<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:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the Com-
mission Only (as permitted by
Rule 14a-6(e)(2))
[X] 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):
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(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, 1996
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 Monday, November 18, 1996 at 11:00 a.m., for the
following purposes:
1. To elect nine directors.
2. 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 30, 1996, 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 21, 1996
Ann Arbor, Michigan
<PAGE> 3
COMSHARE, INCORPORATED
-------------------------
PROXY STATEMENT
1996 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 Monday, November 18, 1996 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 24, 1996.
The Company's Annual Report to Shareholders for the year ended June 30,
1996 is enclosed herewith.
Only holders of record of Common Stock of the Company at the close of
business on September 30, 1996 are entitled to vote at the meeting or any
adjournment or adjournments thereof. On that date, 9,717,655 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 15, 1996.
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. 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
<PAGE> 4
the meeting 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>
Geoffrey B. Bloom............. 55 Chairman and Chief Executive Officer, 1995
Wolverine World Wide, Inc., a manufacturer
and seller of footwear, Rockford, Michigan
Daniel T. Carroll............. 70 Chairman and President of The Carroll Group, 1986
Inc., a management consulting company, Ann
Arbor, Michigan
Richard L. Crandall........... 53 Chairman of the Board of Directors of the 1968
Company
Stanley R. Day................ 71 Retired Chairman of the Board, Champion 1967
Enterprises, Inc., a manufacturer and
seller of manufactured homes and mid-sized
buses, Dryden, Michigan
W. John Driscoll.............. 67 Retired President, Rock Island Company, a 1970
private investment company, St. Paul,
Minnesota
Alan G. Merten................ 54 President, George Mason University, Fairfax, 1985
Virginia
George R. Mrkonic............. 43 Vice Chairman and President, Borders Group, 1995
Inc., an operator of book and music stores,
Ann Arbor, Michigan
John F. Rockart............... 65 Director and Senior Lecturer, Center for 1989
Information Systems Research, Massachusetts
Institute of Technology, Cambridge,
Massachusetts
T. Wallace Wrathall........... 59 President and Chief Executive Officer of the 1982
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. Bloom, Crandall, Merten, Mrkonic and Wrathall.
Mr. Bloom assumed the position of Chairman and Chief Executive Officer of
Wolverine World Wide, Inc. in April 1996, after having served as its President
and Chief Executive Officer from 1993 to April 1996 and as its Chief Operating
Officer from 1987 to 1993.
Mr. Carroll also serves as a director of the following corporations: A.M.
Castle & Co., American Woodmark Corporation, Aon Corporation, DeSoto, Inc.,
Diebold, Inc., Holmes Protection Group, Inc., Oshkosh Truck Corporation,
Recombinant BioCatalysis, Inc., Wolverine World Wide, Inc. and Woodhead
Industries, Inc.
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 left unfilled. Mr.
Crandall also serves as a director of Computer Task Group, Inc. and Diebold,
Inc.
Mr. Driscoll also serves as a director of the following corporations: The
John Nuveen Company, The St. Paul Companies, Inc., Northern States Power Company
and Weyerhaeuser Company.
Mr. Merten assumed the position of President of George Mason University in
July 1996 after having served as the Dean of the Johnson Graduate School of
Management at Cornell University since 1989. 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.
2
<PAGE> 5
Mr. Mrkonic assumed the position of Vice Chairman and President of Borders
Group, Inc. in December 1994 and has been a director of Borders Group, Inc.
since August 1994. Prior to joining Borders Group, Inc., Mr. Mrkonic served as
Executive Vice President, Specialty Retailing Group of K-Mart Corporation, a
general merchandise retailer, from November 1990 to November 1994. Mr. Mrkonic
is also a director of Champion Enterprises, Inc.
Mr. Rockart also serves as a director of Keane, Inc. and Renaissance
Solutions, 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.
MEETINGS AND COMMITTEES OF THE BOARD
During the Company's fiscal year ended June 30, 1996, the Board of
Directors held seven 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 four 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. Bloom, Carroll, Merten and Rockart.
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 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. Carroll, Day, Driscoll and Mrkonic.
The Nominating Committee of the Board met one time 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 and
Rockart.
FURTHER INFORMATION
PRINCIPAL SHAREHOLDERS
The Common Stock is the only voting security of the Company. The Company is
not aware of any person who beneficially owned five percent or more of such
stock as of September 30, 1996.
3
<PAGE> 6
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
30, 1996.
<TABLE>
<CAPTION>
COMMON STOCK
OF THE COMPANY
OWNED PERCENT
NAME BENEFICIALLY(1) OF CLASS
- ---------------------------------------------------------------------- -------------- --------
<S> <C> <C>
Geoffrey Bloom(2)..................................................... 2,875 0.03%
Daniel T. Carroll(3).................................................. 5,250 0.05%
Richard L. Crandall(4)................................................ 160,310 1.64%
Stanley R. Day(5)..................................................... 5,577 0.06%
W. John Driscoll(6)................................................... 18,750 0.19%
Alan G. Merten(7)..................................................... 6,675 0.07%
George R. Mrkonic(8).................................................. 9,875 0.10%
John F. Rockart(9).................................................... 6,750 0.07%
T. Wallace Wrathall(10)............................................... 284,559 2.91%
Dennis G. Ganster(11)................................................. 49,899 0.51%
Kathryn A. Jehle(12).................................................. 50,752 0.52%
Dion T. O'Leary(13)................................................... 37,638 0.39%
Donald J. Walker(14).................................................. 17,308 0.18%
All executive officers and directors as a group (14 persons)(15)...... 677,257 6.82%
</TABLE>
- -------------------------
(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 1,875 shares which Mr. Bloom has, or within 60 days of September
30, 1996 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 3,750 shares which Mr. Carroll has, or within 60 days of September
30, 1996 will have, the right to acquire pursuant to the presently
exercisable portion of options granted under the Company's Directors Stock
Option Plan.
(4) Includes 56,250 shares which Mr. Crandall has, or within 60 days of
September 30, 1996 will have, the right to acquire pursuant to the
presently exercisable portion of options granted under the Company's 1988
Stock Option Plan and 2,633 shares which have been allocated to his account
under the Company's Profit Sharing Plan. Mr. Crandall disclaims beneficial
ownership of 24,000 shares reflected in the table which are owned by his
minor son.
(5) Includes 3,750 shares which Mr. Day has, or within 60 days of September 30,
1996 will have, the right to acquire pursuant to the presently exercisable
portion of options granted under the Company's Directors Stock Option Plan.
(6) Includes 3,750 shares which Mr. Driscoll has, or within 60 days of
September 30, 1996 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 3,750 shares which Mr. Merten has, or within 60 days of September
30, 1996 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 1,875 shares which Mr. Mrkonic has, or within 60 days of September
30, 1996 will have, the right to acquire pursuant to the presently
exercisable portion of options granted under the Company's Directors Stock
Option Plan.
4
<PAGE> 7
(9) Includes 3,750 shares which Mr. Rockart has, or within 60 days of September
30, 1996 will have, the right to acquire pursuant to the presently
exercisable portion of options granted under the Company's Directors Stock
Option Plan.
(10) Includes 71,250 shares which Mr. Wrathall has, or within 60 days of
September 30, 1996 will have, the right to acquire pursuant to the
presently exercisable portion of options granted under the Company's 1988
Stock Option Plan and 2,019 shares which have been allocated to his account
under the Company's Profit Sharing Plan.
(11) Includes 14,813 shares which Mr. Ganster has, or within 60 days of
September 30, 1996 will have, the right to acquire pursuant to the
presently exercisable portion of options granted under the Company's 1988
Stock Option Plan and 1,299 shares which have been allocated to his account
under the Company's Profit Sharing Plan.
(12) Includes 21,761 shares which Ms. Jehle has, or within 60 days of September
30, 1996 will have, the right to acquire pursuant to the presently
exercisable portion of options granted under the Company's 1988 Stock
Option Plan and 438 shares which have been allocated to her account under
the Company's Profit Sharing Plan.
(13) Includes 18,375 shares which Mr. O'Leary has, or within 60 days of
September 30, 1996 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 17,308 shares which Mr. Walker has, or within 60 days of September
30, 1996 will have, the right to acquire pursuant to the presently
exercisable portion of options granted under the Company's 1988 Stock
Option Plan.
(15) Includes 216,199 shares which certain directors and executive officers
have, or within 60 days of September 30, 1996 will have, the right to
acquire pursuant to the presently exercisable portion of options granted
under the Company's 1988 Stock Option Plan and the Directors Stock Option
Plan; 6,389 shares that have been allocated to the accounts of members of
the group under the Company's Profit Sharing Plan; and 24,000 Shares,
referred to in Note (4) above under "Stock Ownership of Management," as to
which beneficial ownership is disclaimed. Excludes shares owned by Mr.
Walker, who is not currently serving as an executive officer of the
Company.
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 59
Dennis G. Ganster........................... Senior Vice President and Chief Technology 45
Officer
Kathryn A. Jehle............................ Senior Vice President, Chief Financial 44
Officer, Treasurer and Assistant Secretary
Dion T. O'Leary............................. Senior Vice President, Emerging Markets 52
Mark E. Tapling............................. Senior Vice President, North American 39
Field Operations
Steven J. Tonissen.......................... Senior Vice President, Marketing 47
</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. 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.
5
<PAGE> 8
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 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 Senior Vice President, Emerging Markets, of the
Company in July 1996 after having served as Vice President, Agents and
Distributors, of the Company, since November 1994. He had previously served as
the Company's Director of Agents and Distributors for over ten years.
Mr. Tapling was named Senior Vice President, North American Field
Operations, of the Company in September 1996. Prior to joining the Company, Mr.
Tapling served as Director of Northeast Region Sales for Lotus Development
Corporation, a client/server software and service provider, from February 1996
to September 1996; North American Sales Manager of the Communications Product
Sales division for Lotus Development from April 1994 to February 1996; and Area
Vice President for Soft Switch, Inc., a messaging-based software and services
company, from May 1989 to April 1994, at which time Lotus Development acquired
Soft Switch.
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.
The executive officers of the Company serve at the pleasure of the Board of
Directors.
6
<PAGE> 9
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 four other most highly compensated
executive officers who were serving as executive officers at the end of fiscal
year 1996 (the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
------------------------------------------------- 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............ 1996 $363,461 $ 0 $4,641 40,000 $ 55,461
President, Chief Executive 1995 312,500 106,924 4,641 45,000 47,894
Officer and a Director of the 1994 265,200 0 4,641 30,000 13,223
Company
Dennis G. Ganster.............. 1996 191,923 0 0 9,000 18,946
Senior Vice President and 1995 162,500 58,166 2,913 8,500 17,191
Chief Technology Officer 1994 140,000 25,500 2,634 0 8,384
Kathryn A. Jehle............... 1996 202,404 0 0 9,000 22,851
Senior Vice President, Chief 1995 173,750 81,084 0 8,500 15,801
Financial Officer, Treasurer 1994 26,250 3,365 0 25,000 0
and Assistant Secretary
Dion T. O'Leary................ 1996 174,376 0 0 7,500 0
Senior Vice President 1995(4) 157,300 81,493 0 5,000 0
Donald J. Walker(5)............ 1996 212,308 0 3,031 9,000 23,886
Former Senior 1995 196,280 70,142 3,272 10,000 24,546
Vice President 1994 170,100 14,300 3,186 30,000 10,889
</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 1996 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 $9,081, Mr.
Ganster $8,446, Ms. Jehle $10,425 and Mr. Walker $8,233; (2) the excess
benefits provision of the Company's Benefit Adjustment Plan ("BAP") as
follows: Mr. Wrathall $7,072, Mr. Ganster $1,402, Ms. Jehle $1,755 and Mr.
Walker $2,083; (3) discretionary Social Security integration contributions
under the BAP as follows: Mr. Wrathall $13,778, Mr. Ganster $3,262, Ms.
Jehle $3,918 and Mr. Walker $4,526; and (4) discretionary supplemental
contributions under the BAP as follows: Mr. Wrathall $22,249, Mr. Ganster
$5,288, Ms. Jehle $6,345 and Mr. Walker $7,326, 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 $3,281, Mr.
Ganster $549, Ms. Jehle $408 and Mr. Walker $1,718.
"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
7
<PAGE> 10
presented under: (1) the Company's Profit Sharing Plan as follows: Mr.
Wrathall $8,239, Mr. Ganster $8,047, Ms. Jehle $4,328 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 under the BAP as follows: Mr. Wrathall $11,616,
Mr. Ganster $2,592, Ms. Jehle $3,405 and Mr. Walker $4,421; and (5)
discretionary supplemental contributions under the 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 $2,501.
(4) Information for fiscal year 1994 is not required because Mr. O'Leary did not
serve as an executive officer during such year.
(5) Mr. Walker ceased serving as a Senior Vice President of the Company in July
1996.
OPTION GRANTS AND RELATED INFORMATION
The following table provides information with respect to options granted to
the Named Officers during fiscal year 1996.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATES OF
----------------------------- STOCK
NUMBER OF % OF TOTAL PRICE APPRECIATION
SECURITIES OPTIONS FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(2)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION --------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SH.) DATE 5%($) 10%($)
- ------------------------- ------------- ------------ ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
T. Wallace Wrathall...... 15,000 9.66 $ 24.25 11/29/2000 $100,497 $228,760
25,000 16.10 27.25 05/09/2001 188,217 428,434
------ ----- -------- --------
40,000 25.76 288,714 657,195
Dennis G. Ganster........ 9,000 5.80 24.25 11/29/2000 60,298 137,256
Kathryn A. Jehle......... 9,000 5.80 24.25 11/29/2000 60,298 137,256
Dion T. O'Leary.......... 7,500 4.83 24.25 11/29/2000 50,249 114,380
Donald J. Walker......... 9,000 5.80 24.25 11/29/2000 60,298 137,256
</TABLE>
- -------------------------
(1) All of these options, which were granted pursuant to the Company's 1988
Stock Option Plan, were granted at market value on the date of grant, become
exercisable annually in 25% increments beginning one year after the grant
date and have a term of five years. The exercisability of certain of these
options may be accelerated in the event of a change in control of the
Company. See "Employment Agreements and Termination/Change in Control
Agreements."
8
<PAGE> 11
(2) Represents value of option at end of five year term, assuming the market
price of the Company's Common Stock appreciates at an annually compounded
rate of 5% or 10%. These amounts represent assumed rates of appreciation
only. Actual gains, if any, will be dependent on overall market conditions
and on future performance of the Company's Common Stock. There can be no
assurance that the amounts reflected in the table will be achieved.
OPTION EXERCISES AND HOLDINGS
The following table contains information regarding options exercised by the
Named Officers during fiscal year 1996, and the value of options held by such
officers as of June 30, 1996 measured in terms of the closing price of the
Company's Common Stock on June 30, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
SHARES FISCAL YEAR END(#) AT FISCAL YEAR END($)(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
T. Wallace Wrathall....... -- $ -- 39,375 113,125 $ 950,569 $ 1,929,356
Dennis G. Ganster......... 3,187 51,247 9,375 27,938 252,375 526,667
Kathryn A. Jehle.......... 5,615 60,015 16,324 37,312 363,375 691,457
Dion T. O'Leary........... 9,750 194,220 12,000 23,250 304,354 438,716
Donald J. Walker.......... 26,192 478,725 58 42,750 1,295 870,638
</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, 1996 over the exercise price of such option.
LONG-TERM INCENTIVE PLAN AWARDS
The following table sets forth information concerning awards for fiscal
year 1996 to the Named Officers under the long-term incentive portion of the
Company's Executive Officer 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 "1995-1997 Bonus Pools"), and a
bonus pool is created at the end of each of fiscal years 1998, 1999 and 2000,
based on a formula related to the increase in earnings per share in the fiscal
year over the prior year's earnings per share (the "1998-2000 Bonus Pools"). 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,
except for the Long-Term Incentive Award for fiscal year 1997 (the "1997 LTIP
Award"), added to the participant'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, 2000 will be paid to the participants,
or, if earlier, upon a participant's retirement under normal circumstances on or
after age 60 (the "Final Payment Date"). The 1997 LTIP Award will not be added
to the 1998-2000 Bonus Pools, will be maintained separately, and will not be
reduced by a negative bonus pool amount in fiscal year 1998, if any. The 1997
LTIP Award shall be increased or decreased annually by a percentage of the 1997
LTIP Award equal to the percentage increase (if in excess of certain minimum
levels and if earnings per share increases by certain minimum levels) or
decrease in the Company's revenues for the fiscal year as compared to the prior
year's revenue. All 1997 LTIP Award amounts remaining in the
9
<PAGE> 12
bonus pool at the Final Payment Date will be paid to the participants. Payments
from the 1998-2000 Bonus Pools may be made in cash, the Company's Common Stock,
or a combination thereof.
LONG-TERM INCENTIVE PLAN -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE OR OTHER NON-STOCK PRICE-BASED PLANS(1)
PERIOD UNTIL MATURATION ------------------------------------------------
NAME OR PAYOUT(2) THRESHOLD($) TARGET $(3) MAXIMUM($)
- -------------------------------- ----------------------- ------------ ------------ ----------------
<S> <C> <C> <C> <C>
T. Wallace Wrathall............. July 31, 1997/2000 $1,579 $ 58,423 Not determinable
Dennis G. Ganster............... July 31, 1997/2000 853 31,573 Not determinable
Kathryn A. Jehle................ July 31, 1997/2000 886 32,794 Not determinable
Dion T. O'Leary................. July 31, 1997/2000 788 29,156 Not determinable
Donald J. Walker................ July 31, 1997/2000 942 34,854 Not determinable
</TABLE>
- -------------------------
(1) The estimated future payouts relating to fiscal year 1996 presented in the
table were calculated at the beginning of fiscal year 1996 and do not
reflect actual results for the period. Because the Company's financial
results for fiscal year 1996 were below threshold levels, there will be no
future payouts under the Long-Term Incentive Plan relating to fiscal year
1996 and all payouts under the Long-Term Incentive Plan relating to fiscal
year 1995 were forfeited. There was no negative bonus pool amount relating
to fiscal year 1996 to be carried over to future periods.
(2) If the Long-Term Incentive Award for fiscal year 1996 had been earned by the
Named Officers, two-thirds of the award would have become payable on
July 31, 1997, if revenues, earnings and cash flow exceeded threshold levels
in fiscal year 1997, and the remainder of the award, if any, would have
become payable on July 31, 2000, if revenue increased in fiscal years 1998,
1999 and 2000.
(3) 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
1996 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 1996.
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").
10
<PAGE> 13
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:
DEFINED BENEFIT PLAN PENSION TABLE(2)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
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.
(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
11
<PAGE> 14
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, who is the only Named Officer eligible to participate in the
Defined Benefit Plan, has not begun drawing benefits under this plan. Mr.
O'Leary's covered compensation for fiscal year 1996 was $245,216, and he has 25
years of credited service.
COMPENSATION COMMITTEE REPORT
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 1996 were the Named Officers plus Stephen R. Fluin 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.
Early in fiscal year 1996, the Board delegated to the Committee the
authority to award stock options under the Company's 1988 Stock Option Plan.
The Committee met four times in fiscal 1996. 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 align further 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 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."
Upon the recommendation of the Committee and with the approval of the full
Board, Mr. Wrathall's base salary was increased from $350,000 to $400,000
effective April 1, 1996. This action reflected the
12
<PAGE> 15
Company's much improved profitability as well as the Committee's assessment of
Mr. Wrathall's performance and particularly his successful reorganization of the
Company to coincide with its strategic focus on decision support software and
selected vertical markets.
During the fiscal year, on the recommendation of the chief executive
officer, the other executive officers (with the exception of Mr. Tonissen, who
joined the Company in June 1995) were granted increases in salary ranging from
approximately 5% to 18% to reflect their individual performances.
PERFORMANCE BONUSES
In 1994, the Board of Directors adopted a three-year incentive program for
the executive officers, for fiscal years 1995, 1996 and 1997. 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. See "Executive Compensation -- Long-Term Incentive Plan Awards."
Under the incentive program, a bonus pool is created at the end of each
fiscal year 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 and approved by the full Board. In fiscal year 1995
these threshold levels were exceeded by approximately 115%. That 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 1995 was paid to the executive
officers in July 1995. The other one-third was deferred and was be added to the
bonus pool for fiscal 1996.
Because performance in fiscal 1996 was below the required threshold levels,
the amount deferred from fiscal 1995 was forfeited, and no amounts were earned
in the bonus pool for 1996.
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. After approval by the Board, the Company
made a discretionary contribution of $96,723 to the BAP in fiscal 1996. 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 approved
by the shareholders. Stock options are granted at exercise prices not less than
the market price of the 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.
During fiscal 1996, the Committee granted to the executive officers
additional options to purchase stock in the following amounts: Mr. Wrathall
40,000, Mr. Tonissen 7,500, Mr. Walker 9,000, Mr. Fluin 7,500, Mr. Ganster
9,000, Ms. Jehle 9,000, and Mr. O'Leary 7,500. The Committee anticipates that
options to purchase additional shares will be granted in November of each year.
The number of option shares granted was established based on the Committee's
determination as to each executive officer's opportunities to contribute to
increases in shareholder value.
13
<PAGE> 16
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 1988
Stock Option Plan includes restrictions on option grants required by 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 $1,000,000, and therefore has concluded that no further
action with respect to qualifying such compensation for deductibility was
necessary at this time.
Dated: October 4, 1996 COMPENSATION COMMITTEE, as of June 30,
1996
Daniel T. Carroll, Chair
Stanley R. Day
W. John Driscoll
George R. Mrkonic
14
<PAGE> 17
SHAREHOLDER RETURN
Set forth below is a graph comparing the cumulative total return on the
Company's Common Stock from July 1, 1991 through June 30, 1996 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, 1991 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
AMONG COMSHARE, INCORPORATED, THE NASDAQ STOCK MARKET - U.S. INDEX
AND THE S & P COMPUTER SOFTWARE AND SERVICES INDEX*
<TABLE>
<CAPTION>
MEASUREMENT PERIOD COMSHARE, NASDAQ STOCK S & P CMPTR
(FISCAL YEAR COVERED) INC. MRKT-US SOFTWR & SVCS
<S> <C> <C> <C>
6/91 100 100 100
6/92 53 120 113
6/93 32 151 167
6/94 61 153 189
6/95 108 204 294
6/96 242 261 392
</TABLE>
* $100 invested on June 30, 1991 in Stock or Index -- including reinvestment of
dividends. Fiscal year ending June 30.
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, 1999. 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,
1996, Mr. Wrathall's salary was increased to $400,000. In addition to his base
salary, Mr. Wrathall is also eligible to participate in health and welfare
15
<PAGE> 18
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 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 Stock 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 Stock 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 1994
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
16
<PAGE> 19
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.
Effective July 1, 1996, Mr. Donald J. Walker terminated his position as
Senior Vice President of the Company. Mr. Walker will continue as an employee of
the Company until November 30, 1996 and, thereafter, as a consultant to the
Company until June 30, 1997, unless he is otherwise employed on a full-time
basis prior thereto. Mr. Walker has further agreed that he will not perform
services anywhere in the world for a competitor of the Company until July 1,
1997. The Company has agreed to provide placement services and to continue Mr.
Walker's salary (a monthly payment of $17,916.67) and benefits (including a $945
car allowance through November 30, 1996) through June 30, 1997; provided that
such payments shall cease upon Mr. Walker being otherwise employed on a
full-time basis on or after January 1, 1997.
DIRECTOR COMPENSATION
In fiscal year 1996, 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 $1,000 for each Board or committee meeting attended (except for meetings
conducted by telephone, for which they received $500, and committee meetings
held on the same day as Board meetings, for which they received $250). In
addition, the Chairman of each standing committee received a semi-annual
retainer of $1,500 for serving as such.
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.
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 150,000
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
7,500 shares of the Company's Common Stock at an exercise price of $8.33 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 7,500
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 1,500
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 Stock 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. On November 29,
1995, options to purchase 7,500 shares at an exercise price of $24.25 were
granted to Messrs. Bloom and Mrkonic. On January 1, 1996, options to purchase
1,500 shares at an exercise price of $26.00 were granted to Messrs. Carroll,
Day, Driscoll, Merten and Rockart.
In addition to his director fees, Mr. Rockart earned $6,750 in fiscal year
1996 for his services as a consultant to the Company.
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<PAGE> 20
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On November 17, 1994, the shareholders approved the 1994 Executive Stock
Purchase 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. In September 1996, Mark
Tapling, an executive officer of the Company, purchased 12,500 shares at a price
of $16.00 per share pursuant to the 1994 Executive Stock Purchase Program. No
shares were purchased under this program during fiscal 1996.
Pursuant to the 1994 Executive Stock Purchase Program, certain executive
officers have utilized promissory notes to purchase shares. Mr. Wrathall
currently has notes outstanding to the Company in the aggregate principal amount
of $300,023, which is the largest aggregate amount of indebtedness due by Mr.
Wrathall to the Company since July 1, 1995; Ms. Jehle currently has notes
outstanding to the Company in the aggregate principal amount of $196,827, which
is the largest aggregate amount of indebtedness due by Ms. Jehle to the Company
since July 1, 1995; Mr. O'Leary currently has notes outstanding to the Company
in the aggregate principal amount of $192,645, which is the largest aggregate
amount of indebtedness due by Mr. O'Leary to the Company since July 1, 1995; Mr.
Tonissen currently has notes outstanding to the Company in the aggregate
principal amount of $49,249, which reflects a $137,000 payment made on May 10,
1996, prior to which time he had notes outstanding to the Company in the
aggregate principal amount of $179,637, which is the largest aggregate amount of
indebtedness due by Mr. Tonissen to the Company since July 1, 1995; and Mr.
Tapling currently has notes outstanding to the Company in the aggregate
principal amount of $200,000, which is the largest aggregate amount of
indebtedness due by Mr. Tapling to the Company since he joined the Company in
September 1996. In September 1996, Mr. Fluin, a former executive officer of the
Company, repaid notes outstanding to the Company in the aggregate principal
amount of $195,530.53, which is the largest aggregate amount of indebtedness due
by Mr. Fluin to the Company since July 1, 1995, by authorizing the Company to
retain 10,641 shares of the Company's Common Stock pledged to secure the notes.
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, Ms. Jehle and Mr.
O'Leary bear interest at a rate of 8.75% per annum, the note from Mr. Tonissen
bears interest at a rate of 10.0% per annum and the note from Mr. Tapling bears
interest at a rate of 9.25% per annum. The foregoing principal amounts include
accrued interest through July 15, 1996.
ACCOUNTANTS
Arthur Andersen LLP, independent public accountants, have audited the
financial statements of the Company since 1972. Representatives from Arthur
Andersen LLP 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, 1997 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 (the "SEC"). 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.
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<PAGE> 21
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, 1995 to June 30, 1996, all of
these applicable requirements were complied with by each of its directors,
officers and greater than ten percent beneficial owners.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Shareholder proposals intended to be presented at the 1997 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 June 26, 1997 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 21, 1996
Ann Arbor, Michigan
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<PAGE> 22
COMSHARE, INCORPORATED
555 BRIARWOOD CIRCLE, ANN ARBOR, MICHIGAN 48108
SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS
ON NOVEMBER 18, 1996
P The undersigned hereby appoints T. Wallace Wrathall and Richard L.
Crandall, or any one of them, proxies with full power of substitution to
R 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
O of Comshare, Incorporated to be held on Monday, November 18, 1996, or at
any adjournment or adjournments thereof.
X
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED. IF
Y 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, 1996. 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.
(change of address/comments)
_____________________________________
_____________________________________
_____________________________________
_____________________________________
(If you have written in the above
space, please mark the corresponding
box on the reverse side of this card.)
SEE REVERSE
SIDE
<PAGE> 23
[x] PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
FOR WITHHELD
1. Election of [ ] [ ] Geoffrey B. Bloom, Daniel T. Carroll, Richard
Directors L. Crandall, Stanley R. Day, W. John Driscoll,
Alan G. Merten, George R. Mrkonic, John F.
Rockart, T. Wallace Wrathall
For, except vote withheld from the following nominee(s):
_________________________________________________________
CHANGE
OF [ ]
ADDRESS
SIGNATURE(S) _____________________________________ DATE _____________
SIGNATURE(S) _____________________________________ DATE _____________
NOTE: Please sign exactly as name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
