<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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 Com-
mission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or
Rule 14a-12
COMSHARE, INCORPORATED
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
COMSHARE, INCORPORATED
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] 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:
- --------------------------------------------------------------------------------
<PAGE> 2
COMSHARE, INCORPORATED
555 Briarwood Circle
Ann Arbor, Michigan 48108
(313) 994-4800
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 18, 1995
The Annual Meeting of Shareholders of Comshare, Incorporated, a
Michigan corporation, will be held at the Comshare Training Center, 555
Briarwood Circle, Ann Arbor, Michigan 48108 on Saturday, November 18, 1995 at
11:00 a.m., for the following purposes:
1. To elect nine directors.
2. To amend the Articles of Incorporation to increase the
number of shares of Common Stock authorized for issuance from 10,000,000 to
20,000,000.
3. To vote upon such other matters as may properly come before
the meeting or any adjournment or adjournments thereof.
The determination of shareholders entitled to notice of and to vote at
the meeting was made as of the close of business on September 25, 1995, the
record date fixed by the Board of Directors for such purpose.
You are invited to attend the meeting. Whether or not you expect to be
present, please execute and return the enclosed proxy, which is solicited by
the Board of Directors of the Company. The proxy is revocable and will not
affect your right to vote in person if you attend the meeting.
By Order of the Board of Directors
JANET L. NEARY
Secretary
October __, 1995
Ann Arbor, Michigan
<PAGE> 3
COMSHARE, INCORPORATED
___________
PROXY STATEMENT
1995 ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is provided in connection with the solicitation
of proxies by the Board of Directors of Comshare, Incorporated, a Michigan
corporation (the "Company"), to be used at the Annual Meeting of Shareholders
of the Company to be held on Saturday, November 18, 1995 or at any adjournment
or adjournments thereof, for the purposes set forth in the accompanying Notice
of Annual Meeting of Shareholders and in this Proxy Statement. In addition to
the solicitation by mail, proxies may be solicited in person or by telephone,
telegraph or facsimile by officers, directors and employees of the Company.
Such officers, directors and employees will not be additionally compensated,
but may be reimbursed for out-of-pocket expenses in connection with such
solicitation. The cost of soliciting proxies will be borne by the Company. The
principal executive offices of the Company are located at 555 Briarwood Circle,
Ann Arbor, Michigan 48108. This Proxy Statement and the accompanying form of
proxy were first given or sent to shareholders on or about October __, 1995.
The Company's Annual Report to Shareholders for the year ended June
30, 1995 is enclosed herewith.
Only holders of record of Common Stock of the Company at the close of
business on September 25, 1995 are entitled to vote at the meeting or any
adjournment or adjournments thereof. On that date, ________ shares of Common
Stock were issued and outstanding. Each shareholder is entitled to one vote for
each share of Common Stock held of record on the record date. Shares cannot be
voted at the meeting unless the holder is present in person or represented by
proxy. Shares may not be voted cumulatively for the election of directors.
Shares represented by a proxy in the accompanying form, unless
previously revoked, will be voted at the meeting if the proxy, properly
executed, is received by the Company before the close of business on November
17, 1995. Shares represented by a proxy received after that time will be voted
if the proxy is received by the Company in sufficient time to permit the
necessary examination and tabulation of the proxy before a vote is taken.
Shareholders who execute a proxy in the accompanying form may nevertheless
revoke the proxy at any time before it is exercised by giving written notice to
the Secretary of the Company bearing a later date than the proxy, by submitting
a later-dated proxy, or by voting the shares represented by such proxy in
person at the Annual Meeting.
For purposes of determining the number of votes cast with respect to
the election of directors, only those cast "for" or "against" are included.
Abstentions are counted only for purposes of determining whether a quorum is
present at the Annual Meeting. Broker non-votes are not counted for any
purpose.
MATTERS TO COME BEFORE THE MEETING
(1) ELECTION OF DIRECTORS
Nine directors will be elected, each to hold office until the next
Annual Meeting of Shareholders and until his or her successor is elected and
qualified, or until the director's resignation or removal. The individuals who
will be nominated by the Board of Directors for election at the Annual Meeting
are listed in the table below. Except for Mr. Mrkonic, each of the nominees for
election is presently a director of the Company.
Shares represented by proxies in the form accompanying this Proxy
Statement will be voted for the election of the nominees listed below unless
the proxy is marked (in accordance with the instructions thereon) to indicate
that authority to do so is withheld. If, as a result of circumstances not now
known or foreseen, any of the nominees shall be unavailable to serve as a
director, proxies will be voted for the election of such other person or
persons as the Board of Directors may select. The nominees receiving a
plurality of the votes cast at the meeting
<PAGE> 4
will be elected as directors. Each shareholder is entitled to one vote
for each share of Common Stock held.
<TABLE>
<CAPTION>
Year
First
Elected or
Principal Occupation Appointed
Name Age and Other Information Director
- ------------- ---- ----------------------------- --------
<S> <C> <C> <C>
Daniel T. Carroll 69 Chairman and President of The 1986
Carroll Group, Inc., a management
consulting company, Ann Arbor,
Michigan
Richard L. Crandall 52 Chairman of the Board of Directors 1968
of the Company
Stanley R. Day 70 Retired Chairman of the Board, 1967
Champion Enterprises, Inc., a
manufacturer of mobile homes,
motor homes and commercial vehicles,
Dryden, Michigan
W. John Driscoll 66 Retired President, Rock Island 1970
Company, a private investment
company, St. Paul, Minnesota
Alan G. Merten 53 Dean, Johnson Graduate School 1985
of Management, Cornell University,
Ithaca, New York
George R. Mrkonic 42 Vice Chairman and President, _____
Borders Group, Inc., an operator of
book and music stores, Ann Arbor,
Michigan
John F. Rockart 64 Director and Senior Lecturer, 1989
Center for Information Systems
Research, Massachusetts Institute
of Technology, Cambridge, Massachusetts
Brian Sullivan 70 Retired Partner, Dykema Gossett PLLC,
Attorneys, Detroit, Michigan
T. Wallace Wrathall 58 President and Chief Executive 1982
Officer of the Company
</TABLE>
Each of the foregoing persons has been engaged in the principal
occupation shown above, or in a similar one with the same employer, for more
than five years, except for Messrs. Crandall, Mrkonic and Wrathall.
Prior to being named Chairman of the Board of the Company in April
1994, Mr. Crandall had served as President and Chief Executive Officer of the
Company since 1970. The position of Chairman had previously been
2
<PAGE> 5
left unfilled. Mr. Crandall also serves as a director of Computer Task Group,
Inc.
Mr. Wrathall assumed the position of President and Chief Executive
Officer of the Company in April 1994, after having served as the Company's
Chief Financial Officer for 18 years and as a Senior Vice President since 1988.
Mr. Carroll also serves as a director of the following corporations:
A.M. Castle & Co., American Woodmark Corporation, Aon Corporation, DeSoto,
Inc., Diebold, Inc., Michigan National Corporation, Oshkosh Truck Corporation,
UDC Homes, Inc., Wolverine World Wide, Inc. and Woodhead Industries, Inc.
Mr. Driscoll also serves as a director of the following corporations:
The John Nuveen Company, MIP Properties, Inc., The St. Paul Companies, Inc.,
Northern States Power Company and Weyerhaeuser Company.
Mr. Merten also serves as a director of Tompkins County Trust Company,
American Capital Bond Fund, Inc., American Capital Convertible Securities, Inc.
and American Capital Income Trust and as a trustee of the Common Sense Trust.
Mr. Mrkonic assumed the position of Vice Chairman and President of
Borders Group, Inc. in December 1994 and has been a director of Borders since
August 1994. Prior to joining Borders, Mr. Mrkonic served as Executive Vice
President, Specialty Retailing Group of K-Mart, from November 1990 to November
1994. Prior to joining K-Mart, he was President of Eyelab, Inc. from 1987 to
1990. Mr. Mrkonic is also a director of The Sports Authority, Inc., a sporting
goods megastore retailer, OfficeMax Inc., an office products superstore
retailer, and Champion Enterprises, Inc., a manufacturer and seller of
manufactured homes and mid-sized buses.
Mr. Rockart also serves as a director of Keane, Inc. and Renaissance
Solutions, Inc.
Mr. Sullivan also serves as a director of Network Express, Inc. The
law firm from which Mr. Sullivan retired has provided legal services to the
Company and its subsidiaries since 1966, and the Company expects to retain such
firm for such purposes in the current fiscal year.
Messrs. Day and Driscoll are both members of the Weyerhaeuser Family.
See "Principal Shareholders."
MEETINGS AND COMMITTEES OF THE BOARD
During the Company's fiscal year ended June 30, 1995, the Board of
Directors held six meetings. All of the Directors attended at least 75% of the
total number of meetings of the Board, and of any committees on which they
served, held during the period in which they served as Directors or members of
any such committees. The Company anticipates that regardless of the schedule
chosen for its regular meetings, there will be occasions on which not all
Directors are available. Furthermore, special meetings of the Board are
sometimes held on relatively short notice and Directors, particularly those
located outside the Detroit-Ann Arbor area, may sometimes be unable to attend
such meetings because of prior commitments.
The Audit Committee of the Board met five times during the Company's
last fiscal year. The Audit Committee is responsible for recommending to the
full Board the selection of independent auditors; reviewing the engagement of
the independent auditors (including the fee, scope and timing of the audit);
reviewing with the independent auditors and management the Company's policies
and procedures with respect to accounting and financial controls; reviewing
with the independent auditors, upon completion of their audit, their report or
opinion, their perception of the Company's financial and accounting personnel
and significant transactions which are not a normal part of the Company's
business, any change in accounting principles and practices, all significant
proposed adjustments and any recommendations they may have for improving
internal accounting controls, choice of accounting principles or management
systems; and meeting with the Company's financial staff to discuss internal
accounting and financial controls and the extent to which recommendations made
by the independent auditors have been implemented. The members of the Audit
Committee are Messrs. Carroll, Driscoll, Merten and Rockart. Mr. Day served
on the Committee during the Company's fiscal year ended June 30, 1995 until
November 1994, and Mr. Merten and Mr. Rockart joined the Committee in November
1994.
The Compensation Committee of the Board met four times during the
Company's last fiscal year. The Compensation Committee is responsible for
determining or approving the salaries or range of salaries, bonus
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<PAGE> 6
compensation and other compensation arrangements for officers of the Company,
and performing such functions as may be delegated to it under the provisions of
any bonus, stock option or other compensation plans adopted by the Company. The
members of the Compensation Committee are Messrs. Allard, Carroll, Day and
Sullivan. Messrs. Driscoll, Merten and Rockart served on the Committee during
the Company's fiscal year ended June 30, 1995 until November 1994.
Mr. Claude Allard is not standing for reelection to the Board of Directors.
The Nominating Committee of the Board met six times during the
Company's last fiscal year. This committee is responsible for identifying and
recommending to the Board qualified candidates for election as directors of the
Company. In carrying out its responsibilities, the Nominating Committee will
consider candidates suggested by other directors, employees and shareholders.
Suggestions for candidates, accompanied by biographical material for
evaluation, may be sent to the Secretary of the Company at the Company's
principal executive offices. The members of the Nominating Committee are
Messrs. Crandall, Merten, Rockart and Sullivan. Mr. Merten and Rockart joined
the Committee in November 1994. Mr. Carroll served on the Committee during
the Company's fiscal year ended June 30, 1995 until November 1994.
(2) AMENDMENT OF THE COMPANY'S ARTICLES OF INCORPORATION TO INCREASE THE
NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE.
On August 16, 1995, the Board of Directors approved an amendment to
Article V of the Company's Articles of Incorporation to increase the number of
shares of Common Stock authorized for issuance from 10,000,000 shares to
20,000,000 shares.
As of September 25, 1995 there were _______ shares of the Company's
Common Stock issued and outstanding and approximately __________ additional
authorized but unissued shares of Common Stock reserved for issuance pursuant
to the Company's stock based compensation plans.
The increase in the number of authorized shares of Common Stock will
provide additional authorized and unissued shares which may be used by the
Company for any proper corporate purpose. Such purposes might include, without
limitation, issuance in public or private sales for cash as a means of
obtaining additional capital for use in the Company's business and operations,
issuance as part or all of the consideration required to be paid by the Company
for acquisitions of other businesses or properties and issuance in connection
with possible distributions or stock dividends to holders of the Common Stock.
Issuances of additional shares of Common Stock require the approval of
the Board of Directors. The Board of Directors has not approved the issuance
of any additional shares of Common Stock being considered for authorization
under this proposal, although the Company does consider from time to time
proposals or transactions involving the issuance of additional shares of Common
Stock or instruments convertible into or exercisable for Common Stock.
Issuances of additional shares of Common Stock will generally not require
shareholder approval.
Although the Board of Directors authorizes the issuance of additional
shares of Common Stock based on its judgment as to the best interests of the
Company and its shareholders, the issuance of additional authorized shares
would have the effect of diluting the voting power per share of outstanding
common stock and, if additional shares were issued for consideration with a
value of less than book value per share, such issuance could have the effect of
diluting the book value per share of the outstanding shares of Common Stock.
In addition, increasing the authorized shares of Common Stock could, in certain
instances, render more difficult or discourage a merger, tender offer, or proxy
contest and thus potentially have an "anti-takeover" effect, especially if
additional shares of Common Stock were issued in response to a potential
takeover. Such an effect could deter certain types of transactions that might
be proposed, whether or not such transactions were favored by the majority of
the
4
<PAGE> 7
shareholders, and could enhance the ability of officers and directors to retain
their positions.
REQUIRED VOTE
The affirmative vote of a majority of the Company's Common Stock
present in person or by proxy and entitled to vote at the Annual Meeting is
required to approve the proposed amendment to the Articles of Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS VOTE FOR APPROVAL OF THIS
PROPOSAL. PROXIES WILL BE VOTED FOR THE APPROVAL OF THE PROPOSED AMENDMENT TO
THE ARTICLES OF INCORPORATION UNLESS THE SPECIFICATION IS MARKED ON THE PROXY
INDICATING THAT AUTHORITY TO DO SO IS WITHHELD.
FURTHER INFORMATION
PRINCIPAL SHAREHOLDERS
The Common Stock is the only voting security of the Company. The
following table sets forth certain information with respect to the beneficial
ownership of shares of the Common Stock, as of September 25, 1995, by each
person who is known by the Company to have been the beneficial owner of five
percent or more of such stock as of such date.
<TABLE>
<CAPTION>
Name and Address of Amount Percent of
Beneficial Owner Beneficially Owned(1) Class
---------------- --------------------- -----
<S> <C> <C>
Various members of the
Weyerhaeuser Family(2) ................ 968,536(3) 17.62%
332 Minnesota Street, Suite 2100
St. Paul, Minnesota
Included in the Weyerhaeuser
Family (above) is--
W. John Driscoll ...................... 415,946(4) 7.57%
332 Minnesota Street, Suite 2191
St. Paul, Minnesota
- -----------
</TABLE>
(1) Unless otherwise indicated by any additional information included in the
footnotes to the table, each of the named persons is presumed to have sole
voting and investment power with respect to all shares shown.
(2) The "Weyerhaeuser Family" as used in this Proxy Statement means certain
of the descendants (and their spouses) of Frederick Weyerhaeuser, who died in
1914 and who was one of the founders of Weyerhaeuser Company, a forest products
company located in Tacoma, Washington. Stanley R. Day and W. John Driscoll,
directors of the Company, and their wives, are members of the Weyerhaeuser
Family. Except for Mr. Driscoll, no member of the Weyerhaeuser Family
individually owns beneficially more than 5% of the outstanding Common Stock of
the Company.
(3) Includes 1,250 shares for Stanley R. Day and 1,250 shares for W. John
Driscoll which they have, or within 60 days of September 30, 1995 will have,
the right to acquire pursuant to the presently exercisable portion of options
granted under the Company's Directors Stock Option Plan.
5
<PAGE> 8
(4) Includes an aggregate of 56,258 shares owned by five trusts. Mr.
Driscoll is a co-trustee of four of these trusts and is the sole trustee of the
fifth trust. This number also includes 340,938 shares owned by Rock Island
Company, a private investment company, all of the capital stock of which is
owned by members of the Weyerhaeuser Family, as well as 1,250 shares which Mr.
Driscoll has, or within 60 days of September 30, 1995 will have, the right to
acquire pursuant to the presently exercisable portion of options granted under
the Company's Directors Stock Option Plan. Mr. Driscoll is a director of, and
owns .8721% of the stock of, Rock Island Company. Mr. Driscoll shares voting
and investment power with respect to the shares owned by the four trusts of
which he is the co-trustee and the shares owned by Rock Island Company;
however, except as to 2,973 of the shares owned by Rock Island Company, he
disclaims beneficial ownership of such shares. Mr. Driscoll has voting power,
but no investment power, with respect to the trust of which he is the sole
trustee. All of the shares of Common Stock described in this note are included
in the shares owned by various members of the Weyerhaeuser Family, as described
in note (2), above. The information in this footnote pertaining to Rock
Island Company is based on a Schedule 13D Report, dated July 3, 1995, which was
filed by Rock Island Company with the Securities and Exchange Commission. The
Schedule 13D Report reflects that Rock Island Company has the sole power to
vote or direct the vote and sole power to dispose or direct the disposition of
340,938 shares. The information in the table pertaining to W. John Driscoll is
based on a Schedule 13G Report, dated July 3, 1995, which was filed by W. John
Driscoll with the Securities and Exchange Commission. The Schedule 13G Report
reflects that W. John Driscoll has sole voting power with respect to 17,500
shares, shared voting power with respect to 56,258 shares, sole dispositive
power with respect to 17,500 shares, and shared dispositive power with respect
to 24,800 shares.
STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of shares of
the Company's Common Stock by each of the Company's directors, Named Officers
and by all executive officers and directors of the Company as a group, as of
September 25, 1995.
<TABLE>
<CAPTION>
Common Stock
of the Company
Owned Percent
Name Beneficially(1) of Class
- ---- --------------- --------
<S> <C> <C>
Daniel T. Carroll(2) 2,250 .04%
Richard L. Crandall(3) 139,873 2.53%
Stanley R. Day(4) 2,468 .04%
W. John Driscoll(5) 415,946 7.57%
Alan G. Merten(6) 3,000 .05%
George R. Mrkonic --- ---
John F. Rockart(7) 8,250 .15%
Brian Sullivan(8) 4,248 .08%
T. Wallace Wrathall(9) 167,942 3.04%
Stephen R. Fluin(10) 20,592 .37%
Dennis G. Ganster(11) 23,391 .43%
Kathryn A. Jehle(12) 24,324 .44%
Dion T. O'Leary(13) 24,092 .44%
Donald J. Walker(14) 38,757 .70%
All executive officers
and directors as a group (15 persons)(15) 884,322 15.80%
- ----------
</TABLE>
6
<PAGE> 9
(1) To the best of the Company's knowledge, based on information reported by
such directors and officers or contained in the Company's shareholder records.
Unless otherwise indicated by any additional information included in the
footnotes to the table, each of the named persons is presumed to have sole
voting and investment power with respect to all shares shown.
(2) Includes 1,250 shares which Mr. Carroll has, or within 60 days of
September 30, 1995 will have, the right to acquire pursuant to the presently
exercisable portion of options granted under the Company's Directors Stock
Option Plan.
(3) Includes 25,000 shares which Mr. Crandall has, or within 60 days of
September 30, 1995 will have, the right to acquire pursuant to the presently
exercisable portion of options granted under the Company's 1988 Stock Option
Plan and 1,755 shares which have been allocated to his account under the
Company's Employee Stock Ownership Plan. Mr. Crandall disclaims beneficial
ownership of 24,000 shares reflected in the table which are owned by his minor
son.
(4) Includes 1,250 shares which Mr. Day has, or within 60 days of September
30, 1995 will have, the right to acquire pursuant to the presently exercisable
portion of options granted under the Company's Directors Stock Option Plan.
(5) See Note (4) under "Principal Shareholders."
(6) Includes 1,250 shares which Mr. Merten has, or within 60 days of
September 30, 1995 will have, the right to acquire pursuant to the presently
exercisable portion of options granted under the Company's Directors Stock
Option Plan.
(7) Includes 1,250 shares which Mr. Rockart has, or within 60 days of
September 30, 1995 will have, the right to acquire pursuant to the presently
exercisable portion of options granted under the Company's Directors Stock
Option Plan.
(8) Includes 1,250 shares which Mr. Sullivan has, or within 60 days of
September 30, 1995 will have, the right to acquire pursuant to the presently
exercisable portion of options granted under the Company's Directors Stock
Option Plan.
(9) Includes 26,250 shares which Mr. Wrathall has, or within 60 days of
September 30, 1995 will have, the right to acquire pursuant to the presently
exercisable portion of options granted under the Company's 1988 Stock Option
Plan and 1,346 shares which have been allocated to his account under the
Company's Employee Stock Ownership Plan.
(10) Includes 7,750 Shares which Mr. Fluin has, or within 60 days of September
30, 1995 will have, the right to acquire pursuant to the presently exercisable
portion of options granted under the Company's 1988 Stock Option Plan.
(11) Includes 2,125 shares which Mr. Ganster has, or within 60 days of
September 30, 1995 will have, the right to acquire pursuant to the presently
exercisable portion of options granted under the Company's 1988 Stock Option
Plan and 866 shares which have been allocated to his account under the
Company's Employee Stock Ownership Plan.
(12) Includes 6,375 shares which Ms. Jehle has, or within 60 days of September
30, 1995 will have, the right to acquire pursuant to the presently exercisable
portion of options granted under the Company's 1988 Stock Option Plan and 292
shares which have been allocated to her account under the Company's Employee
Stock Ownership
7
<PAGE> 10
Plan.
(13) Includes 11,250 shares which Mr. O'Leary has, or within 60 days of
September 30, 1995 will have, the right to acquire pursuant to the presently
exercisable portion of options granted under the Company's 1988 Stock Option
Plan.
(14) Includes 17,500 shares which Mr. Walker has, or within 60 days of
September 30, 1995 will have, the right to acquire pursuant to the presently
exercisable portion of options granted under the Company's 1988 Stock Option
Plan and 1,257 shares which have been allocated to his account under the
Company's Employee Stock Ownership Plan.
(15) Includes 103,750 shares which certain directors and executive officers
have, or within 60 days of September 30, 1995 will have, the right to acquire
pursuant to the presently exercisable portion of options granted under the
Company's 1988 Stock Option Plan; 395,473 shares, referred to in note (4) above
under the caption "Principal Shareholders," as to which beneficial ownership is
disclaimed; 5,516 shares that have been allocated to the accounts of members of
the group under the Company's Employee Stock Ownership Plan; and 24,000 Shares,
referred to in Note (3) above under "Stock Ownership of Management," as to
which beneficial ownership is disclaimed.
EXECUTIVE OFFICERS
The persons listed below currently are the executive officers of the
Company.
<TABLE>
<CAPTION>
Name Office(s) Age
- --------------------- --------------------------------------- ---
<S> <C> <C>
T. Wallace Wrathall President and Chief Executive Officer 58
Stephen R. Fluin Vice President, European Operations 41
Dennis G. Ganster Senior Vice President and Chief 44
Technology Officer
Kathryn A. Jehle Senior Vice President, Chief 43
Financial Officer, Treasurer
and Assistant Secretary
Dion T. O'Leary Vice President, Agents 51
and Distributors
Steven J. Tonissen Senior Vice President, Marketing 46
Donald J. Walker Senior Vice President 55
</TABLE>
Mr. Wrathall was named President and Chief Executive Officer of the
Company in April 1994. See "Election of Directors" for further information
concerning Mr. Wrathall.
Mr. Fluin was named Vice President, European Operations, of the
Company in November 1994, after having served as the Company's Director of UK
Sales for over seven years.
Mr. Ganster was named Senior Vice President of the Company in July
1994, after having served as Vice President and Chief Technology Officer of the
Company since April 1993. He had previously served as the Company's Vice
President of Product Management from July 1988 to April 1993, and has been with
the Company in various positions since 1972.
Ms. Jehle was named Senior Vice President, Chief Financial Officer,
Treasurer and Assistant Secretary of the Company in May 1994. Ms. Jehle
served as Chief Financial Officer of Pharmavene, Inc., a
8
<PAGE> 11
pharmaceutical company, from June 1993 to May 1994, and as Vice President of
AMF Bowling Centers, Inc. from May 1990 to June 1993. Ms. Jehle was previously
employed by the Company from 1981 through 1987, most recently as Vice President
and Treasurer.
Mr. O'Leary was named Vice President, Agents and Distributors of the
Company, in November 1994 after having served as the Company's Director of
Agents and Distributors for over ten years.
Mr. Tonissen was named Senior Vice President, Marketing, of the
Company in June 1995. Prior to joining the Company, Mr. Tonissen served as a
principal in The Spectrum Group, a management and information system consulting
organization, from December 1992 until June 1995; Sales Director of ONTOS, an
object oriented database company, from December 1991 to December 1992; Managing
Director of the Telon Division of Pansophic Systems, a computer software and
service company, which was later acquired by Computer Associates
International, Inc., from June 1991 to December 1991; and as Director of
Marketing of the same division of Pansophic from January 1990 to June 1991.
Mr. Walker has been principally employed in the capacity or capacities
shown above or in similar ones with the Company for the past five years.
The executive officers of the Company serve at the pleasure of the
Board of Directors.
9
<PAGE> 12
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides summary information concerning compensation
paid by the Company and its subsidiaries to (or accrued on behalf of) the
Company's Chief Executive Officer and the five other most highly compensated
executive officers who were serving as executive officers at the end of fiscal
year 1995 (the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
------------------- Securities
Other Annual Underlying All Other
Fiscal Salary Bonus Compensation Options Compensation
Name and Principal Position Year ($) ($) ($)(1) (#)(2) ($)(3)
- --------------------------- ---- ------ ------- ------------ -------------- -----
<S> <C> <C> <C> <C> <C> <C>
T. Wallace Wrathall........... 1995 $312,500 $106,924 $4,641 45,000 $47,894
President, Chief Executive 1994 265,200 0 4,641 30,000 13,223
Officer and a Director of the 1993 253,600 0 4,133 0 14,154
Company
Stephen R. Fluin............... 1995(4) 157,300 65,446 0 9,000 0
Vice President
Dennis G. Ganster............. 1995 170,000 58,166 2,913 8,500 17,191
Senior Vice President and 1994 140,000 25,500 2,634 0 8,384
Chief Technology Officer 1993 119,200 21,500 915 25,000 7,073
Kathryn A. Jehle.............. 1995 173,750 81,084 0 8,500 15,801
Senior Vice President, Chief 1994(5) 26,250 3,365 0 25,000 0
Financial Officer, Treasurer
and Assistant Secretary
Dion T. O'Leary.............. 1995(6) 157,300 87,857 0 5,000 0
Vice President
Donald J. Walker............. 1995 205,000 70,142 3,272 10,000 24,546
Senior Vice President 1994 170,100 14,300 3,186 30,000 10,889
1993 189,000 22,500 1,649 0 11,619
</TABLE>
- ----------
(1) The amounts indicated for Messrs. Wrathall, Ganster and Walker
represent tax adjustment payments on income imputed for income tax purposes
related to each Named Officer's use of a Company car. While certain of the
Named Officers receive certain perquisites, such perquisites do not exceed
the lesser of $50,000 or 10% of such officer's salary and bonus.
(2) Certain of the options granted to the Named Officers in fiscal year
1994 represent options regranted upon cancellation of options granted in
prior fiscal years.
(3) "All Other Compensation" for fiscal year 1995 is comprised of: (i)
contributions made by the Company to the accounts (or accrued by the
Company on behalf) of each of the Named Officers for each period presented
under: (1) the Company's Profit Sharing Plan as follows: Mr. Wrathall
$8,239, Mr. Ganster $8,047, Ms. Jehle $4,328
10
<PAGE> 13
and Mr. Walker $8,272; (2) the Company's Employee Stock Ownership Plan as
follows: Mr. Wrathall $1,330, Mr. Ganster $1,330, Ms. Jehle $1,330 and Mr.
Walker $1,330; (3) the excess benefits provision of the Company's Benefit
Adjustment Plan ("BAP") as follows: Mr. Wrathall $5,853, Mr. Ganster $855, Ms.
Jehle $1,306 and Mr. Walker $1,868; (4) discretionary Social Security
integration contributions of BAP as follows: Mr. Wrathall $11,616, Mr. Ganster
$2,592, Ms. Jehle $3,405 and Mr. Walker $4,421; and (5) supplemental
contribution portions of BAP as follows: Mr. Wrathall $18,403, Mr. Ganster
$3,847, Ms. Jehle $5,160 and Mr. Walker $6,797, and (ii) the dollar value of
any premiums paid by the Company during each period presented with respect to
term life insurance for the benefit of each of the Named Officers (other than
group life plans which do not discriminate in scope, terms or operations in
favor of the executive officers and that are generally available to all
salaried employees) as follows: Mr. Wrathall $2,453, Mr. Ganster $520, Ms.
Jehle $272 and Mr. Walker $1,858.
"All Other Compensation" for fiscal year 1994 is comprised of (i) contributions
made by the Company to the accounts (or accrued by the Company on behalf) of
each of the Named Officers for each period presented under (1) the Company's
Profit Sharing Plan as follows: Mr. Wrathall $9,144, Mr. Ganster $7,484 and Mr.
Walker $8,268; (2) the Company's Employee Stock Ownership Plan as follows: Mr.
Wrathall $147, Mr. Ganster $105 and Mr. Walker $120; (3) the excess benefits
provisions of BAP as follows: Mr. Wrathall $627 and (ii) the dollar value of
any premiums paid by the Company during each period presented with respect to
term life insurance for the benefit of each of the Named Officers (other than
group life plans which do not discriminate in scope, terms or operations in
favor of the executive officers and that are generally available to all
salaried employees) as follows: Mr. Wrathall $3,305, Mr. Ganster $795 and Mr.
Walker $2,501.
"All Other Compensation" for fiscal year 1993 is comprised of (i) contributions
made by the Company to the accounts (or accrued by the Company on behalf) of
each of the Named Officers for each period presented under (1) the Company's
Profit Sharing Plan as follows: Mr. Wrathall $10,051, Mr. Ganster $6,258
and Mr. Walker $9,166; (2) the Company's Employee Stock Ownership Plan as
follows: Mr. Wrathall $183, Mr. Ganster $107 and Mr. Walker $175; (3) the excess
benefits provisions of BAP as follows: Mr. Wrathall $1,154 and (ii) the dollar
value of any premiums paid by the Company during each period presented with
respect to term life insurance for the benefit of each of the Named Officers
(other than group life plans which do not discriminate in scope, terms or
operations in favor of the executive officers and that are generally available
to all salaried employees) as follows: Mr. Wrathall $2,766, Mr. Ganster $708 and
Mr. Walker $2,278.
(4) Information for fiscal years 1994 and 1993 is not required because Mr.
Fluin did not serve as an executive officer of the Company during such years.
(5) Information for fiscal year 1993 is not required because Ms. Jehle did not
serve as an executive officer of the Company during such year.
(6) Information for fiscal years 1994 and 1993 is not required because Mr.
O'Leary did not serve as an executive officer during such years.
11
<PAGE> 14
OPTION GRANTS AND RELATED INFORMATION
The following table provides information with respect to options granted to
the Named Officers during fiscal year 1995.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants Potential Realizable
-------------------------------- Value at Assumed
Number of % of Total Annual Rates of
Securities Options Stock Price
Underlying Granted to Exercise or Appreciation For
Options Employees in Base Price Expiration Option Term(2)
Name Granted(#)(1) Fiscal Year ($/Sh.) Date 5% ($) 10% ($)
---- ------------ ------------ -------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
T. Wallace Wrathall... 30,000 20.83 $11.00 8/1/99 $91,173 $207,535
15,000 10.42 13.00 11/21/99 53,875 122,634
------ ----- ------- -------
45,000 31.25 145,048 330,170
Stephen R. Fluin ..... 9,000 6.25 13.00 11/21/99 32,325 73,581
Dennis G. Ganster..... 8,500 5.90 13.00 11/21/99 30,259 69,493
Kathryn A. Jehle ..... 8,500 5.90 13.00 11/21/99 30,259 69,493
Dion T. O'Leary ...... 5,000 3.47 13.00 11/21/99 17,958 40,878
Donald J. Walker...... 10,000 6.94 13.00 11/21/99 35,917 81,756
- ----------
</TABLE>
(1) All of these options, which were granted pursuant to the Company's
1988 Stock Option Plan, were granted at market value on the date of grant,
become exercisable annually in 25% increments beginning one year after the
grant date and have a term of five years. The exercisability of certain of
these options may be accelerated in the event of a change in control of the
Company. See "Employment Agreements and Termination/Change in Control
Agreements."
(2) Represents value of option at end of five year term, assuming the
market price of the Company's Common Stock appreciates at an annually
compounded rate of 5% or 10%. These amounts represent assumed rates of
appreciation only. Actual gains, if any, will be dependent on overall
market conditions and on future performance of the Company's Common Stock.
There can be no assurance that the amounts reflected in the table will be
achieved.
OPTION EXERCISES AND HOLDINGS
The following table contains information regarding options exercised by the
Named Officers during fiscal 1995, and the value of options held by such
officers as of June 30, 1995 measured in terms of the closing price of the
Company's Common Stock on June 30, 1995.
12
<PAGE> 15
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised in-the-Money Options
Options at At Fiscal Year
Shares Fiscal Year End (#) End ($)(1)
Acquired on Value ----------------------------- ---------------------------
Name Exercise Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- -------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
T. Wallace Wrathall..... ------ ------ 7,500 67,500 $86,250 $667,500
Stephen R. Fluin ....... ------ ------ 5,500 19,500 66,375 111,375
Dennis G. Ganster....... 6,250 $80,469 ------ 21,000 ------ 209,625
Kathryn A. Jehle ....... ------ ------ 6,250 27,250 47,656 208,844
Dion T. O'Leary ........ ------ ------ 8,250 16,750 115,625 195,500
Donald J. Walker ....... ------ ------ 7,500 32,500 86,250 336,250
- ------------
</TABLE>
(1) Calculated on the basis of the number of shares subject to each such option
multiplied by the excess of the fair market value of a share of Common
Stock at June 30, 1995 over the exercise price of such option.
LONG-TERM INCENTIVE PLAN AWARDS
The following table sets forth information concerning awards for fiscal
year 1995 to the Named Officers under the long-term incentive portion of the
Company's Executive Officer Annual Incentive Award Program (the "Program").
Under the Program, a bonus pool is created at the end of each of fiscal years
1995, 1996 and 1997, based on a formula related to the amount by which the
Company's revenue, earnings and cash flow for the year exceeds threshold levels
established by the Compensation Committee. The bonus pool is then allocated on
a pro rata basis among the participants in accordance with their base
salaries. Two-thirds of the bonus is paid out in the year earned and one-third
is deferred (the "Long-Term Incentive Award") and added to the executive's
bonus for the next fiscal year or is used to offset any negative bonus amounts
generated under the Program in a subsequent fiscal year. If performance in any
fiscal year is below threshold levels, a negative bonus pool amount will
result. This negative bonus pool amount will be allocated among the
participants and will first be used to reduce the Long-Term Incentive Award
from the prior fiscal year, if any, and the remainder will reduce the bonus
pool amount for the next fiscal year. Distributions are made on or about July
31 of each year of the Program to participants who are employees of the Company
at the time of payment. All Long-Term Incentive Award amounts remaining in the
bonus pool on July 31, 1997 will be paid to the participants.
LONG-TERM INCENTIVE PLAN--AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Estimated Future Payouts Under Non-Stock
Performance or Other Price-Based Plans(1)
Period Until Maturation -------------------------------------------
Name or Payout(1) Threshold($) Target $(2) Maximum($)(3)
---- --------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
T. Wallace Wrathall July 31, 1996/1997 $998 $31,941 Not
determinable
Stephen R. Fluin July 31, 1996/1997 402 12,878 Not
determinable
Dennis G. Ganster July 31, 1996/1997 543 17,375 Not
determinable
Kathryn A. Jehle July 31, 1996/1997 555 17,759 Not
determinable
</TABLE>
13
<PAGE> 16
<TABLE>
<S> <C> <C> <C> <C>
Dion T. O'Leary July 31, 1996/1997 402 12,878 Not
determinable
Donald J. Walker July 31, 1996/1997 655 20,953 Not
determinable
</TABLE>
(1) Two-thirds of the Long-Term Incentive Award for fiscal year 1995 earned
by the Named Officers in fiscal year 1996 becomes payable on July 31, 1996 and
the remainder of the award becomes payable on July 31, 1997, assuming 1996 and
1997 targets are achieved.
(2) The amounts in this column reflect the Long-Term Incentive Award that
would have been allocated to each of the Named Executive Officers in fiscal
year 1995 under the long-term incentive portion of the Program, assuming that
the Company achieved, but did not exceed, its earnings per share, revenue
growth and cash flow targets for fiscal year 1995.
(3) At the beginning of fiscal year 1995, the maximum amount payable
under the long-term incentive portion of the Program to each Named Officer for
fiscal year 1995 was not determinable. At June 30, 1995, the maximum Long-Term
Incentive Award payable in future years under the long-term incentive plan
portion of the Program to each Named Officer relating to fiscal year 1995 was as
follows: T. Wallace Wrathall, $53,461; Stephen R. Fluin, $21,556; Dennis G.
Ganster, $29,084; Kathryn A. Jehle, $29,724; Dion T. O'Leary, $21,556; and
Donald J. Walker, $35,071.
PENSION PLANS FOR COMSHARE LIMITED (U.K.) EMPLOYEES
The Company's subsidiary, Comshare Limited U.K. ("Comshare Limited"),
through trustees, maintains a defined benefit pension plan for certain of its
employees hired before January 1, 1994 (the "Defined Benefit Plan").
The following table shows the estimated annual pension benefits payable to
a covered participant at normal retirement age(1) under the Defined Benefit
Plan, based on remuneration that is covered under the Defined Benefit Plan and
years of service:
<TABLE>
<CAPTION>
DEFINED BENEFIT PLAN PENSION TABLE(2)
REMUNERATION 5 10 15 20 25 30 35
-- -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C> <C>
$100,000 $10,000 $20,000 $ 30,000 $ 40,000 $ 50,000 $ 60,000 $ 70,000
125,000 12,500 25,000 37,500 50,000 62,500 75,000 87,500
150,000 15,000 30,000 45,000 60,000 75,000 90,000 105,000
175,000 17,500 35,000 52,500 70,000 87,500 105,000 122,500
200,000 20,000 40,000 60,000 80,000 100,000 120,000 140,000
225,000 22,500 45,000 67,500 90,000 112,500 135,000 157,500
250,000 25,000 50,000 75,000 100,000 125,000 150,000 175,000
300,000 30,000 60,000 90,000 120,000 150,000 180,000 210,000
350,000 35,000 70,000 105,000 140,000 175,000 210,000 245,000
400,000 40,000 80,000 120,000 160,000 200,000 240,000 280,000
450,000 45,000 90,000 135,000 180,000 225,000 270,000 315,000
500,000 50,000 100,000 150,000 200,000 250,000 300,000 350,000
- -------------
</TABLE>
(1) Normal retirement age is age 65 for men and 60 for women, except that
normal retirement age for main board directors who report to the Managing
Director of Comshare Limited is age 60 if the director made certain
contributions to the Defined Benefit Plan or is age 63 if the director did
not make such contributions. As a result of developments in European
Community Law, employers must now move to equalize retirement ages for
pension purposes; accordingly, the Defined Benefit Plan provides for a
normal retirement age of 65 for all employees, male and female, who
commenced employment with Comshare Limited after August 1, 1992. The table
assumes normal retirement at age 65, and the payment of benefits at normal
retirement age.
14
<PAGE> 17
(2) Figures set forth in the table are subject to a maximum pension of 66 2/3%
(or 33.33 years of pensionable service) in accordance with United Kingdom
Inland Revenue Maximum Benefit levels.
Only full-time salaried directors and staff employees of Comshare
Limited, who were hired before January 1, 1994 and who are normally resident in
the United Kingdom are eligible to participate in the Defined Benefit Plan. To
participate in the Defined Benefit Plan, eligible employees are required to
contribute at rates ranging from 5% to 6% of "pensionable salary" (as defined
below) depending on their positions with Comshare Limited, and may contribute
additional amounts to buy additional benefits.
The Defined Benefit Plan is approved by the Inland Revenue as an exempt
approved pension plan under the Income and Corporation Taxes Act 1988.
Participants in the Defined Benefit Plan remain entitled to their basic state
pensions (except for married women who pay reduced National Insurance
contributions). As described below, a participant's required contributions for
basic state pension benefits reduce the amount of "pensionable salary," but
pension payments are not otherwise subject to offset amounts. Participants in
the Defined Benefit Plan are, however, contracted out of the State Earnings
Related Pension Scheme. Accordingly, participants in the Defined Benefit Plan
pay lower rates of National Insurance contributions than they would if they did
not participate in the Defined Benefit Plan.
At normal retirement age, a participant generally receives a pension of
one-fiftieth of final pensionable salary for each year of credited service, as
adjusted for cost-of-living increases; provided that the participant's pension
benefits under the Defined Benefit Plan may not be lower than the pension
benefits that would otherwise be available under the State Earnings Related
Pension Scheme. "Pensionable salary" is the participant's annual salary plus the
average of any bonus received in the three years prior to the year in which
salary is determined, reduced by 1.25 times the annual equivalent of the lower
earnings level on which the participant's required National Insurance
contributions are based. A participant's "final pensionable salary" is the
highest average pensionable salary in any consecutive three years in the ten
years preceding retirement or earlier leaving employment or death; provided that
main board directors who report to the Managing Director of Comshare Limited
receive a final pensionable salary equal to their highest annual salary in the
five years preceding retirement plus the annual average of any bonus received in
the three prior years, if greater. Participants have the option of exchanging
part of their pension for a tax-free cash sum at normal retirement age. In
addition, participants may retire at any time between their fiftieth birthday
and normal retirement age and receive an immediate pension, which would be less
than if determined under the general formula, if Comshare Limited agrees.
If a participant dies while in receipt of a pension, the participant's
widow or widower will receive a lifelong pension equal to two-thirds of the
pension the participant was receiving at the date of death. If the participant's
death occurs within five years after retiring, a cash sum equal to the
discounted value of 60 monthly pension payments less any pension benefits
received will also be payable to the participant's relatives or dependents. The
Defined Benefit Plan also provides for benefits to a participant's family if the
participant dies before retirement while employed, and contains provisions for
the payment of long-term disability payments for disability caused by accident
or illness.
Mr. O'Leary and Mr. Fluin, who are the only Named Officers eligible to
participate in the Defined Benefit Plan, have not begun drawing benefits under
this plan. Mr. O'Leary's covered compensation for fiscal year 1995 was
$200,000, and he has 24 years of credited service, and Mr. Fluin's covered
compensation for fiscal year 1995 was $238,000, and he has 17 years of credited
service.
15
<PAGE> 18
COMPENSATION COMMITTEE REPORT 1995
The Compensation Committee recommends to the Board of Directors
the compensation of the executive officers of the Company, who during some or
all of fiscal year 1995 were the Named Officers and Steven J. Tonissen. The
Committee also reviews the recommendations of the chief executive officer with
respect to the compensation of other officers of the Company and recommends to
the full Board approval or modification of that compensation.
Historically, the Committee, with the advice of the chief
executive officer, has recommended to the Board the stock option grants to be
made to the executive officers and other Company officers and managers. In
August 1995 the Board delegated to the Committee the authority to award stock
options under the Company's 1988 Stock Option Plan.
At the beginning of fiscal year 1995, the Committee consisted of
all of the non-employee directors of the Company. In November 1994 the
Committee was reduced to the four members listed at the end of this report.
The Committee met four times in fiscal year 1995. Executive officers were not
present during the Committee's consideration of their individual compensation.
The objective of the Company's executive compensation program is
to attract and retain key executives who are critical to the long-term success
of the Company. The compensation program is intended to further align the
interests of the executive officers with the interests of the Company's
shareholders by tying executive compensation to increases in shareholder value.
The program is designed to provide the executives with a balanced incentive
package which encourages the achievement of both short-term and long-term
performance goals and which rewards the executives for continuously increasing
shareholder value.
The Company's executive compensation program consists of four
principal components: base salary, performance bonuses, participation in
Company employee benefit programs and stock-based incentives.
Base Salary
The Committee recognizes the importance of a competitive
compensation structure for attracting and retaining valuable senior executives.
Salaries are established and reviewed at least annually. The Committee reviews
the chief executive officer's recommendations and determines executive officer
salaries based on the Committee's assessment of individual performance and
profitability of the Company. The
16
<PAGE> 19
Committee also takes into account required compensation levels under the
Company's employment agreement with Mr. Wrathall. See "Executive
Compensation--Employment Agreements and Termination/Change in Control
Arrangements."
Mr. Wrathall's base salary was increased from $300,000 to
$350,000 effective April 1, 1995, the first anniversary of his election as
chief executive officer. The Committee recommended the increase as a
reflection of Mr. Wrathall's superior performance in reorganizing the Company's
management and improving profitability during the preceding year.
During the fiscal year, on the recommendation of the chief
executive officer, the salaries of Ms. Jehle, Mr. Walker, and Mr. Ganster were
raised by approximately 18%, 21% and 21%, respectively, to reflect their
performances. In October 1994, Mr. Fluin and Mr. O'Leary became executive
officers of the Company, and in June 1995, Mr. Tonissen joined the company as
Senior Vice President, Marketing, at base salary levels which the Committee,
with the advice of Mr. Wrathall, determined to be appropriate for their
positions and level of responsibility and as compared with the Company's other
executive officers.
Performance Bonuses
On the recommendation of the Committee, the Board of Directors
adopted a three-year incentive program for the executive officers for fiscal
years 1995, 1996 and 1997. Under the incentive program, a bonus pool was
created at the end of fiscal year 1995 based on a formula related to the amount
by which the Company's revenue, earnings and cash flow for that year exceeded
threshold levels established by the Committee. These threshold levels were
exceeded in fiscal year l995 by approximately 115%. The bonus pool was
allocated among the executive officers based upon their base salaries, with
each executive officer's share of the bonus pool, including Mr. Wrathall's,
representing an amount equal to approximately one-third of their base salaries.
Two-thirds of the available bonus for fiscal year l995 was paid
to the executive officers. The other one-third was deferred and will be added
to the bonus pool for fiscal year l996, or will be used to offset any negative
bonus amount generated in fiscal year 1996 or fiscal year 1997 under the
program as described below.
In each of fiscal years l996 and l997, a bonus pool will be
created based on the same formula as was used in fiscal year l995, except at
higher threshold levels, plus the deferred bonus amount for the prior fiscal
year. Two-thirds of the bonus pool for each of these years will be paid to the
executive officers and one-third will be deferred to the next
17
<PAGE> 20
fiscal years, with all amounts in the pool at the end of fiscal year l997 paid
to the executive officers. To be eligible for a bonus, the person must be an
executive officer at the time each bonus is paid out.
If performance in fiscal year l996 or l997 is below threshold
levels, a negative bonus pool amount will result. This negative bonus amount
will first reduce the deferred bonus amount from the prior fiscal year, and the
excess, if any, will reduce the bonus amount for the next fiscal year.
To participate in the executive officer incentive program, the
officer is expected to own shares of the Company's Common Stock in prescribed
amounts related to the officer's base salary. To assist the executive officers
in achieving these stock ownership targets, the Company, with the approval of
the shareholders at the 1994 annual meeting, adopted an Executive Stock
Purchase Program under which the executives are allowed to buy the Company's
Common Stock directly from the Company with notes payable over a four-year
period, secured by the purchased stock.
Special Benefit Plans
The executive officers generally participate in the Company's
benefit plans on the same terms as other employees of the Company. In
addition, executive officers in the United States receive benefits under the
Company's Benefit Adjustment Plan ("BAP") and a program which provides the
executive officers with increased levels of term life insurance coverage. The
BAP provides for (i) the payment of benefits which would otherwise be funded by
the Company under its tax-qualified retirement plans but for Internal Revenue
Code restrictions, (ii) the discretionary payment of Social Security
integration benefits and (iii) certain discretionary contributions. The
Company made a discretionary contribution of $123,459.00 to the BAP in fiscal
year 1995, based on the Company's profit performance in fiscal year l995, which
exceeded budget and represented a marked improvement over the Company's recent
history. BAP contributions are allocated among the executive officers based on
their base salaries.
Stock Option Awards
For many years, the Company has had in place stock option
programs. Stock options are granted at exercise prices not less than the
market price of the Company's Common Stock on the date of the grant and,
therefore, have no value unless the Company's stock appreciates in value. As a
result, through the use of stock options, the Committee and the Board relate
the benefits received by the executive officers to the amount of appreciation
realized by shareholders over comparable periods.
18
<PAGE> 21
During fiscal year 1995, the Committee recommended and the Board
granted to the executive officers additional options to purchase the Company's
Common Stock in the following amounts: Mr. Wrathall 45,000 shares, Mr.
Tonissen 25,000 shares, Mr. Walker 10,000 shares, Mr. Fluin 9,000 shares, Mr.
Ganster 8,500 shares, Ms. Jehle 8,500 shares, and Mr. O'Leary 5,000 shares.
The Committee anticipates that options to purchase additional shares will be
granted in December of each year. The number of option shares granted was
established based on the Committee's determination as to each executive
officer's opportunity to contribute to increases in shareholder value and, in
the case of Mr. Tonissen, included options granted as part of his initial
overall compensation package.
Deductibility of Executive Compensation
The Company from time to time reviews the extent to which its
executive compensation arrangements are subject to the provisions of the
Internal Revenue Code ("IRC") and related regulations limiting the
deductibility of executive compensation in excess of $1,000,000 paid to any of
the five most highly compensated executive officers of the Company in any
fiscal year which does not qualify for an exemption under the statute or
proposed regulations. The l988 Stock Option Plan includes restrictions on
option grants in compliance with these provisions of the IRC. As a result,
compensation realized in connection with future exercises of options granted
under such plan will be exempt from the limit on deductibility described above.
It is important to note that while these restrictions in the 1988 Stock Option
Plan give the Committee continuing discretion in establishing executive officer
compensation, they do limit such discretion by restricting the size of option
awards which the Committee may grant to any single individual. The Committee
does not presently believe that other components of the Company's compensation
program are likely to result in payments to any executive officer in any year
in excess of $l,000,000, and therefore has concluded that no further action
with respect to qualifying such compensation for deductibility was necessary at
this time.
Dated: September 20, 1995 COMPENSATION COMMITTEE, as of
June 30, 1995
Claude M. Allard
Daniel T. Carroll, Chair
Stanley R. Day
Brian Sullivan
19
<PAGE> 22
SHAREHOLDER RETURN
Set forth below is a graph comparing the cumulative total return on the
Company's Common Stock from July 1, 1990 through June 30, 1995 with the
Standard and Poor's Computer Software and Services Index (the "S&P Computer
Software Index") and the NASDAQ Stock Market-US Index (the "NASDAQ US Index").
The graph assumes that the value of the investment in the Company's Common
Stock, the S&P Computer Software Index and the NASDAQ US Index was $100 on
July 1, 1990 and that all dividends were reinvested.
The graph displayed below is presented in accordance with Securities and
Exchange Commission requirements. Stockholders are cautioned against drawing
any conclusions from the data contained therein, as past results are not
necessarily indicative of future performance. This graph in no way reflects the
Company's forecast of future financial performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
6/90 6/91 6/92 6/93 6/94 6/95
<S> <C> <C> <C> <C> <C> <C>
COMSHARE, 100 80 43 26 49 86
INCORPORATED
NASDAQ STOCK 100 106 127 160 162 215
MARKET- US
S & P CMPTR 100 87 98 145 164 255
SOFTWR & SVCS
</TABLE>
EMPLOYMENT AGREEMENTS AND TERMINATION/CHANGE IN CONTROL ARRANGEMENTS
The Named Officers of the Company serve at the pleasure of the
Board of Directors. Mr. Wrathall serves in his present capacity pursuant to
the terms of an employment agreement.
Mr. Wrathall's employment agreement is effective through April 1,
1998. On each April 1, the agreement is automatically extended for an
additional year unless either party elects not to extend the agreement. The
agreement provides for an initial annual salary of $300,000, with increases
subject to annual review by the Compensation Committee and the Board of
Directors. On April 1, 1995, Mr. Wrathall's salary was increased to $350,000.
In addition to his base salary, Mr. Wrathall is also eligible to participate in
health and welfare benefit, employee stock ownership, profit sharing and
incentive programs of the Company offered to other senior executives of the
Company. Mr. Wrathall shall participate in any incentive compensation program
of the Company at a level appropriate for a Chief Executive Officer, and his
share of incentive compensation, by dollar amount and percentage, shall
increase not less than proportionately with any other senior executive of the
Company. The agreement provides for the continuation of Mr. Wrathall's salary
for a period of up to three years upon the occurrence of a material breach of
this agreement by the Company, provided Mr. Wrathall chooses to terminate the
agreement by giving to the Company thirty (30) days written notice of such
termination. The agreement also provides that Mr. Wrathall will not terminate
his employment under this agreement for a period of twelve (12) months
following a change in control (as defined in the agreement) of the Company. At
the end of such twelve (12) month period, Mr. Wrathall may terminate his
employment under this agreement and receive the same compensation and benefits
as if the Company had materially breached this agreement. Also, Mr. Wrathall
will receive the same compensation and benefits as if the Company had
materially breached this agreement if, during the twelve (12) month period
following a change in control of the Company, Mr. Wrathall is either terminated
by the Company, or terminates the agreement for "good reason" (as defined in
the agreement). In addition, upon termination of Mr. Wrathall's employment by
breach of the Company or a change in control of the Company, Mr. Wrathall may
surrender some or all of the stock options he holds and receive therefor an
amount in cash equal to the difference between the per share exercise price and
the per share
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closing price of the Company's Common Stock on the effective date of
termination or, if higher, the average price per share paid in cash or other
consideration in connection with any such change in control transaction.
The BAP is a partially funded program maintained primarily to
provide deferred compensation for a select group of the Company's management
and highly compensated executives, including the Named Officers. The BAP
provides, among other benefits, (i) for the payment of benefits which would
otherwise be currently funded by the Company under its tax-qualified retirement
plans but for the restrictions of Sections 401 and 415 of the Internal Revenue
Code, (ii) that the Company may make discretionary Social Security integration
contributions to a participant's account and (iii) that the Company may make
supplemental contributions to a participant's account equal to a set percentage
of each participant's compensation. Such benefits vest at various times
specified in the BAP and, in addition, such benefits vest immediately upon a
change in control of the Company (as defined in the BAP).
The Company also has an Executive Stock Purchase Program (the
"1994 Executive Purchase Program"), which provides eligible executives of the
Company with a means to purchase up to an aggregate of 200,000 shares of the
Company's Common Stock at then current market prices, and to obtain limited
financing for such purchases through promissory notes issued to the Company.
In the event of a change in control of the Company, an executive participating
in the 1994 Executive Purchase Program may surrender shares of the Company's
Common Stock securing a promissory note issued under the program in order to
discharge such promissory note.
For purposes of Mr. Wrathall's employment agreement, the BAP, and
the Executive Stock Purchase Program described above, a change in control is
generally deemed to have occurred upon the happening of any of the following
events: (i) the election of a Board of Directors of the Company, a majority of
the members of whom were nominees of a person, other than the Weyerhaeuser
Family or persons who were members of the Board of Directors or officers of the
Company as of certain specified dates, following the acquisition by such person
of twenty-five percent, or more, of the outstanding Common Stock, (ii) the
acquisition of ownership by a person or group of persons described in (i) above
of fifty-one percent, or more, of the outstanding Company's Common Stock, (iii)
a sale of all or substantially all of the assets of the Company to any entity
not controlled by the Weyerhaeuser Family or persons who were members of the
Board of Directors or officers of the Company as of certain specified dates or
any Employee Stock Ownership Plan for the benefit of employees of the Company,
or (iv) a merger, consolidation or similar transaction between the Company and
another entity if a majority of the members of the Board of Directors of the
surviving corporation are not persons who were members of the Board of
Directors of the Company as of certain specified dates.
In addition, under the Company's 1988 Stock Option Plan, which
provides for the granting of incentive and non-qualified stock options and
tandem stock appreciation rights ("SARs") to key employees, including the Named
Officers, stock options and SARs granted under such plan become fully
exercisable, even if not otherwise exercisable, upon the dissolution or
liquidation of the Company or upon any merger or consolidation in which the
Company is not the surviving corporation, if a period of twelve months from the
date of grant has expired. The Board of Directors has discretionary authority
to grant options which may be surrendered by the optionee, in the event of
certain changes in control of the Company, for a cash payment, irrespective of
whether the optionee has held the option for 12 months.
DIRECTOR COMPENSATION
In fiscal year 1995, each director who was not an officer or
employee of the Company received for his services as such a semi-annual
retainer of $4,000, plus $750 for each Board or committee meeting attended
(except for meetings conducted by telephone and committee meetings held on the
same day as board meetings). In addition, the Chairman of the Compensation
Committee receives a semi-annual retainer of $1,500 for serving as such, plus
$250 for each Compensation Committee meeting held by telephone. Directors who
are officers or employees of the Company receive no compensation (beyond their
compensation for services as an officer or employee) for serving as directors.
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<PAGE> 24
In addition, the Company has a Directors Stock Option Plan (the
"Directors Plan"). This plan provides for the issuance of options to purchase
up to 100,000 shares of the Company's Common Stock to non-employee directors of
the Company. Under the Directors Plan, each of the seven non-employee
directors serving on the Board of Directors on November 17, 1994 was granted an
option to purchase 5,000 shares of the Company's Common Stock at an exercise
price of $12.50 per share. Any non-employee director who is first elected or
appointed to the Board of Directors after November 17, 1994 will receive an
option to purchase 5,000 shares of the Company's Common Stock on the date of
the first Board of Directors meeting following his or her election or
appointment. In addition, each non-employee director who has been a director
for six months before the January 1 following the date of each Annual Meeting
of Shareholders held during the term of the Directors Plan automatically shall
be granted, as of the January 1 following each such Annual Meeting, an option
to purchase an additional 1,000 shares of Common Stock. Options under the
Directors Plan are granted at the last sale price per share of the Company's
Common Stock on the Nasdaq National Market on the date of grant, are
exercisable at a rate of 25% per year beginning one year from the date of
grant and have a term of five years. Options granted under the Directors Plan
become immediately exercisable, if not otherwise exercisable, upon the
dissolution or liquidation of the Company or upon any merger or consolidation
in which the Company is not the surviving corporation, provided that a period
of 12 months from the date of grant has expired.
In addition to their director fees, Mr. Merten and Mr. Rockart
earned $30,000 and $17,500, respectively, in fiscal year 1995 for their services
as consultants to the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On November 17, 1994, the shareholders approved the 1994 Executive
Stock Purchase Program (the "Program"). This program allows eligible executive
officers to purchase the Company's Common Stock directly from the Company at a
per share price equal to the last sale price of the Company's Common Stock on
the Nasdaq National Market on the day preceding the purchase. The purchase
price for shares can be paid in cash or by delivery of a promissory note.
Since July 1, 1994, the following executive officers of the Company have
purchased, pursuant to the Program, the following number of shares at the per
share price indicated below: Mr. Wrathall, 20,000 shares at $13.00 per share;
Ms. Jehle, 14,490 shares at $13.50 per share; Mr. Fluin, 12,842 shares at
$13.00 per share; Mr. O'Leary, 12,842 shares at $13.00 per share; and Mr.
Tonissen, 9,189 shares at $18.50 per share.
Pursuant to this Program, each of the above mentioned executive
officers utilized promissory notes to purchase such shares. Mr. Wrathall
currently has notes outstanding to the Company in the aggregate principal
amount of $274,437, which is the largest aggregate amount of indebtedness due
by Mr. Wrathall to the Company since July 1, 1994; Ms. Jehle currently has
notes outstanding to the Company in the aggregate principal amount of $180,041,
which is the largest aggregate amount of indebtedness due by Ms. Jehle to the
Company since July 1, 1994; Mr. O'Leary currently has notes outstanding to the
Company in the aggregate principal amount of $176,216, which is largest
aggregate amount of indebtedness due by Mr. O'Leary to the Company since July
1, 1994; Mr. Fluin currently has notes outstanding to the Company in the
aggregate principal amount of $176,216, which is the largest aggregate amount
of indebtedness due by Mr. Fluin to the Company since July 1, 1994; and Mr.
Tonissen currently has notes outstanding to the Company in the aggregate
principal amount of $170,374, which is the largest aggregate amount of
indebtedness due by Mr. Tonissen to the Company since July 1, 1994. The
executive officer notes described above are full recourse notes and are
secured by the purchased shares of the Company's Common Stock. Interest is
accrued semi-annually and is added to the principal amount of the notes.
Principal and accrued interest on the notes is due four years from the date of
issuance. The outstanding notes from Messrs. Wrathall, Fluin, O'Leary and Ms.
Jehle bear interest at a rate of 8.75% per annum, and the note from Mr.
Tonissen bears interest at a rate of 10.0% per annum. The foregoing principal
amounts include accrued interest through June 30, 1995.
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<PAGE> 25
ACCOUNTANTS
Arthur Andersen & Co., independent public accountants, have audited the
financial statements of the Company since 1972. Representatives from Arthur
Andersen & Co. will be present at the Annual Meeting, will have an opportunity
to make a statement if they wish, and will be available to respond to
appropriate questions. In accordance with the Company's past practice, the
selection of independent public accountants to audit the financial statements
of the Company for the fiscal year ending June 30, 1996 will be made by the
Board of Directors at a later date.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10 percent of a
registered class of the Company's equity securities, to file reports of their
ownership with the Securities and Exchange Commission. Officers, directors and
greater than ten percent shareholders are required by SEC regulation to furnish
the Company with copies of all Section 16(a) reports they file. Specific due
dates for these reports have been established and the Company is required to
report in this proxy statement any delinquent filings and failures to file such
reports.
Based solely on its review of the copies of such reports received by it and
written representations of its incumbent directors and officers, the Company
believes that during the period from June 30, 1994 to June 30, 1995, all filing
reports applicable to its directors, officers and greater than ten percent
beneficial owners were complied with, except that Mr. Merten did not timely
file two Form 4s.
SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Shareholder proposals intended to be presented at the 1996 Annual Meeting
which are eligible for inclusion in the Company's Proxy Statement for that
meeting under the applicable rules of the Securities and Exchange Commission
must be received by the Company not later than _______, 1996 if they are to be
included in the Company's Proxy Statement relating to that meeting. Such
proposals should be addressed to the Secretary at the Company's principal
executive offices and should satisfy the requirements applicable to shareholder
proposals contained in the Company's bylaws.
GENERAL
At the date of this Proxy Statement, management is not aware of any matters
to be presented for action at the Annual Meeting other than those described
above. However, if any other matters should come before the meeting, it is the
intention of the persons named in the accompanying proxy to vote in accordance
with their judgment on such matters.
October __, 1995
Ann Arbor, Michigan
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<PAGE> 26
Please mark your SHARES IN YOUR NAME REINVESTMENT SHARES
/X/ votes as in this
example.
<TABLE>
<S><C>
FOR WITHHELD FOR AGAINST WITHHELD
1. Election of Directors. / / / / 2. Approve the amendment to / / / / / /
DANIEL T. CARROLL, RICHARD L. CRANDALL, the Articles of Incorporation
STANLEY R. DAY, W. JOHN DRISCOLL, ALAN to increase the number of shares of
G. MERTEN, GEORGE R. MRKONIC, JOHN F. Common Stock authorized for issuance
ROCKART, BRIAN SULLIVAN, T. WALLACE from 10,000,000 to 20,000,000.
WRATHALL
For, except vote withheld from the following nominee(s):
________________________________________________________
/ /
SIGNATURE(S) ____________________________________________ DATE _____________
SIGNATURE(S) ____________________________________________ DATE _____________
NOTE: Please sign exactly as name appears hereon. Joint owners should sign
each. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
</TABLE>
COMSHARE, INCORPORATED
555 Briarwood Circle
Ann Arbor, Michigan 48108
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON NOVEMBER 18, 1995
The undersigned hereby appoints Richard L. Crandall and T. Wallace Wrathall, or
any one of them, proxies with full power of substitution to vote, as designated
on the reverse side, all shares of Common Stock that the undersigned is
entitled to vote at the Annual Meeting of Shareholders of Comshare,
Incorporated to be held on Saturday, November 18, 1995, or at any adjournment
or adjournments thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED. IF
NO DIRECTION IS GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS PROXY WILL BE
VOTED FOR SUCH PROPOSAL.
Discretionary authority is hereby conferred as to any other matters as may
properly come before the Annual Meeting. The undersigned acknowledges receipt
of the Notice of Annual Meeting, the Proxy Statement and the Annual Report of
Shareholders of Comshare, Incorporated for the year ended June 30, 1995. The
undersigned ratifies all that the proxies or any of them or their substitutes
may lawfully do or cause to be done by virtue hereof and revokes all former
proxies.
PLEASE MARK, DATE, SIGN, AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
_____________________________________ ____________________________________
_____________________________________ ____________________________________
_____________________________________ ____________________________________
