<PAGE>
================================================================================
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:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CSG SYSTEMS INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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:
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Notes:
<PAGE>
CSG SYSTEMS INTERNATIONAL, INC.
7887 E. BELLEVIEW AVENUE, SUITE 1000
ENGLEWOOD, COLORADO 80111
----------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 16, 1997
----------------
A Special Meeting of Stockholders of CSG Systems International, Inc. (the
"Company" or "CSG") will be held at the office of the Company at 7887 E.
Belleview Avenue, Suite 1000, Englewood, Colorado on Tuesday, December 16,
1997, at 8:30 a.m. Mountain Time, to consider and act upon the following
matters:
1. To consider and vote on a proposal to approve an increase in the
number of shares of the Common Stock of the Company available for issuance
under the Company's 1996 Stock Incentive Plan from 2,400,000 shares to
4,000,000 shares; and
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on October 20, 1997
as the record date for determination of stockholders of the Company entitled
to notice of and to vote at the meeting or any adjournment thereof.
All stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors,
Joseph T. Ruble
Secretary
, 1997
REGARDLESS OF WHETHER YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE
IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED
IF MAILED IN THE UNITED STATES.
<PAGE>
CSG SYSTEMS INTERNATIONAL, INC.
7887 E. BELLEVIEW AVENUE, SUITE 1000
ENGLEWOOD, COLORADO 80111
----------------
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
----------------
DECEMBER 16, 1997
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of CSG Systems International,
Inc. (the "Company" or "CSG") for a special meeting of stockholders of the
Company (the "Special Meeting") to be held at the office of the Company at
7887 E. Belleview Avenue, Suite 1000, Englewood, Colorado, on Tuesday,
December 16, 1997, at 8:30 a.m., Mountain Time, and at any adjournments of the
Special Meeting. All proxies will be voted in accordance with the instructions
contained therein; if no choice is specified, the proxies will be voted in
favor of the proposal set forth in the Notice of Special Meeting. Any proxy
may be revoked by a stockholder at any time before it is exercised by giving
written notice to that effect to the Secretary of the Company, by delivering
to the Company a duly executed proxy bearing a later date or by attending the
Special Meeting and voting in person.
The Board has fixed the close of business on October 20, 1997 as the record
date for determining stockholders of the Company who are entitled to notice of
and to vote at the Special Meeting. At the close of business on October 20,
1997, there were outstanding and entitled to vote shares of Common Stock
of the Company, par value $.01 per share ("Common Stock"). Each share is
entitled to one vote.
This Proxy Statement and the accompanying form of proxy are first being sent
to stockholders of the Company on or about , 1997.
All costs of this solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's directors, officers, and
regular employees, without additional remuneration, and their appointed agents
may solicit proxies by telephone, facsimile and personal interviews. Brokers,
custodians and fiduciaries will be requested to forward proxy soliciting
material to the owners of stock held in their names. The Company will
reimburse banks and brokers for their reasonable out-of-pocket expenses
incurred in connection with the distribution of proxy material.
VOTE REQUIRED
The affirmative vote of a majority of the shares of Common Stock present or
represented by proxy at the Special Meeting is required for approval of the
sole matter expected to be voted upon at the Special Meeting, as set forth in
the Notice of Special Meeting. A majority of the shares of Common Stock
outstanding is required to be present or represented by proxy at the Special
Meeting in order to have the quorum necessary to take action at the Special
Meeting.
Votes cast by proxy or in person at the Special Meeting will be tabulated by
the inspector appointed for the Special Meeting. The inspector will treat
abstentions as Common Stock that is present and entitled to vote for purposes
of determining the presence of a quorum but as not voted for purposes of
determining the approval of any matter submitted to stockholders for a vote.
If a broker indicates on a proxy that such broker does not have discretionary
authority as to certain Common Stock to vote on a particular matter, such
shares will not be considered as present and entitled to vote with respect to
that matter.
1
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The first table below sets forth each person or group known by the Company
to own beneficially more than 5% of the outstanding Common Stock as of
September 30, 1997. The second table below sets forth to the Company's
knowledge the beneficial ownership of Common Stock by each director and
executive officer of the Company, individually, and by all directors and
executive officers of the Company as a group as of September 30, 1997.
PRINCIPAL STOCKHOLDERS
<TABLE>
<CAPTION>
SHARES OF COMMON PERCENTAGE OF
STOCK BENEFICIALLY COMMON STOCK
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED OUTSTANDING
- ------------------------------------ ------------------ -------------
<S> <C> <C>
Morgan Stanley Capital Partners III, L.P.(1).. 6,854,681(2) 26.86%
1221 Avenue of the Americas
New York, NY 10020
Trident Capital, L.P. ........................ 1,452,009(3) 5.69%
2480 Sand Hill Road
Menlo Park, CA 94025
Neal C. Hansen................................ 1,678,132(4) 6.57%
7887 East Belleview Avenue, Suite 1000
Englewood, CO 80111
</TABLE>
- --------
(1) Morgan Stanley, Dean Witter, Discover & Co. is the sole stockholder of the
general partner of the general partner of the "Morgan Stanley Capital
Funds" as defined in footnote (2) below and also of Morgan Stanley Venture
Capital II, Inc. and may be deemed to be the beneficial owner of the
shares of the Company owned by the Morgan Stanley Capital Funds and by
Morgan Stanley Venture Capital II, Inc. Morgan Stanley, Dean Witter,
Discover & Co. disclaims beneficial ownership with respect to these shares
except to the extent of its pecuniary interest therein.
(2) Includes 752,912 and 241,444 shares owned by MSCP 892 Investors, L.P. and
Morgan Stanley Capital Investors, L.P., respectively, each of which is
affiliated with, and has the same general partner as, Morgan Stanley
Capital Partners III, L.P. Such three named partnerships are referred to
collectively as the "Morgan Stanley Capital Funds". Also includes 108,467
shares beneficially owned by Morgan Stanley Venture Capital II, Inc. which
is an affiliate of the Morgan Stanley Capital Funds.
(3) Includes 587,202, 116,160 and 708,386 shares owned by Trident Capital
Partners Fund-I, L.P., Trident Capital Partners Fund-I, C.V., and Trident
Capital Partners CSG Acquisition Fund, L.P., respectively, each of which
is affiliated with and whose general partner is Trident Capital, L.P. Also
includes 1,488 shares owned by Trident Administrator, N.V., a wholly owned
subsidiary of Trident Capital, Inc., the general partner of Trident
Capital, L.P. Trident Capital, L.P., such three affiliated partnerships
and Trident Administrator, N.V. are referred to collectively as the
"Trident Capital Funds".
(4) Includes 22,450 shares which may be acquired pursuant to currently
exercisable options. Also includes 700,000 shares owned by Hansen
Partnership, Ltd., of which Mr. Hansen is the managing general partner,
and 58,504 shares owned by Mr. Hansen's spouse, as to which shares Mr.
Hansen disclaims beneficial ownership except to the extent of his
pecuniary interest in the shares owned by such partnership.
2
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
SHARES OF COMMON PERCENTAGE OF
STOCK BENEFICIALLY COMMON STOCK
NAME OF BENEFICIAL OWNER OWNED (1) OUTSTANDING
- ------------------------ ------------------ -------------
<S> <C> <C>
Larry G. Fendley........................... 48,334 0.19%
George F. Haddix........................... 1,167,120(2)(3) 4.57%
Neal C. Hansen............................. 1,678,132(4) 6.57%
Royce J. Holland........................... -- --
Greg Parker................................ 33,500(3) 0.13%
John P. Pogge.............................. 156,400(3) 0.61%
Bernard W. Reznicek........................ 1,500 0.01%
Rockwell A. Schnabel....................... 161,633(5) 0.63%
Frank V. Sica.............................. 6,120(6) 0.02%
All directors and executive officers as a
group (9 persons)......................... 3,252,739 12.69%
</TABLE>
- --------
(1) Includes 48,334, 22,450, 22,450, 3,500, 6,400 and 103,134 shares which may
be acquired pursuant to currently exercisable options which are held by
Messrs. Fendley, Haddix, Hansen, Parker and Pogge and all directors and
executive officers as a group, respectively. Except for the shares
referred to in this footnote (which have not yet been acquired by the
persons named) and in footnote (2) below and the shares referred to in
footnote (4) below as being owned by Mr. Hansen's spouse (as to which Mr.
Hansen has no voting or investment power), the persons named in this table
have sole voting power and sole investment power with respect to the
shares listed after their respective names.
(2) Includes 21,400 shares owned by Mr. Haddix and his spouse as joint
tenants, as to which shares Mr. Haddix and his spouse have shared voting
power and shared investment power.
(3) Includes 64,200, 18,000 and 66,000 shares which were purchased by Messrs.
Haddix, Parker and Pogge, respectively, pursuant to stock purchase
agreements with the Company and which remain subject to a stock repurchase
option on the part of the Company, effective upon termination of service
as an employee of or consultant to the Company. The shares are released
from the repurchase option in equal increments over a five-year period;
40% of each person's shares originally purchased have been released as of
September 30, 1997.
(4) Includes 700,000 shares owned by Hansen Partnership, Ltd., of which Mr.
Hansen is the managing general partner, and 58,504 shares owned by Mr.
Hansen's spouse, as to which shares Mr. Hansen disclaims beneficial
ownership except to the extent of his pecuniary interest in the shares
owned by such partnership.
(5) The 161,633 shares listed in this table are owned by Mr. Schnabel
personally. Mr. Schnabel is the Co-Chairman of Trident Capital, Inc., the
general partner of Trident Capital, L.P., and thus he may be deemed to be
the beneficial owner of all shares owned by the Trident Capital Funds. See
above table under "Principal Stockholders". Except to the extent of his
pecuniary interest therein, Mr. Schnabel disclaims beneficial ownership
with respect to the shares beneficially owned by the Trident Capital
Funds.
(6) The 6,120 shares listed in this table are owned by Mr. Sica personally.
Mr. Sica is a Vice Chairman and a director of Morgan Stanley Capital
Partners III, Inc., the general partner of the general partner of the
Morgan Stanley Capital Funds, and is a director of Morgan Stanley Venture
Capital II, Inc. See footnotes (1) and (2) to the above table under
"Principal Stockholders".
3
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information with respect to the compensation
paid by the Company to each of its executive officers for services rendered
during the year ended December 31, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION (1) -------------
FISCAL ----------------- STOCK OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (2) AWARDED COMPENSATION (3)
- --------------------------- ------ ------- --------- ------------- ----------------
($) ($) (#) ($)
<S> <C> <C> <C> <C> <C>
Neal C. Hansen.......... 1996 220,000 150,000 112,250 8,700
Chairman of the Board and
Chief Executive Officer 1995 200,000 150,000 -- 2,500
1994(4) 200,000 -- -- --
George F. Haddix........ 1996 220,000 150,000 112,250 8,236
President and Chief 1995 200,000 150,000 -- 2,500
Technical Officer 1994(5) 200,000 -- -- --
David I. Brenner........ 1996 170,000 100,000 32,000 7,313
Executive Vice President
and Chief Financial Officer 1995 150,000 75,000 -- --
(6) 1994 -- -- -- --
John P. Pogge
Executive Vice President 1996 175,000 100,000 32,000 1,063
and General Manager, 1995(7) 145,000 72,500 -- --
Business Units 1994 -- -- -- --
Larry G. Fendley........ 1996(8) 170,000 100,000 175,000 --
Executive Vice President 1995 -- -- -- --
Product Delivery Services 1994 -- -- -- --
</TABLE>
- --------
(1) With respect to each of the individuals named in the Summary Compensation
Table, the aggregate amount of perquisites and other personal benefits,
securities or property received was less than 10% of the total of annual
salary and bonus reported for such individual.
(2) The bonus earned for each fiscal year is payable in the first quarter of
the subsequent fiscal year.
(3) Consists of contributions made to the CSG Incentive Savings Plan.
(4) Mr. Hansen joined the Company in October 1994. The salary in the table was
calculated on an annualized basis.
(5) Mr. Haddix joined the Company in October 1994. The salary in the table was
calculated on an annualized basis.
(6) Mr. Brenner retired from the Company's employ on March 31, 1997 due to a
physical disability.
(7) Mr. Pogge joined the Company in April 1995. The salary in the table was
calculated on an annualized basis.
(8) Mr. Fendley joined the Company in April 1996. The salary in the table was
calculated on an annualized basis.
4
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth the stock options granted to the Company's
executive officers during the year ended December 31, 1996.
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
OPTIONS % OF TOTAL
GRANTED ON OPTIONS GRANTED EXERCISE
COMMON TO EMPLOYEES IN PRICE PER EXPIRATION GRANT DATE
NAME STOCK FISCAL 1996 SHARE (3) DATE PRESENT VALUE (4)
- ---- ---------- --------------- --------- ---------- -----------------
(#) (%) ($/SHARE) ($)
<S> <C> <C> <C> <C> <C>
Neal C. Hansen.......... 12,250(1) 1.0 15.00 2/22/06 80,000
100,000(1) 8.2 28.75 4/23/06 1,296,000
George F. Haddix........ 12,250(1) 1.0 15.00 2/22/06 80,000
100,000(1) 8.2 28.75 4/23/06 1,296,000
David I. Brenner........ 32,000(1) 2.6 15.00 2/22/06 209,600
John P. Pogge........... 32,000(1) 2.6 15.00 2/22/06 209,600
Larry G. Fendley........ 100,000(2) 8.2 29.875 4/29/06 1,349,000
75,000(1) 6.1 22.125 7/17/06 756,800
</TABLE>
- --------
(1) One-fifth of the options become exercisable on the first anniversary of
the date of grant and on each of the second through fifth anniversaries
thereafter.
(2) One-third of the options become exercisable on the first anniversary of
the date of grant and on each of the second and third anniversaries
thereafter.
(3) The exercise price per share is the market price on the date the options
were granted.
(4) Grant date present value is determined using a modified Black-Scholes
option pricing model. The estimated values under the model are based on
several assumptions, including a weighted-average expected volatility of
40%, a weighted-average risk-free rate of return of 6.1%, no dividend
yield and expected option lives of five years and may not be indicative of
actual value. The actual gain, if any, the option holder may realize will
depend on the excess of the actual market price of the stock over the
exercise price on the date the option is exercised. There is no assurance
that the value that may be realized by the option holder will be at or
near the value estimated by the modified Black-Scholes model.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR END OPTION VALUES
The following table sets forth certain information regarding the exercise of
stock options during the year ended December 31, 1996 by the Company's
executive officers.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT
ACQUIRED OPTIONS AT FISCAL YEAR END FISCAL YEAR END (1)
ON VALUE ------------------------------- -------------------------
EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------- -------- ------------ --------------- ----------- -------------
(#) ($) (#) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Neal C. Hansen.......... -- -- -- 112,250 -- 4,594
George F. Haddix........ -- -- -- 112,250 -- 4,594
David I. Brenner........ -- -- -- 32,000 -- 12,000
John P. Pogge........... -- -- -- 32,000 -- 12,000
Larry G. Fendley........ -- -- -- 175,000 -- --
</TABLE>
- --------
(1) "In-the-Money Options" are options outstanding at the end of the last
fiscal year for which the fair market value of the Common Stock at the end
of the last fiscal year ($15.375 per share) exceeded the exercise price of
the options.
5
<PAGE>
DIRECTOR COMPENSATION
Each non-employee director of the Company, other than non-employee directors
of the Company who are affiliated with Trident Capital, Inc. or Morgan
Stanley, Dean Witter, Discover & Co., is entitled to receive the following
compensation: (i) $2,500 for each meeting of the Board attended in person;
(ii) $500 for each meeting of the Board attended by conference telephone call
or its equivalent; and (iii) $500 for each meeting of a committee of the Board
attended in person or by conference telephone call or its equivalent.
Directors who are officers or employees of the Company do not receive
additional compensation for serving as a director or committee member.
EMPLOYMENT AGREEMENTS
Mr. Hansen and Dr. Haddix are parties to employment agreements with the
Company. The agreements expire in 1999, are terminable by Mr. Hansen and Dr.
Haddix upon 30 days' notice and are terminable by the Company for cause or
disability. Each agreement provides for an annual salary of not less than
$200,000 (with annual CPI adjustments), the opportunity for an incentive bonus
of not less than $100,000, insurance, an automobile allowance, and certain
other benefits. Each agreement contains a post-termination non-competition
clause restricting competition by the employees for three years after the
termination of employment. Dr. Haddix has advised the Company that he intends
to retire from the employ of the Company on December 31, 1997. In anticipation
of such retirement, Dr. Haddix resigned as President and Chief Technical
Officer of the Company, effective September 24, 1997. The Company anticipates
that Dr. Haddix will remain on the Board following his retirement as an
employee and also will serve as a consultant to the Company with respect to
its technology research and development.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Holland, Schnabel and Sica currently serve as members of the
Compensation Committee of the Board. Mr. Sica is a director of Morgan Stanley
Venture Capital II, Inc., affiliated entities of which purchased 3,630,254
shares of the Company's Convertible Preferred Stock at a price of $3.31 per
share in connection with the Company's acquisition of Cable Services Group,
Inc. (now known as CSG Systems, Inc.) from First Data Corporation in November
1994 (the "Acquisition"). Mr. Sica also is a Vice Chairman and a director of
Morgan Stanley Capital Partners III, Inc., affiliated entities of which
purchased 6,746,214 shares of the Company's Convertible Preferred Stock at a
price of $3.31 per share in connection with the Acquisition. Mr. Schnable is
Co-Chairman of Trident Capital, Inc., affiliated entities of which purchased
4,554,026 shares of the Company's Convertible Preferred Stock at a price of
$3.31 per share in connection with the Acquisition. Such Convertible Preferred
Stock was converted to Common Stock in February 1996 in connection with the
Company's initial public offering of Common Stock. See "Beneficial Ownership
of Common Stock--Principal Stockholders" above.
In August 1995, the Company entered into a Printing and Mailing Services
Agreement with PageMart, Inc., pursuant to which the Company provides
customized printing and mailing services to PageMart, Inc. Mr. Sica, who
currently is a member of the Company's Board, presently serves on the board of
directors of PageMart, Inc.; affiliated entities of Morgan Stanley Venture
Capital II, Inc. and Morgan Stanley Capital Partners III, Inc. are substantial
stockholders of PageMart, Inc. and together with other entities affiliated
with Morgan Stanley, Dean Witter, Discover and Co. own a majority of the
outstanding common stock of PageMart, Inc.
6
<PAGE>
PROPOSAL TO AUTHORIZE AN INCREASE IN THE NUMBER
OF SHARES OF COMMON STOCK SUBJECT TO THE COMPANY'S
1996 STOCK INCENTIVE PLAN
PROPOSED AMENDMENT
At the Special Meeting, the stockholders will be asked to approve an
amendment to the Company's 1996 Stock Incentive Plan (the "1996 Plan"), as
adopted by the Board on September 3, 1997, which increases the number of
shares of Common Stock available for issuance under the 1996 Plan from
2,400,000 shares to 4,000,000 shares.
The 1996 Plan is intended to foster and promote the long-term financial
success of the Company and its subsidiaries and thereby increase stockholder
value by providing incentives to those officers and other key employees who
are likely to be responsible for achieving such success. The 1996 Plan also
fosters the Company's goal of recruiting and retaining key employees in the
highly competitive technology industry. The Company believes that
participation in the 1996 Plan by employees fosters their commitment to the
Company and more closely ties employee compensation and stockholder objectives
by focusing the attention of employees on stockholder return.
REQUIRED VOTE
Approval of the amendment to the 1996 Plan requires the affirmative vote of
the holders of a majority of the shares of Common Stock present or represented
by proxy at the Special Meeting and entitled to vote at the Special Meeting.
THE BOARD RECOMMENDS A VOTE FOR APPROVAL
OF THE AMENDMENT TO THE 1996 PLAN
7
<PAGE>
PLAN ACTIVITY
As of September 30, 1997, option grants or other awards covering an
aggregate of 2,237,505 shares had been made under the 1996 Plan, and options
covering 2,051,910 shares were outstanding and unexercised. Without taking
into account the proposed amendment to the 1996 Plan, only 323,465 shares
remained available for future grants or awards under the 1996 Plan as of
September 30, 1997. As of September 30, 1997, options had been granted or
awards made to approximately 400 persons who are not executive officers. As of
September 30, 1997, options have been granted under the 1996 Plan to 6
executive officers for a total of 702,900 shares.
The following table sets forth certain information regarding the options
which have been granted and the awards which have been made under the 1996
Plan as of September 30, 1997.
<TABLE>
<CAPTION>
NUMBER OF
NAME AND POSITION SHARES (1)
- ----------------- ----------
<S> <C>
Neal C. Hansen..................................................... 172,250
Chairman of the Board and
Chief Executive Officer
George F. Haddix (2)............................................... 152,250
David I. Brenner (3)............................................... 39,200
John P. Pogge (4).................................................. 92,000
President and Chief Operating Officer
Larry G. Fendley................................................... 195,000
Executive Vice President
Product Delivery Services
Greg Parker (5).................................................... 52,200
Vice President and
Chief Financial Officer
All current executive officers as a group.......................... 663,700
All current directors who are not executive officers as a group
(6)............................................................... 0
All employees, including all current officers who are not executive
officers, as a group (7).......................................... 1,534,605
</TABLE>
- --------
(1) All of the shares listed in this table involve stock options, except for
an aggregate of 5,925 shares granted as stock bonus awards to employees
who are not executive officers.
(2) In anticipation of his planned retirement from the Company on December 31,
1997, Dr. Haddix resigned as President and Chief Technical Officer of the
Company, effective September 24, 1997.
(3) Mr. Brenner was an Executive Vice President and the Chief Financial
Officer for the Company until his retirement on March 31, 1997. He
exercised his options as to 6,400 shares; the options as to the remaining
32,800 shares were not exercisable and terminated upon his retirement.
(4) Mr. Pogge became President and Chief Operating Officer of the Company on
September 24, 1997. Prior to that time, he was an Executive Vice President
of the Company and General Manager, Business Units.
(5) Mr. Parker became Chief Financial Officer of the Company on April 1, 1997.
(6) Directors who are not employees of the Company are not eligible to receive
options or awards under the 1996 Plan.
(7) In addition to the 1996 Plan, the Company has a 1995 Incentive Stock Plan
(the "1995 Plan") pursuant to which 257,000 shares of Common Stock are
authorized for option grants to employees of the Company. As of September
30, 1997, option grants covering an aggregate of 251,750 shares had been
made under the 1995 Plan, and options covering 183,600 shares were
outstanding and unexercised. As of September 30 1997, 54,050 shares
remained available for future option grants under the 1995 Plan. There
have been no option grants made under the 1995 Plan since 1995.
8
<PAGE>
It is not possible to state the terms or types of any options or awards that
may be granted to executive officers of the Company or other persons under the
1996 Plan at a future time or to identify the persons to whom such future
grants may be made.
DESCRIPTION OF THE 1996 PLAN AND OPTION TERMS
The following summary of the 1996 Plan does not purport to be complete and
is subject to and qualified in its entirety by the full terms of the 1996
Plan. Stockholders may request a copy of the 1996 Plan from the Secretary of
the Company at the address shown above.
The 1996 Plan authorizes the grant of (i) incentive stock options under the
Internal Revenue Code of 1986 (the "Code"), (ii) non-qualified stock options,
(iii) stock appreciation rights, (iv) performance unit awards, (v) restricted
stock awards, and (vi) stock bonus awards to officers and other key employees
of the Company or any subsidiary of the Company who are responsible for or
contribute to, or are likely to be responsible for or contribute to, the
management, growth, and success of the Company or such subsidiary. The Company
and its subsidiaries currently have approximately 1,000 employees who
potentially are eligible to receive such a grant, but the Company expects that
most of such employees will not receive a grant under the 1996 Plan.
Without giving effect to the proposed amendment to increase the number of
shares of Common Stock available for issuance pursuant to the 1996 Plan, the
aggregate number of shares of Common Stock available for issuance pursuant to
the 1996 Plan is 2,400,000 which may be authorized and unissued shares or
treasury shares. The aggregate number of shares of Common Stock subject to or
issuable in payment of a grant or award to any one person in any calendar year
may not exceed 240,000. If there is a stock dividend, stock split, or other
relevant change in the outstanding shares of Common Stock, then the
Compensation Committee (the "Committee") of the Board will make appropriate
adjustments in (a) the aggregate number of shares of Common Stock (i) reserved
for issuance under the 1996 Plan, (ii) for which grants or awards may be made
to an individual grantee, and (iii) covered by outstanding awards or grants,
(b) the exercise or other applicable price relating to outstanding awards or
grants, and (c) the appropriate fair market value and other price
determinations relevant to outstanding awards or grants. Any shares subject to
an option or right which expires or terminates unexercised as to such shares
will again be available for the grant of awards or options under the 1996
Plan. If any shares of Common Stock which have been pledged as collateral for
indebtedness incurred by an optionee in connection with an option exercise are
returned to the Company in satisfaction of such indebtedness, then such shares
will again be available for the grant of awards or options under the 1996
Plan.
No award or grant under the 1996 Plan may be assigned or transferred by the
recipient except by will, the laws of descent and distribution, or, in the
case of awards or grants other than incentive stock options, pursuant to a
qualified domestic relations order or by such other means as the Committee may
approve.
ADMINISTRATION
The 1996 Plan is administered by the Committee, which is composed of three
directors of the Company who are not employees of the Company or any of its
subsidiaries. The Committee has authority to interpret the 1996 Plan, to
select the officers and other key employees to whom awards or options will be
granted, to determine whether and to what extent awards and options will be
granted under the 1996 Plan, to determine the types of awards and options to
be granted and the amount, size, terms, and conditions of each award or grant,
and to make other relevant determinations and administrative decisions. In
general, all decisions and determinations made by the Committee pursuant to
the 1996 Plan are final and binding on all persons.
The Committee may delegate to any officer or officers of the Company any of
the Committee's duties, powers, and authorities under the 1996 Plan upon such
conditions and with such limitations as the Committee may determine; provided,
that only the Committee may select for awards or options under the 1996 Plan,
and make grants of awards or options under the 1996 Plan to, officers and
other key employees of the Company or any subsidiary of the Company who are
subject to Section 16 of the Securities Exchange Act of 1934 at the time of
such selection or the making of such a grant.
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AWARDS AND GRANTS
Stock Options. The Committee may grant incentive stock options under the
Internal Revenue Code of 1986, as amended from time to time, or any successor
thereto (the "Code") and non-qualified stock options. The option price per
share may not be less than the fair market value of the Common Stock on the
date of the grant. The Committee will fix the term of each option at the time
of its grant, but such term may not be more than ten years after the date of
the grant. The Committee may determine when an option becomes exercisable and
may accelerate previously established exercise rights. The Committee may
permit payment of the option exercise price in cash or in shares of Common
Stock valued at their fair market value on the exercise date. The Committee
also may permit the exercise price to be paid by the optionee's delivery of a
properly executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Company the amount of the applicable sale or
loan proceeds required to pay the exercise price.
If an optionee's employment terminates for any reason other than death or
disability, then the optionee generally may exercise an option to the extent
it was exercisable at the time of the termination for a period of three months
after the termination (but not after the expiration date of the option).
However, the Committee has the power to terminate an optionee's rights under
an outstanding option if the Committee determines (i) that the optionee's
employment was terminated for cause or (ii) that the optionee has engaged or
may engage in employment or activities competitive with the Company or a
subsidiary or contrary to the best interests of the Company or a subsidiary.
If an optionee's employment terminates by reason of disability, then the
optionee's options generally will be exercisable for six months after the
termination to the extent that the exercise was permitted prior to the
termination (but not after the expiration date of the option). If an optionee
dies while in the employ of the Company or a subsidiary, then the optionee's
options generally will be exercisable by the optionee's personal
representative or other successor for 12 months after the date of death to the
extent that the exercise was permitted prior to the optionee's death (but not
after the expiration date of the option).
Stock Appreciation Rights. The Committee may grant stock appreciation rights
("SAR's") which entitle the grantee to receive, upon the exercise of an SAR,
an award equal to all or a portion of the excess of (i) the fair market value
of a specified number of shares of Common Stock at the time of the exercise
over (ii) a specified price not less than the fair market value of the Common
Stock at the time the SAR was granted. An SAR may be granted independently or
in connection with a stock option grant. Upon the exercise of an SAR, the
applicable award may be paid in cash or in shares of Common Stock (or a
combination thereof) as the Committee may determine. The Committee will fix
the term of an SAR at the time of its grant, but such term may not be more
than ten years after the date of the grant. The Committee may determine when
an SAR becomes exercisable and may accelerate previously established exercise
rights.
The provisions of the 1996 Plan relating to exercisability of SAR's upon the
termination of a grantee's employment are similar to those discussed above in
connection with stock options.
Performance Unit Awards. The Committee may grant performance unit awards
which entitle the grantees to receive future payments based upon and subject
to the achievement of preestablished long-term performance targets. In
connection with such awards, the Committee is required to establish (i)
performance periods of not less than two nor more than five years, (ii) the
value of each performance unit, and (iii) maximum and minimum performance
targets to be achieved during the performance period. The Committee may adjust
previously established performance targets or other terms and conditions of a
performance unit award to reflect major unforeseen events, but such
adjustments may not increase the payment due upon attainment of the previously
established performance targets. Performance unit awards, to the extent
earned, may be paid in cash or shares of Common Stock (or a combination
thereof) as the Committee may determine.
If the employment of a grantee of a performance unit award terminates prior
to the end of an applicable performance period other than by reason of
disability or death, then the award generally terminates. However, the 1996
Plan permits the Committee to make partial payments of performance unit awards
if the Committee determines such action to be equitable. If the employment of
a grantee of a performance unit award terminates
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as a result of the grantee's disability or death prior to the end of an
applicable performance period, then the Committee may authorize the payment of
all or a portion of the performance unit award (to the extent earned in the
case of disability) to the grantee or the grantee's legal representative.
Restricted Stock Awards. The Committee may grant restricted stock awards
consisting of shares of Common Stock restricted against transfer, subject to a
substantial risk of forfeiture and to other terms and conditions established
by the Committee. The Committee must determine the restriction period
applicable to a restricted stock award and the amount, form, and time of
payment (if any) required from the grantee of a restricted stock award in
consideration of the issuance of the shares covered by such award. The
Committee in its discretion may provide for the lapse in installments of the
restrictions applicable to restricted stock awards and may waive the
restrictions in whole or in part.
If the employment of a grantee of a restricted stock award terminates for
any reason while some or all of the shares covered by such award are still
restricted, the grantee's rights with respect to the restricted shares
generally terminate. However, the Committee has the discretion to provide for
complete or partial exemptions to such employment requirement.
Stock Bonus Awards. The Committee may grant a stock bonus award based upon
the performance of the Company, a subsidiary, or a segment thereof in terms of
preestablished objective financial criteria or performance goals or, in
appropriate cases, such other measures or standards of performance (including
but not limited to performance already accomplished) as the Committee may
determine. The Committee may adjust preestablished financial criteria or
performance goals to take into account unforeseen events or changes in
circumstances, but such adjustments may not increase the amount of a stock
bonus award. The Committee, in its discretion, may impose additional
restrictions upon the shares of Common Stock which are the subject of a stock
bonus award.
MISCELLANEOUS PROVISIONS
Unless the 1996 Plan is sooner terminated by the Board, the 1996 Plan will
terminate on December 31, 2005. Awards or options outstanding at the time of
the termination of the 1996 Plan will remain in effect in accordance with
their terms. The Board may amend the 1996 Plan at any time; however,
stockholder approval must be obtained for any amendment for which approval is
required by Rule 16b-3 under the Securities Exchange Act of 1934 or Sections
162(m) or 422 of the Code. The Company's obligation to deliver shares of
Common Stock or make cash payments under the 1996 Plan is subject to
applicable tax withholding requirements; in the discretion of the Committee,
required tax withholding amounts may be paid by the grantee in cash or shares
of Common Stock having a fair market value equal to the required tax
withholding amount.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following brief description of certain federal income tax consequences
is based upon present federal income tax laws and regulations and does not
purport to be a complete description of the federal income tax consequences of
the 1996 Plan.
Incentive Stock Options. The grant of an incentive stock option under the
1996 Plan will not result in taxable income to the grantee or a tax deduction
for the Company. If the grantee holds the shares purchased upon the exercise
of an incentive stock option for at least one year after the purchase of the
shares and until at least two years after the option was granted, then the
grantee's sale of the shares will result in a long-term gain or loss, and the
Company will not be entitled to any tax deduction. If the grantee sells or
otherwise transfers the shares before such holding periods have elapsed, then
the grantee generally will recognize ordinary income and the Company would be
entitled to a tax deduction in an amount equal to the lesser of (i) the fair
market value of the shares on the exercise date minus the option price or (ii)
the amount realized upon the disposition minus the option price. Any gain in
excess of such ordinary income portion would be taxable as long-term or short-
term capital gain depending upon the grantee's holding period for the shares.
The excess of the fair market value of the shares received on the option
exercise date over the option price is an item of tax preference, potentially
subject to the alternative minimum tax.
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Non-Qualified Stock Options. The grant of a non-qualified stock option under
the 1996 Plan will not result in taxable income to the grantee or a tax
deduction for the Company. Upon the exercise of a non-qualified stock option,
the grantee will be taxed at ordinary income rates on the excess of the fair
market value of the shares received over the option exercise price, and the
Company generally will be entitled to a tax deduction in the same amount. The
exercise price of the non-qualified stock option plus the amount included in
the grantee's income as a result of the option exercise will be treated as the
grantee's basis in the shares received, and any gain or loss on the subsequent
sale of the shares will be treated as long-term or short-term capital gain or
loss depending upon the grantee's holding period for the shares. The grantee's
sale of shares acquired upon the exercise of a non-qualified stock option will
have no tax consequences to the Company.
Stock Appreciation Rights and Performance Unit Awards. The grant of an SAR
or a performance unit award under the 1996 Plan will not result in taxable
income to the grantee or a tax deduction for the Company. Upon the exercise of
an SAR or the receipt of cash or shares of Common Stock upon the payment of a
performance unit award, the grantee will recognize ordinary income and the
Company generally will be entitled to a tax deduction in an amount equal to
the fair market value of the shares plus any cash received.
Restricted Stock Awards. The grant of a restricted stock award should not
result in taxable income for the grantee or a tax deduction for the Company if
the shares of Common Stock transferred to the grantee are subject to
restrictions which create a substantial risk of forfeiture of the shares by
the grantee if certain conditions prescribed at the time of the grant are not
subsequently satisfied. However, the grantee may elect within 30 days after
the acquisition of the shares to recognize ordinary income on the date of the
acquisition in an amount equal to the excess (if any) of the fair market of
the shares on the date of the grant, determined without regard to the
restrictions imposed on such shares (other than restrictions which by their
terms will never lapse), over the amount (if any) paid for the shares. If the
grantee does not make the election referred to in the preceding sentence,
then, when the restrictions imposed upon the shares lapse or otherwise
terminate, the grantee of the shares will recognize ordinary income in an
amount equal to the excess (if any) of the fair market value of the shares on
the date of such lapse or other termination over the amount (if any) paid for
the shares. If and when the grantee of a restricted stock award recognizes
ordinary income with respect to the shares covered by such award, the Company
generally will be entitled to a tax deduction in the same amount. The amount
paid by the grantee for restricted shares plus any amount recognized by the
grantee as ordinary income under the rules described above will be treated as
the grantee's basis in the shares; when the grantee sells the shares covered
by a restricted share award following the lapse or other termination of the
restrictions, any gain or loss on such sale will be treated as long-term or
short-term capital gain or loss depending upon the grantee's holding period.
Any dividends paid to the grantee of restricted shares while the shares are
still subject to the restrictions would be treated as compensation for federal
income tax purposes.
Stock Bonus Awards. When a stock bonus award is paid to a grantee by the
delivery of shares of Common Stock, the grantee will recognize ordinary income
and the Company generally will be entitled to a tax deduction in an amount
equal to the fair market value of such shares at the time of such delivery.
If, however, such shares are subject to any restrictions which create a
substantial risk of forfeiture, then the tax rules described above with
respect to restricted stock awards would be applicable.
MARKET PRICE
The closing price of the Common Stock on the NASDAQ National Market on ,
1997, was $ per share.
OTHER MATTERS
The Board does not know of any other matters that may come before the
Special Meeting; however, if any other matters are properly presented to the
Special Meeting, it is the intention of the persons named in the accompanying
proxy to vote, or otherwise act, in accordance with their judgment on such
matters.
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DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Proposals of stockholder intended to be presented at the 1998 Annual Meeting
of Stockholders must be received by the Company at its principal office in
Englewood, Colorado, not later than December 31, 1997 for inclusion in the
proxy statement for that meeting.
By the Order of the Board,
Joseph T. Ruble
Secretary
, 1997
THE BOARD HOPES THAT STOCKHOLDERS WILL ATTEND THE SPECIAL MEETING. REGARDLESS
OF WHETHER YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. A PROMPT RESPONSE WILL
GREATLY FACILITATE ARRANGEMENTS FOR THE SPECIAL MEETING, AND YOUR COOPERATION
WILL BE APPRECIATED. STOCKHOLDERS WHO ATTEND THE SPECIAL MEETING MAY VOTE
THEIR STOCK PERSONALLY EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
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CSG SYSTEMS INTERNATIONAL, INC.
1996 STOCK INCENTIVE PLAN
1. Purpose. The purpose of the CSG Systems International, Inc. 1996
Stock Incentive Plan (the "Plan") is to foster and promote the long-term
financial success of the Company and its Subsidiaries and thereby increase
stockholder value by providing incentives to those officers and other key
employees who are likely to be responsible for achieving such success.
2. Certain Definitions.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor thereto. References to a particular section of the Code
shall include any regulations issued under such section.
"Committee" shall have the meaning provided in Section 3 of the Plan.
"Common Stock" means the Common Stock, $0.01 par value per share, of the
Company.
"Company" means CSG Systems International, Inc., a Delaware corporation.
"Disability" means (i) with respect to the exercise of an Incentive Stock
Option after termination of employment, a disability within the meaning of
Section 22(e)(3) of the Code and (ii) for all other purposes, a mental or
physical condition which, in the opinion of the Committee, renders a grantee
unable or incompetent to carry out the job responsibilities which such grantee
held or the tasks to which such grantee was assigned at the time the disability
was incurred and which is expected to be permanent or for an indefinite duration
exceeding one year.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Fair Market Value" means, as determined by the Committee, the last sale
price of the Common Stock as quoted on the Nasdaq National Market System on the
trading day for which the determination is being made, or, in the event that no
such sale takes place on such day, the average of the reported closing bid and
asked prices on such day, or, if the Common Stock of the Company is listed on a
national securities exchange, the last reported sale price on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading on the trading day for which the determination is being made, or, if no
such reported sale takes place on such day, the average of the closing bid and
asked prices on such day on the principal national securities exchange on which
the Common Stock is listed or admitted to trading, or, if the
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Common Stock is not quoted on such National Market System nor listed or admitted
to trading on a national securities exchange, the average of the closing bid and
asked prices in the over-the-counter market on the day for which the
determination is being made as reported through Nasdaq, or, if bid and asked
prices for the Common Stock on such day are not reported through Nasdaq, the
average of the bid and asked prices for such day as furnished by any New York
Stock Exchange member firm regularly making a market in the Common Stock
selected for such purpose by the Committee, or, if none of the foregoing is
applicable, then the fair market value of the Common Stock as determined in good
faith by the Committee in its sole discretion.
"Incentive Stock Option" means any stock option intended to qualify as an
"incentive stock option" within the meaning of Section 422 of the Code.
"Non-Qualified Stock Option" means any stock option that is not intended to
be an Incentive Stock Option, including any stock option that provides (as of
the time such option is granted) that it will not be treated as an Incentive
Stock Option.
"Parent Corporation" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time of the
granting of the option, each of the corporations other than the Company owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
"Performance Unit Award" means an award granted pursuant to Section 8.
"Plan Year" means the twelve-month period beginning on January 1 and ending
on December 31; provided, that the first Plan Year shall be a short Plan Year
beginning on January 3, 1996, and ending on December 31, 1996.
"Restricted Stock Award" means an award of Common Stock granted pursuant to
Section 9.
"Rule 16b-3" means Rule 16b-3 under the Exchange Act, as in effect from
time to time.
"Stock Appreciation Right" means an award granted pursuant to Section 7.
"Stock Bonus Award" means an award of Common Stock granted pursuant to
Section 10.
"Stock Option" means any option to purchase Common Stock granted pursuant
to Section
"Subsidiary" means (i) as it relates to Incentive Stock Options, any
corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company if, at the time of the granting of the option, each
of the corporations (other than the last corporation in the unbroken chain) owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain and (ii) for all other
purposes, a corporation, domestic or foreign, of which not less than 50% of the
voting shares are held by the
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Company or by a Subsidiary, whether or not such corporation now exists or
hereafter is organized or acquired by the Company or by a Subsidiary.
3. Administration. The Plan shall be administered by a committee of two
or more members of the Board (the "Committee") selected by the Board, each of
whom shall qualify as a "disinterested person" within the meaning of Rule 16b-3
and as an "outside director" within the meaning of Section 162(m) of the Code.
The Committee shall have authority to grant to eligible employees of the
Company or its Subsidiaries, pursuant to the terms of the Plan, (a) Stock
Options, (b) Stock Appreciation Rights, (c) Restricted Stock Awards, (d)
Performance Unit Awards, (e) Stock Bonus Awards, or (f) any combination of the
foregoing.
Subject to the applicable provisions of the Plan, the Committee shall have
authority to interpret the provisions of the Plan and to decide all questions of
fact arising in the application of such provisions; to select the officers and
other key employees to whom awards or options shall be granted under the Plan;
to determine whether and to what extent awards or options shall be granted under
the Plan; to determine the types of awards and options to be granted under the
Plan and the amount, size, terms and conditions of each such award or option; to
determine the time when awards or options shall be granted under the Plan; to
determine whether, to what extent and under what circumstances the payment of
Common Stock and other amounts payable with respect to an award granted under
the Plan shall be deferred either automatically or at the election of the
grantee; to determine the Fair Market Value of the Common Stock from time to
time; to authorize persons to execute on behalf of the Company any agreement
required to be entered into under the Plan; to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as the
Committee from time to time shall deem advisable; and to make all other
determinations necessary or advisable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all decisions and
determinations made by the Committee pursuant to the provisions of the Plan
shall be made in the sole discretion of the Committee and shall be final and
binding on all persons, including but not limited to the Company and its
Subsidiaries, the officers and other key employees to whom awards and options
are granted under the Plan, the heirs and legal representatives of such officers
and key employees, and the personal representatives and beneficiaries of the
estates of such officers and key employees.
The Committee may delegate to any officer or officers of the Company any of
the Committee's duties, powers, and authorities under the Plan upon such
conditions and with such limitations as the Committee may determine; provided,
that only the Committee may select for awards or options under the Plan, and
make grants of awards or options under the Plan to, officers and other key
employees of the Company or any Subsidiary who are subject to Section 16 of the
Exchange Act at the time of such selection or the making of such a grant.
4. Common Stock Subject to the Plan. The Company shall reserve and keep
available for issuance under the Plan 2,400,000 shares of Common Stock, subject
to adjustment
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pursuant to Section 19. Such shares may consist in whole or in part of
authorized and unissued shares or treasury shares or any combination thereof.
The aggregate number of shares of Common Stock subject to or issuable in payment
of (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Stock Bonus Awards,
(iv) Restricted Stock Awards or (v) Performance Unit Awards granted under the
Plan in any Plan Year to any individual may not exceed 240,000, subject to
adjustment pursuant to Section 19. Except as otherwise provided in the Plan, any
shares subject to an option or right which expires for any reason or terminates
unexercised as to such shares shall again be available for the grant of awards
or options under the Plan. If any shares of Common Stock have been pledged as
collateral for indebtedness incurred by an optionee in connection with the
exercise of a Stock Option and such shares are returned to the Company in
satisfaction of such indebtedness, then such shares shall again be available for
the grant of awards or options under the Plan.
5. Eligibility to Receive Awards and Options. Awards and options may be
granted under the Plan to those officers and other key employees of the Company
or any Subsidiary who are responsible for or contribute to, or are likely to be
responsible for or contribute to, the management, growth and success of the
Company or any Subsidiary. The granting of an award or option under the Plan to
an officer or other key employee of the Company or any Subsidiary shall
conclusively evidence the Committee's determination that such grantee meets one
or more of the criteria referred to in the preceding sentence. Directors of the
Company or of any Subsidiary who are not employees of the Company or any
Subsidiary shall not be eligible to participate in the Plan.
6. Stock Options. A Stock Option may be an Incentive Stock Option or a
Non-Qualified Stock Option. To the extent that any Stock Option does not
qualify as an Incentive Stock Option, it shall constitute a separate Non-
Qualified Stock Option. Stock Options may be granted alone or in addition to
other awards made under the Plan. Stock Options shall be evidenced by
agreements in such form as the Committee shall approve from time to time. The
agreements shall contain in substance the following terms and conditions and may
contain such additional terms and conditions, not inconsistent with the terms of
the Plan, as the Committee shall deem appropriate:
(a) Type of Option. Each option agreement shall identify the Stock
Option represented thereby as an Incentive Stock Option or a Non-Qualified
Stock Option, as the case may be.
(b) Option Price. The option exercise price per share shall not be
less than the Fair Market Value of the Common Stock on the date the Stock
Option is granted and in no event shall be less than the par value of the
Common Stock.
(c) Term. Each option agreement shall state the period or periods of
time within which the Stock Option may be exercised, in whole or in part,
which shall be such period or periods of time as the Committee may
determine at the time of the Stock Option grant; provided, that no Stock
Option granted under the Plan shall be exercisable more than ten years
after the date of its grant; and provided further, that each Stock Option
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granted under the Plan shall become exercisable one year after the date of
its grant, unless the option agreement specifically provides otherwise.
The Committee shall have authority to accelerate previously established
exercise rights, subject to the requirements set forth in the Plan, under
such circumstances and upon such terms and conditions as the Committee
shall deem appropriate.
(d) Payment for Shares. The Committee may permit all or part of the
payment of the option exercise price to be made (i) in cash, by check or by
wire transfer or (ii) in shares of Common Stock (A) which already are owned
by the optionee and which are surrendered to the Company in good form for
transfer or (B) which are retained by the Company from the shares of the
Common Stock which would otherwise be issued to the optionee upon the
optionee's exercise of the Stock Option. Such shares shall be valued at
their Fair Market Value on the date of exercise of the Stock Option. In
lieu of payment in fractions of shares, payment of any fractional share
amount shall be made in cash or check payable to the Company. The
Committee also may provide that the exercise price may be paid by
delivering a properly executed exercise notice in a form approved by the
Committee together with irrevocable instructions to a broker to promptly
deliver to the Company the amount of the applicable sale or loan proceeds
required to pay the exercise price. No shares of Common Stock shall be
issued to any optionee upon the exercise of a Stock Option until the
Company receives full payment therefor as described above.
(e) Rights upon Termination of Employment. In the event that an
optionee ceases to be employed by the Company and all of its Subsidiaries
for any reason other than such optionee's death or Disability, any rights
of the optionee under any Stock Option then in effect immediately shall
terminate; provided, that the optionee (or the optionee's legal
representative) shall have the right to exercise the Stock Option during
its term within a period of three (3) months after such termination of
employment to the extent that the Stock Option was exercisable at the time
of such termination or within such other period and subject to such other
terms and conditions as may be specified by the Committee. Notwithstanding
the foregoing provisions of this Section 6(e), the optionee (and the
optionee's legal representative) shall not have any rights under any Stock
Option, and the Company shall not be obligated to sell or deliver shares of
Common Stock (or have any other obligation or liability) under any Stock
Option, if the Committee shall determine that (i) the employment of the
optionee with the Company or any Subsidiary has been terminated for cause
or (ii) the optionee has engaged or may engage in employment or activities
competitive with the Company or any Subsidiary or contrary, in the opinion
of the Committee, to the best interests of the Company or any Subsidiary.
In the event of such determination, the optionee (and the optionee's legal
representative) shall have no right under any Stock Option to purchase any
shares of Common Stock regardless of whether the optionee (or the
optionee's legal representative) shall have delivered a notice of exercise
prior to the Committee's making of such determination. Any Stock Option
may be terminated entirely by the Committee at the time of or at any time
subsequent to a determination by the Committee under this Section
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6(e) which has the effect of eliminating the Company's obligation to sell
or deliver shares of Common Stock under such Stock Option.
In the event that an optionee ceases to be employed by the Company and
all of its Subsidiaries by reason of such optionee's Disability, prior to
the expiration of a Stock Option and without such optionee's having fully
exercised such Stock Option, such optionee or such optionee's legal
representative shall have the right to exercise such Stock Option during
its term within a period of six (6) months after such termination of
employment to the extent that such Stock Option was exercisable at the time
of such termination or within such other period and subject to such other
terms and conditions as may be specified by the Committee.
In the event that an optionee ceases to be employed by the Company and
all of its Subsidiaries by reason of such optionee's death, prior to the
expiration of a Stock Option and without such optionee's having fully
exercised such Stock Option, the personal representative of such optionee's
estate or the person who acquired the right to exercise such Stock Option
by bequest or inheritance from such optionee shall have the right to
exercise such Stock Option during its term within a period of twelve (12)
months after the date of such optionee's death to the extent that such
Stock Option was exercisable at the time of such death or within such other
period and subject to such other terms and conditions as may be specified
by the Committee.
To the extent that the aggregate Fair Market Value (determined as of the time
the option is granted) of the Common Stock with respect to which Incentive Stock
Options granted under the Plan (and all other plans of the Company and its
Subsidiaries) become exercisable for the first time by any individual in any
calendar year exceeds $100,000, such Stock Options shall be treated as Non-
Qualified Stock Options. No Incentive Stock Option shall be granted to any
employee if, at the time the option is granted, the employee (in his or her own
right or by reason of the attribution rules applicable under Section 424(d) of
the Code) owns more than 10% of the total combined voting power of all classes
of stock of the Company or any Parent Corporation or Subsidiary unless at the
time such option is granted the option price is at least 110% of the Fair Market
Value of the stock subject to such Stock Option and such Stock Option by its
terms is not exercisable after the expiration of five years from the date of its
grant.
7. Stock Appreciation Rights. Stock Appreciation Rights shall enable the
grantees thereof to benefit from increases in the Fair Market Value of shares of
Common Stock and shall be evidenced by agreements in such form as the Committee
shall approve from time to time. The agreements shall contain in substance the
following terms and conditions and may contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall
deem appropriate:
(a) Award. A Stock Appreciation Right shall entitle the grantee,
subject to such terms and conditions as the Committee may prescribe, to
receive upon the exercise thereof an award equal to all or a portion of the
excess of (i) the Fair Market Value of a specified number of shares of
Common Stock at the time of the exercise of such right
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<PAGE>
over (ii) a specified price which shall not be less than the Fair Market
Value of the Common Stock at the time the right is granted or, if connected
with a previously granted Stock Option, not less than the Fair Market Value
of the Common Stock at the time such Stock Option was granted. Subject to
the limitations set forth in Section 4, such award may be paid by the
Company in cash, shares of Common Stock (valued at their then Fair Market
Value) or any combination thereof, as the Committee may determine. Stock
Appreciation Rights may be, but are not required to be, granted in
connection with a previously or contemporaneously granted Stock Option. In
the event of the exercise of a Stock Appreciation Right, the number of
shares reserved for issuance under the Plan shall be reduced by the number
of shares covered by the Stock Appreciation Right as to which such exercise
occurs.
(b) Term. Each agreement shall state the period or periods of time
within which the Stock Appreciation Right may be exercised, in whole or in
part, subject to such terms and conditions prescribed for such purpose by
the Committee; provided, that no Stock Appreciation Right shall be
exercisable more than ten years after the date of its grant; and provided
further, that each Stock Appreciation Right granted under the Plan shall
become exercisable one year after the date of its grant, unless the
agreement specifically provides otherwise. The Committee shall have
authority to accelerate previously established exercise rights, subject to
the requirements set forth in the Plan, under such circumstances and upon
such terms and conditions as the Committee shall deem appropriate.
(c) Rights upon Termination of Employment. In the event that a
grantee of a Stock Appreciation Right ceases to be employed by the Company
and all of its Subsidiaries for any reason other than such grantee's death
or Disability, any rights of the grantee under any Stock Appreciation Right
then in effect immediately shall terminate; provided, that the grantee (or
the grantee's legal representative) shall have the right to exercise the
Stock Appreciation Right during its term within a period of three (3)
months after such termination of employment to the extent that the Stock
Appreciation Right was exercisable at the time of such termination or
within such other period and subject to such other terms and conditions as
may be specified by the Committee. Notwithstanding the foregoing
provisions of this Section 7(c), the grantee (and the grantee's legal
representative) shall not have any rights under any Stock Appreciation
Right, and the Company shall not be obligated to pay or deliver any cash,
Common Stock or any combination thereof (or have any other obligation or
liability) under any Stock Appreciation Right, if the Committee shall
determine that (i) the employment of the grantee with the Company or any
Subsidiary has been terminated for cause or (ii) the grantee has engaged or
may engage in employment or activities competitive with the Company or any
Subsidiary or contrary, in the opinion of the Committee, to the best
interests of the Company or any Subsidiary. In the event of such
determination, the grantee (and the grantee's legal representative) shall
have no right under any Stock Appreciation Right regardless of whether the
grantee (or the grantee's legal representative) shall have delivered a
notice of exercise prior to the Committee's making of such determination.
Any Stock Appreciation Right may be terminated entirely by the
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<PAGE>
Committee at the time of or at any time subsequent to a determination by
the Committee under this Section 7(c) which has the effect of eliminating
the Company's obligations under such Stock Appreciation Right.
In the event that a grantee of a Stock Appreciation Right ceases to be
employed by the Company and all of its Subsidiaries by reason of such
grantee's Disability, prior to the expiration of a Stock Appreciation Right
and without such grantee's having fully exercised such Stock Appreciation
Right, such grantee or such grantee's legal representative shall have the
right to exercise such Stock Appreciation Right during its term within a
period of six (6) months after such termination of employment to the extent
that such Stock Appreciation Right was exercisable at the time of such
termination or within such other period and subject to such other terms and
conditions as may be specified by the Committee.
In the event that a grantee ceases to be employed by the Company and
all of its Subsidiaries by reason of such grantee's death, prior to the
expiration of a Stock Appreciation Right and without such grantee's having
fully exercised such Stock Appreciation Right, the personal representative
of the grantee's estate or the person who acquired the right to exercise
such Stock Appreciation Right by bequest or inheritance from such grantee
shall have the right to exercise such Stock Appreciate Right during its
term within a period of twelve (12) months after the date of such grantee's
death to the extent that such Stock Appreciation Right was exercisable at
the time of such death or within such other period and subject to such
other terms and conditions as may be specified by the Committee.
8. Performance Unit Awards. Performance Unit Awards shall entitle the
grantees thereof to receive future payments based upon and subject to the
achievement of preestablished long-term performance targets and shall be
evidenced by agreements in such form as the Committee shall approve from time to
time. The agreements shall contain in substance the following terms and
conditions and may contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem
appropriate:
(a) Performance Period. The Committee shall establish with respect to
each Performance Unit Award a performance period of not fewer than two
years nor more than five years.
(b) Unit Value. The Committee shall establish with respect to each
Performance Unit Award a value for each unit which shall not change
thereafter or which may vary thereafter on the basis of criteria specified
by the Committee.
(c) Performance Targets. The Committee shall establish with respect
to each Performance Unit Award maximum and minimum performance targets to
be achieved during the applicable performance period. The achievement of
the maximum targets shall entitle a grantee to payment with respect to the
full value of a Performance Unit Award. The achievement of less than the
maximum targets, but in excess of the minimum targets,
A-8
<PAGE>
shall entitle a grantee to payment with respect to a portion of a
Performance Unit Award according to the level of achievement of the
applicable targets as specified by the Committee. To the extent the
Committee deems necessary or appropriate to protect against the loss of
deductibility pursuant to Section 162(m) of the Code, such targets shall be
established in conformity with the requirements of Section 162(m) of the
Code.
(d) Performance Measures. Performance targets established by the
Committee shall relate to corporate, division, subsidiary, group or unit
performance in terms of objective financial criteria or performance goals
which satisfy the requirements of Section 162(m) of the Code or, with
respect to grantees not subject to Section 162(m) of the Code, such other
measures or standards of performance as the Committee may determine.
Multiple targets may be used and may have the same or different weighting,
and the targets may relate to absolute performance or relative performance
measured against other companies, businesses or indexes.
(e) Adjustments. At any time prior to the payment of a Performance
Unit Award, the Committee may adjust previously established performance
targets or other terms and conditions of such Performance Unit Award,
including the Company's or another company's financial performance for Plan
purposes, in order to reduce or eliminate, but not to increase, the payment
with respect to a Performance Unit Award that otherwise would be due upon
the attainment of such previously established performance targets. Such
adjustments shall be made to reflect major unforeseen events such as
changes in laws, regulations or accounting practices, mergers, acquisitions
or divestitures or other extraordinary, unusual or nonrecurring items or
events.
(f) Payment of Performance Unit Awards. Upon the conclusion of each
performance period, the Committee shall determine the extent to which the
applicable performance targets have been attained and any other terms and
conditions have been satisfied for such period and shall provide such
certification thereof as may be necessary to satisfy the requirements of
Section 162(m) of the Code. The Committee shall determine what, if any,
payment is due on a Performance Unit Award and, subject to the limitations
set forth in Section 4, whether such payment shall be made in cash, shares
of Common Stock (valued at their then Fair Market Value) or a combination
thereof. Payment of a Performance Unit Award shall be made in a lump sum
or in installments, as determined by the Committee, commencing as promptly
as practicable after the end of the performance period unless such payment
is deferred upon such terms and conditions as may be specified by the
Committee.
(g) Termination of Employment. In the event that a grantee of a
Performance Unit Award ceases to be employed by the Company and all of its
Subsidiaries for any reason other than such grantee's death or Disability,
any rights of such grantee under any Performance Unit Award then in effect
whose performance period has not ended shall terminate immediately;
provided, that the Committee may authorize the partial payment of any such
Performance Unit Award if the Committee determines such action to be
equitable.
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In the event that a grantee of a Performance Unit Award ceases to be
employed by the Company and all of its Subsidiaries by reason of such
grantee's death or Disability, any rights of such grantee under any
Performance Unit Award then in effect whose performance period has not
ended shall terminate immediately; provided, that the Committee may
authorize the payment to such grantee or such grantee's legal
representative of all or any portion of such Performance Unit Award to the
extent earned under the applicable performance targets, even though the
applicable performance period has not ended, upon such terms and conditions
as may be specified by the Committee.
9. Restricted Stock Awards. Restricted Stock Awards shall consist of
shares of Common Stock restricted against transfer, subject to a substantial
risk of forfeiture and to other terms and conditions intended to further the
purpose of the Plan as the Committee may determine, and shall be evidenced by
agreements in such form as the Committee shall approve from time to time. The
agreements shall contain in substance the following terms and conditions and may
contain such additional terms and conditions, not inconsistent with the terms of
the Plan, as the Committee shall deem appropriate:
(a) Restriction Period. The Common Stock covered by Restricted Stock
Awards shall be subject to the applicable restrictions established by the
Committee over such period as the Committee shall determine. To the extent
the Committee deems necessary or appropriate to protect against the loss of
deductibility pursuant to Section 162(m) of the Code, Restricted Stock
Awards also may be subject to the attainment of one or more preestablished
performance objectives which relate to corporate, subsidiary, division,
group or unit performance in terms of objective financial criteria or
performance goals which satisfy the requirements of Section 162(m) of the
Code; provided, that any such preestablished financial criteria or
performance goals subsequently may be adjusted by the Committee to reduce
or eliminate, but not to increase, a Restricted Stock Award in order to
take into account unforeseen events or changes in circumstances.
(b) Restriction upon Transfer. Shares of Common Stock covered by
Restricted Stock Awards may not be sold, assigned, transferred, exchanged,
pledged, hypothecated or otherwise encumbered, except as provided in the
Plan or in any Restricted Stock Award agreement entered into between the
Company and a grantee, during the restriction period applicable to such
shares. Notwithstanding the foregoing provisions of this Section 9(b), and
except as otherwise provided in the Plan or the applicable Restricted Stock
Award agreement, a grantee of a Restricted Stock Award shall have all of
the other rights of a holder of Common Stock including but not limited to
the right to receive dividends and the right to vote such shares.
(c) Payment. The Committee shall determine the amount, form and time
of payment, if any, that shall be required from the grantee of a Restricted
Stock Award in consideration of the issuance and delivery of the shares of
Common Stock covered by such Restricted Stock Award.
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<PAGE>
(d) Certificates. Each certificate issued in respect of shares of
Common Stock covered by a Restricted Stock Award shall be registered in the
name of the grantee and shall bear the following legend (in addition to any
other legends which may be appropriate):
"This certificate and the shares of stock represented hereby are
subject to the terms and conditions (including forfeiture
provisions and restrictions against transfer) contained in the
CSG Systems International, Inc. 1996 Stock Incentive Plan and a
Restricted Stock Award Agreement entered into between the
registered owner and CSG Systems International, Inc. Release
from such terms and conditions may be obtained only in accordance
with the provisions of such Plan and Agreement, a copy of each of
which is on file in the office of the Secretary of CSG Systems
International, Inc."
The Committee may require the grantee of a Restricted Stock Award to enter
into an escrow agreement providing that the certificates representing the
shares covered by such Restricted Stock Award will remain in the physical
custody of an escrow agent until all restrictions are removed or expire.
The Committee also may require that the certificates held in such escrow be
accompanied by a stock power, endorsed in blank by the grantee, relating to
the Common Stock covered by such certificates.
(e) Lapse of Restrictions. Except for preestablished performance
objectives established with respect to Restricted Stock Awards to grantees
subject to Section 162(m) of the Code, the Committee may provide for the
lapse of restrictions applicable to Common Stock subject to Restricted
Stock Awards in installments and may waive such restrictions in whole or in
part based upon such factors and such circumstances as the Committee shall
determine. Upon the lapse of such restrictions, certificates for shares of
Common Stock, free of the restrictive legend set forth in Section 9(c),
shall be issued to the grantee or the grantee's legal representative. The
Committee shall have authority to accelerate the expiration of the
applicable restriction period with respect to all or any portion of the
shares of Common Stock covered by a Restricted Stock Award except, with
respect to grantees subject to Section 162(m) of the Code, to the extent
such acceleration would result in the loss of the deductibility of such
Restricted Stock Award pursuant to Section 162(m) of the Code.
(f) Termination of Employment. In the event that a grantee of a
Restricted Stock Award ceases to be employed by the Company and all of its
Subsidiaries for any reason, any rights of such grantee with respect to
shares of Common Stock that remain subject to restrictions under such
Restricted Stock Award shall terminate immediately, and any shares of
Common Stock covered by a Restricted Stock Award with unlapsed restrictions
shall be subject to reacquisition by the Company upon the terms set forth
in the applicable agreement with such grantee. The Committee may provide
for complete or partial exceptions to such employment requirement if the
Committee determines such action to be equitable.
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<PAGE>
10. Stock Bonus Awards. The Committee may grant a Stock Bonus Award to an
eligible grantee under the Plan based upon corporate, division, subsidiary,
group or unit performance in terms of preestablished objective financial
criteria or performance goals or, with respect to participants not subject to
Section 162(m) of the Code, such other measures or standards of performance
(including but not limited to performance already accomplished) as the Committee
may determine; provided, that any such preestablished financial criteria or
performance goals subsequently may be adjusted to reduce or eliminate, but not
to increase, a Stock Bonus Award in order to take into account unforeseen events
or changes in circumstances.
If appropriate in the sole discretion of the Committee, Stock Bonus Awards
shall be evidenced by agreements in such form as the Committee shall approve
from time to time. In addition to any applicable performance goals or standards
and subject to the terms of the Plan, shares of Common Stock which are the
subject of a Stock Bonus Award may be (i) subject to additional restrictions
(including but not limited to restrictions on transfer) or (ii) granted directly
to a grantee free of any restrictions, as the Committee shall deem appropriate.
11. General Restrictions. Each award or grant under the Plan shall be
subject to the requirement that if at any time the Committee shall determine
that (i) the listing, registration or qualification of the shares of Common
Stock subject or related thereto upon any securities exchange or under any state
or federal law, (ii) the consent or approval of any governmental regulatory
body, or (iii) an agreement by the grantee of an award or grant with respect to
the disposition of the shares of Common Stock subject or related thereto is
necessary or desirable as a condition of, or in connection with, such award or
grant or the issuance or purchase of shares of Common Stock thereunder, then
such award or grant may not be consummated and any rights thereunder may not be
exercised in whole or in part unless such listing, registration, qualification,
consent, approval or agreement shall have been effected or obtained upon
conditions acceptable to the Committee. Awards or grants under the Plan shall
be subject to such additional terms and conditions, not inconsistent with the
Plan, as the Committee in its sole discretion deems necessary or desirable,
including but not limited to such terms and conditions as are necessary to
enable a grantee to avoid any short-swing profit recapture liability under
Section 16 of the Exchange Act.
12. Single or Multiple Agreements. Multiple forms of awards or grants or
combinations thereof may be evidenced either by a single agreement or by
multiple agreements, as determined by the Committee.
13. Rights of a Stockholder. Unless otherwise provided by the Plan, the
grantee of any award or grant under the Plan shall have no rights as a
stockholder of the Company with respect to the shares of Common Stock subject or
related to such award or grant unless and until certificates for such shares of
Common Stock are issued to such grantee.
14. No Right to Continue Employment. Nothing in the Plan or in any
agreement entered into pursuant to the Plan shall confer upon any grantee the
right to continue in the
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<PAGE>
employment of the Company or any Subsidiary or affect any right which the
Company or any Subsidiary may have to terminate the employment of any grantee
with or without cause.
15. Withholding. The Company's obligation to (i) deliver shares of Common
Stock or pay cash upon the exercise of any Stock Option or Stock Appreciation
Right, (ii) deliver shares of Common Stock or pay cash in payment of any
Performance Unit Award, (iii) deliver stock certificates upon the vesting of any
Restricted Stock Award, and (iv) deliver shares of Common Stock upon the grant
of any Stock Bonus Award shall be subject to applicable federal, state and local
tax withholding requirements. In the discretion of the Committee, amounts
required to be withheld for taxes may be paid by the grantee in cash or shares
of Common Stock (either through the surrender of previously held shares of
Common Stock or the withholding of shares of Common Stock otherwise issuable
upon the exercise or payment of such award or grant) having a Fair Market Value
equal to the required tax withholding amount and upon such other terms and
conditions as the Committee shall determine; provided, that any election by a
grantee subject to Section 16(b) of the Exchange Act to pay any tax withholding
in shares of Common Stock shall be subject to and must comply with Rule 16b-3(e)
under the Exchange Act.
16. Indemnification. No member of the Board or the Committee, nor any
officer or employee of the Company or a Subsidiary acting on behalf of the Board
or the Committee, shall be personally liable for any action, determination or
interpretation taken or made in good faith with respect to the Plan; and all
members of the Board or the Committee and each and any officer or employee of
the Company or any Subsidiary acting on their behalf shall, to the extent
permitted by law, be fully indemnified and protected by the Company in respect
of any such action, determination or interpretation.
17. Non-Assignability. No award or grant under the Plan shall be
assignable or transferable by the recipient thereof except by will, by the laws
of descent and distribution or, in the case of awards or grants other than
Incentive Stock Options, pursuant to a qualified domestic relations order or by
such other means (if any) as the Committee may approve from time to time with
respect to holders whose transactions in the Common Stock are not subject to
Section 16(b) of the Exchange Act. No right or benefit under the Plan shall in
any manner be subject to the debts, contracts, liabilities or torts of the
person entitled to such right or benefit.
18. Nonuniform Determinations. The Committee's determinations under the
Plan (including but not limited to determinations of the persons to receive
awards or grants, the form, amount and timing of such awards or grants, the
terms and provisions of such awards or grants and the agreements evidencing them
and the establishment of values and performance targets) need not be uniform and
may be made by the Committee selectively among the persons who receive, or are
eligible to receive, awards or grants under the Plan, whether or not such
persons are similarly situated.
19. Adjustments. In the event of any change in the outstanding shares of
Common Stock, by reason of a stock dividend or distribution, stock split,
recapitalization, merger, reorganization, consolidation, split-up, spin-off,
combination of shares, exchange of shares or other change in corporate structure
affecting the Common Stock, the Committee shall make
A-13
<PAGE>
appropriate adjustments in (a) the aggregate number of shares of Common Stock
(i) reserved for issuance under the Plan, (ii) for which grants or awards may be
made to an individual grantee and (iii) covered by outstanding awards and grants
denominated in shares or units of Common Stock, (b) the exercise or other
applicable price related to outstanding awards or grants and (c) the appropriate
Fair Market Value and other price determinations relevant to outstanding awards
or grants and shall make such other adjustments as may be equitable under the
circumstances; provided, that the number of shares subject to any award or grant
always shall be a whole number.
20. Terms of Payment. Subject to any other applicable provisions of the
Plan and to any applicable laws, whenever payment by a grantee is required with
respect to shares of Common Stock which are the subject of an award or grant
under the Plan, the Committee shall determine the time, form and manner of such
payment, including but not limited to lump-sum payments and installment payments
upon such terms and conditions as the Committee may prescribe. Installment
payment obligations of a grantee may be evidenced by full-recourse, limited-
recourse or non-recourse promissory notes or other instruments, with or without
interest and with or without collateral or other security as the Committee may
determine.
21. Termination and Amendment. The Board may terminate or amend the Plan
or any portion thereof at any time, including but not limited to amendments to
the Plan necessary to comply with the requirements of Section 16(b) of the
Exchange Act, except that the Board may not increase the maximum number of
shares which may be issued under the Plan (other than by way of adjustments made
pursuant to Section 19), extend the maximum period during which any award or
grant may be exercised, extend the term of the Plan, decrease the minimum option
price to less than the Fair Market Value on the date of the grant of the option
or change the employees or class of employees eligible to participate in the
Plan without stockholder approval as required by Rule 16b-3. The termination or
any modification or amendment of the Plan shall not, without the consent of a
grantee, adversely affect such grantee's rights under an award or grant
previously made to such grantee under the Plan. The Committee may amend the
terms of any award or grant theretofore granted, prospectively or retroactively;
but, except as otherwise expressly permitted by the Plan and subject to Section
19, no such amendment shall adversely affect the rights of the grantee of such
award or grant without such grantee's consent. Notwithstanding the foregoing
provisions of this Section 21, stockholder approval of any action referred to in
this Section 21 shall be required whenever necessary to satisfy the applicable
requirements of Rule 16b-3, Section 162(m) of the Code or Section 422 of the
Code.
22. Severability. With respect to participants subject to Section 16 of
the Exchange Act, (i) the Plan is intended to comply with all applicable
conditions of Rule 16b-3 or any successor to such rule, (ii) all transactions
involving grantees who are subject to Section 16(b) of the Exchange Act are
subject to such conditions, regardless of whether the conditions are expressly
set forth in the Plan and (iii) any provision of the Plan that is contrary to a
condition of Rule 16b-3 shall not apply to grantees who are subject to Section
16(b) of the Exchange Act. If any of the terms or provisions of the Plan, or
awards or grants made under the Plan, conflict with the requirements of Section
162(m) or Section 422 of the Code with respect to awards or grants subject to or
governed by Section 162(m) or Section 422 of the Code, as the case may be, then
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<PAGE>
such terms or provisions shall be deemed inoperative to the extent they so
conflict with the requirements of Section 162(m) or Section 422 of the Code, as
the case may be. With respect to an Incentive Stock Option, if the Plan does
not contain any provision required to be included in the Plan under Section 422
of the Code (as amended from time to time) or any successor to such section,
then such provision shall be deemed to be incorporated in the Plan with the same
force and effect as if such provision had been expressly set out in the Plan.
23. Effect on Other Plans. Participation in the Plan shall not affect an
employee's eligibility to participate in any other benefit or incentive plan of
the Company or any Subsidiary. Any awards made pursuant to the Plan shall not be
taken into account in determining the benefits provided or to be provided under
any other plan of the Company or any Subsidiary unless otherwise specifically
provided in such other plan.
24. Term of Plan. The Plan shall become effective on January 3, 1996, and
shall terminate for purposes of further grants on the first to occur of (i)
December 31, 2005, or (ii) the effective date of the termination of the Plan by
the Board pursuant to Section 21. No awards or options may be granted under the
Plan after the termination of the Plan, but such termination shall not affect
any awards or options outstanding at the time of such termination or the
authority of the Committee to continue to administer the Plan apart from the
making of further grants.
25. Governing Law. The Plan shall be governed by and construed in
accordance with the laws of Delaware.
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<PAGE>
PROXY
CSG SYSTEMS INTERNATIONAL, INC.
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 16, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
-----------------------------------------------------------
The undersigned hereby constitutes and appoints Neal C. Hansen and John P.
Pogge, and each or either of them, attorneys and proxies of the undersigned,
with full power of substitution to each of them, to vote all stock of CSG
Systems International, Inc. (the "Corporation") standing in the name of the
undersigned at the special meeting of stockholders of the Corporation to be held
at the office of the Corporation, 7887 E. Belleview Avenue, Suite 1000,
Englewood, Colorado, at 8:30 a.m. (Mountain Time), on December 16, 1997, and at
any adjournments thereof, on the matter set forth on the reverse side hereof
and on any other matters that properly may come before such meeting or any
adjournments thereof.
THIS PROXY, WHEN PROPERLY SIGNED, WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE MATTER SET FORTH ON THE
REVERSE SIDE HEREOF.
The undersigned hereby ratifies and confirms all that either of such
attorneys and proxies, or their substitutes, may do or cause to be done by
virtue hereof and acknowledges receipt of the Notice of Special Meeting of
Stockholders of the Corporation to be held on December 16, 1997 and the Proxy
Statement of the Corporation for such Special Meeting.
(TO BE SIGNED ON REVERSE SIDE)
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
[X ] Please mark your
votes as in this
example.
Approval of an amendment to the
Corporation's 1996 Stock Incentive
Plan (the "1996 Plan") to increase
the number of shares of the Common
Stock of the Corporation available for
issuance under the 1996 Plan from FOR AGAINST ABSTAIN
2,400,000 shares to 4,000,000 shares. [ ] [ ] [ ]
</TABLE>
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE
___________________________ ____________________________ ____________
SIGNATURE OF STOCKHOLDER SIGNATURE IF HELD JOINTLY DATE
NOTE: Please sign exactly as name appears above. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
Corporations, partnerships, and limited liability companies should sign
in their names by an authorized officer, partner, member or manager.
