<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(C) or 240.14a-12
CARREKER-ANTINORI, INC.
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction
applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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</TABLE>
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[LOGO]
4055 Valley View Lane, Suite 1000
Dallas, Texas 75244
(972) 458-1981
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 20, 2000
------------------------
To the Stockholders of
CARREKER-ANTINORI, INC.
The Annual Meeting of Stockholders of Carreker-Antinori, Inc. (the
"Company"), a Delaware corporation, will be held in the Kings & Queens Room, The
University Club, 13350 Dallas Parkway, 6(th) Floor, Dallas, Texas, on Tuesday,
June 20, 2000, at 9:00 a.m. Central Standard Time ("CST"), for the following
purposes:
1. To elect three directors as Class II directors for terms expiring at the
Annual Meeting of Stockholders in 2003. The directors will continue to serve
until their respective successors are duly elected and qualified;
2. To ratify the appointment by the Board of Directors of Ernst & Young LLP
as independent certified public accountants of the Company for the fiscal year
ending January 31, 2001;
3. To consider and vote upon a proposal to amend the Company's Certificate
of Incorporation so as to change the Company name from Carreker-Antinori, Inc.
to Carreker Corporation;
4. To consider and vote upon a proposal to amend and restate the Company's
1994 Long Term Incentive Plan; and
5. To transact such other business as properly may come before the meeting
or any adjournment thereof.
The close of business on April 25, 2000 has been fixed by the Board of
Directors as the record date for the Annual Meeting. Only stockholders of record
on that date will be entitled to notice of and to vote at the Annual Meeting or
any adjournment thereof, notwithstanding the transfer of any stock on the books
of the Company after such record date. The stock transfer books will not be
closed.
A Proxy Statement, form of Proxy, and copy of the Annual Report on the
Company's operations for the fiscal year ended January 31, 2000, accompany this
notice.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING. IF
YOU DO NOT EXPECT TO ATTEND IN PERSON, PLEASE SIGN AND DATE THE FORM OF PROXY
AND RETURN IT IN THE ENCLOSED ENVELOPE. THE FORM OF PROXY IS ENCLOSED IN THE
MAILING ENVELOPE IN WHICH THIS PROXY STATEMENT IS CONTAINED. STOCKHOLDERS WHO
ATTEND THE ANNUAL MEETING MAY REVOKE THEIR PROXIES AND VOTE IN PERSON IF THEY
DESIRE.
By Order of the Board of Directors
MAURICE E. PURNELL, JR.
SECRETARY
April 28, 2000
<PAGE>
[LOGO]
4055 Valley View Lane, Suite 1000
Dallas, Texas 75244
(972) 458-1981
------------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 20, 2000
------------------------
SOLICITATION OF PROXIES
This Proxy Statement is furnished to stockholders of
Carreker-Antinori, Inc., a Delaware corporation (the "Company"), in connection
with the solicitation of proxies by the Board of Directors to be voted at the
Annual Meeting of Stockholders of the Company to be held in the Kings & Queens
Room, The University Club, 13350 Dallas Parkway, 6(th) Floor, Dallas, Texas, on
Tuesday, June 20, 2000, at 9:00 a.m. CST, or at any adjournment thereof, for the
purposes set forth in the accompanying Notice of Annual Meeting of Stockholders.
This Proxy Statement and form of Proxy are being mailed to stockholders on
or about May 9, 2000. If the enclosed form of Proxy is executed and returned, it
may nevertheless be revoked by the stockholder at any time by filing with the
Secretary of the Company a written revocation or a duly executed proxy bearing a
later date. A stockholder who attends the meeting in person may revoke his or
her proxy at that time and vote in person if so desired. All proxies duly
signed, dated, and returned will be voted as specified therein, but unless
otherwise specified, will be deemed to grant authority to vote:
(1) FOR the election of the three nominees listed under "Election of
Directors" as nominees of the Company for election as directors;
(2) FOR the ratification of the appointment by the Board of Directors of
Ernst & Young LLP as independent certified public accountants of the Company
for the fiscal year ending January 31, 2001;
(3) FOR the amendment to the Company's Certificate of Incorporation so
as to change the Company name from Carreker-Antinori, Inc. to Carreker
Corporation;
(4) FOR the proposal to amend and restate the Company's 1994 Long Term
Incentive Plan; and
(5) AT the discretion of the persons named in the enclosed form of
Proxy, on any other matter that may properly come before the meeting or any
adjournment thereof.
The enclosed Proxy is solicited by and on behalf of the Board of Directors
of the Company. The Company is unaware of any additional matters not set forth
in the Notice of Annual Meeting of Stockholders that will be presented for
consideration at the Annual Meeting. If any other matters are properly brought
before the Annual Meeting and presented for a vote of the stockholders, the
persons named in the Proxy will vote in accordance with their best judgment upon
such matters, unless otherwise restricted by law.
The cost of solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may also be solicited by personal
interview, facsimile transmission, and telephone by directors, officers,
employees, and agents of the Company. The Company will also supply brokers,
nominees, or other custodians with the numbers of Proxy forms, Proxy Statements,
and Annual Reports they may require for forwarding to beneficial owners, and the
Company will reimburse such persons for their expense in so doing.
2
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OUTSTANDING CAPITAL STOCK AND STOCK OWNERSHIP OF
DIRECTORS, CERTAIN EXECUTIVE OFFICERS
AND PRINCIPAL STOCKHOLDERS
The record date for the determination of the stockholders entitled to notice
of and to vote at the Annual Meeting has been established by the Board of
Directors as the close of business on April 25, 2000. As of April 25, 2000, the
Company had issued and outstanding and entitled to vote at the Annual Meeting
shares of Common Stock, par value $.01 per share ("Common Stock").
(For a description of the voting rights of the Common Stock, see "Quorum and
Voting" herein.)
The following table sets forth information as of April 25, 2000, regarding
the beneficial ownership of the Company's Common Stock by each person or group
known by management of the Company to own more than five percent of the
outstanding shares of Common Stock of the Company, by each of the Company's
executive officers named in the Summary Compensation Table below, by each of the
Company's directors and by all of its directors and executive officers as a
group.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED AND
PERCENTAGE OF
OUTSTANDING SHARES AS OF
APRIL 25, 2000
------------------------
NAME NUMBER PERCENT
- ---- --------- --------
<S> <C> <C>
John D. Carreker, Jr.(1)(2)................................. 4,395,271 23.67%
Ronald R. Antinori(2)(3).................................... 2,750,646 14.81%
Richard L. Linting(2)(5).................................... 462,135 2.43%
Royce D. Brown(2)(6)........................................ 376,178 2.02%
Wyn P. Lewis(2)(4).......................................... 270,984 1.46%
David K. Sias(7)............................................ 261,873 1.41%
James L. Fischer(8)......................................... 148,015 *
Richard R. Lee, Jr.(9)...................................... 139,801 *
James D. Carreker(10)....................................... 136,801 *
Richard J. Jerrier(11)...................................... 35,000 *
Donald L. House(12)......................................... 34,412 *
Larry J. Peck(13)........................................... 13,719 *
--------- -----
Directors and executive officers as a group
(15 persons)(2)(14)....................................... 9,256,613 47.60%
</TABLE>
- ------------------------
* Less than 1%
(1) Includes 189,282 shares held in family trusts for which Mr. Carreker is the
trustee; 252,375 shares held in a family limited partnership for which
Mr. Carreker is the general partner; and 189,282 shares held in family
trusts for which Connie B. Carreker, the wife of Mr. Carreker, is the
trustee, as to which shares Mr. Carreker disclaims beneficial ownership.
(2) Includes 68,837, 135, 135, 42,956, 17,239 and 146,769 shares of Common
Stock held in the Employee Stock Option Plan ("ESOP") for the benefit of
Messrs. Carreker, Antinori, Linting, Brown and Lewis, respectively, and all
directors and executive officers as a group.
(3) Includes 402,111 shares held by Susan Antinori, the wife of Mr. Antinori,
as to which Mr. Antinori disclaims beneficial ownership. The address for
Mr. Antinori is c/o the Company, 4055 Valley View Lane, Suite 1000, Dallas,
Texas 75244.
(4) Includes 37,760 shares held under exercisable options and 38,500 shares of
restricted stock issued under the Long Term Incentive Plan.
(5) Includes 462,000 shares held under currently exercisable options.
3
<PAGE>
(6) Includes 77,000 shares held under currently exercisable options.
(7) Includes 6,000 shares held by Patricia L. Sias, the wife of Mr. Sias, as to
which Mr. Sias disclaims beneficial ownership and 7,700 shares held under
currently exercisable options. The address for Mr. Sias is 1930 Jelinda
Drive, Santa Barbara, California 93108.
(8) Includes 2,000 shares held by Elizabeth Fischer, the wife of Mr. Fischer,
as to which Mr. Fischer disclaims beneficial ownership and 11,529 shares
held under currently exercisable options. The address for James L. Fischer
is 7170 Kendallwood, Dallas, Texas 75240.
(9) Includes 22,602 shares held under currently exercisable options. Includes
5,000 shares held by Lee Financial Corporation and 11,576 shares currently
held in trust, as to which Mr. Lee disclaims beneficial ownership. The
address for Mr. Lee is 12201 Merritt Drive, Suite 530, Dallas, Texas 75251.
(10) Includes 22,602 shares held under currently exercisable options and 6,576
shares held by children of Mr. Carreker, as to which Mr. Carreker
disclaims beneficial ownership. The address for Mr. Carreker is 1950
Stemmons Freeway, Suite 6001, Dallas, Texas 75207.
(11) Includes 35,000 shares held under currently exercisable options.
(12) Includes 34,412 shares held under currently exercisable options. The
address for Mr. House is 2480 Spalding Drive, Atlanta, Georgia 30350.
(13) Includes 10,719 shares held under currently exercisable options. The
address for Mr. Peck is c/o SAIC, 10260 Campus Point Drive, San Diego,
California 92121.
(14) Includes 875,135 shares held under currently exercisable options and
61,600 shares of restricted stock issued under the Long Term Incentive
Plan.
QUORUM AND VOTING
The presence, in person or by proxy, of the holders of a majority of the
voting power of the outstanding shares of Common Stock of the Company entitled
to vote is necessary to constitute a quorum at the meeting. The affirmative vote
of a plurality of the voting power represented at the meeting and entitled to
vote is required for the election of directors. The affirmative rate of a
majority of the voting power represented at the meeting and entitled to vote is
required on all other matters. A holder of shares of Common Stock will be
entitled to one vote per share of Common Stock as to each matter properly
brought before the meeting. Cumulative voting is not permitted in the election
of directors. Abstentions and votes "withheld" are included in the determination
of the number of shares present at the meeting for purposes of determining a
quorum. Broker non-votes are counted for purposes of determining whether a
quorum is present on any particular matter only if authority to vote on the
matter is granted by the respective proxy. Abstentions and broker non-votes have
no effect on determinations of plurality, except to the extent that they affect
the total votes received by any particular candidate, and have the effect of
negative votes on matters requiring approval of a specified percentage of the
outstanding shares. For matters requiring approval by the holders of a specified
percentage of the voting power represented at the meeting and entitled to vote,
abstentions will have the effect of negative votes but broker non-votes will
have no effect since they are not treated as shares entitled to vote on such
matters.
4
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
The Company's Amended and Restated Certificate of Incorporation provides for
classified directors with staggered terms. The Company currently has authorized
nine directors. The directors are divided into three classes and their terms
expire as follows: Class I, which consists of Messrs. John D. Carreker, Jr.,
Donald L. House and Larry J. Peck, will expire at the Annual Meeting of
Stockholders to be held in 2002; Class II, which consists of Messrs. Ronald R.
Antinori, James L. Fischer and Richard R. Lee, Jr., will expire at the Annual
Meeting of Stockholders to be held on June 20, 2000; and Class III, which
consists of Messrs. James D. Carreker, Wyn P. Lewis and David K. Sias, will
expire at the Annual Meeting of Stockholders to be held in 2001. At each Annual
Meeting of Stockholders, the successors to directors whose terms will then
expire will be elected to serve from the time of their election and
qualification until the third Annual Meeting following election and until their
successors have been duly elected and qualified, or until their earlier
resignation or removal. Vacancies on the Board of Directors or newly created
directorships will be filled by a vote of the majority of the directors then in
office and any director so chosen will hold office until the next election of
the class for which such director was chosen.
On February 1, 2000, Mr. Richard L. Linting resigned as a director and
Mr. Wyn P. Lewis was appointed by the Board of Directors to fill the vacated
seat through the reminder of the term expiring in 2001.
Three directors will be elected at the Annual Meeting as Class II directors
for terms expiring at the Annual Meeting of Stockholders to be held in 2003. The
directors will continue to serve until their respective successors are duly
elected and qualified. Each of the Board of Directors' nominees currently serves
as a director of the Company.
Shares represented by proxies returned duly executed will be voted, unless
otherwise specified, in favor of the three nominees for the Board of Directors
named below. If any nominee named below should be unable to serve, the persons
named in the enclosed Proxy will vote the shares covered thereby for such
substitute nominee (or nominees) as the Board of Directors may select.
Stockholders may withhold authority to vote for any nominee by striking a line
through the name of such nominee in the space provided for such purpose on the
form of Proxy.
NOMINEES FOR DIRECTORS (THREE YEAR TERMS)
RONALD R. ANTINORI, age 57, serves as Vice Chairman of the Board of the
Company, which position he has held since January 1997. Prior to the Company's
merger with Antinori Software, Inc. ("ASI"), Mr. Antinori served as Chairman of
the Board of ASI since its formation in 1988 and Chief Executive Officer of ASI
from 1988 through December 1995.
JAMES L. FISCHER, age 72, has served as a director of the Company since
1984. Mr. Fischer retired in 1984 from Texas Instruments Incorporated ("TI"), an
electronics manufacturer, where he served in a variety of positions over
29 years. At the time of his retirement, Mr. Fischer served as Executive Vice
President and Principal Financial Officer of TI.
RICHARD R. LEE, JR., age 53, has served as a director of the Company since
1984. Mr. Lee has served as President of Lee Financial Corporation, a financial
advisory firm, since 1975.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE APPROVAL OF EACH OF THE DIRECTOR NOMINEES.
5
<PAGE>
CONTINUING DIRECTORS
JAMES D. CARREKER, age 52, has served as a director of the Company since
1984. Since January 1998, Mr. Carreker has served as Chairman of the Board of
Directors and Chief Executive Officer of Wyndham International, Inc. Since
March 1999, Mr. Carreker has served as Chief Executive Officer of Patriot
American Hospitality, Inc. ("Patriot"), a hotel real estate investment trust,
and Wyndham International, Inc., a hotel management and leasing company.
Mr. Carreker served as President and Chief Executive Officer of Wyndham Hotel
Corporation ("Wyndham"), a national hotel company, from May 1996, and as a
director of Wyndham from February 1996, until the merger of Wyndham with and
into Patriot in January 1998. Mr. Carreker also served as Chief Executive
Officer of Trammell Crow Company, a national real estate company, from
August 1994 to December 1995 and currently serves as a director of Crow Family
Holdings. John D. Carreker, Jr. and James D. Carreker are brothers. His term
expires in 2001.
JOHN D. CARREKER, JR., age 57, has served as Chairman of the Board and Chief
Executive Officer of the Company since the Company's formation in 1978, and
served as the Company's President from 1978 until July 1997, at which time
Richard L. Linting became President of the Company. John D. Carreker, Jr. and
James D. Carreker are brothers. His term expires in 2002.
DONALD L. HOUSE, age 58, has served as a director of the Company since
March 30, 1998. From January 1993 until December 1997, Mr. House served as
Chairman of the Board of Directors of SQL Financials International, Inc. (now
known as Clarus Corporation), a developer of electronic commerce application
software; Mr. House continues to serve as a director of Clarus Corporation.
Mr. House is a director of Eshare Technologies, Inc. (formerly known as Melita
International Corporation), a provider of automated customer relationship
management systems, where he serves as chairman of its audit committee and a
member of its compensation committee. He is now Chairman of Ockham
Technologies, Inc., a provider of sales management software, and he is on the
board of several other private high technology companies. His term expires in
2002.
WYN P. LEWIS, age 50, was appointed as a Director of the Company on
March 7, 2000 and appointed as Vice Chairman of the Office of the President on
September, 19 1999. Mr. Lewis has served as Executive Vice President and
Managing Director of the Company since March 1996. From March 1993 to
March 1996, Mr. Lewis served as Vice President and Managing Director for Yield
Management. His term expires in 2001.
LARRY J. PECK, age 52, has served as a director of the Company since
October 1996. Mr. Peck has served as Sector Vice President and Manager,
Technology Solutions Sector, of SAIC, a diversified technology research and
development services company, since January 1994. His term expires in 2002.
DAVID K. SIAS, age 62, has served as a director of the Company since
October 1993 and has served as a consultant to the Company since November 1993.
Mr. Sias also serves as a consultant to other companies. His term expires in
2001.
BOARD MEETINGS AND COMMITTEES
The Board of Directors held a total of five meetings in the fiscal year
ended January 31, 2000. Each director attended at least 75% of the meetings held
by the Board of Directors and by committees of the Board on which he served. The
Board of Directors has an Audit Committee and a Compensation Committee. The
members of the Audit Committee are Messrs. James D. Carreker, House, Peck and
Sias. Mr. Sias serves as Chairman. The members of the Compensation Committee are
Messrs. Fischer and Lee. Mr. Fischer serves as Chairman. The Board of Directors
does not have a Nominating Committee nor a Stock Option Committee.
Employee directors do not receive compensation for their services as
directors. Non-employee directors receive an annual retainer of $5,000, a fee of
$1,250 per board meeting attended and a fee of
6
<PAGE>
$625 per committee meeting attended. Under the Company's Director Stock Option
Plan, non-employee directors may elect to receive options to purchase Common
Stock in lieu of all or a portion of their fees for serving as directors and
committee members and for performing consulting services to the Company.
The Company maintains the Carreker-Antinori, Inc. Director Stock Option Plan
(the "Director Plan"). The Director Plan provides that eligible directors of the
Company may elect to receive options to purchase Common Stock in lieu of all or
a portion of their annual director's retainer and various attendance fees,
including committee meetings, and any consulting fees for consulting services
rendered to the Company (the "Fees"). Only directors of the Company who are not
employees of the Company are eligible to participate in the Director Plan.
Options are granted automatically on the first trading day in any fiscal
quarter (the "Grant Date") to any eligible director who, prior to the Grant
Date, files with the committee administering the Director Plan an election to
receive a stock option in lieu of 25%, 50%, 75% or all of their Fees, excluding
Committee fees, to be earned in the period from the Grant Date to the end of the
fiscal year. The per share option price (the "Option Price") under the Director
Plan is equal to 50% of the fair market value of the Common Stock (the "Market
Value") on the Grant Date. "Market Value" is the fair market value of the Common
Stock at the close of business on the relevant Grant Date, as reported on the
Nasdaq National Market. Elections are deemed made for each succeeding fiscal
year, and options automatically granted on the first trading day in each
succeeding fiscal year, unless the director notifies the Company of the
cancellation of the election prior to the first day of the fiscal year. The
number of option shares granted to an eligible director are determined by a
formula which provides that each director will receive an option equal to the
nearest number of whole shares equivalent to the Deferred Retainer and Fees
divided by the Option Price. "Deferred Retainer and Fees" are the amounts the
director would have been entitled to receive (i) for serving as a director and
attending all regularly scheduled meetings of the Board of Directors and
(ii) for serving as a consultant, during the remainder of the fiscal year
following the Grant Date but for the election described above.
Generally, no option may be exercised prior to the first anniversary of the
date the option was granted. However, an option will become fully exercisable
upon the retirement of the director because of disability or death. In addition,
upon a merger or other business combination involving the Company, an option
will become fully exercisable unless the Company is the surviving corporation in
such merger or business combination or provision is made for the continuance and
assumption of the option. No option may be exercised after the expiration of
15 years from the date the option was granted. If the optionee ceases to be a
director or consultant before an option granted under the Director Plan becomes
exercisable, is absent from a regularly scheduled meeting, or fails to earn a
consulting fee, the option shall terminate as to a pro rata portion of the
shares subject to the option, based upon the Fees actually earned.
During the course of the last fiscal year, David K. Sias received a total of
$53,975 for consulting services. The Company paid a fee of $22,800 to Donald L.
House and a fee of $7,150 to James L. Fischer for consulting services.
AUDIT COMMITTEE. The Audit Committee is responsible for (i) recommending to
the Board the selection of the Company's outside auditors, (ii) reviewing the
audit scope and risk assessment process, (iii) reviewing the relationships that
may effect the independence of the outside auditors, (iv) reviewing any major
internal control or accounting issues of the Company, and (v) reviewing and
discussing with management and the outside auditors the annual audited financial
statements included in the Company's 10-K as well as the interim financial
statements. The Audit Committee met five times during the fiscal year ended
January 31, 2000.
COMPENSATION COMMITTEE. The Compensation Committee is responsible for
executive compensation policies and approving compensation payable to executive
officers of the Company. The Compensation Committee met six times during the
fiscal year ended January 31, 2000.
7
<PAGE>
PROPOSAL TWO
RATIFICATION OF SELECTION OF AUDITOR
The Board of Directors has selected Ernst & Young LLP as independent
certified public accountants for the fiscal year ended January 31, 2001, and has
determined that it would be desirable to request that the stockholders ratify
such selection. The affirmative vote of a majority of the outstanding shares of
Common Stock present at the Annual Meeting in person or by proxy is necessary
for the ratification of the appointment of Ernst & Young LLP. Ernst & Young LLP
served as the Company's independent certified public accountants since fiscal
1992. Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting and will have the opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions from
stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE RATIFICATION OF ERNST & YOUNG LLP
AS INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF
THE COMPANY FOR THE FISCAL YEAR ENDED JANUARY 31, 2001.
PROPOSAL THREE
SECOND AMENDED AND RESTATED 1994 LONG TERM INCENTIVE PLAN
The Board of Directors of the Company, after consultation with an industry
benefits consulting firm, has approved an amendment (the "Amendments") to
Section 6 of the Amended and Restated 1994 Long Term Incentive Plan (the "1994
Plan") which will (i) make an additional 1,000,000 shares of Common Stock
available for issuance pursuant thereto and (ii) change the formula for
calculating the annual increase in the number of shares of Stock available under
the 1994 Plan, and has directed that the Amendments to the 1994 Plan be
submitted to the stockholders for approval. If approved, Section 6 of the 1994
Plan will read as follows, effective June 20, 2000:
"The shares of Stock with respect to which awards may be made under the Plan
shall be either authorized and unissued shares or issued and outstanding
shares (including, in the discretion of the Board, shares purchased in the
market). Subject to the provisions of paragraph I.10, the number of shares
of Stock available under the Plan shall not exceed 6,959,936 shares in the
aggregate increased, as of the first day of each fiscal year, commencing
February 1, 2001, by that number of shares of Stock equal to two per cent
(2%) of the number of shares of Stock outstanding as of January 31, 2000.
If, for any reason, any award under the Plan otherwise distributable in
shares of Stock, or any portion of the award, shall expire, terminate, or be
forfeited or cancelled, or be settled in cash pursuant to the terms of the
Plan and, therefore, any such shares are no longer distributable under the
award, such shares of Stock shall again be available for award under the
Plan."
The 1994 Plan was initially adopted in 1994. The 1994 Plan was amended in
1998 to authorize an aggregate of 5,500,000 shares of Common Stock for issuance
under the 1994 Plan, increased each fiscal year commencing February 1, 1999, by
229,968 shares. As of February 1, 2000, the adjusted number of shares of Common
Stock authorized for issuance under the 1994 Plan is 5,959,936. As of March 31,
2000, there were 472,310 shares of Common Stock remaining available for grant as
awards under the 1994 Plan. If Proposal No. 3 is approved by the stockholders,
there will be 1,472,310 shares of Common Stock available for grant as awards
under the 1994 Plan, and each year, the number of shares available will increase
by 370,774 shares, commencing on February 1, 2001. In the opinion of the Board
of Directors, it is appropriate to amend the 1994 Plan to increase the number of
shares available for issuance because of the current intentions of the Company
to recruit additional senior management personnel.
PURPOSE. The purpose of the 1994 Plan is to secure for the Company and its
stockholders the benefits arising from stock ownership by selected employees,
consultants and non-employee directors of the
8
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Company or its subsidiaries as the Board of Directors of the Company, or a
committee constituted for such purpose, may from time to time determine. The
Company believes that the possibility of participation in the 1994 Plan through
receipt of incentive options ("Incentive Options"), nonqualified options
("Nonqualified Options") and shares of the Common Stock of the Company that are
restricted ("Restricted Shares") (Incentive Options, Nonqualified Options and
Restricted Shares shall be collectively referred to herein as "Stock Options")
will provide participants an incentive to perform more effectively and will
assist the Company in attracting and retaining people of outstanding talent and
ability.
TERM. The 1994 Plan was initially adopted in 1994 and its duration is
unlimited. However, the Board may terminate the 1994 Plan at any time, and no
awards of Incentive Options can be made under the 1994 Plan after October 6,
2004 (or June 19, 2010, if the stockholders vote to approve the Amendments).
ADMINISTRATION. The 1994 Plan is administered by the Board of Directors or
the Compensation Committee (the "Committee"). All questions of interpretation
and application of the 1994 Plan are determined by the Board of Directors or the
Committee, and each Stock Option granted under the 1994 Plan has a term selected
by the Board of Directors or the Committee.
PARTICIPATION. All employees, consultants and non-employee directors of the
Company or any subsidiary of the Company are eligible for selection to
participate in the 1994 Plan. The Board of Directors or the Committee shall
determine from time to time the individuals who are to receive Stock Options
under the 1994 Plan. The number of employees participating in the 1994 Plan is
approximately 98. During the lifetime of participants, Stock Options shall be
exercisable only by the optionee, and no Stock Options will be transferable
otherwise than by will or the laws of descent and distribution.
SHARES OF STOCK AVAILABLE FOR GRANT. A total of 472,310 shares of the
Company's Common Stock are currently available for issuance under the 1994 Plan.
If the Amendments are approved by the stockholders, a total of 1,472,310 shares
of the Company's Common Stock will be available for issuance under the 1994
Plan. The shares may be either authorized and unissued shares or authorized and
issued and outstanding shares (including, in the discretion of the Board, shares
purchased in the market). In the event a Stock Option expires unexercised, is
terminated, or is canceled or forfeited, the shares of Common Stock allocable to
the unexercised portion of that Stock Option may again be subject to a Stock
Option under the 1994 Plan.
The 1994 Plan provides that in the event of any change in the outstanding
shares of Stock of the Company by reason of any stock dividend, split, spinoff,
recapitalization, merger, consolidation, combination, exchange of shares of
other similar change, the aggregate number of shares of Stock with respect to
which awards may be made under the 1994 Plan, the terms and the number of shares
of any outstanding Stock Options, and the purchase price of a share of Stock
under Stock Options, may be equitably adjusted by the Board in its sole
discretion.
STOCK OPTIONS. The Committee may designate a Stock Option as an Incentive
Option, a Nonqualified Option, or a Restricted Share. The terms of each Stock
Option shall be set out in a written option agreement which incorporates the
terms of the 1994 Plan.
The purchase price per share of Common Stock (the "Purchase Price") of a
Nonqualified Option may not be less than the par value of a share of Common
Stock of the Company. The Purchase Price of an Incentive Option may not be less
than 100% of the Fair Market Value (as defined in the 1994 Plan) of the Common
Stock on the date of grant, and the Incentive Option may not be exercisable
after 10 years from the date of grant. Additionally, the grant of Incentive
Options to an employee owning over 10% of the voting Stock of the Company must
be at an exercise price of not less than 110% of the Fair Market Value of the
stock on the date of grant, and the Incentive Option may not be exercisable
after 5 years from the date of grant. The aggregate fair market value of all
shares of Common Stock with respect to which Incentive Options are exercisable
for the first time by any optionee during any one calendar year shall not exceed
$100,000. The purchase price of Restricted Stock will be determined by the
Committee on the date
9
<PAGE>
the Restricted Stock is granted, and the Restricted Stock will be free of the
restrictions at the end of the Performance Period (as defined in the 1994 Plan).
On March 31, 2000 the closing price of the Common Stock was $12.63 per share.
Incentive Options and Nonqualified Options may be exercised by payment of
the Stock Option price in cash or, with approval of the Committee, in shares of
Common Stock valued at fair market value on the date of exercise. If the Company
shall have a class of its Common Stock registered pursuant to Section 12 of the
1934 Act, a holder of Nonqualified Options may also make payment by delivering
to the Company a properly executed exercise notice together with irrevocable
instructions to a broker approved by the Company that upon such broker's sale of
shares with respect to which such option is exercised, it is to deliver promptly
to the Company the amount of sales proceeds necessary to satisfy the option
exercise price and any required withholding taxes. Special rules apply which
limit the time of exercise of a Stock Option following an employee's termination
of employment or upon the occurrence of a "Capital Transaction" (as defined in
the 1994 Plan). The Committee may impose additional restrictions on the exercise
of any Stock Option.
AMENDMENT OF THE 1994 PLAN. The Board of Directors may amend, suspend or
terminate the 1994 Plan at any time. In the event that the Board of Directors
determines that stockholder approval of any amendment to the 1994 Plan is
necessary or desirable, then the effectiveness of any such amendment may be
conditioned upon its approval by the affirmative votes of the holders of a
majority of the outstanding voting stock of the Company. No change may be made
in, and no amendment, rescission, suspension or termination of the 1994 Plan
shall have an effect on, Stock Options previously granted under the 1994 Plan
which may impair or alter the rights or obligations of the holders thereof
except with the consent of the optionee.
CHANGE IN CONTROL. Upon the consummation of a merger or consolidation of
the Company with or into another corporation in which the Company is not the
survivor, a dissolution of the Company, or a transfer of all or substantially
all of the assets or shares of stock of the Company (a "Capital Transaction"),
then (i) if a plan or agreement respecting the Capital Transaction provides for
the change, conversion, or exchange of the shares of Common Stock under
outstanding and unexercised Options for securities of another corporation, then
the Board will adjust the shares of Stock accordingly, or (ii) if there is no
plan or agreement respecting the Capital Transaction or if such plan or
agreement does not specifically provide for the change, conversion, or exchange
of the shares of Common Stock under outstanding and unexercised Stock Options
for securities of another corporation, then the Committee will provide the
Participant with thirty (30) days written notice of the transaction and the
Participant, without the necessity of any further action by the Committee, shall
be entitled to purchase, prior to the effective date of the Capital Transaction,
the number of Stock Options then vested. The unexercised portion of any Stock
Option shall be deemed cancelled and terminated as of the effective date of such
transaction. Notwithstanding the foregoing, the Board or the Committee may
provide that upon the occurrence of such events as it shall deem appropriate,
any or all outstanding Stock Options shall become fully vested and exercisable.
FEDERAL TAX CONSEQUENCES. The grant of Incentive Options to an employee
does not result in any income tax consequences. The exercise of an Incentive
Option generally does not result in any income tax consequences to an employee
if (i) the Incentive Option is exercised by the employee during his employment
with the Company or a subsidiary of the Company, or within a specified period
after termination of employment, and (ii) the employee does not dispose of
shares acquired pursuant to the exercise of an Incentive Option before the
expiration of two years from the date of grant of the Incentive Option or one
year after exercise and the transfer of the shares to him, whichever is later
(the "Waiting Period"). However, the excess of the fair market value of the
shares of Common Stock as of the date of exercise over the option exercise price
is includable in an employee's alternative minimum taxable income in the year of
exercise.
10
<PAGE>
An employee who disposes of his Incentive Option shares prior to the
expiration of the Waiting Period (an "Early Disposition") generally will
recognize ordinary income in the year of sale in an amount equal to the excess,
if any, of (a) the lesser of (i) the fair market value of the shares as of the
date of exercise or (ii) the amount realized on the sale, over (b) the Incentive
Option price. Any additional amount realized on an Early Disposition should be
treated as capital gain to the employee, short or long term, depending on the
employee's holding period for the shares.
As a result of changes made by the IRS Restructuring and Reform Act of 1998
reducing the required holding period for assets afforded long-term capital gains
tax treatment, if an employee sells shares acquired pursuant to the exercise of
an Incentive Option after December 31, 1997, the employee will generally
recognize a long-term capital gain or loss on the sale if the shares were held
for more than twelve (12) months. Under those circumstances, if the employee
recognizes a long-term capital gain on the sale, his or her long-term capital
gain will be taxed at a maximum rate of 20%. After December 31, 2000, the sale
by an employee of shares acquired pursuant to the exercise of an Incentive
Option which are held for more than five years will be taxed at a maximum rate
of 18%.
The Company will not be entitled to a deduction as a result of the grant of
an Incentive Option, the exercise of an Incentive Option, or the sale of
Incentive Option shares after the Waiting Period. If an employee disposes of
Incentive Option shares in an Early Disposition, the Company would be entitled
to deduct the amount of ordinary income recognized by the Employee.
The grant of Nonqualified Options under the 1994 Plan will not result in the
recognition of any taxable income by the optionee. An optionee will recognize
ordinary income on the date of exercise of the Nonqualified Option equal to the
excess, if any, of (i) the fair market value of the shares acquired as of the
exercise date, over (ii) the exercise price. The income reportable on exercise
of a Nonqualified Option is subject to federal income and employment tax
withholding. Generally, the Company will be entitled to a deduction for its
taxable year within which the optionee recognizes compensation income in a
corresponding amount.
Generally, the recipient of an award of Restricted Shares is taxed upon the
fair market value of the shares at the date or dates that such shares vest, and
the Company is entitled to a deduction at the same time in the same amount. In
fiscal 1999 there were grants of options to purchase shares of the Company's
Common Stock to the CEO and four most highly compensated executive officers as
follows:
AMENDED AND RESTATED 1994 LONG TERM INCENTIVE PLAN
<TABLE>
<CAPTION>
NAME POSITION NUMBER OF OPTIONS
- ---- ------------------------------------ -----------------
<S> <C> <C>
Richard J. Jerrier.......... Executive Vice President and 22,500
Managing Director
</TABLE>
STOCKHOLDER APPROVAL REQUIREMENT. The approval of the amendment requires
the affirmative vote of a majority of the shares of Common Stock voting on the
matter. Accordingly, abstentions and broker non-votes applicable to shares at
the Annual Meeting will not be included in the tabulation of votes cast on this
proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE FOR PROPOSAL THREE.
11
<PAGE>
PROPOSAL FOUR
COMPANY NAME CHANGE
The Board of Directors has deemed it advisable and recommends that the
stockholders approve an amendment to the Company's Certificate of Incorporation
to change the Company's name from Carreker-Antinori, Inc. to Carreker
Corporation. Upon approval of the above Amendment by the Company's Stockholders,
it is anticipated that the filing with the Delaware Secretary of State
implementing the Amendment would be made and would become effective as soon
thereafter as practicable.
The proposed name change of the Company will not affect stockholders'
rights, will not necessitate any exchange of outstanding stock certificates and
will not affect the Company's NYSE ticker symbol, which is "CANI."
THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE FOR PROPOSAL FOUR.
12
<PAGE>
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following information sets forth certain compensation provided to the
Company's five most highly compensated executive officers of the Company
(collectively, the "Named Executive Officers") for each of the last three fiscal
years:
SUMMARY COMPENSATION TABLE
(FISCAL YEAR ENDED JANUARY 31, 2000)
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION AWARDS
---------------------------------- ----------
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND FISCAL SALARY BONUS COMPENSATION RESTRICTED UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) (1)($) STOCK($) OPTIONS($) (2)($)
- ------------------ -------- -------- -------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
John D. Carreker, Jr ........... 1999 487,752 -- -- -- -- 5,000
Chairman of the Board and 1998 485,668 -- -- -- -- 5,000
Chief Executive Officer 1997 475,248 -- -- -- -- 9,125
Richard J. Jerrier ............. 1999 350,000 206,000 32,903 -- -- 5,000
Executive Vice President and 1998 -- -- -- -- -- --
Managing Director 1997 -- -- -- -- -- --
Wyn P. Lewis ................... 1999 327,502 -- -- -- -- 237,293
Director, Vice Chairman of the 1998 308,340 -- -- -- -- 5,000
Office of the President, 1997 300,000 -- -- 342,750 582,952 8,875
Executive Vice President and
Managing Director
Richard L. Linting ............. 1999 291,680 -- 34,000 -- -- 5,000
President, Chief Operating 1998 350,016 -- 45,525 -- -- 5,000
Officer and Director 1997 350,016 -- 49,345 205,650 495,757 10,521
Royce D. Brown ................. 1999 266,668 -- -- -- -- 5,000
Vice Chairman of the Office of 1998 242,512 -- -- -- -- 5,000
the President Executive Vice 1997 218,750 -- -- -- 120,890 9,125
President and Managing
Director
</TABLE>
- --------------------------
(1) Includes moving expenses for Mr. Jerrier and lease expenses for
Mr. Linting.
(2) Includes Company contributions to the Long Term Incentive Plan on behalf of
Messrs. Carreker, Jerrier, Lewis, Linting, and Brown. Includes $232,293
resulting from a disqualifying distribution of Company Stock received
through the exercise of incentive stock options by Mr. Lewis.
13
<PAGE>
AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth, for each of the identified Named Executive
Officers, information concerning the number of shares received during the fiscal
year ended January 31, 2000 upon exercise of options and the aggregate dollar
amount received from such exercise, as well as the number and value of
securities underlying unexercised options held on January 31, 2000.
Mr. Carreker neither exercised any options during the fiscal year ended
January 31, 2000 nor held any options on January 31, 2000.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FISCAL YEAR-END(#) AT FISCAL YEAR-END($)(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE (#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard J. Jerrier..... -- -- 35,000 22,500 126,858 70,313
Wyn P. Lewis........... -- -- 37,760 37,762 20,198 20,199
Richard L. Linting..... -- -- 462,000 0 3,000,125 0
Royce D. Brown......... -- -- 77,000 38,500 351,336 20,594
</TABLE>
- ------------------------
(1) Based on the difference between the option exercise price and the closing
sales price of the Company's Common Stock as reported on the Nasdaq National
Market on the exercise date.
(2) Based on the difference between the option exercise price and the closing
sale price of $9.4375 of the Company's Common Stock as reported on the
Nasdaq National Market on January 29, 2000, the last trading day prior to
the closing of the Company's fiscal year ended January 31, 2000, multiplied
by the number of shares underlying the options.
COMPENSATION OF DIRECTORS
Directors have been reimbursed for travel and other out-of-pocket expenses
in attending meetings of the Board of Directors. Employee directors do not
receive compensation for their services as directors. Non-employee directors
receive an annual retainer of $5,000, a fee of $1,250 per board meeting attended
and a fee of $625 per committee meeting attended. Under the Company's Director
Stock Option Plan, non-employee directors may elect to receive options to
purchase Common Stock in lieu of all or a portion of their fees of serving as
directors and committee members and for performing consulting services. For a
brief description of the Director Plan see "Report on Executive Compensation" on
page 14.
During the course of the last fiscal year, David K. Sias received a total of
$53,975 for consulting services. The Company paid a fee of $22,800 to Donald L.
House and a fee of $7,150 to James L. Fischer for consulting services.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act ("Section 16 (a)") 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 on Form 3 and changes in ownership on Form 4 or Form 5 with the
Commission and the National Association of Securities Dealers, Inc. Such
officers, directors and ten-percent stockholders are also required by Commission
rules to furnish the Company with copies of all such forms that they file. Based
solely on its review of the copies of such forms received by the Company, or
written representations from certain reporting persons that no other reports
were required for such persons, the Company believes that during the fiscal year
ended January 31, 2000 all Section 16(a) filing requirements applicable to its
officers, directors and ten-percent stockholders were compiled with except that
Wyn P. Lewis filed two Form 4s late.
14
<PAGE>
COMPENSATION AND OTHER COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Fischer and Lee. The Audit
Committee consists of Messrs. James D. Carreker, House, Peck and Sias. None of
these individuals was at any time during the fiscal year ended January 31, 2000,
or any other time, an officer or employee of the Company. No member of the
Compensation Committee or Audit Committee serves as a member of the board of
directors, compensation committee or audit committee of any entity that has one
or more executive officers serving as a member of the Company's Board of
Directors, Compensation Committee or Audit Committee.
CERTAIN TRANSACTIONS
PROVISION OF MANAGEMENT SERVICES AND OTHER TRANSACTIONS INVOLVING ECCHO, PSN AND
INFITEQ
The Company provides management services to three organizations, Electronic
Check Clearing House Organization ("ECCHO"), Payment Solutions Network, Inc.
("PSN") and INFITEQ, LLC ("INFITEQ"). David Walker, Senior Vice President of the
Company, serves as Executive Director of ECCHO. For the fiscal year ended
January 31, 2000, the Company recognized revenues from ECCHO for its management
services in the amount of approximately $887,780. John D. Carreker, Jr.,
Chairman of the Board and Chief Executive Officer of the Company, serves as a
director of PSN. In the fiscal year ended January 31, 2000, the Company
recognized revenues from PSN for its management services in the amount of
$850,458. John D. Carreker, Jr. serves as Chairman of the Board of INFITEQ, and
John D. Carreker, III, Senior Vice President of the Company and the son of John
D. Carreker, Jr., served as Executive Director of INFITEQ until February, 1999.
In the fiscal year ended January 31, 2000, the Company recognized revenues from
INFITEQ management and consulting services in the amount of $50,901.
The Company loaned PSN $500,000 in fiscal 1996, which amount has been
reserved due to the Company's belief that collection is doubtful. The Company
loaned PSN an additional $66,000 in fiscal 1996, which loan is currently being
repaid in accordance with its terms.
FUTURE TRANSACTIONS
The Company has adopted a policy providing that all transactions between the
Company and related parties will be subject to approval by a majority of all
disinterested directors and must be on terms no less favorable than those that
could otherwise be obtained from unrelated third parties.
15
<PAGE>
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee provides advice and recommendations to the Board
of Directors concerning the compensation, including base salaries, bonuses and
stock option awards under the Company's 1994 Long Term Incentive Plan ("LTIP")
for the Named Executive Officers, stock option awards to other eligible
employees, employer contributions to the 401K savings plan, and the compensation
of the Directors of Carreker-Antinori, Inc. All decisions made by the
Compensation Committee relating to compensation of the Company's executive
officers, are reviewed by the Board of Directors. The Compensation Committee
consists of Messrs. James L. Fischer and Richard R. Lee, Jr. who are
non-employee directors with no interlocking directorships with other companies
(or their compensation committee). During the fiscal year ended January 31, 2000
Messrs. Fischer and Lee held six (6) meetings to review the Company's
compensation policy for the fiscal year ended January 31, 2000 as they affected
the Company's executive officers, including the Company's chief executive
officer, Mr. John D. Carreker, Jr.
The Compensation Committee's executive compensation policies are designed to
provide competitive levels of compensation that integrate pay with the Company's
annual and long term performance goals, reward above-average corporate
performance, recognize individual initiative and achievements, and assist the
Company in attracting and retaining qualified executives. Total executive
compensation is generally set at levels that the Compensation Committee believes
to be consistent with others in the Company's industry, although actual
compensation levels in any particular year may be above or below those of the
Company's competitors, depending upon the Company's performance. The objectives
of the Company's executive compensation program are as follows:
1. Compensate competitively in order to attract, retain and motivate a
highly competent executive team dedicated to achieving the Company's
mission and strategic plans, which are designed to result in long term
growth in shareholder value;
2. Tie individual compensation to individual and team performance and the
success of the Company;
3. Align executive officers and certain eligible employees' interests with
those of the Company by making incentive compensation dependent upon the
performance of the Company or the appropriate business unit; and
4. Align executive officers and certain eligible employees' interests with
those of the Company and its stockholders by providing long term
compensation opportunities through participation in the Company's LTIP.
To achieve these compensation objectives, the Company uses a combination of
short term and long term compensation elements, all of which are based upon the
performance of the individual and/or the performance of the Company or the
appropriate business unit. The Compensation Committee is mindful of grants or
awards made to the Company's executive officers under the Company's LTIP. The
Compensation Committee endorses the position that stock ownership by management
and stock based performance compensation arrangements are beneficial in aligning
management's and stockholders' interests in the enhancement of shareholder
value.
In 1993, Congress amended the Internal Revenue Code to add Section 162(M).
This Section of the Internal Revenue Code limits the deductibility of
compensation paid to specified executive officers to $1,000,000 per officer in
any one year. Compensation which qualifies as performance based compensation
does not have to be taken into account for the purposes of this limitation. The
Committee does not expect the cash compensation to be paid to any executive
officer will exceed the $1,000,000 limit per officer in the foreseeable future.
As a result, the Committee has decided at this time to take no action to limit
or restructure any elements of the cash compensation paid to any of the
Company's executive officers. Should the compensation level of any executive
officer approach the $1,000,000 level, the Committee will reevaluate this
decision.
16
<PAGE>
The three (3) principle components of the Company's compensation program are
base salary, profit sharing incentive cash bonuses, and long term compensation.
BASE SALARY. Base compensation of executive officers is set based on
offering competitive salaries in comparison to market salaries. The Company
utilizes survey data developed for comparable executive positions in other
similar companies in the same industry to establish a minimum, medium and
maximum salary and bonus level for each executive position. These ranges may be
adjusted from industry averages for factors such as local market conditions or
unique aspects, responsibilities or qualifications of the position not believed
to be normally associated with the position in other similarly sized companies.
Base salary ranges are reviewed annually with a "Salary Year" from April 1
through March 31. A range of percentage increases and a maximum merit increase
is established for various performance levels. The base salary position within
the range is set after an annual subjective review by the Compensation Committee
of performance in areas of the executive's responsibilities. This review
includes an evaluation of work performance, achievement of specific goals,
position requirements and financial performance of the applicable business unit
in relation to expected performance based on the annual plan. Increases in base
salary of executive officers, including Named Executive Officers, are consistent
with the Company's overall guidelines for other employee salary percentage
increases for defined performance levels. These guidelines are revised annually
to reflect economic, industry and company factors. Salary increases are not
necessarily granted each year. The base salary for each of the Named Executive
Officers including Mr. Carreker was initially established in their Offer Letter
or Employment Agreement.
PROFIT SHARING INCENTIVE PLAN. All Named Executive Officers are currently
eligible for bonuses under the Company's Profit Sharing Incentive Plan (the
"Plan"), which currently has a plan year of February 1 to January 31. The Plan
is a performance driven incentive plan. Awards are earned based on actual
results compared to pre-established targets. Participants in the Plan are
eligible to receive Incentive Awards based on (i) the Company's and business
unit's achievement of certain pre-determined corporate and business unit
performance target goals, and/or (ii) the Participant's achievement of certain
pre-determined individual performance goals. The measurement period for
determining whether performance target goals are met is the Company's the fiscal
year ended January 31 (the "Plan Year"). Employees' salaries and bonus
opportunities are adjusted each "Salary Year", which is the twelve-month period
ending each March 31. In order to participate in the Incentive Award for fiscal
year performance, an employee must remain employed on the last day of the Salary
Year following the Plan Year end. Any employee who shall have been designated by
the Board shall, during such individual's period of employment, be a Plan
Participant. Currently, the Board has designated substantially all full-time
employees as Plan Participants, including Mr. Carreker. The Compensation
Committee seeks input from the Company management in making awards. Awards under
the Profit Sharing Plan are made in the form of cash bonuses and stock-based
compensation pursuant to the Company's Long Term Incentive Plan, with at least
50% of awards granted to senior management consisting of stock-based
compensation. An employee may at his or her election substitute any cash award
for an equivalent stock-based compensation award.
LONG TERM COMPENSATION. Under the Company's LTIP which has previously been
approved by the stockholders, the Company may grant qualified and non-qualified
options to purchase the Company's common stock to the Named Executive Officers
and eligible employees of the Company and its subsidiaries. Stock options
awarded in the fiscal year ended January 31, 2000 must be exercised within
10 years from the date of grant. Such options for the Named Executive Officers
and employees become exercisable under various terms. The number of options
granted is individually determined for each Named Executive Officer based on
subjective evaluation by the Compensation Committee of the individual's
responsibility level and the contribution to the Company. For the fiscal year
ended January 31, 2000, the Board of Directors has elected to award only
non-qualified options pursuant to the LTIP.
DIRECTOR STOCK OPTION PLAN. The Company's Director Stock Option Plan
provides that eligible directors of the Company may elect to receive options to
purchase Common Stock in lieu of all or
17
<PAGE>
a portion of their annual director's retainer and various attendance fees and
any consulting fees for consulting services rendered to the Company (the
"Fees"). Only directors of the Company who are not employees of the Company are
eligible to participate in the Director Plan. Options are granted automatically
on the first trading day in any fiscal quarter (the "Grant Date") to any
eligible director who, prior to the Grant Date, files with the committee
administering the Director Plan an election to receive a stock option in lieu of
25%, 50%, 75% or all of their Fees, excluding Committee fees, to be earned in
the period from the Grant Date to the end of the fiscal year. Elections are
deemed made for each succeeding fiscal year, and options automatically granted
on the first trading day in each succeeding fiscal year, unless the director
notifies the Company of the cancellation of the election prior to the first day
of the fiscal year. Generally, no option may be exercised prior to the first
anniversary of the date the option was granted, and no option may be exercised
after the expiration of 15 years from the date the option was granted. If the
optionee ceases to be a director or consultant before an option granted under
the Director Plan becomes exercisable, is absent from a regularly scheduled
meeting, or fails to earn a consulting fee, the option shall terminate as to a
pro rata portion of the shares subject to the option, based upon the Fees
actually earned.
EMPLOYEES 401K SAVINGS PLAN. The Company's Employee 401(k) savings plan
provides for participation in employer contributions by all eligible employees,
including the Named Executive Officers. Employees are eligible to begin
participation in the Plan on the first day of the calendar quarter after ninety
days of service. The Company currently contributes a percentage (50% during
calendar/plan years 1999 and 2000) of each participant's individual deferral to
the plan. The Company also has the discretion of making an annual lump sum
profit sharing contribution for all eligible employees. This contribution would
be made as a percentage of each employee's base salary. Company contributions
vest at a rate of 25% for each year a participant earns a year of service. All
Company contributions are subject to limitations imposed by the Internal Revenue
Code.
EMPLOYMENT AGREEMENTS. The Company enters into executive employment
agreements with certain officers and employees, including some of the Named
Executive Officers, from time to time. The Compensation Committee believes the
agreements will serve to protect the Company and its stockholders as well as
these officers and employees in the event of a threatened or actual change in
control of the Company. The agreements are designed to reinforce the officers'
and employees' dedication to the Company's best interests before and after such
a transaction, and would reduce the likelihood that these officers and employees
would leave the Company prematurely. In structuring and deciding upon the level
of benefits, the Compensation Committee and Board utilized, among other things,
an analysis of competitive practices within the Company's peer group based on
public filings.
JOHN D. CARREKER, JR. The Company is a party to an employment agreement
with Mr. Carreker with a term beginning February 1, 1997 extending through
January 31, 1999. Pursuant to its terms, the agreement was renewed by
Mr. Carreker for additional one-year terms (through January 31, 2001) by giving
six months' prior written notice to the Company in 1998 and 1999. The agreement
provides that Mr. Carreker will receive a base annual salary of not less than
$450,000 and will be eligible to receive bonuses as determined by the Board of
Directors in its sole discretion. The agreement may be terminated at any time by
the Board of Directors, with or without cause. Upon termination of the agreement
by Mr. Carreker due to a breach on the part of the Company or by the Company
without cause, Mr. Carreker will be entitled to receive, on the Company's
regular payroll dates and less required withholdings, his salary at the current
rate for the remaining term of the agreement.
RICHARD L. LINTING. The Company was a party to an employment agreement with
Mr. Linting with a term which expired on December 17, 1999 and was not renewed.
The agreement provided that Mr. Linting received a base annual salary during the
first year of not less than $350,000.
OTHER EXECUTIVES. The Company is a party to employment agreements with
Messrs. Brown and Lewis. The agreements with Messrs. Brown and Lewis have a term
extending through March 2001. Mr. Gage's contract expired during the fiscal
year. Under the agreements, Messrs. Brown and Lewis will receive an
18
<PAGE>
annual base salary of not less than $240,000 and $300,000 and each is entitled
to a bonus of seventy percent of his annual base salary on terms no less
favorable than those applicable to other high-level officers of the Company in
each year of the applicable agreement if the Board of Directors, in its sole
discretion, so determines. The agreements may be terminated at any time by the
Company, with or without cause, and may be terminated by the executive if the
Company is in material breach of the applicable agreement. Upon termination by
the executive due to a breach on the part of the Company or by the Company
without cause, the executive will be entitled to receive, on the Company's
regular payroll dates and less required withholdings, his salary at the current
rate for the remaining term of the agreement.
FISCAL YEAR ENDED JANUARY 31, 2000 CHIEF EXECUTIVE COMPENSATION. The Chief
Executive Officer of Carreker-Antinori, Inc., Mr. John D. Carreker, Jr.,
participated during the fiscal year ended January 31, 2000 in the same
compensation programs as the other Named Executive Officers with each component
of his compensation determined by the Board of Directors according to the same
criteria described above. Mr. Carreker's base salary was generally determined in
the same manner as other executive officers and as described in the Base Salary
section above. Mr. Carreker's incentive compensation was determined using the
same guidelines described in the Profit Sharing Incentive Plan section of this
report. While the Compensation Committee considers Mr. Carreker's performance
for 1999 to have been exemplary and worthy of option rewards, Mr. Carreker has
declined the award of qualified or non-qualified options to preserve the option
pool for the Company's other key employees.
Submitted by:
The Compensation Committee of
Board of Directors
James L. Fischer (Chairman)
Richard R. Lee, Jr.
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PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total returns for the
Company, the Services Peer Group, the Technology Peer Group, NADQ and FR 2000
during the period commencing on February 1, 1999 and ending on January 31, 2000.
The comparison assumes the reinvestment of all dividends, if any. The Services
Peer Group consists of Atlantic Data Services, Charles River Associates, Hagler
Bailly,Inc. and Technology Solutions. The Technology Peer Group consists of CFI
ProServices, Inc., Cognizant Technology Sol., Information Management Assoc., and
Pegasystems, Inc.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CAR- SERVICES PEER TECHNOLOGY PEER
REKER-
<S> <C> <C> <C> <C> <C>
Antinori, Inc. Group Index Group Index NADQ FR 2000
2/1/99 100.00 100.00 100.00 100.00 100.00
5/1/99 122.92 61.10 99.88 93.63 101.69
8/1/99 116.67 78.24 135.77 98.86 103.88
11/1/99 115.63 100.67 152.47 117.50 101.35
1/31/00 157.29 160.19 205.29 160.93 116.46
</TABLE>
Note: The Stock performance shown below is not necessarily indicative of future
price performance.
<TABLE>
<CAPTION>
(TABLE) 2/1/99 5/1/99 8/1/99 11/1/99 1/31/00
- ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Carreker-Antinori, Inc................................ 100 122.92 116.67 115.63 157.29
Services Peer Group Index............................. 100 61.10 78.24 100.67 160.19
Technology Peer Group Index........................... 100 99.88 135.77 152.47 205.29
NADQ.................................................. 100 93.63 98.86 117.50 160.93
FR 2000............................................... 100 101.69 103.88 101.35 116.46
</TABLE>
ANNUAL REPORT ON FORM 10-K
UPON WRITTEN REQUEST OF ANY BENEFICIAL SHAREHOLDER OR SHAREHOLDER OF RECORD,
A COPY OF THE COMPANY'S ANNUAL REPORT AND FORM 10-K FOR THE FISCAL YEAR ENDED
JANUARY 31, 2000 (INCLUDING THE EXHIBITS, FINANCIAL STATEMENTS, AND THE
SCHEDULES THERETO) REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 13A-1 UNDER THE SECURITIES EXCHANGE ACT OF 1934, MAY
BE OBTAINED, WITHOUT CHARGE, FROM TERRY L. GAGE, CHIEF FINANCIAL OFFICER, 4055
VALLEY VIEW LANE, SUITE 1000, DALLAS, TEXAS 75244.
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<PAGE>
SHAREHOLDER PROPOSALS
Shareholder proposals to be presented at the 2001 Annual Meeting of
Stockholders, for inclusion in the Company's Proxy Statement and form of Proxy
relating to that meeting, must be received by the Company at its offices in
Dallas, Texas, addressed to the Secretary of the Company, 4055 Valley View Lane,
Suite 1000, Dallas, Texas 75244, not later than December 29, 2000. Such
proposals must comply with the Bylaws of the Company and the requirements of
Regulation 14a-8 of the Securities Exchange Act of 1934.
Any holder of Common Stock of the Company desiring to bring business before
the 2001 Annual Meeting of Stockholders in a form other than a stockholder
proposal in accordance with the preceding paragraph must give written notice
that is received by the Company, addressed to the Secretary of the Company, 4055
Valley View Lane, Suite 1000, Dallas, Texas, 75244, no later than March 14,
2000.
OTHER MATTERS
At the date of this Proxy Statement, management was not aware that any
matters not referred to in this Proxy Statement would be presented for action at
the meeting. If any other matters should come before the meeting, the persons
named in the accompanying form of Proxy will have discretionary authority to
vote all proxies in accordance with their best judgment, unless otherwise
restricted by law.
By Order of the Board of Directors
MAURICE E. PURNELL, JR.
SECRETARY
Dated: April 28, 2000
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EXHIBIT A
SECOND AMENDED AND RESTATED
1994 LONG TERM INCENTIVE PLAN
AS AMENDED PER PROPOSAL THREE
WHEREAS, on October 7, 1994, J. D. Carreker & Associates, Inc. adopted the
J. D. Carreker & Associates, Inc. Long Term Incentive Plan, which was approved
by its shareholders; and
WHEREAS, The Carreker Group, Inc. (successor to J. D. Carreker &
Associates, Inc.) subsequently amended and restated the plan as The Carreker
Group, Inc. Amended and Restated 1994 Long Term Incentive Plan, which was
approved at the annual meeting of its shareholders in 1997; and
WHEREAS, the name of the corporation was changed from The Carreker
Group, Inc. to Carreker-Antinori, Inc. (the "Company"); and
WHEREAS, incident to the Company's reincorporation in the state of Delaware,
and the registration of its equity securities in a registered offering pursuant
to the Securities Act of 1934, the Company amended and restated the Plan as the
Carreker-Antinori, Inc. 1994 Long Term Incentive Plan (as Amended and Restated
effective May 12, 1998); and
WHEREAS, the Board of Directors of the Company has determined that it is
advisable and in the best interests of the Company to amend and restate the 1994
Long Term Incentive Plan, effective as of June 20, 2000, subject to the approval
of the Company's shareholders;
NOW, THEREFORE, the terms of the Second Amended and Restated 1994 Long Term
Incentive Plan (the "Plan") shall be as follows.
I. GENERAL
1. PURPOSE. The Plan has been established by the Company to:
(a) attract and retain employees, consultants and non-employee directors;
(b) motivate participating employees, consultants and non-employee
directors, by means of appropriate incentive, to achieve long-range
goals;
(c) provide incentive compensation opportunities for participating
employees, consultants and non-employee directors which are
competitive with those of other major corporations; and
(d) further identify the interests of participating employees,
consultants and non-employee directors with those of the Company's
other shareholders through compensation alternatives based on the
Company's common stock;
and thereby promote the long-term financial interest of the Company and its
Subsidiaries, including the growth in value of the Company's equity and
enhancement of long-term shareholder return.
2. EFFECTIVE DATE. The provisions of the Plan originally became effective
on October 7, 1994. The Plan shall be unlimited in duration and, in the event of
plan termination, shall remain in effect as long as any awards under it are
outstanding; PROVIDED, HOWEVER, that no awards of incentive stock options
("INCENTIVE STOCK OPTIONS") as provided in Section 422 of the Code may be made
under the Plan after June 19, 2010. The provisions of the Plan as restated and
amended herein shall become effective as of June 20, 2000 (the "EFFECTIVE
DATE"), subject to the approval of the holders of a majority of the shares of
voting stock of all classes of the Company present, or represented, and entitled
to vote at a meeting of its stockholders, or the unanimous written consent of
all holders of common stock.
3. DEFINITIONS. The following definitions are applicable to the Plan.
"Board" means the Board of Directors of the Company.
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<PAGE>
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Compensation Committee of the Board or, if no
Compensation Committee is in existence, the entire Board.
"Disabled" means the inability of a Participant, by reason of a physical or
mental impairment, to engage in any substantial gainful activity, of which the
Board shall be the sole judge.
"Fair Market Value" of Stock means as of any date, the value of Stock
determined as follows:
(a) If the Stock is listed on any established stock exchange or a national
market system, including without limitation the National Market System of
the National Association of Securities Dealers, Inc. Automated Quotation
("NASDAQ") System, the Fair Market Value of a Share of Stock shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such system or exchange (or the exchange with the
greatest volume of trading in Stock) on the date of grant, as reported in
THE WALL STREET JOURNAL or such other source as the Board deems reliable;
(b) If the Stock is quoted on the NASDAQ System (but not on the National
Market System thereof) or regularly quoted by a recognized securities
dealer but selling prices are not reported, the Fair Market Value of a
Share of Stock shall be the mean between the bid and asked prices for the
Stock on the last market trading day prior to the day of determination,
as reported in THE WALL STREET JOURNAL or such other source as the Board
deems reliable; or
(c) In the absence of an established market for the Stock, the Fair Market
Value thereof shall be determined in good faith by the Committee.
"Option Date" means, with respect to any Stock Option, the date on which the
Stock Option is awarded under the Plan.
"Participant" means any employee, consultant or non-employee director of the
Company or any Subsidiary who is selected by the Board to participate in the
Plan.
"Performance Period" has the meaning ascribed to it in Article IV.
"Related Company" means any corporation during any period in which it is a
Subsidiary, or during any period in which it directly or indirectly owns 50% or
more of the total combined voting power of all classes of stock of the Company
that are entitled to vote.
"Restricted Stock" has the meaning ascribed to it in Article IV.
"Stock" means Carreker-Antinori, Inc. common stock, $.01 par value.
"Stock Option" means the right of a Participant to purchase Stock pursuant
to an Incentive Stock Option or Non-Qualified Option awarded pursuant to the
provisions of the Plan.
"Subsidiary" means any corporation during any period of which 50% or more of
the total combined voting power of all classes of stock entitled to vote is
owned, directly or indirectly, by the Company.
4. ADMINISTRATION. The authority to manage and control the operation and
administration of the Plan shall be vested in the Board. Subject to the
provisions of the Plan, the Board will have authority to select employees,
consultants and/or non-employee directors to receive awards of Stock Options
and/or Restricted Stock, to determine the time or times of receipt, to determine
the types of awards and the number of shares covered by the awards, to establish
the terms, conditions, performance criteria, restrictions, and other provisions
of such awards, and to cancel or suspend awards. In making such award
determinations, the Board may take into account the nature of services rendered
by the respective employee, consultant and/or non-employee director, his or her
present and potential contribution to the Company's success, and such other
factors as the Board deems relevant. The Board is authorized to
23
<PAGE>
interpret the Plan, to establish, amend, and rescind any rules and regulations
relating to the Plan, to determine the terms and provisions of any agreements
made pursuant to the Plan, to modify such agreements, and to make all other
determinations that may be necessary or advisable for the administration of the
Plan.
The Board, in its discretion, may delegate any or all of its authority,
powers, and discretion under this Plan to the Committee, and the Board in its
discretion may revest any or all such authority, powers, and discretion in
itself at any time. If appointed, the Committee shall function as follows: A
majority of the Committee shall constitute a quorum, and the acts of a majority
of the members present at any meeting at which a quorum is present, or acts
approved in writing by all members of the Committee, shall be the acts of the
Committee, unless provisions to the contrary are embodied in the Company's
Bylaws or resolutions duly adopted by the Board. All actions taken and decisions
and determinations made by the Board or the Committee pursuant to the Plan shall
be binding and conclusive on all persons interested in the Plan. No member of
the Board or the Committee shall be liable for any action or determination taken
or made in good faith with respect to the Plan.
5. PARTICIPATION. Subject to the terms and conditions of the Plan, the
Board shall determine and designate, from time to time, the employees,
consultants and non-employee directors of the Company and/or its Subsidiaries
who will participate in the Plan. In the discretion of the Board, more than one
award may be granted to a Participant. Except as otherwise agreed to by the
Company and the Participant, any award under the Plan shall not affect any
previous award to the Participant under the Plan or any other plan maintained by
the Company or its Subsidiaries.
6. SHARES SUBJECT TO THE PLAN. The shares of Stock with respect to which
awards may be made under the Plan shall be either authorized and unissued shares
or issued and outstanding shares (including, in the discretion of the Board,
shares purchased in the market). Subject to the provisions of paragraph I.10,
the number of shares of Stock available under the Plan shall not exceed
6,959,936 shares in the aggregate increased, as of the first day of each fiscal
year, commencing February 1, 2001, by that number of shares of Stock equal to
two per cent (2%) of the number of shares of Stock outstanding as of
January 31, 2000. If, for any reason, any award under the Plan otherwise
distributable in shares of Stock, or any portion of the award, shall expire,
terminate, or be forfeited or cancelled, or be settled in cash pursuant to the
terms of the Plan and, therefore, any such shares are no longer distributable
under the award, such shares of Stock shall again be available for award under
the Plan.
7. COMPLIANCE WITH APPLICABLE LAWS AND WITHHOLDING OF
TAXES. Notwithstanding any other provision of the Plan, the Company shall have
no liability to issue any shares of Stock under the Plan unless such issuance
would comply with all applicable laws and the applicable requirements of any
securities exchange or similar entity. Prior to the issuance of any shares of
Stock under the Plan, the Company may require a written statement that the
recipient is acquiring the shares for investment and not for the purpose or with
the intention of distributing the shares. If the redistribution of shares is
restricted, certificates representing such shares may bear a legend referring to
such restrictions. All awards and payments under the Plan are subject to
withholding of all applicable taxes, which withholding obligations may be
satisfied, with the consent of the Board, through the surrender of shares of
Stock which the Participant already owns, or to which a Participant is otherwise
entitled under the Plan. The Company shall have the right to deduct from all
amounts paid in cash in consequence of the exercise of a Stock Option under the
Plan any taxes required by law to be withheld with respect to such cash
payments. Where an employee or other person is entitled to receive shares of
Stock pursuant to the exercise of a Stock Option pursuant to the Plan, the
Company shall have the right to require the employee or such other person to pay
to the Company the amount of any taxes that the Company is required to withhold
with respect to such shares, or, in lieu thereof, to retain, or sell without
notice, a sufficient number of such shares to cover the amount required to be
withheld. Upon the disposition (within the meaning of Code Section 424(c)) of
shares of Stock acquired pursuant to the exercise of an Incentive Stock Option
prior to the expiration of the holding period requirements of Code
Section 422(a)(1), the employee shall be required to give notice to the Company
of
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<PAGE>
such disposition and the Company shall have the right to require the employee to
pay to the Company the amount of any taxes that are required by law to be
withheld with respect to such disposition.
8. TRANSFERABILITY. Stock Options awarded under the Plan are not
transferable except as designated by the Participant by will or by the laws of
descent and distribution. Stock Options may be exercised during the lifetime of
the Participant only by the Participant or his guardian or legal representative.
9. EMPLOYEE, CONSULTANT, NON-EMPLOYEE DIRECTOR AND STOCKHOLDER STATUS. The
Plan does not constitute a contract of employment, and selection as a
Participant will not give any employee, consultant or non-employee director the
right to be retained in the employ or as a consultant or non-employee director
of the Company or any Subsidiary. No award under the Plan shall confer upon the
holder thereof any right as a stockholder of the Company prior to the date on
which he fulfills all service requirements and other conditions for receipt of
shares of Stock.
10. ADJUSTMENTS TO NUMBER OF SHARES SUBJECT TO THE PLAN. Subject to the
following provisions of this paragraph 10, in the event of any change in the
outstanding shares of Stock of the Company by reason of any stock dividend,
split, spinoff, recapitalization, merger, consolidation, combination, exchange
of shares or other similar change, the aggregate number of shares of Stock with
respect to which awards may be made under the Plan, the terms and the number of
shares of any outstanding Stock Options, and the purchase price of a share of
Stock under Stock Options, may be equitably adjusted by the Board in its sole
discretion.
11. CAPITAL TRANSACTION. In the event that there shall occur (a) a merger
or consolidation of the Company with or into another corporation in which the
Company shall not be the surviving corporation (other than such a merger or
consolidation undertaken to reincorporate in another jurisdiction) (for purposes
of this Section 11, the Company shall not be deemed the surviving corporation in
any such transaction if, as the result thereof, it becomes a wholly-owned
subsidiary of another corporation), (b) a dissolution of the Company, or (c) a
transfer of all or substantially all of the assets or shares of stock of the
Company in one transaction or a series of related transactions to one or more
other persons or entities (any such transaction being referred to herein as a
"Capital Transaction"), then:
(A) If there is a plan or agreement respecting the Capital Transaction
and if such plan or agreement specifically provides for the change,
conversion, or exchange of the shares of Stock under outstanding and
unexercised Options for securities of another corporation, then the Board
shall adjust the shares of Stock underlying such outstanding and unexercised
Options (and shall adjust the shares of Stock remaining under the Plan which
are then available to be awarded under the Plan, if such plan or agreement
makes specific provision therefor) in a manner not inconsistent with the
provisions of such plan or agreement for the adjustment, change, conversion,
or exchange of such shares of Stock and such Options;
(B) If there is no plan or agreement respecting the Capital Transaction
or if such plan or agreement does not specifically provide for the change,
conversion, or exchange of the shares of Stock under outstanding and
unexercised Options for securities of another corporation, then the
Committee shall provide the Participant with thirty (30) days advance
written notice of such transaction and the Participant, without the
necessity of any further action by the Committee, shall be entitled to
purchase, prior to the effective date of such Capital Transaction, the
number of Option Shares which are then vested. The unvested or unexercised
portion of the Option shall be deemed cancelled and terminated as of the
effective date of such transaction.
Notwithstanding the foregoing, the Board or the Committee may provide that upon
the occurrence of such events as it shall deem appropriate, any or all
outstanding Options shall become fully vested and exercisable.
12. AGREEMENT WITH COMPANY. At the time of any awards under the Plan, the
Board will require a Participant to enter into an agreement with the Company in
a form specified by the Board, agreeing to the
25
<PAGE>
terms and conditions of the Plan and to such additional terms and conditions,
not inconsistent with the Plan, as the Board may, in its sole discretion,
prescribe.
13. AMENDMENT AND TERMINATION OF PLAN. Subject to the following provisions
of this paragraph 13, the Board may at any time and in any way amend, suspend,
or terminate the Plan. No amendment of the Plan and, except as provided in
paragraphs 6 and 10, no action by the Board shall, without further approval of
the stockholders of the Company, increase the total number of shares of Stock
with respect to which awards may be made under the Plan, materially increase the
benefits accruing to Participants under the Plan, or materially modify the
requirements as to eligibility for participation in the Plan, if stockholder
approval of such amendment is a condition of Securities and Exchange Commission
Rule 16b-3 or the Code at the time such amendment is adopted. No amendment,
suspension, or termination of the Plan shall alter or impair any Stock Option or
Restricted Stock previously awarded under the Plan without the consent of the
holder thereof.
II. INCENTIVE STOCK OPTIONS
1. DEFINITION. The award of an Incentive Stock Option under the Plan
entitles the Participant to purchase shares of Stock at a price fixed at the
time the option is awarded, subject to the following terms of this Part II.
2. ELIGIBILITY. The Board shall designate the Participants to whom
Incentive Stock Options, as described in section 422(b) of the Code or any
successor section thereto, are to be awarded under the Plan and shall determine
the number of option shares to be offered to each of them. Incentive Stock
Options may be awarded only to employees, and not to consultants or non-employee
directors. In no event shall the aggregate Fair Market Value (determined at the
time the option is awarded) of Stock with respect to which Incentive Stock
Options are exercisable for the first time by an individual during any calendar
year (under all plans of the Company and all Related Companies) exceed $100,000.
3. PRICE. The purchase price of a share of Stock under each Incentive
Stock Option shall be determined by the Board, provided, however, that in no
event shall such price be less than the greater of (a) 100% of the Fair Market
Value of a share of Stock as of the Option Date (or 110% of such Fair Market
Value if the holder of the option owns stock possessing more than 10% of the
combined voting power of all classes of stock of the Company or any Subsidiary)
or (b) the par value of a share of Stock on such date. The full purchase price
of each share of Stock purchased upon the exercise of any Incentive Stock Option
shall be paid in cash at the time of such exercise or, with the approval of the
Board, in shares of Stock, valued at the Fair Market Value per share on the date
of exercise. As soon as practicable thereafter, a certificate representing the
shares so purchased shall be delivered to the person entitled thereto.
4. EXERCISE. Each Option shall become and be exercisable at such time or
times and during such period or periods, in full or in such installments as may
be determined by the Board at the Option Date.
5. OPTION EXPIRATION DATE. The "Expiration Date" with respect to an
Incentive Stock Option or any portion thereof awarded to a Participant under the
Plan means the earliest of:
(a) the date that is 10 years after the date on which the Incentive Stock
Option is awarded (or, if the Participant owns stock possessing more
than 10% of the combined voting power of all classes of stock of the
Company or any Subsidiary, the date that is 5 years after the date on
which the Incentive Stock Option is awarded);
(b) the date established by the Board at the time of the award;
(c) the date that is one year after the Participant's employment with the
Company and all Related Companies is terminated by reason of the
Participant becoming Disabled or by reason of the Participant's
death; or
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<PAGE>
(d) the date that is three months after the date the Participant's
employment with the Company and all Related Companies is terminated
for any other reason.
All rights to purchase shares of Stock pursuant to an Incentive Stock Option
shall cease as of such option's Expiration Date.
III. NON-QUALIFIED STOCK OPTIONS
1. DEFINITION. The award of a Non-Qualified Stock Option under the Plan
entitles the Participant to purchase shares of Stock at a price fixed at the
time the option is awarded, subject to the following terms of this Part III.
2. ELIGIBILITY. The Board shall designate the Participants to whom
Non-Qualified Stock Options are to be awarded under the Plan and shall determine
the number of option shares to be offered to each of them.
3. PRICE. The purchase price of a share of Stock under each Non-Qualified
Stock Option shall be determined by the Board; provided, however, that in no
event shall such price be less than the par value of a share of such Stock on
such date. The full purchase price of each share of Stock purchased upon the
exercise of any Non-Qualified Stock Option shall be paid in cash at the time of
such exercise or, with the approval of the Board, in shares of Stock, valued at
the Fair Market Value per share on the date of exercise. If the Company shall
have a class of its Common Stock registered pursuant to Section 12 of the 1934
Act, an option holder may also make payment at the time of exercise of an option
by delivering to the Company a properly executed exercise notice together with
irrevocable instructions to a broker approved by the Company that upon such
broker's sale of shares with respect to which such option is exercised, it is to
deliver promptly to the Company the amount of sale proceeds necessary to satisfy
the option exercise price and any required withholding taxes. As soon as
practicable thereafter, a certificate representing the shares so purchased shall
be delivered to the person entitled thereto.
4. EXERCISE. Each Option shall become and be exercisable at such time or
times and during such period or periods, in full or in such installments as may
be determined by the Board at the Option Date.
5. OPTION EXPIRATION DATE. The "Expiration Date" with respect to a
Non-Qualified Stock Option or any portion thereof awarded to a Participant under
the Plan means the earliest of:
(a) the date established by the Board at the time of the award; or
(b) the date that is one year after the Participant's employment with the
Company and all Related Companies is terminated by reason of the
Participant becoming Disabled or by reason of the Participant's
death; or
(c) the date that is three months after the date the Participant's
employment with the Company and all Related Companies is terminated
for any other reason, or the date the Participant ceases to serve as
a consultant or non-employee director of the Company for any reason.
All rights to purchase shares of Stock pursuant to a Non-Qualified Stock Option
shall cease as of such option's Expiration Date.
IV. RESTRICTED STOCK
1. DEFINITION. A Restricted Stock award is an offer by the Company to sell
to an eligible person shares of Stock that are subject to restrictions. The
Board will determine to whom an offer will be made, the number of shares of
Stock the person may purchase, the price to be paid, the restrictions to which
the shares will be subject, and all other terms and conditions of the Restricted
Stock award, subject to the following.
27
<PAGE>
2. ELIGIBILITY. The Board shall designate the Participants to whom
Restricted Stock is to be awarded and the number of shares of Stock that are
subject to the award. The offer of Restricted Stock will be accepted by the
Participant's execution and delivery of the Restricted Stock Purchase Agreement
and full payment for the Shares to the Company within thirty (30) days from the
date the Restricted Stock Purchase Agreement is delivered to the person.
3. TERMS AND CONDITIONS OF AWARDS. The purchase price of shares sold
pursuant to a Restricted Stock Award will be determined by the Committee on the
date the Restricted Stock Award is granted. Restricted Stock Awards shall be
subject to such restrictions as the Committee may impose. These restrictions may
be based upon completion of a specified number of years of service with the
Company or upon completion of the performance goals as set out in advance in the
Participant's individual Restricted Stock Purchase Agreement. Restricted Stock
Awards may vary from Participant to Participant and between groups of
Participants. Prior to the grant of a Restricted Stock Award, the Committee
shall: (a) determine the nature, length and starting date of any Performance
Period for the Restricted Stock Award; (b) select from among the Performance
Factors to be used to measure performance goals, if any; and (c) determine the
number of hares that may be awarded to the Participant. Prior to the payment of
any Restricted Stock Award, the Committee shall determine the extent to which
such Restricted Stock Award has been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Restricted Stock
Awards that are subject to different Performance Periods and having different
performance goals and other criteria.
4. TERMINATION DURING PERFORMANCE PERIOD. If a Participant is terminated
during a Performance Period for any reason, then such Participant will be
entitled to payment (whether in shares of Stock, cash or otherwise) with respect
to the Restricted Stock Award only to the extent earned as of the date of
termination in accordance with the Restricted Stock Purchase Agreement, unless
the Committee determines otherwise.
5. STOCK CERTIFICATE LEGEND. Each certificate issued in respect of shares
of Restricted Stock awarded under the Plan shall be registered in the name of
the Participant and, at the discretion of the Board, each such certificate may
be deposited in a bank designated by the Board. Each such certificate shall bear
the following (or a similar) legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) contained in the Carreker-Antinori, Inc., 1994 Long-Term
Incentive Plan and an agreement entered into between the registered owner
and Carreker-Antinori, Inc. A copy of such plan and agreement is on file
in the office of the Secretary of Carreker-Antinori, Inc., 4055 Valley
View Lane, Suite 1000, Dallas, Texas 75244."
At the end of the Performance Period for Restricted Stock, such Restricted Stock
will be transferred free of all restrictions to a Participant (or his or her
legal representative, beneficiary or heir).
28
