<PAGE> 1
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 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
SCB COMPUTER TECHNOLOGY, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Not Applicable
- --------------------------------------------------------------------------------
(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:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
(SCB LOGO/LETTERHEAD)
NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 16, 1999
To our Shareholders:
The 1999 Annual Meeting of Shareholders of SCB Computer Technology, Inc.
(the "Company") will be held at the Company's Emerging Technology Center, 3239
Players Club Parkway, Memphis, Tennessee, on September 16, 1999, beginning at
10:00 a.m. (Memphis time), for the following purposes:
1. to elect four directors to serve on the Company's Board of Directors for
a one-year term;
2. to ratify the appointment of Ernst & Young LLP as the Company's
independent public accountants for the fiscal year ending April 30,
2000; and
3. to transact any other business that properly comes before the meeting.
Shareholders of record at the close of business on July 23, 1999, are
entitled to receive notice of, and to vote at, the meeting and any postponement
or adjournment thereof.
You are cordially invited to attend the meeting. Regardless of whether you
plan to attend the meeting in person, please complete, date and sign the
enclosed proxy card and return it promptly in the accompanying postage-paid
envelope.
By Order of the Board of Directors,
/s/ Gordon L. Bateman
Gordon L. Bateman
Secretary
August 12, 1999
YOUR VOTE IS IMPORTANT
TO ENSURE THAT YOU ARE REPRESENTED AT THE MEETING, PLEASE COMPLETE, SIGN, DATE
AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE, REGARDLESS
OF WHETHER YOU PLAN TO ATTEND THE MEETING IN PERSON. NO ADDITIONAL POSTAGE IS
NECESSARY IF THE PROXY IS MAILED IN THE UNITED STATES. YOU MAY REVOKE YOUR PROXY
AT ANY TIME BEFORE IT IS VOTED AT THE MEETING.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ABOUT THE MEETING........................................... 1
What is the purpose of the meeting?....................... 1
Who is entitled to vote?.................................. 1
Who can attend the meeting?............................... 1
What constitutes a quorum?................................ 1
How do I vote my shares?.................................. 2
How do I vote the shares credited to my KSOP account?..... 2
Can I change my vote after I return my proxy card or KSOP
voting instruction form?............................... 2
What are the Board's recommendations?..................... 2
What vote is required to approve each item?............... 2
STOCK OWNERSHIP............................................. 4
How much common stock do the Company's largest
shareholders and its management own?................... 4
Compliance with Section 16(a) Filing Requirements......... 5
ITEM 1 -- ELECTION OF DIRECTORS............................. 6
General................................................... 6
Nominees for Director..................................... 6
How does the Board of Directors operate?.................. 6
How are directors nominated?.............................. 7
How often did the Board of Directors and its committees
meet in fiscal 1999?................................... 7
How are directors compensated?............................ 7
Compensation Committee Interlocks and Insider
Participation.......................................... 8
EXECUTIVE OFFICER COMPENSATION.............................. 8
Report of the Compensation Committee on Executive
Compensation........................................... 8
Summary Compensation Table................................ 10
Stock Option Grants in Fiscal 1999........................ 10
Stock Option Exercises and Values for Fiscal 1999......... 11
Employment Agreements..................................... 11
Comparison of Total Shareholder Returns................... 13
ITEM 2 -- RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS.... 14
OTHER MATTERS............................................... 14
ADDITIONAL INFORMATION...................................... 14
Solicitation of Proxies................................... 14
Shareholder Proposals for 2000 Annual Meeting of
Shareholders........................................... 14
</TABLE>
<PAGE> 4
(SCB LOGO/LETTERHEAD)
PROXY STATEMENT
FOR
1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 16, 1999
This Proxy Statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of SCB Computer Technology, Inc. (the
"Company") for use at the 1999 Annual Meeting of Shareholders to be held at the
Company's Emerging Technology Center, 3239 Players Club Parkway, Memphis,
Tennessee, on September 16, 1999, beginning at 10:00 a.m. (Memphis time), and at
any postponement or adjournment thereof. This Proxy Statement and the enclosed
proxy card, together with the Company's 1999 Annual Report to Shareholders, are
first being sent to the shareholders of the Company entitled to vote at the
meeting on or about August 12, 1999.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE MEETING?
At the meeting, shareholders will act upon the matters outlined in the
accompanying Notice of 1999 Annual Meeting of Shareholders. These matters
include (1) election of four directors to serve on the Company's Board of
Directors for a one-year term, and (2) ratification of the appointment of Ernst
& Young LLP as the Company's independent public accountants for the fiscal year
ending April 30, 2000. In addition, the Company's management will report on the
performance of the Company during fiscal 1999 and respond to questions from
shareholders.
WHO IS ENTITLED TO VOTE?
Only shareholders of record at the close of business on the record date,
July 23, 1999, are entitled to receive notice of the meeting and to vote the
shares of common stock that they held on that date at the meeting. Each
outstanding share entitles its holder to cast one vote on each matter to be
voted on at the meeting.
WHO CAN ATTEND THE MEETING?
All shareholders as of the record date or their duly appointed proxies,
together with their guests, may attend the meeting.
WHAT CONSTITUTES A QUORUM?
The presence at the meeting, in person or by proxy, of the holders of a
majority of the shares of the Company's common stock outstanding on the record
date will constitute a quorum, thereby permitting the shareholders to conduct
their business at the meeting. As of the record date, there were 24,711,924
outstanding shares of common stock. Broker non-votes and proxies received but
<PAGE> 5
marked as abstentions will be included in the calculation of the number of
shares considered present at the meeting.
HOW DO I VOTE MY SHARES?
If you complete and properly sign the accompanying proxy card and return it
to the Company, it will be voted as you direct. If you are a registered
shareholder and attend the meeting, you may deliver your completed proxy card or
vote in person at the meeting. "Street name" shareholders who wish to vote at
the meeting will need to obtain a proxy from the broker or other nominee that
holds their shares.
HOW DO I VOTE THE SHARES CREDITED TO MY KSOP ACCOUNT?
If you are a participant in the Company's KSOP, you may vote the shares of
common stock credited to your KSOP account as of the record date. You may vote
by instructing Merrill Lynch Trust Company, the trustee of the KSOP, pursuant to
the voting instruction form being mailed with this Proxy Statement to KSOP
participants. The trustee will vote the shares of common stock credited to your
KSOP account in accordance with the instructions set forth in your voting
instruction form if it is completed and properly signed and is received by Chase
Mellon Shareholder Services, the Company's voting instruction tabulator, by
September 14, 1999. If your voting instructions are not received by such date,
the trustee will vote the shares of common stock credited to your KSOP account
in the same proportion that it votes the shares for which timely instructions
were received.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD OR KSOP VOTING INSTRUCTION
FORM?
Yes. Even after you have submitted your proxy card, you may change your
vote at any time before the proxy is exercised by filing with the Secretary of
the Company either a written notice of revocation or a duly executed proxy card
bearing a later date. "Street name" shareholders must contact their broker or
other nominee and follow their instructions if they wish to change their vote.
If you are a participant in the KSOP, you may revoke your previously given
voting instructions by filing with the voting instruction tabulator by September
14, 1999, either a written notice of revocation or a duly executed voting
instruction form bearing a later date. The powers of the proxy holders will be
suspended if you attend the meeting in person and so request, although
attendance at the meeting will not by itself revoke a previously granted proxy
or voting instruction.
WHAT ARE THE BOARD'S RECOMMENDATIONS?
Unless you give other instructions on your proxy card, the persons named as
proxy holders on the proxy card will vote your shares in accordance with the
recommendations of the Board of Directors. The Board's recommendations, together
with a description of each item, are set forth in this Proxy Statement. In
summary, the Board recommends a vote:
- for election of the nominated slate of four directors to serve on the
Company's Board of Directors for a one-year term (see page 6); and
- for ratification of the appointment of Ernst & Young LLP as the Company's
independent public accountants for the fiscal year ending April 30, 2000
(see page 14).
With respect to any other item of business that properly comes before the
meeting, the proxy holders will vote your shares as recommended by the Board of
Directors or, if no recommendation is given, as they may determine in their own
discretion.
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
ELECTION OF DIRECTORS. The affirmative vote of a plurality of the votes
cast at the meeting is required for the election of directors. A properly
executed proxy card marked "WITHHOLD
2
<PAGE> 6
AUTHORITY" with respect to the election of one or more directors will not be
voted with respect to the director or directors indicated, although it will be
counted for the purpose of determining whether there is a quorum.
OTHER ITEMS. For ratification of the appointment of Ernst & Young LLP as
the Company's independent public accountants for the fiscal year ending April
30, 2000, and for each other item of business that properly comes before the
meeting, the affirmative vote of the holders of a majority of the shares of
common stock present at the meeting, in person or by proxy, and entitled to vote
on the item will be required for approval. A properly executed proxy card marked
"ABSTAIN" with respect to any such matter will not be voted, although it will be
counted for purposes of determining whether there is a quorum.
In general, if you hold shares of common stock in "street name" through a
broker or other nominee, and if your broker or other nominee is not instructed
or otherwise empowered to vote your shares at a meeting with respect to a
particular matter, then your shares will constitute "broker non-votes" as to
such matter. However, there will be no "broker non-votes" at this meeting,
because the nature of the matters to be acted upon by the shareholders at this
meeting is such that your broker or other nominee will have discretion to vote
your shares even in the absence of express instructions from you.
3
<PAGE> 7
STOCK OWNERSHIP
HOW MUCH COMMON STOCK DO THE COMPANY'S LARGEST SHAREHOLDERS AND ITS MANAGEMENT
OWN?
The table below shows the amount of common stock of the Company
beneficially owned as of June 30, 1999 (except as otherwise noted below) by (1)
each shareholder known to management of the Company to be the beneficial owner
of more than 5% of the outstanding shares of common stock, (2) each director and
nominee for director of the Company, (3) each executive officer of the Company
named in the Summary Compensation Table on page 10 of this Proxy Statement, and
(4) all directors, director nominees, and executive officers of the Company as a
group.
<TABLE>
<CAPTION>
PERCENTAGE
NUMBER OF SHARES OF SHARES
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1)(-3) OUTSTANDING(4)
------------------------ ------------------------- --------------
<S> <C> <C>
Ben C. Bryant, Jr........................................... 5,068,556 20.5%
1365 W. Brierbrook Road
Memphis, Tennessee 38138
T. Scott Cobb............................................... 4,476,893 18.1
1365 W. Brierbrook Road
Memphis, Tennessee 38138
SCB Computer Technology, Inc. KSOP(5)....................... 2,333,336 9.4
1365 W. Brierbrook Road
Memphis, Tennessee 38138
Lord, Abbett & Co.(6)....................................... 1,342,846 5.4
767 Fifth Avenue
New York, New York 10153
Gordon L. Bateman........................................... 242,753 *
Jeffrey S. Cobb............................................. 214,693 *
Gary E. McCarter............................................ 97,225 *
James E. Harwood............................................ 31,000 *
Joseph W. McLeary........................................... 31,000 *
All directors, director nominees, and executive officers as
a group (7 persons)....................................... 10,162,120 40.6
</TABLE>
- ---------------
* Less than 1% of the 24,711,924 outstanding shares of common stock.
(1) The numbers of shares of common stock shown in the table include shares that
are individually or jointly owned, as well as shares over which the
individual, directly or indirectly, has either sole or shared investment or
voting authority. Certain of the Company's directors, director nominees, and
executive officers disclaim beneficial ownership of some of the shares of
common stock included in the table as follows: Mr. Bryant -- 924,202 shares
held by his wife and 33,976 shares held directly or indirectly by his
grandchildren; T. Scott Cobb -- 926,058 shares held by his wife and 139,738
shares held directly or indirectly by his daughter; and all directors,
director nominees, and executive officers as a group -- 2,023,974 shares.
(2) For certain of the Company's executive officers, the numbers of shares of
common stock shown in the table include the following numbers of shares held
in the trust created pursuant to the SCB Computer Technology, Inc. KSOP (the
"KSOP") that were credited to their respective accounts as of June 30, 1999:
Mr. Bryant -- 283,085 shares; T. Scott Cobb -- 283,085 shares; Mr.
Bateman -- 71,872 shares; Jeffrey S. Cobb -- 4,940 shares; and all executive
officers as a group -- 642,982 shares.
(3) For certain of the Company's directors, director nominees, and executive
officers, the numbers of shares of common stock shown in the table include
the following numbers of shares that are issuable by the Company upon the
exercise of options as of June 30, 1999, or within 60 days thereafter: Mr.
Bateman -- 82,725 shares; Jeffrey S. Cobb -- 82,725 shares; Mr.
McCarter -- 97,225 shares; Mr. Harwood -- 25,000
4
<PAGE> 8
shares; Mr. McLeary -- 25,000 shares; and all directors, director nominees,
and executive officers as a group -- 312,675 shares.
(4) The percentages of shares outstanding were calculated based on the
24,711,924 shares of common stock that were outstanding as of June 30, 1999.
For the purpose of calculating the percentage ownership of each beneficial
owner, the shares outstanding include shares that such person has the right
to acquire as of June 30, 1999, or within 60 days thereafter.
(5) Approximately 1,341 employees of the Company participate in the KSOP.
Pursuant to the terms of the KSOP and the related trust agreement, Merrill
Lynch Trust Company, the trustee of the KSOP, is required to vote the shares
of common stock credited to participants' accounts in accordance with their
instructions. If the trustee does not receive voting instructions from a
participant in a timely manner, the trustee is to vote the shares of common
stock credited to the participant's KSOP account in the same proportion that
it votes the shares for which timely instructions are received.
(6) Lord, Abbett & Co. ("LAC") is a registered investment adviser. The shares of
common stock shown in the table are beneficially owned by clients of LAC.
The source of this information is Amendment No. 1 to the Schedule 13G filed
by LAC with the Securities and Exchange Commission (the "SEC") on February
12, 1999, with beneficial ownership of the shares of common stock being
reported as of December 31, 1998.
COMPLIANCE WITH SECTION 16(A) FILING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and the beneficial owners of more than 10% of
the outstanding shares of the Company's common stock (the "Reporting Persons")
to file initial reports of, and subsequent reports of changes in, beneficial
ownership of the common stock with the SEC. The Reporting Persons are required
to furnish the Company with copies of all Section 16(a) reports filed with the
SEC. Based solely on the Company's review of the copies of such reports and
written representations from certain Reporting Persons furnished to the Company,
the Company believes that the Reporting Persons complied with all applicable
Section 16(a) filing requirements during fiscal 1999.
5
<PAGE> 9
ITEM I -- ELECTION OF DIRECTORS
GENERAL
The Board of Directors of the Company is composed of four directors. Each
director serves for a term of one year.
NOMINEES FOR DIRECTOR
The Board of Directors proposes that the four nominees described below be
elected to serve as directors of the Company for a one-year term and until their
successors are duly elected and qualified. All of the nominees are incumbent
directors. Each nominee has consented to serve on the Board.
T. SCOTT COBB. Mr. Cobb, age 62, is a founder of the Company and has been
Chairman of the Board since its formation in 1984. He also was President of the
Company from 1984 to 1996. Mr. Cobb was a partner in Seltmann, Cobb & Bryant,
the Company's predecessor, from its formation in 1976 to 1984. He was associated
with the accounting firm of Touche Ross & Company from 1975 to 1976, and held
several engineering positions, including chief computer engineer, at Grumman
Aircraft Engineering Corporation from 1961 to 1972. Mr. Cobb is the father of
Jeffrey S. Cobb, the Company's Chief Operating Officer.
BEN C. BRYANT, JR. Mr. Bryant, age 52, is a founder of the Company and has
been Vice Chairman of the Board, Chief Executive Officer, and Treasurer since
1984. He also has been President of the Company since 1996. Mr. Bryant was a
partner in Seltmann, Cobb & Bryant from its formation in 1976 to 1984. He was
associated with Touche Ross & Company from 1974 to 1976, and held a variety of
positions, including manager of business systems development, with McDonnell
Douglas Corporation from 1968 to 1974.
JAMES E. HARWOOD. Mr. Harwood, age 63, has been a director of the Company
since 1996. He has been President of Sterling Equities, Inc., an investment
services firm, since 1990. Mr. Harwood held several executive positions with
Schering-Plough Corporation, a pharmaceutical and health care products company,
from 1980 to 1990. He also is a director of Morgan Keegan & Company, Inc., a
investment banking firm; Union Planters Corporation, a bank holding company; and
Washington Life Insurance Co.
JOSEPH W. MCLEARY. Mr. McLeary, age 60, has been a director of the Company
since 1996. He has been Chairman of the Board of Executive Financial Services,
Inc., a financial consulting company, since 1997. He was Chairman of the Board
and Chief Executive Officer of Midland Financial Group, Inc., an automobile
insurance company, from 1987 to 1997. Mr. McLeary is a director of Equity Inns,
Inc., a real estate investment trust specializing in hotel properties.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR EACH OF
THE NOMINEES FOR DIRECTOR LISTED ABOVE.
If any nominee were to become unavailable to serve as a director, the Board
may designate a substitute nominee. In that case, the persons named as proxies
will vote for the substitute nominee designated by the Board.
HOW DOES THE BOARD OF DIRECTORS OPERATE?
The Board of Directors has established a policy of holding meetings on a
regular bi-monthly basis and on other occasions when required by special
circumstances. The Board delegates certain of its functions to its standing
Audit and Compensation Committees, the principal functions and members of which
are as follows:
AUDIT COMMITTEE. The Audit Committee assists the directors in fulfilling
their responsibilities and duties to the Company's shareholders and other
constituencies relating to the quality and integrity of the Company's accounting
and financial reporting practices. The Audit Committee is
6
<PAGE> 10
authorized to recommend to the Board of Directors the retention or discharge of
the Company's independent auditors; review and approve the engagement of the
independent auditors, including the scope, extent and procedures of the audits
and the fees to be paid therefor; review, in consultation with the independent
auditors, the audit results and their proposed opinion letters or audit reports
and any related management letters; review and approve the audited financial
statements of the Company; consult with the independent auditors and management
of the Company on the adequacy of internal accounting controls; review the
independence of the independent auditors; review and approve the engagement of
accounting firms for non-audit services; oversee the internal audit function to
ensure proper recording of accounting and financial information, the Company's
compliance with applicable regulations, and the ethical conduct of its affairs;
and direct and supervise investigations into matters within the scope of its
duties and responsibilities. The members of the Audit Committee are Messrs.
Harwood and McLeary.
COMPENSATION COMMITTEE. The Compensation Committee assists the directors
in addressing the compensation of the Company's directors, executive officers
and other employees. The Compensation Committee is authorized to review and
approve the Company's compensation policies and programs; review the performance
of the chief executive officer on an annual basis; and review and approve the
salaries, bonus awards, and grants of stock options and other incentive
compensation for executive officers. The members of the Compensation Committee
are Messrs. Harwood and McLeary.
HOW ARE DIRECTORS NOMINATED?
The Board of Directors does not have a nominating committee. Nominations
for election as a director of the Company may be made by the Board, a nominating
committee appointed by the Board, or any shareholder entitled to vote for the
election of directors. As required by the Company's bylaws, shareholder
nominations for election to the Board must be made by written notice delivered
to the Secretary of the Company in a timely manner and must identify the nominee
by name and provide pertinent information concerning his or her background and
experience.
HOW OFTEN DID THE BOARD OF DIRECTORS AND ITS COMMITTEES MEET IN FISCAL 1999?
The Board of Directors met seven times and took action by unanimous written
consent four times during fiscal 1999. The Audit Committee met once during
fiscal 1999. The Compensation Committee met two times and took action by
unanimous written consent once during fiscal 1999. Each director attended more
than 75% of the total number of meetings of the Board and its committees on
which he or she served in fiscal 1999.
HOW ARE DIRECTORS COMPENSATED?
The Company compensates its non-employee (i.e., outside) directors for
service in such capacity. Directors who are also employees of the Company are
not separately compensated for their service as directors. All directors are
reimbursed for their actual out-of-pocket expenses incurred in attending
meetings.
The Company provides cash and non-cash compensation to its outside
directors. Their compensation consists of (1) an annual cash retainer of $20,000
payable quarterly; (2) a cash fee of $500 for each meeting of the Board of
Directors or a Board committee attended during the year; (3) upon the
commencement of service as a director, a grant of stock options to purchase
10,000 shares of common stock at an exercise price equal to the fair market
value on the effective date of grant; and (4) upon reelection as a director, a
grant of stock options to purchase 5,000 shares of common stock at an exercise
price equal to the fair market value on the effective date of grant. The
principal goals of this compensation program are to enhance the equity and
incentive elements of outside director compensation through reliance on stock
option grants, to reward such directors for
7
<PAGE> 11
taking on extra responsibilities such as service on a committee, and to make the
total compensation package an effective tool for the retention and recruitment
of qualified, talented outside directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
James E. Harwood and Joseph W. McLeary served during fiscal 1999 as members
of the Compensation Committee of the Board of Directors. None of such persons is
or has been an officer or employee of the Company or any of its subsidiaries.
EXECUTIVE OFFICER COMPENSATION
The following Report of the Compensation Committee on Executive
Compensation and the cumulative total shareholder returns graph included
elsewhere in this Proxy Statement do not constitute soliciting material and
should not be deemed filed or incorporated by reference into any other filing by
the Company under the Securities Act of 1933 or the Securities Exchange Act of
1934, except to the extent that the Company specifically incorporates such
information by reference therein.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
OVERVIEW. The Company's executive compensation program is administered by
the Compensation Committee of the Board of Directors (the "Committee"). The
Committee is composed of James E. Harwood and Joseph W. McLeary. The Committee
is responsible for making decisions with respect to the compensation of the
Company's executive officers, including the Chief Executive Officer. In making
decisions regarding executive compensation, the Committee has attempted to
implement a policy that serves the financial interests of the Company's
shareholders while providing appropriate incentives to its executive officers.
COMPENSATION PHILOSOPHY. The Company's executive compensation program is
designed to attract and retain high caliber executives and motivate them to
achieve superior performance for the benefit of the Company's shareholders. The
Committee believes that a significant portion of executive officers'
compensation potential on an annual basis should be at risk based on the
Company's performance and total shareholder return. When the Company's
performance does not meet criteria established by the Committee, incentive
compensation is reduced accordingly.
COMPENSATION PROGRAM. The compensation for executive officers of the
Company consists primarily of a base salary and an annual incentive bonus
opportunity. The total cash compensation (i.e., base salary plus annual
incentive bonus) paid to the Company's executive officers is intended to be
competitive with the total cash compensation paid to executive officers in
similar positions at companies primarily in the information technology services
industry with revenues similar to those of the Company. These components of
executive compensation are discussed more fully below.
BASE SALARY. The Committee determines the base salaries of all executive
officers and reviews the Chief Executive Officer's proposals for the salaries of
other senior officers. The Committee does not rely on a specific list of
companies to compare salaries, but seeks relevant compensation data. Salaries
are reviewed annually, and increases are based primarily on merit according to
each executive officer's achievement of specific performance objectives.
ANNUAL INCENTIVE BONUS. The Company implemented a management bonus plan
for its executive officers and other senior officers for performance in fiscal
1999. The management bonus plan provided for the creation of a bonus pool of up
to $1,000,000 if the Company achieved net income before certain extraordinary
items in fiscal 1999 in excess of a targeted level established by the Board of
Directors. Subject to approval by the Board of Directors, one-half of the bonus
pool would be paid to the Company's executive officers, and the other one-half
may be paid to other senior officers as determined by the President. Because the
Company did not achieve the targeted
8
<PAGE> 12
net income level in fiscal 1999, no bonus awards were made to the executive
officers under the management bonus plan for fiscal 1999.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. Ben C. Bryant, Jr., was the
Vice Chairman of the Board, President, Chief Executive Officer, and Treasurer of
the Company during fiscal 1999. Mr. Bryant's base salary for fiscal 1999 was
$362,500. He did not receive an annual incentive bonus for fiscal 1999. On
November 1, 1998, Mr. Bryant entered into a new employment agreement with the
Company, which is discussed in greater detail elsewhere in this Proxy Statement.
In accordance with this agreement, on November 2, 1998, the Company granted to
Mr. Bryant options to purchase 35,211 shares of common stock at a price equal to
the fair market value on the date of grant ($7.625 per share). The options have
a 10-year term and will fully vest one year after the date of grant. The
Committee considers the total compensation received by Mr. Bryant for fiscal
1999, as well as his anticipated future compensation provided for under his new
employment agreement, to be reasonable and appropriate under the circumstances.
INTERNAL REVENUE CODE LIMITS ON DEDUCTIBILITY OF COMPENSATION. Section
162(m) of the Internal Revenue Code generally disallows a tax deduction to
public corporations such as the Company for compensation over $1,000,000 paid
for any tax year to the corporation's chief executive officer and four other
most highly compensated executive officers as of the year end. However, the
Internal Revenue Code exempts qualifying performance-based compensation from the
deduction limit if certain requirements are met. The Committee currently intends
to structure performance-based compensation, including annual incentive bonuses
and stock option grants, to executive officers who may be subject to Section
162(m) in a manner that satisfies these requirements. The Board of Directors and
the Committee, however, reserve the authority to award non-deductible
compensation in other circumstances as they deem appropriate. Furthermore,
because of ambiguities and uncertainties in the application and interpretation
of Section 162(m) and the implementing regulations issued thereunder, no
assurance can be given that, notwithstanding the Company's efforts, executive
officer compensation intended to satisfy the requirements for deductibility
under Section 162(m) will in fact do so.
Submitted by the Compensation Committee:
James E. Harwood
Joseph W. McLeary
9
<PAGE> 13
SUMMARY COMPENSATION TABLE
The table below sets forth summary compensation information for each of the
last three fiscal years with respect to the Company's Chief Executive Officer
and the four other most highly compensated executive officers of the Company for
fiscal 1999 who were serving in such capacity on April 30, 1999.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL NUMBER OF
COMPENSATION STOCK
FISCAL -------------------- OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITIONS YEAR SALARY(1) BONUS GRANTED(2) COMPENSATION
---------------------------- ------ --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Ben C. Bryant, Jr...................................... 1999 $362,500 -- 35,211 $10,600(3)
Vice Chairman of the Board, President, 1998 300,000 -- -- 7,608
Chief Executive Officer, and Treasurer 1997 350,000 -- -- 5,358
T. Scott Cobb.......................................... 1999 362,500 -- 35,211 13,600(4)
Chairman of the Board 1998 300,000 -- -- 10,608
1997 350,000 -- -- 8,358
Gary E. McCarter....................................... 1999 191,154 -- -- 3,083(5)
Chief Financial Officer 1998 140,000 -- -- 1,389
1997 100,642 -- 117,000 302
Jeffrey S. Cobb........................................ 1999 178,500 -- -- 14,300(6)
Chief Operating Officer 1998 132,000 -- -- 1,990
1997 124,998 -- 60,000 1,446
Gordon L. Bateman...................................... 1999 170,000 -- -- 9,751(7)
Chief Administrative Officer 1998 140,000 -- -- 5,303
1997 134,667 -- 60,000 4,253
</TABLE>
- ---------------
(1) The salary figures shown in the table include amounts deferred by the
employees under the Company's deferred compensation plans.
(2) The numbers of shares of common stock underlying the stock options shown in
the table have been adjusted to give effect to a three-for-two stock split
on September 3, 1997, and a two-for-one stock split on April 27, 1998.
(3) Mr. Bryant's other compensation for fiscal 1999 consisted of $4,800 of
Company matching contributions under a deferred compensation plan, $4,800
for excess life insurance, and $1,000 as an automobile allowance.
(4) T. Scott Cobb's other compensation for fiscal 1999 consisted of $4,800 of
Company matching contributions under a deferred compensation plan, $7,800
for excess life insurance, and $1,000 as an automobile allowance.
(5) Mr. McCarter's other compensation for fiscal 1999 consisted of $2,083 of
Company matching contributions under a deferred compensation plan and $1,000
as an automobile allowance.
(6) Jeffrey S. Cobb's other compensation for fiscal 1999 consisted of $4,800 of
Company matching contributions under a deferred compensation plan and $9,500
as an automobile allowance.
(7) Mr. Bateman's other compensation for fiscal 1999 consisted of $4,800 of
Company matching contributions under a deferred compensation plan, $3,951
for excess life insurance, and $1,000 as an automobile allowance.
The summary compensation information for Steve N. White, a former executive
officer of the Company who resigned as of September 4, 1998, but who would have
been among the four other most highly compensated executive officers of the
Company for fiscal 1999 had he been serving in such capacity on April 30, 1999,
was previously presented in the Company's Proxy Statement dated September 25,
1998.
STOCK OPTION GRANTS IN FISCAL 1999
The table below sets forth information regarding grants of stock options
made to the executive officers named in the Summary Compensation Table during
fiscal 1999 and the potential realizable
10
<PAGE> 14
value of such stock options at assumed annual rates of stock price appreciation
for the ten-year option terms.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENTAGE OF ANNUAL RATES OF STOCK
NUMBER OF TOTAL OPTIONS PRICE APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OPTION TERM(2)
GRANTED IN EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME FISCAL 1999 FISCAL 1999 ($/SHARE) DATE(1) 5% 10%
---- ----------- ------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Ben C. Bryant, Jr....... 35,211(3) 9.0% $7.625 11/03/2008 $168,848 $427,894
T. Scott Cobb........... 35,211(3) 9.0 7.625 11/03/2008 168,848 427,894
Gary E. McCarter........ -- -- -- -- -- --
Jeffrey S. Cobb......... -- -- -- -- -- --
Gordon L. Bateman....... -- -- -- -- -- --
</TABLE>
- ---------------
(1) The Compensation Committee, which administers the 1997 Stock Incentive Plan
and the Company's other incentive plans, has general authority to
accelerate, extend or otherwise modify the benefits under the stock options
in certain circumstances within overall plan and other limitations. The
Compensation Committee has no present intention to exercise that authority
with respect to these stock options.
(2) These dollar figures represent the potential realizable value of each grant
of stock options, assuming that the market price of the common stock
appreciates in value from the date of grant to the end of the ten-year
option term at annualized rates of 5% and 10%. These assumed rates of stock
price appreciation have been established by the SEC solely for the purpose
of this disclosure. The Company's use of this option valuation methodology
should not be interpreted as an endorsement of its accuracy. The actual
value of the stock options may be significantly different, and the value
actually realized, if any, will depend upon the excess of the market value
of the common stock over the option exercise price at the time of exercise.
(3) The stock options will fully vest one year after the date of grant; however,
the Compensation Committee may, in its sole and absolute discretion,
accelerate the period during which the options vest.
STOCK OPTION EXERCISES AND VALUES FOR FISCAL 1999
The executive officers named in the Summary Compensation Table did not
exercise any stock options during fiscal 1999. The table below sets forth
information concerning the number and value of their unexercised options at
April 30, 1999.
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
APRIL 30, 1999 APRIL 30, 1999*
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Ben C. Bryant, Jr........................... -- 35,211 $ -- $ --
T. Scott Cobb............................... -- 35,211 -- --
Gary E. McCarter............................ 97,225 15,075 125,814 17,442
Jeffrey S. Cobb............................. 82,725 7,575 121,246 12,915
Gordon L. Bateman........................... 82,725 7,575 121,246 12,915
</TABLE>
- ---------------
* In accordance with the SEC's rules, the values of the unexercised in-the-money
options are calculated by multiplying the number of options by the difference
between the fair market value of the underlying shares of common stock and the
exercise price of the options. For the purposes of this table, the fair market
value of the common stock is deemed to be $6.875, which is the average of the
high and low sale prices of the common stock reported for transactions
effected on the Nasdaq Stock Market on April 30, 1999.
EMPLOYMENT AGREEMENTS
On November 1, 1998, Ben C. Bryant, Jr., and T. Scott Cobb (collectively,
the "Executives") entered into new employment agreements with the Company.
Pursuant to these agreements, Mr. Bryant serves as Vice Chairman of the Board,
President, Chief Executive Officer, and Treasurer of the Company, and Mr. Cobb
serves as Chairman of the Board of the Company. The Executives'
11
<PAGE> 15
employment agreements are identical in all material respects. The term of each
agreement is three years and expires on October 31, 2001, unless the Company or
the Executive gives written notice to the contrary at least 30 days prior to the
second anniversary of the agreement or any anniversary thereafter, in which
event the term will be extended for an additional year so that the remaining
term will always be two years from such anniversary (the "expiration date"). The
Executives' base salary is $425,000 during the first year of the agreement,
$600,000 during the second year, and $700,000 during the third and any
subsequent year. The Executives also are entitled to receive incentive
compensation as determined in accordance with any bonus plan authorized by the
Compensation Committee of the Board of Directors. In accordance with the
employment agreements, on November 2, 1998, the Company granted to each
Executive options to purchase 35,211 shares of common stock at a price equal to
the fair market value on the date of grant ($7.625 per share). The options have
a 10-year term and will fully vest one year after the date of grant.
The Executives' employment with the Company may be terminated under various
circumstances as provided in their employment agreements. If the Company
terminates an Executive's employment for "cause", or if an Executive terminates
his employment with the Company for any reason (subject to the "change in
control" provisions of his agreement), the Company will be obligated to pay the
Executive his base salary through the termination date. The term "cause" is
defined as any act that is materially inimical to the best interests of the
Company and that constitutes on the part of the Executive personal dishonesty,
willful misconduct, breach of fiduciary duty, intentional failure to perform his
stated duties as an executive officer of the Company, willful violation of any
law, governmental rule or regulation (other than traffic violations or similar
offenses) or final cease and desist order, or material breach of his employment
agreement. If the Company terminates an Executive's employment due to the
Executive's disability or for any other reason other than "cause" (subject to
the "change in control" provisions of his agreement), or if an Executive's
employment is terminated due to his death, the Company will be obligated to pay
the Executive or his estate his base salary through the expiration date.
The Executives' employment agreements also contain provisions relating to
the termination of their employment following a "change in control" of the
Company. The term "change in control" is defined as any of the following events:
(a) any person or entity, with certain exceptions, becomes the beneficial owner
of 35% or more of the combined voting power of the Company's then outstanding
securities that may be voted for the election of directors ("voting
securities"); (b) as the result of, or in connection with, any cash tender or
exchange offer, merger or other business combination, sale of assets, or
contested election (or any combination of the foregoing transactions), less than
a majority of the combined voting power of the Company's or any successor
entity's then outstanding voting securities is held in the aggregate by the
holders of the Company's outstanding voting securities immediately prior to such
transaction; or (c) during any period of two consecutive years individuals who
at the beginning of such period constitute the Board of Directors of the Company
cease for any reason to constitute at least a majority thereof, unless the first
election, or the first nomination for election by the Company's shareholders, of
each director elected during such period was approved by a vote of at least
two-thirds of the directors of the Company then still in office who were
directors of the Company at the beginning of such period. If a change in control
of the Company occurs and an Executive's employment is terminated by the Company
during the term of the Executive's employment agreement, or if the Executive
gives notice of termination of his employment for "good reason" prior to the
earlier to occur of the first anniversary of the change in control or the
expiration date, the Executive will be entitled to receive severance benefits
consisting of (1) a severance payment of $2,000,000 in cash to be paid on the
fifth day following his termination; (2) reimbursement for (a) any excise tax
payable under Section 4999 of the Internal Revenue Code with respect to such
severance payment or any other payment that the Executive has the right to
receive from the Company (the "gross-up payment") and (b) any federal, state and
local income taxes and excise tax imposed on the gross-up payment; and (3)
health insurance substantially equivalent to that provided to the Executive
immediately prior to termination until he is eligible to receive coverage under
any federal or state health care program
12
<PAGE> 16
or is covered or permitted to be covered by benefit plans of another employer
providing substantially similar coverage. Notwithstanding the foregoing, an
Executive is not entitled to any severance benefits following a change in
control of the Company if his termination of employment resulted from his death,
disability or retirement, the Company's termination of the Executive's
employment for cause, or the Executive's termination of his employment for other
than "good reason". The definition of "good reason" is generally typical of that
found in severance agreements for executive officers.
COMPARISON OF TOTAL SHAREHOLDER RETURNS
The graph below compares the cumulative total shareholder returns for the
period from February 15, 1996, to April 30, 1999, for the Company's common
stock, the CRSP Index for the Nasdaq Stock Market -- U.S. Corporations (the
"Nasdaq U.S. Corporations Index"), and the CRSP Index for Nasdaq Computer and
Data Processing Stocks (the "Nasdaq Computer and Data Processing Index"). The
graph assumes that $100 was invested on February 15, 1996 (when trading in the
common stock commenced on the Nasdaq Stock Market following the Company's
initial public offering) in the Company's common stock, the Nasdaq U.S.
Corporations Index, and the Nasdaq Computer and Data Processing Index, and that
all dividends were reinvested. Total returns for the two Nasdaq indexes are
weighted based on the market capitalization of the companies included therein.
Historic stock price performance is not indicative of future stock price
performance. The Company does not make or endorse any prediction as to future
stock price performance.
CUMULATIVE TOTAL SHAREHOLDER RETURNS
BASED ON REINVESTMENT OF $100 BEGINNING ON FEBRUARY 15, 1996
<TABLE>
<CAPTION>
MEASUREMENT PERIOD SCB COMPUTER NASDAQ NASDAQ COMPUTER
(FISCAL YEAR COVERED) TECHNOLOGY, INC. U.S. CORPORATIONS INDEX AND DATA PROCESSING INDEX
<S> <C> <C> <C>
2/15/96 $100 $100 $100
4/30/96 162 110 113
4/30/97 107 116 125
4/30/98 220 173 195
4/30/99 124 235 298
</TABLE>
Source: Center for Research in Security Prices, University of Chicago Graduate
School of Business
13
<PAGE> 17
ITEM 2 -- RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Ernst & Young LLP as the Company's
independent public accountants for the fiscal year ending April 30, 2000,
subject to shareholder ratification. The appointment was made at the
recommendation of the Audit Committee.
Ernst & Young LLP has audited the Company's financial statements for the
past four fiscal years. Representatives of Ernst & Young LLP are expected to be
present at the meeting. They will be given an opportunity to make a statement if
they so desire and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING APRIL 30, 2000. If the
shareholders do not ratify the appointment, the matter will be reconsidered by
the Audit Committee and the Board of Directors.
OTHER MATTERS
As of the date of this Proxy Statement, the Company knows of no business
that will be presented for consideration at the meeting other than the items
referred to above. If any other matter is properly brought before the meeting
for action by shareholders, the proxy holders will vote the shares of common
stock represented by proxies in the enclosed form that are returned to the
Company as recommended by the Board of Directors or, if no recommendation is
given, as they may determine in their own discretion.
ADDITIONAL INFORMATION
SOLICITATION OF PROXIES
The Company will bear the cost of preparing and mailing this Proxy
Statement and soliciting proxies in the enclosed form. The Company has retained
Corporate Communications, Inc. ("CCI") to provide various investor communication
services, including the solicitation of proxies, for which the Company pays CCI
a monthly fee plus reimbursement of certain out-of-pocket expenses. Directors,
officers and other employees of the Company also may solicit proxies without any
additional compensation. The solicitations will be made through the mail and may
also be made in person or by telephone, facsimile or other electronic means. The
Company requests that brokerage firms and other nominees forward the proxy
solicitation materials to the beneficial owners of the shares of common stock
held of record by such nominees and will reimburse them for their reasonable
forwarding expenses.
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING OF SHAREHOLDERS
Shareholders interested in presenting a proposal for consideration at the
Company's annual meeting of shareholders in 2000 must follow the procedures
prescribed in the Company's bylaws and the Securities Exchange Act of 1934 and
the rules and regulations thereunder. Shareholder proposals must be received by
the Secretary of the Company no later than March 31, 2000, to be considered
timely under the advance notice provisions of the Company's bylaws and to be
eligible for inclusion in the Company's Proxy Statement and related proxy for
the 2000 annual meeting of shareholders. Nothing in this paragraph shall be
deemed to require the Company to include any shareholder proposal that does not
meet all the requirements for such inclusion established by the Company's bylaws
or the Securities Exchange Act of 1934 and the rules and regulations thereunder.
14
<PAGE> 18
(SCB LOGO)
(SYMBOL) Printed on Recycled Paper
<PAGE> 19
SCB COMPUTER TECHNOLOGY, INC.
1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 16, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The 1999 Annual Meeting of Shareholders of SCB Computer Technology,
Inc. (the "Company") will be held at the Company's Emerging Technology Center,
3239 Players Club Parkway, Memphis, Tennessee, on September 16, 1999, beginning
at 10:00 a.m. (Memphis time). The undersigned hereby acknowledges receipt of the
related Notice and Proxy Statement dated August 12, 1999, accompanying this
proxy, to which reference is hereby made for further information regarding the
meeting and the matters to be considered and voted on by the shareholders at the
meeting.
The undersigned hereby appoints T. Scott Cobb and Ben C. Bryant, Jr.,
and each of them, attorneys and agents, with full power of substitution, to vote
as proxy all shares of common stock of the Company owned of record by the
undersigned and otherwise to act on behalf of the undersigned at the 1999 Annual
Meeting of Shareholders and any postponement or adjournment thereof, in
accordance with the direction set forth herein and with discretionary authority
with respect to any other business, not known or determined at the time of the
solicitation of this proxy, that properly comes before such meeting or any
postponement or adjournment thereof.
The undersigned hereby revokes any proxy heretofore given and directs
said attorneys and agents to vote or act as indicated on the reverse side
hereof.
(Continued on reverse side)
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
(SCB COMPUTER TECHNOLOGY, INC. LOGO)
1365 W. Brierbrook Rd., Memphis, TN 38138
(800) 221-1640 (901) 754-6577 Fax (901) 754-8463
August 12, 1999
Dear Shareholder:
It is a great pleasure to have this opportunity to provide you with our
1999 Annual Report and the Proxy Statement for our 1999 Annual Meeting of
Shareholders. The Annual Report discusses our record performance in the fiscal
year ended April 30, 1999, as well as our strategy for continued growth and
success in the future. The Proxy Statement provides you with information
relating to the business to be conducted at our annual meeting on September 16,
1999.
Thank you for your interest and ownership in SCB Computer Technology,
Inc.
Sincerely,
/s/ Ben C. Bryant, Jr.
Ben C. Bryant, Jr.
Vice Chairman of the Board, President
and Chief Executive Officer
<PAGE> 20
Please mark your vote as
indicated in this example [X]
1. ELECTION OF FOUR DIRECTORS to serve on the Company's Board of Directors for
a one-year term.
FOR all nominees WITHHOLD T. Scott Cobb James E. Harwood
listed (except AUTHORITY Ben C. Bryant, Jr. Joseph W. McLeary
as otherwise for all nominees
indicated*) listed
[ ] [ ] *Instruction: To withhold authority
to vote for any director nominee,
draw a line through the name of the
nominee in the list above.
2. RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP as the Company's
independent public accountants for the fiscal year ending April 30, 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
This proxy is solicited on behalf of the Board of Directors and will be voted in
accordance with the undersigned's directions set forth herein. If no such
direction is made, this proxy will be voted FOR each of the matters described
above.
Date: , 1999
------------------------------
-----------------------------------------
Signature of shareholder
-----------------------------------------
Signature of shareholder, if held jointly
Please sign your name as it appears on this proxy. Joint owners each should
sign. When signing as trustee, administrator, executor, attorney, etc., please
indicate your full title as such. Corporations should sign in full corporate
name by President or other authorized officer. Partnerships should sign in full
partnership name by authorized partner.
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE> 21
SCB COMPUTER TECHNOLOGY, INC.
1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 16, 1999
VOTING INSTRUCTION FORM FOR PARTICIPANTS IN
SCB COMPUTER TECHNOLOGY, INC. KSOP
The 1999 Annual Meeting of Shareholders of SCB Computer Technology,
Inc. (the "Company") will be held at the Company's Emerging Technology Center,
3239 Players Club Parkway, Memphis, Tennessee, on September 16, 1999, beginning
at 10:00 a.m. (Memphis time). The undersigned hereby acknowledges receipt of the
related Notice and Proxy Statement dated August 12, 1999, accompanying this
voting instruction form, to which reference is hereby made for further
information regarding the meeting and the matters to be considered and voted on
by the shareholders at the meeting.
The undersigned, a participant in the SCB Computer Technology, Inc.
KSOP (the "KSOP"), hereby instructs Merrill Lynch Trust Company, as Trustee of
the KSOP (the "Trustee"), to vote all shares of common stock of the Company
credited to the undersigned's KSOP account as of the record date and otherwise
to act on behalf of the undersigned at the 1999 Annual Meeting of Shareholders
and any postponement or adjournment thereof, in accordance with the directions
set forth herein.
The undersigned hereby revokes any proxy heretofore given and
instructs the Trustee to vote or act as indicated on the reverse side hereof.
(Continued on reverse side)
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
(SCB COMPUTER TECHNOLOGY, INC. LOGO)
1365 W. Brierbrook Rd., Memphis, TN 38138
(800) 221-1640 (901) 754-6577 Fax (901) 754-8463
August 12, 1999
Dear KSOP Participant:
It is a great pleasure to have this opportunity to provide you with our
1999 Annual Report and the Proxy Statement for our 1999 Annual Meeting of
Shareholders. The Annual Report discusses our record performance in the fiscal
year ended April 30, 1999, as well as our strategy for continued growth and
success in the future. The Proxy Statement provides you with information
relating to the business to be conducted at our annual meeting on September 16,
1999.
Thank you for your interest and ownership in SCB Computer Technology,
Inc.
Sincerely,
/s/ Ben C. Bryant, Jr.
Ben C. Bryant, Jr.
Vice Chairman of the Board, President
and Chief Executive Officer
<PAGE> 22
Please mark your vote as
indicated in this example [X]
1. ELECTION OF FOUR DIRECTORS to serve on the Company's Board of Directors for
a one-year term.
FOR all nominees WITHHOLD T. Scott Cobb James E. Harwood
listed (except AUTHORITY Ben C. Bryant, Jr. Joseph W. McLeary
as otherwise for all nominees
indicated*) listed
[ ] [ ] *Instruction: To withhold authority
to vote for any director nominee,
draw a line through the name of the
nominee in the list above.
2. RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP as the Company's
independent public accountants for the fiscal year ending April 30, 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
The Trustee will vote the shares of common stock credited to the undersigned's
KSOP account in accordance with the voting instructions set forth herein if this
voting instruction form is completed and properly signed and is received by
ChaseMellon Shareholder Services, the Company's voting instruction tabulator, by
September 14, 1999. If voting instructions from the undersigned are not received
by such date, the Trustee will vote the shares of common stock credited to the
undersigned's KSOP account in the same proportion that it votes the shares for
which timely instructions were received.
Date: , 1999
--------------------------
----------------------------------------
Signature of KSOP participant*
*Please sign your name as it appears on this voting instruction form.
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
