<PAGE>
PRELIMINARY NOTICE AND PROXY FILING
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Check the appropriate box:
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6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Global Imaging Systems, Inc.
--------------------------------------------------------------------------------
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[X] No fee required.
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<PAGE>
GLOBAL IMAGING SYSTEMS, INC.
3820 NORTHDALE BOULEVARD, SUITE 200A
TAMPA, FLORIDA 33624
July 7, 2000
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Global Imaging Systems, Inc. to be held on Monday, August 14, 2000, at 10:00
a.m., eastern time, at the offices of Global Imaging Systems, Inc., 3820
Northdale Boulevard, Suite 200A, Tampa, Florida 33624.
The matter to be acted on at the meeting--the election of two directors--is
described in the accompanying Notice and Proxy Statement. A proxy card on
which to indicate your vote and an envelope, postage paid, in which to return
your proxy are enclosed. A copy of our Annual Report to Stockholders also is
enclosed.
We realize that each of you cannot attend the meeting and vote your shares
in person. However, whether or not you plan to attend the meeting, we need
your vote. We urge you to complete, sign, and return the enclosed proxy so
that your shares will be represented. If you later decide to attend the
meeting, you may revoke your proxy at that time and vote your shares in
person.
Remember, this is your opportunity to voice your opinion on matters
affecting Global. We look forward to receiving your proxy and perhaps seeing
you at the annual meeting.
Sincerely,
/s/ Thomas S. Johnson
Thomas S. Johnson
President and Chief Executive
Officer
Enclosures
<PAGE>
GLOBAL IMAGING SYSTEMS, INC.
3820 NORTHDALE BOULEVARD, SUITE 200A
TAMPA, FLORIDA 33624
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on August 14, 2000
You are cordially invited to attend the 2000 Annual Meeting of Stockholders
of Global Imaging Systems, Inc. to be held on Monday, August 14, 2000, at
10:00 a.m., eastern time, at the offices of Global Imaging Systems, Inc., 3820
Northdale Boulevard, Suite 200A, Tampa, Florida 33624, to consider and vote
upon the following matters:
1. Election of two directors to serve for a three-year term; and
2. Any other matter that properly comes before the meeting.
Only stockholders of record at the close of business on June 16, 2000, will
be entitled to vote at the meeting or any adjournments thereof.
YOUR VOTE IS VERY IMPORTANT. IF YOU ARE UNABLE TO BE PRESENT AT THE MEETING
IN PERSON, PLEASE SIGN AND DATE THE ENCLOSED PROXY, WHICH IS BEING SOLICITED
BY THE BOARD OF DIRECTORS, AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
By order of the Board of Directors
/s/ Raymond Schilling
Raymond Schilling
Senior Vice President, Chief
Financial Officer, Secretary and
Treasurer
Tampa, Florida
July 7, 2000
<PAGE>
GLOBAL IMAGING SYSTEMS, INC.
3820 NORTHDALE BOULEVARD, SUITE 200A
TAMPA, FLORIDA 33624
----------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
To be held on August 14, 2000
This Proxy Statement is furnished to stockholders of Global Imaging Systems,
Inc., a Delaware corporation, in connection with the solicitation of proxies
for use at the Annual Meeting of Stockholders of Global to be held on Monday,
August 14, 2000, at 10:00 a.m., eastern time, at the offices of Global Imaging
Systems, Inc., 3820 Northdale Boulevard, Suite 200A, Tampa, Florida 33624, for
the purposes set forth in the Notice of Meeting. This solicitation of proxies
is made on behalf of our board of directors.
Holders of record of shares of our common stock as of the close of business
on the record date, June 16, 2000, are entitled to receive notice of, and to
vote at, the meeting. The common stock constitutes the only class of
securities entitled to vote at the meeting, and each share of common stock
entitles the holder thereof to one vote. At the close of business on June 16,
2000, there were 19,225,086 and 18,554,196 shares of common stock issued and
outstanding, respectively.
Shares represented by proxies in the form enclosed, if such proxies are
properly executed and returned and not revoked, will be voted as specified.
Where no specification is made on a properly executed and returned form of
proxy, the shares will be voted FOR the election of all nominees for director.
We know of no business other than the election of directors to be transacted
at the meeting. If other matters requiring a vote do arise, the persons named
in the proxy intend to vote in accordance with their judgment on such matters.
To be voted, proxies must be filed with our Secretary prior to the time of
voting. Proxies may be revoked at any time before they are exercised by filing
with our Secretary a notice of revocation or a later dated proxy or by voting
in person at the meeting.
Our 2000 Annual Report to Stockholders for the fiscal year ended March 31,
2000, is enclosed with this proxy statement. This Proxy Statement, the proxy
card and the 2000 Annual Report to Stockholders were mailed to stockholders on
or about July 10, 2000. Our executive offices are located at 3820 Northdale
Boulevard, Suite 200A, Tampa, Florida 33624.
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ELECTION OF DIRECTORS
(Proposal 1)
Board of Directors
Our Board of Directors is comprised of six members divided into three
classes, with one-third of the directors elected by the stockholders annually.
The directors whose terms will expire at the meeting are Bruce D. Gorchow and
William C. Kessinger. Messrs. Gorchow and Kessinger have been nominated for
election at the meeting as directors to hold office until the 2003 Annual
meeting of Stockholders and until their successors are elected and qualified.
Two nominees for director will be elected upon a favorable vote of a
plurality of the shares of our common stock present and entitled to vote, in
person or by proxy, at the meeting. Our Board of Directors recommends a vote
FOR Bruce D. Gorchow and William C. Kessinger as directors to hold office
until the 2003 Annual Meeting of Stockholders and until their successors are
elected and qualified. Should either or both of these nominees become unable
to serve for any reason, the Board of Directors may designate substitute
nominees, in which event the persons named in the enclosed proxy will vote for
the election of such substitute nominee or nominees, or may reduce the number
of directors on the Board of Directors.
Nominees for Election to Term Expiring 2003--Class II. The two directors
standing for election are as follows:
Bruce D. Gorchow, 42, has served as our director since October 1996. Since
1999, Mr. Gorchow has served as President of PPM America Capital Partners,
LLC. From 1991 through 1999, Mr. Gorchow was Executive Vice President and head
of the Private Finance Group of PPM America, Inc. Prior to joining PPM
America, Inc., Mr. Gorchow was a Vice President at Equitable Capital
Management, Inc. Mr. Gorchow received his B.A. in Economics from Haverford
College in 1980 and received his MBA in Finance from the Wharton School of the
University of Pennsylvania in 1982. Mr. Gorchow is also a director of Leiner
Health Products, Inc., Corvest, Inc., EMSI Holdings, Inc., B2B Solutions,
Inc., Packaging Advantage Corporation, Inc., Burke Industries, Inc., Elgar
Electronics, Inc., Applied Process Solutions Inc. and Elizabeth Arden Salon-
Holdings, Inc.
William C. Kessinger, 34, has served as our director since December 1995.
Mr. Kessinger is a Principal in GTCR Golder Rauner, LLC, a private equity
investment company in Chicago, Illinois formed in January 1998 as a successor
entity to Golder, Thoma, Cressey, Rauner, Inc. Mr. Kessinger joined Golder,
Thoma, Cressey, Rauner, Inc. in May 1995 and became a Principal in September
1997. From July 1994 to May 1995, Mr. Kessinger was a Principal with The
Parthenon Group. From August 1992 to June 1994, Mr. Kessinger attended Harvard
Business School, where he received his MBA. Prior to that time, Mr. Kessinger
served as an Associate with Prudential Asset Management Asia from August 1988
to June 1992. Mr. Kessinger is also a director of AnswerThink Consulting
Group, Inc., National Equipment Services, Inc., Excalibur Tubular Corp.,
Wallace Theater Group Corp., International Payment Services and Cambridge
Protection Industries, Inc.
Directors Continuing in Office
Term Expiring 2001--Class III. The following Class III directors have terms
expiring in 2001:
Thomas S. Johnson, 54, has served as our director and as President and
Chief Executive Officer since our founding in June 1994. From 1991 to 1994,
Mr. Johnson was an office imaging industry consultant. From 1989 to 1990,
Mr. Johnson served as Chief Operating Officer for Danka. From 1975 to 1989,
Mr. Johnson worked at IKON (formerly known as Alco Standard Corporation) in
various staff and operating roles. When he left IKON in 1989, he was Vice
President--Operations of the Office Products group and was responsible for
acquisitions and turning around
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<PAGE>
under-performing operations. Mr. Johnson has been involved in the
acquisition of over 100 office equipment dealers since 1985, and has over
23 years of experience in acquiring and integrating businesses. Mr. Johnson
graduated with a B.S. degree from the University of Florida in 1972, and
received his MBA from Harvard Business School in 1976.
Carl D. Thoma, 51, has served as our director since our founding in June
1994. Mr. Thoma is the Managing Partner of Thoma Cressey Equity Partners, a
private equity investment company in Chicago, Illinois, Denver, Colorado
and San Francisco, California formed in December 1997 as a successor entity
to Golder, Thoma, Cressey, Rauner, Inc. Mr. Thoma co-founded and has been a
Principal and General Partner with Golder, Thoma, Cressey, Rauner, Inc. in
Chicago, Illinois, since 1980 and has been a Managing Partner of Golder,
Thoma, Cressey, Rauner, Inc. since 1993. Mr. Thoma is also a director of
National Equipment Services, Inc., Paging Network, Inc. and several private
companies.
Term Expiring 2002--Class I. The following Class I directors have terms
expiring in 2002.
Edward N. Patrone, 65, has served as our director since August 1998.
Currently retired, Mr. Patrone served as senior consultant to IKON from 1991
to 1997, and in various executive positions with IKON prior to that time,
including as President and Chief Executive Officer of Paper Corporation of
America, a subsidiary of IKON, from 1988 to 1991, and as Executive Vice
President from 1983 to 1988. Mr. Patrone has been active in the office
products industry for over 17 years. Mr. Patrone is also a director of
Primesource Corporation and CompuCom Systems, Inc.
Mark M. Lloyd, 56, has served as our director since August 1999. Since its
founding in 1981, Mr. Lloyd has also served as President of Southern Business
Communications, Inc., which we acquired in October 1996. Mr. Lloyd has served
as a director of Centre Business Products, Inc. and Proview, Inc., two
subsidiaries of Southern Business Communications, Inc., since they were
acquired by us in August 1998 and September 1998, respectively. Mr. Lloyd has
been active in the office products industry for over 35 years. Mr. Lloyd
joined 3M in 1964 in sales, and served there in a variety of managerial
capacities until his departure in 1981, at which time he was National Sales
Manager of the Visual Systems Division in St. Paul, Minnesota. Mr. Lloyd is
also a director of Daniel Communications, Inc., Brinckmann & Associates, Inc.
and AV Presentations, Inc.
Committees and Meeting of the Board of Directors
Our Board of Directors has established two committees, a compensation
committee and an audit committee. Our Board of Directors has not established a
nominating committee.
Compensation committee. The compensation committee is responsible for
determining executive officers' compensation and for administering our 1998
Stock Option and Incentive Plan. The compensation committee held two meetings
during the fiscal year ended March 31, 2000.
Audit committee. The audit committee is responsible for (1) making
recommendations about our independent public accountants, (2) reviewing audit
plans and results with our independent public accountants, (3) reviewing the
independence of the independent public accountants, (4) considering the range
of audit and non-audit fees and (5) reviewing our internal accounting
controls. The audit committee held one meeting during the fiscal year.
Carl Thoma, William Kessinger, Bruce Gorchow and Edward Patrone, all of whom
are non-employee directors, are the members of both the compensation committee
and the audit committee.
The Board of Directors held six meetings during the fiscal year ended March
31, 2000. During the fiscal year, each member of the Board of Directors
attended more than 75% of the aggregate of (i) all
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<PAGE>
meetings of the Board of Directors (or, in Mr. Lloyd's case, all meetings held
after his election to the
Board of Directors) and (ii) all meetings of committees of which such director
was a member.
Compensation of Directors
All of our directors are entitled to be reimbursed for certain expenses in
connection with their attendance at board and committee meetings. Except for
Carl Thoma, William Kessinger, and Bruce Gorchow, directors who are not Global
employees also receive a $1,500 fee for each board meeting they attend. In
addition, directors are eligible to receive awards under our stock option
plan. Global anticipates that future directors who are not employees will each
receive an option to purchase 10,000 shares of common stock when they are
first elected to the board, and that each non-employee director other than
Carl Thoma, William Kessinger and Bruce Gorchow will receive an option to
purchase 2,000 shares of common stock for each of the following years during
which he or she serves as a director. Each of these options is expected to be
exercisable for a purchase price equal to the market value of the underlying
stock on the date of grant, to have a term of ten years and to vest in five
equal annual installments beginning on the first anniversary of the date of
grant.
4
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth the compensation
paid to or earned by our Chief Executive Officer and all other executive
officers of Global whose salary and bonus for services rendered in all
capacities to us during the year ended March 31, 2000, exceeded $100,000, also
referred as the named executive officers:
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
-------------------- ---------------------
Restricted Securities
Stock Underlying All Other
Name and Principal Fiscal Awards Options Compensation
Position Year Salary ($) Bonus ($) ($)(1) (#) ($)(2)
------------------ ------ ---------- --------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Thomas S. Johnson...... 2000 $300,000 $255,000 $ -- 100,300 $21,875
President and Chief 1999 250,000 125,000 -- 250 4,563
Executive Officer 1998 225,000 112,500 34,465 -- 4,125
Raymond Schilling...... 2000 $180,000 $ 90,000 -- 30,300 $13,312
Senior Vice President, 1999 135,000 67,500 -- 10,250 2,739
Chief Financial 1998 118,962 47,585 -- -- 1,168
Officer, Secretary and
Treasurer
Michael Mueller........ 2000 $180,000 $ 90,000 -- 30,300 $14,938
Senior Vice President, 1999 135,000 67,500 -- 10,250 5,120
Chief Operating Officer 1998 118,962 47,585 -- -- 3,505
Alfred N. Vieira....... 2000 $130,000 $ 62,500 -- 15,300 $14,748
Vice President of 1999 115,000 57,500 -- 5,250 2,499
Service 1998 105,000 42,000 -- -- 984
Todd S. Johnson........ 2000 $ 80,000 $ 25,000 -- 10,300 $11,850
Vice President of 1999 60,000 15,000 -- 6,250 1,875
Acquisitions 1998 53,875 15,000 -- -- 516
</TABLE>
--------
(1) At March 31, 2000, Mr. Vieira held 69,020 shares of restricted stock worth
$534,905, based on the difference between the price paid by Mr. Vieira for
the restricted shares and the closing price per share of $7.75 on March
31, 2000.
(2) Consists of matching contributions to our 401(k) plan and car allowances
of $1,500 for Mr. Tom Johnson and $800 per month for the other named
executive officers.
Option Grants Table. The following table shows information relating to
options to purchase common stock granted to the named executive officers
during the year ended March 31, 2000:
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------
Potential
Realizable Value at
Number of Assumed Annual
Securities Rates of Share
Underlying Percent of Total Price Appreciation
Options Options Granted Exercise for Option Term
Granted to Employees in Price Expiration -------------------
Name (*) Fiscal Year ($/Sh) Date 5% 10%
---- ---------- ---------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Thomas S. Johnson....... 100,300 11.51% $15.25 4/25/09 $961,941 $2,437,749
Raymond Schilling....... 30,300 3.48% $15.25 4/25/09 $290,596 $ 736,429
Michael Mueller......... 30,300 3.48% $15.25 4/25/09 $290,596 $ 736,429
Alfred N. Vieira........ 15,300 1.76% $15.25 4/25/09 $156,737 $ 371,860
Todd S. Johnson......... 10,300 1.18% $15.25 4/25/09 $ 98,784 $ 250,337
</TABLE>
5
<PAGE>
The options described in the table above become exercisable in five equal
annual installments beginning on April 26, 2000, and have a term of ten years.
The exercise price of the options is based on the closing price per share of
our common stock of $15.25 as reported on Nasdaq on April 26, 1999, the date
of grant.
Aggregated Option Exercises and Fiscal Year-End Option Values Table. The
following table shows information concerning options held by the named
executive officers at March 31, 2000:
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Shares Options at Options at
Acquired on Value March 31, 2000 (#) March 31, 2000 ($) (1)
Exercise Realized ------------------------- -------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas S. Johnson....... -- -- 50 100,500 -- --
Raymond Schilling....... -- -- 2,050 38,500 -- --
Michael Mueller......... -- -- 2,050 38,500 -- --
Alfred N. Vieira........ -- -- 1,050 19,500 -- --
Todd S. Johnson......... -- -- 1,250 15,300 -- --
</TABLE>
--------
(1) Based on the closing price of $7.75 per share of common stock on March 31,
2000, as reported on the Nasdaq National Market.
Executive Employment Agreements
We have entered into a senior employment agreement with each of Mr. Tom
Johnson, Mr. Schilling, Mr. Mueller, Mr. Vieira and Mr. Todd Johnson. Under
these agreements, each executive receives an annual base salary. These annual
base salaries are currently set at $300,000 for Mr. Tom Johnson, $180,000 for
Mr. Schilling, $180,000 for Mr. Mueller, $130,000 for Mr. Vieira and $80,000
for Mr. Todd Johnson. The executives' annual base salaries are subject to
periodic increases at the discretion of our Board of Directors. Each executive
officer is also eligible for an annual bonus of up to 50% of his annual base
salary upon attaining budgetary and other objectives set by our Board of
Directors. In the case of Mr. Tom Johnson, he is entitled to receive an
additional bonus equal to 50% of his annual base salary in the event Global
achieves performance or substantial increase in its value far in excess of
those objectives established by the Board of Directors.
Each of the executives is entitled to all other benefits approved by our
Board of Directors and made available to our senior management. Each executive
is also entitled to receive reimbursement of expenses for customary travel,
civic and luncheon club dues and other expenses. In addition, Mr. Tom Johnson
and each of Mr. Schilling, Mr. Mueller, Mr. Vieira and Mr. Todd Johnson are
entitled to receive a monthly stipend for automobile expenses of $1,500 and
$800, respectively. Mr. Tom Johnson's employment under his senior executive
agreement terminates on April 1, 2002 but renews automatically for successive
three-year periods unless otherwise terminated by either party upon 60 days'
written notice prior to the end of the applicable term. The terms of
employment under each of Mr. Schilling, Mr. Mueller, Mr. Vieira and Mr. Todd
Johnson's senior executive agreements terminate on April 1, 2003 but renew
automatically for successive three-year periods unless otherwise terminated by
either the applicable executive or Global upon 60 days' written notice prior
to the end of the applicable term.
In the event we terminate Mr. Tom Johnson's employment without cause or Mr.
Tom Johnson terminates his employment for good reason (including as a result
of a change in control of Global), Mr. Tom Johnson is entitled to receive
severance pay equal to his base salary and his bonus for the
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<PAGE>
prior year plus all fringe benefits to which he otherwise would be entitled
for 2 years after the date of termination.
In the event we terminate either Mr. Schilling or Mr. Mueller's employment
without cause, Mr. Schilling and Mr. Mueller are entitled to receive severance
pay equal to their respective base salaries and their respective bonuses plus
all fringe benefits to which they otherwise would be entitled for the prior
year for 2 years after the date of termination. If either Mr. Schilling or Mr.
Mueller terminates his employment for good reason (including as a result of a
change in control of Global), Mr. Schilling and Mr. Mueller are entitled to
receive severance pay equal to their respective base salaries and their
respective bonuses plus all fringe benefits to which they otherwise would be
entitled for the prior year for 1 year after the date of termination. In
either event, we will continue to provide healthcare coverage for at least 2
years following the date of termination.
In the event we terminate either Mr. Vieira or Mr. Todd Johnson's employment
without cause, Mr. Vieira and Mr. Todd Johnson are entitled to receive
severance pay equal to their respective base salaries and their respective
bonuses plus all fringe benefits to which they otherwise would be entitled for
the prior year for 1 year after the date of termination. If either Mr. Vieira
or Mr. Todd Johnson terminates his employment for good reason (including as a
result of a change in control of Global), Mr. Vieira and Mr. Todd Johnson are
entitled to receive severance pay equal to their respective base salaries and
their respective bonuses plus all fringe benefits to which they otherwise
would be entitled for the prior year for 6 months after the date of
termination. In either event, we will continue to provide healthcare coverage
for at least 1 year following the date of termination.
Each of the senior executive employment agreements contains a
confidentiality covenant during the term of employment and a covenant not to
compete with us and our affiliates for a period ranging from one to two years
after the termination of employment in the case of Messrs. Tom Johnson,
Schilling and Mueller and for a period of two years after the termination of
employment in the case of Messrs. Vieira and Todd Johnson. In addition, each
of the senior executive employment agreements contains a covenant not to
solicit any of our or our subsidiaries' executives, employees, customers,
suppliers, vendors, licensees or other business relations for a period ranging
from two to three years following termination of employment in the case of
Messrs. Tom Johnson, Schilling and Mueller and for a period of two years after
the termination of employment in the case of Messrs. Vieira and Todd Johnson.
Under his senior executive employment agreement, Mr. Tom Johnson received,
on April 1, 1999, options to purchase 100,000 shares of our common stock, and,
during the term of his employment agreement, is entitled to receive annually
additional options to purchase 100,000 shares of our common stock, at the
exercise price equal to the stock's fair market value on the date of grant.
These options vest in five equal annual installments beginning one year after
the date of grant and expire no later than ten years after the date of grant.
Retirement Savings Plan
We maintain a 401(k) savings plan that is intended to be a qualified
retirement plan under the Internal Revenue Code. Generally, all of our
employees who work at least 1,000 hours per year and are at least 21 years of
age are eligible to participate in the plan. They may enter the plan at the
first calendar quarter following their original employment date; at this point
participants may make salary deferral contributions to the savings plan,
subject to the limitations imposed by the Internal Revenue Code, with no
company match. We may make discretionary matching contributions after
participants have completed one year of service, beginning at the next
calendar quarter after a participant's one year anniversary. Participants'
contributions may be invested in any of several investment alternatives
including a fund that invests solely in shares of our common stock.
Participants become vested in our contributions according to a graduated
vesting schedule based upon length of service with us.
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<PAGE>
Notwithstanding anything to the contrary set forth in any of our filings
under the Securities Act of 1933, as amended, or the Securities Exchange Act
of 1934, as amended, that might incorporate other filings with the Securities
and Exchange Commission, including this Proxy Statement, in whole or in part,
the following Performance Graph and Report on Executive Compensation shall not
be incorporated by reference into any such filings
8
<PAGE>
PERFORMANCE GRAPH
The following graph presents a comparison of the cumulative total return on
our common stock with the Russell 2000 Index and an Office Equipment Peer
Group Index. The Office Equipment Peer Group Index is comprised of Global,
Danka Business Systems PLC, IKON Office Solutions, Inc. and Xerox Corporation.
This graph assumes that $100 was invested at the time of our initial public
offering, on June 17, 1998, in our common stock and in the other indices, and
that all dividends were reinvested and are weighted on a market capitalization
basis at the time of each reported data point. Past financial performance
should not be considered to be a reliable indicator of future performance, and
investors should not use historical trends to anticipate results or trends in
future periods.
[GRAPH APPEARS HERE]
--------------------------------------------------------------------------------
6/17/98 6/98 9/98 12/98 3/99 6/99 9/99 12/99 3/00
--------------------------------------------------------------------------------
Global Imaging Systems 100 121 103 210 115 176 158 143 98
--------------------------------------------------------------------------------
Russell 2000 Index 100 103 82 95 90 103 96 114 121
--------------------------------------------------------------------------------
Office Equip Peer Group* 100 103 87 122 109 122 87 50 54
--------------------------------------------------------------------------------
*Office Equipment Peer Group Includes: The Company, Danka Business Systems
PLC, IKON Office Solutions, Inc. and Xerox Corporation.
9
<PAGE>
REPORT ON EXECUTIVE COMPENSATION
This report outlines how the Board of Directors and the Compensation
Committee (the "Committee") of the Board of Directors determined 2000
compensation levels for Global's executive officers, including the named
executive officers. The Committee, which is composed entirely of non-employee
directors, is currently responsible for all aspects of Global's officer
compensation programs and some aspects of non-officer compensation, and works
closely with the entire Board in the execution of its duties. During the
fiscal year ended March 31, 2000, the Committee was responsible for all
aspects of Global's officer compensation programs except for the approval of
stock option grants to executive officers under the 1998 Stock Option and
Incentive Plan, which was the responsibility of the full Board of Directors.
Generally, responsibility for granting awards of options under the 1998 Stock
Option and Incentive Plan has been delegated to the Committee.
Overview and Philosophy. The Board of Directors and the Committee strive to
ensure that Global's compensation programs serve to motivate and retain
executive officers and therefore to serve the best interests of Global and its
stockholders. The Committee's philosophy relating to executive compensation is
to attract and retain highly qualified people at industry competitive
salaries, and to link the financial interests of Global's senior management to
those of Global's stockholders. The Committee seeks to attain the goal of
linking the interests of management with those of the stockholders, by linking
a substantial portion of each executive's compensation to the achievement of
certain defined operational and financial objectives adopted annually by the
Board of Directors.
Global's compensation structure has three general components: (i) base
salary, (ii) annual cash bonuses and (iii) stock options.
Base Salary. In the first quarter of each fiscal year, the Committee reviews
with the Chief Executive Officer and approves, with any modifications it deems
appropriate, salary levels for Global's executive officers and certain other
senior managers. The Committee generally seeks to establish base salaries
within the range of salaries paid to similarly situated executives by other
companies in the office imaging systems industry. Generally, within this
range, the salaries are determined subjectively, with the intent of reflecting
past and expected future performance, responsibilities and contributions of
the individual senior executive or manager, as well as Global's overall growth
and profitability.
Annual Cash Incentive Bonus. Under Global's incentive bonus plan for the
fiscal year ended March 31, 2000, the Chief Executive Officer was eligible to
receive a bonus of up to 100 percent of base salary. Executive officers were
eligible to receive annual bonuses of up to 50 percent of base salary based on
individual and overall Company financial and operational performance. In April
1999, the Committee reviewed both Global and individual core company
performance goals recommended by management for purposes of fiscal 2000 bonus
opportunities. Financial goals included achievement of target levels with
respect to revenues, operating income, earnings, asset management performance
and acquisitions, with emphasis placed on earnings and revenues. Operational
goals included internal revenue growth, operating income growth, asset
management, new product initiatives, and the completion of certain corporate
transactions, including strategic acquisitions. In determining the Chief
Executive Officer's annual cash bonus, the Committee also reviews Global's
overall performance as well as specific personal objectives.
Informally during the fiscal year and formally in May 2000 and June 2000,
the Chief Executive Officer evaluated Global's and the individual core
companies' performance against the established goals, and presented his
evaluation, together with his reasoning and recommended bonus payment
percentages. The Committee then determined, based on the recommendations of
the Chief Executive Officer and other members of management and certain other
factors the Committee considered relevant, the percentage of base salary to be
awarded as a bonus to each executive officer. In addition, the Committee
established a bonus pool for other senior managers. The Committee concluded
that
10
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Global achieved substantial success in meeting most of its operational goals
in fiscal 2000. The total bonus percentage awarded to each of the senior
executives, excluding the Chief Executive Officer, was 100 percent of the
target bonus amount, or 50 percent of annual base salary. Mr. Tom Johnson, the
Chief Executive Officer, was awarded 85 percent of the target bonus amount, or
85 percent of annual base salary.
Stock Options. The Board of Directors and the Committee believe that the
award of stock options provides meaningful long-term incentives that are
directly related to the enhancement of stockholder value. Under the 1998 Stock
Option and Incentive Plan, stock options are granted at an exercise price
equal to the closing price of Global's Common Stock on the date of the grant
and generally vest over a five-year period. Therefore, the value of the grant
to the recipient is directly related to an increase in the price of Global's
Common Stock. In the fiscal year ended March 31, 2000, the Board of Directors
approved grants to Mr. Tom Johnson as per the terms of his executive
agreement. No other executive officer received stock option grants for the
fiscal year ended March 31, 2000. In addition, stock option grants
occasionally may be awarded throughout the year to the senior management of
acquired businesses. The number of stock options granted to each individual is
determined subjectively based on a number of factors, including the general
level of performance of Global stock, the individual's degree of
responsibility, general level of performance by Global and its core companies,
ability to affect future Company performance, salary level and recent
noteworthy achievements. Stock option awards are intended to incentivize
employees to work towards achieving operational and financial goals that
management believes will ultimately be reflected in stock value.
Chief Executive Compensation. Based on the Committee's review of the Chief
Executive Officer's performance, the overall performance of Global and
compensation levels for comparable positions in the industry, the Committee
authorized a merit increase of $50,000 in Mr. Tom Johnson's annual base salary
from $250,000 in 1999 to $300,000 effective April 1, 1999. Mr. Tom Johnson
also received $12,000 for certain perquisites. The Committee increased the
Chief Executive Officer's target bonus percentage to 100 percent of base
salary for fiscal 2000. The total bonus percentage awarded the Chief Executive
Officer under the Company's bonus plan in fiscal 2000 was 85 percent of
target, or 85 percent of his base salary. As discussed above under "Annual
Cash Incentive Bonus," the Committee considered specific personal objectives
of the Chief Executive Officer as well as overall Global performance. The
personal objectives for the Chief Executive Officer in 2000 included
management goals with respect to the operations of Global's core companies,
the achievement of certain financial and operational goals, including
acquisitions, and the achievement of objectives with respect to revenues and
earnings. Mr. Tom Johnson received a grant of 100,300 stock options in June
1999.
The foregoing report has been furnished by the Board of Directors:
Carl D. Thoma (Chairman) Edward N. Patrone
William C. Kessinger Mark M. Lloyd
Thomas S. Johnson Bruce D. Gorchow
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COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
None of the four members of the compensation committee is our employee. Two
members of our Board of Directors who are not members of the Compensation
Committee--Thomas S. Johnson and Mark M. Lloyd--are President and Chief
Executive Officer of Global and Vice Chairman of one of our subsidiaries,
Southern Business Communications, Inc., respectively.
Other Transactions
Todd S. Johnson, one of our executive officers, is the son of Thomas S.
Johnson, our President and Chief Executive Officer. Thomas S. Johnson and Todd
S. Johnson received approximately $550,000 and $105,000 in salary and bonus
for the fiscal year ended March 31, 2000, respectively.
Global has entered into indemnification agreements with its directors and
executive officers for the indemnification of and advancement of expenses to
such persons to the full extent permitted by law. See "Executive
Compensation--Limitation of Liability and Indemnification Matters."
CERTAIN TRANSACTIONS
In connection with our acquisition of Berney, Inc. in February 1995, we
entered into a lease with an entity partly owned by Mr. L. Neal Berney, one of
our former directors whose term expired during fiscal year 2000, pursuant to
which we rent space from the entity at rates we believe are commercially
competitive. This lease, which was amended in January 1999, expires on
December 31, 2004. During the fiscal year ended March 31, 2000, Berney, Inc.
paid $282,000 in rent pursuant to this lease.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth certain information regarding the beneficial
ownership of our common stock as of June 16, 2000, by (1) each of our
directors and executive officers, (2) all of our directors and executive
officers as a group and (3) each person (or group of affiliated persons) known
by Global to beneficially own more than 5% of our outstanding common stock.
<TABLE>
<CAPTION>
Shares
Beneficially
Owned(1)
-----------------
Name and Address of Beneficial Owner(1) Number Percent
--------------------------------------- --------- -------
<S> <C> <C>
Golder, Thoma, Cressey, Rauner Fund IV, L.P.(2)............. 7,404,525 39.9%
T. Rowe Price Associates, Inc.(3)........................... 1,435,700 7.7%
Thomas S. Johnson(4)........................................ 746,164 4.0%
Raymond Schilling(5)........................................ 233,768 1.3%
Michael Mueller(6).......................................... 184,274 1.0%
Alfred N. Vieira(7)......................................... 195,236 1.1%
Todd S. Johnson(8).......................................... 50,181 *
Carl D. Thoma(2)............................................ 7,404,525 39.9%
Bruce D. Gorchow(9)......................................... 864,398 4.7%
William C. Kessinger(2)..................................... 7,404,525 39.9%
Mark M. Lloyd(10)........................................... 124,297 *
Edward N. Patrone(11)....................................... 4,000 *
All directors and executive officers as a group (10
persons)(12)............................................... 9,806,843 52.9%
</TABLE>
--------
* Less than 1%.
(1) Unless otherwise indicated, each person has sole voting and investment
power with respect to shares shown as beneficially owned by such person.
For purposes of calculating the number and percentage of shares
beneficially owned, the number of shares of common stock deemed
outstanding consists of 18,554,196 shares outstanding on June 16, 2000,
plus the number of shares of common stock underlying stock options held
by the named person that are exercisable within 60 days. Except as
otherwise specified below, the address of each of the beneficial owners
identified is 3820 Northdale Boulevard, Suite 200A, Tampa, Florida 33624.
(2) Golder, Thoma, Cressey, Rauner, Inc. is the general partner of GTCR IV,
L.P., which in turn is the general partner of Golder, Thoma, Cressey,
Rauner Fund IV, L.P. As a result, all three of these entities may be
deemed to share voting and investment power over, and therefore to be the
beneficial owners of, the shares held by Golder, Thoma, Cressey, Rauner
Fund IV, L.P. Their address is 233 South Wacker Drive, Suite 6100,
Chicago, Illinois 60606. Carl Thoma and William Kessinger, both of whom
are our directors, are each Principals of Golder, Thoma, Cressey, Rauner,
Inc. and may therefore also be deemed to beneficially own these shares by
virtue of their shared voting and investment power over them. Mr. Thoma's
address is c/o Thoma Cressey Equity Partners, 233 South Wacker Drive,
Suite 4460, Chicago, Illinois 60606. Mr. Kessinger's address is c/o GTCR
Golder, Rauner, LLC, 233 South Wacker Drive, Suite 6100, Chicago,
Illinois 60606.
(3) Based on Schedule 13G filed by T. Rowe Price Associates, Inc. on February
4, 2000. The address for T. Rowe Price Associates, Inc. is c/o 100 E.
Pratt Street, Baltimore, Maryland 21202.
(4) Includes 35,100 shares of common stock held of record by members of Mr.
Johnson's immediate family over which Mr. Johnson has shared dispositive
and sole voting power and 50 shares of common stock subject to options
exercisable within 60 days.
(5) Includes 10,160 shares of common stock subject to options exercisable
within 60 days.
(6) Includes 10,160 shares of common stock subject to options exercisable
within 60 days.
(7) Includes 2,765 shares held by Mr. Vieira's wife over which Mr. Vieira may
be deemed to share voting and investment power. Also includes 5,160
shares of common stock subject to options exercisable within 60 days.
13
<PAGE>
(8) Includes 10,200 shares of common stock held of record by members of Mr.
Todd Johnson's immediate family over which Mr. Todd Johnson may be deemed
to sharing voting and investment power. Also includes 4,560 shares of
common stock subject to options exercisable within 60 days.
(9) As the exclusive investment advisor to Jackson National Life Insurance
Company, PPM America, Inc. shares voting and investment power over, and
therefore may be deemed to be the beneficial owner of, the shares held by
Jackson National Life Insurance Company. Bruce Gorchow, a director of
Global, is Executive Vice President of PPM America, Inc. and a member of
its underwriting committee. Accordingly, Mr. Gorchow may be deemed to
share voting and investment power over, and therefore beneficial
ownership of, Jackson National Life Insurance Company's shares. The
address for Jackson National Life Insurance Company, PPM America, Inc.
and Mr. Gorchow is c/o PPM America, Inc., 225 West Wacker Drive, Suite
1200, Chicago, Illinois 60606.
(10) Includes 8,180 shares of common stock subject to options exercisable
within 60 days.
(11) Includes 4,000 shares of common stock subject to options exercisable
within 60 days. Mr. Patrone's address is 101 South Nineteenth Avenue,
Longport, New Jersey 08403.
(12) See notes (2) and (4) through (12).
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers to file reports with the SEC on Forms 3, 4 and 5 for
the purpose of reporting their ownership of and transactions in Common Stock.
During the fiscal year ended March 31, 2000, Mr. Lloyd was late in reporting
one transaction in shares of common stock.
INDEPENDENT PUBLIC ACCOUNTANTS
Our Board of Directors and the audit committee of our Board of Directors are
evaluating our choice of independent auditors. As a result, no independent
auditors of the Company have been chosen for the fiscal year ending March 31,
2001. Ernst & Young LLP has served as our independent auditors since our
commencement of operations. Representatives of Ernst & Young LLP are expected
to be present at the meeting, will have the opportunity to make a statement if
they so desire, and will be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Proposals of stockholders to be presented at the 2001 Annual Meeting must be
received by our Secretary prior to March 13, 2001, to be considered for
inclusion in our proxy material for the 2001 Annual Meeting of Stockholders.
In addition, any stockholder who wishes to propose a nominee to the Board of
Directors or submit any other matter to a vote at a meeting of stockholders
(other than a stockholder proposal included in our proxy materials pursuant to
SEC Rule 14a-8) must deliver the proposal so that it is received by our
Secretary no earlier than May 17, 2001, and no later than June 15, 2001, and
must comply with the advance notice provisions and other requirements of
Article 2, Section 2.2 of our By-laws, which are on file with the Securities
and Exchange Commission and may be obtained from our Secretary upon request.
VOTING PROCEDURES AND COSTS OF PROXY SOLICITATION
Under our Bylaws and the Delaware General Corporation Law, shares
represented by proxies that reflect abstentions will be counted as shares that
are present and entitled to vote for purposes of determining the presence of a
quorum. Directors will be elected by a favorable vote of a plurality of the
shares of our common stock present and entitled to vote, in person or by
proxy, at the meeting.
14
<PAGE>
Accordingly, abstentions from the election of directors will not affect the
election of the candidates receiving the most votes. With respect to all other
proposals to come before the meeting, abstentions will have the same effect as
votes against such proposal. Shares represented by brokers who are prohibited
from exercising discretionary authority because the beneficial owners of such
shares have not provided voting instructions, commonly referred to as "broker
non-votes", will be counted as present for determining the presence of a
quorum, but will not be counted for any purpose in determining whether a
matter has been approved, except with respect to proposals for which such
shares are deemed to be entitled to vote, in which case they will have the
same effect as votes against such proposals.
The cost of preparing, assembling, and mailing the proxy material will be
borne by us. We will also request persons, firms and corporations holding
shares in their names or in the names of their nominees, which shares are
beneficially owned by others, to send the proxy material to, and to obtain
proxies from, such beneficial owners and will reimburse such holders for their
reasonable expenses in doing so. Original solicitation of proxies by mail may
be supplemented by telephone, telegram, or personal solicitation by our
directors, officers, or other regular employees. No additional compensation
will be paid to directors, officers or other regular employees for such
services.
Your vote is important. Please complete the enclosed proxy card and mail it
in the enclosed postage-paid envelope as soon as possible.
By Order of the Board of Directors
/s/ Raymond Schilling
Raymond Schilling
Senior Vice President, Chief
Financial Officer,
Secretary and Treasurer
July 7, 2000
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[LOGO] [LOGO]
-------------------------------------------------------------------------------
GLOBAL IMAGING SYSTEMS, INC.
Proxy Solicited on Behalf of the Board of Directors of
Global for Annual Meeting to be held on August 14, 2000
The undersigned, being a stockholder of Global Imaging Systems, Inc.
("Global"), hereby appoints Thomas S. Johnson and Raymond Schilling, or
either of them, with full power of substitution in each, as proxies and
hereby authorizes such proxies, or either of them, to represent the
undersigned at the Annual Meeting of Stockholders of Global to be held
at the corporate office of Global Imaging Systems, Inc., 3820 Northdale
Boulevard, Suite 200A, Tampa, Florida 33624, on August 14, 2000, at
10:00 a.m., eastern time, and at any adjustment of said meeting, and
thereat to act with respect to all votes that the undersigned would be
entitled to cast, if then personally present, in accordance with the
following instructions. The undersigned stockholder hereby revokes any
proxy or proxies heretofore given.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE
BOX, BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE
YOUR PREFERENCES UNLESS YOU SIGN AND RETURN THIS CARD.
Regardless of whether you plan to attend the Annual Meeting of
Stockholders, please execute your proxy promptly and return it in the
enclosed envelope.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
Global Imaging Systems, Inc.
THIS IS YOUR PROXY
YOUR VOTE IS IMPORTANT
[LOGO] FOLD AND DETACH HERE [LOGO]
--------------------------------------------------------------------------------
GLOBAL IMAGING SYSTEMS, INC.
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
This proxy, when properly executed, will be voted as directed. If no direction
is otherwise made, this proxy will be voted FOR proposal 1 and in the
discretion of the named proxies as to any other matters properly presented at
the meeting. This proxy may be revoked at any time before it is voted by
delivery to Global's Secretary of either a written revocation of the proxy or a
duly executed proxy bearing a later date, or by appearing at the annual meeting
and voting in person.
1. To elect the following nominees to the Board of Directors:
Bruce D. Gorchow William C. Kessinger
[_] FOR ALL NOMINEES [_] WITHHOLD AUTHORITY [_] _____________________
TO VOTE FOR ALL Instruction: To vote for
NOMINEES all nominees except those
indicated on the line
above.
MARK HERE FOR ADDRESS
CHANGE AND NOTE AT
LEFT [_]
Please sign exactly as
your name appears hereon.
Joint owners should each
sign. When signing as
attorney, executor,
administrator, director,
or guardian, please give
full title as such.
