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.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Marcam Solutions, Inc.
------------------------------------------------------------------------
(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:
--------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
--------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
--------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------
(3) Filing Party:
--------------------------------------------------------------
(4) Date Filed:
--------------------------------------------------------------
<PAGE>
MARCAM SOLUTIONS, INC.
January 25, 1999
Dear Stockholder:
You are invited to attend the Annual Meeting of Stockholders to be held at
10:00 a.m., Boston time, Wednesday, February 24, 1999 at the Needham Sheraton
Hotel, 100 Cabot Street, Needham, Massachusetts 02494.
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 02459
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
January 25, 1999
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 24, 1999 at 10:00 a.m., Boston time, at the Needham Sheraton
Hotel, 100 Cabot Street, Needham, Massachusetts 02494, 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 II 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 2,750,000 to 3,500,000 and to ratify the 1997 Stock Plan as so
amended.
3. To ratify the selection of the firm of PricewaterhouseCoopers LLP as
auditors for the fiscal year ending September 30, 1999.
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 15, 1999
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 25, 1999
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 02459
PROXY STATEMENT
January 25, 1999
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Marcam Solutions, Inc. (the "Company") for
use at the Annual Meeting of Stockholders of the Company to be held at the
Needham Sheraton Hotel, 100 Cabot Street, Needham, Massachusetts 02494 on
February 24, 1999, at 10:00 a.m., Boston time, and any adjournments thereof (the
"Meeting"). The Company's 1998 Corporate Report to Stockholders and Annual
Report on Form 10-K, containing financial statements for the fiscal year ended
September 30, 1998, 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 25, 1999.
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 15, 1999. As of that date, 7,746,937 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 15, 1999 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 attorneys in the 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 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 2,750,000 to 3,500,000 and (ii) to ratify the selection of the
firm of PricewaterhouseCoopers LLP as auditors for the fiscal year ending
September 30, 1999. 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 proposal.
A majority in interest of the 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 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
<PAGE>
the Company's transfer agent tabulates the votes. The vote on each matter
submitted to stockholders is tabulated separately.
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.
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 25.8%
c/o General Atlantic Service Corporation
2 Pickwick Plaza
Greenwich, CT 06830
Clover Capital Management, Inc.(3).................................... 1,190,828 15.4%
11 Tobey Village Office Park
Pittsford, NY 14534
Michael H. Iles (4)................................................... 414,518 5.4%
260 Engleburn Avenue
Peterborough, Ontario, Canada K9H 157
Paul A. Margolis (5) ................................................. 390,519 5.0%
c/o The Longworth Companies
P.O. Box 67
Weston, MA 02493
John Campbell(6)...................................................... 104,153 1.3%
Sharon R. Clark (7)................................................... 22,500 *
Jonathan C. Crane (8)................................................. 138,508 1.8%
Thomas D. Ebling (9).................................................. 67,221 *
William O. Grabe (10)................................................. 2,007,875 25.9%
E. Clark Grimes....................................................... -- *
Joe M. Henson (11).................................................... 3,375 *
Denis E. Liptak (12).................................................. 12,375 *
Stephen R. Quehl (13)................................................. 37,500 *
Michael J. Quinlan(14)................................................ 77,850 1.0%
Franchon M. Smithson (15)............................................. 2,002,875 25.9%
William W. Wyman...................................................... -- *
All executive officers and directors as a group (11 persons) (16)..... 2,451,732 31.6%
</TABLE>
- ----------------------------------
* less than 1%
2
<PAGE>
(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 January 15, 1999 unless
otherwise indicated. Unless otherwise indicated, the address of each person
listed on this table is in care of Marcam Solutions, Inc., 95 Wells Avenue,
Newton, Massachusetts 02459.
(2) According to the Questionnaire for Officers, Directors and Principal
Stockholders dated November 30, 1998. 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) According to the Questionnaire for Officers, Directors and Principal
Stockholders dated November 30, 1998. According to the Schedule 13G filed
on February 17, 1998 with the SEC, as investment adviser to certain client
accounts, Clover Capital Management, Inc. ("Clover") shares the voting and
dispositive power with the respective account owners, and, as directors of
Clover, James G. Gould, Michael E. Jones, Geoffrey H. Rosenberger and
Charles W. Ruff share the voting and dispositive powers with Clover.
(4) According to Schedule 13G filed on January 5, 1999 with the SEC. Consists
of 414,518 shares of Common Stock beneficially owned by Michael H. Iles, of
which 316,718 shares are held of record by Technology Investors I Limited
Partnership ("Technology Investors"), whose sole general partner is a
wholly-owned subsidiary of Closeburn Management Ltd. ("Closeburn").
Closeburn acts as the investment manager of Technology Investors, and
Technology Investors has the right to receive any dividends on or proceeds
from the sale of such securities. Closeburn is wholly-owned by Michael H.
Iles ("Iles"). Because Closeburn is wholly-owned by Iles, Iles may be
deemed the beneficial owner of 316,718 shares of the Common stock covered
by this Schedule 13G. Iles is the record holder of 97,800 shares of Common
Stock.
(5) Includes 16,222 shares held in trust and 158,994 shares issuable upon the
exercise of outstanding stock options exercisable currently or within 60
days.
(6) Includes 50,000 shares held by Mr. Campbell's wife and 4,750 shares
issuable upon the exercise of outstanding stock options exercisable
currently or within 60 days.
(7) Includes 22,500 shares issuable upon the exercise of outstanding stock
options exercisable currently or within 60 days.
(8) Includes 118,508 shares issuable upon the exercise of outstanding stock
options exercisable currently or within 60 days.
(9) 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 23,500 shares issuable upon the exercise of outstanding stock
options exercisable currently or within 60 days.
(10) Includes 2,000,000 shares beneficially owned by General Atlantic Partners,
LLC. See note 2 above. Also includes 7,875 shares issuable upon the
exercise of outstanding stock options exercisable currently or within 60
days.
(11) Includes 2,875 shares issuable upon the exercise of outstanding stock
options exercisable currently or within 60 days.
(12) Includes 11,875 shares issuable upon the exercise of outstanding stock
options exercisable currently or within 60 days.
(13) Includes 37,500 shares issuable upon the exercise of outstanding stock
options exercisable currently or within 60 days.
(14) Includes 350 shares held by Mr. Quinlan's wife and 77,500 shares issuable
upon the exercise of outstanding stock options exercisable currently or
within 60 days.
3
<PAGE>
(15) Includes 2,000,000 shares beneficially owned by General Atlantic Partners,
LLC. See note 2 above. Also includes 2,875 shares issuable upon the
exercise of outstanding stock options exercisable currently or within 60
days.
(16) The group is comprised of those persons who were directors and/or executive
officers of the Company on January 15, 1999. Includes 787,258 shares which
the directors and executive officers as a group have the right to acquire
upon the exercise of outstanding warrants and stock options exercisable
currently or within 60 days. In addition, includes 53,675 shares held by
family members of officers or directors, as to which shares the applicable
officer or director disclaims beneficial ownership.
4
<PAGE>
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of the Company met seven times and took action by
unanimous written consent three times during the fiscal year ended September 30,
1998. 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 December 22, 1998, and does not have a standing committee
for nominating directors. 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 6 times
during fiscal 1998. Messrs. Smithson and Wyman 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, took action by written consent 16 times during fiscal
1998. Messrs. Henson, Grabe and Grimes 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 1998.
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 II
Directors' terms will expire at the Meeting. Each director holds office until
his successor is 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 the Class II 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: Term Expires at 2001 Annual Meeting of Stockholders
William O. Grabe, age 60, has served as a director of the Company since
July 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.
Joe M. Henson, age 65, has served as 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.
William W. Wyman, age 60, has served as a director of the Company since
December 22, 1998. From 1984 to 1995, Mr. Wyman served as Managing Partner of
Oliver, Wyman & Company, a consulting firm he founded which specializes in
management consulting to financial institutions in North America and Europe.
From 1965 to 1984, Mr. Wyman was employed at Booz, Allen & Hamilton, an
international management consulting firm. Mr. Wyman is also a director of SS&C
Technologies, Inc., a company which provides client/server-based financial
software solutions for financial institutions.
5
<PAGE>
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. Mr. Campbell was Executive Vice President of the Company from August 1997
through June 1998. 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.
E. Clark Grimes, age 56, has served as a director of the Company since
December 22, 1998. From 1991 to 1997, Mr. Grimes was President of Meritus
Consulting Services, LLC, a management consulting firm specializing in
addressing the operational needs of manufacturing companies. Mr. Grimes is also
a director of New Canaan Bank & Trust Company.
Class III Directors: Term Expires at 2000 Annual Meeting of Stockholders
Jonathan C. Crane, age 49, 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 57, 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 from July 1993 to June 1994, was also Chief Executive
Officer of Access Technology group, a multimedia production company specializing
in executive presentations and sales tools. 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 47, has served as 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.
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 noted for the election of some other person.
6
<PAGE>
Directors' Compensation
The Company compensates its non-employee directors through a one-time
initial grant under the Company's 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. In addition,
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.
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 1998, (ii) the four other most highly compensated executive officers of
the Company who served as such at September 30, 1998 and whose annual
compensation and bonus was $100,000 or more, and (iii) any person for whom
disclosure would have been provided pursuant to clause (ii) but for the fact
that the person did not serve as an executive officer at September 30, 1998 (the
"Named Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards/
Annual Securities
Compensation (1) Underlying All Other
Name and Principal Position Year Salary($) Bonus($)(2) Options (#)(3)(4) Compensation (1)(5)
- --------------------------- ---- --------- ------------ ------------- ------------------
<S> <C> <C> <C> <C> <C>
Jonathan C. Crane (6) 1998 $315,442 $ 75,000 296,270 $31,480
President, Chief Executive 1997 -- -- -- --
Officer and Chairman
Denis E. Liptak (7) 1998 $155,000 $113,100 10,000 $ 5,531
Chief Financial Officer and 1997 $127,504 $ 60,600 25,000 $ 4,792
Vice President of Finance 1996 $105,384 $ 24,562 -- $ 2,436
Thomas D. Ebling (8) 1998 $175,000 $141,481 15,000 $ 5,066
Executive Vice President 1997 $175,000 $ 95,500 57,896 $ 4,823
Customer Operations 1996 $178,740 $ 23,500 -- $ 2,640
Michael J. Quinlan (9) 1998 $ 84,923 $103,600 35,000 $ 542
President and Chief 1997 $240,000 $103,600 125,000 $ 70
Executive Officer 1996 $175,385 $ 40,000 -- $ 84
Former executives:
Sharon R. Clark (10) 1998 $211,076 $ 32,178 -- $ 323
Vice President, Marketing 1997 $160,000 $ 53,000 37,500 $ 4,512
and Communications 1996 -- -- -- $ 16
</TABLE>
- ----------------------------------
(1) During fiscal 1996, all compensation was paid solely by Marcam Corporation
the Company's former parent entity. In July, 1997, Marcam Corporation spun
off in a tax-free distribution certain of its business assets and product
lines, transferring them to the Company, at that time a wholly-owned
subsidiary of Marcam Corporation. Marcam Corporation distributed all of its
ownership interest in the Company by means of a distribution on July 29,
1997 to its stockholders of record on July 23, 1997. In connection with
these transactions, certain of the Named Executive Officers were
transferred from Marcam Corporation to the Company. As a result, during
fiscal 1997, compensation was paid by both Marcam Corporation and the
Company.
(2) 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.
(3) The Company did not grant any restricted stock awards or stock appreciation
rights ("SARs") or make any long-term incentive plan payouts to the Named
Executive Officers during the fiscal year ended September 30, 1998. 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 year ended
September 30, 1997 or 1996.
(4) All options other than the 10,000 options granted to Mr. Quinlan under the
Directors Plan have been granted under the Company's 1997 Stock Plan.
8
<PAGE>
(5) Unless otherwise noted, "All Other Compensation" consists of amounts
contributed on behalf of the Named Executive Officers under group life
insurance policies of the Company, as well as matching contributions made
by the Company to the 401(k) Plan based on a percentage of the individual's
contributions to such 401(k) Plan.
(6) Mr. Crane joined the Company in October 1997 and was elected Chairman of
the Board, President and Chief Executive Officer in November 1997. The
296,270 options granted during fiscal 1998 were granted on October 27, 1997
upon the commencement of his employment. Of the $31,480 listed under "All
Other Compensation," $31,414 was paid to Mr. Crane as a reimbursement of
monthly housing rental expenses through September 30, 1998, and the
remainder was paid in the form of a contribution on behalf of Mr. Crane
under group life insurance policies of the Company. See footnote 5, above.
(7) Mr. Liptak has served as the Company's Chief Financial Officer since August
1997. The 10,000 options granted during fiscal 1998 were granted in two
equal grants of 5,000 shares each on April 21, 1998 and April 27, 1998,
respectively. The 25,000 options granted during fiscal 1997 were granted on
July 28, 1997.
(8) Mr. Ebling has served as the Company's Executive Vice President, Customer
Operations since September 1998. Mr. Ebling served as the Company's Senior
Vice President from December 1997 through August 1998 and as Senior Vice
President, Development and Support from July 1997 through November 1997.
The 15,000 options granted during fiscal 1998 were granted on October 1,
1997. The 57,896 options granted during fiscal 1997 were granted on July
28, 1997.
(9) Mr. Quinlan served as the Company's President and Chief Executive Officer
from July 28, 1997 through November 17, 1997 and resigned his employment
from the Company effective January 27, 1998. Of the 35,000 options granted
in fiscal 1998, 25,000 were granted on October 23, 1997 and the remaining
10,000, which were granted under the Directors Plan, were granted on
January 29, 1998.
(10) Ms. Clark served as the Company's Vice President, Marketing and
Communications from July 1997 through December 31, 1997. Compensation
payments during fiscal 1998 include a lump-sum payment of $166,153 pursuant
to an Employment Contract between the Company and Ms. Clark. See "Certain
Employment Arrangements" on page 11. The 37,500 options granted during
fiscal 1997 were granted on July 28, 1997.
Option Grants in Last Fiscal Year
The following table provides information on stock option grants made
pursuant to the Company's 1997 Stock Plan, during the fiscal year ended
September 30, 1998 to the Named Executive Officers.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Percent of
Total Potential Realizable Value at
Number of Options Assumed Annual Rates of
Securities Granted to Exercise Stock Price
Underlying Employees or Base Appreciation for Option
Options in Fiscal Price Expiration Term (2)
Name Granted(#) Year (1) ($/SH) Date 5%($) 10%($)
---- ---------- -------- ------ ---- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Jonathan C. Crane (3) 296,270 39.7% $ 8.25 10/27/07 $1,535,855 $3,628,490
Denis E. Liptak (4) 5,000 * $ 9.00 04/21/08 $ 23,778 $ 62,334
5,000 * $ 8.25 04/27/08 $ 27,583 $ 66,252
Thomas D. Ebling (5) 15,000 2.0% $11.00 10/01/07 $ 35,810 $ 140,378
Michael J. Quinlan (6) 25,000 3.4% $ 9.13 10/23/07 $ 107,545 $ 283,771
Sharon R. Clark -- -- -- _ -- --
</TABLE>
- ---------------------------------------
* less than 1%
(1) Options to purchase a total of 746,099 shares of Common Stock were granted
in fiscal 1998 under the Company's 1997 Stock Plan, the purpose of which is
to provide incentives to key employees who are in a position to make
significant contributions to the Company.
(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
9
<PAGE>
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 assurance 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 (i) any
appreciation in the price of the Common Stock from the date of grant to the
current date or (ii) any applicable tax or expense payments that may be
associated with such option exercises.
(3) Of the indicated options, 59,254 options are exercisable as of September
30, 1998 and the remaining 237,016 options are exercisable periodically
through October 2001.
(4) Of the indicated options, 2,500 options are exercisable as of September 30,
1998 and the remaining 7,500 options are exercisable periodically through
April 2001.
(5) Of the indicated options, 3,000 options are exercisable as of September 30,
1998 and the remaining 12,000 options are exercisable periodically through
October 2001.
(6) Of the indicated options, 25,000 options were exercisable as of September
30, 1998.
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, 1998, (ii) the net value realized
upon such exercise, (iii) the number of unexercised options held as of September
30, 1998, and (iv) the aggregate dollar value of unexercised options as of
September 30, 1998.
<TABLE>
<CAPTION>
Value of
Number of Securities Unexercised
Underlying In-The-Money
Shares Unexercised Options Options At
Acquired Value at September 30, 1998 (#) September 30, 1998 ($)(1)
Name On Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jonathan C. Crane -- -- 59,254 237,016 $22,220 $88,882
Denis E. Liptak -- -- 9,375 25,625 $14,190 $38,042
Thomas D. Ebling 40,396 $228,199 18,000 14,500 $50,925 $ 5,213
Michael J. Quinlan -- -- 75,000 10,000 $51,250 $21,250
Sharon R. Clark 15,000 $184,287 22,500 -- $52,088 $ --
</TABLE>
- ---------------------------
(1) Value is based on the difference between the option exercise price and the
fair market value per share of Common Stock as of September 30, 1998
($8.625) multiplied by the number of shares underlying the option.
Certain Employment Arrangements
Jonathan C. Crane. The Company has entered into an employment agreement
with Jonathan C. Crane, the Company's Chairman of the Board, Chief Executive
Officer and President (the "Crane Agreement"). Under the Crane Agreement, Mr.
Crane will serve as the Company's Chairman of the Board, Chief Executive Officer
and President for a term from December 22, 1998 through September 30, 1999. The
term of the Crane Agreement automatically extends thereafter for additional
one-year periods, unless terminated by either party at least 30 days prior to
the expiration of the then current term. Pursuant to the Crane Agreement, Mr.
Crane will receive a base salary (the "Base Salary") and will be eligible to
earn a bonus if the Company meets certain performance objectives established by
the Compensation Committee of the Board of Directors (the "Committee"). Mr.
Crane's Base Salary for the initial term of the Crane Agreement will be paid at
an annual rate of $398,000.
If the Company terminates Mr. Crane's employment without Cause (as defined
in the Crane Agreement) either (i) prior to a Change in Control (as defined in
the Crane Agreement) or (ii) after the first anniversary of a Change in Control,
then, in addition to the payment of normal post-termination benefits in
accordance with the Company's retirement, insurance and other benefit plans and
arrangements, (x) Mr. Crane will receive a severance benefit equal to 12 months
of Base Salary at the rate paid to him immediately prior to such termination and
(y) Mr. Crane will have 12 months following the date of such termination during
which to exercise any options which were vested and exercisable as of the date
of such termination. If at any time during a period commencing with a Change in
Control and ending on the first anniversary of a Change in Control, either (i)
the Company terminates Mr. Crane's employment without Cause or (ii) Mr. Crane
terminates his employment for specified Good Reason (as defined in the Crane
Agreement), then, in addition to the payment of normal post-termination benefits
in accordance with the Company's retirement, insurance and other benefit plans
and arrangements (x) Mr. Crane will receive a severance benefit equal to (1) 24
months of Base Salary at the rate paid to him immediately prior to such
termination plus (2) the average of the annual bonuses paid to him by the
Company with respect to the most recently completed three fiscal years (or such
shorter period as Mr. Crane shall have been employed by the Company) and (y) all
options that were unvested as of the date of such termination will become
immediately vested and exercisable as of such date and Mr. Crane will have 12
months following such date during which to exercise any such options. If the
Company terminates Mr. Crane's employment due to a
11
<PAGE>
Disability (as defined in the Crane Agreement), then, in addition to the payment
of normal post-termination benefits in accordance with the Company's retirement,
insurance and other benefit plans and arrangements, (x) Mr. Crane will receive a
severance benefit equal to six months of Base Salary at the rate paid to him
immediately prior to such termination and (y) Mr. Crane will have 12 months
following such termination to exercise any options granted to Mr. Crane after
December 22, 1998 which were vested and exercisable as of the date of such
termination. If Mr. Crane dies, then, in addition to the payment of normal
post-termination benefits in accordance with the Company's retirement, insurance
and other benefit plans and arrangements, (x) the Company will pay to Mr.
Crane's estate an amount equal to six months of Mr. Crane's Base Salary at the
rate paid to him immediately prior to such termination and (y) Mr. Crane's
estate will have 12 months following such termination to exercise any options
granted to Mr. Crane after December 22, 1998 and which were vested and
exercisable at the date of his death. If the Company terminates Mr. Crane's
employment for Cause, or Mr. Crane terminates his employment for other than Good
Reason, Mr. Crane will be entitled to receive compensation and benefits through
the date of termination and payment of normal post-termination benefits in
accordance with the Company's retirement, insurance and other benefit plans and
arrangements.
The Crane Agreement also contains provisions prohibiting Mr. Crane from
directly or indirectly soliciting any of the Company's employees or customers
during the term of the Crane Agreement for the one-year period following the
termination of Mr. Crane's employment with the Company. In addition, Mr. Crane
has entered into an Employee Agreement on Ideas, Inventions, Confidential
Information, and Non-Competition, which contains restrictions (i) on the use of
the Company's proprietary information and (ii) on Mr. Crane's ability to compete
with the Company.
In connection with the execution of the Crane Agreement, the Company also
entered into a loan agreement with Mr. Crane, whereby the Company agreed to loan
Mr. Crane up to $700,000 (the "Loan") at an interest rate equal to the
applicable Federal rate in effect on the date of the drawdown under Section
1274(d) of the Internal Revenue Code of 1986, as amended, compounded
semiannually. The Loan matures on the earlier of (i) October 27, 2001, (ii) 120
days following the expiration or termination of Mr. Crane's employment with the
Company under the Crane Agreement, or (iii) prior to Mr. Crane's commencement of
any employment, consultancy or advisory services with or to any person that the
Board of Directors determines to be a competitor of the Company.
Michael J. Quinlan. 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 remained 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 per share.
As of the Resignation Date, Mr. Quinlan's existing unvested stock options were
forfeited in accordance with their terms and the period of time in which to
exercise any vested options was extended, pursuant to a prior agreement, through
the balance of the term of such options. The letter agreement superseded an
employment agreement with Mr. Quinlan dated June 10, 1997.
Certain Other Executives. 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 stock plans of
12
<PAGE>
the Company's former parent, Marcam Corporation; 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 (a) a reduction in
compensation or benefits without providing an adequate substitute therefore; (b)
a substantial adverse change in the nature of duties or authority, or in title,
position or status; (c) the relocation by the Company of the office outside the
thirty mile radius of the place where it was located on the date of the
Employment Agreement; (d) a material breach by the Company of any employment,
compensation or similar agreement with the individual; and (e) 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.
Stephen R. Quehl. Stephen R. Quehl was hired on November 11, 1998 as
Executive Vice President, Worldwide Field Operations. In Mr. Quehl's offer
letter, dated October 20, 1998 (the "Offer Letter"), the Company agreed to pay
him a signing bonus equal to $72,783, of which $22,783 is repayable to Marcam
if, within the first twelve (12) months of his employment, Mr. Quehl voluntarily
resigns. The amount to be repaid is reduced by 1/12 per month commencing upon
the completion of his first month of employment. In addition, in the Offer
Letter, the Company agreed that if Mr. Quehl's employment was terminated during
the first year for any reason other than gross misconduct, Mr. Quehl would
receive a severance benefit, payable in one lump sum equal to one year's then
current base salary. Further, in the event of a change of control, Mr. Quehl is
entitled to twelve months' severance if his position is reduced, if he is forced
to move, or if the acquiring company does not offer him employment.
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 Company's executive compensation policies and
advising the Board of Directors with respect to such policies. Joe M. Henson,
William O. Grabe and E. Clark Grimes, all 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.
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 1998 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. Based on such comparative
information the Committee used "median" levels as a guide for setting salaries
for its top management positions.
13
<PAGE>
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
achievement of certain performance targets 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 business unit, 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").
The amount of incentive pay, if any, is based on achievement of the
specified performance targets. No incentive pay is payable until performance
exceeds 50% of targeted levels. From 50% to 150% of targeted performance, the
executive receives 2% of the budgeted amount for each 1% of performance
achieved. Bonuses based on business unit contribution are paid when the
corresponding revenue is collected by the Company. Incentive pay based on
financial performance is payable quarterly. During fiscal 1998, incentive pay
received by all Marcam Solutions executives ranged from $32,178 to $141,481,
including bonuses paid in the first quarter of fiscal 1999 for the Company's
performance in the fourth quarter of fiscal 1998.
Stock Options. Executives are eligible for stock option grants under the
"Incentive Stock Options 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 amounts determined by the Committee. Stock option grants are made by
the Committee in its discretion upon review of an executive's performance. The
stock options granted pursuant to the ISO Program have an exercise price equal
to the fair market value of the Company's Common Stock at the time of grant and,
generally, options granted vest 25% on the date of grant, and in equal annual
installments for three years thereafter.
During fiscal 1998, Messrs. Crane, Ebling, Liptak and Quinlan were granted
options to purchase 296,270, 15,000, 10,000 and 25,000 shares of Common Stock,
respectively, pursuant to the ISO Program. Stephen R. Quehl was granted an
option to purchase 150,000 shares of Common Stock pursuant to the ISO Program
upon the commencement of his employment on November 11, 1998.
Chief Executive Officer's Compensation
Mr. Crane's compensation for fiscal 1998 was determined in accordance with
the executive compensation program described above.
Salary and Incentive Pay. Mr. Crane's fiscal 1998 base salary of $350,000
was based upon the comparative information reviewed by the Committee as
described above. Mr. Crane's incentive pay, based 100% on achievement of EPS
performance targets, was $75,000 in 1998. During fiscal 1998, Mr. Crane also
received $31,414 as reimbursement of monthly housing rental expenses through
September 30, 1998. Mr. Crane was granted an option to purchase 296,270 shares
under the 1997 Plan upon the commencement of his employment on October 27, 1997.
Mr. Crane's total compensation for fiscal year 1998 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 in
excess of $1 million paid to any of the Company's Named Executive Officers.
Qualifying performance-based compensation, however, will not be
14
<PAGE>
subject to the deduction limit if certain requirements are met. The Committee
has decided that, for so long as it is consistent with its overall compensation
objective, the Committee will operate the 1997 Stock Plan so that compensation
attributable to options granted pursuant to the 1997 Stock Plan will qualify as
performance-based for purposes of Section 162(m) and deductions attributable to
such options will therefore not be disallowed by Section 162(m). Therefore, the
Committee will grant options under the 1997 Stock Plan with an exercise price
per share equal to the fair market value of the Common Stock on the date of
grant.
Compensation Committee:
Joe M. Henson
William O. Grabe
E. Clark Grimes
Compensation Committee Interlock and Insider Participation
Messrs. Henson, Grabe and Grimes, all non-employee directors, comprise the
Compensation Committee of the Board of Directors. No person who served as a
member of the Compensation Committee during fiscal 1998: (a) was an officer or
employee of the Company or any of its subsidiaries during such fiscal year, (b)
was an officer of the Company or any of its subsidiaries prior to such fiscal
year, or (c) 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.
15
<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, 1998, 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)
[GRAPH]
<TABLE>
<CAPTION>
July 30, 1997 September 30, 1997 September 30,1998
------------- ------------------ -----------------
<S> <C> <C> <C>
Marcam Solutions, Inc. $100.00 $190.00 $172.50
NASDAQ Stock Market Index (U.S.) 100.00 106.18 108.50
Hambrecht & Quist Technology Index 100.00 105.07 97.62
</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 Research Data Group, Inc., a source believed to be reliable,
but the Company is not responsible for any errors or omissions in such
information.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 17, 1998, Longworth LLC, a company controlled by Paul Margolis, a
former director of the Company and current holder of 5% of the Company's Common
Stock, purchased shares of Obtech, Inc. from the Company for $500,000.00. In
reaching the sale price, the Company's Board of Directors consulted with
PricewaterhouseCoopers LLP, which prepared a valuation of the Company's interest
based upon a discounted cash flow analysis and an analysis of market comparable.
At the time of sale, Mr. Margolis was no longer a director of the Company.
16
<PAGE>
PROPOSAL TO AMEND AND RATIFY 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. Initially, 2,500,000 shares of Common Stock were reserved for
issuance pursuant to the 1997 Plan upon the grant of options or in connection
with awards or direct purchases of stock. 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 to 2,750,000, which was approved by
the stockholders on February 25, 1998.
Proposed Amendment and Vote Required for Approval and Ratification
On December 22, 1998, the Board of Directors adopted an amendment to the
1997 Plan to increase the number of shares issuable under the 1997 Plan from
2,750,000 to 3,500,000 (the "Amendment"), subject to the approval of such
increase by the Company's stockholders. The Company's directors determined that
such increase 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 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. In October 1997, 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. In November 1998, the Company granted Mr. Quehl an
option to purchase 150,000 shares in connection with his employment as Executive
Vice President, Worldwide Field Operations. The Company has also granted options
to purchase shares in connection with the employment of other key personnel.
The Company currently is authorized to issue an aggregate of 2,750,000
shares of Common Stock under the 1997 Plan. As a result of the grants described
above, only 135,000 shares were available for future grants under the 1997 Plan
as of December 31, 1998.
The Company has determined that the stockholders should ratify the 1997
Plan so that options granted under the 1997 Plan on or after the date of the
Meeting will qualify as performance-based compensation for purposes of Section
162(m) of the Code. 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 and to ratify the 1997 Plan. 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
and ratification of the 1997 Plan.
Description of the 1997 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 and its future growth through option grants and
Common Stock awards and purchases. The text of the 1997 Plan, as amended, is
attached to this proxy statement as Appendix A. The following is a summary of
the 1997 Plan and should be read together with the full 1997 Plan text.
17
<PAGE>
Under the 1997 Plan, employees of the Company may be awarded incentive
stock options ("ISO" or "ISOs"), as defined in Section 422(b) of the Internal
Revenue Code of 1986, as amended (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. Under the 1997 Plan, no employee of the
Company may be granted options to acquire, in the aggregate, more than 1,500,000
shares of Common Stock during any fiscal year of the Company.
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 (a "10% Holder"), 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 a 10% Holder.
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, 1998, Options to purchase 3,017,959 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 (a) by cash or check, or, if authorized by the
Committee, (b) by a personal recourse note, (c) by tendering Common Stock of the
Company, (d) by assignment to the Company of a sufficient amount of the proceeds
from the sale of the Common Stock acquired upon exercise of the Option or (e) by
any combination of the foregoing. 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, 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
18
<PAGE>
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 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 the specified expiration date of the ISO or 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, 1998, Options granted
under the 1997 Plan to (i) the individuals named in the Summary Compensation
Table, (ii) each other person who received 5% of such options, (iii) all
remaining executive officers of the Company as a group, (iv) all directors who
are not executive officers of the Company as a group, and (v) 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 Chairman, President and Chief Executive Oficer 296,270
Denis E. Liptak Chief Financial Officer 35,000
Thomas D. Ebling Executive Vice President 72,896
Stephen R. Quehl Executive Vice President 150,000
Sharon R. Clark Vice President 37,500
Michael J. Quinlan (1) President and Chief Executive Officer 75,000
All executive officers as a group (4 persons) 554,166
All directors who are not executive 96,500
officers as a group (7 persons)(1)
All employees who are not executive 2,292,293
officers or directors as a group
(795 persons)(2)
</TABLE>
- ---------------------------
(1) Net of cancelled options.
(2) Includes employees and directors of MAPICS, Inc. who were granted options
under the 1997 Plan in connection with the tax-free distribution in July
1997 by Marcam Corporation, the Company's former parent entity, of certain
of its business assets and product lines to the Company, which at that time
was a wholly-owned subsidiary of Marcam Corporation. Marcam Corporation
distributed all of its ownership interest in the Company by means of a
distribution on July 29, 1997 to its stockholders of record on July 23,
1997. Marcam Corporation later changed its name to MAPICS, 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
19
<PAGE>
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.
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) 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 would
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 would not result in income for the grantee if the
grantee (i) does not dispose of the shares within two years after the date of
grant or one year after the 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 would be taxed
to the employee as long-term capital gain and the Company would 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) 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 stock or a
grant of an opportunity to purchase stock would 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). 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.
20
<PAGE>
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected the firm of PricewaterhouseCoopers LLP,
independent certified public accountants, to serve as auditors for the fiscal
year ending September 30, 1999. The Company's principal accountants for the
fiscal year ended 1998 were Coopers & Lybrand L.L.P., which, during 1998, merged
with Price Waterhouse L.L.P. to become PricewaterhouseCoopers LLP. 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 28, 1999. The deadline for providing
timely notice to the Company of matters that stockholders otherwise desire to
introduce at the next annual meeting of stockholders of the Company is December
11, 1999. In order to curtail controversy as to the date on which a proposal
and/or notice was received by the Company, it is suggested that proponents
submit their proposals and/or notice 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 other
employees of the Company may, without receiving additional compensation, solicit
proxies personally or by telephone. Solicitation by directors, officers and
other employees of the Company may also be made of some stockholders of the
Company in person or by mail, telephone or telegraph following the original
solicitation. The Company may request banks, brokers and other custodians,
nominees and fiduciaries to forward proxy soliciting materials to the owners of
stock of the Company 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. The Company may also retain an independent proxy solicitation firm to
assist in the solicitation of proxies. If such a firm is retained, the Company
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 fiscal 1998,
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
Section 16(a) filing requirements.
21
<PAGE>
APPENDIX A
----------
MARCAM SOLUTIONS, INC.
1997 STOCK PLAN, AS AMENDED
1. Purpose.
The purpose of the Marcam Solutions, Inc. 1997 Stock Plan (the "Plan") is
(i) to encourage key employees of Marcam Solutions, Inc. (the "Company") and of
any present or future parent or subsidiary of the Company (including Marcam
Corporation, a Massachusetts corporation ("Marcam") and its subsidiaries)
(collectively, "Related Corporations") and other individuals who render services
to the Company or a Related Corporation, by providing opportunities to
participate in the ownership of the Company and in its future growth through (a)
the grant of options which qualify as "incentive stock options" ("ISOs") under
Section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code");
(b) the grant of options which do not qualify as ISOs ("Non-Qualified Options");
(c) awards of stock in the Company ("Awards"); and (d) opportunities to make
direct purchases of stock in the Company ("Purchases"); and (ii) to provide for
the grant of Stock Rights (as defined below) to employees and others who render
services to the Company and the Related Corporations (including Marcam and its
subsidiaries) in connection with the distribution (the "Distribution") of shares
of the Company's Common Stock, par value $.01 per share (the "Common Stock"), to
Marcam's stockholders pursuant to the Distribution Agreement by and between
Marcam and the Company (the "Distribution Agreement"). Both ISOs and
Non-Qualified Options are referred to hereafter individually as an "Option" and
collectively as "Options." Options, Awards and authorizations to make Purchases
are referred to hereafter collectively as "Stock Rights." As used herein, the
terms "parent" and "subsidiary" mean "parent corporation" and "subsidiary
corporation," respectively, as those terms are defined in Section 424 of the
Code.
2. Administration of the Plan.
A. Board or Committee Administration. The Plan shall be administered by the
Board of Directors of the Company (the "Board") or, subject to paragraph 2(D)
(relating to compliance with Section 162(m) of the Code), by a committee
appointed by the Board (the "Committee"). Hereinafter, all references in this
Plan to the "Committee" shall mean the Board if no Committee has been appointed.
Subject to ratification of the grant or authorization of each Stock Right by the
Board (if so required by applicable state law), and subject to the terms of the
Plan, the Committee shall have the authority to (i) determine to whom (from
among the class of employees eligible under paragraph 3 to receive ISOs) ISOs
shall be granted, and to whom (from among the class of individuals and entities
eligible under paragraph 3 to receive Non-Qualified Options and Awards and to
make Purchases) Non-Qualified Options, Awards and authorizations to make
Purchases may be granted; (ii) determine the time or times at which Options or
Awards shall be granted or Purchases made; (iii) determine the option price of
shares subject to each Option and the purchase price of shares subject to each
Purchase, which prices shall not be less than the minimum price specified in
paragraph 6; (iv) determine whether each Option granted shall be an ISO or a
Non-Qualified Option; (v) determine (subject to paragraph 7) the time or times
when each Option shall become exercisable and the duration of the exercise
period; (vi) extend the period during which outstanding Options may be
exercised; (vii) determine whether restrictions such as repurchase options are
to be imposed on shares subject to Options, Awards and Purchases and the nature
of such restrictions, if any, and (viii) interpret the Plan and prescribe and
rescind rules and regulations relating to it. If the Committee determines to
issue a Non-Qualified Option, it shall take whatever actions it deems necessary,
under Section 422 of the Code and the regulations promulgated thereunder, to
ensure that such Option is not treated as an ISO. The interpretation and
construction by the Committee of any provisions of the Plan or of any Stock
Right granted under it shall be final unless otherwise determined by the Board.
The Committee may from time to time adopt such rules and regulations for
carrying out the Plan as it may deem advisable. No member of the Board or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Stock Right granted under it.
22
<PAGE>
B. Committee Actions. The Committee may select one of its members as its
chairman, and shall hold meetings at such time and places as it may determine. A
majority of the Committee shall constitute a quorum, and acts by a majority of
the members of the Committee at a meeting at which a quorum is present, or acts
reduced to or approved in writing by all the members of the Committee (if
consistent with applicable state law), shall be the valid acts of the Committee.
From time to time the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies however caused, or remove
all members of the Committee and thereafter directly administer the Plan.
C. Grant of Stock Rights to Board Members. Stock Rights may be granted to
members of the Board. All grants of Stock Rights to members of the Board shall
in all respects be made in accordance with the provisions of this Plan
applicable to other eligible persons. Members of the Board who either (i) are
eligible to receive grants of Stock Rights pursuant to the Plan or (ii) have
been granted Stock Rights may vote on any matters affecting the administration
of the Plan or the grant of any Stock Rights pursuant to the Plan, except that
no such member shall act upon the granting to himself or herself of Stock
Rights, but any such member may be counted in determining the existence of a
quorum at any meeting of the Board during which action is taken with respect to
the granting to such member of Stock Rights.
D. Performance-Based Compensation. The Board, in its discretion, may take
such action as may be necessary to ensure that Stock Rights granted under the
Plan qualify as "qualified performance-based compensation" within the meaning of
Section 162(m) of the Code and applicable regulations promulgated thereunder
("Performance-Based Compensation"). Such action may include, in the Board's
discretion, some or all of the following (i) if the Board determines that Stock
Rights granted under the Plan generally shall constitute Performance-Based
Compensation, the Plan shall be administered, to the extent required for such
Stock Rights to constitute Performance-Based Compensation, by a Committee
consisting solely of two or more "outside directors" (as defined in applicable
regulations promulgated under Section 162(m) of the Code), (ii) if any
Non-Qualified Options with an exercise price less than the fair market value per
share of Common Stock are granted under the Plan and the Board determines that
such Options should constitute Performance-Based Compensation, such options
shall be made exercisable only upon the attainment of a pre-established,
objective performance goal established by the Committee, and such grant shall be
submitted for, and shall be contingent upon shareholder approval and (iii) Stock
Rights granted under the Plan may be subject to such other terms and conditions
as are necessary for compensation recognized in connection with the exercise or
disposition of such Stock Right or the disposition of Common Stock acquired
pursuant to such Stock Right, to constitute Performance-Based Compensation.
3. Eligible Employees and Others.
ISOs may be granted only to employees of the Company or any Related
Corporation. Non-Qualified Options, Awards and authorizations to make Purchases
may be granted to any employee, officer or director (whether or not also an
employee) or consultant of the Company or any Related Corporation. The Committee
may take into consideration a recipient's individual circumstances in
determining whether to grant a Stock Right. The granting of any Stock Right to
any individual or entity shall neither entitle that individual or entity to, nor
disqualify such individual or entity from, participation in any other grant of
Stock Rights.
4. Stock.
The stock subject to Stock Rights shall be authorized but unissued shares
of Common Stock or shares of Common Stock reacquired by the Company in any
manner. The aggregate number of shares which may be issued pursuant to the Plan
is Two Million Seven Hundred Fifty Thousand (2,750,000), subject to adjustment
as provided in paragraph 13. If any Option granted under the Plan shall expire
or terminate for any reason without having been exercised in full or shall cease
for any reason to be exercisable in whole or in part or shall be repurchased by
the Company, the unpurchased shares of Common Stock subject to such Option shall
again be available for grants of Stock Rights under the Plan.
23
<PAGE>
No employee of the Company or any Related Corporation may be granted
Options to acquire, in the aggregate, more than One Million Five Hundred
Thousand (1,500,000) shares of Common Stock under the Plan during any fiscal
year of the Company. If any Option granted under the Plan shall expire or
terminate for any reason without having been exercised in full or shall cease
for any reason to be exercisable in whole or in part or shall be repurchased by
the Company, the shares subject to such Option shall be included in the
determination of the aggregate number of shares of Common Stock deemed to have
been granted to such employee under the Plan.
5. Granting of Stock Rights.
Stock Rights may be granted under the Plan at any time on or after June 13,
1997 and prior to June 12, 2007. The date of grant of Stock Rights under the
Plan will be the date specified by the Committee at the time it grants the Stock
Right; provided, however, that such date shall not be prior to the date on which
the Committee acts to approve the grant.
6. Minimum Price; ISO Limitations.
A. Price for Non-Qualified Options, Awards and Purchases. Subject to
paragraph 2(D) (relating to compliance with Section 162(m) of the Code), the
exercise price per share specified in the agreement relating to each
Non-Qualified Option granted, and the purchase price per share of stock granted
in any Award or authorized as a Purchase, under the Plan may be less than the
fair market value of the Common Stock of the Company on the date of grant;
provided that, in no event shall such exercise price or such purchase price be
less than the minimum legal consideration required therefore under the laws of
any jurisdiction in which the Company or its successors in interest may be
organized.
B. Price for ISOs. The exercise price per share specified in the agreement
relating to each ISO granted under the Plan shall not be less than the fair
market value per share of Common Stock on the date of such grant. In the case of
an ISO to be granted to an employee owning stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Related Corporation, the price per share specified in the
agreement relating to such ISO shall not be less than one hundred ten percent
(110%) of the fair market value per share of Common Stock on the date of grant.
For purposes of determining stock ownership under this paragraph, the rules of
Section 424(d) of the Code shall apply.
C. $100,000 Annual Limitation on ISO Vesting. Each eligible employee may be
granted Options treated as ISOs only to the extent that, in the aggregate under
this Plan and all incentive stock option plans of the Company and any Related
Corporation, ISOs do not become exercisable for the first time by such employee
during any calendar year with respect to stock having a fair market value
(determined at the time the ISOs were granted) in excess of $100,000. The
Company intends to designate any Options granted in excess of such limitation as
Non-Qualified Options, and the Company shall issue separate certificates to the
optionee with respect to Options that are Non-Qualified Options and Options that
are ISOs.
D. Determination of Fair Market Value. If, at the time an Option is granted
under the Plan, the Company's Common Stock is publicly traded, "fair market
value" shall be determined as of the date of grant or, if the prices or quotes
discussed in this sentence are unavailable for such date, the last business day
for which such prices or quotes are available prior to the date of grant and
shall mean (i) the average (on that date) of the high and low prices of the
Common Stock on the principal national securities exchange on which the Common
Stock is traded, if the Common Stock is then traded on a national securities
exchange; or (ii) the last reported sale price (on that date) of the Common
Stock on the Nasdaq National Market, if the Common Stock is not then traded on a
national securities exchange; or (iii) the closing bid price (or average of bid
prices) last quoted (on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is not reported on the Nasdaq
National Market. If the Common Stock is not publicly traded at the time an
Option is granted under the Plan, "fair market value" shall mean the fair value
of the Common Stock as determined by the Committee after taking into
consideration all factors which it deems appropriate, including, without
limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.
24
<PAGE>
7. Option Duration.
Subject to earlier termination as provided in paragraphs 9 and 10 or in
the agreement relating to such Option, each Option shall expire on the date
specified by the Committee, but not more than (i) ten years from the date of
grant in the case of Options generally and (ii) five years from the date of
grant in the case of ISOs granted to an employee owning stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any Related Corporation, as determined under paragraph
6(B). Subject to earlier termination as provided in paragraphs 9 and 10, the
term of each ISO shall be the term set forth in the original instrument granting
such ISO, except with respect to any part of such ISO that is converted into a
Non-Qualified Option pursuant to paragraph 16.
8. Exercise of Option.
Subject to the provisions of paragraphs 9 through 12, each Option granted
under the Plan shall be exercisable as follows:
A. Vesting. The Option shall either be fully exercisable on the date of
grant or shall become exercisable thereafter in such installments as the
Committee may specify.
B. Full Vesting of Installments. Once an installment becomes exercisable it
shall remain exercisable until expiration or termination of the Option, unless
otherwise specified by the Committee.
C. Partial Exercise. Each Option or installment may be exercised at any
time or from time to time, in whole or in part, for up to the total number of
shares with respect to which it is then exercisable.
D. Acceleration of Vesting. The Committee shall have the right to
accelerate the date that any installment of any Option becomes exercisable;
provided, however, that the Committee shall not, without the consent of an
optionee, accelerate the permitted exercise date of any installment of any
Option granted to any employee as an ISO (and not previously converted into a
Non-Qualified Option pursuant to paragraph 16) if such acceleration would
violate the annual vesting limitation contained in Section 422(d) of the Code,
as described in paragraph 6(C).
E. In the event of a Change in Control (as hereinafter defined) of the
Company, the date on which all outstanding Stock Rights and all installments of
such Stock Rights may be exercised shall be accelerated to immediately prior to
the time of the Change in Control.
F. For purposes of this Plan and any Stock Rights granted hereunder, a
"Change in Control" shall have occurred if at any time any of the following
events shall occur:
(i) The Company is merged, consolidated or reorganized into or with
another corporation or other legal person, and as a result of such merger,
consolidation or reorganization less than a majority of the combined voting
power of the then-outstanding securities of the combined corporation or
person immediately after such transaction are held in the aggregate by the
holders of the combined voting power of the then-outstanding securities
entitled to vote generally in the election of directors of the Company
("Voting Stock") immediately prior to such transaction;
(ii) The Company sells or otherwise transfers all or substantially all
of its assets to any other corporation or other legal person, and less than
a majority of the combined voting power of the then-outstanding securities
of such corporation or person immediately after such sale or transfer is
held in the aggregate by the holders of the Voting Stock of the Company
immediately prior to such sale or transfer;
(iii) There is a report filed on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated pursuant to
the Securities Exchange Act of 1934, as amended
25
<PAGE>
(the "1934 Act"), disclosing that any person (as the term "person" is used
in Section 13(d)(3) or Section 14(d)(2) or the 1934 Act) has become the
beneficial owner (as the term "beneficial owner" is defined under Rule
13d-3 or any successor rule or regulation promulgated under the 1934 Act)
of securities representing 25% or more of the Voting Stock;
(iv) The Company files a report or proxy statement with the Securities
and Exchange Commission pursuant to the 1934 Act disclosing in response to
Form 8-K or Schedule 14A (or any successor schedule, form or report or item
therein) that a change in control of the Company has or may have occurred
or will or may occur in the future pursuant to any then-existing contract
or transaction; or
(v) If during any period of two consecutive years, individuals who at
the beginning of any such period constitute the directors of the Company
cease for any reason to constitute at least a majority thereof, unless the
election, or the nomination for election by the Company's stockholders, of
each director of the Company first elected during such period was approved
by a vote of at least two-thirds of the directors then still in office who
were directors of the Company at the beginning of any such period;
provided, however, that notwithstanding the foregoing provisions (iii) and (iv)
of this subparagraph F, a "Change in Control" shall not be deemed to have
occurred for purposes of this Plan solely because (i) the Company, (ii) an
entity in which the Company directly or indirectly beneficially owns 50% or more
of the voting securities, (iii) any Company-sponsored employee stock ownership
plan or any other employee benefit plan of the Company, or (iv) any corporation
or legal person approved by the Board prior to the occurrence of the event that,
absent such approval by the Board, would have constituted a Change in Control,
either files or becomes obligated to file a report or a proxy statement under or
in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any
successor schedule, form or report or item therein) under the 1934 Act,
disclosing beneficial ownership by it of shares of Voting Stock, whether in
excess of 25% or otherwise, or because the Company reports that a change in
control of the Company has or may have occurred or will or may occur in the
future by reason of such beneficial ownership; and provided further, however,
that a "Change in Control" shall not occur or have occurred for any reason
(including any filings made or required to be made as contemplated by provision
(iii) of this subparagraph F) as a result of the receipt of shares of Common
Stock or other securities of the Company by any corporation or other legal
person in connection with the Distribution.
9. Termination of Employment.
Unless otherwise specified in the agreement relating to such ISO, if an ISO
optionee ceases to be employed by the Company and all Related Corporations other
than by reason of death or disability as defined in paragraph 10, no further
installments of his or her ISOs shall become exercisable, and his or her ISOs
shall terminate on the earlier of (a) three months after the date of termination
of his or her employment, or (b) their specified expiration dates, except to the
extent that such ISOs (or unexercised installments thereof) have been converted
into Non-Qualified Options pursuant to paragraph 16. For purposes of this
paragraph 9, employment shall be considered as continuing uninterrupted during
any bona fide leave of absence (such as those attributable to illness, military
obligations or governmental service) provided that the period of such leave does
not exceed 90 days or, if longer, any period during which such optionee's right
to reemployment is guaranteed by statute or by contract. A bona fide leave of
absence with the written approval of the Committee shall not be considered an
interruption of employment under this paragraph 9, provided that such written
approval contractually obligates the Company or any Related Corporation to
continue the employment of the optionee after the approved period of absence.
ISOs granted under the Plan shall not be affected by any change of employment
within or among the Company and Related Corporations, so long as the optionee
continues to be an employee of the Company or any Related Corporation. Nothing
in the Plan shall be deemed to give any grantee of any Stock Right the right to
be retained in employment or other service by the Company or any Related
Corporation for any period of time.
26
<PAGE>
10. Death; Disability.
A. Death. If an ISO optionee ceases to be employed by the Company and all
Related Corporations by reason of his or her death, any ISO owned by such
optionee may be exercised, to the extent otherwise exercisable on the date of
death, by the estate, personal representative or beneficiary who has acquired
the ISO by will or by the laws of descent and distribution, until the earlier of
(i) the specified expiration date of the ISO or (ii) 180 days from the date of
the optionee's death.
B. Disability. If an ISO optionee ceases to be employed by the Company and
all Related Corporations by reason of his or her disability, such optionee shall
have the right to exercise any ISO held by him or her on the date of termination
of employment, for the number of shares for which he or she could have exercised
it on that date until the earlier of (i) the specified expiration date of the
ISO or (ii) 180 days from the date of the termination of the optionee's
employment. For the purposes of the Plan, the term "disability" shall mean
"permanent and total disability" as defined in Section 22(e)(3) of the Code or
any successor statute.
11. Assignability.
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.
12. Terms and Conditions of Options.
Options shall be evidenced by instruments (which need not be identical) in
such forms as the Committee may from time to time approve. Such instruments
shall conform to the terms and conditions set forth in paragraphs 6 through 11
hereof and may contain such other provisions as the Committee deems advisable
which are not inconsistent with the Plan, including restrictions applicable to
shares of Common Stock issuable upon exercise of Options. The Committee may
specify that any Non-Qualified Option shall be subject to the restrictions set
forth herein with respect to ISOs, or to such other termination and cancellation
provisions as the Committee may determine. The Committee may from time to time
confer authority and responsibility on one or more of its own members and/or one
or more officers of the Company to execute and deliver such instruments. The
proper officers of the Company are authorized and directed to take any and all
action necessary or advisable from time to time to carry out the terms of such
instruments.
13. Adjustments.
Upon the occurrence of any of the following events, an optionee's rights
with respect to Stock Rights granted to such optionee hereunder shall be
adjusted as hereinafter provided, unless otherwise specifically provided in the
written agreement between the optionee and the Company relating to such Stock
Right:
A. Stock Dividends and Stock Splits. If the shares of Common Stock shall be
subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of Stock Rights shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
B. Consolidations or Mergers. In the event of a Change in Control of the
Company and subject to Section 8(E) hereof, the Committee or the board of
directors of any entity assuming the obligations of the Company hereunder (the
"Successor Board"), shall, as to outstanding Stock Rights, either (i) make
appropriate provision for the continuation of such Stock Rights by substituting
on an equitable basis for the shares of Common Stock then subject to such Stock
Rights the consideration receivable by holders of outstanding shares
27
<PAGE>
of Common Stock in connection with the Acquisition, (ii) upon written notice to
the optionees, provide that all Stock Rights must be exercised, to the extent
then exercisable, within a specified number of days of the date of such notice,
at the end of which period the Stock Rights shall terminate; or (iii) terminate
all Stock Rights in exchange for a cash payment equal to the excess of the fair
market value of the shares of Common Stock subject to such Stock Rights (to the
extent then exercisable) over the exercise price thereof.
C. Recapitalization or Reorganization. If the Company is merged,
consolidated or reorganized into or with another corporation or other legal
person, or if the Company sells or otherwise transfers all or substantially all
of its assets to any other corporation or other legal person pursuant to which
securities of the Company or of another corporation, cash or other property are
issued with respect to the outstanding shares of Common Stock, and such
transaction does not constitute a Change in Control, a holder of a Stock Right
upon exercising a Stock Right shall be entitled to receive for the purchase
price paid upon such exercise the securities, cash or other property he or she
would have received if he or she had exercised such Stock Right prior to such
merger, consolidation, reorganization or sale.
D. Modification of ISOs. Notwithstanding the foregoing, any adjustments
made pursuant to subparagraphs A, B or C with respect to ISOs shall be made only
after the Committee, after consulting with counsel for the Company, determines
whether such adjustments would constitute a "modification" of such ISOs (as that
term is defined in Section 424 of the Code) or would cause any adverse tax
consequences for the holders of such ISOs. If the Committee determines that such
adjustments made with respect to ISOs would constitute a modification of such
ISOs or would cause adverse tax consequences to the holders, it may refrain from
making such adjustments.
E. Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, each Stock Right will terminate immediately prior to
the consummation of such proposed action or at such other time and subject to
such other conditions as shall be determined by the Committee.
F. Issuances of Securities. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
subject to Stock Rights. No adjustments shall be made for dividends paid in cash
or in property other than securities of the Company.
G. Fractional Shares. No fractional shares shall be issued under the Plan
and the optionee shall receive from the Company cash in lieu of such fractional
shares.
H. Adjustments. Upon the happening of any of the events described in
subparagraphs A, B or C above, the class and aggregate number of shares set
forth in paragraph 4 hereof that are subject to Stock Rights which previously
have been or subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the events described in such subparagraphs.
The Committee or the Successor Board shall determine the specific adjustments to
be made under this paragraph 13 and, subject to paragraph 2, its determination
shall be conclusive.
14. Means of Exercising Options.
An Option (or any part or installment thereof) shall be exercised by giving
written notice to the Company at its principal office address, or to such
transfer agent as the Company shall designate. Such notice shall identify the
Option being exercised and specify the number of shares as to which such Option
is being exercised, accompanied by full payment of the purchase price therefor
either (a) in United States dollars in cash or by check, (b) at the discretion
of the Committee, through delivery of shares of Common Stock having a fair
market value equal as of the date of the exercise to the cash exercise price of
the Option, (c) at the discretion of the Committee, by delivery of the grantee's
personal recourse note bearing interest payable not less than annually at no
less than 100% of the lowest applicable Federal rate, as defined in Section
1274(d) of the Code, (d) at the discretion of the Committee and consistent with
applicable law, through the delivery of an assignment to the Company of a
sufficient amount of the proceeds from the sale of the Common Stock acquired
upon exercise of the Option and an authorization to the broker or selling agent
to pay that amount to the Company,
28
<PAGE>
which sale shall be at the participant's direction at the time of exercise, or
(e) at the discretion of the Committee, by any combination of (a), (b), (c) and
(d) above. If the Committee exercises its discretion to permit payment of the
exercise price of an ISO by means of the methods set forth in clauses (b), (c),
(d) or (e) of the preceding sentence, such discretion shall be exercised in
writing at the time of the grant of the ISO in question. The holder of an Option
shall not have the rights of a shareholder with respect to the shares covered by
such Option until the date of issuance of a stock certificate to such holder for
such shares. Except as expressly provided above in paragraph 13 with respect to
changes in capitalization and stock dividends, no adjustment shall be made for
dividends or similar rights for which the record date is before the date such
stock certificate is issued.
15. Term and Amendment of Plan.
This Plan was adopted by the Board on June 13, 1997. The Plan shall expire
at the end of the day on June 12, 2007 (except as to Options outstanding on that
date). Subject to the provisions of paragraph 5 above, Options may be granted
under the Plan prior to the date of stockholder approval of the Plan. The Board
may terminate or amend the Plan in any respect at any time, except that, without
the approval of the stockholders obtained within 12 months before or after the
Board adopts a resolution authorizing any of the following actions: (a) the
total number of shares that may be issued under the Plan may not be increased
(except by adjustment pursuant to paragraph 13); (b) the provisions of paragraph
3 regarding eligibility for grants of ISOs may not be modified; (c) the
provisions of paragraph 6(B) regarding the exercise price at which shares may be
offered pursuant to ISOs may not be modified (except by adjustment pursuant to
paragraph 13); and (d) the expiration date of the Plan may not be extended.
Except as otherwise provided in this paragraph 15, in no event may action of the
Board or stockholders alter or impair the rights of a grantee, without such
grantee's consent, under any Stock Right previously granted to such grantee.
16. Modification of ISOs.
Subject to paragraph 13(D), without the prior written consent of the holder
of an ISO, the Committee shall not alter the terms of such ISO (including the
means of exercising such ISO) if such alteration would constitute a modification
(within the meaning of Section 424(h)(3) of the Code). The Committee, at the
written request or with the written consent of any optionee, may in its
discretion take such actions as may be necessary to convert such optionee's ISOs
(or any installments or portions of installments thereof) that have not been
exercised on the date of conversion into Non-Qualified Options at any time prior
to the expiration of such ISOs, regardless of whether the optionee is an
employee of the Company or a Related Corporation at the time of such conversion.
Such actions may include, but shall not be limited to, extending the exercise
period or reducing the exercise price of the appropriate installments of such
ISOs. At the time of such conversion, the Committee (with the consent of the
optionee) may impose such conditions on the exercise of the resulting
Non-Qualified Options as the Committee in its discretion may determine, provided
that such conditions shall not be inconsistent with this Plan. Nothing in the
Plan shall be deemed to give any optionee the right to have such optionee's ISOs
converted into Non-Qualified Options, and no such conversion shall occur until
and unless the Committee takes appropriate action. Upon the taking of such
action, the Company shall issue separate certificates to the optionee with
respect to Options that are Non-Qualified Options and Options that are ISOs.
17. Application Of Funds.
The proceeds received by the Company from the sale of shares pursuant to
Options granted and Purchases authorized under the Plan shall be used for
general corporate purposes.
18. Notice to Company of Disqualifying Disposition.
By accepting an ISO granted under the Plan, each optionee agrees to notify
the Company in writing immediately after such optionee makes a Disqualifying
Disposition (as described in Sections 421, 422 and 424 of the Code and
regulations thereunder) of any stock acquired pursuant to the exercise of ISOs
granted under the Plan. A Disqualifying Disposition is generally any disposition
occurring on or before the later of (a) the
29
<PAGE>
date two years following the date the ISO was granted or (b) the date one year
following the date the ISO was exercised.
19. Withholding of Additional Income Taxes.
Upon the exercise of a Non-Qualified Option, the transfer of a
Non-Qualified Stock Option pursuant to an arm's length transaction, the grant of
an Award, the making of a Purchase of Common Stock for less than its fair market
value, the making of a Disqualifying Disposition (as defined in paragraph 18),
the vesting or transfer of restricted stock or securities acquired on the
exercise of an Option hereunder, or the making of a distribution or other
payment with respect to such stock or securities, the Company may withhold taxes
in respect of amounts that constitute compensation includible in gross income.
The Committee in its discretion may condition (i) the exercise of an Option,
(ii) the transfer of a Non-Qualified Stock Option, (iii) the grant of an Award,
(iv) the making of a Purchase of Common Stock for less than its fair market
value, or (v) the vesting or transferability of restricted stock or securities
acquired by exercising an Option, on the grantee's making satisfactory
arrangement for such withholding. Such arrangement may include payment by the
grantee in cash or by check of the amount of the withholding taxes or, at the
discretion of the Committee, by the grantee's delivery of previously held shares
of Common Stock or the withholding from the shares of Common Stock otherwise
deliverable upon exercise of Option shares having an aggregate fair market value
equal to the amount of such withholding taxes.
20. Governmental Regulation.
The Company's obligation to sell and deliver shares of the Common Stock
under this Plan is subject to the approval of any governmental authority
required in connection with the authorization, issuance or sale of such shares.
Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
send tax information statements to employees and former employees that exercise
ISOs under the Plan, and the Company may be required to file tax information
returns reporting the income received by grantees of Options in connection with
the Plan.
21. Governing Law; Construction.
The validity and construction of the Plan and the instruments evidencing
Stock Rights shall be governed by the laws of the State of Delaware, or the laws
of any jurisdiction in which the Company or its successors in interest may be
organized.
30
<PAGE>
1644-PS-99
<PAGE>
DETACH HERE
- --------------------------------------------------------------------------------
PROXY
MARCAM SOLUTIONS, INC.
Proxy for Annual Meeting of Stockholders
To Be Held February 24, 1999
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 the 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 02494 on February 24, 1999 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 II DIRECTORS AND FOR PROPOSALS 2 AND 3.
- ------------- --------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ------------ --------------
<PAGE>
MARCAM SOLUTIONS, INC.
c/o EquiServe
P.O Box 9040
Boston, MA 02266-9040
DETACH HERE
Please mark
[X] 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 II Directors.
Nominees: John Campbell and E. Clark Grimes
FOR WITHHELD
[ ] [ ]
[ ]
--------------------------------------------------
Pencil in nominees except as noted above
2. Approval of Amendment to 1997 Stock Plan;
Proposal 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 2,750,000 to 3,500,000 and to ratify the 1997 Stock Plan as
so amended
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Ratification of Auditors:
To ratify the selection of the firm of PricewaterhouseCoopers LLP as auditors
for the fiscal year ending September 30, 1999.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. 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:
-------------- --------- -------------- ---------
