Edgar Filing: EXTENSITY INC

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )

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EXTENSITY, INC.
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EXTENSITY, INC.
2200 Powell Street
Suite 300
Emeryville, CA 94608

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 31, 2002

TO THE STOCKHOLDERS OF EXTENSITY, INC.:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
EXTENSITY, INC., a Delaware corporation (the "Company"), will be held on Friday,
May 31, 2002 at 9:00 a.m. local time in Conference Room D at 2200 Powell Street,
Emeryville, CA 94608 for the following purposes:

1. To elect directors to serve for the ensuing year and until their successors
are elected. The nominees for election are Robert A. Spinner, Sharam I.
Sasson, Christopher D. Brennan, John R. Hummer, David A. Reed and Ted E.
Schlein.

2. To ratify the selection of PricewaterhouseCoopers LLP as independent
auditors of the Company for its fiscal year ending December 31, 2002.

3. To transact such other business as may properly come before the meeting or
any adjournment or postponement thereof.

The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.

The Board of Directors has fixed the close of business on April 5, 2002, as
the record date for the determination of stockholders entitled to notice of and
to vote at this Annual Meeting and at any adjournment or postponement thereof.

By Order of the Board of Directors

/S/ KENNETH R. HAHN
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KENNETH R. HAHN
Secretary

Emeryville, California
April 15, 2002

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ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. 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 OBTAIN FROM THE RECORD
HOLDER A PROXY ISSUED IN YOUR NAME.
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EXTENSITY, INC.
2200 Powell Street
Suite 300
Emeryville, CA 94608

PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS

May 31, 2002

INFORMATION CONCERNING SOLICITATION AND VOTING

GENERAL

The enclosed proxy is solicited on behalf of the Board of Directors of
Extensity, Inc., a Delaware corporation ("Extensity" or the "Company"), for use
at the Annual Meeting of Stockholders to be held on May 31, 2002, at 9:00 a.m.
local time (the "Annual Meeting"), or at any adjournment or postponement
thereof, for the purposes set forth herein and in the accompanying Notice of
Annual Meeting. The Annual Meeting will be held in Conference Room D of 2200
Powell Street, Emeryville, CA 94608. The Company intends to mail this proxy
statement and accompanying proxy card on or about April 15, 2002, to all
stockholders entitled to vote at the Annual Meeting.

SOLICITATION

The Company will bear the entire cost of solicitation of proxies,
including preparation, assembly, printing and mailing of this proxy statement,
the proxy card and any additional information furnished to stockholders. Copies
of solicitation materials will be furnished to banks, brokerage houses,
fiduciaries and custodians holding in their names shares of Common Stock
beneficially owned by others to forward to such beneficial owners. The Company
may reimburse persons representing beneficial owners of Common Stock for their
costs of forwarding solicitation materials to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by telephone, telegram or
personal solicitation by directors, officers or other regular employees of the
Company.

VOTING RIGHTS AND OUTSTANDING SHARES

Only holders of record of Common Stock at the close of business on
April 5, 2002 will be entitled to notice of and to vote at the Annual Meeting.
At the close of business on April 5, 2002, the Company had outstanding and
entitled to vote 24,923,242 shares of Common Stock. Each holder of record of
Common Stock on such date will be entitled to one vote for each share held on
all matters to be voted upon at the Annual Meeting.

All votes will be tabulated by the inspector of election appointed for
the meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the vote
total on proposals presented to the stockholders and will have the same effect
as negative votes. Broker non-votes are counted towards a quorum, but are not
counted for any purpose in determining whether a matter has been approved.

REVOCABILITY OF PROXIES

Any person giving a proxy pursuant to this solicitation has the power
to revoke it at any time before it is voted. It may be revoked by filing with
the Secretary of the Company at the Company's principal executive office, 2200
Powell Street, Suite 300, Emeryville, CA 94608, a written notice of revocation
or a duly executed proxy bearing a later date, or it may be revoked by attending
the meeting and voting in person. Attendance at the meeting will not, by itself,
revoke a proxy.

STOCKHOLDER PROPOSALS

The deadline for submitting a stockholder proposal for inclusion in the
Company's proxy statement and form of proxy for the Company's 2003 annual
meeting of stockholders pursuant to the Company's Bylaws is December 16, 2002.
Stockholders wishing to submit proposals or director nominations that are not to
be included in such proxy statement and proxy must do so not less than ninety
(90) days prior to the anniversary date of the immediately preceding annual
meeting of stockholders. Stockholders are also advised to review the Company's
Bylaws, which contain additional requirements with respect to advance notice of
stockholder proposals and director nominations.

PROPOSAL 1

ELECTION OF DIRECTORS

There are six nominees for the seven Board positions presently
authorized by the Board in accordance with the Company's Bylaws. The Board
currently has one vacancy, which will be filled by the existing directors in
accordance with the Company's Bylaws. Although seven Board positions exist,
proxies may not be voted for a greater number of persons than the number of
nominees named. Each director to be elected will hold office until the next
annual meeting of stockholders and until his successor is elected and has
qualified, or until such director's earlier death, resignation or removal. Each
nominee listed below is currently a director of the Company, all of whom have
been elected by the stockholders.

THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF EACH NAMED NOMINEE.

NOMINEES

The names of the nominees and certain information about them are set
forth below:

NAME AGE PRINCIPAL OCCUPATION/POSITION HELD WITH THE COMPANY

Robert A. Spinner 44 President, Chief Executive Officer and Director
Sharam I. Sasson 47 Chairman of the Board of Directors and Founder
Christopher D. Brennan 45 Director of Extensity
John R. Hummer 53 Managing Member of Hummer Winblad Venture Partners
David A. Reed 54 Managing Partner of Causeway Capital Partners L.P.
Ted E. Schlein 38 General Partner of Kleiner, Perkins, Caufield & Byers

Robert A. Spinner has served as Extensity's President, Chief Executive
Officer and as director since April 1999. Prior to joining Extensity, from
January 1995 to January 1999, Mr. Spinner served as Senior Vice President of
Worldwide Sales and International Operations at Clarify, Inc., a provider of
integrated sales and service solutions for the front office. From October 1988
to December 1994, Mr. Spinner served as Director of Western Regional Sales at
Sybase, Inc., a relational database management software company. Mr. Spinner has
also held technical positions at Applied Data Research, Inc. and Chevron
Corporation. Mr. Spinner received a B.A. in mathematics from Washington
University.

Sharam I. Sasson is the founder and Chairman of the Board of Directors
of Extensity and has served as a director since our inception in 1995. Mr.
Sasson served as our President and Chief Executive Officer until March 1999.
Prior to founding Extensity, Mr. Sasson was an executive at Scopus Technology, a
provider of enterprise customer information management systems which he
co-founded in 1991. Mr. Sasson has also served as a research scientist at
Lockheed Missile and Space Company and as a developer of structural modeling
software at PMB/Bechtel Corporation. Mr. Sasson received a B.S. in civil
engineering from Queen Mary College, University of London, an M.S. in structural
engineering from City University in London, and a Masters in Engineering from
the University of California at Berkeley.

Christopher D. Brennan has served as a director of Extensity since
January 2000. Mr. Brennan also serves as a director of Cintech Solutions, Inc.,
a creator of customer relationship management technology. From April 2000 to
July of 2001, Mr. Brennan served as the President, Chief Executive Officer and a
director of Mobileum, Inc., a private provider of software infrastructure
platforms for wireless applications. From April 1999 to April 2000, Mr. Brennan
served as Chief Financial Officer of Genesys Telecommunications Laboratories, a
provider of interaction management software applications. Genesys
Telecommunications Laboratories is an independent wholly-owned subsidiary of
Alcatel subsequent to its acquisition in January 2000. Prior to joining Genesys,
Mr. Brennan was Chief Financial Officer and Corporate Secretary of Diamond Lane
Communications, a provider of digital subscriber line high speed access
products, from September 1997 to April 1999. Diamond Lane was acquired by Nokia.
From April 1994 to July 1997, Mr. Brennan held various senior executive
positions, including President, Chief Operating Officer and Chief Financial
Officer of UB Networks, a wholly-owned subsidiary of Tandem Computers that
merged with Newbridge Networks. Mr. Brennan holds a B.S. in Commerce from the
University of Louisville, School of Business Administration where he also serves
as a member of the National Visiting Committee.

John R. Hummer has served as a director of Extensity since January
1996. Mr. Hummer is a managing member of Hummer Winblad Venture Partners, a
venture capital firm, which he co-founded in 1989. After graduating from
Princeton University, Mr. Hummer played professional basketball for the Buffalo
Braves and Seattle Supersonics. Mr. Hummer holds a B.A. in English from
Princeton and an MBA from Stanford University.

David A. Reed has served as a director of Extensity since April 2001.
Mr. Reed is the Managing Partner of Causeway Capital Partners L.P., a private
family investment partnership, which he joined in October 2000. From 1974 to
September 2000, Mr. Reed held various positions with Ernst & Young LLP, an
accounting firm, most recently as Senior Vice Chair - Global Accounts,
Industries, Sales and Marketing. Mr. Reed serves as a director of Texas
Industries, Inc., a public company, that manufactures cement and structural
steel, and various private companies. Mr. Reed also serves as a Strategic
Advisor to Stephens Inc., a firm specializing in investment banking, private
capital management and merchant banking. Mr. Reed holds a B.B.A. from Texas Tech
University.

Ted E. Schlein has served as a director of Extensity since May 1997.
Mr. Schlein is a general partner at Kleiner Perkins Caufield & Byers, a venture
capital firm, which he joined in November 1996. Mr. Schlein also manages the
KPCB Java Fund, formed to invest in Java technology-based companies and related
Internet, intranet, networking and communications companies. Mr. Schlein is
currently a director of Corio, Inc., an enterprise application service provider.
From June 1986 to October 1996, Mr. Schlein served in a variety of executive
positions at Symantec Corporation, a provider of Internet security technology
and business management technology solutions, most recently as Vice President,
Networking and Client/Server Solutions. Mr. Schlein holds a B.S. in economics
from the University of Pennsylvania.

Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote at the meeting. Shares represented by
executed proxies will be voted, if authority to do so is not withheld, for the
election of the six nominees named above. In the event that any nominee should
be unavailable for election as a result of an unexpected occurrence, such shares
will be voted for the election of such substitute nominee as management may
propose. Each person nominated for election has agreed to serve if elected, and
management has no reason to believe that any nominee will be unable to serve.

BOARD COMMITTEES AND MEETINGS

During the fiscal year ended December 31, 2001 the Board of Directors
held four meetings and acted by unanimous written consent two times. The Board
has an Audit Committee and a Compensation Committee.

The Audit Committee meets with the Company's independent auditors at
least annually to review the results of the annual audit and discuss the
financial statements; recommends to the Board the independent auditors to be
retained; oversees the independence of the independent auditors; evaluates the
independent auditors' performance; and receives and considers the independent
auditors' comments as to controls, adequacy of staff and management performance
and procedures in connection with audit and financial controls. The Audit
Committee is currently composed of three directors: Messrs. Brennan, Hummer and
Reed. During 2001, the Audit Committee's members were Messrs. Brennan, Hummer
and Schlein. It met four times during such fiscal year and did not act by
unanimous written consent. All members of the Company's Audit Committee are
independent (as independence is defined in Rule 4200(a)(14) of the NASD listing
standards). The Board of Directors has adopted a written Audit Committee
Charter.

The Compensation Committee makes recommendations concerning salaries
and incentive compensation, awards stock options to employees and consultants
under the Company's stock option plans and otherwise determines compensation
levels and performs such other functions regarding compensation as the Board may
delegate. The Compensation Committee is composed of three outside directors:
Messrs. Brennan, Hummer and Schlein. It met four times during such fiscal year
and acted twice by unanimous written consent. The Board of Directors has adopted
a written Compensation Committee Charter.

During the fiscal year ended December 31, 2001, each Board member
attended 75% or more of the aggregate of the meetings of the Board and of the
committees on which he served, held during the period for which he was a
director or committee member, respectively.

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS 1

The Audit Committee of the Board is responsible for providing
independent, objective oversight of the Company's accounting functions and
internal controls. The Audit Committee is composed of independent directors, and
acts under a written charter. Each of the members of the Audit Committee is
independent as defined in Rule 4200(a)(14) of the NASD listing standards.

The responsibilities of the Audit Committee include recommending to the
Board an accounting firm to be engaged as the Company's independent accountants.
Additionally, and as appropriate, the Audit Committee reviews and evaluates, and
discusses and consults with Company management, Company internal audit
personnel, and the independent accountants regarding the following:

o the plan for, and the independent accountants' report on, each
audit of the Company's financial statements;

o the Company's financial disclosure documents, including all
financial statements and reports filed with the SEC or sent to
stockholders;

o changes in the Company's accounting practices, principles, controls
or methodologies, or in the Company's financial statements;

o significant developments in accounting rules;

o the adequacy of the Company's internal accounting controls, and
accounting, financial and auditing personnel; and

The Audit Committee is responsible for recommending to the Board that
the Company's financial statements be included in the Company's annual report.
The Committee took a number of steps in making this recommendation for 2001.
First, the Audit Committee discussed with PricewaterhouseCoopers LLP, the
Company's independent accountants for 2001, those matters required to be
discussed by SAS 61 (Codification of Statements on Auditing Standards, AU
Section 380), including information regarding the scope and results of the
audit. These communications and discussions are intended to assist the Audit
Committee in overseeing the financial reporting and disclosure process. Second,
the Audit Committee discussed PricewaterhouseCoopers' independence with
PricewaterhouseCoopers and received written disclosure from
PricewaterhouseCoopers concerning independence as required under Independence
Standards Board Standard No. 1, Independence Discussions with Audit Committees.
This discussion and disclosure informed the Audit Committee of
PricewaterhouseCoopers' independence, and assisted the Audit Committee in
evaluating such independence. Finally, the Audit Committee reviewed and
discussed, with Company management and PricewaterhouseCoopers, the Company's
audited consolidated balance sheets at December 31, 2001 and 2000, and
consolidated statements of income, cash flows and stockholders' equity for the
years ended December 31, 2001, 2000 and 1999. Based on the discussions with
PricewaterhouseCoopers concerning the audit, the independence discussions, and
the financial statement review, and such other matters deemed relevant and
appropriate by the Audit Committee, the Audit Committee recommended to the Board
that these financial statements be included in the Company's 2001 Annual Report
on Form 10-K.

From the members of the Audit Committee:

Christopher D. Brennan (chair)
John R. Hummer
David A. Reed

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1 The material in this report is not "soliciting material," is not deemed
"filed" with the SEC, and is not to be incorporated by reference into
any filing of the Company under the 1933 or 1934 Act.

PROPOSAL 2

RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

The Board of Directors has selected PricewaterhouseCoopers LLP as the
Company's independent auditors for the fiscal year ending December 31, 2002 and
has further directed that management submit the selection of independent
auditors for ratification by the stockholders at the Annual Meeting.
PricewaterhouseCoopers LLP has audited the Company's financial statements since
1997. Representatives of PricewaterhouseCoopers LLP are expected to be present
at the Annual Meeting, will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.

Stockholder ratification of the selection of PricewaterhouseCoopers LLP
as the Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of
PricewaterhouseCoopers LLP to the stockholders for ratification as a matter of
good corporate practice. If the stockholders fail to ratify the selection, the
Audit Committee and the Board will reconsider whether or not to retain that
firm. Even if the selection is ratified, the Audit Committee and the Board in
their discretion may direct the appointment of different independent auditors at
any time during the year if they determine that such a change would be in the
best interests of the Company and its stockholders.

The affirmative vote of the holders of a majority of the shares present
in person or represented by proxy and entitled to vote at the Annual Meeting
will be required to ratify the selection of PricewaterhouseCoopers LLP.
Abstentions will be counted toward the tabulation of votes cast on proposals
presented to the stockholders and will have the same effect as negative votes.
Broker non-votes are counted towards a quorum, but are not counted for any
purpose in determining whether this matter has been approved.

AUDIT FEES. During the fiscal year ended December 31, 2001, the
aggregate fees billed by PricewaterhouseCoopers LLP for the audit of the
Company's financial statements for such fiscal year and for the reviews of the
Company's interim financial statements was $170,595.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. During
the fiscal year ended December 31, 2001, PricewaterhouseCoopers LLP did not bill
any fees for information technology consulting.

ALL OTHER FEES. During fiscal year ended December 31, 2001, the
aggregate fees billed by PricewaterhouseCoopers LLP for professional services
other than audit and information technology consulting fees was $92,000.

The Audit Committee has determined the rendering of all other non-audit
services by PricewaterhouseCoopers LLP is compatible with maintaining the
auditor's independence.

THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2.

SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the
ownership of the Company's Common Stock as of December 31, 2001 by: (i) each
nominee for director; (ii) each of the executive officers named in the Summary
Compensation Table; (iii) all executive officers and directors of the Company as
a group; and (iv) all those known by the Company to be beneficial owners of more
than five percent of its Common Stock.

BENEFICIAL OWNERSHIP (1)

NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES TOTAL

DIRECTORS AND EXECUTIVE OFFICERS

Robert A. Spinner(2)............................................ 1,204,570 4.8%
Sharam I. Sasson(3)............................................. 1,652,000 6.6%
Christopher D. Brennan(4)....................................... 84,333 *
John R. Hummer(5)............................................... 1,007,399 4.0%
David A. Reed(6)................................................ 76,000 *
Ted. E. Schlein(7).............................................. 2,989,040 12.0%
Kenneth R. Hahn(8).............................................. 120,496 *
Elizabeth A. Ireland(9)......................................... 192,578 *
Mark K. Oney(10)................................................ 181,732 *
David A. Yarnold(11)............................................ 217,711 *
All executive officers and directors as a group (12 persons)(12) 8,080,089 30.9%

5% STOCKHOLDERS

Berkeley International Capital Limited(13)...................... 1,333,333 5.4%
Entities affiliated with Austin Marxe and David Greenhouse(14).. 4,491,970 18.1%
Entities affiliated with Kleiner Perkins Caufield & Byers(7).... 2,909,040 11.7%
Sharam I. Sasson(3)............................................. 1,652,000 6.6%

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* Less than 1% of the outstanding shares of common stock

(1) This table is based upon information supplied by officers, directors
and principal stockholders and Schedules 13D and 13G filed with the
Securities and Exchange Commission (the "SEC"). Unless otherwise
indicated in the footnotes to this table and subject to community
property laws where applicable, the Company believes that each of the
stockholders named in this table has sole voting and investment power
with respect to the shares indicated as beneficially owned. Applicable
percentages are based on 24,871,147 shares outstanding on December 31,
2001, adjusted as required by rules promulgated by the SEC.

(2) Includes 764,933 shares held by the Spinner Family Trust UA dated
August 3, 1999. Also includes 10,000 shares held by the Jacqueline
Nicole Spinner Trust UTA dated August 3, 1999, 10,000 shares held by
the Amanda Spinner Trust UTA dated August 3, 1999 and 10,000 shares
held by the Samantha Sidney Spinner Trust UTA dated August 3, 1999, as
to which shares Mr. Spinner disclaims beneficial ownership. Includes
74,519 shares subject to a right of repurchase in favor of Extensity
which lapses over a period of time, and 409,637 shares of our common
stock issuable upon exercise of options within 60 days of December 31,
2001.

(3) Includes 1,106,378 shares held by the Sasson Family Trust U/D/T dated
December 28, 1994, 225,311 shares held by the Fariba J. Sasson Annuity
Trust I U/I dated October 19, 1999 and 225,311 shares held by the
Sharam I. Sasson Annuity Trust I U/I dated October 19, 1999. Also
includes 10,000 shares held by the DAS Trust UTA dated September 24,
1998 and 10,000 shares held by the EIS Trust UTA dated September 24,
1998, as to which shares Mr. Sasson disclaims beneficial ownership.
Includes 75,000 shares issuable upon exercise of options within 60 days
of December 31, 2001

(4) Includes 75,000 shares issuable upon exercise of options within 60 days
of December 31, 2001.

(5) Includes 407,575 shares held by Hummer Winblad Venture Partners II,
L.P. and 213,320 shares held by Hummer Winblad Venture Partners III,
L.P. Mr. Hummer disclaims beneficial ownership of the shares held by
funds affiliated with Hummer Winblad Venture Partners, except to the
extent of his pecuniary interest therein. Mr. Hummer is the sole
natural person who exercises voting and/or dispositive powers for the
shares held by the entities affiliated with Hummer Winblad Venture
Partners. Includes 75,000 shares issuable upon exercise of options
within 60 days of December 31, 2001.

(6) Includes 75,000 shares issuable upon exercise of options within 60 days
of December 31, 2001.

(7) Includes 900,010 shares held by Kleiner Perkins Caufield & Byers VIII,
72,725 shares held by KPCB Information Sciences Zaibatsu Fund II,
52,096 shares held by KPCB VIII Founders Fund and 1,884,209 shares held
by KPCB Java Fund LP. Mr. Schlein disclaims beneficial ownership of the
shares held by funds affiliated with Kleiner Perkins Caufield & Byers,
except to the extent of his pecuniary interest therein. The following
natural persons exercise voting and/or dispositive powers for the
shares held by the KPCB Information Sciences Zaibatsu Fund II, L.P.:
Brook Byers, John Doerr, James Lally, Floyd Kvamme, Bernard Lacroute,
Vinod Khosla, Joseph Lacob, Kevin Compton, Doug MacKenzie and William
Hearst. The following natural persons exercise voting and/or
dispositive powers for the shares held by the KPCB Java Fund L.P.,
Kleiner Perkins Caufield & Byers VIII, L.P. and Kleiner Perkins
Caufield & Byers VIII Founder's Fund, L.P.: Brook Byers, John Doerr,
Vinod Khosla, Joseph Lacob, Kevin Compton, Doug MacKenzie and William
Hearst. Includes 75,000 shares issuable upon exercise of options within
60 days of December 31, 2001 and 5,000 shares directly held by Mr.
Schlein.

(8) Includes 64,771 shares issuable upon exercise of options within 60 days
of December 31, 2001 and 19,229 subject to a right of repurchase in
favor of Extensity which lapses over a period of time.

(9) Includes 88,333 shares issuable upon exercise of options within 60 days
of December 31, 2001 and 3,125 shares subject to a right of repurchase
in favor of Extensity which lapses over a period of time.

(10) Includes 105,355 shares issuable upon exercise of options within 60
days of December 31, 2001.

(11) Includes 130,188 shares issuable upon exercise of options within 60
days of December 31, 2001.

(12) Includes an aggregate of 1,307,743 shares issuable upon exercise of
options within 60 days of December 31, 2001 and an aggregate of 146,873
shares subject to a right of repurchase in favor of Extensity which
lapses over a period of time.

(13) Ronald William Green and Arthur Trueger are the sole natural persons
who exercise voting and/or dispositive powers for the shares held by
Berkeley International Capital Limited.

(14) Includes 2,877,270 shares owned by Special Situations Fund III, 655,100
shares owned by Special Situations Technology Fund and 959,600 shares
owned by the Special Situations Cayman Fund, L.P. Austin W. Marxe and
David M. Greenhouse are the principal owners of the general
partnerships that control these funds and together exercise the voting
and/or dispositive powers for the shares.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act")
requires the Company's directors and executive officers, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file with the SEC initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Officers,
directors and greater than ten percent stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.

To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 2001, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were

complied with; except that Eric C. Ruud, a former executive officer of the
Company who resigned on July 14, 2001, failed to file one report of one
transaction.

EXECUTIVE AND OTHER OFFICERS OF THE COMPANY

The names of the executive and other officers of the Company and
certain information about them are set forth below:

NAME AGE POSITION

Robert A. Spinner 44 President and Chief Executive Officer and Director
Sharam I. Sasson 47 Chairman of the Board of Directors and Founder
Kenneth R. Hahn 35 Chief Financial Officer
Elizabeth A. Ireland 43 Vice President of Marketing
Allen F. Nordgren 56 Vice President of Professional Services
Mark K. Oney 44 Vice President of Engineering
Donald E. Smith 43 Vice President of Hosted Operations and Customer
Advocacy
David A. Yarnold 42 Vice President of Worldwide Sales
Dr. Rick L. Spickelmier 42 Chief Technology Officer
Jennifer H. Burt 40 Vice President of Human Resources

Biographical information about Messrs. Spinner and Sasson is set forth
under Proposal 1 above.

Kenneth R. Hahn was appointed Extensity's Chief Financial Officer in
December 1999, has served as Vice President of Finance and Administration since
January 1999 and previously served as Corporate Controller from January 1998 to
January 1999. From September 1995 to December 1997, Mr. Hahn was employed as a
management consultant with The Boston Consulting Group, a strategy consulting
firm. Mr. Hahn attended the Stanford Graduate School of Business, where he
earned an MBA and was named an Arjay Miller Scholar. Mr. Hahn also held various
positions at PriceWaterhouse LLP, most recently as an Audit Manager. He received
a B.A. in business administration from California State University, Fullerton
and is a Certified Public Accountant and a Certified Management Accountant.

Elizabeth A. Ireland has served as Extensity's Vice President of
Marketing since January 1998. Prior to joining Extensity, Ms. Ireland was
employed at MapInfo Corporation, a software company, from 1989 to October 1997,
most recently as Vice President and General Manager of Internet Businesses.
Additional positions held by Ms. Ireland at MapInfo Corporation include Vice
President of Marketing and Business Development and Vice President of
Information Products. Ms. Ireland received a B.S. in business administration
from the University of South Carolina and has held a Certified Public
Accountant's license.

Allen F. Nordgren has served as Extensity's Vice President of
Professional Services since November 1997. Prior to joining Extensity, Mr.
Nordgren was employed from June 1996 to November 1997 at Logica, Inc., a systems
integrator, as Vice President and General Manager of Western U.S. Operations.
From October 1992 to May 1996, Mr. Nordgren was employed at Sybase Inc., a
relational database management software company, most recently as Practice
Director of Professional Services for the Northwest Region. Mr. Nordgren
attended Bernard Baruch University and served four years in the U.S. Military.

Mark K. Oney has served as Extensity's Vice President of Engineering
since July 1999. Prior to joining Extensity, from May 1999 to June 1999, Mr.
Oney served as the Vice President of Engineering for Ringer Software, a consumer
information Internet company. From September 1998 through January 1999, Mr. Oney
was a co-founder of and served as Vice President of Software Engineering for
Crag Technologies, Inc., a developer and supplier of data storage solutions.
Crag Technologies was acquired by Western Digital Corporation in February 1999.
From July 1997 through May 1998, Mr. Oney was a co-founder of and served as Vice
President of Software Engineering for Ridge Technologies, a Windows NT storage
company which was acquired by Adaptec, Inc., in May 1998. Prior to founding
Ridge, from May 1988 through June 1997, Mr. Oney served in a variety of
engineering and management roles at Apple Computer, Inc., most recently as
Director of Software Development for the PowerBook line of business. Mr. Oney
received a B.S. in electrical engineering from Rochester Institute of
Technology.

Donald E. Smith has served as Extensity's Vice President of Hosted
Operations since January 2000. Mr. Smith co-founded Clarify, Inc. in 1990, and
held various management positions at Clarify until January 2000, including Vice
President of Sales and Engineering and Director of Quality Assurance, Product
Design and Customer Support. Mr. Smith received a B.S.E.E. from the University
of Nebraska at Lincoln.

David A. Yarnold has served as Extensity's Vice President of Worldwide
Sales since January 2002; previously, he served as Vice President of North
American Sales from January 2001 to December 2001, and Vice President of
Business Development from August 1999 to January 2001. Prior to joining
Extensity, from January 1996 to July 1999, Mr. Yarnold was employed at Clarify,
Inc., most recently as Vice President of Northern American Sales. From January
1993 to October 1995, Mr. Yarnold served as Regional Vice President of Platinum
Software Corporation, a financial software provider. Mr. Yarnold received a B.S.
in accounting from San Francisco State University and has held a Certified
Public Accountant's license.

Dr. Rick L. Spickelmier has served as Extensity's Chief Technology
Officer since July 2000, and prior to this position he was Extensity's Server
Architect. Prior to joining Extensity, from 1990 to 1998, Dr. Spickelmier served
as the Director of Development at Objectivity, a supplier of object database
management systems, and from 1988 to 1990 managed CAD framework development at
the University of California at Berkeley. Dr. Spickelmier holds a Ph.D. and an
M.S. in Electrical Engineering and Computer Sciences from the University of
California at Berkeley and a B.S. in Electrical Engineering from Oregon State
University.

Jennifer H. Burt has served as Extensity's Vice President of Human
Resources since September 2000. Prior to joining Extensity, from May 2000 to
September 2000, Ms. Burt served as Senior Director of Human Resources at
Fatbrain, an online retailer, and from August 1985 to May 2000, at Viking
Freight Inc., an overnight delivery company, she served as a Director of Human
Resources.

EXECUTIVE COMPENSATION

COMPENSATION OF DIRECTORS

Directors currently do not receive any cash compensation from the
Company for their services as members of the Board of Directors. The members
are, however, eligible for reimbursement for their expenses incurred in
connection with attendance at Board meetings in accordance with Company policy.

Each non-employee director of the Company is eligible to receive stock
option grants under the 1996 Stock Option Plan (the "1996 Plan"). Options
granted under the 1996 Plan to non-employee directors are intended by the
Company not to qualify as incentive stock options under the Code.

The exercise price of options granted under the 1996 Plan is not less
than the fair market value of the Common Stock subject to the option on the date
of the option grant. Options granted under the 1996 Plan to non-employee
directors may be early exercised at any date after the date of the option grant,
subject to the Company's repurchase rights. The term of options granted to
non-employee directors under the 1996 Plan is ten years. In the event of a
merger of the Company with or into another corporation or a consolidation,
acquisition of assets or other change-in-control transaction involving the
Company, each option either will continue in effect, if the Company is the
surviving entity, or will be assumed or an equivalent option will be substituted
by the successor corporation, if the Company is not the surviving entity. In the
event that the successor corporation refuses to assume or substitute for each
option, the options granted shall fully vest.

Options granted to non-employee directors are at the discretion of the
Board of Directors. During the last fiscal year, the Company granted options
covering 25,000 shares to each non-employee director of the Company at an
exercise price per share of $3.63. The Company also granted options covering
50,000 shares to one non-employee director at an exercise price per share of
$6.70. The Board of Directors determined the fair market value of such Common
Stock on the dates of grant was $3.63 per share and $6.70 per share
respectively. As of December 31, 2001, no options had been exercised by
non-employee directors under the 1996 Plan.

COMPENSATION OF EXECUTIVE OFFICERS

SUMMARY OF COMPENSATION

The following table shows for the fiscal years ended December 31, 2001,
2000 and 1999, compensation awarded or paid to, or earned by, the Company's
Chief Executive Officer and its other four most highly compensated executive
officers at December 31, 2001 (the "Named Executive Officers"):

SUMMARY COMPENSATION TABLE

Annual Compensation Long-Term Compensation Awards
----------------------------------------- ----------------------------------
Other
Name and Principal Salary Bonus Annual Securities Underlying
Position Year ($) ($) Compensation($) Options(#)2
------------------------ ------- ---------- ---------- ------------------- ----------------------------------

Robert A. Spinner 2001 280,305 -- -- 440,000 3
President and Chief 2000 275,000 -- -- --
Executive Officer and 1999 210,417 -- -- 1,266,070
Director
------------------------ ------- ---------- ---------- ------------------- ----------------------------------

Kenneth R. Hahn 2001 190,000 21,875 -- 145,000 4
Chief Financial Officer 2000 168,750 48,625 -- --
1999 127,500 29,000 -- 80,000
------------------------ ------- ---------- ---------- ------------------- ----------------------------------

Elizabeth A. Ireland 2001 180,000 24,600 -- 125,000 5
Vice President of 2000 178,750 49,893 -- --
Marketing 1999 151,218 45,000 -- 110,000
------------------------ ------- ---------- ---------- ------------------- ----------------------------------

Mark K. Oney 2001 180,000 20,625 -- 115,000 6
Vice President of 2000 180,000 27,625 -- --
Engineering 1999 78,462 20,000 -- 190,000
------------------------ ------- ---------- ---------- ------------------- ----------------------------------

David Yarnold 2001 175,000 85,000 -- 115,000 7
Vice President of 2000 206,500 62,812 -- --
Worldwide Sales 1999 68,990 -- -- 225,000
------------------------ ------- ---------- ---------- ------------------- ----------------------------------

STOCK OPTION GRANTS AND EXERCISES

The Company grants options to its executive officers under its 1996
Stock Option Plan (the "1996 Plan"). As of December 31, 2001, options to
purchase a total of 3,614,167 shares were outstanding under the 1996 Plan and
options to purchase 2,095,616 shares remained available for grant thereunder.
The options have a time-based vesting provision which encourages employees to
remain with the Company. In June 2001, the Company instituted an option exchange
program whereby all employees were given the option to cancel certain previously
granted options under the 1996 Plan and the 2000 Nonstatutory Stock Option Plan
(collectively, the "Plans") in exchange for newly granted options on a
one-to-one basis (the "Program"). On June 6, 2001, the Company granted under the
Plans options representing 10% of the cancelled options (the "Short-Term
Options") to those employees who elected to participate in the Program (the
"Participants"). On December 12, 2001, the Company granted under the Plans
options representing 90% of the cancelled options to the Participants. The
Short-Term Options vested 100% six months after the date of grant and had a term
of nine months. All options granted under the Plans, other than Short-Term
Options and those options discussed in the Chief Executive Officer Compensation
section below, vest 25% after the first year and on a monthly basis thereafter
at a rate of 1/48th per month. All options granted under the Plans, other than
Short-Term Options, have a term of ten years. In the event of a merger of the
Company with or into another corporation or a consolidation, acquisition of
assets or other change-in-control transaction involving the Company, each option
either will continue in effect, if the Company is the

------------------------

2 Certain options granted in 2001 and listed in this column are regrants issued
as replacements pursuant to an option exchange program, which is detailed above
and in the Compensation Committee Report.
3 All 440,000 options are replacement grants.
4 Includes 70,000 replacement grants.
5 Includes 50,000 replacement grants.
6 Includes 40,000 replacement grants.
7 Includes 40,000 replacement grants.

surviving entity, or will be assumed or an equivalent option will be substituted
by the successor corporation, if the Company is not the surviving entity. In the
event that the successor corporation refuses to assume or substitute for each
option, the options granted shall fully vest.

The following tables show for the fiscal year ended December 31, 2001,
certain information regarding options granted to, exercised by, and held at year
end by, the Named Executive Officers:

OPTION GRANTS IN LAST FISCAL YEAR

INDIVIDUAL GRANTS
------------------------------------------

% OF TOTAL POTENTIAL REALIZABLE VALUE
NUMBER OF OPTIONS AT ASSUMED ANNUAL RATES OF
SECURITIES GRANTED TO STOCK PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES OPTION TERM
OPTIONS IN FISCAL EXERCISE EXPIRATION ----------------------------
NAME GRANTED (#) YEAR PRICE ($/SH) DATE 5% ($) 10% ($)
-------------------------- ------------- ------------ -------------- ------------ ----------- --------------

Robert A. Spinner..... 44,000 1.3% $8.82 3/6/02 $14,424 $28,675
396,000 12.0 2.28 12/12/11 567,816 1,438,958
Kenneth R. Hahn....... 7,000 0.2 8.82 3/6/02 2,295 4,562
138,000 4.1 2.28 12/12/11 197,875 501,455
Elizabeth A. Ireland.. 5,000 0.1 8.82 3/6/02 1,639 3,259
120,000 3.6 2.28 12/12/11 172,066 436,048
Mark K. Oney.......... 4,000 0.1 8.82 3/6/02 1,311 2,607
111,000 3.4 2.28 12/12/11 159,161 403,344
David A. Yarnold...... 4,000 0.1 8.82 3/6/02 1,311 2,607
111,000 3.4 2.28 12/12/11 159,161 403,344

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FY-END OPTION VALUES

NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FY-END (#) IN-THE-MONEY OPTIONS AT
ACQUIRED ON EXERCISABLE/ FY-END ($) EXERCISABLE/
NAME EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE 8, 9 UNEXERCISABLE 8, 10
------------------------ -------------- ------------------ ---------------------- -----------------------

Robert A. Spinner..... -- -- 97,564/708,073 --/577,335
Kenneth R. Hahn....... -- -- 59,854/144,146 --/2,720
Elizabeth A. Ireland.. -- -- 80,833/154,167 44,708/29,292
Mark K. Oney.......... -- -- 37,271/174,396 14,591/51,142
David A. Yarnold...... -- -- 44,903/182,597 42,498/124,002

------------------------------
8 Reflects shares vested and unvested at December 31, 2001. Certain options
granted under the 1996 Plan are immediately exercisable, but are subject to the
Company's right to repurchase unvested shares on termination of employment.
9 Includes both "in-the-money" and "out-of-the-money" options. "In-the-money"
options are options with exercise prices below the market price of the Company's
Common Stock at December 31, 2001.
10 Fair market value of the Company's Common Stock at December 31, 2001 ($2.18)
minus the exercise price of the options.

EMPLOYMENT SEVERANCE AND CHANGE OF CONTROL AGREEMENTS

In February 1999, the Company and Mr. Spinner entered into an
employment agreement providing that, if Mr. Spinner's employment is terminated
without cause or constructively terminated, he will be entitled to receive, as
severance, six months continuation of salary. Furthermore, pursuant to the
employment agreement, in the event that Mr. Spinner's employment is terminated
without cause or constructively terminated within one year of an acquisition of
the Company or similar corporate event, 50% of the then remaining unvested
portion of the 1,266,070 options granted to Mr. Spinner in conjunction with his
initial employment will become fully vested.

In July 1999, the Company and Mr. Oney entered into an employment
agreement providing that in the event that Mr. Oney's employment is terminated
without cause or constructively terminated within one year of an acquisition of
the Company or similar corporate event, Mr. Oney will be entitled to receive, as
severance, six months continuation of salary and six months of accelerated
vesting of Mr. Oney's then remaining unvested stock and options.

In August 1999, the Company and Mr. Yarnold entered into an employment
agreement providing that in the event that Mr. Yarnold's employment is
terminated without cause or constructively terminated within one year of an
acquisition of the Company or similar corporate event, Mr. Yarnold will be
entitled to receive, as severance, six months continuation of salary and nine
months of accelerated vesting of Mr. Yarnold's then remaining unvested stock and
options.

REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION 11

The Compensation Committee is currently composed of three outside
directors: Messrs. Brennan, Hummer and Schlein. The Compensation Committee is
responsible for establishing the Company's compensation programs for all
employees, including executives. For executive officers, the Compensation
Committee evaluates performance and determines compensation policies and levels.

COMPENSATION PHILOSOPHY

The goals of the compensation program are to align compensation with
business objectives and performance and to enable the Company to attract and
retain the highest quality executive officers and other key employees, reward
them for the Company's progress and motivate them to enhance long-term
stockholder value. Key elements of this philosophy are as follows:

o The Company pays competitively with comparable technology
companies, both inside and outside its industry, with which
the Company competes for talent. To ensure that compensation
is competitive, the Company compares its practices with
software companies and sets its parameters based on this
comparison.

o The Company maintains short to long-term incentive
opportunities sufficient to provide motivation to achieve
specific operating goals and to generate rewards that bring
total compensation to competitive levels.

o The Company provides significant equity-based incentives for
executives and other key employees to ensure that they are
motivated over the long-term to respond to the Company's
business challenges and opportunities as owners and not just
as employees.

BASE SALARY. The Compensation Committee annually reviews each executive
officer's base salary. When reviewing base salaries, the Compensation Committee
considers individual and corporate performance, levels of responsibility, prior
experience, breadth of knowledge and competitive pay practices. Except for one
executive officer,

--------------------------------
11 With the exception of the material contained in the Option Repricing
Information section, the material in this report is not "soliciting material,"
is not deemed "filed" with the SEC, and is not to be incorporated by reference
into any filing of the Company under the 1933 Act or 1934 Act, whether made
before or after the date hereof and irrespective of any general incorporation
language contained in such filing.

base salaries for all executive officers remained unchanged for fiscal 2001
compared to fiscal 2000. The one increase was due solely to keep that executive
base salary within the range of competitive salaries for comparable companies.

Thc Company has also adopted the Management By Objective Bonus Plan
(the "MBO Bonus Plan") for employees of the Company, including all executive
officers. Cash bonuses are paid on a quarterly basis based upon achievement of
certain specified corporate goals and individual goals. The Compensation
Committee determines the amount of bonus to be paid on an individual basis.

Amounts reflected as "bonuses" in the "Summary Compensation Table"
above, were paid based on the criteria set forth in the MBO Bonus Plan.

LONG-TERM INCENTIVES. The Company's long-term incentive program
consists of the 1996 Stock Option Plan (the "1996 Plan") and the 2000
Nonstatutory Stock Option Plan (the "Nonstatutory Plan"). In fiscal 2001, the
Company granted 825,000 stock options to its executive officers under the 1996
Plan, and no shares have been awarded under the Nonstatutory Plan. The
Compensation Committee awarded these grants in order to provide significant
links between executive compensation and stockholder interests. Such grants were
intended to provide incentive to successfully achieve certain specified revenue
and profitability targets and to maximize stockholder value over the next
several years. The 1996 Plan utilizes a combination of vesting plans designed to
enhance the long-term goals of the Company. The options have a time-based
vesting provision which encourages employees to remain with the Company. Except
for certain options granted to the Chief Executive Officer as discussed below,
the 1996 Plan options vest 25% after the first year and on a monthly basis
thereafter at a rate of 1/48th per month, which the Company believes provides a
strong incentive for employees to remain with the Company.

Future grants will be made under both the 1996 Plan and the
Nonstatutory Plan. Employees are also allowed to participate in the Company's
Employee Stock Purchase Plan (the "ESPP").

CORPORATE PERFORMANCE AND CHIEF EXECUTIVE OFFICER COMPENSATION

Mr. Spinner's base salary and bonus are based on the Company achieving
several key objectives. For fiscal year 2001, these objectives included
achieving specified financial performance for the Company, the successful
transition to new technology and an increase in market share. Mr. Spinner's base
salary during fiscal 2001 as President and Chief Executive Officer was $280,305.
Mr. Spinner was also eligible for a $100,000 performance bonus. Mr. Spinner
requested, however, that he not be considered for this bonus for the 2001 fiscal
year. In fiscal 2001, Mr. Spinner received 440,000 option regrants, replacing
previously cancelled stock options, for 440,000 shares of Common Stock. The
vesting commencement date of these grants is January 1, 2003, and these options
shall vest monthly over a twenty four month period following the vesting
commencement date. These replacement grants were issued pursuant to the Option
Exchange Program, which is detailed in the Compensation of Executive Officers
section above and in the Option Repricing Information section below.

LIMITATION ON DEDUCTION OF COMPENSATION PAID TO CERTAIN EXECUTIVE
OFFICERS

Section 162(m) of the Internal Revenue Code (the "Code") limits the
Company to a deduction for federal income tax purposes of no more than $1
million of compensation paid to certain Named Executive Officers in a taxable
year. Compensation above $1 million may be deducted if it is "performance-based
compensation" within the meaning of the Code.

The statute containing this law and the applicable regulations offer a
number of transitional exceptions to this deduction limit for pre-existing
compensation plans, arrangements and binding contracts. As a result, the
Compensation Committee believes that at the present time it is quite unlikely
that the compensation paid to any Named Executive Officer in a taxable year
which is subject to the deduction limit will exceed $1 million. Therefore, the
Compensation Committee has not yet established a policy for determining which
forms of incentive compensation awarded to its Named Executive Officers shall be
designed to qualify as "performance-based compensation." The Compensation
Committee intends to continue to evaluate the effects of the statute and
regulations and to comply with Code Section 162(m) in the future to the extent
consistent with the best interests of the Company.

OPTION REPRICING INFORMATION

The Company believes a cornerstone of its success has been the
retention and motivation of its employees through the Company's long-term
incentive program, which includes the 1996 Plan and the Nonstatutory Plan
(collectively, the "Plans"). Many of the outstanding options under the Plans,
however, had exercise prices that were significantly higher than the then
current market price of the Company's Common Stock. Accordingly, these options
no longer provided the intended long-term incentive and the Company determined
it was appropriate to offer an exchange program.

In June 2001, the Company instituted an option exchange program whereby
all employees were given the option to cancel certain previously granted options
in exchange for newly granted options on a one-to-one basis (the "Program"). On
June 6, 2001, the Company granted under the Plans options representing 10% of
the cancelled options (the "Short-Term Options") to those employees who elected
to participate in the Program (the "Participants"). On December 12, 2001, the
Company granted under the Plans options representing 90% of the cancelled
options to the Participants. All options granted under the Program have an
exercise price equal to the market price of the Company's Common Stock on the
date of grant. The Short-Term Options vested 100% six months after the date of
grant and had a term of nine months. All options granted under the Program,
other than Short-Term Options, vest 25% after the first year and on a monthly
basis thereafter at a rate of 1/48th per month. All options granted under the
Program, other than Short-Term Options, have a term of ten years.

The table on the following page shows certain information concerning
the repricing of options received by executive officers under the Program since
the Company's Initial Public Offering.

TEN YEAR OPTION REPRICINGS

LENGTH OF
NUMBER OF MARKET ORIGINAL
SECURITIES PRICE OF EXERCISE OPTION
UNDERLYING STOCK AT PRICE AT NEW TERM
OPTIONS TIME OF TIME OF EXERCISE REMAINING
REPRICED REPRICING REPRICING PRICE AT DATE OF
NAME DATE (#) ($) ($) ($) REPRICING
------------------------------ ----------- ---------------- ---------------- --------------- ---------------- ----------------

Robert A. Spinner 6/6/01 44,000 8.82 14.50 8.82 9.25 years
President and 12/12/01 396,000 2.28 14.50 2.28 8.75 years
Chief Executive Officer

------------------------------------------------------------------------------------------------------------------------------
Kenneth R. Hahn 6/6/01 2,500 8.82 9.00 8.82 8.5 years
Chief Financial Officer 6/6/01 4,500 8.82 14.50 8.82 9.25 years
12/12/01 22,500 2.28 9.00 2.28 8 years
12/12/01 40,500 2.28 14.50 2.28 8.75 years

------------------------------------------------------------------------------------------------------------------------------
Elizabeth A. Ireland 6/6/01 5,000 8.82 14.50 8.82 9.25 years
Vice President of 12/12/01 45,000 2.28 14.50 2.28 8.75 years
Marketing

------------------------------------------------------------------------------------------------------------------------------
Allen F. Nordgren 6/6/01 4,500 8.82 14.50 8.82 9.25 years
Vice President of
Professional Services 12/12/01 40,500 2.28 14.50 2.28 8.75 years

------------------------------------------------------------------------------------------------------------------------------
Mark K. Oney 6/6/01 3,000 8.82 29.75 8.82 9 years
Vice President of 6/6/01 1,000 8.82 6.23 8.82 9.5 years
Engineering 12/12/01 27,000 2.28 29.75 2.28 8.5 years
12/12/01 9,000 2.28 6.23 2.28 9 years

------------------------------------------------------------------------------------------------------------------------------
Donald E. Smith 6/6/01 9,000 8.82 9.00 8.82 8.5 years
Vice President of Hosted 6/6/01 3,000 8.82 29.75 8.82 9 years
Operations and Customer 6/6/01 2,000 8.82 14.50 8.82 9.25 years
Advocacy 12/12/01 81,000 2.28 9.00 2.28 8 years
12/12/01 27,000 2.28 29.75 2.28 8.5 years
12/12/01 18,000 2.28 14.50 2.28 8.75 years

------------------------------------------------------------------------------------------------------------------------------
David A. Yarnold 6/6/01 3,000 8.82 29.75 8.82 9 years
Vice President of 6/6/01 1,000 8.82 14.50 8.82 9.25 years
Worldwide Sales 12/12/01 27,000 2.28 29.75 2.28 8.5 years
12/12/01 9,000 2.28 14.50 2.28 8.75 years

------------------------------------------------------------------------------------------------------------------------------

CONCLUSION

Through the plans described above, a significant portion of the
Company's executive compensation program, including Mr. Spinner's compensation,
is contingent on Company performance, and realization of benefits is closely
linked to increases in long-term stockholder value. The Company remains
committed to this philosophy of pay for performance, recognizing that the
competitive market for talented executives and the volatility of the Company's
business may result in highly variable compensation for a particular time
period.

From the members of the Compensation Committee:

Christopher D. Brennan
John R. Hummer
Ted E. Schlein

PERFORMANCE MEASUREMENT COMPARISON (1)

The following graph shows the total stockholder return of an investment
of $100 in cash on January 27, 2000 for (i) the Company's Common Stock, (ii) the
JP Morgan H&Q Technology Index and (iii) the Nasdaq Stock Market - U.S. Index.
All values are calculated as of the end of each calendar month during 2000 and
2001:

EXTENSITY, INC.
JPMORGAN H & Q TECHNOLOGY INDEX
NASDAQ STOCK MARKET - U.S. INDEX

[PERFORMANCE GRAPH]

JPMorgan H&Q Stock Indices:
2002 Proxy Performance Graph Data

MONTHLY DATA SERIES
SCALED PRICES: Stock and index prices scaled to 100 at 1/27/00

JPMorgan Nasdaq
DATES Extensity, Inc. H&Q Technology Stock Market - U.S.
------- --------------- -------------- -------------------
1/27/00 100 100 100
Jan-00 289.38 98.00 97.52
Feb-00 362.50 125.26 116.07
Mar-00 240.00 115.55 113.67
Apr-00 61.25 103.07 95.61
May-00 85.94 90.62 84.08
Jun-00 171.25 103.79 98.84
Jul-00 80.94 97.15 93.48
Aug-00 112.50 114.27 104.53
Sep-00 105.00 101.90 90.95
Oct-00 63.75 92.62 83.48
Nov-00 39.06 66.30 64.32
Dec-00 30.08 66.22 60.90
Jan-01 38.13 75.72 68.29
Feb-01 44.06 54.08 52.87
Mar-01 29.69 46.31 45.46
Apr-01 39.75 55.18 52.24
May-01 45.30 52.30 52.18
Jun-01 50.50 51.62 53.58
Jul-01 20.25 48.32 50.17
Aug-01 25.20 42.99 44.71
Sep-01 14.00 33.81 37.17
Oct-01 11.00 38.75 41.94
Nov-01 10.20 45.07 47.91
Dec-01 10.90 45.77 48.33

(1) This Section is not "soliciting material," is not deemed "filed" with the
SEC and is not to be incorporated by reference in any filing of the Company
under the 1933 Act or the 1934 Act whether made before or after the date hereof
and irrespective of any general incorporation language in any such filing.

CERTAIN TRANSACTIONS

At December 31, 2001, the Company had loans outstanding in the
principal amount of $250,000.00 to Mr. Smith and $94,999.50 to Mr. Oney, each of
whom are executive officers of the Company. Mr. Smith's loan was entered into in
January 2000 and Mr. Oney's loan was entered into in August 1999. The loans were
entered into for the purpose of assisting each such officer with the early
exercise of certain of their stock option grants. Each such loan is evidenced by
a full recourse promissory note secured either by shares of the Company's Common
Stock or other collateral securing each such loan valued in excess of the
principal balance of each such loan. Interest on Mr. Smith's loan is compounded
semiannually at a rate of 6.12% per annum. Interest on Mr. Oney's loan is
compounded semiannually at a rate of 5.87% per annum. Since the commencement of
fiscal 2001, the largest aggregate indebtedness of Mr. Smith and Mr. Oney under
such loans was $281,335 and $108,927, respectively, including principal and
accrued interest.

The Company has entered into indemnity agreements with certain officers
and directors which provide, among other things, that the Company will indemnify
such officer or director, under the circumstances and to the extent provided for
therein, for expenses, damages, judgments, fines and settlements such officer or
director may be required to pay in actions or proceedings which he or she is or
may be made a party by reason of his or her position as a director, officer or
other agent of the Company, and otherwise to the fullest extent permitted under
Delaware law and the Company's Bylaws.

OTHER MATTERS

The Board of Directors knows of no other matters that will be presented
for consideration at the Annual Meeting. If any other matters are properly
brought before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.

By Order of the Board of Directors

BY /S/ KENNETH R. HAHN
----------------------
KENNETH R. HAHN
Secretary

April 15, 2002

DELIVERY OF THIS PROXY STATEMENT

The Securities and Exchange Commission has adopted rules that permit companies
and intermediaries (e.g., brokers) to satisfy the delivery requirements for
proxy statements with respect to two or more security holders sharing the same
address by delivering a single proxy statement addressed to those security
holders. This process, which is commonly referred to as "householding,"
potentially means extra convenience for securityholders and cost savings for
companies.

This year, a number of brokers with account holders who are Extensity, Inc.
stockholders may be "householding" our proxy materials. A single proxy statement
would be delivered to multiple stockholders sharing an address unless contrary
instructions have been received from the affected stockholders. Once you have
received notice from your broker or us that they will be "householding"
communications to your address, "householding" will continue until you are
notified otherwise or until you revoke your consent. If, at any time, you no
longer wish to participate in "householding" and would prefer to receive a
separate proxy statement, please notify your broker, direct your written request
to Corporate Secretary, Extensity, Inc., 2200 Powell Street, Suite 300
Emeryville, CA 94608 or contact Kenneth R. Hahn at (510) 594-5755.

Stockholders who currently receive multiple copies of the proxy statement at
their address and would like to request "householding" of their communications
should contact their broker.

A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001 IS AVAILABLE WITHOUT
CHARGE UPON WRITTEN REQUEST TO: CORPORATE SECRETARY, EXTENSITY, INC., 2200
POWELL STREET, SUITE 300, EMERYVILLE, CA 94608.

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COMPANY #
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CONTROL #
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EXTENSITY, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 31, 2002

The undersigned hereby appoints Robert A. Spinner and Kenneth R. Hahn,
and each of them, as attorneys and proxies of the undersigned, with full power
of substitution, to vote all of the shares of stock of Extensity, Inc. which the
undersigned may be entitled to vote at the Annual Meeting of Stockholders of
Extensity, Inc. to be held in Conference Room D at 2200 Powell Street,
Emeryville, California on Friday, May 31, 2002 at 9:00 a.m. (local time), and at
any and all postponements, continuations and adjournments thereof, with all
powers that the undersigned would possess if personally present, upon and in
respect of the following matters and in accordance with the following
instructions, with discretionary authority as to any and all other matters that
may properly come before the meeting.

UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR
ALL NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2, AS MORE SPECIFICALLY
DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS
PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.

(Please Sign on Reverse Side)

PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!

ANNUAL MEETING OF STOCKHOLDERS
EXTENSITY, INC.

MAY 31, 2002

Mark, sign and date your proxy card and return it in the postage-paid envelope
we have provided or return it to Extensity, Inc., 2200 Powell Street, Suite 300,
Emeryville, California 94608.

-----------------PLEASE DETACH HERE AND MAIL IN ENVELOPE PROVIDED---------------

MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED BELOW.

PROPOSAL 1: To elect directors to hold office until the 2003 Annual Meeting
of Stockholders and until their successors are elected.

|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY to vote for
(except as marked to the contrary all nominees listed below.
below).

NOMINEES: Robert A. Spinner, Sharam I. Sasson, Christopher D. Brennan,
John R. Hummer, David A. Reed and Ted E. Schlein

TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S) WRITE SUCH NOMINEE(S)' NAME(S)
BELOW:

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MANAGEMENT RECOMMENDS A VOTE FOR PROPOSAL 2.

PROPOSAL 2: To ratify selection of PricewaterhouseCoopers LLP as independent
auditors of the Company for its fiscal year ending
December 31, 2002.

|_| FOR |_| AGAINST |_| ABSTAIN

Signature(s) Dated
---------------------- ----------------------------------------

PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON. IF THE STOCK IS REGISTERED IN
THE NAMES OF TWO OR MORE PERSONS, EACH SHOULD SIGN. EXECUTORS, ADMINISTRATORS,
TRUSTEES, GUARDIANS AND ATTORNEYS-IN-FACT SHOULD ADD THEIR TITLES. IF SIGNER IS
A CORPORATION, PLEASE GIVE FULL CORPORATE NAME AND HAVE A DULY AUTHORIZED
OFFICER SIGN, STATING TITLE. IF SIGNER IS A PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED PERSON.