SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
Marcam Solutions, Inc.
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(Name of Registrant as Specified In Its Charter)
Marcam Solutions, Inc.
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(Name of Person(s) Filing Proxy Statement)
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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(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 the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE>
MARCAM SOLUTIONS, INC.
January 23, 1998
Dear Stockholder:
You are invited to attend the Annual Meeting of Stockholders to be held
at 10:00 a.m., Boston time, Wednesday, February 25, 1998 at the Sheraton
Needham Hotel, 100 Cabot Street, Needham, Massachusetts 02194.
Whether or not you plan to attend the meeting, we urge you to sign and
return the enclosed proxy so that your shares will be represented at the
meeting. If you so desire, you can withdraw your proxy and vote in person at
the Annual Meeting.
Cordially,
/s/ Jonathan C. Crane
JONATHAN C. CRANE
Chairman, President and Chief Executive Officer
<PAGE>
MARCAM SOLUTIONS, INC.
95 WELLS AVENUE
NEWTON, MASSACHUSETTS 02159
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
January 23, 1998
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Marcam
Solutions, Inc., a Delaware corporation (the "Company"), will be held on
Wednesday, February 25, 1998 at 10:00 a.m., Boston time, at the Sheraton
Needham Hotel, 100 Cabot Street, Needham, Massachusetts 02194, to consider and
vote upon the following proposals:
1. To elect two members to the Board of Directors to serve for three-year
terms as Class I Directors.
2. To amend the 1997 Stock Plan of the Company to increase the aggregate
number of shares of Common Stock which may be issued pursuant to said
plan from 2,500,000 to 2,750,000.
3. To ratify the selection of the firm of Coopers & Lybrand L.L.P. as
auditors for the fiscal year ending September 30, 1998.
4. To transact such other business as may properly come before the meeting
and any adjournments thereof.
Only stockholders of record at the close of business on January 9, 1998
are entitled to notice of and to vote at the meeting and any adjournment
thereof.
By Order of the Board of Directors
/s/ Diane R. Tormey
DIANE R. TORMEY
Vice President, General Counsel and Secretary
Newton, Massachusetts
January 23, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN THE
ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED STAMPED ENVELOPE BY RETURN MAIL.
<PAGE>
MARCAM SOLUTIONS, INC.
95 WELLS AVENUE
NEWTON, MASSACHUSETTS 02159
PROXY STATEMENT
January 23, 1998
This proxy statement is furnished in connection with the solicitation of
proxies by the Directors of Marcam Solutions, Inc., a Delaware corporation (the
"Company" or "Marcam Solutions"), for use at the Annual Meeting of Stockholders
of the Company to be held at the Sheraton Needham Hotel, 100 Cabot Street,
Needham, Massachusetts 02194, on February 25, 1998, at 10:00 a.m., Boston time,
and any adjournments thereof (the "Meeting"). The Company's 1997 Corporate
Report to Stockholders and Annual Report on Form 10-K, containing financial
statements for the fiscal year ended September 30, 1997, is being mailed
together with this proxy statement to all stockholders entitled to vote at the
Meeting. This proxy statement and the accompanying notice and form of proxy
were first sent or given to stockholders on or about January 23, 1998.
The record date for the determination of stockholders entitled to notice
of and to vote at the Meeting has been fixed by the Board of Directors as the
close of business on January 9, 1998. As of that date, 7,499,043 shares of
common stock, par value $.01 per share, of the Company ("Common Stock") were
outstanding and entitled to vote at the Meeting. Holders of the Company's
Common Stock are entitled to cast one vote for each share held of record at the
close of business on January 9, 1998 on each matter submitted to a vote at the
Meeting.
Stockholders may vote in person or by proxy. Execution of a proxy will
not in any way affect a stockholder's right to attend the Meeting and vote in
person. Any stockholder may revoke a proxy at any time prior to its exercise by
filing a later-dated proxy or a written notice of revocation with the Secretary
of the Company, or by voting in person at the Meeting. If a stockholder is not
attending the Meeting, any proxy or notice should be returned in time for
receipt no later than the close of business on the day preceding the Meeting.
The persons named as proxies are directors, officers or employees of the
Company. With respect to the election of Directors, any stockholder submitting
a proxy has a right to withhold authority to vote for any individual nominee by
writing that nominee's name in the space provided on the proxy. The proxies
will be voted on that matter as stated below under "Election of Directors." In
addition to the election of Directors, the stockholders will consider and vote
upon proposals (i) to amend the 1997 Stock Plan of the Company to increase the
aggregate number of shares of Common Stock which may be issued pursuant to said
plan from 2,500,000 to 2,750,000 and (ii) to ratify the selection of the firm
of Coopers & Lybrand L.L.P. as auditors for the fiscal year ending September
30, 1998. Where a proxy is properly signed and returned without indicating any
voting instructions regarding the foregoing matters, the shares represented by
the proxy will be voted FOR the proposals.
A majority in interest of the issued and outstanding shares of Common
Stock entitled to vote and represented at the Meeting in person or by proxy
shall constitute a quorum for the transaction of business. Votes withheld from
any nominee, abstentions and broker "non-votes" are counted as present or
represented for purposes of determining the presence or absence of a quorum for
the Meeting. A "non-vote" occurs when a broker or other nominee holding shares
for a beneficial owner votes on one proposal, but does not vote on another
proposal because the broker or other nominee does not have discretionary voting
power and has not received instructions from the beneficial owner. Directors
are elected by a plurality of the votes cast by stockholders entitled to vote
and voting on the matter at the Meeting. On all other matters being submitted
to stockholders, an affirmative vote of at least a majority of the shares
present or represented by proxy, entitled to vote and voting on the matter at
the Meeting is required for approval. Broker "non-votes" and abstentions on any
matter shall be deemed not to have been voted on such matter. An automated
system administered by the Company's transfer agent tabulates the votes. The
vote on each matter submitted to stockholders is tabulated separately.
<PAGE>
The Board of Directors of the Company knows of no other matters to be
presented at the Meeting. If any other matter should be presented at the
Meeting upon which a vote properly may be taken, shares represented by all
proxies received by the Board of Directors will be voted with respect thereto
in accordance with the judgment of the persons named in the proxies.
2
<PAGE>
OVERVIEW OF MARCAM SOLUTIONS, INC.
On July 29, 1997, Marcam Corporation spun off in a tax-free distribution
the portion of its business relating to its PRISM, Protean and Avantis product
lines. In connection with the distribution, Marcam Corporation transferred to
Marcam Solutions, at that time a wholly owned subsidiary of Marcam Corporation,
substantially all of the business, assets and liabilities relating to its
PRISM, Protean and Avantis product lines and an aggregate of $39.0 million in
cash in exchange for (i) the assumption by Marcam Solutions of certain
liabilities and obligations relating to the business to be conducted by Marcam
Solutions, (ii) a number of shares of common stock of Marcam Solutions
sufficient for Marcam Corporation to make the Distribution (as defined below)
and (iii) warrants to purchase an aggregate of 500,000 shares of common stock
of Marcam Solutions (the "Marcam Solutions Warrants"). Marcam Corporation
distributed all of its ownership interest in Marcam Solutions by means of a
distribution on July 29, 1997 to its stockholders of record on July 23, 1997
(the "Distribution"). In connection with the Distribution, Marcam Corporation
changed its name from "Marcam Corporation" to "MAPICS, Inc." ("MAPICS").
In the Distribution, each stockholder of Marcam Corporation on the
record date for the Distribution received one share of Marcam Solutions Common
Stock for each two shares of Marcam Corporation common stock held and five
shares of Marcam Solutions Common Stock for each share of Marcam Corporation
preferred stock held. No consideration was paid by Marcam Corporation
stockholders for the Marcam Solutions Common Stock distributed in the
Distribution.
Each holder of an outstanding employee or director stock option to
purchase shares of Marcam Corporation common stock (the "Marcam Options") (i)
retained such Marcam Options, which after the Distribution was an option to
purchase the same number of shares of MAPICS common stock (the "Adjusted MAPICS
Option"), and (ii) was granted an option to purchase shares of Marcam Solutions
Common Stock equal to one-half of the number of shares of Marcam Corporation
common stock subject to such Marcam Option (each, a "Marcam Solutions Option";
collectively the "Adjusted Options"). Thus, after the Distribution, each holder
of a Marcam Option held separate options to purchase shares of MAPICS common
stock and Marcam Solutions Common Stock. The per share exercise price of each
Adjusted Option was adjusted to give effect to the Distribution by allocating
the exercise price of the corresponding Marcam Option between the Adjusted
MAPICS Option and the Adjusted Marcam Solutions Option based on the relative
fair market values of the underlying MAPICS common stock and Marcam Solutions
Common Stock after the Distribution so as to preserve the "spread" value of the
existing Marcam Option. For this purpose, the fair market value of a share of
each such common stock was established by determining the average of the
closing sales prices per share of each common stock on the Nasdaq National
Market for each of the five consecutive trading days beginning on July 30,
1997, the first day following the Distribution date. Each Adjusted Option is
subject to the same terms and conditions that applied to the corresponding
Marcam Option prior to the Distribution, except that vesting is based on
service with Marcam Solutions, MAPICS or both.
The holders of warrants to purchase 1,000,000 shares of Marcam
Corporation common stock (the "Marcam Warrants") (i) retained the Marcam
Warrants, which after the Distribution became warrants to purchase the same
number of shares in the aggregate of MAPICS common stock (the "MAPICS
Warrants") and (ii) received the Marcam Solutions Warrants. The original
exercise price of the Marcam Warrants was allocated between the MAPICS Warrants
and the Marcam Solutions Warrants on a basis intended to preserve the "spread
value" of the original Marcam Warrants.
Although the Marcam Solutions Common Stock was distributed to Marcam
Corporation's stockholders, the Distribution was recorded for accounting
purposes as a disposal of the business conducted by MAPICS, due to the relative
significance of the business conducted by Marcam Solutions. The financial
statements of Marcam Solutions for reporting periods after the Distribution
reflect the Distribution as a disposal of the business conducted by MAPICS and
have not been restated to remove the effects of the prior operating results of
the MAPICS business. The financial statements of Marcam Solutions for periods
prior to the Distributions correspond to the historical consolidated financial
statements of Marcam Corporation.
3
<PAGE>
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth as of the dates indicated below, certain
information regarding beneficial ownership of the Company's Common Stock (i) by
each person who, to the knowledge of the Company, beneficially owned more than
5% of any class of the Company's voting securities; (ii) by each director of
the Company; (iii) by each executive officer named in the Summary Compensation
Table on page 8; and (iv) by all directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Name and Address Ownership(1) of Class
- ------------------------------------------------------------------------ -------------- ---------
<S> <C> <C>
General Atlantic Partners, LLC (2) .................................... 2,000,000 26.7%
c/o General Atlantic Service Corporation
2 Pickwick Plaza
Greenwich, CT 06830
John Campbell (3) ...................................................... 101,778 1.3%
George A. Chamberlain 3d (4) .......................................... 13,100 *
Sharon R. Clark (5) ................................................... 37,500 *
Jonathan C. Crane ...................................................... 10,000 *
Thomas D. Ebling (6) ................................................... 70,031 *
William O. Grabe (7) ................................................... 2,005,000 26.7%
Richard S. Hickok (8) ................................................ 22,673 *
Joseph M. Henson ...................................................... 500 *
Denis E. Liptak (9) ................................................... 4,250 *
Paul A. Margolis (10) ................................................ 386,894 5.1%
Michael J. Quinlan (11) ................................................ 75,350 1.0%
Franchon M. Smithson (12) ............................................. 2,000,000 26.7%
All executive officers and directors as a group (10 persons) (13) ...... 2,676,476 35.7%
</TABLE>
- -------------
* less than 1%
(1) The persons and entities named in the table have sole voting and
investment power with respect to all shares shown as beneficially owned by
them, except as noted below. Information is as of December 31, 1997 unless
otherwise indicated.
(2) According to the Questionnaire for Officers, Directors and Principal
Stockholders dated December 8, 1997. Consists of 431,595 shares of Common
Stock held by General Atlantic Partners 32, L.P. ("GAP 32"), 880,290
shares of Common Stock held by General Atlantic Partners 21, L.P. ("GAP
21"), and 188,115 shares of Common Stock held by GAP Coinvestment
Partners, L.P. ("GAP Coinvestment"). Also includes warrants to purchase
431,595 and 68,405 shares of Common Stock held by GAP 32 and GAP
Coinvestment, respectively. Mr. Grabe, William E. Ford, Steven A. Denning,
David C. Hodgson, Stephen P. Reynolds and J. Michael Cline (the "GA
Members") are the managing members of General Atlantic Partners, LLC,
which is the sole general partner of GAP 32, and are the same persons who
have voting and investment control over securities held by GAP 21 and GAP
Coinvestment. The GA Members disclaim beneficial ownership of such shares,
except to the extent of each member's proportionate pecuniary interest
therein.
(3) Includes 50,000 shares held by Mr. Campbell's wife and 2,375 shares
issuable upon the exercise of outstanding stock options exercisable
currently or within 60 days.
(4) Consists of 13,100 shares issuable upon the exercise of outstanding stock
options exercisable currently or within 60 days.
(5) Consists of 37,500 shares issuable upon the exercise of outstanding stock
options exercisable currently or within 60 days.
4
<PAGE>
(6) Includes 1,550 shares held in trust and 1,775 shares held by Mr. Ebling's
wife; Mr. Ebling disclaims beneficial ownership of all such shares. Also
includes 58,396 shares issuable upon the exercise of outstanding stock
options exercisable currently or within 60 days.
(7) Includes 2,000,000 shares of Marcam Solutions Common Stock beneficially
owned by General Atlantic Partners, LLC. See note 2 above. Also includes
5,000 shares issuable upon the exercise of outstanding stock options
exercisable currently or within 60 days.
(8) Includes 250 shares held by Mr. Hickok's wife; Mr. Hickok disclaims
beneficial ownership of all such shares. Also includes 7,975 shares
issuable upon the exercise of outstanding stock options exercisable
currently or within 60 days. Mr. Hickok is not standing for re-election as
a director of the Company.
(9) Includes 3,750 shares issuable upon the exercise of outstanding stock
options exercisable currently or within 60 days.
(10) Includes 22,222 shares held in trust and 149,369 shares issuable upon the
exercise of outstanding stock options exercisable currently or within 60
days.
(11) Consists of 350 shares held by Mr. Quinlan's wife and 75,000 shares
issuable upon the exercise of outstanding stock options exercisable
currently or within 60 days.
(12) Consists 2,000,000 shares of Marcam Solutions Common Stock beneficially
owned by General Atlantic Partners, LLC. See note 2 above.
(13) The group is comprised of the individuals named in the Summary
Compensation Table, the remaining executive officers of the Company and
those persons who were directors of the Company on January 9, 1998.
Includes 301,865 shares which the directors and executive officers as a
group have the right to acquire upon the exercise of outstanding stock
options exercisable currently or within 60 days granted under the
Company's stock plans. In addition, includes 3,575 shares held by family
members of officers or directors, as to which shares the applicable
officer or director disclaims beneficial ownership.
5
<PAGE>
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of the Company met three times and took action by
unanimous written consent five times during the fiscal year ended September 30,
1997. The Board of Directors has a standing Audit Committee and a standing
Compensation Committee, the memberships of which were most recently fixed by
the Board of Directors on August 7, 1997. The Audit Committee, which oversees
the accounting and financial functions of the Company, including matters
relating to the appointment and activities of the Company's independent
auditors, met once during fiscal 1997. Messrs. Hickok and Smithson are members
of the Audit Committee. The Compensation Committee of the Company, which
reviews and makes recommendations concerning executive compensation and
administers certain of the Company's stock plans, met once and took action by
written consent five times during fiscal 1997. Messrs. Grabe and Hickok are
members of the Compensation Committee.
All directors attended at least 75 percent of the total number of
meetings of the Board of Directors and the total number of meetings of all
committees of the Board on which they served during fiscal 1997.
ELECTION OF DIRECTORS
Pursuant to the Company's Certificate of Incorporation, the Company's
Board of Directors is divided into three classes: the Class I, II and III
Directors. Each director is elected for a three-year term of office, with one
class of directors being elected at each annual meeting of stockholders. The
Class I Directors' terms will expire at the Meeting. Each director holds office
until his successor is duly elected and qualified or until his earlier death,
resignation or removal.
The information below sets forth for each member of the Board of
Directors, including each of the Class I nominees to be elected at the Meeting,
such person's age, principal occupations during the past five years and certain
other information:
Class I Directors: To be Elected at 1998 Annual Meeting of Stockholders
William O. Grabe, age 59, has been a director of the Company since July
1997. Mr. Grabe served as a director of Marcam Corporation from October 1995
until August 1997. Mr. Grabe has been a managing member of General Atlantic
Partners, LLC since 1992. From 1990 to 1992, Mr. Grabe was a corporate vice
president with IBM. Mr. Grabe is also a director of Compuware Corporation,
Gartner Group, Inc., Centura Software Corporation, Baan Company N.V., Coda,
Plc. and LHS Group, Inc.
Joseph M. Henson, age 64, has been a director of the Company since
December 4, 1997. Mr. Henson was Chairman of the Board of Legent Corporation, a
computer systems software company, from November 1989 to February 1995. Mr.
Henson is also a director of Harrah's Entertainment, Inc.
Class II Directors: To be Elected at 1999 Annual Meeting of Stockholders
John Campbell, age 51, has served as a director of the Company since
July 1997 and Executive Vice President of the Company since August 1997. Mr.
Campbell was a co-founder of Marcam Corporation and served as a director of
Marcam Corporation since its organization in 1980. Mr. Campbell also served as
Marcam Corporation's Executive Vice President from 1980 until April 1996.
Paul A. Margolis, age 44, has served as a director of the Company since
July 1997 and served as Chairman of the Board of Directors from July 1997 until
November 1997. Mr. Margolis, a co-founder of Marcam Corporation, was its
Chairman of the Board since its organization in 1980 and served as its
President and Chief Executive Officer from 1980 until January 1996. Since 1996,
Mr. Margolis has been an employee of Longworth Management Company, Inc., which
provides consulting services. Mr. Margolis is a director of Dendrite
International, Inc.
6
<PAGE>
Class III Directors: To be Elected at 2000 Annual Meeting of Stockholders
Jonathan C. Crane, age 48, has served as Chairman of the Board of
Directors, President and Chief Executive Officer since November 1997. From
October 1995 until July 31, 1997, Mr. Crane was Chief Operating Officer of
Geotek Communications, Inc., a wireless voice and data communications company.
From February 1995 to October 1995, Mr. Crane was a consultant in the
telecommunications industry. From January 1994 to January 1995, Mr. Crane was
President and Chief Executive Officer of Lightstream Corporation, a majority
owned subsidiary of Bolt, Beranek & Newman, which developed and marketed ATM
switching network products. Prior to 1994, Mr. Crane held a number of
management positions with MCI Corporation, including Executive Vice President,
Multi-National Accounts.
Michael J. Quinlan, age 56, has been a director of the Company since
June 1997 and served as the Company's President and Chief Executive Officer
from July 1997 until November 1997. Mr. Quinlan served as Marcam Corporation's
President and Chief Executive Officer from January 1996 until August 1997 and
as a director of Marcam Corporation from February 1996 until August 1997. Prior
to joining Marcam Corporation, Mr. Quinlan was Senior Vice President of
Marketing for Telular Corporation, a developer of fixed wireless phone systems,
from June 1994 to October 1995. From July 1992 to June 1994, he was Director of
Technology at the Wharton School, and Chief Executive Officer of Access
Technology Group, a multimedia production company specializing in executive
presentations and sales tools, from July 1993 and June 1994. Prior to 1992, Mr.
Quinlan held a number of senior management positions including Director of
Strategic Planning, President of the National Accounts Division and Chief
Financial Officer of IBM's Asia Pacific Group.
Franchon M. Smithson, age 46, has been a director of the Company since
August 1997. Mr. Smithson has been a member of General Atlantic Partners, LLC
since 1995. From 1992 to 1995, Mr. Smithson was Senior Vice President and Chief
Financial Officer of Legent Corporation, a computer systems software company.
Retiring Director
Richard S. Hickok, age 72, has been a director of the Company since July
1997. Mr. Hickok served as a director of Marcam Corporation from 1983 until
August 1997. Mr. Hickok retired in 1983 from KPMG Main Hurdman, Certified
Public Accountants, where he was Chairman from 1981. Mr. Hickok was President
of KMG, the international firm of Main Hurdman, from 1981 to 1983. Mr. Hickok
is also a director of Marsh & McLennan Companies, Inc., Comstock Resources,
Inc., and Projectavisions, Inc.
Directors are elected by a plurality of the votes cast by stockholders
entitled to vote in the election of such directors at the Meeting. Shares
represented by all proxies received by the Board of Directors and not so marked
as to withhold authority to vote for any individual director (by writing that
individual director's name where indicated on the proxy) or for all directors
will be voted (unless one or more nominees are unable or unwilling to serve)
FOR the election of all the nominees named above. The Board of Directors knows
of no reason why any such nominee would be unable or unwilling to serve, but if
such should be the case, proxies may be voted for the election of some other
person.
Directors' Compensation
The Company compensates its non-employee directors through a one-time
initial grant under the 1997 Non-Employee Director Stock Option Plan (the
"Directors Plan") of a stock option to purchase 10,000 shares of the Company's
Common Stock and an annual grant under the Directors Plan of a stock option to
purchase 1,500 shares of the Company's Common Stock. Additionally, non-employee
directors receive $1,000 for each Board meeting and committee meeting attended
on a day other than when the Board of Directors meets.
On September 19, 1997, Mr. Grabe was granted a non-qualified option by
the Board of Marcam Solutions to purchase 10,000 shares of Common Stock
pursuant to the Company's 1997 Stock Plan at an exercise price of $10.00 per
share, of which 5,000 shares were immediately exercisable, with an additional
2,500 shares vesting each on September 19, 1998 and September 19, 1999,
respectively.
7
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation received by (i) any
person who served as the Chief Executive Officer of the Company during any part
of fiscal 1997, (ii) the four other most highly compensated executive officers
of the Company who served as such at September 30, 1997 and whose annual
compensation and bonus was $100,000 or more, and (iii) any person for whom
disclosure would have been provided pursuant to clause (ii) but for the fact
that the person did not serve as an executive officer at September 30, 1997
(the "Named Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards/
Securities
Annual Underlying
Compensation(1)(2) Options All Other
Name and Principal Position Year Salary($) Bonus($)(3) (#)(4)(5) Compensation(1)(6)
- ------------------------------- ------ ----------- ------------- ------------- -------------------
<S> <C> <C> <C> <C> <C>
Jonathan C. Crane (7) 1997 -- -- -- --
President, Chief Executive
Officer and Chairman
Denis E. Liptak (8) 1997 $127,504 $ 60,600 25,000 $4,792
Chief Financial Officer and 1996 $105,384 $ 24,562 -- $2,436
Vice President of Finance
Thomas D. Ebling (9) 1997 $175,000 $ 95,500 57,896 $4,823
Senior Vice President 1996 $178,740 $ 23,500 -- $2,640
Customer Operations
Sharon R. Clark (10) 1997 $160,000 $ 53,000 37,500 $4,512
Vice President, Marketing 1996 $ 24,615 $ 0 -- $ 16
and Communications
Michael J. Quinlan (11) 1997 $240,000 $103,600 125,000 $ 70
President and Chief 1996 $175,385 $ 40,000 -- $ 84
Executive Officer
George A. Chamberlain 3d (12) 1997 $220,616 $260,000 60,000 $6,231
Chief Financial Officer 1996 $240,000 $ 20,000 -- $2,459
</TABLE>
- -------------
(1) During fiscal 1996, all compensation was paid solely by Marcam
Corporation. In connection with the Distribution certain of the Named
Executive Officers were transferred from Marcam Corporation to Marcam
Solutions. Therefore, during fiscal 1997, compensation was paid by both
Marcam Corporation and the Company as a result of the Distribution. For
further information see "Overview of Marcam Solutions, Inc."
(2) Excludes perquisites the aggregate annual amount of which for each officer
was less than the lesser of $50,000 or 10% of the total compensation
reported as salary and bonus.
(3) Includes bonus payments earned by the Named Executive Officers in the year
indicated for services rendered in such year which were paid in the
subsequent year.
(4) Certain of the Named Executive Officers were granted stock options to
purchase shares of Marcam Corporation Common Stock in connection with
their employment by Marcam Corporation (the "Marcam Option"). As a result
of the Distribution, such Named Executive Officers (i) retained such
Marcam Options, which after the Distribution was an option to purchase the
same number of shares of MAPICS common stock (the "Adjusted MAPICS
Option"), and (ii) were granted an option to purchase shares of Marcam
Solutions Common Stock equal to one-half of the number of shares of Marcam
Corporation common stock subject to such Marcam Option (each, a "Marcam
Solutions Option"; collectively the "Adjusted Options"). Thus, after the
Distribution, each holder of a Marcam Option held separate options to
purchase shares of MAPICS common stock and Marcam Solutions Common Stock.
The per share exercise price of each Adjusted Option was adjusted to give
effect to the Distribution by allocating the exercise price of the
corresponding Marcam Option between the Adjusted MAPICS Option and the
Marcam Solutions Option, based on the relative fair market values of the
underlying MAPICS
8
<PAGE>
common stock and Marcam Solutions Common Stock after the Distribution so as
to preserve the "spread" value of the existing Marcam Option. For this
purpose, the fair market value of a share of each such common stock was
established by determining the average of the closing sales prices per
share of each common stock on the Nasdaq National Market for each of the
five consecutive trading days beginning on July 30, 1997, the first day
following the Distribution Date. Each Adjusted Option is subject to the
same terms and conditions that applied to the corresponding Marcam Options
prior to the Distribution, except that vesting is based on service with
Marcam Solutions, MAPICS or both. As a result of the Distribution, the
Company's option grants during fiscal 1997 reflect grants of options to
purchase shares of the Company's common stock in respect of all options to
purchase shares of Marcam Corporation's Common Stock outstanding on July
29, 1997, the date of the Distribution. All such options were granted on
July 28, 1997. For further information see "Overview of Marcam Solutions,
Inc."
(5) Neither the Company nor Marcam Corporation granted any restricted stock
awards or stock appreciation rights ("SARs") or made any long-term
incentive plan payouts to the Named Executive Officers during the fiscal
years ended September 30, 1997 or 1996.
(6) "All Other Compensation" consists of amounts contributed on behalf of the
Named Executive Officers under group life insurance policies of Marcam
Corporation and the Company, as well as matching contributions made by
Marcam Corporation and the Company to the respective 401(k) Plan based on
a percentage of the individual's contributions to such 401(k) Plan.
(7) Mr. Crane joined the Company on October 27, 1997 and was elected Chairman
of the Board, President and Chief Executive Office on November 17, 1997.
Mr. Crane was granted an option to purchase 296,270 upon the commencement
of his employment under the Company's 1997 Stock Plan.
(8) Mr. Liptak has served as the Company's Chief Financial Officer since
August 7, 1997.
(9) Mr. Ebling has served as the Company's Senior Vice President, Customer
Operations since December 18, 1997. Mr. Ebling served as the Company's
Senior Vice President, Development and Support from July 28, 1997 through
December 18, 1997.
(10) Ms. Clark served as the Company's Vice President, Marketing and
Communications from July 28, 1997 through December 31, 1997.
(11) Mr. Quinlan served as the Company's President and Chief Executive Officer
from July 28, 1997 through November 17, 1997.
(12) Mr. Chamberlain served as the Company's Chief Financial Officer from July
28, 1997 through his retirement on August 7, 1997. The bonus paid in
fiscal 1997 includes a lump sum payment of $240,000 paid by Marcam
Solutions in connection with Mr. Chamberlain's retirement.
9
<PAGE>
Option Grants in Last Fiscal Year
The following table provides information with respect to stock option
grants made pursuant to the Company's 1997 Stock Plan, during the fiscal year
ended September 30, 1997 to the Named Executive Officers. As a result of the
Distribution, the Company's option grants during fiscal 1997 reflect grants of
options to purchase shares of the Company's common stock in respect of all
options to purchase shares of Marcam Corporation's Common Stock outstanding on
July 29, 1997, the date of the Distribution. All such options were granted on
July 28, 1997. See "Overview of Marcam Solutions, Inc." The Company did not
grant any stock appreciation rights in fiscal 1997.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Percent of
Total Potential Realizable Value at
Number of Options Assumed Annual Rates of
Securities Granted to Exercise Stock Price
Underlying Employees or Base Appreciation for Option
Options in Fiscal Price Expiration Term (2)
Name Granted(#) Year (1) ($/SH) Date 5%($) 10%($)
- ------------------------------ ------------ ------------ ---------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Jonathan C. Crane ............ -- -- -- -- -- --
Denis E. Liptak (3) ......... 1,250 * $ 7.35 10/03/05 $ 8,369 $ 16,301
1,750 * $ 5.79 10/01/06 $ 15,669 $ 29,099
9,500 * $ 6.35 01/09/07 $ 81,623 $ 158,281
12,500 * $ 6.85 07/23/07 $106,082 $ 217,040
Thomas D. Ebling (4) ......... 15,000 * $ 5.23 06/25/00 $ 84,408 $ 106,522
5,396 * $10.21 10/01/02 $ 10,349 $ 27,508
25,000 1.2% $ 9.28 02/10/03 $ 76,595 $ 164,117
12,500 * $ 6.54 02/21/04 $ 80,501 $ 136,741
Sharon R. Clark (5) ......... 20,000 * $ 5.42 07/26/06 $183,842 $ 332,185
10,000 * $ 6.35 01/09/07 $ 85,919 $ 166,612
7,500 * $ 6.85 03/14/07 $ 61,652 $ 124,117
Michael J. Quinlan (6) ...... 125,000 6.0% $ 7.60 01/06/06 $826,900 $1,659,447
George A. Chamberlain 3d
(7) ........................ 60,000 2.9% $ 5.42 09/08/04 $379,765 $ 623,826
</TABLE>
- -------------
* less than 1%
(1) Options to purchase a total of 2,056,351 shares of Common Stock were
granted to in fiscal 1997 under the Company's 1997 Stock Plan, including
1,288,281 shares as a result of the Distribution. See "Overview of Marcam
Solutions, Inc."
(2) Amounts reported in this column represent hypothetical amounts that may be
realized upon exercise of the options immediately prior to the expiration
of their term assuming the specified compounded rates of appreciation of
the Company's Common Stock over the term of the options. These numbers are
calculated based on rules promulgated by the Securities and Exchange
Commission and do not reflect the Company's estimate of future stock price
growth. Actual gains, if any, on stock option exercises and Common Stock
holdings are dependent on the timing of such exercise and the future
performance of the Company's Common Stock. There can be no assurances that
the rates of appreciation assumed in this table can be achieved or that
the amounts reflected will be received by the individuals. This table does
not take into account any appreciation in the price of the Common Stock
from the date of grant to the current date.
(3) Of the indicated options, 1,250 options are exercisable as of September 30,
1997 and the remaining 23,750 options are exercisable periodically through
January 2002.
(4) Of the indicated options, 45,396 are exercisable as of September 30, 1997
and the remaining 12,500 options are exercisable periodically through
February 1999.
(5) Of the indicated options, 9,500 options are exercisable as of September 30,
1997 and the remaining 28,000 options are exercisable periodically through
March 2001.
(6) Of the indicated options, 25,000 options are exercisable as of September
30, 1997 and the remaining 100,000 options are exercisable periodically
through January 2001. In addition, 25,000 options were granted on October
23, 1997, all of which are immediately exercisable.
(7) Of the indicated options, 12,000 options were exercised on or before
September 30, 1997, an additional 24,000 options are exercisable as of
September 30, 1997 and the remaining 24,000 options are exercisable
periodically through September 1999.
10
<PAGE>
Option Exercises and Fiscal Year-End Values
The following table sets forth information with respect to options to
purchase the Company's Common Stock granted under the Company's 1997 Stock Plan
including (i) the number of shares of Common Stock received upon exercise of
options in the fiscal year ended September 30, 1997, (ii) the net value
realized upon such exercise, (iii) the number of unexercised options held at
September 30, 1997, and (iv) the aggregate dollar value of unexercised options
at September 30, 1997.
<TABLE>
<CAPTION>
Value of
Number of Securities Unexercised
Underlying In-The-Money
Shares Unexercised Options Options At
Acquired Value at September 30, 1997(#) September 30, 1997 ($)(1)
Name On Exercise (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
- -------------------------------- ----------------- -------------- --------------------------- --------------------------
<S> <C> <C> <C> <C>
Jonathan C. Crane ............ 0 -- -- --
Denis E. Liptak ............... 0 -- 1,250/23,750 $ 3,634/$68,597
Thomas D. Ebling ............... 0 -- 45,396/12,500 $ 79,975/$26,575
Sharon R. Clark ............... 0 -- 9,500/28,000 $ 36,615/$96,360
Michael J. Quinlan ............ 0 -- 25,000/100,000 $47,500/$190,000
George A. Chamberlain 3d ...... 12,000 $57,210 24,000/24,000 $ 97,920/$97,920
</TABLE>
- -------------
(1) Value is based on the difference between the option exercise price and the
fair market value per share of Common Stock at September 30, 1997 ($9.50)
multiplied by the number of shares underlying the option.
Certain Employment Arrangements
Under a letter agreement dated October 23, 1997 between Michael J.
Quinlan and the Company, Mr. Quinlan resigned as President and Chief Executive
Officer effective November 17, 1997 and will remain an employee of the Company
through January 27, 1998 (the "Resignation Date"). Under the terms of the
letter agreement, Mr. Quinlan was granted an option to purchase 25,000 shares
of Common Stock under the Company's 1997 Stock Plan, such option to be 100%
vested upon the date of grant and at an exercise price of $9.125. As of the
Resignation Date, Mr. Quinlan's existing stock options not vested will be
forfeited in accordance with their terms and the period of time in which to
exercise any options which are vested as of the Resignation Date is extended,
pursuant to a prior agreement, through the balance of the term of such option
grants. This letter agreement supersedes an Employment Agreement (defined
below) with Mr. Quinlan dated June 10, 1997.
The Company is party to employment agreements with Messrs. Ebling and
Liptak and Ms. Clark (the "Employment Agreements"). The Employment Agreements
provide that if an individual's employment with the Company or any of its
subsidiaries or affiliates is either terminated by the Company for any reason
(other than gross dereliction of duty or a criminal or civil judgment which, in
the good faith judgment of the Company or its successor, renders the individual
unsuitable for such employment) or is terminated for Good Reason (as defined
below), then: (a) the Company will pay the individual an amount equal to the
sum of (i) one year's then current base salary, (ii) an amount, determined at
the individual's then current salary, for all earned but untaken vacation days,
and (iii) any award previously made to the individual under the then current
bonus plan which has not yet been paid; (b) the Company will make payments on
the individual's behalf under the Consolidated Omnibus Budget Reconciliation
Act of 1985 for one year; (c) any options previously granted to the individual
will become immediately vested and exercisable, including any options
previously granted under the Marcam Corporation stock plans; and (d) the
Company will otherwise pay the individual's ordinary post-termination benefits
in accordance with its retirement, insurance and other benefit plans and
arrangements.
"Good Reason" is defined in the Employment Agreements as (v) a reduction
in compensation or benefits without providing an adequate substitute therefor;
(w) a substantial adverse change in the nature of duties or authority, or in
title, position or status; (x) the relocation by the Company of the office
outside the thirty mile radius of the place were it was located on the date of
the Employment Agreement; (y) a material
11
<PAGE>
breach by the Company of any employment, compensation or similar agreement with
the individual; and (z) the failure by the Company to give the individual,
within ten days after request, written assurance of its intent to honor the
Employment Agreement.
In connection with Ms. Clark's departure, the terms of her Employment
Agreement were implemented.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
Introduction
The Compensation Committee of the Board of Directors (the "Committee")
is responsible for developing the executive compensation policies and advising
the Board of Directors with respect to such policies. William O. Grabe and
Richard S. Hickok, both non-employee directors, are currently the members of
the Committee. The Committee's goal is to create and implement a compensation
program which will attract and retain talented executives and provide
incentives to management to enhance Company performance by basing a significant
portion of annual and long-term compensation on achievement of targeted levels
of performance. The executive compensation policies for fiscal 1997 were
originally developed and approved by the Compensation Committee of the Board of
Directors of Marcam Corporation, the members of which were Messrs. Grabe and
Hickok. After the Distribution, these policies were adopted by the Company for
the balance of fiscal 1997 (see "Overview--Marcam Solutions, Inc.")
Executive Compensation Program
The Company's executive compensation program consists of three elements:
salary (base pay); incentive pay (cash bonus); and stock options. This program
applies to the Company's key management positions, including the position of
Chief Executive Officer. All of the Company's executives also are eligible for
employee benefits offered to all Company employees, including life, health,
disability and dental insurance, and the Company's savings plan and employee
stock purchase plan.
Salary. Base salary of top management in fiscal year 1997 was set by the
Committee after review of salary levels in the software industry for various
executive positions. The Committee reviewed salary information presented in
several independent surveys, ranging from broad-based overviews of the entire
software industry to information regarding entities more similar to the
Company: software companies with over $50 million in revenue. The Committee
used "median" levels as a guide for setting salaries for its top management
positions, based on such comparative information.
Incentive Pay. Incentive pay in the form of cash bonuses for executive
officers of the Company is based either (a) 100% on the Company's financial
performance, or (b) a combination of the Company's financial performance and
the occurrence of certain events within specified timeframes.
Generally, a budgeted amount for incentive pay for financial performance
is set for each executive by the Committee, and payment is made based on
achievement of specific performance targets. For executives with managerial
responsibilities chiefly linked with one profit center, performance targets
relate to that profit center. For executives with diverse responsibilities and
for the most senior management, performance targets may also include those set
in terms of the Company's earnings-per-share ("EPS"). Additionally, each
executive has the opportunity to earn an additional bonus based on
over-achievement of the quarterly budgeted EPS target. Such bonuses range from
$500 to $5,000 for each additional cent per share attained above the quarterly
budgeted EPS target and are paid on a quarterly basis.
The amount of incentive pay, if any, is based on achievement of the
specified performance targets. No incentive pay is payable until performance
exceeds 75% of targeted levels. From 75% to 100% of targeted performance, the
executive receives 4% of the budgeted amount for each 1% of performance
achieved. For performance exceeding 100%, the executive receives an amount
equal to 2.0% of budgeted incentive pay for each 1% increase in performance.
Bonuses based on business group
12
<PAGE>
contribution are paid when the corresponding revenue is collected by the
Company. There is no limit on incentive pay amounts based on financial
performance. During fiscal 1997, incentive pay based on financial performance
was payable as follows: 0% in the first quarter; 25% in the second quarter; 25%
in the third quarter and 50% in the fourth quarter. During fiscal 1997,
incentive pay received by all Marcam Solution executives ranged from $5,000 to
$103,600, including bonuses paid in the first quarter of fiscal 1998 for the
Company's performance in the fourth quarter of fiscal 1997.
Stock Options. Executives are eligible for stock option grants under the
"Incentive Stock Option Program" (the "ISO Program"). This program is designed
to provide long-term performance and retention incentives for top management.
An executive's participation in this program is determined by the Committee.
Executives participating in the ISO Program are eligible for stock
option grants in a budgeted amount set annually by the Committee. Grants are
generally made within the first month following the end of the fiscal year,
with an exercise price set at fair market value at the time of grant.
Generally, options granted vest 20% on the date of grant, and in equal portions
annually for four years thereafter. For fiscal 1997, the Committee set aside a
pool of options which could be earned by the executives based on overall
performance and contribution, as determined by the Committee at the end of the
fiscal year. On October 1, 1997, Mr. Ebling was granted an option to purchase
15,000 shares under the ISO Program. No other named executive officer received
options as a result of attaining targeted performance levels.
Chief Executive Officer's Compensation
Michael J. Quinlan. Mr. Quinlan's compensation for fiscal year 1997 was
determined in accordance with the executive compensation program described
above.
Mr. Quinlan's fiscal 1997 base salary was set at $240,000 based upon the
comparative information reviewed by the Committee as described above. Mr.
Quinlan received a bonus of $103,600 for achievement EPS performance targets in
the fourth quarter of 1997. Mr. Quinlan was not granted any options under the
ISO Program.
Mr. Quinlan's total compensation for fiscal year 1997 is set out in
detail in the Summary Compensation Table above.
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the Internal Revenue Code of 1986, as amended
("Section 162(m)"), generally disallows a tax deduction to the Company for
compensation over $1 million paid to any of the Company's Named Executive
Officers. Qualifying performance-based compensation, however, will not be
subject to the deduction limit if certain requirements are met. The Committee
has decided to structure the 1997 Stock Plan so that compensation granted to
executive officers pursuant to the 1997 Stock Plan will allow the Company to
take advantage of the benefits afforded by Section 162(m) with respect to
compensation under such plan.
Compensation Committee:
William O. Grabe
Richard S. Hickok
Compensation Committee Interlock and Insider Participation
Messrs. Grabe and Hickok, both non-employee directors, comprise the
Compensation Committee of the Board of Directors. No person who served as a
member of the Compensation Committee was, during the fiscal year ended
September 30, 1997, an officer or employee of the Company or any of its
subsidiaries, was formerly an officer of the Company or any of its
subsidiaries, or had any relationship requiring disclosure herein. No executive
officer of the Company served as a member of the compensation committee of
another entity (or other committee of the Board of Directors performing
equivalent functions or, in the absence of any such committee, the entire Board
of Directors), one of whose executive officers served as a director of the
Company.
13
<PAGE>
Performance Graph
The following graph compares the cumulative stockholder return on the
Common Stock of the Company from July 30, 1997 to September 30, 1997, with the
cumulative total return of the NASDAQ Stock Market Index (U.S.) and the
Hambrecht & Quist Technology Index over the same period. The graph assumes
$100.00 was invested on July 30, 1997 in the Company's Common Stock and in each
of the indexes referred to above. The comparative data assumes that dividends,
if any, were reinvested.
Marcam Solutions, Inc.
Hambrecht & Quist Technology Index
NASDAQ Stock Market Index (U.S.) (1)(2)
[TABULAR REPRESENTATION OF GRAPHIC]
<TABLE>
<CAPTION>
July 30, 1997 September 30, 1997
--------------- -------------------
<S> <C> <C>
Marcam Solutions, Inc. .................. $ 100.00 $ 190.00
NASDAQ Stock Market Index (U.S.) ......... 100.00 106.18
Hambrecht & Quist Technology Index ...... 100.00 105.07
</TABLE>
- -------------
(1) This graph is not "soliciting material," is not deemed filed with the
Securities and Exchange Commission and is not to be incorporated by
reference in any filing of the Company under the Securities Act of 1933 or
the Securities Exchange Act of 1934 whether made before or after the date
hereof and irrespective of any general incorporation language in any such
filing.
(2) The stock price performance shown on the graph is not necessarily
indicative of future price performance. Information used on the graph was
obtained from Hambrecht & Quist, a source believed to be reliable, but the
Company is not responsible for any errors or omissions in such
information.
14
<PAGE>
PROPOSAL TO AMEND THE 1997 STOCK PLAN
On June 13, 1997, the Board of Directors of the Company adopted the 1997
Stock Plan (the "1997 Plan"), which was approved by the stockholders on July
17, 1997. 2,500,000 shares of Common Stock were reserved for issuance pursuant
to the 1997 Plan upon the issuance of options or in connection with awards or
direct purchases of stock.
Proposed Amendment and Vote Required for Approval
On January 16, 1998, the Board of Directors adopted an amendment to the
1997 Plan to increase the number of shares issuable under the 1997 Plan from
2,500,000 shares to 2,750,000 shares (the "Amendment"), subject to the approval
of such increase by the Company's stockholders. The Company's directors
determined that the increase in the number of shares issuable under the 1997
Plan is necessary to provide adequate equity-based incentives primarily to new
key employees, and secondarily, to current key personnel, and is in the best
interests of the Company and its stockholders.
The Company's future performance depends to a significant extent on its
ability to recruit, retain and motivate on a timely basis both capable senior
executives and highly skilled technical, managerial and marketing personnel.
The purpose of the 1997 Plan is to encourage key employees of the Company and
its subsidiaries and other individuals who render services of special
importance to the Company and its subsidiaries to continue their association
with the Company by providing favorable opportunities for such persons to
participate in the ownership of the Company and its future growth through
grants of options and Common Stock awards and purchases. Generally, the Company
has granted options to purchase shares of Common Stock to a broad range of
employees as part of its ISO Program. In addition, the Company grants stock
options in connection with recruiting key employees. Competition for qualified
employees is intense and is likely to intensify further. The Company believes
that its ability to recruit, retain and motivate key employees is significantly
enhanced by the ability to offer attractive equity-based incentives.
Since the Distribution, the Company has taken a number of actions
designed to provide incentives for existing employees to continue with the
Company and has recruited a new Chief Executive Officer. In this regard, in
August 1997, the Company granted options to purchase an aggregate of 680,770
shares, with each employee of the Company receiving an option to purchase a
minimum of 100 shares. In October 1997, the options to purchase an aggregate of
163,129 shares were granted under the Company's ISO Program. Further, the
Company granted Mr. Crane an option to purchase 296,270 shares in connection
with his employment as Chairman, President and Chief Executive Officer of the
Company. The Company has also granted options to purchase shares in conjunction
with the employment of other key personnel.
Under the 1997 Plan, the Company currently is authorized to issue an
aggregate of 2,500,000 shares of Common Stock. In connection with the
Distribution, the Company was required to grant options to purchase an
aggregate of 1,288,281 shares of Common Stock to persons who then held options
to purchase shares of Marcam Corporation common stock. As a result of the
grants made in connection with the Distribution and the other grants described
above, only 37,314 shares were available for future grants under the 1997 Plan
as of December 31, 1997. The Company has determined that the increase in the
number of shares issuable under the 1997 Plan is necessary is necessary to
provide adequate equity-based incentives primarily to new key employees, and
secondarily, to current key personnel, and is in the best interests of the
Company and its stockholders.
The affirmative vote of at least a majority of the issued and
outstanding shares of Common Stock present or represented by proxy, entitled to
vote and voting on the matter at the Meeting is required to approve the
Amendment. Broker "non-votes" and abstentions on this matter shall be deemed
not to have been voted on this matter. The Board of Directors recommends that
the stockholders vote FOR approval of the Amendment.
Description of the 1997 Stock Plan
The purpose of the 1997 Plan is to provide incentives to officers and
other employees of the Company by providing them with opportunities to
participate in the ownership of the Company through the acquisition of shares
of Common Stock of the Company. Under the 1997 Plan, employees of the
15
<PAGE>
Company may be awarded incentive stock options ("ISO" or "ISOs"), as defined in
Section 422(b) of the Code, and directors, officers, employees and consultants
of the Company may be granted (i) options which do not qualify as ISOs
("Non-Qualified Option" or "Non-Qualified Options"), (ii) awards of stock of
the Company ("Awards"), and (iii) opportunities to make direct purchases of
stock of the Company ("Purchases"). ISOs, Non-Qualified Options, Awards and
Purchases are sometimes collectively referred to as "Stock Rights", and ISOs
and Non-Qualified Options are sometimes collectively referred to as "Options."
The 1997 Plan is administered by the Compensation Committee (the
"Committee") of the Board of Directors of the Company. Subject to the terms of
the 1997 Plan, the Committee has the authority to determine the persons to whom
Stock Rights are granted, the number of shares covered by each Stock Right, the
exercise price per share and other terms and provisions governing the Stock
Rights, including restrictions, if any, applicable to the shares of Common
Stock issuable upon exercise of Stock Rights.
Stock Rights may be granted under the 1997 Plan at any time prior to
June 12, 2007. The exercise price per share of Non-Qualified Options granted
under the 1997 Plan cannot be less than the minimum legal consideration
required under applicable state law. The exercise price per share of ISOs
cannot be less than the fair market value of the Common Stock on the date of
grant (or, in the case of ISOs granted to employees holding more than ten
percent (10%) of the voting stock of the Company, 110% of the fair market value
of the Common Stock on the date of grant). The 1997 Plan provides that each
Option shall expire on the date specified by the Committee, but not more than
ten years from its date of grant, in the case of Options, and five years from
its date of grant, in the case of ISOs granted to an employee holding more than
ten percent (10%) of the voting stock of the Company.
Any shares which are subject to an Option which for any reason expires
or terminates unexercised may again be available for grant under the 1997 Plan.
As of December 31, 1997, Options to purchase 2,564,200 shares of Common Stock
have been granted under the 1997 Plan.
Each Option granted under the 1997 Plan may either be fully exercisable
at the time of grant or may become exercisable in such installments as the
Committee may specify. Each Option may be exercised from time to time, in whole
or in part, up to the total number of shares with respect to which it is then
exercisable. The Committee has the right to accelerate the date of exercise of
any installment of any option (subject to the $100,000 per year limitation on
the fair market value of stock subject to ISOs granted to any employee which
become exercisable in any calendar year).
Exercise of any Option, in whole or in part, is effected by a written
notice delivered to the principal office of the Company, together with payment
of the exercise price. Payment of the exercise price of an Option granted under
the 1997 Plan may be made, in whole or in part, by cash or check, or, if
authorized by the Committee, by a personal recourse note or by tendering Common
Stock of the Company. In the case of ISOs, such authorization shall be
evidenced in writing at the time of the grant. The 1997 Plan contains terms
providing for the exercise of Options by or on behalf of former and deceased
employees, respectively, as described below.
No ISO shall be assignable or transferable by the optionee except by
will or by the laws of descent and distribution, and during the lifetime of the
optionee shall be exercisable only by such optionee. Stock Rights other than
ISOs shall be transferable to the extent set forth in the agreement relating to
such Stock Right.
Unless otherwise specified in the agreement relating to such ISO, if an
ISO optionee ceases to be employed by the Company other than by reason of death
or disability, no further installments of his ISOs shall become exercisable,
and, unless converted to Non-Qualified Options, his ISOs shall terminate no
later than the earlier of (a) three months after the date of termination of his
employment, and (b) their specified expiration dates. If an ISO optionee ceases
to be employed by the Company by reason of his death, any ISO of his may be
exercised, for the number of shares for which he could have exercised
16
<PAGE>
it on the date of his death, by his estate, personal representative or
beneficiary who has acquired the ISO by will or by the laws of descent and
distribution, until no later than the earlier of (a) the specified expiration
date of the ISO and (b) 180 days from the date of the optionee's death. If an
ISO optionee ceases to be employed by the Company by reason of his disability,
he shall have the right to exercise any ISO held by him on the date of
termination of employment, for the number of shares for which he could have
exercised it on that date until no later than the earlier of (a) the specified
expiration date of the ISO and (b) 180 days from the date of the termination of
the optionee's employment. Upon the occurrence of an event constituting a
"Change in Control" (as defined in the 1997 Plan), all outstanding but unvested
options to purchase Common Stock will become fully exercisable immediately
prior to the time of the event constituting the "Change in Control."
Option holders are protected against dilution in the event of a stock
dividend, stock split, recapitalization, reorganization, consolidation, merger
or similar transaction. The Board of Directors may from time to time adopt
amendments to the 1997 Plan, certain of which are subject to stockholder
approval, and may terminate the 1997 Plan at any time (although such action
shall not affect Options previously granted). Any shares subject to an Option
granted under the 1997 Plan, which for any reason expire or terminate
unexercised, may again be available for future Option grants. Unless terminated
sooner, the 1997 Plan will terminate on June 12, 2007 (except as to Stock
Rights outstanding on that date).
The following table sets forth as of December 31, 1997 Options granted
under the 1997 Plan to (i) the individuals named in the Summary Compensation
Table, (ii) each nominee for election as a director, (iii) each other person
who received 5% of such options, (iv) all remaining executive officers of the
Company as a group, (v) all directors who are not executive officers of the
Company as a group, and (vi) all employees including all officers who are not
executive officers, as a group:
<TABLE>
<CAPTION>
Name Title Options Granted
- -------------------------------- ----------------------------------- ----------------
<S> <C> <C>
Jonathan C. Crane ............ President, Chief Executive Officer
and Chairman of the Board 296,270
Denis E. Liptak ............... Chief Financial Officer 25,000
Thomas D. Ebling ............... Senior Vice President 72,896
Sharon R. Clark ............... Vice President 37,500
Michael J. Quinlan ............ President and Chief Executive
Officer 150,000
George A. Chamberlain 3d ...... Chief Financial Officer 60,000
All executive officers as a group (4 persons) ..................... 441,666
All directors who are not executive officers as a group (5 persons) 372,994
All employees who are not executive officers or directors as a group
(800 persons)(1) ................................................ 1,749,540
</TABLE>
- -------------
(1) Includes employees and directors of MAPICS, Inc. who were granted options
under the 1997 Plan in connection with the Distribution. See "Overview of
Marcam Solutions, Inc."
The following discussion of the United States federal income tax
consequences of the issuance and exercise of Options granted under the 1997
Plan is based upon the provisions of the Code as in effect on the date of this
Proxy Statement, current regulations thereunder, and existing administrative
rulings of the Internal Revenue Service. It is not intended to be a complete
discussion of all of the United States federal income tax consequences of the
1997 Plan or of the requirements that must be met in order to qualify for the
described tax treatment.
The grant of an ISO or a Non-Qualified Option generally would not result
in income for the grantee or in a deduction for the Company.
17
<PAGE>
The exercise of a Non-Qualified Option would result in ordinary income
for the grantee and a deduction for the Company (subject to the limitations
contained in Section 162(m) of the Code) measured by the difference between the
option price and the fair market value of the shares received at the time of
exercise. Withholding of taxes may be required. When the shares acquired
through the exercise of a Non-Qualified Option are sold by the optionee, he or
she should generally recognize capital gain or loss in an amount equal to the
difference between the amount realized upon the sale of shares and his or her
tax basis in the shares (generally, the option price plus the amount taxed to
the optionee as ordinary income). If the optionee holds the shares for more
than one year, this gain or loss would be long-term capital gain or loss.
Special rules apply if the shares acquired upon the exercise of a Non-Qualified
Option are subject to vesting or to certain restrictions on resale under United
States federal securities laws.
The exercise of an ISO should not result in income for the grantee if
the grantee (i) does not dispose of the shares within two years from the date
of grant or one year after the transfer of such shares upon exercise and (ii)
is an employee of the Company or a subsidiary of the Company from the date of
grant until three months before the exercise date. If these requirements are
met, the tax basis of the shares upon later disposition generally would be the
option price. Any gain should be taxed to the employee as long-term capital
gain and the Company should not be entitled to a deduction. The excess of the
fair market value on the exercise date over the option price, however, is an
item of tax preference for the grantee, potentially subject to the alternative
minimum tax.
If the grantee disposes of the ISO shares prior to the expiration of
either of the holding periods discussed above, then, in most cases, the grantee
would recognize ordinary income and the Company would be entitled to a
deduction (subject to the limitations contained in Section 162(m) of the Code)
equal to the lesser of (i) the fair market value of the shares on the exercise
date minus the option price or (ii) the amount realized on disposition minus
the option price. Any gain in excess of the portion recognized as ordinary
income would generally be taxable as long-term or short-term capital gain.
Special rules apply if the shares acquired upon the exercise of an ISO are
subject to vesting or to certain restrictions on resale under United States
federal securities laws.
Payment for option shares may in some cases be made by delivering shares
of the Company's Common Stock or by certain other methods if at the time of
grant the optionee's agreement so provides. If an optionee makes payment of the
option price other than by cash or check, special rules would apply.
In general, persons receiving Common Stock pursuant to an award of stock
or a grant of an opportunity to purchase stock should recognize ordinary income
equal to the excess of the fair market value of the shares received over the
amount paid, if any. The Company should generally be entitled to a
corresponding deduction for United States federal income tax purposes (subject
to the limitations contained in Section 162(m) of the Code). When such Common
Stock is sold, the seller generally would recognize capital gain or loss.
Special rules apply if the shares are subject to vesting or to certain
restrictions on resale under United States federal securities laws.
18
<PAGE>
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected the firm of Coopers & Lybrand
L.L.P., independent certified public accountants, to serve as auditors for the
fiscal year ending September 30, 1998. It is expected that a member of the firm
will be present at the meeting with the opportunity to make a statement if so
desired and will be available to respond to appropriate questions. The Board of
Directors recommends a vote FOR the ratification of this selection.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended for inclusion in the proxy statement
to be furnished to all stockholders entitled to vote at the next annual meeting
of stockholders of the Company must be received at the Company's principal
executive offices not later than September 25, 1998. In order to curtail
controversy as to the date on which a proposal was received by the Company, it
is suggested that proponents submit their proposals by Certified Mail-Return
Receipt Requested.
EXPENSES AND SOLICITATION
The cost of solicitation of proxies will be borne by the Company, and in
addition to soliciting stockholders by mail, the directors, officers and
regular employees of Marcam may, without receiving additional compensation,
solicit proxies personally or by telephone. Solicitation by directors, officers
and regular employees of Marcam may also be made of some stockholders of Marcam
in person or by mail, telephone or telegraph following the original
solicitation. Marcam may request banks, brokers and other custodians, nominees
and fiduciaries to forward proxy soliciting materials to the owners of stock of
Marcam held in their names and, if so, will reimburse such banks, brokers and
other custodians, nominees and fiduciaries for their reasonable out-of-pocket
costs incurred in connection with the distribution of such proxy materials.
Marcam Solutions may also retain an independent proxy solicitation firm to
assist in the solicitation of proxies. If such firm is retained, Marcam will
pay such firm a fee, plus reimbursement of reasonable costs and expenses.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities Exchange Commission.
Officers, directors and greater-than-ten percent stockholders are required by
SEC regulation to furnish the Company with all Section 16(a) forms they file.
Based solely on a review of the forms received by the Company pursuant
to Section 16(a) of the Securities Exchange Act of 1934 and on written
representations received by it, the Company believes that during the fiscal
year 1997, the Company's directors, executive officers and persons who
beneficially own more than ten percent of the Company's Common Stock complied
with all applicable Section16(a) filing requirements.
19
<PAGE>
MRC79 2 DETACH HERE
MARCAM SOLUTIONS, INC.
Proxy for Annual Meeting of Stockholders
To Be Held February 25, 1998
This Proxy is Solicited on Behalf of The Board of Directors
The undersigned hereby appoints Jonathan C. Crane and Diane R. Tormey, and
each of them, attorneys and proxies, with full power of substitution and
resubstitution, to vote at the Annual Meeting of Stockholders of MARCAM
SOLUTIONS, INC. (the "Company") to be held at the Sheraton Needham Hotel, 100
Cabot Street, Needham, Massachusetts 02194 on February 25, 1998 at 10:00 a.m.
and any adjournment(s) thereof, revoking all previous proxies, with all powers
the undersigned would possess if present, to act upon the following matters and
upon such other business as may properly come before the meeting or any
adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
THE CLASS I DIRECTORS AND FOR PROPOSALS 2, 3 AND 4.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE
SIDE
<PAGE>
MRC79 3 DETACH HERE
[X] Please mark
votes as in
this example.
1. Election of Directors: To elect two members to the Board of Directors to
serve for three-year terms as Class I Directors.
Nominees: William O. Grabe and Joseph M. Henson
FOR WITHHELD
[ ] [ ]
[ ] __________________________________________
For both nominees except as noted above
2. Approval of Amendment to 1997 Stock Plan:
To approve an amendment to the 1997 Stock Plan to increase the aggregate
number of shares of Common Stock which may be issued pursuant to said plan
from 2,500,000 to 2,750,000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Ratification of Auditors:
To ratify the selection of the firm of Coopers & Lybrand L.L.P. as auditors
for the fiscal year ending September 30, 1998.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Transaction of Other Business:
To transact such other business as may properly come before the meeting and
any adjournments thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please sign exactly as name appears. When shares are held by joint tenants, both
should sign. State full title when signing as executor, administrator, trustee
or guardian, etc. Please promptly return the signed proxy in the enclosed
envelope.
Signature: _________________________________________ Date: ____________________
Signature: _________________________________________ Date: ____________________
