscal year and at sufficiently high levels to motivate the executive officers to continue to grow the business and manage expenses, with an emphasis on increasing sales. The following table sets forth our revenue, operating income and sales targets for 2007:2008: Component (In millions) | | Target (GAAP)(1) | | | Target (1) | | Revenue | | $ | 61.0 | | | $ | 78.0 | | Operating income | | 9.5 | | | Non GAAP operating income | | | 15.3 | | Sales | | 40.0 | | | 55.0 | | |
(1)The targets set forth in this table were established and are disclosed only as performance objectives for our executive officers, and do not constitute guidance regarding our expected future operating results. Our actual operations results are subject to significant risks, uncertainties and contingencies, including those risks set forth in Item 1A “Risk factors” in our annual report on Form 10-K for the year ended December 31, 2008. | (1)
| The targets set forth in this table were established and are disclosed only as performance objectives for our executive officers, and do not constitute guidance regarding our expected future operating results. Our actual operations results are subject to significant risks, uncertainties and contingencies, including those risks set forth in Item 1A “Risk factors” in our annual report on Form 10-K for the year ended December 31, 2007.
|
Each of the components areis independent of the others, but the weighting of the components as they relate to potential bonus payouts areis set forth in the following table: Component | | Weighting of component as a % of bonus payment | | Revenue | | 33.3 | % | Operating income | | 33.3 | % | Sales | | 33.3 | % |
The committeeCompensation Committee weighted the components equally because the committeeCompensation Committee sought to retain the motivational benefits of growing the sales and customer base but also determined that the executive officers should be equally motivated to manage the business in such a way to achieve high operating income. The committeeCompensation Committee set the amount of each bonus payment as a percentage of the base salary of each executive officer as set forth in the following table: Executive officer | | At target threshold | | At target | | At target maximum | | | At target threshold | | At target | | At target maximum | | Albert E. Winemiller | | 50 | % | 100 | % | 146 | % | | 50 | % | 100 | % | 147 | % | Charles H. Murphy | | 40 | % | 80 | % | 117 | % | | 40 | % | 80 | % | 117.6 | % | Ronald F. Woestemeyer | | 22.5 | % | 45 | % | 66 | % | | 22.5 | % | 45 | % | 66.2 | % | Andres D. Reiner | | | 25 | % | 50 | % | 100 | % | Jeffrey E. Robinson | | | 25 | % | 50 | % | 100 | % |
The committeeCompensation Committee increased these percentages in 20072008 compared with those used in the 20062007 Bonus Plan based on its analysis and observations of competitive market pay levels for the respective officers and in consideration of the total compensation of each executive officer. Under the 2007 cash incentive bonus plan,2008 Bonus Plan, each executive officer achieved 88.6% of the at target maximum as presented above. Executive compensation activities in 2008.2009. On February 25, 2009, our Compensation Committee approved the Named Executive Officer Plan for 2009 (the “2009 NEO Bonus Plan”). The 2008 ExecutiveCompany’s named executive officers will participate in the 2009 NEO Bonus Plan which is intended to compensate participants for achieving company financial and Key Employees Incentiveoperational goals. In response to current global economic challenges, the Company has taken actions to more closely manage its expenses. Consistent with those efforts, the Compensation Committee elected not to increase the base salaries of the named executive officers 24
Table of Contents for 2009. The 2009 NEO Bonus Plan sets target bonus amounts and performance criteria for participants. The performance criteria, the criteria’s weighting andExcept for certain modifications described below the general terms of the 2008 Executive and Key Employees Incentive2009 NEO Bonus Plan are consistent with the Company’s 2007 Executive and Key Employee Incentive2008 Bonus Plan as described above, exceptabove. The 2008 Bonus Plan was comprised of three components; (i) revenue, (ii) non-GAAP operating income, and (iii) sales, each weighted at 33.3%. In addition, the Compensation Committee had the right to add a discretionary amount to the bonus received by the named executive officers. The 2009 NEO Bonus Plan retained the revenue and non-GAAP operating income components of the 2008 Bonus Plan; however, the weighting of these two components was modified. The revenue and the non-GAAP operating income components were each increased to a 45% weighting.The Compensation Committee elected to make discretionary the remaining 10%. The Compensation Committee felt that by increasing the weighting of the revenue and non-GAAP operating income components of the 2009 NEO Bonus Plan would heighten management’s focus on maximizing our revenues and profitability during the 2009 fiscal year. To align with the Company’s reporting standards, the revenue and non-GAAP operating income components of the 2009 NEO Bonus Plan will be measured at the end of each quarterly period rather than on an annual basis as in the previous year. There will be a cumulative annual performance calculation for those two components. The discretionary component will be determined by the Compensation Committee on an annual basis at the end of the Company’s fiscal year. The payments will be made on an annual basis unless the Compensation Committee makes a determination to pay on an interim basis. The performance targets under the 2008 Executive and Key Employees Incentive2009 NEO Bonus Plan based uponwill be tied to the Company’s 2008 operating plan.2009 quarterly guidance. In 2009, the Committee set the amount of each executive officer’s potential bonus payment under the 2009 NEO Bonus Plan, as a percentage of his base salary, as follows: Executive officer | | At target threshold | | At target | | At target maximum | | Albert E. Winemiller | | 50 | % | 100 | % | 150 | % | Charles H. Murphy | | 40 | % | 80 | % | 120 | % | Ronald F. Woestemeyer | | 22.5 | % | 45 | % | 67.5 | % | Andres D. Reiner | | 25 | % | 50 | % | 100 | % | Jeffrey E. Robinson | | 25 | % | 50 | % | 100 | % |
Tax considerations We are subject to Internal Revenue Code Section 162(m), which limits the amount that we may deduct for compensation paid to our chief executive officer and to each of our four most highly compensated officers to $1,000,000 per person per year, unless certain exemption requirements are met. Exemptions to this deductibility limit may be made for various forms of “performance-based” compensation approved by our stockholders. In addition to salary and bonus compensation that is not “performance-based,” the exercise of stock options may cause an officer’s total compensation to exceed $1,000,000. However, compensation from options that meet certain requirements will be exempt from the $1,000,000 cap on deductibility. In the past, annual cash compensation to our executive officers has not exceeded $1,000,000 per person. Although we do not currently anticipate such compensation to exceed the $1,000,000 limit, our officer compensation could in the future exceed this limit, and we may not be able to deduct the compensation amount in excess of $1,000,000. While the compensation committeeCompensation Committee cannot predict how the deductibility limit may impact our 20
compensation program in future years, the compensation committeeCompensation Committee intends to maintain an approach to executive compensation that strongly links pay to performance. COMPENSATION COMMITTEE REPORT The Compensation Committee has reviewed and discussed the preceding Compensation Discussion and Analysis section of this proxy statement with our management. Based on this review and discussion, the compensation committeeCompensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in our proxy statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2007.2008. THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS Kurt R. Jaggers, Chairman
Greg B. Petersen, Chairman Timothy V. Williams William Russell 25
Table of Contents EXECUTIVE COMPENSATION Summary compensation table The following table presents the compensation paid to or earned by our Chief Executive Officer, our Chief Financial Officer and our highest compensated executive officers (collectively, our “Named Executive Officers”) during 2007.2008. | | | | | | Non-equity | | | | | | | | | | | | | Non-equity | | Restricted | | | | | | | | | | | | | | Incentive Plan | | Option | | All Other | | | | | | | | | Incentive Plan | | Stock | | Option | | All Other | | | | Name and | | | | | | Compensation | | Awards | | Compensation | | | | | | | | | Compensation | | Units | | Awards | | Compensation | | | | Principal Position | | Year | | Salary ($) | | ($) (1) | | ($) (2) | | ($) (3) | | Total ($) | | | Year | | Salary ($) | | ($) (1) | | ($) (2) | | ($) (2) | | ($) (3) | | Total ($) | | Albert E. Winemiller | | 2007 | | 300,000 | | 438,000 | | 138,143 | | 13,974 | | 890,117 | | | 2008 | | 340,000 | | 301,334 | | — | | 121,784 | | 13,074 | | 776,192 | | President and Chief Executive Officer | | 2006 | | 275,000 | | 291,060 | | — | | 8,250 | | 574,310 | | | 2007 | | 300,000 | | 438,000 | | — | | 138,143 | | 13,974 | | 890,117 | | | | | | | | | | | | | | | | | 2006 | | 275,000 | | 291,060 | | — | | — | | 8,250 | | 574,310 | | | | | | | | | | | | | | | | | | | Charles H. Murphy | | 2007 | | 275,000 | | 321,750 | | 138,143 | | 12,803 | | 747,696 | | | 2008 | | 300,000 | | 212,706 | | — | | 121,784 | | 11,145 | | 645,635 | | Executive Vice President and Chief Financial Officer | | 2006 | | 245,000 | | 194,481 | | — | | 7,350 | | 446,831 | | | Executive Vice President and Chief | | | 2007 | | 275,000 | | 321,750 | | — | | 138,143 | | 12,803 | | 747,696 | | Financial Officer | | | 2006 | | 245,000 | | 194,481 | | — | | — | | 7,350 | | 446,831 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Ronald F. Woestemeyer | | 2007 | | 233,750 | | 154,275 | | — | | 17,194 | | 405,219 | | | 2008 | | 233,750 | | 93,226 | | — | | — | | 13,054 | | 340,030 | | Executive Vice President | | 2006 | | 233,750 | | 61,850 | | — | | 7,013 | | 302,613 | | | 2007 | | 233,750 | | 154,275 | | — | | — | | 17,194 | | 405,219 | | | | | 2006 | | 233,750 | | 61,850 | | — | | — | | 7,013 | | 302,613 | | | | | | | | | | | | | | | | | | | Jeff Robinson | | | 2008 | | 210,000 | | 93,059 | | 7,212 | | 15,778 | | 12,746 | | 338,795 | | Senior Vice President, Pricing | | | 2007 | | 182,000 | | 163,800 | | — | | 73,557 | | 5,460 | | 424,817 | | | | | 2006 | | 170,000 | | 111,860 | | — | | — | | 4,425 | | 286,285 | | | | | | | | | | | | | | | | | | | Andres Renier | | | 2008 | | 210,000 | | 93,059 | | 7,212 | | 15,778 | | 8,943 | | 334,992 | | Senior Vice President, Product | | | 2007 | | 182,000 | | 163,800 | | — | | 73,557 | | 5,460 | | 424,817 | | Development | | | 2006 | | 176,000 | | 108,662 | | — | | — | | 5,280 | | 289,942 | |
(1)
| Payment for 2007 performance made in March 2008 under the cash incentive bonus plan. No bonus was earned or paid in 2007 to a named executive officer except as part of our cash incentive bonus plan.
| (2)
| Represents the expense incurred by us for the year ended December 31, 2007, as determined under Financial Accounting Standards No. 123R for outstanding awards granted as related to the Named Executive Officers. See Note 10 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2007 regarding assumptions underlying valuation of equity awards.
| (3)
| (1) With respect to year 2008, represents payment for 2008 performance made in March 2009 under our 2008 Bonus Plan. (2) Represents the expense incurred by us for the years ended December 31, 2008 and 2007, as determined under Financial Accounting Standards No. 123R for outstanding equity awards granted as related to the Named Executive Officers. See Note 8 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2008 regarding assumptions underlying valuation of equity awards. (3) Represents matching contributions for each individual’s 401(k) plan contributions, life insurance premiums and health insurance. |
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Grants of plan-based awards for 20072008 The Company awards bonuses pursuant to a 2008 Bonus Plan, which provides for the award of annual cash bonuses, based upon threshold, target and maximum payout amounts. Please see “Compensation Discussion and Analysis — Components of executive compensation for 2008 and 2009 — Executive compensation activities in 2008” for additional information on the 2008 Bonus Plan. The actual amount paid to each named executive officer for the fiscal year ended December 31, 2008 is set forth in the Summary Compensation Table under the heading, “Non-Equity Incentive Plan Compensation.” The following table presents information relating to plan-baseda 2008 Bonus Plan awards granted to our Named Executive Officers in 2007.2008. | | | | | | | | | | All other | | | | | | | | | | | | | | | | | Stock Awards: | | | | | | | | | | | Estimated Future Payouts under | | Number of | | Exercise or base | | Grant date fair | | | | | | | Non-equity Incentive Plan Awards | | shares of stock | | price of option | | value of stock | | | | | Estimated Future Payouts under Non-equity Incentive Plan Awards | | Name | | Grant Date | | Threshold($) | | Target ($) | | Maximum ($) | | of units (#) | | awards ($/SH) | | and option awards | | | Grant Date | | Threshold ($) | | Target ($) | | Maximum ($) | | Albert E. Winemiller | | 4/2/2007 | | 150,000 | | 300,000 | | 438,000 | | 150,000 | | 6.00 | | 900,000 | | | 2/14/2008 | | 170,000 | | 340,000 | | 499,800 | | | | | | | | | | | | | | | | | | | | | | | | | | | Charles H. Murphy | | 4/2/2007 | | 110,000 | | 220,000 | | 321,750 | | 150,000 | | 6.00 | | 900,000 | | | 2/14/2008 | | 120,000 | | 240,000 | | 352,800 | | | | | | | | | | | | | | | | | | | | | | | | | | | Ronald F. Woestemeyer | | 4/2/2007 | | 52,594 | | 105,188 | | 154,275 | | — | | — | | — | | | 2/14/2008 | | 52,594 | | 105,188 | | 154,743 | | | | | | | | | | | | | Jeffrey E. Robinson | | | 5/14/2008 | | 52,500 | | 105,000 | | 210,000 | | | | | | | | | | | | | Andres D. Renier | | | 5/14/2008 | | 52,500 | | 105,000 | | 210,000 | |
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Table of Contents Outstanding equity awards at fiscal 20072008 year-end The following table presents information, as of December 31, 2007,2008, concerning unexercised options that have not vested for each Named Executive Officer:Officer. We have not granted Mr. Woestemeyer any equity based awards because of his equity position in the Company. | | | Option Awards | | Restricted Stock Units | | Name | | | Number of securities underlying unexercised options (#) Exercisable | | Number of securities underlying unexercised options (#) Unexercisable | | Equity incentive plan awards: number of securities underlying unexercised unearned options (#) | | Option exercise price ($) | | Option expiration date | | Equity incentive plan awards: number of unearned shares units or other rights that have not vested (#) | | Equity incentive plan awards: market or payout value of unearned shares units or other rights that have not vested ($) | | Albert E. Winemiller | | | 150,000 | (1) | — | | — | | 6.00 | | 4/2/2017 | | | | | | Charles H. Murphy | | | 150,000 | (1) | — | | — | | 6.00 | | 4/2/2017 | | | | | | Jeffrey E. Robinson | | | | | | | | | | | | | 50,000 | (6) | 287,500 | | | | Option Awards | | | 19,444 | | 30,556 | (2) | — | | 12.72 | | 5/14/2018 | | | | | | | | | | | | Equity Incentive | | | | | | | — | | 100,000 | (3) | — | | 16.73 | | 11/15/2017 | | | | | | | | | | | | Plan Awards: | | | | | | | 7,291 | | 28,126 | (4) | — | | 6.00 | | 3/26/2017 | | | | | | | | Number of | | Number of | | Number of | | | | | | | 3,281 | | 5,626 | (5) | — | | 0.65 | | 12/30/2015 | | | | | | | | Securities | | Securities | | Securities | | | | | | | 6,250 | | — | | — | | 0.43 | | 2/10/2015 | | | | | | Andres D. Renier | | | | | | | | | | | | | 50,000 | (6) | 287,500 | | | | underlying | | underlying | | underlying | | | | | | | 19,444 | | 30,566 | (2) | — | | 12.72 | | 5/14/2018 | | | | | | | | Unexercised | | Unexercised | | Unexercised | | Option | | Option | | | — | | 100,000 | (3) | — | | 16.73 | | 11/15/2017 | | | | | | | | Options (#) | | Options (#) | | Unearned | | Exercise | | Expiration | | | 21,874 | �� | 28,126 | (4) | — | | 6.00 | | 3/26/2017 | | | | | | Name | | Exercisable | | Unexercisable | | Options (#) | | Price ($) | | Date | | | Albert E. Winemiller | | 150,000 | | — | | — | | 6.00 | | 4/2/2017 | | | Charles H. Murphy | | 150,000 | | — | | — | | 6.00 | | 4/2/2017 | | | | | | 5,156 | | 5,626 | (5) | — | | 0.65 | | 12/30/2015 | | | | | | | | | 6,250 | | — | | — | | 0.43 | | 2/10/2015 | | | | | |
The option awards for both(1)These options were awarded to Messrs. Winemiller and Murphy awarded on April 2, 20072007. They are immediately exercisable and which vest as tovested 25% on April 2, 2008 andwith the remaining options vesting monthly, in equal installments, thereafter based on continued employment through April 2, 2011.
(2)These options were awarded to Messrs. Reiner and Robinson on May 14, 2008. They vest monthly, in equal installments, over an 18 month period from the date of grant. (3)These options were awarded to Messrs. Reiner and Robinson on November 15, 2007. The options vest monthly, in equal installments, over a 30 month period commencing June 1, 2009. These options will be fully vested on December 1, 2011. (4)These options were awarded to Messrs. Reiner and Robinson on March 26, 2007. The options vested 25% on March 26, 2008 with the remaining options vesting monthly, in equal installments, thereafter over a three year period. These options will be fully vested on March 26, 2011. (5)These options were awarded to Messrs. Reiner and Robinson on December 30, 2005. The options vested 25% on December 30, 2006 with the remaining options vesting monthly, in equal installments, thereafter over a three year period. These options will be fully vested on December 30, 2009. (6) The Restricted Stock Units were awarded to Messrs. Reiner and Robinson on November 11, 2008. The Restricted Stock Units vest as follows: 16,666 restricted stock units will vest on January 1, 2010, 16,667 restricted stock units will vest on January 1, 2011, and 16,667 restricted stock units will vest on January 1, 2012. Option exercises and stock vested for 20072008 In 2007, our executive officersThe following table presents information on stock options exercised during the year ended December 31, 2008.
| | Option Awards | | | | Number of shares | | Value realized | | Name | | acquired on exercise (#) | | on exercise ($) (1) | | Jeff Robinson | | 38,020 | | $ | 498,429 | | Andres Reiner | | 13,906 | | $ | 200,953 | |
(1)Based on the difference between the market price of the Company’s common stock on the date of exercise and the exercise price. For the year ended December 31, 2008, Messrs. Winemiller and Murphy did not exercise any options. In April 2007, Messrs. Winemiller and Murphy were each granted options to purchase 150,000 shares of our common stock. None of the options issued to either Messrs. Winemiller or Murphy have vested as of December 31, 2007. We have not granted Mr. Woestemeyer any stock options because of his equity position in us. In September 2005, Mr. Murphy was granted an immediately exercisable stock option for 100,000 shares. In 2006, Mr. Murphy exercised 100,000 shares at an exercise price of $0.43 per share. Of these shares, 75,000 shares of this option grant were vested at December 31, 2007. We would have had the right on December 31, 2007 to repurchase 25,000 shares if Mr. Murphy had been terminated for cause or resigned 27
Table of Contents without good reason on December 31, 2007. Mr. Murphy’s 25,000 shares will vestvested on December 31, 2008 and our right of repurchase lapses, at a rate of approximately 2,083 shares per month through that date.lapsed. 22In February 2008, Messrs. Winemiller and Murphy were each granted options to purchase 100,000 shares of our common stock. In November 2008, Messrs. Winemiller and Murphy surrendered options held to acquire 100,000 shares each of the Company’s common stock. Messrs. Winemiller and Murphy made the request to surrender their options to enable the Compensation Committee to grant employees (other than Mr. Winemiller and Mr. Murphy) more shares than would have otherwise been available for grant under the 2007 plan. Upon surrender, the shares subject to these options returned to the plan as available to grant. Messrs. Winemiller and Murphy requested that no additional compensation be paid to them in connection with the surrender. Messrs. Winemiller and Murphy did not receive any value for the surrender of these options and did not receive a new grant of restricted stock units or any additional compensation.
Potential payments upon termination or change in control Termination events Our employment agreements with each of our Named Executive Officers provide that in the case of a termination of employment by us without cause, as defined in the agreement, or by the Named Executive Officer for Good Reason, as defined in the agreement, the Named Executive OfficerOfficers would be entitled to a payment equal to one year of his then current base salary. In addition to the one year of his then current base salary, Messrs. Winemiller and Murphy would be entitled to; (i) up to 12 months of health benefits; (ii) 12 months of acceleration of the vesting of their stock option awards and equity awards granted prior to April 2, 2007; and (iii)(ii) full acceleration on the vesting of any stock option award or equity award granted on or after April 2, 2007. Messrs. Robinson and Reiner would be entitled to (i) up to 12 months of health benefits; and (ii) acceleration of the vesting on their stock options or other equity awards with respect to shares comprising fifty percent of the unvested shares under such stock options or other equity awards as of the date of termination. The following table presents the amounts of such severance payments to Messrs. Winemiller, Murphy, Woestemeyer, Reiner and WoestemeyerRobinson assuming the event that triggered the payment occurred December 31, 2007:2008: | | | | | | SFAS 123R | | | | | | | | | SFAS 123R | | | | | | | | | | Fair Value of | | | | | | | | | Fair Value of | | | | | | | | Health | | Vesting | | | | | | | Health | | Vesting | | | | Name | | Severance ($) | | Benefits ($) | | Acceleration ($) | | Total ($) | | | Severance ($) (1) | | Benefits ($) (2) | | Acceleration ($) | | Total ($) | | Albert E. Winemiller | | 300,000 | | 9,866 | | 1,904,857 | | 2,214,723 | | | 340,000 | | 6,173 | | 419,580 | | 765,753 | | Charles H. Murphy | | 275,000 | | 11,476 | | 2,384,607 | | 2,671,083 | | | 300,000 | | 4,244 | | 419,580 | | 723,824 | | Ronald F. Woestemeyer | | 233,750 | | — | | — | | 233,750 | | | 233,750 | | — | | — | | 233,750 | | Jeffrey E. Robinson | | | 210,000 | | 5,845 | | 950,361 | | 1,166,206 | | Andres D. Renier | | | 210,000 | | 2,842 | | 950,361 | | 1,163,203 | |
(1)Reflects the then current base monthly salary for twelve months, payable on normal payroll cycles. (2)Reflects health benefits as made generally available to employees for twelve months. On March 24, 2009, the Company entered into a First Amendment of Employment Agreement with Messrs. Reiner and Robinson. The First Amendment of Employment Agreement with Messrs. Reiner and Robinson would provide for payment of (i) any unpaid bonus earned prior to the termination, and (ii) the payment of a bonus at one hundred percent of performance targets, including discretionary components, within the bonus plan in effect as if employed by the Company for twelve months. The unpaid bonus described in subsection (i) shall be paid on or about termination and the bonus as described in subsection (ii) shall be payable in equal installments during the twelve month period following termination. Such bonuses are payable if Messrs. Reiner or Robinson are terminated by us without cause, as defined in the agreement or by the Named Executive Officer for Good Reason, as defined in the agreement. On March 24, 2009, the Company entered into a Second Amendment of Employment Agreement with Messrs. Winemiller and Murphy. The Second Amendment of Employment Agreement will provide Messrs. Winemiller and Murphy with payment of (i) any unpaid bonus earned prior to the termination, and (ii) the payment of a bonus at one hundred percent of performance targets, including discretionary components, within the bonus plan in effect as if employed by the Company for twelve months. The unpaid bonus described in subsection (i) shall be paid on or about termination and the bonus as described in subsection (ii) shall be payable in equal installments during the twelve month period following termination. Such bonuses are payable if Messrs. Winemiller and Murphy are terminated by us without cause, as defined in the agreement or by the Named Executive Officer for Good Reason, as defined in the agreement. 28
Table of Contents Termination events after a change-in-control Our employment agreements with Messrs. Winemiller and Murphy provide that in the event of a termination of employment without cause or for Good Reason within six months of or anytime after a change-in-control, Messrs. Winemiller and Murphy each would be entitled to a payment equal to 18 months of his then current base salary. In addition to the 18 months of base salary Messrs. Winemiller and Murphy would be entitled to: (i) 18 months of health benefits, (ii) 12 months of acceleration of the vesting of their stock option awards and equity awards granted prior to April 2, 2007 and (iii)(ii) full acceleration on the vesting of any stock option award or equity award granted on or after April 2, 2007. The amounts presented below assume a termination effective as of December 31, 2007,2008, as well as a closing price of our common stock on Monday, December 31, 20072008 (the last trading day of our fiscal year) of $19.62$5.75 per share, and thus include amounts earned through such time and are estimates of amounts that would be paid out to the Named Executive Officers upon their separation or termination. The actual obligation can only be determined at the time of the Named Executive Officer’s separation from us. The following table presents potential payments to the Messrs. Winemiller and Murphy in the event of a termination without cause or termination for Good Reason by Messrs. Winemiller and Murphy within six months of a change-in-control, in each case assuming the event that triggered the payment occurred December 31, 2007:2008: | | | | | | SFAS 123R | | | | | | | | | SFAS 123R | | | | | | | | | | Fair Value of | | | | | | | | | Fair Value of | | | | | | | | Health | | Vesting | | | | | | | Health | | Vesting | | | | Name | | Severance ($) | | Benefits ($) | | Acceleration ($) | | Total ($) | | | Severance ($) (1) | | Benefits ($) (2) | | Acceleration ($) | | Total ($) | | Albert E. Winemiller | | 450,000 | | 14,799 | | 1,904,857 | | 2,369,656 | | | 509,998 | | 9,260 | | 419,580 | | 938,838 | | Charles H. Murphy | | 412,500 | | 17,214 | | 2,384,607 | | 2,814,321 | | | 450,000 | | 6,366 | | 419,580 | | 875,946 | |
(1)Reflects the then current base monthly salary for 18 months, payable on normal payroll cycles. (2)Reflects health benefits as made generally available to employees for 18 months. 23On March 24, 2009, the Company entered into a Second Amendment of Employment Agreement with Messrs. Winemiller and Murphy. The Second Amendment of Employment Agreement will provide Messrs. Winemiller and Murphy with payment of (i) any unpaid bonus earned prior to the termination, and (ii) the payment of a bonus at one hundred percent of performance targets, including discretionary components, within the bonus plan in effect as if employed by the Company for eighteen months. The unpaid bonus described in subsection (i) shall be paid on or about termination and the bonus as described in subsection (ii) shall be payable in equal installments during the eighteen month period following termination. Such bonuses are payable if Messrs. Winemiller and Murphy in the event of a termination of employment without cause or for Good Reason within six months of or anytime after a change-in-control.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD Our audit committeeAudit Committee has (1) reviewed and discussed the audited financial statements with management, (2) discussed with PricewaterhouseCoopers LLP, our independent registered public accounting firm, the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T, and (3) received the written disclosures and the letter from the independent registered public accounting firm required by the Independence Standards Board Standard No. 1, and has discussed the accounting firms’ independence with the independent registered public accounting firm. Based upon these discussions and reviews, the audit committeeAudit Committee recommended to our Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 20072008 and filed with the SEC. Our Board of Directors has determined that each member meets the independence requirements of the NYSE and Rule 10A-3 (b) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and that each qualify as an audit committeeAudit Committee financial expert within the meaning of SEC regulations and the rules of the New York Stock Exchange. Our audit committeeAudit Committee operates under a written charter adopted by our Board of Directors, a copy of which is available under Corporate Governance in the Company — Investor Relations section of our website at www.prospricing.com .www.prospricing.com. PricewaterhouseCoopers LLP served as our independent registered public accounting firm since 2002 and audited our consolidated financial statements for the year ended December 31, 2007.2008. THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS Timothy V. Williams, Chairman Harry S. Gruner
Greg B. Petersen Ellen Keszler 29
Table of Contents STOCKHOLDERS PROPOSALS Stockholders may present proposals for action at meetings of stockholders only if they comply with the proxy rules established by the SEC, applicable Delaware law and our bylaws, a copy of which was filed as Exhibit 3.2.1 to our Registration Statement on Form S-1/A filed with the SEC on June 15, 2007. No stockholder proposals were received for consideration at our 20082009 annual meeting of stockholders. Pursuant to the various rules promulgated by the SEC, stockholders interested in submitting a proposal for inclusion in our proxy materials and for presentation at the 20092010 Annual Meeting of Stockholders may do so by following the procedures set forth in Rule 14a-8 under the Securities Exchange Act of 1934, as amended. To be eligible for inclusion in such proxy materials, stockholder proposals must be received by our Secretary no later than December 1, 2008.22, 2009. Under our bylaws, with respect to any stockholder proposal or director nomination that is not submitted for inclusion in order for a stockholderthe next year’s proxy statement but instead is proposed to bring any business before a stockholderbe presented directly at our 2010 annual meeting, the stockholder must provide us written notice not less than one hundred and twenty (120) days in advance of the date that our proxy statement is released to stockholder. Any such notice shall set forth the following as to each matter the stockholder proposes to bring before the meeting: (a) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting and; (b) the name and address, as they appear on our corporate books, of the stockholder proposing such business; (c) the class and number of our shares that are beneficially owned by such stockholder; and (d) any material interest of the stockholder in such business. In the absence of such notice meeting the above requirements, a stockholder shall not be entitled to present any business at any meeting of stockholders. Notwithstanding the above, in the event that the number of directors to be elected at an annual meeting is increased and there is no public announcement by the Company naming the nominees for the additional directorships at least one hundred thirty (130) days prior to the first anniversary of the date that the Company’s proxy statement was released to stockholders in connection with the previous year’s annual meeting, a stockholder’s notice shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the Secretary of the Company at the principal executive offices of the Company not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Company. In the event the Company calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person(s), for election to such positions as are specified in the Company’s notice of meeting, if the stockholder’s notice shall be delivered to the Secretary of the Corporation at the principal executive offices of the Company not earlier than the ninetieth (90th) day prior to such special meeting and not later than the close of business on the later of the seventieth (70th) day prior to such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. ANNUAL REPORT ON FORM 10-K We have furnished or made available a copy of our Annual Report, as filed with the SEC, including the financial statements thereto to each person whose proxy is being solicited. Our Annual Report and exhibits thereto may be viewed on the Internet at www.prospricing.com or at www.sec.gov. We will furnish to any such person any exhibit described in the list accompanying the Annual Report. Requests for copies of such report and/or exhibit(s) should be directed to Corporate Communications Department, PROS Holdings, Inc., 3100 Main Street Suite 900, Houston, Texas 77002. NO INCORPORATION BY REFERENCE OF CERTAIN PORTIONS OF THIS PROXY STATEMENT
Notwithstanding anything to the contrary set forth in any of our filings made under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate information in this proxy statement, neither the Audit Committee Report nor the Compensation Committee Report is to be incorporated by reference into any such filings as provided by SEC regulations. In addition, this Proxy Statement includes certain website addresses intended to provide inactive, textual references only. The information on these websites shall not be deemed part of this proxy statement. 2430
PROS HOLDINGS, INC.
3100 MAIN STREET
SUITE 900
HOUSTON, TX 77002
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
If you would like to reduce the costs incurred by PROS Holdings, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to PROS Holdings, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | PROS01
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
Signature (Joint Owners) Signature [PLEASE SIGN WITHIN BOX] Date Date PROS HOLDINGS, INC. | | For
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| | M13676-P72398 VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS If you would like to reduce the costs incurred by PROS Holdings, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to PROS Holdings, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. PROS HOLDINGS, INC. 3100 MAIN STREET SUITE 900 HOUSTON, TX 77002 To withhold authority to vote for any | | |
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| | | | | | | | 2009. For All Withhold All For All Except 0 0 0 0 0 0 Vote on Directors 01) Ellen Keszler 02) William Russell 1. ELECTION OF DIRECTORS Class II Nominees: Vote on Proposal The Board of Directors recommends a vote IN FAVOR OF the directors listed above and IN FAVOR OF the appointment of PricewaterhouseCoopers LLP. This Proxy, when properly executed, will be voted as specified above. If no specification is made, this Proxy will be voted IN FAVOR OF the election of the directors listed above and IN FAVOR OF the appointment of PricewaterhouseCoopers LLP. | | | | | | | | For address changes and/or comments, please check this box and write them on the back where indicated.
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| | | | | | | | Please sign exactly as your name or names appearappear(s) on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If the signer is a partnership, please sign in partnership name by authorized person. For address changes and/or comments, please check this box and write them on the back where indicated. 0 In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting. | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX]
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PROS HOLDINGS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
May 16, 2008
The stockholder(s) hereby appoint(s) Albert E. Winemiller and Charles H. Murphy, or each of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of PROS Holdings, Inc. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 8:00 a.m. CDT on May 16, 2008, at 3100 Main Street, Suite 900, Houston, TX 77002, and any adjournment or postponement thereof.
Such shares shall be voted as indicated with respect to the proposals listed on the reverse side hereof and the proxies’ discretion on such other matters as may properly come before the meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE
| PROS HOLDINGS, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF STOCKHOLDERS June 4, 2009 The stockholder(s) hereby appoint(s) Albert E. Winemiller and Charles H. Murphy, or each of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of PROS Holdings, Inc. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 8:00 a.m. CDT on June 4, 2009, at 3100 Main Street, Suite 900, Houston, TX 77002, and any adjournment or postponement thereof. Such shares shall be voted as indicated with respect to the proposals listed on the reverse side hereof and the proxies' discretion on such other matters as may properly come before the meeting or any adjournment thereof. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE CONTINUED AND TO BE MARKED, DATED AND SIGNED ON REVERSE SIDE Address Changes/Comments: _____________________________________________________________________________ ________________________________________________________________________________________________________ (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) M13677-P72398 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. | | | |
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
CONTINUED AND TO BE MARKED, DATED AND SIGNED ON REVERSE SIDE
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