<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ShowCase Corporation
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
4115 Highway 52 North, Suite 300
Rochester, Minnesota 55901-0144
Telephone (507) 288-5922
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 3, 2000
----------------
The Annual Meeting of Shareholders of Showcase Corporation (the "Company")
will be held August 3, 2000, at 3:30 p.m. (Central Standard Time) at the
Marquette Hotel, 710 Marquette Avenue, Minneapolis, MN 55402 for the following
purposes:
1. To elect one Class I director to serve until the 2003 Annual Meeting of
Shareholders.
2. To act upon any other business that may properly come before the meeting
and any adjournment thereof.
The Board of Directors has fixed the close of business on June 12, 2000, as
the record date for the determination of the shareholders entitled to vote at
the meeting or any adjournment thereof.
You are cordially invited to attend the meeting. However, whether or not
you plan to be personally present at the meeting, please mark, date and sign
the enclosed proxy and return it promptly in the enclosed envelope. If you
later desire to revoke your proxy, you may do so at any time before it is
exercised.
By Order of the Board Of Directors
/s/ Craig W. Allen
Craig W. Allen
Chief Financial Officer and
Secretary
Dated: June 29, 2000
<PAGE>
[LOGO OF ShowCase Corporation]
4115 Highway 52 North, Suite 300
Rochester, Minnesota 55901-0144
Telephone (507) 288-5922
----------------
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
AUGUST 3, 2000
----------------
SOLICITATION AND REVOCABILITY OF PROXY
This Proxy Statement is furnished to the shareholders of Showcase
Corporation (the "Company"), in connection with the solicitation by the
Company's Board of Directors of the enclosed proxy for use at the 2000 Annual
Meeting of Shareholders of the Company to be held on August 3, 2000, at 3:30
p.m. (Central Standard Time) at the Marquette Hotel, 710 Marquette Avenue,
Minneapolis, MN 55402, or at any adjournment(s) thereof (the "2000 Annual
Meeting") for the purposes set forth in the Notice of Annual Meeting of
Shareholders. The persons named as proxies in the enclosed form of proxy will
vote the Common Stock according to the instructions given therein or, if no
instruction is given, then according to their judgment. A person giving a proxy
may revoke it before it is exercised by delivering to the Secretary of the
Company a written notice terminating the proxy's authority or by duly executing
a proxy bearing a later date. A shareholder who attends the meeting need not
revoke his or her proxy and vote in person unless he or she wishes to do so.
The Company will pay expenses for solicitation of proxies. Proxies are being
solicited primarily by mail, but, in addition, directors, officers and regular
employees of the Company who will receive no extra compensation for their
services may solicit proxies personally, by telephone or by special letter.
So far as the management of the Company is aware, only matters described in
this Proxy Statement will be acted upon at the meeting. If another matter
requiring a vote of shareholders properly comes before the meeting, the persons
named as proxies in the enclosed proxy form will vote on such matter according
to their judgment.
A copy of the Company's Annual Report on Form 10-K, including financial
statements, for the fiscal year ended March 31, 2000, is being furnished to
each shareholder with this Proxy Statement.
The principal executive offices of the Company are 4115 Highway 52 North,
Suite 300, Rochester, Minnesota 55901. The approximate mailing date of this
Proxy Statement and the accompanying form of proxy is June 29, 2000.
RECORD DATE AND VOTING OF SECURITIES
The Common Stock of the Company, $.01 par value, is the only authorized
voting security of the Company. Only holders of the Company's Common Stock
whose names appear of record on the Company's
1
<PAGE>
books on June 12, 2000, are entitled to receive notice of, and to vote at, the
2000 Annual Meeting. At the close of business on June 12, 2000, a total of
10,568,873 shares of Common Stock were outstanding, each entitled to one vote.
Holders of Common Stock do not have cumulative voting rights.
PROPOSAL 1: ELECTION OF DIRECTORS
Nominees
The Company's Amended and Restated Bylaws provide that the directors of the
Company shall be divided into three classes, as nearly equal in number as
reasonably possible. The term of office of the first class of directors will
expire at the annual meeting of shareholders in 2000, the term of office of the
second class of directors will expire at the annual meeting of shareholders in
2001 and the term of office of the third class of directors will expire at the
annual meeting of shareholders in 2002. At each annual meeting of shareholders
following such initial classification and election, directors elected to
succeed those directors whose terms expire shall be elected to hold office for
a term of three consecutive years. Each director of the corporation shall serve
until such director's successor shall have been elected and shall qualify, or
until the earlier death, resignation, removal or disqualification of such
director.
Vacancies in the Board of Directors occurring by reason of death,
resignation, removal or disqualification shall be filled for the unexpired term
by a majority of the remaining directors of the Board although less than a
quorum, and newly created directorships resulting from an increase in the
authorized number of directors by action of the Board of Directors may be
filled by a two-thirds vote of the directors serving at the time of such
increase; each director so chosen shall be a director until such director's
successor is elected by the shareholders at their next regular or special
meeting.
At the 2000 Annual Meeting, the term of office of William Binch will expire.
Mr. Binch has been nominated to be elected to the Board of Directors for an
additional three-year term, which will expire at the annual meeting of
shareholders in 2003. The Board of Directors recommends that the shareholders
elect Mr. Binch as director of the company for the ensuing three-year period.
It is intended that the persons named as proxies in the enclosed form of proxy
will vote the proxies received by them for the election of Mr. Binch, unless
otherwise directed. Mr. Binch has indicated a willingness to serve, but in case
he is not a candidate at the meeting, which is not presently anticipated, the
proxies named in the enclosed form of proxy may vote for a substitute nominee
in their discretion. Information regarding the directors of the Company is set
forth in the table below.
<TABLE>
<CAPTION>
Director Expiration
Name Age Since of Term
---- --- -------- ----------
<S> <C> <C> <C>
William B. Binch..................................... 60 1999 2000
Kenneth H. Holec..................................... 45 1993 2001
Promod Haque......................................... 52 1992 2001
C. McKenzie Lewis III................................ 53 1994 2002
Jack Noonan.......................................... 52 1995 2002
</TABLE>
William B. Binch has been a director since 1999. Mr. Binch was senior vice
president of worldwide operations for Hyperion Solutions from July 1997 to May
1999. Prior to Hyperion, he was a senior executive for Business Objects and
Prism, two business intelligence and data-warehousing companies. In addition,
Mr. Binch served as vice president of strategic accounts at Oracle Corporation
and has held sales and management positions at IBM, Itel and Fortune. He also
is a director of five other technology companies: Market-Touch, On-Link
Technology, seeCommerce, Adflight, and Closedloop Solutions.
2
<PAGE>
Kenneth H. Holec has been President and Chief Executive Officer and a member
of the Board of Directors of the Company since November 1993. From 1985 to
1993, Mr. Holec was president and chief executive officer of Lawson Software, a
provider of high-end financial and human resource management software
solutions. Currently, Mr. Holec is a director of IntraNet Solutions, Inc., a
maker of Web-based document management products for corporate intranets.
Promod Haque has been a director of the Company since March 1992. Dr. Haque
joined Norwest Venture Partners, a venture capital firm, in November 1990 and
is currently managing general partner of Norwest Venture Partners VIII & VII,
general partner of Norwest Venture Partners VI and general partner of Norwest
Equity Partners V & IV. Dr. Haque is a director of Extreme Networks, Inc., On
Display, Primus Knowledge Solutions, Redback Networks, Annuncio Software and
several privately held companies.
C. McKenzie Lewis III has been a director of the Company since June 1994.
Mr. Lewis is president of Sherpa Partners LLC, an investment and management
company, and the managing general partner of Minnesota Management Partners,
L.P., a venture capital fund. From 1986 through 1995 he was the president and
chief executive officer of Computer Network Technology Corporation, a developer
and manufacturer of high performance extended channel networking systems.
Jack Noonan has been a director of the Company since February 1995. Mr.
Noonan has been president and chief executive officer and a director of SPSS
Inc., a statistical software products company, since January 1992. Mr. Noonan
was president and chief executive officer of Microrim Corp., a developer of
database software products, from 1990 until December 1991. From 1985 to 1990,
Mr. Noonan was vice president of the Product Group of Candle Corporation, a
developer of IBM mainframe system software.
The Board of Directors recommends a vote FOR Mr. Binch.
Board Meetings
During the fiscal year ended March 31, 2000, the Board of Directors met on
nine occasions and adopted resolutions by unanimous written consent on five
additional occasions.
Committees
The Board of Directors has established an Audit Committee and a Compensation
Committee. The Audit Committee reviews the results and scope of the Company's
audit and other accounting related services and reviews the Company's
accounting practices and systems of internal accounting controls. Messrs.
Haque, Lewis and Noonan are members of the Audit Committee. The Compensation
Committee makes recommendations to the Board of Directors concerning executive
compensation and administers the stock option plans. Messrs. Haque and Lewis
are members of the Compensation Committee. The Audit Committee met once and the
Compensation Committee adopted resolutions by unanimous written consent on two
occasions during the fiscal year ended March 31, 2000.
Attendance at Board and Committee Meetings
No director of the Company attended fewer than 75% of all board and
committee meetings.
Compensation of Directors
The Company does not currently pay any compensation to directors for serving
in that capacity, but the Company does reimburse directors for out-of-pocket
expenses incurred in attending board meetings. Mr. Binch
3
<PAGE>
provides consulting services to the Company and receives $3,000 per month. The
Board of Directors has the discretion to grant options to non-employee
directors pursuant to the Company's stock option plans. Each of Messrs. Lewis
and Noonan currently hold options to purchase 45,000 shares of the Company's
Common Stock. Mr. Binch currently holds options to purchase 50,000 shares of
the Company's Common Stock.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of May 15, 2000, certain information
with respect to the beneficial ownership of the Common Stock of the Company by
(i) each person who, to the knowledge of the Company, owned beneficially more
than five percent of such stock, (ii) each director, (iii) each executive
officer named in the "Summary Compensation Table" below and (iv) all directors
and executive officers as a group. Unless otherwise noted, shares are subject
to the sole voting and investment power of the indicated person.
<TABLE>
<CAPTION>
Amount and
Nature of Percent Shares
Beneficial of Subject to
Name and address of Beneficial Owner (1) Ownership (2) Class Options (2)
---------------------------------------- ------------- ------- -----------
<S> <C> <C> <C>
Promod Haque and Norwest Equity Partners... 2,812,312 26.6 --
245 Lytton Avenue, Suite 250
Palo Alto, California 94301 (3)
David G. Wenz.............................. 910,000 8.6 --
2924 Salem Point Dr. S.W.
Rochester, Minnesota 55902 (4)
Dennis Semerad............................. 856,960 8.1 --
1717 Northern Viola Lane, N.W.
Rochester, Minnesota 55906 (5)
Wayne W. Mills 800,000 7.6 --
The Colonnade, Suite 290, 5500 Wayzata
Boulevard
Golden Valley, Minnesota 55436 (6)
Kenneth H. Holec (7)....................... 829,448 7.8 31,290
Jonathan P. Otterstatter (8)............... 163,205 1.5 103,416
Kevin R. Potrzeba.......................... 36,000 * 36,000
Patrick Dauga.............................. 34,000 * 34,000
Jack Noonan................................ 33,020 * 33,020
C. McKenzie Lewis III...................... 33,020 * 33,020
Theresa Z. O'Neil.......................... 13,333 * 13,333
William B. Binch........................... 11,458 * 11,458
All directors and executive officers as a
group (11 persons)........................ 4,043,558 37.0 351,887
</TABLE>
--------
* Less than 1% of the outstanding shares of Common Stock.
(1) The address of each executive officer of the Company is 4115 Highway 52
North, Suite 300, Rochester, Minnesota 55901-0144.
(2) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission, and includes general voting power
and/or investment power with respect to securities. Shares of Common Stock
subject to options or warrants currently exercisable or exercisable within
60 days of May 15, 2000 are deemed to be outstanding for the purpose of
computing the percentage of the person holding such options or warrants,
but are not deemed outstanding for computing the percentage of any other
person.
(3) Dr. Haque's beneficial ownership includes 1,895,028 shares held by
Norwest Equity Partners IV, L.P. and 917,284 shares held by Norwest
Equity Partners V, L.P. Dr. Haque, one of the Company's directors, is a
4
<PAGE>
general partner of Norwest Equity Partners IV and a general partner of
Norwest Equity Partners V. Dr. Haque shares voting and dispositive power of
the shares held by the Norwest funds with other general and managing
partners of the Norwest funds. Dr. Haque disclaims beneficial ownership of
shares held by Norwest Equity Partners, IV, L.P. and Norwest Equity
Partners V, L.P.
(4) Based solely on a Schedule 13G filed with the Securities and Exchange
Commission on February 11, 2000.
(5) Based solely on a Schedule 13G filed with the Securities and Exchange
Commission on February 11, 2000. Mr. Semerad's beneficial ownership
includes 20,000 shares registered in the name of Mr. Semerad's wife, Rita
M. Semerad.
(6) Based solely on a Schedule 13G filed with the Securities and Exchange
Commission on March 10, 2000.
(7) Mr. Holec's beneficial ownership includes 150,000 shares registered in
the name of Kenneth H. Holec 1999 Trust and 3,738 shares registered in
the name of each of Mr. Holec's three minor children.
(8) Mr. Otterstatter's beneficial ownership includes 17,000 shares registered
jointly with Pamela Otterstatter, Mr. Otterstatter's wife, and 1,000
shares registered in the name of each of Mr. Otterstatter's three minor
children.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Compensation Committee (the "Committee") was established in
1999 and is composed entirely of independent, outside members of the Company's
Board of Directors. The Committee reviews and approves each of the elements of
the executive compensation program and assesses the effectiveness and
competitiveness of the overall program.
The Company's executive compensation program is designed to accomplish
several goals, including:
. To attract, retain, and motivate employees of outstanding ability.
. To link changes in employee compensation to individual and corporate
performance.
. To align the interests of management with the interests of the Company's
shareholders.
General Compensation Policy. The Company's executive compensation program
consists of three components: base salary, annual incentive bonus, and long-
term incentives in the form of stock options. The program includes a strong
link between pay and performance by emphasizing variable components of the
program through annual incentive bonus and stock options. The annual incentive
bonus is an integral part of the program, providing a means for total
executive compensation to adjust from the low to middle range of compensation
for comparable-sized software companies as appropriate based on the
individual's and the Company's performance. In the past, the Company has
typically paid a portion of the available annual incentive bonus to each
executive, which has generally resulted in total executive compensation
falling in the low to midrange of compensation at comparable companies.
Base salary. The Committee determines base salaries for executive officers
on the basis of a number of factors, including an assessment of competitive
compensation levels for similar-size publicly held software companies
performed by an independent consulting firm, the Company's financial
condition, any changes in job responsibilities, and the performance of each
executive. Executive officer base salaries generally are set to correspond to
the midrange of comparable competitive compensation data.
Annual Cash Incentive Bonuses. Executive officers are eligible to receive
annual incentive compensation equivalent to a specified percentage of their
salaries under the Company's bonus plan. At the beginning of each fiscal year,
the Company establishes bonus payout targets that are designed to bring the
level of total annual
5
<PAGE>
cash compensation (base salary plus annual incentive bonus) within the
competitive ranges for comparable positions at similar-size publicly held
software companies. The total potential bonus for each executive is based upon
performance objectives as appropriate for that executive's area of
responsibility. These objectives include financial performance of the Company
and individual performance objectives. The results from the respective areas of
responsibility for each executive are evaluated against financial and
individual performance objectives, to determine a payout level as a percentage
of the annual incentive target. In recent years, incentive payouts have
generally averaged 15--50% of the executives' base salary.
Long-Term Incentive Compensation (Stock Options). Generally, the Company
awards stock options to executive officers on an annual basis. Each grant is
designed to align the interests of executive officer with those of the
shareholders and provide each individual with a significant incentive to manage
the Company from the perspective of an owner with an equity stake in the
business. Awards to specific employees, including the Chief Executive Officer,
are made on the basis of each employee's job responsibilities and
recommendations of the executive officers of the Company concerning the
individual's contributions (both historical and potential) to the success of
the Company, including an assessment of the vesting of prior awards of stock
option grants.
Compensation of Chief Executive Officer. Mr. Holec has served as the Chief
Executive Officer of the Company since 1993. Mr. Holec's base salary and annual
incentive bonus are set by the Committee using the same policies and criteria
used for other executive officers. In setting Mr. Holec's salary for fiscal
2000, the Committee considered competitive information for similar sized
companies provided by an independent compensation survey and the Company's
financial performance. Each fiscal year, the annual incentive plan is
reevaluated with a new achievement threshold and new targets for revenue and
operating income.
Tax Limitation. As a result of federal tax legislation enacted in 1993, a
publicly-held company such as the Company will not be allowed a federal income
tax deduction for compensation paid to certain executive officers, to the
extent that compensation exceeds $1 million per officer in any year. It is not
expected that the compensation to be paid to the Company's executive officers
for the 2001 fiscal year will exceed the $1 million limit per officer.
Compensation which qualifies as performance-based compensation will not have to
be taken into account for purposes of this limitation. The Company believes the
total compensation granted to its executives, including options, is less than
the $1 million limit per officer and that, in any case, stock options granted
to its executives qualify for the performance-based exception to the deduction
limit. However, there can be no assurance that the options will so qualify. In
addition, future amendments to the Company's Option Plan may be necessary to
preserve such qualification in the future.
The cash compensation paid to the Company's executive officers for the
fiscal 2000 year did not exceed the $1 million dollar limit per officer, nor is
the cash compensation to be paid to the Company's executive officers for the
2001 fiscal year expected to reach that level. Because it is very unlikely that
the cash compensation payable to any of the Company's executive officers in the
foreseeable future will approach the $1 million dollar limitation, the
Compensation Committee has decided not to take action at this time to limit or
restructure the elements of cash compensation payable to the Company's
executive officers. The Compensation Committee will reconsider this decision
should the individual compensation of any executive officer ever approach the
$1 million dollar level.
SUBMITTED BY THE COMPENSATION
COMMITTEE OF THE BOARD OF DIRECTORS
-- William B. Binch
-- Promod Haque
-- C. McKenzie Lewis III
6
<PAGE>
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee is a former officer or employee of
the Company or any of its subsidiaries.
Stock Performance Graph
The following graph compares the cumulative total shareholder return on the
Company's Common Stock between June 30, 1999 (the date the Company's Common
Stock commenced public trading) and March 31, 2000 with the cumulative total
return of the Nasdaq Stock Market Total Return Index-U.S. Companies (the
"Nasdaq Stock Market-U.S. Index") and the Standard & Poors Computers-Software &
Services Index (the "S& P Computers-Software & Services Index") over the same
period. This graph assumes $100 was invested on June 30, 1999 in the Company's
Common Stock and in each of the foregoing indices and assumes reinvestment of
dividends, if any.
COMPARISON OF 9-MONTH CUMULATIVE RETURN AMONG
SHOWCASE CORPORATION, THE NASDAQ STOCK MARKET-U.S. INDEX AND
THE S & P COMPUTERS--SOFTWARE & SERVICES
6/99 3/00
---- ----
SHOWCASE CORPORATION $100 $104.35
NASDAQ STOCK MARKET (U.S.) 100 169.86
S&P COMPUTERS - SOFTWARE & SERVICES 100 137.41
The Company effected its initial public offering on June 29, 1999 at a per
share price of $9.00. The graph above, however, commences with the closing
price of $8.625 per share on June 30, 1999, the date the Company's Common Stock
commenced public trading. The closing price of the Company's Common Stock on
the Nasdaq National Market on March 31, 2000 was $9.00 per share.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933 or the Securities Exchange
Act of 1934 that might incorporate future filings, including this Proxy
Statement, in whole or in part, the preceding Compensation Committee Report on
Executive Compensation and the preceding Company Stock Performance Graph are
not to be incorporated by reference into any such filings; nor are such Report
or Graph to be incorporated by reference into any future filings.
7
<PAGE>
EXECUTIVE COMPENSATION AND RELATED INFORMATION
Executive compensation is determined by the Board of Directors based on the
recommendations of the Compensation Committee, which is composed entirely of
independent, outside directors. The following table sets forth the compensation
paid by the Company for services rendered during the two (2) fiscal years ended
March 31, 2000 for the Company's Chief Executive Officer and for each of the
other four (4) most highly compensated executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation
Compensation Awards
----------------- ------------
Shares
Fiscal Underlying All Other
Name and Principal Position Year Salary Bonus Options Compensation
--------------------------- ------ -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Kenneth H. Holec............ 2000 $228,000 $ 48,500 -- $ 6,029(3)
President and Chief
Executive Officer........ 1999 205,000 127,625 200,000 4,245(3)
Patrick Dauga............... 2000 183,067 59,377 -- 45,262(4)
Executive Vice President,
Worldwide Field
Operations............... 1999 180,654 92,053 30,000 45,275(4)
Kevin R. Potrzeba........... 2000 145,000 58,512 -- 8,919(3)
Vice President, North
America Sales............ 1999 135,000 109,476 20,000 4,245(3)
Jonathan P. Otterstatter.... 2000 156,250 16,500 -- 7,632(3)
Executive Vice President,
Technology Services...... 1999 126,000 40,100 60,000 4,245(3)
Roger E. Bottum............. 2000 168,381 9,833 -- 4,862(3)
Vice President, Marketing
(1)...................... 1999 109,375 13,125 135,000 2,995(3)
Theresa Z. O'Neil........... 2000 66,667 2,133 100,000 2,053(3)
Vice President, Marketing
(2)
</TABLE>
--------
(1) Mr. Bottum is no longer an executive officer of the Company. His annual
salary as of October 31, 1999, his date of termination, was $175,000.
(2) Ms. O'Neil joined the Company in November 1999. Her annual salary as of
March 31, 2000 was $160,000.
(3) Includes amounts which, at the recipient's discretion, may be allocated
toward our 401(k) plan or toward medical premiums, medical expense
reimbursement or dependent care expense reimbursement on a pre-tax basis
under the Company's flexible benefit plan.
(4) Includes amounts the Company pays for health insurance and retirement
benefits.
8
<PAGE>
The following table summarizes stock options granted to each of the Named
Executive Officers during fiscal year ended March 31, 2000. The Company granted
no stock appreciation rights ("SARs") during the fiscal year 2000.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential
Realizable
Value at
Assumed Annual
Rates of Stock
Percent of Price
Total Appreciation
Options For Option Term
Granted to (1)
Options Employees in Exercise Expiration ---------------
Name Granted (#) Fiscal Year Price ($/Sh) (2) Date 5% 10%
---- ----------- ------------ ---------------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Theresa Z. O'Neil....... 100,000 (3) 26.3% (4) $3.875 11/1/2009 243,697 617,575
</TABLE>
--------
(1) Potential realizable value is based on an assumption that the market price
of the stock appreciates at the stated rate, compounded annually, from the
date of grant until the end of the ten-year option term. These values are
calculated based on regulations promulgated by the Securities and Exchange
Commission and do not reflect the Company's estimate of future stock price
appreciation. There is no assurance that the actual stock price
appreciation over the ten-year option term will be at the assumed 5% or 10%
levels, or at any other defined level.
(2) The exercise price of each option is equal to the market value of the
Common Stock on the date of grant. The exercise price is payable in cash,
or, at the discretion of the Compensation Committee, in Common Stock of
the Company already owned by the optionee or by promissory note acceptable
to the Company.
(3) This option vests over a five-year period beginning on the grant date of
November 1, 1999.
(4) Percentage calculations based on total options granted to officers and
employees in fiscal year 2000..
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
(Fiscal year ended March 31, 2000)
The following table summarizes the value of unexercised stock options held
by the Company's Named Executive Officers at fiscal year 2000.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Shares Options at Fiscal In-the-Money Options at
Acquired on Year-End (#) Fiscal Year-End ($) (2)
Exercise Value ------------------------- -------------------------
Name (#) Realized $ (1) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ken H. Holec............ 47,351 176,170 15,645 171,681 101,079 1,070,272
Patrick Dauga........... -- -- 32,000 68,000 226,840 413,260
Kevin R. Potrzeba....... 10,000 70,450 34,666 65,334 263,171 443,429
Jonathan P. Ottersatter. 5,000 35,225 99,416 60,584 814,876 343,474
Theresa Z. O'Neil....... -- -- 6,666 93,334 34,163 478,337
</TABLE>
--------
(1) Value realized is based on the fair market value of the Company's Common
Stock on the date of exercise minus the exercise price and does not
necessarily indicate that the optionee sold such stock.
(2) Based on the difference between the closing price of the Company's Common
Stock as reported on The Nasdaq National Market on March 31, 2000 ($9.00)
and the option exercise price per share multiplied by the number of shares
subject to the option. An in-the-money option is an option that has an
exercise price for the Common Stock that is lower than the fair market
value of the Common Stock on a specified date.
9
<PAGE>
Employment Agreements
The Company entered into an employment agreement with Kenneth H. Holec, our
President and Chief Executive Officer, on November 22, 1993 that governs Mr.
Holec's employment with the Company. The agreement establishes Mr. Holec's
compensation level and eligibility for salary increases, bonuses, benefits and
option grants under the Company's stock option plans. The initial employment
term was one year. Mr. Holec's employment term is automatically renewed for
additional one-year terms, unless either the Company or Mr. Holec provide
written notice that the employment agreement will not be renewed to the other
party at least 30 days prior to the expiration of any one-year employment term.
The Company may also terminate Mr. Holec's employment without cause if the
Company gives him written notice 30 days before such termination. If the
Company does not renew the agreement or terminates his employment without
cause, Mr. Holec is entitled to severance pay equal to six months' salary plus
salary for six additional months or until he finds full-time employment.
The Company also entered into an employment agreement with Patrick Dauga,
currently the Company's Executive Vice President, Worldwide Field Operations,
on March 17, 1998. The agreement establishes Mr. Dauga's minimum compensation
level and eligibility for salary increases, bonuses, benefits and option
grants. The Company may terminate Mr. Dauga's employment agreement if the
Company gives him written notice twelve months prior to termination. The
Company may terminate his employment immediately without notice if the Company
pays Mr. Dauga his remaining base salary, targeted commissions, bonus and
fringe benefits. Mr. Dauga may terminate his employment agreement if he
provides the Company written notice three months prior to such termination.
Under the terms of the Company's offer letter dated October 28, 1999 to Ms.
O'Neil, the Company's Vice President, Marketing, and the Company's offer letter
dated August 23, 1996 to Mr. Potrzeba, the Company's Vice President, North
America Sales, upon termination of employment without cause, each of Ms. O'Neil
or Mr. Potrzeba is entitled to base salary for six months or until Ms. O'Neil
or Mr. Potrzeba has obtained permanent employment elsewhere, if sooner. In
addition, under the Company's guidelines for severance pay for executives, Mr.
Otterstatter also is entitled to base salary for six months or until he has
obtained permanent employment elsewhere, if sooner. In the case of Mr.
Potrzeba, if after six months he has been unable to obtain employment elsewhere
and the Company believes he has made a good faith effort to do so, the Company
will continue to pay Mr. Potrzeba his base salary for an additional six months
or until he has obtained full-time employment elsewhere, if sooner. Neither Mr.
Potrzeba nor Ms. O'Neil is entitled to salary continuance if he or she
voluntarily terminates his or her employment with the Company for any reason
other than a change in control that results in a substantial change in the
scope of his or her employment responsibilities or job location.
The Company and Mr. Potrzeba entered into a letter agreement dated April 27,
2000 under which the Company agreed to pay Mr. Potrzeba the balance of his base
salary through March 31, 2001 in the event Mr. Potrzeba's employment is
terminated prior to such date. Amounts payable under this agreement, if any,
are in addition to amounts payable under Mr. Potrzeba's offer letter described
above.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent
(10%) of a registered class of the Company's equity
10
<PAGE>
securities, to file with the Securities and Exchange Commission initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Officers, directors and greater than ten-
percent shareholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended March 31, 2000, all Section
16(a) filing requirements applicable to its officers, directors and greater
than ten-percent beneficial owners were properly met.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of shareholders of the Company that are intended to be presented
by such stockholders at the Company's 2001 Annual Meeting must be received no
later than April 5, 2001, in order that they may be included in the proxy
statement and form of proxy relating to that meeting.
ADDITIONAL INFORMATION
A copy of the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 2000 as filed with the Securities and Exchange Commission is
furnished with this Proxy Statement. Copies of that Report are also available
without charge upon written request to Showcase Corporation, 4115 Highway 52
North, Suite 300, Rochester, Minnesota 55901-0144, to the attention of Craig W.
Allen, Chief Financial Officer.
Please mark, sign, date and return promptly the enclosed proxy provided. The
signing of a proxy will not prevent you from attending the meeting in person.
By Order of the Board Of Directors
/s/ Kenneth H. Holec
Kenneth H. Holec
President
Dated: June 29, 2000
11
