SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of
[X] Definitive Proxy Statement the Commission only (as
[_] Definitive Additional Materials permitted by Rule 14a-6(e)(2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
KANA SOFTWARE, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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[LOGO] "KANA"
November 13, 2001
To Our Stockholders:
You are cordially invited to attend a Special Meeting of Stockholders of
Kana Software, Inc., to be held at our headquarters located at 181 Constitution
Drive, Menlo Park, California, on Tuesday, December 11, 2001, at 9:00 a.m.
Pacific Standard Time.
The matter expected to be acted upon at the meeting is approval of an
amendment to our Certificate of Incorporation to authorize our board of
directors to effect a reverse split of our outstanding common stock at an
exchange ratio of one-for-ten. This proposal is described in detail in the
accompanying notice of special meeting of stockholders and proxy statement.
I'm sure you are aware that the Nasdaq moratorium on enforcement of its $1
minimum bid price listing requirement is scheduled to end on January 2, 2002.
Our board of directors believes that the reverse stock split is necessary to
provide our stockholders and customers reasonable assurance that we would not
be subject to delisting from Nasdaq upon resumption of enforcement of this
requirement. Our board of directors has approved this proposal and recommends
that you approve the proposal to amend our Certificate of Incorporation, as
well as any other items to be considered at the meeting.
Please use this opportunity to take part in our affairs by voting on the
business to come before this meeting. Whether or not you plan to attend the
meeting, please complete, date, sign and promptly return the enclosed proxy in
the enclosed postage-paid envelope prior to the meeting so that your shares
will be represented at the meeting. Returning the proxy does not deprive you of
your right to attend the meeting and to vote your shares in person.
We hope to see you at the meeting.
Sincerely,
/s/ Chuck Bay
Chuck Bay
Chief Executive Officer and President
KANA SOFTWARE, INC.
181 Constitution Drive
Menlo Park, California 94025
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Our Stockholders:
NOTICE IS HEREBY GIVEN that a special meeting of stockholders of Kana
Software, Inc. will be held at our headquarters located at 181 Constitution
Drive, Menlo Park, California, on Tuesday, December 11, 2001, at 9:00 a.m.,
Pacific Standard Time. At the meeting, you will be asked to consider and vote
upon the following matters:
1. To approve an amendment to our Certificate of Incorporation, attached to
this proxy statement as Annex A, which will effect a reverse split of our
outstanding common stock at an exchange ratio of one-for-ten. If approved, our
board of directors intends to effect the reverse stock split as soon as
possible thereafter.
2. To transact such other business as may properly come before the meeting
or any adjournment or postponement of the meeting.
The foregoing items of business are more fully described in the proxy
statement accompanying this notice. Only stockholders of record at the close of
business on November 8, 2001 are entitled to notice of and to vote at the
meeting or any adjournment or postponement of the meeting.
By Order of the Board of Directors
/s/ Chuck Bay
Chuck Bay
Chief Executive Officer and President
Menlo Park, California
November 13, 2001
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE SO THAT YOUR SHARES MAY BE REPRESENTED AT THE MEETING.
KANA SOFTWARE, INC.
181 Constitution Drive
Menlo Park, California 94025
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November 13, 2001
The accompanying proxy is solicited on behalf of the board of directors of
Kana Software, Inc., a Delaware corporation, for use at a special meeting of
our stockholders, to be held at our headquarters located at 181 Constitution
Drive, Menlo Park, California, on Tuesday, December 11, 2001, at 9:00 a.m.
Pacific Standard Time. This proxy statement and the accompanying form of proxy
were first mailed to stockholders on or about November 13, 2001.
Record Date and Quorum
Only holders of our common stock of record at the close of business on
November 8, 2001, the record date, will be entitled to vote at the meeting. A
majority of the shares outstanding on the record date will constitute a quorum
for the transaction of business at the meeting. At the close of business on the
record date, we had 182,587,855 shares of common stock outstanding and entitled
to vote, held of record by approximately 1,754 stockholders.
Voting Rights and Required Votes
Holders of our common stock are entitled to one vote for each share held as
of the record date. Approval of Proposal No. 1 to amend our Certificate of
Incorporation to effect a one-for-ten reverse stock split requires the
affirmative vote of the majority of the shares of our outstanding common stock
as of the record date. All votes will be tabulated by the inspector of
elections appointed for the meeting, who will separately tabulate, for each
proposal, affirmative and negative votes, abstentions and broker non-votes.
Effect of Abstentions and Broker Non-Votes
If you or your broker mark "Abstain" on a duly submitted proxy card
representing your shares, or if you attend the stockholder meeting in person
but elect not to vote on a particular proposal or proposals, then your shares
will be considered present at the meeting for purposes of determining the
required quorum. However, your shares will be considered shares entitled to
vote with respect to Proposal No. 1, and, therefore, will have the effect of a
vote against the proposal.
Brokers holding shares of record for customers generally are not entitled to
vote on some matters unless they receive voting instructions from their
customers. "Broker non-votes" are votes that could have been cast on the matter
in question if the brokers had received their customers' instructions, and as
to which the broker has notified us on a proxy form in accordance with industry
practice or has otherwise advised us that it lacks voting authority. Shares
represented by broker non-votes will be considered present at the meeting for
purposes of determining the required quorum. However, these shares will be
considered shares entitled to vote with respect to Proposal No. 1 and therefore
will have the effect of a vote against the proposal.
Voting of Proxies
The proxy accompanying this proxy statement is solicited on behalf of our
board of directors for use at the meeting. Stockholders are requested to
complete, date and sign the accompanying proxy card and promptly return it in
the enclosed envelope or otherwise mail it to us. All executed, returned
proxies that are not revoked will be voted in accordance with the included
instructions. Signed proxies that are returned without instructions as to how
they should be voted on a particular proposal at the meeting will be counted as
votes "for" such
1
proposal. We are not aware of any other matters to be brought before the
meeting. However, as to any business that may properly come before the meeting,
we intend that proxies in the form enclosed will be voted in accordance with
the judgment of the persons holding such proxies. In the event that sufficient
votes in favor of the proposals are not received by the date of the meeting,
the persons named as proxies may propose one or more adjournments of the
meeting to permit further solicitation of proxies. Any such adjournment would
require the affirmative vote of the majority of the outstanding shares present
in person or represented by proxy at the meeting. We will pay the expenses of
soliciting proxies to be voted at the meeting. Following the original mailing
of the proxies and other soliciting materials, we will request that brokers,
custodians, nominees and other record holders of our common stock forward
copies of the proxy and other soliciting materials to persons for whom they
hold shares of common stock and request authority for the exercise of proxies.
In such cases, upon the request of the record holders, we will reimburse such
holders for their reasonable expenses. Proxies may also be solicited by some of
our directors, officers and regular employees, without additional compensation,
in person or by telephone.
Revocability of Proxies
Anyone signing a proxy in the form accompanying this proxy statement has the
power to revoke it prior to the meeting or at the meeting prior to the vote
pursuant to the proxy. A proxy may be revoked by a writing delivered to us
stating that the proxy is revoked, by a subsequent proxy that is signed by the
person who signed the earlier proxy and is present at the meeting, or by
attendance at the meeting and voting in person. Please note, however, that if
your shares are held of record by a broker, bank or other nominee and you wish
to vote at the meeting, you must bring to the meeting a letter from the broker,
bank or other nominee confirming your beneficial ownership of the shares and
that such broker, bank or other nominee is not voting your shares.
2
PROPOSAL NO. 1
AMENDMENT TO OUR CERTIFICATE OF INCORPORATION
TO EFFECT A REVERSE SPLIT OF OUR COMMON STOCK
Overview
You are being asked to vote on an amendment to our Certificate of
Incorporation which would authorize our board of directors to effect a reverse
split of all outstanding shares of our common stock at an exchange ratio of
one-for-ten. If our stockholders approve this proposal, our board intends to
effect the reverse stock split as soon as possible thereafter.
To effect the reverse stock split, our board would file the approved
proposed amendment to our Certificate of Incorporation with the Delaware
Secretary of State. The forms of amendment to our Certificate of Incorporation
to effect the proposed reverse stock split is attached to this proxy statement
as Annex A. As a result of the reverse stock split, the number of issued and
outstanding shares of our common stock would be reduced in accordance with the
reverse stock split exchange ratio. The par value of our common stock would
remain unchanged at $0.001 per share, and the number of authorized shares of
our common stock would remain unchanged.
Our board of directors has approved the reverse stock split and recommends
the amendment to our Certificate of Incorporation to effect the proposed
reverse stock split.
Reasons for the Reverse Stock Split
Our board of directors believes that we should obtain the right to implement
a reverse stock split to facilitate the continued listing of our common stock
on the Nasdaq National Market and to enhance the desirability and marketability
of our common stock to the financial community and the investing public.
Our board of directors believes that the reverse stock split will help to
ensure our continued compliance with the Nasdaq listing requirements,
particularly, when Nasdaq reinstates the listing requirement that we maintain a
minimum bid price for our common stock of $1.00 per share, which it is expected
to do in January 2002. Although we currently meet all other listing
requirements, when reinstated, our common stock might not meet the $1.00
minimum bid price requirement. As of November 9, 2001, the last reported sale
price for our common stock was $1.05 per share. Management and our board of
directors believe that the Nasdaq National Market is the preferred market for
listing our common stock. Delisting from the Nasdaq National Market would
likely significantly decrease the liquidity of our common stock, which could
reduce the trading price and increase the transaction costs of trading shares
of our common stock. Accordingly, if required to maintain our Nasdaq National
Market listing, management and our board believe that the implementation of the
reverse split may be in the best interests of us and our stockholders.
In addition, our board of directors believes that the reverse stock split
would enhance the desirability and marketability of our common stock to the
financial community and the investing public and may mitigate reluctance on the
part of brokers and investors to trade in our common stock. Many institutional
investors have policies prohibiting them from holding lower-priced stocks in
their own portfolios, which reduces the number of potential buyers of our
common stock. In addition, analysts at many leading brokerage firms are
reluctant to recommend lower-priced stocks to their clients or monitor the
activity of lower-priced stocks. A variety of brokerage house policies and
practices also tend to discourage individual brokers within those firms from
dealing in lower-priced stocks. Some of those policies and practices pertain to
the payment of brokers' commissions and to time-consuming procedures that
function to make the handling of lower-priced stocks unattractive to brokers
from an economic standpoint. Additionally, because brokers' commissions on
lower-priced stocks generally represent a higher percentage of the stock price
than commissions on higher-priced stocks, the current share price of our common
stock can result in an individual stockholder paying transaction costs that
represent a higher
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percentage of total share value than would be the case if our share price were
substantially higher. This factor may also limit the willingness of
institutions to purchase our stock.
Further, our common stock has been trading at or below $1.00 for several
months. With our common stock trading in this a range, small movements, in
absolute terms, in the price per share of our common stock translate into
disproportionately large swings in the price on a percentage basis. These
swings tend to bear little relationship to our financial condition and results.
In the board's view, these factors have contributed to an unjustified,
relatively low level of interest in our common stock on the part of investment
analysts, brokers and professionals and individual investors, which tends to
depress the market for our common stock. The board has proposed effecting the
reverse split as a means of increasing the per-share market price of our common
stock.
If our stockholders approve the amendment to our Certificate of
Incorporation, no further action on the part of our stockholders would be
required to effect the reverse stock split. The board intends to effect the
reverse stock split as soon as possibly thereafter.
Potential Effects of the Reverse Stock Split
The immediate effect of a reverse stock split would be to reduce the number
of shares of our common stock outstanding and to increase the trading price of
our common stock. Based on 182,587,855 shares of our common stock outstanding
as of the record date for this special meeting, without accounting for
fractional shares, which will be cancelled and paid for in cash, 18,258,785
shares of our common stock would be outstanding as a result of the proposed
reverse stock split.
However, the effect of any reverse stock split upon the market price of our
common stock cannot be predicted. Some companies in similar circumstances who
have effected a reverse stock split have experienced improved stock price
performance while others have not. We cannot assure you that the trading price
of our common stock after the reverse stock split will rise in proportion to
the reduction in the number of shares of our common stock outstanding as a
result of the reverse stock split. Further, we cannot assure you that a reverse
stock split would lead to a sustained increase in the trading price of our
common stock, that the trading price would remain above the thresholds required
by the Nasdaq Stock Market, or that we will be able to continue to meet the
other continued listing requirements of the Nasdaq Stock Market. The trading
price of our common stock may change due to a variety of other factors,
including our operating results and factors related to our business and general
market conditions. Finally, the resulting decrease in the number of shares of
our common stock outstanding could potentially impact the liquidity of our
common stock on the Nasdaq National Market, especially in the case of larger
block trades.
Effects on Ownership by Individual Stockholders. If we implement a reverse
stock split, the number of shares of our common stock held by each stockholder
would be reduced by multiplying the number of shares held immediately before
the reverse stock split by the exchange ratio, and then rounding down to the
nearest whole share. We would pay cash to each stockholder in lieu of any
fractional interest in a share to which each stockholder would otherwise be
entitled as a result of the reverse stock split, as described in further detail
below. No fractional shares will be issued as a result of the reverse stock
split. The reverse stock split would not affect any stockholder's percentage
ownership interests in us or proportionate voting power, except to the extent
that interests in fractional shares would be paid in cash.
Effect on Options, Warrants and Other Securities. In addition, all shares
subject to outstanding options, warrants and other securities entitling their
holders to purchase shares of our common stock would be adjusted as a result of
the reverse stock split, as required by the terms of these securities. In
particular, the conversion ratio for each such security would be reduced in
proportion to the reverse stock split exchange ratio, and the exercise price,
if applicable, would be increased in proportion to the exchange ratio, in
accordance with the terms of each
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such security. Also, the number of shares reserved for issuance under our
existing stock option and employee stock purchase plans would be reduced in
proportion to the exchange ratio. None of the rights currently accruing to
holders of our common stock, options, warrants or other securities convertible
into our common stock, would be affected by the reverse stock split.
Other Effects on Outstanding Shares. If a reverse stock split is
implemented, the rights and preferences of the outstanding shares of our common
stock would remain the same after the reverse stock split. Each share of common
stock issued pursuant to the reverse stock split would be fully paid and
nonassessable.
In addition, the reverse stock split would result in some stockholders
owning "odd-lots" of fewer than 100 shares of our common stock. Brokerage
commissions and other costs of transactions in odd-lots are generally higher
than the costs of transactions in "round-lots" of even multiples of 100 shares.
Our common stock is currently registered under Section 12(g) of the
Securities Exchange Act of 1934. As a result, we are subject to the periodic
reporting and other requirements of the Securities Exchange Act. The proposed
reverse stock split would not affect the registration of our common stock under
the Securities Exchange Act.
Authorized Shares of Our Common Stock
The reverse stock split, if implemented, would not change the number of
authorized shares of our common stock as designated by our Certificate of
Incorporation. Therefore, because the number of issued and outstanding shares
of our common stock would decrease, the number of shares remaining available
for issuance under our authorized pool of common stock would increase.
These additional shares of common stock would also be available for issuance
from time to time for corporate purposes such as raising additional capital,
acquisitions of companies or assets and sales of stock or securities
convertible into common stock. We believe that the availability of the
additional shares will provide us with the flexibility to meet business needs
as they arise, to take advantage of favorable opportunities and to respond to a
changing corporate environment. We have no current plan to issue shares from
these additional shares.
The additional shares of common stock that would become available for
issuance if the reverse split is approved could also be used by us to oppose a
hostile takeover attempt or delay or prevent changes of our control or changes
in or removal of our management, including transactions that are favored by a
majority of the independent stockholders or in which the stockholders might
otherwise receive a premium for their shares over then-current market prices or
benefit in some other manner. For example, without further stockholder
approval, our board of directors could strategically sell shares of our common
stock in a private transaction to purchasers who would oppose a takeover or
favor our current board of directors. Although the reverse stock split has been
prompted by business and financial considerations, stockholders nevertheless
should be aware that approval of the proposal could facilitate future efforts
by us to deter or prevent changes of our control.
Procedure for Effecting the Reverse Stock Split and Exchange of Stock
Certificates
If our stockholders approve the proposed amendment to our Certificate of
Incorporation, the board of directors intend to effect the reverse stock split
as soon as possible thereafter. The reverse stock split would be implemented by
filing the appropriate amendment to our Certificate of Incorporation with the
Delaware Secretary of State and would become effective on the date the filing
is accepted by the Delaware Secretary of State.
As of the effective date of the reverse stock split, each certificate
representing shares of our common stock before the reverse stock split would be
deemed, for all corporate purposes, to evidence ownership of the reduced
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number of shares of our common stock resulting from the reverse stock split,
except that holders of unexchanged shares would not be entitled to receive any
dividends or other distributions payable by us after the effective date until
they surrender their old stock certificates for exchange. All shares subject to
outstanding options, warrants, and other securities would also be automatically
adjusted on the effective date.
Our transfer agent would act as the exchange agent for purposes of
implementing the exchange of stock certificates. As soon as practicable after
the effective date, stockholders and holders of securities convertible into our
common stock would be notified of the effectiveness of the reverse split.
Stockholders of record would receive a letter of transmittal requesting that
they surrender their stock certificates for stock certificates reflecting the
adjusted number of shares as a result of the reverse stock split. Persons who
hold their shares in brokerage accounts or "street name" would not be required
to take any further actions to effect the exchange of their certificates. No
new certificates would be issued to a stockholder until the stockholder has
surrendered the stockholder's outstanding certificate(s) together with the
properly completed and executed letter of transmittal to the exchange agent.
Until surrender, each certificate representing shares before the reverse stock
split would continue to be valid and would represent the adjusted number of
shares based on the exchange ratio of the reverse stock split, rounded down to
the nearest whole share. Stockholders should not destroy any stock certificate
and should not submit any certificates until they receive a letter of
transmittal.
Fractional Shares
We would not issue fractional shares in connection with the reverse stock
split. Instead, any fractional share resulting from the reverse stock split
would be rounded down to the nearest whole share. Stockholders who otherwise
would be entitled to receive fractional shares because they hold a number of
shares not evenly divisible by the exchange ratio would instead receive cash
upon surrender to the exchange agent of the certificates and a properly
completed and executed letter of transmittal. The cash amount to be paid to
each stockholder would be equal to the resulting fractional interest in one
share of our common stock to which the stockholder would otherwise be entitled,
multiplied by the closing trading price of our common stock on the trading day
immediately preceding the effective date of the reverse stock split.
No Appraisal Rights
No appraisal rights are available under the Delaware General Corporation Law
or under our Certificate of Incorporation or bylaws to any stockholder who
dissents from this proposal. There may exist other rights or actions under
state law for stockholders who are aggrieved by reverse stock splits generally.
Accounting Consequences
The par value of our common stock would remain unchanged at $0.001 per share
after the reverse stock split. Also, our capital account would remain
unchanged, and we do not anticipate that any other accounting consequences
would arise as a result of the reverse stock split.
Federal Income Tax Consequences
The following is a summary of material federal income tax consequences of
the reverse stock split and does not purport to be complete. It does not
discuss any state, local, foreign or minimum income or other tax consequences.
Also, it does not address the tax consequences to holders that are subject to
special tax rules, including banks, insurance companies, regulated investment
companies, personal holding companies, foreign entities, nonresident alien
individuals, broker-dealers and tax-exempt entities. The discussion is based on
the provisions of the United States federal income tax law as of the date
hereof, which are subject to change retroactively as well as prospectively.
This summary also assumes that the shares are held as a "capital asset," as
defined in the Internal Revenue Code of 1986 (generally, property held for
investment). The tax treatment of a stockholder may vary depending upon the
particular facts and circumstances of the stockholder. Each stockholder is
urged to consult with the stockholder's own tax advisor with respect to the
consequences of the reverse stock split.
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Other than the cash payments for fractional shares discussed below, no gain
or loss should be recognized by a stockholder upon the stockholder's exchange
of shares pursuant to the reverse stock split. The aggregate tax basis of the
shares received in the reverse stock split, including any fraction of a share
deemed to have been received, would be the same as the stockholder's aggregate
tax basis in the shares exchanged. Stockholders who receive cash upon
redemption of their fractional share interests in the shares as a result of the
reverse stock split will generally recognize gain or loss based on their
adjusted basis in the fractional share interests redeemed. The federal income
tax liabilities generated by the receipt of cash in lieu of a fractional
interest should not be material in amount in view of the low value of the
fractional interest. The stockholder's holding period for the shares would
include the period during which the stockholder held the pre-split shares
surrendered in the reverse stock split. Our beliefs regarding the tax
consequence of the reverse stock split are not binding upon the Internal
Revenue Service or the courts, and there can be no assurance that the Internal
Revenue Service or the courts will accept the positions expressed above. The
state and local tax consequences of the reverse stock split may vary
significantly as to each stockholder, depending upon the state in which he or
she resides.
The board of directors unanimously recommends
that you vote FOR the proposed amendment to our
Certificate of Incorporation to effect a reverse stock split.
PROPOSALS FOR THE 2002 ANNUAL MEETING OF STOCKHOLDERS
Proposals of our stockholders that are intended to be presented at our 2002
annual meeting must be timely delivered or received by us. Under our bylaws, to
be deemed properly presented, notice must be delivered to, or mailed and
received by, us no less than 120 days prior to the date of the meeting. The
stockholder's notice must set forth, as to each proposed matter:
. a brief description of the business desired to be brought before the
meeting and the reasons for conducting the business at the meeting;
. the name and address, as they appear on our books, of the stockholder
proposing the business, and the name and address of the beneficial
owner, if any, on whose behalf the proposal is made;
. the class and number of shares of our common stock that are owned
beneficially and of record by the stockholders of record and the
beneficial owner, if any, on whose behalf the proposal is made; and
. any material interest of the stockholder of record and the beneficial
owner, if any, on whose behalf the proposal is made in the business to
be presented.
If the presiding officer of the meeting determines that such business has
not been properly brought before the meeting, then the business will not be
transacted.
7
ANNEX A
CERTIFICATE OF AMENDMENT
OF SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF KANA SOFTWARE, INC.
(a Delaware corporation)
Kana Software, Inc., a corporation organized and existing under the Delaware
General Corporation Law (the "DGCL") DOES HEREBY CERTIFY:
FIRST: The name of the corporation is Kana Software, Inc. The original
Certificate of Incorporation of Kana Software, Inc. was filed with the
Secretary of State of Delaware on June 17, 1999. The Second Amended and
Restated Certificate of Incorporation was filed on April 18, 2001, as amended
by a Certificate of Amendment filed June 29, 2001. The corporation was
originally incorporated under the name "Kana Communications, Inc."
SECOND: Pursuant to Section 242(b) of the Delaware General Corporation Law
(the "DGCL") the Board of Directors of the corporation has duly adopted, and a
majority of the outstanding stock entitled to vote thereon and a majority of
the outstanding stock of each class entitled to vote as a class has approved,
the amendment to the Second Amended and Restated Certificate of Incorporation
of the corporation set forth in this Certificate of Amendment.
THIRD: Pursuant to Section 242 of the DGCL, the text of the Second Amended
and Restated Certificate of Incorporation is hereby amended to add the
following paragraph to Article IV:
"Effective at 4:30 p.m. Eastern Time on the date of filing of this
Certificate of Amendment with the Delaware Secretary of State, every ten
(10) outstanding shares of common stock of the corporation will be
combined into and automatically become one (1) outstanding share of
common stock of the corporation and the authorized shares of the
corporation shall remain as set forth in this Certificate of
Incorporation. No fractional share shall be issued in connection with
the foregoing stock split; all shares of each series of common stock so
split that are held by a stockholder will be aggregated by such series
subsequent to the foregoing split and each fractional share resulting
from such aggregation of each series held by a stockholder shall be
rounded down to the nearest whole share. In lieu of any interest in a
fractional share to which a stockholder would otherwise be entitled as a
result of the foregoing split, the corporation shall pay a cash amount
to such stockholder equal to the fair value of such fractional share as
of the effective date of the foregoing split."
IN WITNESS WHEREOF, the corporation has caused this Certificate of Amendment
to be signed by its duly authorized officer this day of December, 2001, and
the foregoing facts stated herein are true and correct.
KANA SOFTWARE, INC.
By: _________________________________
Chuck Bay
Chief Executive Officer and
President
A-1
Kana Software, Inc.
181 Constitution Drive
Menlo Park, California 94025
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Chuck Bay, Brett White and Eric Willgohs, and
each of them, as proxies, each with full powers of substitution, and hereby
authorizes them to vote, as designated below, all shares of common stock,
$0.001 par value, of Kana Software, Inc. (the "Company") held of record by the
undersigned on November 8, 2001, at the Special Meeting of Stockholders of the
Company to be held on December 11, 2001, and at any continuations or
adjournments thereof.
This Proxy, when properly executed and returned in a timely manner, will be
voted at the meeting and any adjournments or postponements thereof in the
manner described herein. If no contrary indication is made, the proxy will be
voted FOR Proposal No. 1 and in accordance with the judgment of the persons
named as proxies herein on any other matters that may properly come before the
meeting.
In accordance with their judgment, the proxies are authorized to vote upon such
other matters as may properly come before the Special Meeting or any
adjournment or postponement thereof.
Whether or not you expect to attend the meeting please complete, date and sign
this proxy card and return it prior to the meeting in the enclosed envelope.
The Board of Directors unanimously recommends that you vote FOR Proposal No. 1.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
X
Please mark your votes as in this example.
[_]
Mark here for address change and note on address label.
1.Approval of an amendment to the Company's Certificate of Incorporation, which
will effect a reverse split of the Company's outstanding common stock at an
exchange ratio of one-for-ten.
.
DATE __________________________________________________________________________
SIGNATURE _____________________________________________________________________
This Proxy must be signed exactly as your name appears hereon. If more than one
name appears, all persons so designated should sign. Attorneys, executors,
administrators, trustees and guardians indicate their capacities. If the signer
is a corporation, please print full corporate name and indicated capacity of
duly authorized officer executing on behalf of the corporation. If the signer
is a partnership please print full partnership name and indicate capacity of
duly authorized person executing on behalf of the partnership.
This is your proxy. Your vote is important.
SIGNATURE _____________________________________________________________________
ABSTAIN
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AGAINST
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FOR
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