SCHEDULE 14A
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:
[ ] 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 ss240.14a-11(c) or ss240.14a-12
H.T.E, 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)(1) 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:
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[ ] 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 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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<PAGE>
H.T.E., INC.
1000 Business Center Drive
Lake Mary, Florida 32746
April 9, 1998
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
of H.T.E., Inc. (the "Company"). The Annual Meeting will be held in Crystal Room
D on Wednesday, May 13, 1998 at 11:00 a.m. at the Renaissance Orlando Resort
located at 6677 Sea Harbor Drive, Orlando, Florida.
Details of the business to be conducted at the annual meeting are given
in the attached Notice of Annual Meeting and Proxy Statement.
Whether or not you attend the Annual Meeting, it is important that your
shares be represented and voted at the meeting. Therefore, I urge you to sign,
date and promptly return the enclosed proxy in the enclosed postage-paid
envelope. If you decide to attend the Annual Meeting and vote in person, you
will of course have that opportunity.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in the affairs of the Company.
We look forward to seeing you at the Annual Meeting.
Sincerely,
DENNIS J. HARWARD
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
H.T.E., INC.
1000 Business Center Drive
Lake Mary, Florida 32746
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 13, 1998
To Our Shareholders:
The Annual Meeting of Shareholders of the Company will be held in
Crystal Room D on Wednesday, May 13, 1998, at 11:00 a.m., in the Renaissance
Orlando Resort located at 6677 Sea Harbor Drive, Orlando, Florida for the
following purposes, as described in the attached Proxy Statement:
1. To elect two members to the Company's Board of Directors to hold office
until the 2001 Annual Meeting of Shareholders or until their successors
are duly elected and qualified.
2. To consider and act upon a proposal to ratify the Company's 1997
Employee Stock Purchase Plan.
3. To transact such other business as may properly come before the Annual
Meeting and any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on April 8, 1998
as the record date for determining those shareholders entitled to notice of, and
to vote at, the Annual Meeting and any adjournments or postponements thereof.
By Order of the Board of Directors,
L. A. Gornto, Jr.
Executive Vice President, Secretary and General Counsel
Lake Mary, Florida
Date: April 9, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND
RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE PAID ENVELOPE AS PROMPTLY
AS POSSIBLE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. SHAREHOLDERS
WHO EXECUTE A PROXY CARD MAY NEVERTHELESS ATTEND THE MEETING, REVOKE THEIR PROXY
AND VOTE THEIR SHARES IN PERSON.
<PAGE>
H.T.E., INC.
PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS
TO BE HELD MAY 13, 1998
This Proxy Statement has been prepared and is furnished by the Board of
Directors of H.T.E., Inc., a Florida corporation (the "Company") in connection
with the solicitation of proxies for use at the 1998 Annual Meeting of
Shareholders of the Company (the "Annual Meeting") to be held at 11:00 a.m. in
Crystal Room D on Wednesday, May 13, 1998, at the Renaissance Orlando Resort
located at 6677 Sea Harbor Drive, Orlando, Florida and any adjournments or
postponements thereof, for the purposes set forth in the accompanying notice of
meeting.
It is anticipated that this Proxy Statement and the accompanying form
of proxy will be mailed to shareholders on or about April 15, 1998. The
Company's Annual Report, including audited financial statements for the fiscal
year ended December 31, 1997, is being mailed or delivered concurrently with
this Proxy Statement. The Annual Report is not to be regarded as proxy
soliciting material. The Company's principal executive offices are located at
1000 Business Center Drive, Lake Mary, Florida 32746.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Board of Directors of
the Company. The giving of a proxy does not preclude the right to vote in person
should any shareholder giving the proxy so desire. Shareholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Annual Meeting or by filing with the Secretary
of the Company at the Company's headquarters a written revocation or duly
executed proxy bearing a later date; however, no such revocation will be
effective until written notice of the revocation is received by the Company at
or prior to the Annual Meeting.
The expense of soliciting proxies will be borne by the Company. Proxies
will be solicited principally by mail, but directors, officers and regular
employees of the Company may solicit proxies personally, by telephone or by
facsimile transmission without additional compensation in respect therefor. The
Company will reimburse custodians, nominees or other persons for their
out-of-pocket expenses in sending proxy material to beneficial owners.
PURPOSES OF THE MEETING
At the Annual Meeting, the Company's shareholders will consider and
vote upon the following matters:
(1) To elect two members to the Company's Board of Directors
to hold office until the 2001 Annual Meeting of Shareholders or until their
successors are duly elected and qualified;
(2) To consider and act upon a proposal to ratify the
Company's 1997 Employee Stock Purchase Plan;
(3) To transact such other business as may properly come
before the Annual Meeting and any adjournments or postponements thereof.
<PAGE>
Shares represented by a properly executed proxy received in time to
permit its use at the Annual Meeting and any adjournments or postponements
thereof will be voted in accordance with the instructions indicated therein. If
no instructions are indicated, the shares represented by the proxy will be voted
(a) FOR the election of all nominees for director, (b) FOR the proposal to
ratify the 1997 Employee Stock Purchase Plan, and (c) in the discretion of the
proxy holders as to any other matter which may properly come before the Annual
Meeting.
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors has set the close of business on April 8, 1998
as the record date (the "Record Date") for determining shareholders of the
Company entitled to notice of and to vote at the Annual Meeting. As of the
Record Date, there were 7,849,728 shares of Common Stock issued and outstanding,
all of which are entitled to be voted on each matter to be presented at the
Annual Meeting on the basis of one vote for each share held. A majority of
these shares of Common Stock will constitute a quorum for the transaction of
business at the Annual Meeting.
In determining the presence of a quorum at the Annual Meeting,
abstentions are counted and broker or nominee non-votes (instances where brokers
or nominees are prohibited from exercising discretionary authority for
beneficial owners who have not returned a proxy) are not. As to all matters to
be voted on by shareholders at the Annual Meeting, abstentions and broker or
nominee non-votes have no legal effect on whether a matter is approved.
Directors or nominees are elected by a plurality of the votes cast. The
affirmative vote of a majority of the votes cast is required for the
ratification of the 1997 Employee Stock Purchase Plan and any other matter that
may be submitted to the vote of the shareholders.
As of the Record Date, the directors and executive officers of the
Company beneficially owned Common Stock representing 47.9% of the issued and
outstanding shares of voting stock. Such persons have informed the Company that
they intend to vote all of their shares of Common Stock in favor of all
proposals set forth in this Proxy Statement.
You are requested, regardless of the number of shares you hold, to sign
the proxy and return it promptly in the enclosed envelope.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of April 8,
1998, with respect to the beneficial ownership of the Company's Common Stock by:
(i) each shareholder known by the Company to be the beneficial owner of more
than 5% of the Company's Common Stock; (ii) each director; (iii) each executive
officer named in the Summary Compensation Table; and (iv) all current executive
officers and directors as a group.
SHARES PERCENTAGE OF
NAME AND ADDRESS OF BENEFICIALLY OUTSTANDING
BENEFICIAL OWNER(1)(2) OWNED(3) SHARES OWNED
- ---------------------- -------- ------------
Dennis J. Harward 1,856,899 23.7
Jack L. Harward 1,252,577 16.0
BancBoston Ventures, Inc. 786,216 10.0
175 Federal Street, 10th floor
Boston, Massachusetts 02110
Meridian Venture Partners(4) 569,178 7.3
259 Radnor Chestor Road-Suite 140
Radnor, Pennsylvania 19087
Bernard B. Markey(5) 569,178 7.3
Ronald E. Goodrow(6) 84,800 1.1
Daniel E. Catan(7) 58,714 *
Susan D. Falotico(8) 5,435 *
Raymond Ambrose(9) 2,500 *
All executive officers and directors
as a group (9 persons) 3,936,603 50.1
- ----------------------------------
* Less than one percent.
(1) Except as otherwise noted, and subject to community property laws where
applicable, each person named in the table has sole voting and
investment power with respect to all securities owned by such person.
(2) Unless otherwise noted, the address of each person or entity listed is
H.T.E., Inc., 1000 Business Center Drive, Lake Mary, Florida 32764.
(3) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date hereof either from
the exercise of options or from the conversion of a security.
(4) Bernard B. Markey, a director of the Company, Robert E. Brown, Jr.,
Esq. and Raymond R. Rafferty, Jr. serve as the general partners of this
Pennsylvania limited partnership and hold in the aggregate an
approximately 1% partnership interest.
(5) Represents shares held by Meridian Venture Partners, a limited
partnership of which Mr. Markey is one of three general partners who
share voting and investment power.
(6) Includes 58,300 shares of Common Stock that Mr. Goodrow may acquire
within 60 days upon exercise of stock options.
(7) Includes 58,600 shares of Common Stock that Mr. Catan may acquire
within 60 days upon exercise of stock options.
(8) Represents 5,300 shares of Common Stock that Ms. Falotico may acquire
within 60 days upon exercise of stock options.
(9) Includes 2,500 shares Mr. Ambrose holds jointly with his wife.
3
<PAGE>
I. ELECTION OF DIRECTORS AND MANAGEMENT INFORMATION NOMINEES
The Company's Articles of Incorporation and Bylaws provide that the
number of directors shall be a minimum of three and a maximum of nine, which
number is fixed from time-to-time by the Board of Directors. The number of
directors is currently fixed at six. The Company's Articles of Incorporation
further provides that the Board of Directors shall consist of three classes of
directors, as nearly equal in number as possible, to serve in staggered terms of
office for three years. Each director elected at the Annual Meeting will serve
for a term expiring at the 2001 Annual Meeting of Shareholders or until his
successor has been duly elected and qualified.
Mr. Jack L. Harward and Mr. Raymond Ambrose have been nominated as the
directors to be elected by the shareholders at this Annual Meeting, and proxies
will be voted for Messrs. Jack L. Harward and Raymond Ambrose, absent contrary
instructions.
The Board of Directors has no reason to believe that any nominee will
refuse or be unable to accept election; however, in the event that a nominee is
unable to accept election or if any other unforeseen contingencies should arise,
each proxy that does not direct otherwise will be voted for the remaining
nominee, if any, and for such other person as may be designated by the Board of
Directors, unless it is directed by a proxy to do otherwise.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" ALL
NOMINEES FOR DIRECTORS.
EXECUTIVE OFFICERS AND DIRECTORS
The Executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Dennis J. Harward 41 Director (Chairman), President and Chief Executive Officer
Jack L. Harward 66 Executive Vice President, Assistant Secretary, Assistant Treasurer,
and Director
Bernard B. Markey 33 Director
Raymond Ambrose 51 Director
L.A. Gornto, Jr. 55 Executive Vice President, Secretary and General Counsel
Susan D. Falotico 35 Vice President, Treasurer and Chief Financial Officer
Ronald E. Goodrow 46 Vice President-Operations
Daniel E. Catan 42 Vice President-Chief Marketing officer
Charlotte B. Hill 42 Vice President-Research and Development
</TABLE>
Mr. Dennis J. Harward founded the Company in 1981 and has served as its
President and Chief Executive Officer, Chairman of the Board and a Director
since inception of the Company. From 1978 to 1980, he was employed by
Southeastern Academy, a private educational institution, where he was
responsible for developing its initial management information systems
environment and implementing "mid-range" relational database systems. From 1980
through 1981, he was employed as a consultant at an oil and gas company where he
was responsible for coordinating large-scale conversion of applications to a
relational database environment. Dennis J. Harward is the son of Jack L.
Harward.
4
<PAGE>
Mr. Jack L. Harward joined the Company in 1983 and since that time has
served as an Executive Vice President and a Director of the Company. During
November 1997, he was also appointed Assistant Secretary and Assistant
Treasurer. Mr. Harward also serves as the Chief Operating Officer of
HTE-Bellamy, Ltd., a wholly-owned subsidiary of the Company. From 1978 to 1983,
Mr. Harward was employed by Seminole County, Florida, where he served as
Information Systems Director. From 1974 to 1978, Mr. Harward was responsible for
systems development-information technology management at Pepsi-Cola, Inc., a
food and beverage company. Jack L. Harward is the father of Dennis J. Harward.
Raymond Ambrose was appointed as a member of the Company's Board of
Directors in November 1997. Since 1984, Mr. Ambrose has been the President of
Air Orlando, Inc., Orlando, Florida, an aviation company with aircraft charter,
maintenance, sales and flying school divisions. From 1981 until 1987, Mr.
Ambrose served as the Mayor of the City of Altamonte Springs. From 1971 until
1981, Mr. Ambrose was employed by the Altamonte Springs Police Department as a
Rank Lieutenant.
Mr. Bernard B. Markey has been a Director of the Company since 1995.
Mr. Markey has been employed since 1988 with Meridian Venture Partners, a
privately-held venture capital fund and has been a General Partner of the fund
since 1995. Mr. Markey also serves on the Board of Directors for several
privately-held companies.
Mr. L.A. Gornto, Jr. joined the Company in January 1997 and serves as
an Executive Vice President, Secretary and General Counsel. From January 1997
until November 1997, he served as the Company's Chief Financial Officer. Since
1988, Mr. Gornto has been engaged in the private practice of law in central
Florida and provided legal services to the Company as General Counsel. From 1985
to 1987, Mr. Gornto served as Senior Vice President-Finance and Chief Financial
Officer of Jerrico, Inc., formerly a publicly-traded company and holding company
of Long John Silvers, a seafood restaurant chain. From 1977 to 1985, he was
engaged in the private practice of law and also served as a management
consultant. From 1968 to 1977, he served as Executive Vice President and Chief
Financial Officer and a director of Red Lobster Restaurants, a seafood
restaurant chain and formerly a subsidiary of General Mills, Inc. Mr. Gornto is
an attorney-at-law and certified public accountant licensed in the states of
Florida and Georgia and holds an L.L.M. degree from Emory University School of
Law.
Ms. Susan D. Falotico joined the Company in 1995 and serves as Vice
President, Treasurer and in November 1997 was also appointed Chief Financial
Officer. From 1995 to November 1997, Ms. Falotico served as the Company's Vice
President-Controller and Chief Accounting Officer. From 1988 to 1995, Mrs.
Falotico served as Controller of the Newtrend Division of EDS, Inc., a systems
integration company, where she headed the Financial Accounting and Corporate
Planning Department. From 1986 to 1988, Ms. Falotico was a Financial Analyst for
ISI, a division of Mars, Inc., a food company, where she was responsible for
monthly financial reporting and for coordinating a $70 million budget.
Mr. Ronald E. Goodrow joined the Company in 1988, and currently serves
as its Vice President-Operations. From 1987 to 1988, he was employed by GCC
Beverage Corporation, where he was Vice President of Information Systems. From
1980 to 1987, he was Vice President of Dynamic Control Corporation (Baxter
Travenol), a healthcare company.
Mr. Daniel E. Catan joined the Company in July 1996 and currently
serves as Vice President-Chief Marketing Officer. From 1991 to 1996, he was
employed by Atlanta Centennial Olympic Properties as its Vice President of
Marketing, where he was responsible for creating sponsorship packages to raise
revenues for the 1996 Summer Olympic Games. Mr. Catan was also responsible for
managing the sales negotiation and sponsor support departments. From 1977 to
1991, he was employed by IBM Corporation, a computer manufacturer, in its Sales,
Marketing and Business Management Department where he was responsible for
developing sales personnel, managing field business units, creating its software
and services business unit and national cross-industry strategies and producing
the launch of the AS/400 system in the Southeast.
5
<PAGE>
Ms. Charlotte B. Hill joined the Company in February 1997 and currently
serves as its Vice President-Research and Development. From 1979 to 1996, Ms.
Hill was employed by IBM Corporation, and ISSC, a wholly-owned subsidiary of
IBM. During the period 1991 to 1996, Ms. Hill served as a Consulting and
Services Executive responsible for profit and loss, revenue growth, strategy
development, and management of field systems integration. From 1984 to 1992, Ms.
Hill served in various sales and technical management capacities.
The Company's Articles of Incorporation provide for the Board of
Directors to have a minimum of three and a maximum of nine directors, which
number is fixed from time to time by the Board of Directors. The number of
directors is currently fixed at six. The Articles of Incorporation further
provide that the members of the Board be divided into three classes, as nearly
equal in number as possible, to serve in staggered terms of office for three
years. The number of members comprising the Board presently is four. Messrs.
Jack L. Harward and Raymond Ambrose, as Class II directors, serve until this
1998 Annual Meeting of Shareholders, and Messrs. Dennis J. Harward and Bernard
B. Markey, as Class III directors, serve until the 1999 Annual Meeting of
Shareholders. Mr. Markey and Peter R. Roberts (a director-appointee of
BancBoston Ventures, Inc.) both Class I directors, resigned from the Board in
November 1997 and Mr. Markey was subsequently re-appointed to the Board as a
Class III director. There are two vacancies in Class I which, pursuant to the
Company's Articles of Incorporation and Bylaws, may be filled by majority vote
of the Board of Directors. The Company has not yet identified candidates to fill
the vacancies. In the event these vacancies are filled, the term of the Class I
directors would expire at the 2000 Annual Meeting of Shareholders or until their
successors were duly elected and qualified. The Company's officers serve at the
discretion of the Board of Directors and are elected by the Board annually.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors and greater than ten percent shareholders (collectively, "Reporting
Persons") to file reports of ownership and changes in ownership with the
Securities and Exchange Commission ("SEC") and NASDAQ. Reporting Persons are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file. Based solely on its review of the copies of such forms
received or written representations from Reporting Persons, the Company believes
that with respect to the fiscal year ended December 31, 1997, all the Reporting
Persons complied with all applicable filing requirements except that an initial
statement of beneficial ownership for Raymond Ambrose, a director, was filed
late.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company held 6 meetings during its fiscal
year ended December 31, 1997 and took action 17 times by written consent. The
Board has an Audit Committee and a Compensation Committee, each of which met
twice during the fiscal year ended December 31, 1997. The Company does not have
a nominating committee. All directors attended 75% or more of the aggregate
number of Board meetings and meetings of committees of which they are members.
The Audit Committee reviews the scope and results of the annual audit
of the Company's consolidated financial statements conducted by the Company's
independent accountants, the scope of other services provided by the Company's
independent accountants, proposed changes in the Company's financial and
accounting standards and principles, and the Company's policies and procedures
with respect to its internal accounting, auditing and financial controls. The
Audit Committee also examines and considers other matters relating to the
financial affairs and accounting methods of the Company, including selection and
retention of the Company's independent accountants. The Audit Committee is
currently comprised of Bernard B. Markey and Raymond Ambrose.
6
<PAGE>
The Compensation Committee administers the Company's compensation
programs and performs such other duties as may from time to time be determined
by the Board of Directors. The Compensation Committee is currently comprised of
Bernard B. Markey and Raymond Ambrose.
COMPENSATION OF DIRECTORS
The Company reimburses all directors for the expenses incurred in
attending meetings of the Board of Directors. Directors who are officers of the
Company receive no additional compensation for service as directors. In
November, 1997, pursuant to the Company's 1997 Executive Incentive Stock Option
Plan, the Company granted to Mr. Ambrose an option to acquire 5,000 shares of
Common Stock. The option has an exercise price of $17.13 per share and vests
over a five year period.
INFORMATION REGARDING EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid by the Company for
services performed on the Company's behalf during the fiscal years ended
December 31, 1997 and 1996 and the fiscal year ended March 31, 1996 with respect
to the Company's Chief Executive Officer and the Company's four most highly
compensated executive officers other than the Chief Executive Officer who served
as such on December 31, 1997, and whose total annual salary and bonus for the
fiscal year ended December 31, 1997 exceeded $100,000 (the "Named Executive
Officers").
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION (1) COMPENSATION
---------------------------------------- AWARDS
-------------
SECURITIES
FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPLE POSITION YEAR SALARY (10) BONUS (2) COMPENSATION(3) OPTIONS(#) COMPENSATION
- --------------------------- ------ ----------- -------- --------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Dennis J. Harward 12/31/97 $260,417 $140,000 $35,883 0 $7,813(4)
Chairman, President and Chief 12/31/96 200,000 62,157 25,830 0 3,190(4)
Executive Officer 3/31/96 175,000 78,794 34,440 0 2,250(4)
Jack L. Harward 12/31/97 148,438 68,476 35,883 0 4,453(4)
Executive Vice President 12/31/96 142,500 38,487 25,830 0 5,820(4)
3/31/96 142,000 93,980 34,440 0 2,250(4)
Daniel E. Catan(8) 12/31/97 156,250 75,000 0 0 198,678(5)
Vice President-Chief 12/31/96 68,750 22,240 0 53,000(6) 81,826(7)
Marketing Officer 3/31/96 0 0 0 0
Ronald E. Goodrow 12/31/97 140,000 60,000 0 0 4,013(4)
Vice President-Operations 12/31/96 120,000 26,100 0 0 5,080(4)
3/31/96 120,000 45.698 0 0 3,680(4)
Susan D. Falotico(9) 12/31/97 99,375 50,755 0 0 2,981(4)
Vice President-Chief Financial 12/31/96 90,000 11,880 0 0 1,820(4)
Officer 3/31/96 16,120 0 0 0 0
</TABLE>
(1) The amounts reflected in the above table do not include any amounts for
perquisites and other personal benefits extended to the Named Executive
Officers. The aggregate amount of such compensation for each Named
Executive Officer is less than 10% of the total annual salary and
bonus.
(2) The Company has had a policy of granting discretionary annual bonuses
to its executive officers and employees based primarily on certain
performance criteria. The Board of Directors intends to continue this
policy in the future. See "-Annual Incentive Compensation Bonuses."
7
<PAGE>
(3) Represents special compensation paid pursuant to an agreement dated
November 9, 1994 which provides for approximately $2,333 per month for
each of Messrs. D. Harward and J. Harward until March 31, 1998.
(4) Represents matching contributions to the accounts of the Named
Executive Officers under the Company's 401(k) savings plan.
(5) Includes $193,991 in sales commissions and $4,687 in matching
contributions to Mr. Catan's account under the Company's 401(k) savings
plan.
(6) Represents an option granted in 1996 that is exercisable at $1.81 per
share until June 30, 2001.
(7) Represents $52,526 for relocation moving expenses and $29,300 for
commissions.
(8) Mr. Catan's employment began July 1, 1996.
(9) Ms. Falotico's employment began December 29, 1995.
(10) During the calendar year ended December 31, 1997, the Company changed
its payroll schedule which created an additional pay period accounting
for the variance in the base salaries shown above compared to the
amounts discussed under "-Employment Agreements and Change in Control
Agreements."
STOCK OPTIONS GRANTED IN FISCAL 1997
The following table sets forth certain information concerning grants of
options made during fiscal 1997 to the Named Executive Officers.
<TABLE>
<CAPTION>
NUMBER OF PERCENT POTENTIAL REALIZABLE VALUE
SECURITIES OF TOTAL AT ASSUMED ANNUAL RATES
UNDERLYING OPTIONS/SARS OF STOCK PRICE APPRECIATION
OPTIONS/ GRANTED TO EXERCISE FOR OPTION TERM(1)
SARS EMPLOYEES OR BASE EXPIRATION ---------------------------
NAME GRANTED(#) IN 1997 PRICE($/SH)(2) DATE 5%($) 10%($)
---- ---------- ------------ --------- ----------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Daniel E. Catan 53,000 10% $ 9.43 2/6/2002 $ 637,873 $ 804,917
10,000 2% 11.88 6/22/2002 803,598 1,014,042
Ronald E. Goodrow 79,500 15% 9.43 2/6/2002 1,205,397 1,521,062
Susan D. Falotico 26,500 5% 9.43 2/6/2002 401,799 507,021
</TABLE>
(1) The dollar amounts set forth in these columns are the result of
calculations at the five percent and ten percent rates set by the SEC,
and therefore are not intended to forecast possible future
appreciation, if any, of the market price of the Common Stock.
(2) Fair market value as of the date of grant.
8
<PAGE>
AGGREGATE STOCK OPTION EXERCISES AND YEAR-END OPTION VALUE TABLE
The following table sets forth certain information concerning option
exercises in fiscal 1997, the number of stock options held by the Named
Executive Officers as of December 31, 1997 and the value (based on the fair
market value of a share of stock at fiscal year-end) of in-the-money options
outstanding as of such date.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS/SARS HELD AT MONEY OPTIONS/SARS AT FISCAL
NUMBER OF FISCAL YEAR END(#) YEAR END(1)
SHARES ACQUIRED VALUE ---------------------------------- -------------------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Daniel E. Catan 0 0 63,600 52,400 $1,123,812 $479,968
Ronald E. Goodrow 0 0 58,300 21,200 659,956 239,984
Susan D. Falotico 0 0 5,300 21,200 59,956 239,984
</TABLE>
(1) The closing sale price for the Company's Common Stock as reported by
the NASDAQ National Market System on December 31, 1997 was $20.75.
Value is calculated by multiplying (a) the difference between $20.75
and the option exercise price by (b) the number of shares of Common
Stock underlying the option.
EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL AGREEMENTS
Effective February 1997, the Company entered into employment agreements
with Dennis J. Harward, the Company's President, Chief Executive Officer and
Chairman of the Board and Jack L. Harward, the Company's Executive Vice
President. These agreements with Messrs. D. Harward and J. Harward provide for
base salaries of $250,000 and $142,500, respectively, to be reviewed annually by
the Board of Directors. Each of the agreements is for a term of three years,
which automatically renews for successive one-year periods. The agreements also
provide that, upon the termination of the executive's employment or death,
mental or physical incapacity, illness or disability, the Company will pay to
the executive any unpaid base salary, any accrued but unpaid incentive
compensation through the date of termination and a pro rata portion of the
incentive compensation for such period. The Company has the right to terminate
the agreements for "Cause" (as defined), and shall be obligated to pay to the
executive base salary to the date of termination. In the event either executive
is terminated without Cause, the Company must pay to such executive any unpaid
base salary, any accrued but unpaid incentive compensation through the date of
termination and the executive's base salary for a period of 12 months as well as
continue to provide the executive with incentive compensation and the other
benefits under the agreement for the same period. Additionally, upon termination
without Cause the Company must pay to each executive a single lump sum payment
equal to the value of the portion of his benefits under any savings, pension,
profit sharing or deferred compensation plans. These agreements also provide
that Messrs. D. Harward and J. Harward may receive stock options pursuant to the
Company's Executive Incentive Plan. Each of the employment agreements contain
confidentiality provisions and also prohibit the executives from competing with
the Company during the term of the agreement, and for two years thereafter. At
any time, the executives have the right to resign and terminate the agreement
upon 60 days' notice. Upon such resignation, the Company must pay to such
executive any unpaid base salary and any accrued but unpaid incentive
compensation through the date of resignation.
Effective February 1997, the Company also entered into severance
agreements with Dennis J. Harward and Jack L. Harward. The severance agreements
will become effective on, and provide for continued employment or retention
following, a "Change in Control" (as defined in the agreement) of HTE. Such
agreements generally provide that upon (i) termination by HTE of the executive's
employment for any reason other than death, mental or physical incapacity,
illness or disability or "Cause" (as defined), (ii) termination by the executive
for "Good Reason" (generally defined as the diminution of the executive's duties
or other breach by HTE of the agreement) or (iii) termination by the executive
during a 30-day
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<PAGE>
period commencing one year after the Change in Control, he will receive, in
addition to base salary, bonus and other compensation accrued through the date
of termination, a lump sum cash payment equal to 2.5 times his then-existing
base salary and incentive compensation provided however that, in the event of a
Change in Control, such severance provision shall not apply to an executive who
votes any shares in favor of any such Change in Control.
Effective as of January 16, 1997, the Company entered into an
employment agreement with L.A. Gornto, Jr. Pursuant to the agreement, Mr. Gornto
has agreed to make himself available on a full-time basis to serve as the
Company's Executive Vice President, Secretary and General Counsel. The agreement
is for a term of one year and automatically renews for successive one-year
periods. Either party may terminate this agreement upon 60 days prior notice to
the other. The agreement provides for an annual salary of $75,000 for up to 16
hours per week of services and for additional independent contractor payments
based on hourly rates for additional, primarily legal services. The Company
anticipates that Mr. Gornto will devote substantially his full business time to
the Company's affairs. The agreement also provides that Mr. Gornto shall be
reimbursed for all reasonable expenses incurred by him in the performance of his
duties. Mr. Gornto has waived participation in the Company's annual executive
bonus compensation plan. However, Mr. Gornto is eligible to receive stock option
grants pursuant to the Company's Executive Incentive Plan. The agreement
contains confidentiality provisions and also prohibits Mr. Gornto from competing
with the Company during the term of the agreement, and for one year thereafter.
The Company has also entered into employment agreements with Daniel E.
Catan, Vice President-Chief Marketing Officer, Charlotte B. Hill, Vice
President-Research and Development, Ronald E. Goodrow, Vice
President-Operations and Susan D. Falotico, Vice President and Chief Financial
Officer. The Company's agreements with Mr. Catan, Ms. Hill, Mr. Goodrow and Ms.
Falotico provide for base salaries and incentive compensation payments based on
performance and for Mr. Catan commissions on certain sales. Current base
salaries are $150,000, $160,000, $150,000 and $130,000 respectively. Each of the
agreements is for a term of one year, which automatically renew for successive
one-year periods. Either party may terminate this agreement upon 60 days' prior
notice to the other. The agreements also provide that, upon the termination of
the executive's employment or death, the Company will pay to the executive's
estate any unpaid base salary and any accrued but unpaid incentive compensation
through the date of termination. In the event an executive is terminated without
Cause (as defined), the Company will pay to such executive any unpaid base
salary, any accrued but unpaid incentive compensation through the date of
termination, and in certain cases, additional payment of salary and benefits for
up to six months after the date of termination. These agreements also provide
that the executives may receive stock options pursuant to the Executive
Incentive Plan. Each of the agreements contain confidentiality provisions and
also prohibit the executives from competing with the Company during the term of
the agreement, and for one year thereafter. Upon resignation, the Company shall
pay to such executive any unpaid base salary and any accrued but unpaid
incentive compensation through the date of resignation.
ANNUAL INCENTIVE COMPENSATION BONUSES
The Company has an incentive compensation bonus program for its
executive officers pursuant to which distributions may be made annually based on
the Company's earnings and on each participating officer's contributions to the
Company's profits and other corporate goals. Distributions are made from a pool,
the amount of which is established by the Company's Board of Directors.
Individual distributions from the pool are determined by the Company's
Compensation Committee and are generally based on a percentage of the
participating officer's base salary.
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<PAGE>
1997 EXECUTIVE INCENTIVE COMPENSATION PLAN
The Executive Incentive Plan was established by the Company in January
1997. The purpose of the Executive Incentive Plan is to attract and retain key
employees and consultants of the Company, to provide an incentive for them to
achieve long-range performance goals, and to enable them to participate in the
long-term growth of the Company.
The Executive Incentive Plan authorizes the grant of stock options
(incentive and nonstatutory), stock appreciation rights ("SARs") and restricted
stock to employees and consultants of the Company capable of contributing to the
Company's performance. The Company has reserved an aggregate of 954,000 shares
of Common Stock for grants under the Executive Incentive Plan. Incentive stock
options may be granted only to employees eligible to receive them under the
Internal Revenue Code of 1986, as amended. Nonstatutory options to purchase
503,500 shares of Common Stock were granted on February 7, 1997 at an exercise
price of $9.43 per share. Of the options issued, 116,600 were immediately vested
and 386,900 vest over up to a five-year period. During the period of February 8,
1997 through December 31, 1997 an additional 27,000 options were granted under
this plan, all vesting over a five-year period. 12,000 options were granted at
an exercise price of $11.88 per share, 10,000 options at $14.63 per share and
5,000 options at $17.13 per share.
1997 EMPLOYEE STOCK PURCHASE PLAN
The 1997 Employee Stock Purchase Plan was approved by the Board of
Directors in July 1997 and is subject to ratification by the shareholders at
this Annual Meeting. For a summary of the Employee Stock Purchase Plan, please
refer to the discussion herein below. Also, a copy of the plan appears as
EXHIBIT A to this Proxy Statement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Bernard B. Markey and Peter R. Roberts, independent directors of the
Company, served on the Company's Compensation Committee until November 1997. At
that time, Peter R. Roberts resigned his position as a director and Raymond
Ambrose was appointed. Mr. Ambrose also assumed Mr. Roberts' position on the
Compensation Committee at that time.
11
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON
EXECUTIVE COMPENSATION
GENERAL
The Compensation Committee (the "Committee") of the Board of Directors
consists of Bernard B. Markey and Raymond Ambrose, each of whom is a
non-employee director of the Company. The Compensation Committee administers the
Company's executive compensation program, monitors corporate performance and its
relationship to compensation for executive officers, and makes appropriate
recommendations concerning matters of executive compensation.
COMPENSATION PHILOSOPHY
The Committee has developed and implemented a compensation program that
is designed to attract, motivate, reward and retain the broad based management
talent required to achieve the Company's business objectives and increase
stockholder value. There are two major components of the Company's compensation
program: base salary, and incentives, each of which is intended to serve the
overall compensation philosophy.
BASE SALARY
The Company's salary levels for executive officers are intended to be
consistent with competitive pay practices of similar sized companies within the
industry. In determining executive officers' salaries, the Compensation
Committee considers level of responsibility, competitive trends, the financial
performance and resources of the Company, general economic conditions, as well
as factors relating to the particular individual, including overall job
performance, level of experience and prior service, ability, and knowledge of
the job. Base salaries were increased for certain executive officers in fiscal
1997 to maintain an externally competitive rate of pay.
INCENTIVES
Incentives consist of stock options and cash bonus awards. The
Committee strongly believes that the compensation program should provide
employees with an opportunity to increase their ownership and potential for
financial gain from increases in the Company's stock price. This approach
closely aligns the best interests of shareholders and executives and employees.
Therefore, executives and other employees are eligible to receive stock options,
giving them the right to purchase shares of the Company's Common Stock at a
specified price in the future. The grant of options is based primarily on a key
employee's potential contribution to the Company's growth and profitability, as
measured by the market value of the Company's Common Stock. The Company has an
incentive compensation bonus program for its executive officers pursuant to
which distributions may be made annually based on the Company's earnings and on
each participating officer's contributions to the Company's profits and other
corporate goals. Distributions are made from a pool, the amount of which is
established by the Company's Board of Directors. Individual distributions from
the pool are determined by the Company's Compensation Committee and are
generally based on a percentage of the participating officer's base salary.
THE COMPENSATION COMMITTEE
Bernard B. Markey
Raymond Ambrose
12
<PAGE>
STOCK PERFORMANCE GRAPH
The graph below compares the cumulative total stockholder return on the
Company's Common Stock (Company Index) with the cumulative total return of the
NASDAQ Stock Market (Market Index) and the NASDAQ Computer and Data Processing
Stocks (Peer Index) for the period commencing June 11, 1997 (the date on which
trading in the Company's Common Stock commenced) through December 31, 1997,
assuming an investment of $100 and the reinvestment of any dividends. The base
price for the Company's Stock is the initial public offering price of $11.00 per
share. The comparisons in the graph below are based upon historical data and are
not indicative of, nor intended to forecast, future performance of the Company's
Common Stock.
6/11/97 6/30/97 9/30/97 12/31/97
------- ------- ------- --------
HTE, INC. 100 101 142 195
NASDAQ (U.S. Companies) 100 103 120 112
NASDAQ (Computer and Data Processing 100 102 111 105
Services)
CERTAIN TRANSACTIONS INVOLVING MANAGEMENT
On November 1, 1996, the Company acquired all of the outstanding Common
Stock of Bellamy, Ltd., a Canadian company by paying cash of $375,000, issuing
notes totaling $300,000 and by issuing 63,600 shares of Class C Common Stock of
the Company. The notes bore annual interest at 10% and were payable in annual
installments totaling $60,000, $90,000 and $150,000 on November 1, 1997, 1998
and 1999, respectively. The Company repaid such notes with proceeds from the
initial public offering. The payees are employees of HTE-Bellamy, Ltd. and are
not executive officers.
Mr. Gornto, the Company's Executive Vice President, General Counsel and
Secretary, has performed certain legal services for the Company through his law
firm, L.A. Gornto, Jr. PA, for which the Company paid approximately $204,000
during fiscal 1997, and from which office expenses, secretarial and certain
other expenses incurred by Mr. Gornto in providing such services were paid.
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<PAGE>
In June 1997, the Company completed an initial public offering of its
Common Stock for a purchase price of $11.00 per share. Certain related parties
sold an aggregate of 550,000 shares of Common Stock for total gross proceeds of
$6,050,000, before deducting underwriting commissions of 7%. The selling
shareholders and the number of shares sold were: Dennis J. Harward, Chairman,
President and Chief Executive Officer, 110,000 shares; Jack L. Harward,
Executive Vice President, Director, 110,000 shares; BancBoston Ventures, Inc.,
220,000 shares; and Meridian Venture Partners, 110,000 shares. Bernard B.
Markey, a Director of the Company, is a general partner of Meridian Venture
Partners.
II. PROPOSAL TO RATIFY THE COMPANY'S EMPLOYEE STOCK PURCHASE PLAN
The Company's Board of Directors has adopted and is submitting to the
shareholders for approval, the 1997 Employee Stock Purchase Plan (the "Plan").
The Plan became effective September 1, 1997 and is designed to qualify as an
employee stock purchase plan under Section 423 of the Internal Revenue Code of
1986, as amended (the "Code"). 200,000 shares of the Company's Common Stock have
been reserved for issuance over the term of the Plan, subject to periodic
adjustment for changes in the outstanding Common Stock occasioned by stock
splits, stock dividends, recapitalizations or other similar changes. The
material features of the Plan are discussed below, but the description is
subject to, and is qualified in its entirety by, the full text of the Plan,
which is attached hereto as EXHIBIT A.
The purpose of the Plan is to encourage stock ownership in the Company
by employees of the Company and those subsidiaries of the Company designated by
the Company's Board of Directors as eligible to participate, thereby enhancing
employee interest in the continued success and progress of the Company.
GENERAL TERMS AND CONDITIONS
The Plan is currently administered by the Board of Directors; however,
under the Plan's terms, the Board may appoint a Committee to administer the
Plan. The Plan gives broad powers to the Board or the Committee to administer
and interpret the Plan.
The Plan permits employees to purchase stock of the Company at a
favorable price and possibly with favorable tax consequences to the
participants. All employees (including officers, other than Dennis J. Harward
and Jack L. Harward) of the Company or of those subsidiaries designated by the
Board who are regularly scheduled to work at least 20 hours per week and more
than five months per year are eligible to participate in any of the purchase
periods of the Plan after completing 90 days of continuous employment. However,
any participant who would own (as determined under the Code), immediately after
the grant of an option, stock possessing 5% or more of the total combined voting
power or value of all classes of the stock of the Company will not be granted an
option under the Plan. As of the Record Date, the Company had approximately 450
eligible participants.
Under the Plan, eligible employees may elect to participate in the Plan
on January 1 or July 1 of each year (except in 1997, when the election date was
September 1, 1997). On the date he becomes a participant, subject to certain
limitations determined in accordance with calculations set forth in the Plan, an
eligible employee is granted a right to purchase shares of Common Stock (up to a
maximum of 500 shares) on the last business day on or before each June 30 and
December 31 during which he is a participant. Upon enrollment in the Plan, the
participant authorizes a payroll deduction, on an after-tax basis, in an amount
of not less than 1% and not more than 25% of the participant's compensation on
each payroll date. Unless the participant withdraws from the Plan, the
participant's option for the purchase of shares will be exercised automatically
on each exercise date, and the maximum number of full shares subject to such
option shall be purchased for the participant at the applicable exercise price
with the accumulated Plan contributions then credited to the participant's
account under the Plan. The option exercise price per share may not be less than
85% of the lower of the market price on the first day of the
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<PAGE>
offering period or the market price on the exercise date, unless the
participant's entry date is not the first day of the offering period, in which
case the exercise price may not be lower than 85% of the market price of the
Common Stock on the entry date.
As required by tax law, no participant may receive an option under the
Plan for shares which have a fair market value in excess of $25,000 for any
calendar year, determined at the time such option is granted. Any funds not used
to purchase shares will remain credited to the participant's bookkeeping account
and applied to the purchase of shares of Common Stock in the next succeeding
purchase period. No interest is paid by the Company on funds withheld, and such
funds are used by the Company for general operating purposes.
No plan contributions or options granted under the Plan are assignable
or transferable, other than by will or by the laws of descent and distribution
or as provided under the Plan. During the lifetime of a participant, an option
is exercisable only by such participant. The expiration date of the Plan will be
determined by the Board and may be made any time following the close of any
six-month exercise period, but may not be longer than ten years from the date of
the grant. Under circumstances of dissolution or liquidation, the offering
period will terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Board. In the event of merger or a sale
of all or substantially all of the Company's assets, each option under the Plan
shall be assumed or an equivalent option substituted by the successor
corporation, unless the Board, in its sole discretion, accelerates the date on
which the options may be exercised. No option may be granted under the Plan
after September 1, 2007. The unexercised portion of any option granted to an
employee under the Plan shall be automatically terminated immediately upon the
termination of the employee's employment for any reason, including retirement or
death.
The Plan provides for adjustment of the number of shares for which
options may be granted, the number of shares subject to outstanding options and
the exercise price of outstanding options in the event of any increase or
decrease in the number of issued and outstanding shares as a result of one or
more reorganizations, restructurings, recapitalizations, reclassifications,
stock splits, reverse stock splits, or stock dividends.
The Board or the Committee may amend, suspend or terminate the Plan at
any time, provided that such amendment may not change any option which adversely
affects the rights of the holder of the option and the Plan may not be amended
if such amendment would in any way cause rights issued under the Plan to fail to
meet the requirements for employee stock purchase plans as defined in Section
423 of the Code, or would cause the Plan to fail to comply with Rule 16b-3 of
the Exchange Act of 1934, as amended.
As of December 31, 1997, 20,060 shares of Common Stock had been
purchased under the Plan. The Company's shareholders will not have any
preemptive rights to purchase or subscribe for the shares reserved for issuance
under the Plan. If any option granted under the Plan expires or terminates for
any reason other than having been exercised in full, the unpurchased shares
subject to that option will again be available for purposes of the Plan.
FEDERAL INCOME TAX EFFECTS
Options granted under the Plan are intended to qualify for favorable
tax treatment to the employees under Sections 421 and 423 of the Code. Employee
contributions are made on an after-tax basis. A capital gain or capital loss on
Common Stock purchased under the Plan would not be realized until the
participant would sell the shares of Common Stock. If a participant disposes of
shares two years or more after the date of the beginning of the purchase period
when the shares were acquired, and more than one year after the shares are
purchased, the participant would recognize as ordinary income the lesser of: (i)
the excess of the fair market value of the shares on the date of sale over the
price paid or (ii) the
15
<PAGE>
discount (currently 15%) of the fair market value of the shares at the beginning
of the purchase period(s). Additionally, the participant would recognize a
long-term capital gain or loss (within the meaning of the Code) equal to the
difference between the amount realized from the sale of the shares and the basis
(the basis would be the purchase price plus any amount taxed as ordinary
compensation income). If a participant disposes of shares within two years of
the date of the beginning of the purchase period when the shares were acquired,
or within one year after the shares are purchased, the participant would
recognize ordinary compensation income equal to the excess of the fair market
value of the shares on the purchase date(s) over the price paid for the shares.
Additionally, the participant would recognize a capital gain or loss (within the
meaning of the Code) equal to the difference between the amount realized from
the sale of the shares and the basis (the basis would be the purchase price plus
the amount taxed as ordinary compensation income). If the participant held the
shares for more than one year, the capital gain or loss would be a long-term
gain or loss. The Company would not receive an income tax deduction upon either
the grant or exercise of the option by the participant, but generally would
receive a deduction equal to the ordinary compensation income required to be
recognized by the participant as a result of the disposition of the shares if
the shares are disposed of by the participant within two years of the date of
the beginning of the purchase period when the shares were acquired, or within
one year after the shares are purchased.
IMPORTANCE OF CONSULTING TAX ADVISOR. The information set forth above
is a summary only and does not purport to be complete. In addition, the
information is based upon current Federal income tax rules and therefore is
subject to change when those rules change. Moreover, because the tax
consequences to any participant in the Plan may depend on his or her particular
situation, each participant should consult his or her tax adviser as to the
Federal, state, local and other tax consequences of the acquisition or
disposition of Common Stock under the Plan.
SHARES PURCHASED UNDER THE 1997 EMPLOYEE STOCK PURCHASE PLAN
The following table sets forth certain information as of December 31,
1997 regarding shares purchased under the Plan by the persons and groups
indicated.
<TABLE>
<CAPTION>
AGGREGATE PURCHASE AGGREGATE DOLLAR
NAME AND POSITION AGGREGATE NUMBER PRICE PAID TO VALUES AT PURCHASE
OR GROUP OF SHARES PURCHASED THE COMPANY DATES (1)
------------------ ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Dennis J. Harward, Chairman, 0 0 0
President, and CEO
Jack L. Harward, 0 0 0
Executive Vice President
Daniel E. Catan, Vice President
- - Chief Marketing Officer 114 $1,502 $864
Ronald E. Goodrow,
Vice President - Operations 0 0 0
Susan D. Falotico,
Vice President - CFO 135 $1,779 $1,022
All current directors who are not
executive officers as a group (2 persons) 0 0 0
All current executive officers as
a group (7 persons) 749 $9,868 $ 5,674
All employees as a group, other
than executive officers (214 persons) 19,311 $254,594 $146,379
</TABLE>
(1) Aggregate Dollar Values at Purchase Dates represents the aggregate
market value of the shares acquired on the Purchase Dates in 1997, less
the aggregate purchase price paid for such shares under the Plan. As
the Plan was not adopted until July 1997, the only Purchase Date during
1997 occurred on December 31, 1997.
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<PAGE>
The Committee believes that shares granted under the Plan have been and
will be awarded to all employees presently meeting the existing eligibility
requirements, except no one plan participant may be granted an aggregate number
of shares with a fair market value exceeding $25,000 in any calendar year as
determined at the beginning of each purchase period as defined under the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSAL
TO RATIFY THE COMPANY'S 1997 EMPLOYEE STOCK PURCHASE PLAN.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company's independent public accountants for year ended December
31, 1997 were and for 1998 will be the firm of Arthur Andersen LLP. It is
expected that representatives of such firm will attend the Annual Meeting, have
an opportunity to make a statement if they desire to do so, and be available to
respond to appropriate questions.
OTHER BUSINESS
The Board of Directors is not aware of any matters to be presented at
the meeting other than the matters described herein and does not intend to bring
any other matters before the meeting. However, if any other matters should come
before the meeting, or any adjournment thereof, the persons named in the
enclosed proxy will have discretionary authority to vote all proxies in
accordance with their best judgment.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Shareholder proposals for inclusion in the Company's Proxy statement and form of
proxy relating to the Company's 1999 Annual Meeting of Shareholders must be
received by the Company by December 14, 1998. Shareholder proposals should be
addressed to L.A. Gornto, Jr., Executive Vice President, Secretary & General
Counsel, H.T.E. Inc., 1000 Business Center Drive, Lake Mary, Florida 32746.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE TO THE RECIPIENTS OF THIS PROXY STATEMENT,
UPON WRITTEN REQUEST AND WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM
10-K RELATED TO THE YEAR ENDED DECEMBER 31, 1997. Written requests for the
Company's Form 10-K should be addressed to: H.T.E., Inc., Investor Relations
Department, 1000 Business Center Drive, Lake Mary, Florida 32746.
Kindly date, sign and return the enclosed proxy card.
By Order of the Board of Directors,
L.A. GORNTO, JR.
Executive Vice President, Secretary &
General Counsel
ALL SHAREHOLDERS ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING
PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE. THANK YOU FOR YOUR PROMPT
ATTENTION TO THIS MATTER.
17
<PAGE>
EXHIBIT A
H.T.E., INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
<PAGE>
H.T.E., INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose..............................................................1
2. Definitions..........................................................1
3. Eligibility..........................................................2
4. Offering Periods.....................................................3
5. Election to Participate..............................................3
6. Participant Contributions............................................3
7. Grant of Option......................................................4
8. Exercise Price.......................................................5
9. Exercise of Options..................................................5
10. Delivery.............................................................5
11. Withdrawal; Termination of Employment................................5
12. Stock................................................................5
13. Administration.......................................................6
14. Designation of Beneficiary...........................................6
15. Transferability......................................................7
16. Participant Accounts.................................................7
17. Adjustments Upon Changes in Capitalization; Corporate Transactions...7
18. Amendment of Plan....................................................8
19. Termination of the Plan..............................................8
20. Notices..............................................................8
21. Effective Date.......................................................8
22. Conditions Upon Issuance of Shares...................................8
23. Expenses of the Plan.................................................8
24. No Employment Rights.................................................9
25. Applicable Law.......................................................9
26. Additional Restrictions of Rule 16b-3................................9
<PAGE>
H.T.E., INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE. The purpose of the Plan is to provide incentive for present
and future employees of the Company and any Designated Subsidiary to acquire a
proprietary interest (or increase an existing proprietary interest) in the
Company through the purchase of Common Stock. It is the Company's intention that
the Plan qualify as an "employee stock purchase plan" under Section 423 of the
Code. Accordingly, the provisions of the Plan shall be administered, interpreted
and construed in a manner consistent with the requirements of that section of
the Code.
2. DEFINITIONS.
(a) "APPLICABLE PERCENTAGE" means the percentage specified in
Section 8, subject to adjustment by the Committee as provided in Section 8.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as
amended, and any successor thereto.
(d) "COMMITTEE" means the committee appointed by the Board to
administer the Plan as described in Section 13 of the Plan or, if no such
Committee is appointed, the Board.
(e) "COMMON STOCK" means the Company's Common Stock, par value
$.01 per share.
(f) "COMPANY" means H.T.E., INC., a Florida corporation.
(g) "COMPENSATION" means, with respect to each Participant for
each pay period, the full base salary, overtime and other wages paid to such
Participant by the Company or a Designated Subsidiary. Except as otherwise
determined by the Committee, "Compensation" does not include: (i) commissions or
bonuses; (ii) any amounts contributed by the Company or a Designated Subsidiary
to any pension plan; (iii) any automobile or relocation allowances (or
reimbursement for any such expenses); (iv) any amounts paid as a starting bonus
or finder's fee; (v) any amounts realized from the exercise of any stock options
or incentive awards; (vi) any amounts paid by the Company or a Designated
Subsidiary for other fringe benefits, such as health and welfare,
hospitalization and group life insurance benefits, or perquisites, or paid in
lieu of such benefits, or; (vii) other similar forms of extraordinary
compensation.
(h) "CONTINUOUS STATUS AS AN EMPLOYEE" means the absence of
any interruption or termination of service as an Employee. Continuous Status as
an Employee shall not be considered interrupted in the case of a leave of
absence agreed to in writing by the Company or the Designated Subsidiary that
employs the Employee, provided that such leave is for a period of not more than
90 days or reemployment upon the expiration of such leave is guaranteed by
contract or statute.
(i) "DESIGNATED SUBSIDIARIES" means the Subsidiaries that have
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(j) "EMPLOYEE" means any person, including an Officer, whose
customary employment with the Company or one of its Designated Subsidiaries is
at least twenty (20) hours per week and more than five (5) months in any
calendar year.
(k) "ENTRY DATE" means the first day of each Exercise Period.
(l) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
<PAGE>
(m) "EXERCISE DATE" means the last business day ending on or
before December 31, 1997, and the last business day ending on or before each
June 30 and December 31 thereafter.
(n) "EXERCISE PERIOD" means, for any Offering Period, each
period commencing on the Offering Date and on the day after each Exercise Date,
and terminating on the immediately following Exercise Date.
(o) "EXERCISE PRICE" means the price per share of Common Stock
offered in a given Offering Period determined as provided in Section 8.
(p) "FAIR MARKET VALUE" means, with respect to a share of
Common Stock, the Fair Market Value as determined under Section 7(b).
(q) "FIRST OFFERING DATE" means September 1, 1997.
(r) "OFFERING DATE" means the first business day of each
Offering Period; provided, that in the case of an individual who becomes
eligible to become a Participant under Section 3 after the first business day of
an Offering Period, the term "Offering Date" shall mean the first business day
of the Exercise Period coinciding with or next succeeding the day on which that
individual becomes eligible to become a Participant. Options granted after the
first day of an Offering Period will be subject to the same terms as the options
granted on the first business day of such Offering Period except that they will
have a different grant date (thus, potentially, a different exercise price) and,
because they expire at the same time as the options granted on the first
business day of such Offering Period, a shorter term.
(s) "OFFERING PERIOD" means (i) with respect to the first
Offering Period, the period beginning on the First Offering Date and ending on
December 31, 1997, and (ii) with respect to each Offering Period thereafter, and
subject to adjustment as provided in Section 4, the period beginning on the
first business day in January and ending on the last business day in June, and
the period beginning on the first business day in July and ending on the last
business day of December.
(t) "OFFICER" means a person who is an officer of the Company
within the meaning of Section 16 under the Exchange Act and the rules and
regulations promulgated thereunder.
(u) "PARTICIPANT" means an Employee who has elected to
participate in the Plan by filing an enrollment agreement with the Company as
provided in Section 5 of the Plan.
(v) "PLAN" shall mean this 1997 Employee Stock Purchase Plan.
(w) "PLAN CONTRIBUTIONS" means, with respect to each
Participant, the payroll deductions withheld from the Compensation of the
Participant and contributed to the Plan for the Participant as provided in
Section 6 of the Plan and any other amounts contributed to the Plan for the
Participant in accordance with the terms of the Plan.
(x) "SUBSIDIARY" shall mean any corporation, domestic or
foreign, of which the Company owns, directly or indirectly, 50% or more of the
total combined voting power of all classes of stock, and that otherwise
qualifies as a "subsidiary corporation" within the meaning of Section 424(f) of
the Code.
3. ELIGIBILITY.
(a) Any Employee shall be eligible to become a Participant as
of any Entry Date coinciding with or following the date on which he becomes an
Employee, subject to the requirements of Section 5(a) and the limitations
imposed by Section 423(b) of the Code.
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(b) Notwithstanding any provision of the Plan to the contrary,
no Participant shall be granted an option under the Plan (i) if, immediately
after the grant, such Participant (or any other person whose stock would be
attributed to such Participant pursuant to Section 424(d) of the Code) would own
stock and/or hold outstanding options to purchase stock possessing 5% or more of
the total combined voting power or value of all classes of stock of the Company
or of any Subsidiary of the Company, or (ii) which permits such Participant's
rights to purchase stock under all employee stock purchase plans of the Company
and its Subsidiaries intended to qualify under Section 423 of the Code to accrue
at a rate which exceeds $25,000 of fair market value of stock (determined at the
time such option is granted) for each calendar year in which such option is
outstanding at any time.
4. OFFERING PERIODS. The Plan shall be implemented by a series of
consecutive Offering Periods. The first Offering Period shall commence on the
First Offering Date, the second Offering Period shall commence on the first
business day in 1998, and succeeding Offering Periods shall commence on the
first business day of January and the first business day of July in each
succeeding calendar year (or at such other time or times as may be determined by
the Committee). The Committee shall have the power to change the duration and/or
the frequency of Offering Periods with respect to future offerings without
stockholder approval if such change is announced at least fifteen (15) days
prior to the scheduled beginning of the first Offering Period to be affected.
5. ELECTION TO PARTICIPATE.
(a) An eligible Employee may elect to participate in the Plan
commencing on any Entry Date by completing an enrollment agreement on the form
provided by the Company and filing the enrollment agreement with the Company on
or prior to such Entry Date, unless a later time for filing the enrollment
agreement is set by the Committee for all eligible Employees with respect to a
given offering. The enrollment agreement shall set forth the percentage of the
Participant's Compensation that is to be withheld by payroll deduction pursuant
to the Plan.
(b) Except as otherwise determined by the Committee under
rules applicable to all Participants, payroll deductions for a Participant shall
commence on the first payroll following the Entry Date on which the Participant
elects to participate in accordance with Section 5(a) and shall end on the last
payroll in the Offering Period, unless sooner terminated by the Participant as
provided in Section 11.
(c) Unless a Participant elects otherwise prior to the last
Exercise Date of an Offering Period, such Participant shall be deemed (i) to
have elected to participate in the immediately succeeding Offering Period (and,
for purposes of such Offering Period such Participant's "Entry Date" shall be
deemed to be the first day of such Offering Period) and (ii) to have authorized
the same payroll deduction for such immediately succeeding Offering Period as
was in effect for such Participant immediately prior to the commencement of such
succeeding Offering Period.
6. PARTICIPANT CONTRIBUTIONS.
(a) Except as otherwise authorized by the Committee pursuant
to Section 6(d) below, all Participant contributions to the Plan shall be made
only by payroll deductions. At the time a Participant files the enrollment
agreement with respect to an Offering Period, the Participant may authorize
payroll deductions to be made on each payroll date during the portion of the
Offering Period that he or she is a Participant in an amount not less than 1%
and not more than 25% of the Participant's Compensation on each payroll date
during the portion of the Offering Period that he or she is a Participant (or
subsequent Offering Periods as provided in Section 5(c)). The amount of payroll
deductions shall be a whole percentage (i.e., 1%, 2%, 3%, etc.) of the
Participant's Compensation.
(b) A Participant may discontinue his or her participation in
the Plan as provided in Section 11, or may decrease or increase the rate or
amount of his or her payroll deductions during such Offering Period (within the
limitations of Section 6(a) above) by completing and filing with the Company a
new enrollment
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agreement authorizing a change in the rate or amount of payroll deductions;
PROVIDED, that a Participant may not change the rate or amount of his or her
payroll deductions more than once in any Exercise Period. The change in rate or
amount shall be effective with the first full payroll period following ten (10)
business days after the Company's receipt of the new enrollment agreement.
(c) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a
Participant's payroll deductions may be decreased to 0% at such time during any
Exercise Period which is scheduled to end during the current calendar year that
the aggregate of all payroll deductions accumulated with respect to such
Exercise Period and any other Exercise Period ending within the same calendar
year are equal to the product of $25,000 multiplied by the Applicable Percentage
for the calendar year. Payroll deductions shall recommence at the rate provided
in the Participant's enrollment agreement at the beginning of the following
Exercise Period which is scheduled to end in the following calendar year, unless
terminated by the Participant as provided in Section 11.
(d) Notwithstanding anything to the contrary in the foregoing,
but subject to the limitations set forth in Section 3(b), the Committee may
permit Participants to make additional contributions to the Plan subject to such
terms and conditions as the Committee may in its discretion determine. All such
additional contributions shall be made in a manner consistent with the
provisions of Section 423 of the Code or any successor thereto, and shall be
held in Participants' accounts and applied to the purchase of shares of Common
Stock pursuant to options granted under this Plan in the same manner as payroll
deductions contributed to the Plan as provided above.
(e) All Plan Contributions made for a Participant shall be
deposited in the Company's general corporate account and shall be credited the
Participant's account under the Plan. No interest shall accrue or be credited
with respect to a Participant's Plan Contributions. All Plan Contributions
received or held by the Company may be used by the Company for any corporate
purpose, and the Company shall not be obligated to segregate or otherwise set
apart such Plan Contributions from any other corporate funds.
7. GRANT OF OPTION.
(a) On a Participant's Entry Date, subject to the limitations
set forth in Sections 3(b) and 12(a), the Participant shall be granted an option
to purchase on each subsequent Exercise Date during the Offering Period in which
such Entry Date occurs (at the Exercise Price determined as provided in Section
8 below) a number of shares of Common Stock determined by dividing such
Participant's Plan Contributions accumulated prior to such Exercise Date and
retained in the Participant's account as of such Exercise Date by the lower of
(i) the Applicable Percentage of the greater of (A) the Fair Market Value of a
share of Common Stock on the Offering Date or (B) the Fair Market Value of a
share of Common Stock on the Entry Date on which the Employee elects to become a
Participant within the Offering Period, or (ii) the Applicable Percentage of the
Fair Market Value of a share of Common Stock on such Exercise Date; PROVIDED,
that the maximum number of shares an Employee may purchase during any Exercise
Period shall be Five Hundred (500) shares. The Fair Market Value of a share of
Common Stock shall be determined as provided in Section 7(b).
(b) The Fair Market Value of a share of Common Stock on a
given date shall be determined by the Committee in its discretion; PROVIDED,
that if there is a public market for the Common Stock, the Fair Market Value per
share shall be either (i) the closing price of the Common Stock on such date
(or, in the event that the Common Stock is not traded on such date, on the
immediately preceding trading date), as reported by the National Association of
Securities Dealers Automated Quotation (Nasdaq) National Market System, (ii) if
such price is not reported, the average of the bid and asked prices for the
Common Stock on such date (or, in the event that the Common Stock is not traded
on such date, on the immediately preceding trading date), as reported by Nasdaq,
(iii) in the event the Common Stock is listed on a stock exchange, the closing
price of the Common Stock on such exchange on such date (or, in the event that
the Common Stock is not traded on such date, on the immediately preceding
trading date), as reported in The Wall Street Journal, or (iv) if no such
quotations are available for a date within a reasonable time prior to the
valuation date, the value of the Common Stock as determined by the Committee
using any reasonable means. For purposes of the First Offering Date, the
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<PAGE>
Fair Market Value of a share of Common Stock shall be the Price to Public as set
forth in the final prospectus filed by the Company with the Securities and
Exchange Commission pursuant to Rule 424 under the Securities Act of 1933, as
amended.
8. EXERCISE PRICE. The Exercise Price per share of Common Stock offered
to each Participant in a given Offering Period shall be the lower of: (i) the
Applicable Percentage of the greater of (A) the Fair Market Value of a share of
Common Stock on the Offering Date or (B) the Fair Market Value of a share of
Common Stock on the Entry Date on which the Employee elects to become a
Participant within the Offering Period or (ii) the Applicable Percentage of the
Fair Market Value of a share of Common Stock on the Exercise Date. The
Applicable Percentage with respect to each Offering Period shall be 85%, unless
and until such Applicable Percentage is increased by the Committee, in its sole
discretion, provided that any such increase in the Applicable Percentage with
respect to a given Offering Period must be established not less than fifteen
(15) days prior to the Offering Date thereof.
9. EXERCISE OF OPTIONS. Unless the Participant withdraws from the Plan
as provided in Section 11, the Participant's option for the purchase of shares
will be exercised automatically on each Exercise Date, and the maximum number of
full shares subject to such option shall be purchased for the Participant at the
applicable Exercise Price with the accumulated Plan Contributions then credited
the Participant's account under the Plan. During a Participant's lifetime, a
Participant's option to purchase shares hereunder is exercisable only by the
Participant.
10. DELIVERY. As promptly as practicable after each Exercise Date, the
Company shall arrange for the delivery to each Participant (or the Participant's
beneficiary), as appropriate, or to a custodial account for the benefit of each
Participant (or the Participant's beneficiary) as appropriate, of a certificate
representing the shares purchased upon exercise of such Participant's option.
Any amount remaining to the credit of a Participant's account after the purchase
of shares by such Participant on an Exercise Date, or which is insufficient to
purchase a full share of Common Stock, shall be carried over to the next
Exercise Period if the Participant continues to participate in the Plan or, if
the Participant does not continue to participate, shall be returned to the
Participant.
11. WITHDRAWAL; TERMINATION OF EMPLOYMENT.
(a) A Participant may withdraw from the Plan at any time by
giving written notice to the Company. All of the Plan Contributions credited to
the Participant's account and not yet invested in Common Stock will be paid to
the Participant as soon as administratively practicable after receipt of the
Participant's notice of withdrawal, the Participant's option to purchase shares
pursuant to the Plan automatically will be terminated, and no further payroll
deductions for the purchase of shares will be made for the Participant's
account. Payroll deductions will not resume on behalf of a Participant who has
withdrawn from the Plan (a "Former Participant") unless the Former Participant
enrolls in a subsequent Offering Period in accordance with Section 5(a).
(b) Upon termination of the Participant's Continuous Status as
an Employee prior to any Exercise Date for any reason, including retirement or
death, the Plan Contributions credited to the Participant's account and not yet
invested in Common Stock will be returned to the Participant or, in the case of
death, to the Participant's beneficiary as determined pursuant to Section 14,
and the Participant's option to purchase shares under the Plan will
automatically terminate.
(c) A Participant's withdrawal from an Offering Period will
not have any effect upon the Participant's eligibility to participate in
succeeding Offering Periods or in any similar plan which may hereafter be
adopted by the Company.
12. STOCK.
(a) The maximum number of shares of the Company's Common Stock
that shall be made available for sale under the Plan shall be Two Hundred
Thousand (200,000) shares, subject to adjustment as provided in Section 17.
Shares of Common Stock subject to the Plan may be newly issued shares or shares
5
<PAGE>
reacquired in private transactions or open market purchases. If and to the
extent that any right to purchase reserved shares shall not be exercised by any
Participant for any reason or if such right to purchase shall terminate as
provided herein, shares that have not been so purchased hereunder shall again
become available for the purpose of the Plan unless the Plan shall have been
terminated, but all shares sold under the Plan, regardless of source, shall be
counted against the limitation set forth above.
(b) A Participant will have no interest or voting right in
shares covered by his option until such option has been exercised.
(c) Shares to be delivered to a Participant under the Plan
will be registered in the name of the Participant or in the name of the
Participant and his or her spouse, as requested by the Participant.
13. ADMINISTRATION.
(a) The Plan shall be administered by the Committee. The
Committee shall have the authority to interpret the Plan, to prescribe, amend
and rescind rules and regulations relating to the Plan, and to make all other
determinations necessary or advisable for the administration of the Plan. The
administration, interpretation, or application of the Plan by the Committee
shall be final, conclusive and binding upon all persons.
(b) Notwithstanding the provisions of Subsection (a) of this
Section 13, in the event that Rule 16b-3 promulgated under the Exchange Act or
any successor provision thereto ("Rule 16b-3") provides specific requirements
for the administrators of plans of this type, the Plan shall only be
administered by such body and in such a manner as shall comply with the
applicable requirements of Rule 16b-3. Unless permitted by Rule 16b-3, no
discretion concerning decisions regarding the Plan shall be afforded to any
person that is not "disinterested" as that term is used in Rule 16b-3.
14. DESIGNATION OF BENEFICIARY
(a) A Participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
Participant's account under the Plan in the event of the Participant's death
subsequent to an Exercise Date on which the Participant's option hereunder is
exercised but prior to delivery to the Participant of such shares and cash. In
addition, a Participant may file a written designation of a beneficiary who is
to
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<PAGE>
receive any cash from the Participant's account under the Plan in the event of
the Participant's death prior to the exercise of the option.
(b) A Participant's beneficiary designation may be changed by
the Participant at any time by written notice. In the event of the death of a
Participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such Participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the Participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the Participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.
15. TRANSFERABILITY. Neither Plan Contributions credited to a
Participant's account nor any rights to exercise any option or receive shares of
Common Stock under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will or the laws of descent and
distribution, or as provided in Section 14). Any attempted assignment, transfer,
pledge or other distribution shall be without effect, except that the Company
may treat such act as an election to withdraw funds in accordance with Section
11.
16. PARTICIPANT ACCOUNTS. Individual accounts will be maintained for
each Participant in the Plan to account for the balance of his Plan
Contributions and options issued and shares purchased under the Plan. Statements
of account will be given to Participants semi-annually in due course following
each Exercise Date, which statements will set forth the amounts of payroll
deductions, the per share purchase price, the number of shares purchased and the
remaining cash balance, if any.
17. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CORPORATE TRANSACTIONS.
(a) If the outstanding shares of Common Stock are increased or
decreased, or are changed into or are exchanged for a different number or kind
of shares, as a result of one or more reorganizations, restructurings,
recapitalizations, reclassifications, stock splits, reverse stock splits, stock
dividends or the like, upon authorization of the Committee, appropriate
adjustments shall be made in the number and/or kind of shares, and the per-share
option price thereof, which may be issued in the aggregate and to any
Participant upon exercise of options granted under the Plan.
(b) In the event of the proposed dissolution or liquidation of
the Company, the Offering Period will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Committee. In the event of a proposed sale of all or substantially all of the
Company's assets, or the merger of the Company with or into another corporation
(each, a "Sale Transaction"), each option under the Plan shall be assumed or an
equivalent option shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation, unless the Committee determines, in
the exercise of its sole discretion and in lieu of such assumption or
substitution, to shorten the Exercise Period then in progress by setting a new
Exercise Date (the "New Exercise Date"). If the Committee shortens the Exercise
Period then in progress in lieu of assumption or substitution in the event of a
Sale Transaction, the Committee shall notify each Participant in writing, at
least ten (10) days prior to the New Exercise Date, that the exercise date for
such Participant's option has been changed to the New Exercise Date and that
such Participant's option will be exercised automatically on the New Exercise
Date, unless prior to such date the Participant has withdrawn from the Plan as
provided in Section 11. For purposes of this Section 17(b), an option granted
under the Plan shall be deemed to have been assumed if, following the Sale
Transaction, the option confers the right to purchase, for each share of option
stock subject to the option immediately prior to the Sale Transaction, the
consideration (whether stock, cash or other securities or property) received in
the Sale Transaction by holders of Common Stock for each share of Common Stock
held on the effective date of the Sale Transaction (and if such holders were
offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding shares of Common Stock); PROVIDED, that
if the consideration received in the Sale Transaction was not solely common
stock of the successor corporation or its parent (as defined in Section 424(e)
of the Code), the Committee may, with the consent of the successor corporation
and the Participant, provide for the consideration to be received upon exercise
of the option to be
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<PAGE>
solely common stock of the successor corporation or its parent equal in fair
market value to the per share consideration received by the holders of Common
Stock in the Sale Transaction.
(c) In all cases, the Committee shall have sole discretion to
exercise any of the powers and authority provided under this Section 17, and the
Committee's actions hereunder shall be final and binding on all Participants. No
fractional shares of stock shall be issued under the Plan pursuant to any
adjustment authorized under the provisions of this Section 17.
18. AMENDMENT OF THE PLAN. The Board or the Committee may at any time,
or from time to time, amend the Plan in any respect; PROVIDED, that (i) no such
amendment may make any change in any option theretofore granted which adversely
affects the rights of any Participant and (ii) the Plan may not be amended in
any way that will cause rights issued under the Plan to fail to meet the
requirements for employee stock purchase plans as defined in Section 423 of the
Code or any successor thereto. To the extent necessary to comply with Rule 16b-3
under the Exchange Act, Section 423 of the Code, or any other applicable law or
regulation), the Company shall obtain shareholder approval of any such
amendment.
19. TERMINATION OF THE PLAN.
The Plan and all rights of Employees hereunder shall terminate on the
earliest of:
(a) the Exercise Date that Participants become entitled to
purchase a number of shares greater than the number of reserved shares remaining
available for purchase under the Plan;
(b) such date as is determined by the Board in its discretion;
or
(c) the last Exercise Date immediately preceding the tenth
(10th) anniversary of the Plan's effective date.
In the event that the Plan terminates under circumstances described in
Section 19(a) above, reserved shares remaining as of the termination date shall
be sold to Participants on a PRO RATA basis.
20. NOTICES. All notices or other communications by a Participant to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.
21. EFFECTIVE DATE. Subject to adoption of the Plan by the Board, the
Plan shall become effective on the First Exercise Date. The Board shall submit
the Plan to the shareholders of the Company for approval within twelve months
after the date the Plan is adopted by the Board. If such shareholder approval is
not obtained, the Plan and all rights of Participants under the Plan shall be
null and void and shall have no effect.
22. CONDITIONS UPON ISSUANCE OF SHARES.
(a) The Plan, the grant and exercise of options to purchase
shares under the Plan, and the Company's obligation to sell and deliver shares
upon the exercise of options to purchase shares shall be subject to compliance
with all applicable federal, state and foreign laws, rules and regulations and
the requirements of any stock exchange on which the shares may then be listed.
(b) The Company may make such provisions as it deems
appropriate for withholding by the Company pursuant to federal or state tax laws
of such amounts as the Company determines it is required to withhold in
connection with the purchase or sale by a Participant of any Common Stock
acquired pursuant to the Plan. The Company may require a Participant to satisfy
any relevant tax requirements before authorizing any issuance of Common Stock to
such Participant.
23. EXPENSES OF THE PLAN. All costs and expenses incurred in
administering the Plan shall be
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paid by the Company, except that any stamp duties or transfer taxes applicable
to participation in the Plan may be charged to the account of such Participant
by the Company.
24. NO EMPLOYMENT RIGHTS. The Plan does not, directly or indirectly,
create any right for the benefit of any employee or class of employees to
purchase any shares under the Plan, or create in any employee or class of
employees any right with respect to continuation of employment by the Company,
and it shall not be deemed to interfere in any way with the Company's right to
terminate, or otherwise modify, an employee's employment at any time.
25. APPLICABLE LAW. The laws of the State of Florida shall govern all
matter relating to this Plan except to the extent (if any) superseded by the
laws of the United States.
26. ADDITIONAL RESTRICTIONS OF RULE 16B-3. The terms and conditions of
options granted hereunder to, and the purchase of shares by, persons subject to
Section 16 of the Exchange Act shall comply with the applicable provisions of
Rule 16b-3. This Plan shall be deemed to contain, and such options shall
contain, and the shares issued upon exercise thereof shall be subject to, such
additional conditions and restrictions as may be required by Rule 16b-3 to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
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H.T.E., INC
PROXY FOR 1988 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Dennis J. Harward and Jack L. Harward, or either
of them, each with power of substitution, as proxies to represent the
undersigned at the Annual Meeting of Shareholders of H.T.E., INC., to be held on
Wednesday, May 13, 1998, at 11:00 a.m. at the Renaissance Orlando Resort located
at 6677 Sea Harbor Drive, Orlando, Florida, and any adjournment thereof, and to
vote the number of shares the undersigned would be entitled to vote if
personally present on the following matters:
1. ELECTION OF Jack L. Harward and Raymond Ambrose as directors to serve
until the Annual Meeting of Shareholders in 2001 or until their successors are
duly elected and qualified;
[ ] FOR all nominees listed above (except as marked to the contrary
below)
[ ] WITHHOLD AUTHORITY to vote
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the space provided below
2. PROPOSAL TO RATIFY THE COMPANY'S 1997 EMPLOYEE STOCK PURCHASE PLAN;
[_] FOR [_] AGAINST [_] ABSTAIN
3. OTHER BUSINESS: The proxies are authorized to vote in their
discretion upon such other business as may properly
come before the Annual Meeting or any adjournment or
postponement thereof.
(SEE REVERSE SIDE)
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(CONTINUED FROM OTHER SIDE)
THIS PROXY, WHEN PROPERTY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2.
The undersigned hereby acknowledges receipt of (i) the Company's 1997
Annual Report to Shareholders, (ii) the Proxy Statement and (iii) the Notice of
Annual Meeting of Shareholders to be held on May 13, 1998.
Date: ____________, 1998
____________________________________________
____________________________________________
Please sign exactly as your name appears
hereon. If stock is registered in more than
one name, each holder should sign. When
signing as an attorney, administrator,
executor, guardian or trustee, please add
your title as such. If executed by a
corporation or partnership, the proxy should
be signed in full corporate or partnership
name by a duly authorized officer or
partner, as applicable.
SHAREHOLDERS ARE URGED TO DATE, MARK, SIGN, AND RETURN THIS PROXY IN THE
ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED STATES.
24
