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SCHEDULE 14A INFORMATION REQUIRED IN PROXY STATEMENT Proxy Statement Pursuant to Section 14(a) of the Securities
(Rule 14A-101)
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eLOYALTY CORPORATION
(Name of Registrant as Specified in Its Charter)
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Contact:
Timothy Cunningham
eLoyalty Corporation
(847) 582 7000
ir@eloyalty.com
Leading Proxy Advisory Firm Recommends That eLoyalty
Stockholders
Vote in Favor Of Three Proposals
Lake Forest, IL, December 3, 2001 – eLoyalty Corporation, a leading enterprise CRM services company (Nasdaq: ELOY), announced today that Institutional Shareholder Services, a leading proxy advisory firm, has recommended that its clients vote in favor of the three proposals put forth at eLoyalty’s upcoming stockholders’ meeting on December 18, 2001. The proposed actions are to:
| 1. | Approve the issuance and sale of shares of 7% convertible preferred stock in a private placement to funds affiliated with Technology Crossover Ventures and Sutter Hill Ventures and the issuance of common stock upon the conversion of that preferred stock; |
| 2. | Approve an increase in the number of authorized shares of both the company’s common stock and the company’s preferred stock; and |
| 3. | Approve a one-for-ten reverse stock split with respect to all issued shares of the company’s common stock and a corresponding reduction in the number of authorized shares of the company’s common stock. |
“We are pleased to hear that ISS has recommended a favorable vote on all three actions,” said Kelly D. Conway, President and CEO of eLoyalty. “We believe that these actions will provide eLoyalty with greater flexibility for achieving our long-term business plans in these challenging economic times. By bolstering eLoyalty’s financial fundamentals, the company will be in a stronger position to achieve future profitable growth.”
About eLoyalty
eLoyalty is a leading management consulting and systems integration company focused exclusively on customer relationship management (CRM). eLoyalty delivers a broad range of services throughout North America, Europe and Australia including strategy and measurement, program management, customer service operations, technology enablement, change management and on-going technical managed services. The combination of methodologies and technical expertise enables eLoyalty to deliver the tangible economic benefits of customer loyalty for our Fortune 1000 clients. For more information, please go to the Company’s web site at www.eloyalty.com or call 877-2-ELOYAL.
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About Institutional Shareholder Services
Institutional Shareholder Services (ISS) is the world’s leading provider of proxy advisory, voting, and corporate governance services. ISS products help institutional investors — pension plans, investment managers and bank trust departments — comply with their proxy voting fiduciary obligations, as defined by the U.S. Department of Labor. Together with its global partners, ISS currently serves more than 950 institutional and corporate clients throughout North America and Europe with its core business. Annually, ISS analyzes proxies and issues vote recommendations for more than 10,000 U.S. and 10,000 non-U.S. shareholder meetings. Although ISS’s staff of more than 190 professionals is responsible for all ISS products and services, global coverage is augmented through alliances with a number of other specialists including DSW (German Shareholders Association), VEB (Dutch Shareholders Association), and Franklin Global Investor Services (Paris).
ASSUMPTIONS UNDERLYING FORWARD-LOOKING STATEMENTS AND FACTORS THAT MAY AFFECT
FUTURE RESULTS
This news release contains forward-looking statements, including references to
plans, strategies, objectives and anticipated future performance and other
statements not strictly historical in nature, that are based on current
management expectations, forecasts and assumptions. These forward-looking
statements are subject to risks and uncertainties that could cause actual
events or results to differ materially from those expressed or implied by the
forward-looking statements. Such risks, uncertainties and other factors that
might cause such a difference include, among others: the ability to maintain
our common stock listing on NASDAQ; the ability to attract new clients and
continuation of existing and new business from existing clients; reliance on
major clients and suppliers, increasing client concentration and maintenance of
good relations with key business partners; maintenance or our reputation and
financial strength to remain competitive; management of the risks associated
with increasingly complex client projects and new services offerings, including
risks involving the variability and predictability of the number, size, scope,
cost and duration of, and revenues from, client engagements, unanticipated
cancellations or deferrals, collection of billed amounts, shifts from time and
materials to alternative or value-based pricing and variable employee
utilization rates, project personnel costs and project requirements; management
of growth and expansion of business with new services offerings and into new
markets; continued access to capital resources to meet eLoyalty’s operating and
financial needs, including the successful consummation of eLoyalty’s pending
private placement and rights offering; the realization of certain deferred tax
assets which may require a valuation allowance if operating results do not
improve in the future; implementation of appropriate infrastructure in a timely
and cost-effective manner; the ability to attract and retain highly skilled
employees in a competitive information technology labor market; demand for CRM
services and software generally and continuing intense competition in the
information technology services industry generally and particularly in the
provision of CRM services and software; the rapid pace of technological
innovation in the information technology services industry and the ongoing
challenge of creating innovative solutions that meet client expectations; risks
associated with eLoyalty’s global operations; future legislative, regulatory or
legal actions affecting the information technology services industry or the
protection of eLoyalty’s intellectual property rights; the continued impact of
the slowdown in the economy on eLoyalty’s financial results; and other general
business, capital market and economic conditions and volatility. For further
information about these and other risks, see eLoyalty’s recent SEC filings,
including its most recent annual report on Form 10-K and those identified under
“Risk Factors” in the Registration Statement on Form S-3 filed on September 24,
2001 (as amended on November 13, 2001) and in the company’s quarterly reports
on Form 10-Q.