<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 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:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
[LOGO]
CSG Systems International, Inc.
7887 East Belleview Avenue, Suite 1000
Englewood, Colorado 80111
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 19, 2000
----------------
The annual meeting of stockholders of CSG Systems International, Inc. (the
"Company") will be held at the office of the Company, 7887 East Belleview
Avenue, Suite 1000, Englewood, Colorado, on Friday, May 19, 2000, at 8:30
a.m., for the following purposes:
1. To elect three Class III Directors.
2. To consider and vote on a proposed amendment of the Company's Stock
Option Plan for Non-Employee Directors which will increase by 250,000 the
number of shares of Common Stock of the Company available for issuance
under such Plan.
3. To transact such other business as properly may come before the
meeting or any adjournments thereof.
The Board of Directors fixed the close of business on March 21, 2000, as the
record date for determining the stockholders of the Company who are 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
March 23, 2000
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 THE ENCLOSED ENVELOPE IS MAILED IN THE UNITED STATES. YOU ALSO MAY FILE
YOUR PROXY BY TELEPHONE OR THE INTERNET IN ACCORDANCE WITH THE INSTRUCTIONS
ACCOMPANYING THE PROXY. THE PROXY WILL NOT BE USED IF YOU ATTEND THE MEETING
IN PERSON AND SO REQUEST.
<PAGE>
CSG Systems International, Inc.
7887 East Belleview Avenue, Suite 1000
Englewood, Colorado 80111
----------------
PROXY STATEMENT
----------------
ANNUAL MEETING OF STOCKHOLDERS
May 19, 2000
This Proxy Statement is furnished by the Board of Directors (the "Board") of
CSG Systems International, Inc. (the "Company") in connection with the Board's
solicitation of proxies for use at the annual meeting of stockholders of the
Company (the "Annual Meeting") to be held at the office of the Company, 7887
East Belleview Avenue, Suite 1000, Englewood, Colorado, on Friday, May 19,
2000, at 8:30 a.m., and at any adjournments of the Annual 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 director
nominees named in this Proxy Statement and in favor of the proposed amendment
of the Company's Stock Option Plan for Non-Employee Directors which will
increase by 250,000 the number of shares of Common Stock of the Company
available for issuance under such Plan. A stockholder may revoke a proxy at
any time before it is exercised either 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 Annual Meeting and voting in
person.
The Board fixed the close of business on March 21, 2000, as the record date
for determining the stockholders of the Company who are entitled to notice of
and to vote at the Annual Meeting. At the close of business on March 21, 2000,
there were outstanding and entitled to vote at the Annual Meeting 52,078,321
shares of Common Stock of the Company, par value $.01 per share ("Common
Stock"). Each share is entitled to one vote.
The Company will bear all costs of this solicitation of proxies. In addition
to solicitations by mail, the Company's directors, officers and regular
employees, without additional remuneration, and their appointed agents may
solicit proxies in person or by telephone, facsimile or other means. The
Company will request brokers, custodians and fiduciaries 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.
The Company is mailing its Annual Report to stockholders for the year ended
December 31, 1999, with this Proxy Statement and the accompanying proxy on or
about April 12, 2000.
Quorum and Votes Required
A majority of the shares of Common Stock outstanding on the record date is
required to be present or represented by proxy at the Annual Meeting in order
to have the quorum necessary to take action at the Annual Meeting. Assuming
that a quorum is present at the Annual Meeting, the three nominees for
election as directors who receive the greatest number of votes cast in the
election of directors will be elected as directors. Approval of the proposed
amendment of the Company's Stock Option Plan for Non-Employee Directors
requires the affirmative vote of the holders of a majority of the shares of
Common Stock present or represented by proxy at the Annual Meeting and
entitled to vote on such matter.
Votes cast in person or by proxy at the Annual Meeting will be tabulated by
the inspector appointed for the Annual 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.
Abstentions will have no effect in the election of directors but will have the
effect of a "no" vote with respect to other matters voted upon. If a broker
indicates on a proxy that such broker does not have discretionary authority to
vote on a particular matter as to certain Common Stock, then such shares will
not be counted in determining the number of votes required for approval;
however, such "broker non-votes" will be counted for purposes of determining
whether a quorum is present at the Annual Meeting.
1
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The first table below sets forth each person known by the Company to own
beneficially more than 5% of the outstanding Common Stock as of January 31,
2000, except as otherwise indicated. The second table below sets forth to the
Company's knowledge the beneficial ownership of Common Stock by each director,
nominee and executive officer of the Company, individually, and by all
directors and executive officers of the Company as a group, as of January 31,
2000.
Principal Stockholders
<TABLE>
<CAPTION>
Shares of Percentage
Name and Address of Common Stock of Common
Beneficial Owner Beneficially Owned Stock Outstanding
- ------------------- ------------------ -----------------
<S> <C> <C>
J. & W. Seligman & Co. 3,972,000 7.7%
Incorporated (1).......
William C. Morris (1)
100 Park Avenue
New York, New York
10017
Robert Day (2).......... 3,756,776 7.3%
The TCW Group, Inc. (2)
865 South Figueroa
Street
Los Angeles, California
90017
Neal C. Hansen (3)...... 3,054,976 5.9%
7887 East Belleview
Avenue, Suite 1000
Englewood, Colorado
80111
</TABLE>
- --------
(1) Beneficial ownership is as of December 31, 1999. J. & W. Seligman & Co.
Incorporated and William C. Morris, as the owner of a majority of the
outstanding voting securities of J. & W. Seligman & Co. Incorporated, have
filed with the Securities and Exchange Commission (the "SEC") a joint
Schedule 13G dated February 10, 2000, stating that they have shared voting
power with respect to 3,762,500 of these shares and shared dispositive
power with respect to all of these shares.
(2) Beneficial ownership is as of December 31, 1999. Robert Day and The TCW
Group, Inc. have filed with the SEC a joint Schedule 13G dated February
11, 2000, stating that Robert Day, an individual who may be deemed to
control The TCW Group, Inc., has sole voting power and sole dispositive
power with respect to 111,224 of these shares and that Robert Day and The
TCW Group, Inc. have shared voting power and shared dispositive power with
respect to 3,645,552 of these shares.
(3) Includes 264,700 shares subject to currently exercisable options and 4,900
shares subject to options which are exercisable within 60 days after
January 31, 2000. Also includes 1,115,000 shares owned by Hansen
Partnership, Ltd., of which Mr. Hansen is General Partner, and 90,408
shares owned by Mr. Hansen's spouse. Mr. Hansen disclaims beneficial
ownership of the shares owned by his spouse and, except to the extent of
his pecuniary interest therein, the shares owned by Hansen Partnership,
Ltd.
2
<PAGE>
Directors and Executive Officers
<TABLE>
<CAPTION>
Percentage
Shares of Common Stock of Common
Name of Beneficial Owner Beneficially Owned(1)(2) Stock Outstanding
- ------------------------ ------------------------ -----------------
<S> <C> <C>
George F. Haddix.................... 1,998,040(3) 3.9%
Neal C. Hansen...................... 3,054,976(4) 5.9%
Royce J. Holland.................... 24,000 *
Edward C. Nafus..................... 61,702 *
Janice Obuchowski................... 20,385 *
Gregory A. Parker................... 109,050(5) *
John P. Pogge....................... 359,200(5) *
Bernard W. Reznicek................. 27,000 *
Rockwell A. Schnabel (6)............ 251,000 *
Frank V. Sica....................... 257,682 *
All directors and executive officers
as a group
(10 persons)....................... 6,163,035 11.8%
</TABLE>
- --------
* Less than 1% of the outstanding Common Stock.
(1) Includes 264,700, 24,000, 50,000, 16,000, 93,050, 146,400, 24,000,
16,000, 16,000 and 650,150 shares subject to currently exercisable
options which are held by Mr. Hansen, Mr. Holland, Mr. Nafus, Ms.
Obuchowski, Mr. Parker, Mr. Pogge, Mr. Reznicek, Mr. Schnabel and Mr.
Sica and all directors and executive officers as a group, respectively.
(2) Includes 4,900, 4,000, 12,800 and 21,700 shares subject to options which
are held by Mr. Hansen, Mr. Parker, Mr. Pogge and all directors and
executive officers as a group, respectively, and are exercisable within
60 days after January 31, 2000.
(3) Includes 20,000 shares owned by a charitable organization of which Dr.
Haddix is a trustee. Dr. Haddix disclaims beneficial ownership of such
20,000 shares.
(4) Includes 1,115,000 shares owned by Hansen Partnership, Ltd., of which Mr.
Hansen is General Partner, and 90,408 shares owned by Mr. Hansen's
spouse. Mr. Hansen disclaims beneficial ownership of the shares owned by
his spouse and, except to the extent of his pecuniary interest therein,
the shares owned by Hansen Partnership, Ltd.
(5) Includes 12,000 and 44,000 shares which were purchased by Messrs. 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 services as an employee of
or a consultant to the Company. The shares are released from the
repurchase option in equal increments over a five-year period; 80% of
Messrs. Parker's and Pogge's shares originally purchased have been
released from the repurchase option as of January 31, 2000.
(6) Mr. Schnabel is a Co-Chairman of Trident Capital, Inc. Trident Capital,
L.P. owns 4,428 shares, and Trident Administrator, N.V. owns 4,090
shares. Trident Capital, L.P. and Trident Administrator, N.V. are
affiliates of Trident Capital, Inc., and Mr. Schnabel may be deemed to be
the beneficial owner of such shares, which are not included in the
numbers shown in this table. Except to the extent of his pecuniary
interest therein, Mr. Schnabel disclaims beneficial ownership of such
8,518 shares.
3
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes consisting of three
Class I directors, two Class II directors and three Class III directors, whose
present terms continue until the annual meetings of stockholders of the
Company to be held in 2001, 2002 and 2000, respectively, and until their
respective successors are elected and qualified. Three Class III directors
will be elected at the Annual Meeting to serve for a three-year term expiring
at the annual meeting of stockholders to be held in 2003.
Unless the proxy is marked otherwise, the persons named in the accompanying
proxy will vote to elect Messrs. Haddix, Hansen, and Sica as Class III
directors. The proxy may not be voted for more than three directors. If a
nominee is unable to serve, then the person acting under the proxy may vote
the proxy for the election of a substitute nominee. The Company does not
presently contemplate that any of such nominees will be unable to serve.
The following information relates to the Board's nominees for election at
the Annual Meeting and to the other directors whose terms of office will
continue after the Annual Meeting:
Nominees for Election as Class III Directors With Terms Expiring in 2003:
George F. Haddix, Ph.D. Director since 1994
Dr. Haddix, 61, is a co-founder of the Company and was the President and
Chief Technical Officer of the Company from its inception in 1994 until
September 1997. Dr. Haddix currently is a private investor and, subsequent to
his retirement as an employee of the Company at the end of 1997, served until
December 23, 1999, as a consultant to the Company with respect to its
technical management and administration. From 1991 until founding the Company,
Dr. Haddix was a private investor. From 1989 to 1991, Dr. Haddix was a General
Partner in Hansen, Haddix and Associates, a partnership which provided
advisory management services to suppliers of software products and services.
From 1987 to 1988, Dr. Haddix served as President and Chief Executive Officer
of US WEST Network Systems, Inc. Dr. Haddix received a Ph.D. in Mathematics
from Iowa State University in 1968 and has served on the faculties of three
universities. Dr. Haddix also is a director of infoUSA, Inc.
Neal C. Hansen Director since 1994
Mr. Hansen, 59, is a co-founder of the Company and has been the Chairman of
the Board and Chief Executive Officer of the Company since its inception in
1994. From 1991 until founding the Company, Mr. Hansen served as a consultant
to several software companies, including First Data Corporation ("FDC"). From
1989 to 1991, Mr. Hansen was a General Partner in Hansen, Haddix and
Associates, a partnership which provided advisory management services to
suppliers of software products and services. From 1983 to 1989, Mr. Hansen was
Chairman and Chief Executive Officer of US WEST Applied Communications, Inc.
and President of US WEST Data Systems Group. From 1971 to 1983, Mr. Hansen
served in a variety of executive positions with FDC and in 1982 was
responsible for the development of FDC's cable television processing division,
which was acquired by the Company in 1994.
Frank V. Sica Director since 1994
Mr. Sica, 49, has served as a director of the Company since its inception in
1994. Mr. Sica has been a Managing Director of Soros Fund Management Company
since May 1998. He was a Managing Director of Morgan Stanley & Co.
Incorporated from 1988 to March 1998 and had been employed by Morgan Stanley
& Co. Incorporated since 1981, originally in the Mergers and Acquisition
Department, and from 1988 to March 1998 in the Merchant Banking Division. Mr.
Sica also is a director of Kohl's Corporation, Emmis Broadcasting Corporation,
Outboard Marine Corp., and Global Telesystems Group, Inc.
4
<PAGE>
Class I Directors With Terms Expiring in 2001:
Janice I. Obuchowski Director since 1997
Ms. Obuchowski, 48, was elected to the Company's Board of Directors in
November 1997. Ms. Obuchowski has been President of Freedom Technologies,
Inc., a provider of telecommunications research and consulting services, since
1992. From 1995 to June 1998, Ms. Obuchowski also was an Executive Vice
President of NextWave Telecom, Inc., a provider of wireless communications
services. On December 23, 1998, NextWave Telecom, Inc. filed a petition for
reorganization under Chapter 11 of the United States Bankruptcy Code;
subsidiaries of NextWave Telecom, Inc. filed similar petitions on June 8,
1998. Ms. Obuchowski served as Assistant Secretary for Communications and
Information for the Department of Commerce and Administrator for the National
Telecommunications and Information Administration during the Bush
Administration. Ms. Obuchowski also is a director of Orbital Sciences
Corporation and ewireless.
John P. Pogge Director since 1997
Mr. Pogge, 46, joined the Company in 1995 and has been President and Chief
Operating Officer of the Company since September 1997. Prior to that time, he
was an Executive Vice President of the Company and General Manager, Business
Units. From 1991 to 1995, Mr. Pogge was Vice President, Corporate Development,
of US WEST, Inc. He was elected to the Company's Board of Directors in
September 1997.
Rockwell A. Schnabel Director since 1994
Mr. Schnabel, 63, has served as a director of the Company since its
inception in 1994. Mr. Schnabel is a founder and General Partner of Trident
Capital, Inc. (a venture capital firm). He served as the Acting Secretary of
Commerce and the Deputy Secretary of Commerce during the Bush Administration
and was the U.S. Ambassador to Finland from 1985 to 1989. From 1965 to 1983,
Mr. Schnabel served in various senior positions in the securities industry,
including President of Bateman Eichler Hill Richards (Everen Securities). Mr.
Schnabel also is a director of International Game Technology.
Class II Directors With Terms Expiring in 2002:
Royce J. Holland Director since 1997
Mr. Holland, 51, was elected to the Company's Board of Directors in January
1997. Mr. Holland has been Chairman and Chief Executive Officer of Allegiance
Telecom, Inc., a provider of telecommunications services, since March 1997.
Mr. Holland served as President and Chief Operating Officer of MFS
Communications Company, Inc., a competitive local exchange carrier, from 1990
until the acquisition of MFS by WorldCom, Inc. at the end of 1996. Mr. Holland
also is a director of Allegiance Telecom, Inc. and Choice One Communications,
Inc.
Bernard W. Reznicek Director since 1997
Mr. Reznicek, 63, was elected to the Company's Board of Directors in January
1997. Mr. Reznicek has served as National Director of Utility Marketing for
Central States Indemnity Company of Omaha, a Berkshire Hathaway company, since
January 1997. Mr. Reznicek was Dean of the College of Business Administration
at Creighton University from 1994 to 1996. Previously, Mr. Reznicek was
Chairman (1992-94) and Chief Executive Officer (1990-94) of Boston Edison
Company, an electric utility company. Mr. Reznicek also is a director of Stone
& Webster, Incorporated and State Street Corporation.
John P. Pogge, President of the Company, and Gregory A. Parker, Chief
Financial Officer of the Company, are brothers-in-law. There are no other
family relationships between any of the directors or officers. There are no
arrangements between any director or officer and any other person pursuant to
which such person was selected as a director or officer.
5
<PAGE>
The Board of Directors has a standing Audit Committee, composed of Ms.
Obuchowski and Messrs. Reznicek and Schnabel (Chairman). The Audit Committee
held four meetings during the year ended December 31, 1999. The Committee's
functions are to recommend to the Board of Directors the firm to be appointed
as the Company's independent accountants, to review and approve the scope of
the Company's annual audit, to review the audit report and recommendations to
management of the Company's independent accountants, to consult with the
Company's independent accountants concerning the Company's financial controls,
accounting procedures and internal auditing functions, and to consider and
review such other matters relating to the financial and accounting affairs of
the Company as the Committee may deem appropriate.
The Board of Directors has a standing Compensation Committee, composed of
Messrs. Holland, Schnabel and Sica (Chairman), which held four meetings and
acted by written consent on one other occasion during the year ended December
31, 1999. The Committee's functions are to provide oversight with respect to
the compensation and benefit policies, plans and programs of the Company for
the executive officers of the Company and, to the extent not otherwise
determined by contract or formal plan, to review and recommend to the Board of
Directors salaries, bonuses and other benefits and compensation for the
executive officers of the Company. The Committee also is responsible for the
administration of and the granting of stock options, stock purchase rights and
other awards under the Company's 1995 Incentive Stock Plan, 1996 Stock
Incentive Plan and 1996 Employee Stock Purchase Plan.
The Company does not have a nominating committee.
During the year ended December 31, 1999, the Board of Directors held five
meetings and acted by written consent on two other occasions. During 1999, all
directors except Mr. Holland attended at least 75% of the aggregate number of
meetings of the Board of Directors and of the committees on which they serve.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers (as defined in the applicable regulations) and directors, and persons
who own more than 10% of a class of the Company's equity securities registered
under such Act, to file certain reports of ownership and changes of ownership
of the Company's equity securities with the SEC. Officers, directors and more
than 10% stockholders are required by SEC regulation to furnish to the Company
copies of all Section 16(a) forms which they file.
Based solely on its review of the copies of such forms submitted to it, or
written representations from certain reporting persons that no Form 5 was
required for those persons, the Company believes that all filing requirements
applicable to its officers and directors were complied with for the year ended
December 31, 1999.
Director Compensation
Each non-employee director of the Company is entitled to receive the
following compensation: (i) $2,500 for each meeting of the Board of Directors
attended in person, (ii) $500 for each meeting of the Board of Directors
attended by conference telephone call or its equivalent and (iii) $500 for
each meeting of a committee of the Board of Directors attended in person or by
conference telephone call or its equivalent. Directors who are officers or
employees of the Company do not receive additional compensation for serving as
a director or committee member. The Company also has a Stock Option Plan for
Non-Employee Directors (the "Directors Plan") which was approved at the 1997
annual meeting of stockholders. During the year ended December 31, 1999, the
Board granted an option under the Directors Plan to Dr. Haddix, who is a non-
employee director of the Company, to purchase 16,000 shares of Common Stock at
a price per share equal to the last sale price of the Common Stock as quoted
on the Nasdaq National Market System on the date of the grant. Such option
becomes exercisable in two equal installments on the first and second
anniversaries of the grant date if the optionee is then a member of the Board
and will expire ten years after the date of the grant, if not sooner
exercised. If a director ceases to be a member of the Board before fully
exercising his or her options, then various provisions of the Plan relating to
such an event will govern the continuing exercisability of such options.
6
<PAGE>
Compensation of Executive Officers
The following table sets forth information with respect to the compensation
paid by the Company to each of its executive officers for services rendered
during 1999. The numbers of stock options awarded for 1998 and 1997 have been
adjusted to reflect a 2-for-1 stock split which became effective through the
payment of a 100% stock dividend on March 5, 1999.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-term
Annual Compensation (1) Compensation
--------------------------- -------------
Name and Principal Fiscal Stock Options All Other
Position Year Salary Bonuses (2) Awarded Compensation (4)
- ------------------ ------ ------- ---------- ------------- ----------------
($) ($) (#) ($)
<S> <C> <C> <C> <C> <C>
Neal C. Hansen ......... 1999 400,000 410,800 80,000 10,400
Chairman of the Board 1998 350,000 359,450 480,000 7,683
and 1997 300,000 195,000 120,000 7,312
Chief Executive Officer 200,000(3)
John P. Pogge........... 1999 290,000 274,920 -- 14,150
President and Chief 1998 265,000 251,220 266,000 11,383
Operating 1997 250,000 135,000 120,000 12,162
Officer (5) 120,000(3)
Edward C. Nafus ........ 1999 262,500 228,113 -- 9,784
Executive Vice 1998(6) 250,000 108,625 280,000 --
President
Gregory A. Parker....... 1999 205,000 161,950 -- 13,475
Vice President and 1998 170,000 134,300 180,000 9,975
Chief 1997 140,000 65,000 69,400 9,663
Financial Officer 120,000(3)
</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 did not exceed the lesser of $50,000 or
10% of the total amount of annual salary and bonus reported for such
individual.
(2) Except as indicated in footnote (3), the bonuses were annual performance
bonuses paid to the executive officers. The bonus earned for each year is
payable in the first quarter of the subsequent year.
(3) These bonuses were special bonuses paid in October 1997 in recognition of
extraordinary services performed by the recipients in connection with the
negotiation of an Asset Purchase Agreement and a Master Subscriber
Management System Agreement with certain affiliates of Tele-
Communications, Inc. and the successful consummation and implementation of
the transactions contemplated by such agreements.
(4) All Other Compensation for 1999 for Mr. Hansen consists of employer
contributions to the CSG Incentive Savings Plan (a 401(k) plan). All Other
Compensation for 1999 for Messrs. Pogge, Nafus and Parker consists of
employer contributions to the CSG Incentive Savings Plan (Pogge--$10,400,
Nafus--$3,534 and Parker--$10,400) and employer credits to the CSG
Systems, Inc. Wealth Accumulation Plan (Pogge--$3,750, Nafus--$6,250 and
Parker--$3,075). The CSG Systems, Inc. Wealth Accumulation Plan is a
deferred compensation plan which provides for elective salary and
incentive compensation deferrals by participants. CSG Systems, Inc.
matches a participant's deferral up to 25% thereof, with a maximum annual
credit of $6,250 per participant.
(5) Mr. Pogge was elected President and Chief Operating Officer of the Company
in September 1997. Prior to that time, he served as an Executive Vice
President of the Company.
(6) Mr. Nafus joined the Company in August 1998, and his salary for 1998 is
presented on an annualized basis.
7
<PAGE>
Option Grants in 1999
The following table sets forth the stock options granted to the Company's
executive officers during 1999. The number of shares and the exercise price
per share have been adjusted to reflect a 2-for-1 stock split which became
effective through the payment of a 100% stock dividend on March 5, 1999.
Individual Grants
<TABLE>
<CAPTION>
Options % of Total
Granted on Options Granted Exercise
Common to Employees Price per Expiration Grant Date
Name Stock (1) in 1999 Share (3) Date Present Value (4)
---- ---------- --------------- --------- ---------- -----------------
(#) (%) ($/share) ($)
<S> <C> <C> <C> <C> <C>
Neal C. Hansen.......... 80,000(2) 11.19 35.88 1/14/09 $1,216,800
John P. Pogge........... -- -- -- -- --
Edward C. Nafus......... -- -- -- -- --
Gregory A. Parker....... -- -- -- -- --
</TABLE>
- --------
(1) This option was granted pursuant to the Company's 1996 Stock Incentive
Plan.
(2) One-half of these options become exercisable on each of November 17, 2002,
and November 17, 2003. The exercisability of these options will be
accelerated upon the occurrence of certain "change of control" events
specified in the applicable option agreement.
(3) The exercise price is the closing market price on the date the option was
granted.
(4) Grant date present value is determined using a modified Black-Scholes
option pricing model. The estimated value under the model is based on
several assumptions, including a weighted-average expected volatility of
40.0%, a weighted-average risk-free rate of return of 4.72%, no dividend
yield and expected option life of 5.0 years, and may not be indicative of
actual value. The actual gain, if any, the option holder may realize will
depend on the excess of the actual market price of the stock over the
exercise price on the date the option is exercised. There is no assurance
that the value that may be realized by the option holder will be at or
near the value estimated by the modified Black-Scholes model.
Aggregated Option Exercises and 1999 Year-End Option Values
The following table sets forth certain information regarding the exercise of
stock options during 1999 by the Company's executive officers and the number
and value of their unexercised stock options at December 31, 1999.
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money Options
Shares Options at December 31, 1999 at December 31, 1999(1)
Acquired Value -------------------------------- -------------------------
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- -------------- --------------- ----------- -------------
(#) ($) (#) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Neal C. Hansen.......... -- -- 214,700 689,800 5,722,163 10,876,005
John P. Pogge........... -- -- 114,900 335,100 3,209,136 6,044,726
Edward C. Nafus......... -- -- 50,000 230,000 943,750 3,883,746
Gregory A. Parker....... -- -- 75,700 208,700 1,932,880 3,794,000
</TABLE>
- --------
(1) "In-the-Money Options" are options outstanding at the end of 1999 for
which the fair market value of the Common Stock at the end of 1999 ($39.88
per share) exceeded the exercise price of the options.
8
<PAGE>
Employment and Consulting Agreements
Mr. Hansen
Mr. Hansen initially was employed by the Company pursuant to an employment
agreement dated November 30, 1994, which had a five-year term ending on
November 30, 1999 (the "1994 Agreement"). In November 1998, Mr. Hansen and the
Company entered into a new employment agreement (the "1998 Agreement") which
superseded the 1994 Agreement. The term of the 1998 Agreement is from November
17, 1998, through December 31, 2001. On December 31 of each year during its
term (beginning December 31, 1999), the term of the 1998 Agreement
automatically is extended by one year unless, not later than one year prior to
a particular December 31, either the Company or Mr. Hansen notifies the other
that such extension shall not occur, in which case the 1998 Agreement will
terminate at the end of its then remaining term.
The 1998 Agreement provided for the continuation of Mr. Hansen's 1998 base
salary of $350,000 through December 31, 1998; thereafter, Mr. Hansen is to
receive an annual base salary of not less than $400,000 (with annual Consumer
Price Index adjustments). Beginning in 1999, Mr. Hansen also is given the
opportunity under the 1998 Agreement to earn an annual incentive bonus of not
less than 65% of his base salary if the objectives established annually by the
Board are fully achieved; a similar bonus program was in place for Mr. Hansen
for 1998. The 1998 Agreement also provides certain group insurance coverages,
an automobile allowance, certain expenses of club membership and various other
benefits to Mr. Hansen.
The 1998 Agreement will terminate upon Mr. Hansen's death, and the Company
may terminate the 1998 Agreement in the event of Mr. Hansen's disability for a
continuous period of more than six months or for more than 180 days in the
aggregate during any 12-month period. The Company also may terminate the 1998
Agreement for "cause", as defined in the 1998 Agreement. In the cases of death
or disability, Mr. Hansen (or his estate) would be entitled to receive his
base salary through the termination date and a pro rata portion of his annual
incentive bonus for the year of termination. In the case of termination for
cause, Mr. Hansen is not entitled to receive any portion of his incentive
bonus for the year of termination.
If the Company terminates Mr. Hansen's employment without cause prior to a
change of control of the Company, then Mr. Hansen is entitled to continue to
receive his base salary for the remaining term of the 1998 Agreement (less
compensation received from other employment), his full incentive bonus for the
year of termination (payable at the regularly scheduled time) and an
additional amount equal to 195% of his base salary in effect at the time of
the termination (the latter amount being payable 50% one year after the
termination and 50% two years after the termination). If the Company
terminates Mr. Hansen's employment without cause after a change of control of
the Company, then he is entitled to receive the amounts referred to in the
preceding sentence, but the payment times generally are accelerated to 30 days
after the effective date of the termination. "Change of Control" is defined in
the 1998 Agreement and includes among other events various types of mergers,
dissolutions or changes in ownership of the Company or its principal operating
subsidiary, acquisitions of significant amounts of the voting stock of the
Company and certain changes in the composition of the Board.
If the Company or a permitted successor to the Company materially alters Mr.
Hansen's duties and responsibilities under the 1998 Agreement or assigns to
Mr. Hansen duties and responsibilities inappropriate to the chief executive
officer of the Company without Mr. Hansen's consent, then Mr. Hansen may
resign from his offices and positions with the Company (without further
obligation to perform any services) and will be entitled to receive the
compensation described in the applicable sentence of the preceding paragraph,
depending upon whether such event occurs before or after a change of control
of the Company.
If any payments made to Mr. Hansen under the preceding two paragraphs cause
Mr. Hansen to be subject to excise taxes on "excess parachute payments" under
the Internal Revenue Code, then the Company is obligated to reimburse Mr.
Hansen for such excise taxes and for any additional income, excise or other
taxes which he incurs as a result of such reimbursements.
9
<PAGE>
If Mr. Hansen voluntarily resigns prior to the expiration of the 1998
Agreement, he is only entitled to receive his base salary through the
termination date (unless the termination date is December 31, in which case he
also is entitled to receive his incentive bonus for the year of termination.)
The 1998 Agreement also contains provisions which prohibit Mr. Hansen from
competing with the Company or soliciting the Company's employees for a period
of one year after the termination of his employment for any reason.
Mr. Pogge
In November 1998, the Company also entered into an employment agreement with
Mr. Pogge, which generally is similar to Mr. Hansen's 1998 Agreement, except
that Mr. Pogge's 1998 base salary was $265,000, his minimum annual base salary
thereafter is $290,000 (with CPI adjustments), his annual incentive bonus
target is 60% of his base salary and his additional payment in the event of
termination without cause is an amount equal to 180% of his base salary. Mr.
Pogge did not previously have an employment agreement with the Company.
Messrs. Nafus and Parker
In November 1998, the Company also entered into employment agreements with
Messrs. Nafus and Parker. The agreements cover the period from November 17,
1998, through December 31, 1999, and provide for automatic one-year extensions
(similar to Mr. Hansen's) beginning on December 31, 1998. Mr. Nafus' agreement
continued his base salary of $250,000 through December 31, 1998, and provides
for a minimum annual base salary thereafter of $262,500 (with CPI
adjustments), an annual incentive bonus target of 55% of his base salary and
various group insurance coverages. Mr. Parker's agreement continued his base
salary of $170,000 through December 31, 1998, and provides for a minimum
annual base salary thereafter of $205,000, an annual incentive bonus target of
50% of his base salary and various group insurance coverages. The provisions
of these agreements in the cases of termination for death, disability or cause
are the same as in Mr. Hansen's agreement. If the Company terminates the
employment of Mr. Nafus or Mr. Parker without cause prior to a change of
control of the Company, then the Company must continue to pay such person's
base salary for one year after the termination (less compensation received
from another employer) and also must pay such person's annual incentive bonus
for the year of termination and an additional amount equal to 55% (in the case
of Mr. Nafus) or 50% (in the case of Mr. Parker) of such person's base salary
(payable one year after the termination). If the termination without cause
occurs after a change of control, then the Company must pay (within 30 days
after the termination) the person's base salary for two years, the annual
incentive bonus for the year of termination and an additional amount equal to
110% (in the case of Mr. Nafus) or 100% (in the case of Mr. Parker) of such
person's base salary. The provisions of these agreements relating to a
constructive termination require that the employee give notice to the Company
of a claimed constructive termination, and the Company then has an opportunity
to take appropriate actions to remove the basis for such claim. Other
provisions of these agreements generally are similar to those contained in Mr.
Hansen's agreement. Neither Mr. Nafus nor Mr. Parker previously had an
employment agreement with the Company.
Dr. Haddix
In anticipation of his retirement from full-time employment by the Company
on December 31, 1997, on December 23, 1997, Dr. Haddix entered into an
Independent Consulting Agreement with the Company to provide advice regarding
the technical management and administration of the Company. The agreement
expired on December 23, 1999, and was not renewed. Dr. Haddix's compensation
under the agreement consisted of $3,000 per calendar quarter on a retainer
basis, inclusive of all costs, expenses and taxes, plus $1,000 for each day
worked (based on an 8-hour work day) in excess of one day per month. For his
services during 1999, Dr. Haddix received $14,500 pursuant to such agreement.
Dr. Haddix also received $2,500 for his services as a director of the Company
during 1999.
10
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee"),
consisting entirely of non-employee directors, approves the basic policies
under which compensation is paid or awarded to the Company's executive
management. The Committee is composed of Messrs. Sica (Chairman), Holland and
Schnabel.
Compensation Philosophy
The Company's executive compensation program is premised on the belief that
the interests of executives should be closely aligned with those of the
Company's stockholders. The Company's executive compensation plans also are
designed to attract, retain, motivate and appropriately reward individuals who
are responsible for the Company's short-term and long-term profitability and
growth. Based on this philosophy, a significant portion of each executive's
total compensation is placed at-risk and linked to the accomplishment of
specific Company and individual financial, strategic and performance results,
as well as potential appreciation in the value of the Common Stock.
Compensation Program
Each year the Committee comprehensively reviews the Company's overall
executive compensation program. Such Committee review includes the members'
consideration of compensation programs adopted by competing companies and by
other employers likely to recruit executives with skill sets similar to those
which the Company regularly seeks. In addition, at the Committee's request,
the Company engages an independent compensation consulting firm to prepare a
more extensive formal analysis which assesses the competitiveness of the
Company's executive compensation and compares the several components of the
Company's executive compensation program with those of other publicly owned
technology companies. The Committee's annual compensation review permits an
ongoing evaluation of the link between the Company's performance and its
executive compensation in the context of the compensation programs of such
other companies.
The Committee approves the compensation of the executive officers, including
the Chief Executive Officer, whose compensation is detailed in this Proxy
Statement and sets policies with respect to the Company's executive
compensation program generally.
The key elements of the Company's executive compensation program consist of
base annual salaries, performance bonuses and stock options.
The Committee's policies with respect to each of these elements, including
the basis for the compensation paid to Mr. Hansen, are discussed below.
Base Annual Salaries
Base annual salaries for executive officers are initially determined by
evaluating the responsibilities of the position, the experience and knowledge
of the individual, and the scope and complexity of the executive's position
relative to other senior management positions internally and at competitive
frame companies. The external comparison is based on the results of a report
prepared by an independent compensation consulting firm and takes into
consideration the compensation practices and programs of other corporations
which are most likely to compete with the Company for the services of
executive management personnel.
Annual salary adjustments are determined by evaluating both the position and
the performance of each executive officer, taking into account any changes in
responsibilities. Individual performance ratings take into account such
factors as achievement of the Company's strategic plan and attainment of
specific individual objectives.
With respect to the base salary paid to Mr. Hansen in 1999, the Committee
took into account a comparison of base salaries of chief executive officers of
peer companies, the Company's performance in 1998 and the
11
<PAGE>
assessment by the Committee of Mr. Hansen's individual performance. Based upon
this evaluation, the Committee increased Mr. Hansen's base salary by $50,000
to $400,000 for 1999.
Performance Bonuses
The Company maintains a Performance Bonus Plan (the "Bonus Plan"), which
provides for the payment of performance bonuses to most management employees
of the Company who do not receive sales commissions. Executive officers of the
Company participate in the Bonus Plan, which is a pay-for-performance plan
designed to compensate participants for achieving certain levels of
performance with respect to key objectives established in the Company's annual
financial plan.
Annually, the Committee approves targeted levels and minimum threshold
levels of performance with respect to key objectives affecting the executive
officers' performance bonuses. No performance bonus is paid when results are
below the threshold levels. For executive officers, the performance bonus
objectives are based upon revenue and earnings of the Company. Performance
bonuses are paid during the first quarter after the year in which they are
earned. Because the Company's 1999 revenue and earnings substantially exceeded
the targets for a 100% performance bonus payment (which would range from 50%
to 65% of base salary, depending upon the particular executive officer), the
1999 performance bonus payments to the Company's executive officers ranged
from approximately 79% of base salary to approximately 103% of base salary,
depending upon the particular executive officer.
Mr. Hansen's performance bonus for 1999 was based on the Company's overall
revenue and earnings. Mr. Hansen earned a performance bonus of $410,800 for
1999, representing approximately 103% of his 1999 base salary, based upon the
levels of achievement of the applicable targets, as compared with a
performance bonus of $359,450 in 1998, which also reflected the achievement of
well in excess of the applicable targets and similarly represented 103% of his
1998 base salary. The targeted levels of performance for 1999 had been
increased substantially over those for 1998.
Stock Options
The third component of executive officers' compensation is the Company's
1996 Stock Incentive Plan, pursuant to which the Company has granted to its
executive officers options to purchase shares of Common Stock.
Stock options are designed to align the interests of executives with those
of the Company's stockholders. Stock options are granted at an exercise price
equal to the market price of the Common Stock on the date of grant, generally
vest in equal installments over four or five years and are exercisable no
later than ten years from the date of grant. This plan is designed to provide
incentives for the creation of value for the Company's stockholders over the
long term because the full benefit of an executive's compensation package
cannot be realized unless stock price appreciation occurs and is maintained
over a number of years.
During 1995, following the formation of the Company in late 1994, a small
number of executives and other key employees of the Company purchased shares
of Common Stock whose transferability was restricted and which generally were
subject to repurchase by the Company at a price significantly below market
value if the holder of such shares were to leave the employ of the Company.
Beginning in 1996, such restrictions and repurchase rights have lapsed
generally at the rate of 20% per year, so that by late 2000 none of such
shares still outstanding will any longer be restricted or subject to
repurchase by the Company. Similarly, stock options granted to various
executives and other key employees (some of whom also own restricted stock) in
1996 and subsequent years have begun to become exercisable. In light of the
highly competitive employment environment in which the Company operates,
during 1998 the Committee considered various means of creating a further
incentive for its senior executives to remain in the employ of the Company
over an extended period of time. With the assistance of the Company's
independent compensation consulting firm, the Committee concluded that a one-
time stock option grant in lieu of anticipated annual option grants for 1999,
2000 and 2001 to the particular
12
<PAGE>
recipients could serve to accomplish the Committee's objective. Such special
grant would involve the approximate total number of shares that might normally
be expected to be granted annually over such three-year period; however,
unlike the normal annual option grant which has a four-year vesting schedule
beginning one year after the grant date, the options covered by the special
grant would become exercisable as to 50% of the shares covered by the option
four years after the grant date and as to the remaining shares covered by the
option five years after the grant date. Such options were granted by the
Committee on November 17, 1998, and thus become exercisable as to 50% of the
option shares on each of November 17, 2002 and 2003. The option agreements
provide that, upon the occurrence of a change of control of the Company, the
options covered by such agreements will become immediately exercisable in full
without regard to their original schedule for exercisability. "Change of
control" is defined in such agreements and includes among other events various
types of mergers, dissolutions or changes in ownership of the Company or its
principal subsidiary, acquisitions of significant amounts of the voting stock
of the Company, certain "going private" transactions involving the Company and
certain changes in the composition of the Board.
The Committee determined that the special option grant to Mr. Hansen should
cover 480,000 shares; however, because of limitations contained in the
Company's 1996 Stock Incentive Plan, the Committee only was able to grant Mr.
Hansen an option covering 400,000 shares on November 17, 1998. In January
1999, the Committee granted an option to Mr. Hansen covering the additional
80,000 shares with the same vesting schedule as the November 1998 option but
at the higher January 1999 market price.
Because of the special 1998 option grant discussed in the preceding
paragraphs, the Committee did not make any option grants to the executive
officers of the Company during 1999 (other than the 80,000-share special grant
to Mr. Hansen).
Conclusion
Through the programs described above, a significant portion of the Company's
executive compensation is linked directly to individual and Company
performance in furtherance of the Company's strategic goals as well as to
potential stock price appreciation. The Committee presently intends to
continue a policy of closely linking executive compensation to Company
performance and stockholder return.
Compensation Committee of the Board of
Directors
Frank V. Sica, Chairman
Royce J. Holland
Rockwell A. Schnabel
13
<PAGE>
STOCK PRICE PERFORMANCE
The following graph assumes $100 invested on February 28, 1996 (the date on
which the Company's Common Stock was first traded publicly) in the Common
Stock, in the S&P 500 Index and in the Company's Standard Industrial
Classification ("SIC") Code Index: Computer Processing and Data Preparation
Services.
---------------------FISCAL YEAR ENDING------------------
COMPANY/INDEX/MARKET 2/28/1996 12/31/1996 12/31/1997 12/31/1998 12/21/1999
CSG Systems Intl 100.00 66.85 173.91 343.48 346.74
Data Processing &
Preparation 100.00 108.88 118.38 154.78 185.30
S&P Composite 100.00 117.82 157.13 202.03 244.55
Russell 2000 Index 100.00 113.10 138.36 134.48 160.83
NASDAQ Market Index 100.00 115.81 141.66 199.79 352.38
Note : Base price date is 2/28/1996
SOURCE: MEDIA GENERAL FINANCIAL SERVICES
P.O. BOX 85333
RICHMOND, VA 23293
PHONE: 1-(800) 446-7922
FAX: 1-(804) 649-6826
14
<PAGE>
PROPOSAL TO INCREASE THE NUMBER OF SHARES
OF COMMON STOCK AVAILABLE FOR ISSUANCE UNDER
THE COMPANY'S STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
Proposed Amendment
At the Annual Meeting, the stockholders will be asked to approve an
amendment (the "Plan Amendment") to the Company's Stock Option Plan for Non-
Employee Directors (the "Plan"), as adopted by the Board on January 22, 2000,
which will increase by 250,000 (from 200,000 to 450,000) the number of shares
of Common Stock available for issuance under the Plan.
The Plan is intended to foster and promote the long-term financial success
of the Company and thereby increase stockholder value by attracting and
retaining as directors of the Company highly qualified persons who are not
employees of the Company or a subsidiary of the Company. The Board believes
that by giving non-employee directors of the Company a personal financial
stake in the Company, the interests of such directors and the stockholders of
the Company will be more closely aligned. Non-employee directors also receive
cash remuneration for their services, as described above under "Director
Compensation".
A copy of the Plan Amendment appears as Exhibit A to this Proxy Statement.
Approval of the Plan Amendment will ensure that enough shares are available
under the Plan to fulfill the objectives of the Plan for the next several
years.
Required Vote
Approval of the Plan Amendment requires the affirmative vote of the holders
of a majority of the shares of Common Stock present or represented by proxy at
the Annual Meeting and entitled to vote on such matter.
The Board Recommends a Vote FOR Approval
of the Plan Amendment
Plan Activity
As of February 25, 2000, options covering an aggregate of 184,000 shares
were outstanding and unexercised under the 1996 Plan at option prices ranging
from $9.69 to $47.63 per share and with expiration dates ranging from January
28, 2007, to January 22, 2010. Without taking into account the effect of the
Plan Amendment, only 16,000 shares remained available for future grants or
awards under the Plan as of February 25, 2000. As of February 25, 2000,
options had been granted to each of the Company's six non-employee directors.
None of such options has been exercised.
The following table sets forth certain information regarding the options
which have been granted under the Plan as of February 25, 2000.
<TABLE>
<CAPTION>
Name Number of Shares
---- -----------------
<S> <C>
George F. Haddix...........................................
(Director nominee) 16,000
Neal C. Hansen (1).........................................
Chairman of the Board and
Chief Executive Officer
(Director nominee) 0
Frank V. Sica..............................................
(Director nominee) 24,000
All current directors who are
not executive officers or
employees as a group...................................... 184,000
</TABLE>
- --------
(1) As an employee of the Company, Mr. Hansen is not eligible to receive an
option grant under the Plan.
15
<PAGE>
It is not possible to state the terms of any options that may be granted to
non-employee directors of the Company under the Plan at a future time or to
identify the non-employee directors to whom such future grants may be made.
Such grants are entirely within the discretion of the Board, and the Board has
made no decisions with respect to future grants under the Plan.
Effect of Plan Amendment
If the Plan Amendment is approved at the Annual Meeting, then the maximum
number of shares of Common Stock that still may be issued under the Plan (in
addition to the 184,000 shares subject to outstanding options as of February
25, 2000) would be increased to 266,000. The latter number represents shares
available for, but not yet subject to, an option grant under the Plan as of
the date of the Annual Meeting (16,000 shares, assuming no grants or awards
are made under the Plan between February 25, 2000, and the date of the Annual
Meeting) plus the additional 250,000 shares authorized by the Plan Amendment.
Description of the Plan and Option Terms
The following summary of the Plan does not purport to be complete and is
subject to and qualified in its entirety by the full terms of the Plan.
Stockholders may request a copy of the Plan from the Secretary of the Company
at the address shown on the first page of this Proxy Statement.
The Plan authorizes the Board to grant to non-employee directors of the
Company options to purchase shares of Common Stock. The option exercise price
per share may not be less than the fair market value of the Common Stock on
the date of the option grant (normally the last sale price of the Common Stock
as quoted on the Nasdaq National Market on such date). Each option will be
reflected in a written agreement which sets forth the terms and conditions of
the option, including the number of shares covered by the option, the option
exercise price, when the option becomes exercisable, and the period or periods
of time during which the option may be exercised. The Plan provides that no
option may be exercised more than ten years after the date of its grant. When
an option granted under the Plan is exercised, the optionee must pay the
option exercise price to the Company in full in cash at the time of such
exercise.
Unless an option agreement provides otherwise, if an option holder ceases to
be a director of the company for a reason other than retirement (after a
minimum number of years of service) or death, the option will continue to be
exercisable (to the extent that is was exercisable at the time the option
holder ceased to be a director) for a period of 90 days or, if sooner, until
the option expires.
Unless an option agreement provides otherwise, if an option holder retires
from the Board and is at least age 65 with ten or more years of service on the
Board or is at least age 70 with five or more years of service on the Board,
the option will continue to be or become exercisable in accordance with its
terms for a period of five years after the retirement date or, if sooner,
until the option expires.
Unless an option agreement provides otherwise, if an option holder dies, the
option (if held for at least 12 months as of the date of death and not already
exercisable) will become fully exercisable upon the option holder's death. The
option, to the extent exercisable, may be exercised by the legal
representative of the option holder's estate or by the beneficiaries of such
estate to whom the option is distributed for a period of three years after the
date of death or, if sooner, until the option expires.
The Plan gives the Board authority to accelerate the exercisability of any
outstanding option under such circumstances and upon such terms and conditions
as the Board deems appropriate.
No option granted under the Plan may be assigned or transferred by the
option holder other than upon the option holder's death.
16
<PAGE>
Any shares subject to an option which expires or terminates unexercised as
to such shares will be available for future option grants; however, no option
grants may be made under the Plan after December 31, 2006. In the event of a
stock dividend, stock split, recapitalization, merger, reorganization,
consolidation, exchange of shares, or other similar event, the Plan requires
the Board to appropriately adjust the aggregate numbers of shares of Common
Stock reserved for issuance under the Plan and covered by outstanding options
and the exercise price related to outstanding options.
Administration
The Plan is administered by the Board, which has authority to interpret the
provisions of the Plan, to select the non-employee directors of the Company to
whom options are granted, to determine when and in what amounts options are
granted, to determine the amount, terms and conditions of each option, to
determine the fair market value of the Common Stock for purposes of the Plan,
to establish administrative rules for the Plan and to make all other
determinations necessary or advisable for the administration of the Plan.
The Board may terminate or amend the Plan at any time. However, the Board
may not increase the maximum number of shares which may be issued under the
Plan (except in the case of an adjustment described above), extend the maximum
period during which an option may be exercised, extend the term of the Plan,
decrease the minimum option price to less than the fair market value of the
Common Stock on the option grant date or change the category of persons
eligible to participate in the Plan without stockholder approval if such
approval is required by the rules of the Securities and Exchange Commission,
the Nasdaq National Market or any national securities exchange on which the
Common Stock is listed. The amendment or termination of the Plan may not,
without the consent of the affected option holder, adversely affect the rights
of an option holder under a previously granted option.
Certain Federal Income Tax Considerations
Options granted under the Plan will be non-statutory options not intended to
qualify under Section 422 of the Internal Revenue Code of 1996.
The grant of an option under the Plan will not result in taxable income to
the optionee or a tax deduction for the Company at the time of the grant.
The exercise of an option will result in taxable ordinary income to the
optionee to the extent that the fair market value of the shares acquired on
the date of the exercise exceeds the purchase price for such shares, and the
Company will be entitled to a deduction for income tax purposes in the same
amount in the taxable year of the Company in which the optionee recognizes the
income.
An optionee's sale of shares acquired upon the exercise of an option
ordinarily will result in long-term or short-term capital gain or loss
(depending upon the applicable holding period) in an amount equal to the
difference between (i) the amount realized upon such sale and (ii) the sum of
the purchase price for the shares sold plus the amount of ordinary income
recognized in connection with the exercise of the option as to such shares.
Market Price
The closing price of the Common Stock on the Nasdaq National Market on
February 25, 2000, was $46.31 per share.
17
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP served as the Company's independent public
accountants for the year ended December 31, 1999, and has been selected by the
Board of Directors to serve in such capacity for the current fiscal year
ending December 31, 2000.
The Company expects that a representative of Arthur Andersen LLP will be
present at the Annual Meeting, with the opportunity to make a statement if he
or she desires to do so, and that such representative will be available to
respond to appropriate questions.
OTHER MATTERS
Because no stockholder has given the Company timely written notice of
business not discussed in this Proxy Statement which such stockholder intends
to bring before the Annual Meeting, under the bylaws of the Company no
stockholder may properly bring any other business before the Annual Meeting.
As of the date of this Proxy Statement, the Company does not know of any
matter that may come before the Annual Meeting other than the matters
discussed in this Proxy Statement; however, if any other matter is properly
presented at the Annual Meeting, the persons named in the accompanying proxy
or their substitutes will have discretionary authority to vote on such matter
in accordance with their judgment.
18
<PAGE>
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Under the bylaws of the Company, a stockholder who wishes to bring any
business before the 2001 annual meeting of stockholders of the Company must
give advance written notice to the Company of such business and of any
proposal which such stockholder wishes to have included in the Company's proxy
statement and on the Company's proxy card for such annual meeting. The notice
must be sent to the Secretary of the Company at the principal executive office
of the Company, must be received by the Secretary of the Company not later
than November 24, 2000, and must contain certain information required by the
bylaws of the Company. Such advance notice requirement applies to all matters
even if a stockholder does not seek to include in the Company's proxy
statement a proposal with respect to a particular matter.
The bylaws of the Company also provide that stockholder nominations of
persons for election to the Board of Directors are subject to certain advance
notice and informational requirements.
Copies of the Company's bylaws are available to stockholders upon request
made to the Secretary of the Company at the address set forth on the first
page of this Proxy Statement.
The bylaw requirements referred to above do not supersede the conditions and
requirements established by the Securities and Exchange Commission for
stockholder proposals to be included in the Company's proxy materials for a
meeting of stockholders, and in that regard stockholders also must comply with
the applicable requirements of Rule 14a-8 under the Securities Exchange Act of
1934.
By Order of the Board of Directors
Joseph T. Ruble
Secretary
March 23, 2000
ALL STOCKHOLDERS ARE WELCOME TO ATTEND THE ANNUAL MEETING. REGARDLESS OF
WHETHER YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING ENVELOPE. YOU ALSO MAY FILE
YOUR PROXY BY TELEPHONE OR THE INTERNET IN ACCORDANCE WITH THE INSTRUCTIONS
ACCOMPANYING THE PROXY. A PROMPT RESPONSE WILL FACILITATE ARRANGEMENTS FOR THE
ANNUAL MEETING, AND THE COMPANY WILL APPRECIATE YOUR COOPERATION. STOCKHOLDERS
OF RECORD WHO ATTEND THE ANNUAL MEETING MAY VOTE THEIR STOCK PERSONALLY EVEN
THOUGH THEY HAVE SENT IN THEIR PROXIES.
19
<PAGE>
EXHIBIT A
Section 4 of the CSG Systems International, Inc. Stock Option Plan for Non-
Employee Directors is proposed to be amended so as to read as follows:
"4. Common Stock Subject to the Plan. The Company shall reserve and
keep available for issuance under the Plan four hundred fifty thousand
(450,000) shares of Common Stock, subject to adjustment pursuant to
Section 17. Such shares may consist in whole or in part of authorized
and unissued shares or treasury shares or any combination thereof.
Except as otherwise provided in the Plan, any shares subject to a
Stock Option which expires or terminates unexercised as to such shares
shall again be available for the grant of Stock Options."
20
<PAGE>
DETACH HERE
PROXY
CSG SYSTEMS INTERNATIONAL, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 19, 2000
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 of them, as attorneys and proxies of the undersigned, with full
power of substitution to each of them, to vote all shares of stock of CSG
Systems International, Inc. (the "Corporation") standing in the name of the
undersigned at the annual meeting of stockholders of the Corpration 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 May 19, 2000, and at any
adjournments thereof, on the matters set forth on the reverse side hereof and in
their discretion on any other matters that properly may come before such meeting
or any adjounments thereof.
THIS PROXY, WHEN PROPERLY SIGNED, WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS
AND FOR THE OTHER 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 acknowleges receipt of the Notice of Annual Meeting of
Stockholders of the Corporation to be held on May 19, 2000, the Proxy Statement
of the Corporation for such Annual Meeting, and the 1999 Annual Report of the
Corporation.
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
<PAGE>
CSG SYSTEMS
INTERNATIONAL, INC.
c/o EquiServe
P.O. Box 8040
Boston, MA 02266-8040
<TABLE>
<CAPTION>
<S> <C> <C>
Vote by Telephone Vote by Internet
It's fast, convenient, and immediate! It's fast, convenient, and your vote is immediately
Call Toll-Free on a Touch-Tone Phone confirmed and posted
1-877-PRX-VOTE (1-877-779-8683).
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy 1. Read the accompanying Proxy
Statement/Prospectus and Proxy Card. Statement/Prospectus and Proxy Card.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). For http://www.eproxyvote.com/csgs
shareholders reading outside the United
States call collect on a touch-tone phone 3. Enter your 14-digit Voter Control Number
1-201-536-8073. located on your Proxy Card above your name.
3. Enter you 14-digit Voter Control Number 4. Follow the instructions provided.
located on you Proxy Card above your name.
4. Follow the recorded instructions.
Your vote is important! Your vote is important!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/csgs anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet
[X] Please mark
votes as in
this example
1. Election of Directors. 2. Approval of an amendment to the FOR AGAINST ABSTAIN
Corporation's Stock Option Plan for
Nominees: (01) George F. Haddix, Non-Employee Directors which will [_] [_] [_]
(02) Neal C. Hansen, increase by 250,000 the number of
(03) Frank V. Sica shares of Common Stock available for
issuance under such Plan.
FOR AUTHORITY
ALL [_] [_] TO VOTE
NOMINEES WITHHELD
[_] ______________________________________
For all nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.
NOTE: Please sign exactly as name appears at left. 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.
Signature:______________________ Date:___________________ Signature:______________________ Date:______________________
</TABLE>
