SCHEDULE 14A

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

      Filed by the registrant [X]

      Filed by a party other than the registrant [   ]

      Check the appropriate box:

      [X]  Definitive proxy statement

      [   ]  Definitive additional materials

      [   ]  Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

Payment of filing fee (Check the appropriate box):

      [X]  No fee required.

      [   ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

      (1)  Title of each class of securities to which transaction applies:

      (2)  Aggregate number of securities to which transaction applies:

      (3)  Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):

      (4)  Proposed maximum aggregate value of transaction:

      (5)  Total fee paid:

      [   ]  Fee paid previously with preliminary materials.

      [   ]  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

      (1)  Amount previously paid:

      (2)  Form, schedule or registration statement no.:

      (3)  Filing party:

      (4)  Date filed:

COMSHARE, INCORPORATED

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

      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 22, 1999 at 11:00 a.m., for the following purposes:

	1.  To elect seven directors.
	2.  To consider and act upon a proposal to amend the Employee Stock Purchase Plan to increase the number of shares of Common Stock of the Company to be reserved for issuance under the Employee Stock Purchase Plan by 500,000 shares and to permit the non-employee directors of the Company to receive shares of Common Stock of the Company in lieu of their cash compensation.
	3.  To consider and act upon a proposal to increase the number of shares of Common Stock of the Company to be reserved for issuance under the 1998 Global Employee Stock Option Plan by 500,000 shares.
	4.  To consider and act upon a proposal to amend the Directors Stock Option Plan to increase the number of shares of Common Stock of the Company to be reserved for issuance under the Directors Stock Option Plan by 50,000 shares, to increase the annual option grant to the non-employee directors of the Company from 1,500 to 5,000 shares of Common Stock of the Company and to provide for a one-time accelerated option grant of 10,000 shares of Common Stock of the Company to the non-employee directors of the Company following the 1999 Annual Meeting of Shareholders in lieu of the annual option grants that would otherwise be granted in January 2000 and 2001 under the Directors Stock Option Plan.
	5.  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, 1999, 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
	/s/  MICHAEL S. KHOURY
	Secretary

October 14, 1999

COMSHARE, INCORPORATED

PROXY STATEMENT

      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 22, 1999 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. The Company’s 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 14, 1999.

      The Company’s Annual Report to Shareholders for the year ended June 30, 1999 is enclosed with this Proxy Statement.

      Shareholders are urged to read this Proxy Statement carefully and vote their shares on each matter by returning their signed proxy cards before the close of business on November 19, 1999. United States and Canadian shareholders of record may vote their shares either by calling a toll-free telephone number or by mailing their signed proxy cards. Shareholders who vote by telephone do not need to mail their proxy cards. The telephone voting procedures are designed to authenticate shareholders’ identities, allow shareholders to give their voting instructions and confirm that shareholders’ instructions have been recorded properly. Specific instructions for shareholders of record that wish to use the telephone voting procedures are included on the enclosed proxy card. A proxy may be revoked at any time prior to the voting at the 1999 Annual Meeting by submitting a later-dated proxy (including a proxy by telephone), by giving written notice of such revocation to the Secretary of the Company, or by voting in person at the 1999 Annual Meeting.

      Only holders of record of Common Stock of the Company at the close of business on September 30, 1999 (the “Record Date”) are entitled to vote at the meeting or any adjournment or adjournments thereof. On that date, 9,638,295 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 by telephone or represented by proxy. Shares may not be voted cumulatively for the election of directors.

      If no specific instructions are given and a proxy is properly given (including a proxy by telephone), all shares covered by the proxy will be voted by Dennis G. Ganster and Kathryn A. Jehle (i) for the election of all of the Board’s nominees for director; (ii) for approval of the amendments to the Employee Stock Purchase Plan; (iii) for approval of the amendment to the 1998 Global Employee Stock Option Plan; and (iv) for approval of the amendments to the Directors Stock Option Plan. Unless otherwise indicated by the shareholder, a proxy (including a proxy by telephone) also gives Mr. Ganster and Ms. Jehle discretionary authority to vote all shares of Common Stock represented by the proxy on any other matter that is properly presented for action at the meeting; however, the Board of Directors does not intend to present any other matters at the Annual Meeting.

      Abstentions, and withheld votes with respect to the election of directors, are counted only for purposes of determining whether a quorum is present at the 1999 Annual Meeting. Broker non-votes are not counted for any purpose. Directors are elected by a plurality of the votes cast, so that only votes cast “for” directors are counted in determining which directors are elected. Approval of the other matters specified in the Notice of

      Seven 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.

      The Board recommends a vote FOR the election of each of the nominated directors.

      Shares represented by proxies in the form accompanying this Proxy Statement or by telephone vote 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. Each shareholder is entitled to one vote for each share of Common Stock held.

      Each of the foregoing persons has been engaged in the principal occupation shown above, or in a similar occupation with the same employer, for more than five years, except for Messrs. Bloom, Carroll, Crandall, Ganster and Dr. Merten.

      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. Bloom also serves as a director of Coachmen Industries, Inc.

      Mr. Carroll assumed the position of Chairman of the Board of Directors of the Company in March 1997. Mr. Carroll also serves as a director of the following corporations: A.M. Castle & Co., American Woodmark

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      Mr. Crandall served as Chairman of the Board of the Company from April 1994 to March 1997. Mr. Crandall served as President and Chief Executive Officer of the Company from 1970 to 1994. Mr. Crandall also serves as a director of Giga Information Group, Computer Task Group, Inc. and Diebold, Inc.

      Mr. Ganster was appointed President and Chief Executive Officer of the Company in August 1997, after having served as Senior Vice President of the Company since July 1994. He had previously served as Vice President and Chief Technology Officer of the Company from April 1993 to July 1994, and Vice President of Product Management from July 1988 to April 1993. Mr. Ganster has been with the Company in various positions since 1972, with positions of responsibility in sales, marketing and product development.

      Dr. Merten became the President of George Mason University on July 1, 1996. From 1989 until accepting this position, he served as Dean of the Johnson Graduate School of Management at Cornell University. Dr. Merten also currently serves on the boards of BTG, Inc. and Smith Barney Concert Series, Inc.

      Dr. Rockart also serves as a director of Keane, Inc.

Meetings and Committees of the Board

      During the Company’s fiscal year ended June 30, 1999, 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, except Mr. Day. 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 six 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 Mr. Carroll and Drs. Merten and Rockart.

      The Compensation Committee of the Board met six 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 Mr. Bloom, Stanley R. Day and W. John Driscoll (Messrs. Day and Driscoll are retiring from the Board of Directors effective November 22, 1999).

      The Nominating Committee of the Board met one time this past 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

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(2)  PROPOSAL TO AMEND THE COMPANY’S EMPLOYEE STOCK PURCHASE PLAN

      The Employee Stock Purchase Plan (the “Employee Stock Plan”) was approved by the shareholders of the Company at the 1994 Annual Meeting of Shareholders held on November 17, 1994. The Employee Stock Plan provides eligible employees of the Company with the means to purchase, through payroll deductions, up to an aggregate of 300,000 shares of the Company’s Common Stock at a discount of 15% from the then current market price. Eligible employees who participate in the Employee Stock Plan purchase Company Common Stock directly from the Company and save brokerage fees and commissions. The Employee Stock Plan was adopted in order to encourage increased ownership of the Company’s Common Stock by employees of the Company, including its executive officers.

Proposed Amendments

	Amendment to Increase the Number of Shares of Common Stock of the Company Reserved for Issuance under the Employee Stock Plan

      At the June 24, 1999 meeting of the Board of Directors, the Board authorized the management of the Company to seek approval from the shareholders of the Company of an amendment to the Employee Stock Plan to increase the number of shares of the Company’s Common Stock reserved for issuance under the Employee Stock Plan by 500,000 shares.

      The increase in the number of shares authorized for issuance under the Employee Stock Plan will allow the Company to continue to offer employees options to purchase additional shares of Common Stock of the Company under the Employee Stock Plan. As of September 30, 1999, there were 24,423 shares of the Company’s Common Stock reserved for future issuance under the Employee Stock Plan. Approximately 22% of the eligible employees of the Company currently participate in the Employee Stock Plan. During fiscal year 1999, eligible employees elected to purchase a total of 148,716 shares of the Company’s Common Stock under the Employee Stock Plan. Accordingly, if the Employee Stock Plan is not amended to increase the number of shares reserved for issuance under the plan, there will be insufficient shares available to satisfy future elections by the Company’s employees to participate in the Employee Stock Plan and the plan will have to be discontinued.

      The management of the Company and the Board of Directors believe that this proposed amendment to the Employee Stock Plan will assist the Company in its efforts to attract and retain qualified employees and will further the Company’s goal of aligning the interests of the employees with those of the shareholders.

      At the June 24, 1999 meeting of the Board of Directors, the Board authorized the management of the Company to seek approval from the shareholders of the Company of an amendment to the Employee Stock Plan to allow non-employee directors to purchase shares of the Company’s Common Stock through the Employee Stock Plan in lieu of a portion of the non-employee director’s cash compensation.

      Under the current Employee Stock Plan, non-employee directors are not eligible to participate. Under the amended Employee Stock Plan, if approved by the shareholders, a new Section will be added that will allow non-employee directors to make semi-annual elections, prior to the end of each December and June of each calendar year, to purchase shares of Common Stock of the Company instead of receiving all or a portion of his or her base cash compensation (based upon the compensation payable for the semi-annual retainers and attendance at Board and Committee meetings). If the directors proposed in Item 1 to this Proxy are all elected, there will be five non-employee directors that will be eligible to participate in the amended Employee Stock Plan: Messrs. Bloom, Carroll and Crandall and Drs. Merten and Rockart. At the date of issuance, the Company will issue to each participating non-employee director a number of shares of Common Stock of the Company equal to the dollar amount of the director’s base cash compensation during the then current six-month

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      The management of the Company and the Board of Directors believe that these proposed amendments to the Employee Stock Plan will assist the Company in its efforts to attract and retain highly qualified outside directors and will further the Company’s goal of aligning the interests of the directors with those of the shareholders.

      The Board of Directors recommends the shareholders vote FOR the approval of the proposed amendments to the Employee Stock Plan.

Terms of the Employee Stock Plan

      The following is a summary of the principal provisions of the Employee Stock Plan, but it is not intended to be a complete description of all of the terms and provisions of the Employee Stock Plan. A copy of the Employee Stock Plan will be furnished to any shareholder upon written request to the Secretary of the Company at the executive offices of the Company in Ann Arbor, Michigan.

      Subject to the limited exceptions described below, all full-time employees of the Company and its subsidiaries (as determined in accordance with Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”)), are eligible to participate in the Employee Stock Plan. Currently, the Company’s non-employee directors are not eligible to participate in the Employee Stock Plan. As of September 30, 1999, there were 358 employees eligible to participate in the Employee Stock Plan. Employees may not participate in the Employee Stock Plan to the extent they own or hold Common Stock and options to purchase Common Stock equal to 5% or more of the outstanding Common Stock. In addition, employees may not purchase more than $25,000 of Common Stock under the Employee Stock Plan (and any future plan qualified under Section 423 of the Code) in any calendar year.

      The Employee Stock Plan is administered by the Compensation Committee. Employees may elect to participate in the Employee Stock Plan by presenting an election form and payroll deduction form specifying the percentage of his or her cash compensation that the Company is authorized to withhold. Payroll deductions are made in installments over a six-month purchase period (the “Purchase Period”). The minimum payroll deduction that a participating employee may authorize in any Purchase Period is one percent of his or her cash compensation. An employee may suspend contributions during the Purchase Period only with the approval of the Company in the event of an unforeseen hardship. On the last day of the Purchase Period the contributions made by each participating employee will be used to purchase shares of Common Stock of the Company at 85% of the lower of the fair market value of the Common Stock of the Company on (i) the beginning date of the Purchase Period; or (ii) the last day of the Purchase Period. For purposes of the Employee Stock Plan, the fair market value of the Common Stock is determined by the last sale price of shares of the Company’s Common Stock on The Nasdaq Stock Market, Inc.’s, National Market (the “Nasdaq Stock Market”) on the date of determination. As of the close of business on September 30, 1999, the price per share of Common Stock as quoted on the Nasdaq Stock Market was $2.875. In the event that there are insufficient shares available for purchase under the Employee Stock Plan at the end of a Purchase Period, the shares available for purchase will be allocated to participating employees (and, if the Employee Stock Plan is amended as proposed, non-employee directors) in accordance with their compensation.

      In the event of any change in the number of outstanding shares of Common Stock due to a stock dividend, subdivision or combination of shares, or reclassification of shares, the aggregate number of shares of stock for which options may be granted and number of shares subject to each outstanding option in the stated option price shall be appropriately adjusted by the Committee, whose determination shall be conclusive. In the event of a merger in which the Company is the surviving corporation, an employee shall be entitled to exercise his or her option for the number of shares of stock or other securities which such participant would have been

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      If an employee participating in the Employee Stock Plan dies, becomes disabled or ceases to be employed by the Company for any reason, the aggregate amount of such employee’s payroll deductions during the Purchase Period will be returned to such employee or his or her executor or other legal representative.

      If the Employee Stock Plan is amended as proposed, and a non-employee director participating in the Employee Stock Plan dies, becomes disabled, or ceases to be a director of the Company for any reason, the amount of such director’s accrued cash compensation that has not yet been issued in the form of Common Stock will be paid to such director or his or her executor or other legal representative.

      Unless previously terminated, the Employee Stock Plan will terminate on July 31, 2004. The Board may at any time prior to the date terminate or discontinue the Employee Stock Plan, or from time to time alter, amend or modify the Employee Stock Plan; provided, however, that the Board may not, without the approval of the shareholders of the Company, amend the Employee Stock Plan in any manner that would disqualify the Employee Stock Plan under Section 423 of the Code. No amendment or termination shall affect any option previously granted without the consent of the holder.

      The following table sets forth information with respect to shares purchased under the Employee Stock Plan during fiscal year 1999 by each person or group of persons listed in the table. None of the Company’s non-employee directors or director nominees participated in the Employee Stock Plan in fiscal year 1999. No associates of the directors, executive officers or director nominees purchased shares of Common Stock of the Company under the Employee Stock Plan in fiscal year 1999. No other person other than those listed in the table purchased more than 5% of the shares of Common Stock of the Company purchased under the Employee Stock Plan in fiscal year 1999.

Federal Income Tax Consequences

      The Employee Stock Plan is not a retirement plan qualified under Section 401 of the Code, but is intended to be a qualified employee stock plan under Section 423 of the Code for employees participating in the plan. If the plan is amended as proposed, the plan will not be a qualified employee stock plan under Section 423 of the Code for participating non-employee directors. An employee will not recognize taxable income prior to the sale or other disposition of the shares of Common Stock purchased under the Employee Stock Plan. If the Common Stock has been held by the employee for two years from the date of grant and one year from the date of transfer (the “Holding Period”), upon the sale or other disposition of such Common Stock, the employee will recognize ordinary income in an amount equal to the difference between the purchase price and the lower of (i) the fair market value of the Common Stock on the date of grant or (ii) the

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      If the Employee Stock Plan is amended as proposed, a non-employee director who elects to use all or a portion of his or her base director’s fees to purchase Common Stock under the Plan will realize taxable ordinary income on the date the Common Stock is issued equal to 100% of the fair market value of the shares of Common Stock on the date of issuance, and the Company will receive a corresponding compensation tax deduction. Upon disposition of the shares of Common Stock, the non-employee director will be accorded capital gain or loss treatment on the difference between the disposition price and the fair market value of the shares of Common Stock on the date of issuance.

(3)  PROPOSAL TO AMEND THE COMPANY’S 1998 GLOBAL EMPLOYEE STOCK OPTION PLAN

      The 1998 Global Employee Stock Option Plan (the “1998 Plan”) was approved by the shareholders of the Company at the Annual Meeting of Shareholders held on November 23, 1998. The 1998 Plan provides for the issuance of options to purchase up to 900,000 shares of the Company’s Common Stock to employees. The 1998 Plan was adopted to assist the Company in its efforts to attract and retain qualified employees and to provide incentives for employees to promote the success of the Company.

Proposed Amendment

	Amendment to Increase the Number of Shares of Common Stock of the Company Reserved for Issuance under the 1998 Plan

      At the June 24, 1999 meeting of the Board of Directors, the Board authorized management of the Company to seek approval from the shareholders of the Company of an amendment to the 1998 Plan to increase the number of shares of the Company’s Common Stock reserved for issuance under the 1998 Plan by 500,000 shares. This will increase the total number of authorized shares of Common Stock of the Company to be reserved for issuance under the 1998 Plan to 1,400,000 shares.

      As of September 30, 1999, options to purchase 748,700 shares of Common Stock of the Company were outstanding under the 1998 Plan. Without taking into account the proposed amendment to the 1998 Plan, 151,300 shares remained available for future grants as of September 30, 1999, which the Board believes is insufficient to support the Company’s ongoing activities.

      During fiscal year 1999, the Company faced increased competition for employees. The Compensation Committee and management were concerned about the very competitive employment environment and determined that additional actions were necessary to retain employees of the Company. Consistent with the terms of the 1998 Plan, the Company accelerated the grants normally made to employees on an annual basis, effectively granting the existing employees a portion of their future annual option grants in 1999. By accelerating these grants, the Board of Directors believes that the interests of employees in promoting the success of the Company will be strengthened at a critical time in the Company’s implementation of its business strategy. The acceleration of option grants, however, has also reduced the number of available stock option shares to a level that the Board believes is insufficient for the Company’s ongoing stock-based compensation requirements, particularly for recruiting new employees.

      Stock option grants are of significant importance to the Company in attracting and retaining high-quality executives and other key employees and are an important element of a competitive recruitment process. Under the Company’s overall compensation policy, particularly for executives, a substantial portion of an employee’s

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	•	Since stock options gain value only if the price of the Common Stock increases above the exercise price of the option, stock option grants are an effective means of closely linking employee compensation to Company performance.
	•	Stock options, by tying employees’ economic incentives to increases in the value of the Common Stock, further align the employee’s interests to those of the Company’s shareholders.
	•	The Company’s stock options include a vesting period before the employee can realize the benefit of the stock option. This feature assists in the long-term retention of employees and requires these employees to contribute to the Company over an extended period in order to benefit from the options.

      The Board of Directors recommends the shareholders vote FOR the approval of the proposed amendment to the 1998 Plan.

Terms of the 1998 Plan

      The following is a summary of the principal provisions of the 1998 Plan, but it is not intended to be a complete description of all of the terms and provisions of the 1998 Plan. A copy of the 1998 Plan will be furnished to any shareholder upon written request to the Secretary of the Company at the executive offices of the Company in Ann Arbor, Michigan.

      The 1998 Plan is administered by the Compensation Committee of the Board of Directors. The Committee is authorized to adopt such rules and regulations as are necessary to administer the 1998 Plan. Options may be granted to such employees as the Committee may select. As of September 30, 1999, there were 358 employees of the Company eligible to receive stock option grants under the 1998 Plan. Options granted under the 1998 Plan may be incentive stock options (“ISOs”) within the meaning of Section 422 of the Code, or nonqualified options that do not meet the requirements of ISOs (“nonqualified stock options”). Under the terms of the 1998 Plan, the Committee may designate a portion of an option as an ISO or a nonqualified stock option. Stock released from option upon the termination, cancellation, expiration, forfeiture or surrender of any option prior to complete exercise of the option may again be subjected to options under the 1998 Plan.

      Unless the exercise price for the ISO is at least 110% of the fair market value of the shares subject to the option (measured at the time of grant), and the option, by its terms, is not exercisable more than five years after the date of grant, no ISO may be granted to any participant who possesses more than 10% of the total combined voting power of all classes of stock of the Company or a subsidiary. In addition, the Committee cannot grant an ISO if, as a result of the grant, the optionee would have the right in any calendar year to exercise for the first time, one or more ISOs for shares having an aggregate fair market value (under all plans of the Company and determined for each share as of the date the option to purchase the share was granted) in excess of $100,000.

      The 1998 Plan provides that the option price for each share of stock for which an option is granted under the 1998 Plan shall not be less than 100% of the fair market value of the stock on the Nasdaq Stock Market (as reported in The Wall Street Journal) on the date the option is granted. As of the close of business on September 30, 1999, the price per share of Common Stock as quoted on the Nasdaq Stock Market was $2.875. Options granted under the 1998 Plan are exercisable at such times and on such terms as the Committee may determine, but no options may be exercised before one year from the date of grant (except in the event of a “change of control” as defined below) nor more than 10 years after the date of grant. Unless the option agreement between the optionee and the Company provides otherwise, an option granted shall vest 25% annually over four consecutive years commencing on the first anniversary of the grant date and shall not be exercisable after the tenth anniversary of the grant date.

      The 1998 Plan provides that the portion of any outstanding option (including any option that has not been outstanding for one year) that has not expired or been exercised, terminated, canceled, forfeited or

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      The option exercise price is payable in cash, by personal check (certified or bank cashier’s check), or by surrendering to the Company certain shares of the Company’s Common Stock, duly endorsed for transfer or with duly executed stock powers attached, or in any combination of the foregoing. At the discretion of the Committee, as set forth in an optionee’s option agreement with the Company, an option may also be exercised by delivery of an exercise notice together with irrevocable instructions to the optionee’s broker to deliver to the Company sufficient cash to pay the exercise price and applicable taxes in accordance with a written agreement between the Company and the brokerage firm (“cashless exercise procedure”). For purposes of the cashless exercise procedure, the fair market value of the Company’s stock on the date of exercise shall be the per share amount actually paid to the optionee by the brokerage house upon the sale of stock used to satisfy the option exercise price.

      In the event of any dividend or subdivision or combination of shares, reclassification or merger or consolidation in which the Company is the surviving corporation, the aggregate number of shares of stock for which options may be granted and the number of shares subject to each outstanding option and the stated option price shall be proportionately adjusted. After any merger of one or more corporations into the Company, or after any consolidation of the Company and one or more corporations in which the Company shall be the surviving corporation, each optionee shall, at no additional cost, be entitled upon any exercise of his or her option, to receive, in lieu of the number of shares as to which such option shall then be exercised, the number and class of shares or other securities to which such optionee would have been entitled pursuant to the terms of the agreement of merger or consolidation if at the time of such merger or consolidation such optionee had been a holder of record of a number of shares of stock of the Company equal to the number of shares as to which such option shall then be so exercised. Anything to the contrary notwithstanding, upon the dissolution or liquidation of the Company or upon any merger or consolidation in which the Company is not the surviving corporation, any option granted under the 1998 Plan shall terminate.

      Under Section 162(m) of the Code, the Company may deduct compensation paid to the Company’s chief executive officer and to each of its four most highly compensated executive officers only to the extent that it does not exceed $1,000,000 during any fiscal year, unless the compensation constitutes “performance-based” compensation. In general, compensation attributable to a stock option or stock appreciation right is deemed to be based on performance if (i) the grant is made by the corporation’s compensation committee; (ii) the plan under which the grant is made includes a per employee limit on the number of shares with respect to which options may be granted during a specified period; and (iii) the amount of compensation the employee could receive under the terms of the option is based solely on the increase in value of the stock after the date of grant.

      The 1998 Plan provides that no employee shall be eligible to receive aggregate option grants under the 1998 Plan in any one fiscal year to purchase more than 100,000 shares of the Company’s stock. In addition, as described above, grants under the 1998 Plan may only be made by the Compensation Committee and the option price may not be less than fair market value.

      Unless previously terminated, the 1998 Plan will terminate on August 14, 2008. The Board may, at any time prior to that date, terminate or discontinue the 1998 Plan or from time to time alter, amend or modify the

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      Options granted under the 1998 Plan are not transferable except by will or by the laws of descent and distribution, and may be exercised during an optionee’s lifetime only by such optionee.

      In the event an optionee’s employment with the Company is terminated, an exercisable stock option may remain exercisable for up to ninety days after termination of employment. The Committee may determine, however, that the option will terminate at a time prior to the expiration of such ninety-day period.

      The following table sets forth information with respect to options granted under the 1998 Plan during fiscal year 1999 by each person or group of persons listed in the table. None of the company’s non-employee directors or director nominees participated in the 1998 Plan during fiscal year 1999. No associates of the directors, executive officers or director nominees received options under the 1998 Plan in fiscal year 1999. No other person other than those listed in the table received more than 5% of the options granted under the 1998 Plan in fiscal year 1999.

Federal Income Tax Consequences

      Incentive Stock Options.  The optionee generally will not be deemed to recognize income at the time an ISO is granted or exercised. The spread between the exercise price and the fair market value of the Company’s Common Stock on the date of exercise, however, is an item of tax preference that may subject the optionee to the alternative minimum tax.

      Upon disposition of shares acquired upon exercise of an ISO, an optionee will be accorded long-term capital gain or loss treatment on the difference between the option exercise price and the disposition price; provided that the disposition occurs more than two years from the date of grant and one year from the date of exercise. An optionee who disposes of shares acquired upon exercise of an ISO prior to the expiration of the foregoing holding periods recognizes ordinary income upon the disqualifying disposition equal to the difference between the option exercise price and the lesser of the fair market value of the shares on the date of exercise or the date of disposition. Any appreciation between the date of exercise and the date of disposition is taxed as long- or short-term capital gain, depending upon the holding period of the shares.

      The Company is generally not entitled to a compensation deduction in connection with the grant to, or the exercise by, an optionee of an ISO. In the event of a disqualifying disposition, the Company is entitled to a compensation deduction to the extent ordinary income is recognized by the optionee.

      Nonqualified Stock Options.  An optionee recognizes ordinary income upon the exercise of a nonqualified option equal to the spread between the option exercise price and the fair market value of the Company’s Common Stock on the date of exercise. Upon disposition of the shares acquired upon exercise of the option, the optionee will be accorded capital gain or loss treatment on the difference between the fair market value of

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      When an optionee exercises a nonqualified option, the Company withholds FICA and income taxes on the spread between the option exercise price and the fair market value of the Company’s Common Stock on the date of exercise, and is entitled to a compensation deduction in the amount of ordinary income recognized by the optionee upon exercise of the option.

(4)  PROPOSAL TO AMEND THE COMPANY’S DIRECTORS STOCK OPTION PLAN

      The Directors Stock Option Plan (the “Directors Plan”) was approved by the shareholders of the Company at the 1994 Annual Meeting of Shareholders held on November 17, 1994. The Directors Plan provides for the issuance of options to purchase up to 150,000 shares of the Common Stock of the Company to non-employee directors of the Company. Non-employee directors are granted options under the Directors Plan in addition to their annual retainers and meeting fees. The Directors Plan was adopted to encourage increased ownership of the Company’s Common Stock by the Company’s non-employee directors, and to provide such directors with incentive-based compensation so as to further align their interests with the interests of the Company’s shareholders.

Proposed Amendments

	Amendment to Increase the Annual Grant of Options to Non-employee Directors under the Directors Plan

      At the June 24, 1999 meeting of the Board of Directors, the Board authorized the management of the Company to seek approval from the shareholders of the Company for an amendment to the Directors Plan to increase the annual stock option grants to non-employee directors under the Directors Plan from 1,500 shares to 5,000 shares of Company Common Stock per year and to grant a one-time accelerated option to directors elected at the 1999 Annual Meeting. If this amendment is approved, the Company will issue an option for 10,000 shares of the Company’s Common Stock on the first business day after the 1999 Annual Meeting in lieu of the Annual Options that would otherwise be granted in January 2000 and 2001. The Company and the Board of Directors believe that this amendment will assist the Company in its efforts to retain highly qualified non-employee directors. In addition, the proposed amendment will further the Company’s goal of aligning the interests of its non-employee directors with those of the shareholders.

      At the June 24, 1999 meeting of the Board of Directors, the Board authorized the management of the Company to seek approval from the shareholders of the Company of an amendment to the Directors Plan to increase the number of shares of the Company’s Common Stock reserved for issuance under the Directors Plan by 50,000 shares.

      Currently there are 150,000 shares of Common Stock of the Company reserved for issuance under the Directors Plan. As of September 30, 1999, options to purchase 84,000 shares of Common Stock of the Company were outstanding under the Directors Plan and, without taking into account the proposed amendment to the Directors Plan, 62,250 shares remain available for future option grants. The proposed increase in the number of shares of Common Stock of the Company reserved for issuance under the Directors Plan will allow the Company to continue to award grants of options to purchase shares of Common Stock of the Company to its non-employee directors.

      The Board of Directors recommends the shareholders vote FOR the approval of the amendments to the Directors Plan.

Terms of the Directors Plan

      The following is a summary of the principal provisions of the Directors Plan, but it is not intended to be a complete description of all of the terms and provisions of the Directors Plan. A copy of the Directors Plan will

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      Only directors who are not employees of the Company or any subsidiary of the Company are eligible to participate in the Directors Plan. There are currently seven directors eligible to participate in the Directors Plan. If the slate of directors proposed in Item 1 to this Proxy are all elected, five directors will be eligible to participate in the amended Directors Plan. Neither the Named Officers, nor any other executives or employees of the Company, are eligible to participate in the Directors Plan.

      Under the Directors Plan, each non-employee director who is first elected or appointed after November 17, 1994 to the Board of Directors will receive an option to purchase 7,500 shares of Common Stock (“Initial Option”) on the date of the first Board of Directors meeting following his or her election or appointment; provided that he or she is still serving on the Board at the time of such Board meeting. In addition, each non-employee director who has been a director for six months before January 1 following the date of each Annual Meeting of Shareholders held during the term of the Directors Plan, and who has not received his or her Initial Option within six months before the January 1 following the Annual Meeting, automatically shall be granted, as of January 1 following each such Annual Meeting, an option to purchase an additional 1,500 shares of Common Stock (proposed to be amended to 5,000 shares of Common Stock) (“Annual Option”) if he or she is still serving on the Board as of each January 1.

      Grants of options under the Directors Plan shall be at exercise prices equal to the last sale price per share of the Company’s Common Stock on the Nasdaq Stock Market on the date of grant. As of the close of business on September 30, 1999, the price per share of Common Stock as quoted on the Nasdaq Stock Market was $2.875.

      Each option granted under the Directors Plan becomes exercisable in four annual increments of 25% of the shares subject to the option, and is exercisable for a period of five years from the date of grant, unless earlier terminated (the “Option Period”). If a non-employee director’s service terminates for any reason prior to the date the option or portion thereof becomes exercisable, such option or portion thereof shall terminate. To the extent that option is exercisable and is unexercised on the date the non-employee director’s service terminates, the option shall terminate on the earlier of (i) the expiration date of the option or (ii) two months after such non-employee director’s termination; provided, however, that the exercise period in clause (ii) shall be extended to one year after termination if termination is due to the non-employee director’s death or disability. During the period from the non-employee director’s termination until the termination of the option, the non-employee director or the person or persons to whom the option shall have been transferred by will or the laws of descent and distribution, may exercise the option only to the extent that such option was exercisable on the date of the non-employee director’s termination.

      The option exercise price is payable in cash, by certified check, bank draft or money order, in Common Stock having a fair market value equal to the option exercise price, or by any combination of the foregoing.

      The Directors Plan provides that in the event of any merger or consolidation in which the Company is the surviving corporation, the non-employee director will be entitled to receive the number and class of shares of stock or other securities which the non-employee director would have been entitled to receive if, at the time of such merger or consolidation, the non-employee director had been a record holder of the number of shares of Common Stock underlying the option; provided that a period of 12 months from the date of grant has expired. In addition, 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 the event of any dividend or subdivision or combination of shares, reclassification or merger or consolidation in which the Company is the surviving corporation, the aggregate number of shares of stock for which options may be granted and the number of shares subject to each outstanding option and the stated option price shall be appropriately adjusted; provided, however, that no adjustment shall be made to the extent

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      Options granted under the Directors Plan are not transferable except by will or by the laws of descent and distribution, and may be exercised during a non-employee director’s lifetime only by such non-employee director.

      The Directors Plan is administered by the Compensation Committee. The Committee is authorized to construe the provisions of the Directors Plan, but shall have no discretion with respect to the terms of grants made automatically under the Directors Plan, except to the extent such discretion would not result in the Directors Plan failing to qualify for the exemption provided under the Securities and Exchange Commission Rule 16b-3.

      Unless previously terminated, the Directors Plan will terminate on July 31, 2004. The Board may at any time prior to that terminate or discontinue the Directors Plan or from time to time alter, amend or modify the Directors Plan; provided, however, that unless otherwise permitted under Securities and Exchange Commission Rule 16b-3 without shareholder approval, no amendment or modification, without the approval of the shareholders of the Company, shall (i) materially increase the benefits accruing to non-employee directors under the Directors Plan; (ii) increase the amount of Common Stock for which grants may be made under the Directors Plan (other than as permitted under the Directors Plan for anti-dilution purposes); or (iii) change the provisions relating to eligibility of individuals to whom grants may be made under the Directors Plan. Unless otherwise permitted under Rule 16b-3, the Directors Plan may not be amended more than once in any six-month period. No amendment or termination shall affect any option previously granted to a non-employee director without the consent of such non-employee director.

      The following table sets forth information with respect to options granted under the Directors Plan during fiscal year 1999, and options which would be granted under the Directors Plan in fiscal year 2000 if the current director nominees serve as members of the Board of Directors of the Company through January 1, 2001, to each person or group of persons listed in the table. None of the Company’s executive officers or other employees participate in the Directors Plan. No associates of the directors, executive officers or other employees participate in the Directors Plan. No person other than those listed in the table received more than 5% of the options granted under the Directors Plan in fiscal year 1999.

Federal Income Tax Consequences

      Upon the exercise of an option granted under the Directors Plan, a non-employee director will recognize ordinary income equal to the difference between the option price in the fair market value of the Common Stock at the time of exercise, and the Company will receive a corresponding compensation deduction. Upon disposition of the shares acquired upon exercise of the option, the optionee will be accorded capital gain or loss treatment on the difference between the fair market value of the Company’s Common Stock on the date of the disposition and the fair market value of the Company’s Common Stock on the date of exercise of the option.

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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, 1999.

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, 1999.

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		to his account under the Company’s Profit Sharing Plan. Mr. Ganster disclaims beneficial ownership of 1,951 shares reflected in the table which are owned by his spouse.
	(8)	Includes 24,000 shares which Ms. Jehle has, or within 60 days of September  30, 1999 will have, the right to acquire pursuant to the presently exercisable portion of options granted under the Company’s Expired 1988 Plan.
	(9)	Includes 21,750 shares which Mr. King has, or within 60 days of September 30, 1999 will have, the right to acquire pursuant to the presently exercisable portion of options granted under the Expired 1988 Plan.

(10)	Includes 2,250 shares which Mr. Merten has, or within 60 days of September  30, 1999 will have, the right to acquire pursuant to the presently exercisable portion of options granted under the Company’s Directors Plan.
(11)	Includes 22,500 shares which Mr. Neuman has, or within 60 days of September  30, 1999 will have, the right to acquire pursuant to the presently exercisable portion of options granted under the Expired 1988 Plan.
(12)	Includes 2,250 shares which Dr. Rockart has, or within 60 days of September  30, 1999 will have, the right to acquire pursuant to the presently exercisable portion of options granted under the Company’s Directors Plan.
(13)	Includes 11,250 shares which Mr. Starkey has, or within 60 days of September  30, 1999 will have the right to acquire pursuant to the presently exercisable portion of options granted under the Expired 1988 Plan.
(14)	Includes 149,250 shares which certain directors and executive officers have, or within 60 days of September 30, 1999 will have, the right to acquire pursuant to the presently exercisable portion of options granted under the Expired 1988 Plan and the Directors Plan; and 2,600 shares referred to in Note (7) 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.

      Mr. Ganster was named President and Chief Executive Officer of the Company in August 1997. See “Election of Directors” for further information concerning Mr. Ganster.

      Ms. Jehle was named Senior Vice President, Chief Financial Officer, Treasurer and Assistant Secretary of the Company in May 1994.

      Mr. King was named Senior Vice President, Product Development and Chief Technology Officer of the Company in August 1997, after having served as Director of Research and Innovation of the Company since July 1995. He has been with the Company in various positions since March 1991 when the Company purchased the operating assets of Execucom Systems Corporation. Prior to the acquisition, Mr. King held various positions with Execucom Systems Corporation, including Director of Research and Development, from 1982 through 1991.

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      Mr. Neuman was named Senior Vice President, Marketing of the Company in August 1997. He has been with the Company in various marketing, customer support and customer relation positions since 1969, and was Vice President of North America Marketing from 1983 to 1993.

      Mr. Starkey was named Senior Vice President, Field Operations in October 1998 after serving as Senior Vice President, Americas Operations of the Company from January 1, 1998 to October 1998. From July 1996 to January 1998, Mr. Starkey was Vice President of Sales for Gentia Software, Inc., a client/server software company. From 1972 through July 1996, he was employed by the Company in various positions including Vice President of Industry Solutions Group Sales, Vice President of Industry Service Group Marketing and Vice President Sales, Western Region.

      The executive officers of the Company serve at the pleasure of the Board of Directors.

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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 1999 (the “Named Officers”).

Summary Compensation Table

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Option Grants and Related Information

      The following table provides information with respect to options granted to the Named Officers during fiscal year 1999.

Option Grants in Last Fiscal Year

Option Exercises and Holdings

      The following table contains information regarding options exercised by the Named Officers during fiscal year 1999, and the value of options held by such officers as of June 30, 1999 measured in terms of the closing price of the Company’s Common Stock on June 30, 1999.

Aggregated Option Exercises in Last Fiscal Year and

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Long-Term Incentive Plan Awards

      Certain Named Officers of the Company were eligible for payouts under a long-term executive bonus plan in effect during fiscal year 1999 (the “Plan”). The Plan provides for those Named Officers to receive a bonus payout on September 1, 1999 if the named officer was employed by the Company on that date. As of September 1, 1999, only one person eligible to participate in the Plan, Ms. Jehle, was employed by the Company. Ms. Jehle received $54,800 under the Plan on September 1, 1999. Ms. Jehle was also eligible for a bonus in September 1998, but declined to accept the bonus.

Employment Agreements and Termination/ Change in Control Arrangements

      Under the Expired 1988 Plan, incentive stock options were granted to key employees (including the Named Officers) and such stock options 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. No further options (or SARs) may be granted under the Expired 1988 Plan as it expired June 1998. As of September 30, 1998, 704,509 shares of the Company’s Common Stock were still subject to outstanding options under the Expired 1988 Plan.

      In addition, under the 1998 Plan, stock options were granted to employees (including the Named Officers) and such stock options became 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. As of September 30, 1999, 748,700 shares of the Company’s Common Stock were subject to outstanding options under the 1998 Plan.

      As of June 1, 1998, the Company entered into Change in Control Severance Agreements (the “Change in Control Agreements”) with the following officers: Dennis G. Ganster, Kathryn A. Jehle, Norman R. Neuman, Jr., David King and Stanley R. Starkey.

      The Change in Control Agreement between Mr. Ganster, the President and Chief Executive Officer, and the Company generally provides that in the event of termination of Mr. Ganster’s employment within two years following a change in control of the Company, Mr. Ganster will be entitled to a cash severance benefit equal to three times minus $1 of his average gross income, calculated over the five-year period immediately preceding the taxable year of the change of control. This severance payment is to be paid in a lump sum cash payment within ten days following Mr. Ganster’s termination of employment. Payments made later than this ten-day period will be subject to interest at the prime rate plus two percent, which begins to accrue on the tenth day following the termination of employment.

      The Change in Control Agreements between the Company and each of Ms. Jehle and Messrs. Neuman, King and Starkey are substantially similar. Each provides that in the event of termination of such officers’ employment within two years following a change in control of the Company, such officer will be entitled to a cash severance benefit equal to two times such officer’s annual base salary as in effect at the time of the change in control. Such severance payments are to be paid in a lump sum cash payment within ten days following such officer’s termination of employment. Payments made later than this ten-day period will be subject to interest at the prime rate plus two percent, which begins to accrue on the tenth day following the termination of employment.

      For purposes of each of the Change in Control Agreements, the term “change in control” means (a) the election of a Board of Directors of the Company, a majority of the members of which were nominees of a person (including an individual, a corporation, partnership, joint venture, trust or other entity) or a group of persons acting together (other than persons who were members of the Board of Directors or officers of the Company as of June 1, 1998 or certain tax-qualified retirement plans of the Company (collectively, the “Exempted Persons”)), following the acquisition by such person of twenty-five percent, or more, of the outstanding Common Stock of the Company, (b) the acquisition of ownership by a person (other than Exempted Persons) of fifty-one percent or more of the outstanding Common Stock of the Company, (c) a sale of all or substantially all of the assets of the Company to any entity not controlled by persons who were

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      For purposes of each of the Change in Control Agreements, the term “termination of employment” is defined as (a) the officer’s involuntary termination by the Company for any reason other than death, disability, retirement or cause; or (b) the officer’s termination for (i) any reassignment or change in the identity or corporate position to whom the officer reports, or a change in title (other than a promotion); (ii) any reduction in the officer’s base salary or failure by the Company to continue any bonus, stock or incentive plans, (iii) the discontinuance or reduction in benefits to the officer of any qualified or nonqualified retirement or welfare plan or the discontinuance of any fringe benefits or other perquisites, (iv) the required relocation of the officer’s principal place of employment by more than fifty miles or more frequent and/or longer required business traveling (other than a promotion), or (v) the Company’s breach of any provision of the Change in Control Agreement.

      Each of the Change in Control Agreements provides that the value of the cash severance benefit, when aggregated with any other “golden parachute” amounts (as defined in Section 280G of the Code) pursuant to any other plans, agreements or policies of the Company and its subsidiaries, shall be reduced to the highest amount permissible under the Code before the officer becomes subject to the excess parachute payment excise tax and the Company loses all or part of its compensation deduction for such payments.

Director Compensation

      In fiscal year 1999, 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. In addition, the Chairman of each standing committee received a semi-annual retainer of $2,500 for serving as such. Mr. Carroll, the Chairman of the Board of the Company, receives an additional $5,000 per month for his services as Chairman of the Board and of the Executive Committee.

      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.

      The Company’s Directors 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 non-employee director 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 elapsed. On January 1, 1999, options to purchase 1,500 shares

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      Certain proposed amendments to the Directors Plan will have an effect on Director Compensation. For a discussion of proposed amendment to the Directors Plan, please see Item 4 of this Proxy Statement.

      In addition to his director fees, Dr. Rockart earned $11,350 in fiscal year 1999 for his services as a consultant to the Company.

Compensation Committee Interlocks and Insider Participation

      The Compensation Committee currently consists of Messrs. Bloom, Day and Driscoll, although Messrs. Day and Driscoll are retiring from the Company’s Board of Directors effective November 22, 1999. During fiscal year 1999, no member of the Compensation Committee served as an officer or employee of the Company or any of its subsidiaries nor had any member of the Compensation Committee formerly served as an officer of the Company or any of its subsidiaries. During fiscal year 1999, none of the executive officers of the Company served on the board of directors or on the compensation committee of any other entity, any of whose executive officers served either on the Board of Directors or on the Compensation Committee of the Company.

COMPENSATION COMMITTEE REPORT

      The responsibilities of the Compensation Committee include recommending to the Board of Directors the compensation for the executive officers of the Company, who during all or part of fiscal year 1999 were the Named Officers. The Committee also considers recommendations from the Chief Executive Officer for compensation of other officers of the Company and recommends to the Board of Directors approval or changes in those recommendations. The Committee also grants stock options to officers and key employees under the 1998 Plan.

      The Committee met six times in fiscal year 1999. Executive officers were not present during the Committee’s consideration of their individual compensation.

      The Company’s executive compensation program is designed to give executives a balanced incentive package which encourages the achievement of both short-term and long-term performance goals and which rewards continuous increases in shareholder value. The Committee believes that the compensation program is essential to the Company’s effort to attract and retain key executives. The Committee also believes that the Company’s compensation program should encourage the executive officers to align their interests with the shareholders by conditioning a significant portion of executive compensation on increases in shareholder value.

      The executive compensation program consists of three main components: base salary, performance bonuses and stock-based incentives. In addition, the executive officers participate in the Company’s employee benefit plans generally on the same terms as other Company employees.

  Base Salary

      The base compensation of Mr. Ganster as the chief executive officer of the Company was established when he was appointed to that position in August 1997. The Committee did not increase the salaries of any of the executive officers of the Company for fiscal year 1999. The Committee’s actions did not reflect a negative view of the abilities and efforts of the individual officers but rather reflected the belief of the Committee and Mr. Ganster that the Company’s performance did not warrant salary increases for executive officers.

  Performance Bonuses

      The Committee adopted an incentive plan for executive officers for fiscal year 1999 that called for payments equal to 40% of base salary for Senior Vice Presidents and 50% of base salary for the Chief

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      The Company’s performance in fiscal year 1999 was below the target and no incentive plan payments were made to the executive officers.

  Stock Option Awards

      Stock option awards are an important means by which the Committee directly links executive officers’ compensation to the appreciation in value realized by all of the Company’s shareholders. Under the Company’s stock option plans, options are granted at exercise prices equal to the market price on the date of grant and therefore have no value to the executive unless the Company’s stock appreciates. In making awards, the Committee considers each executive’s performance and potential as well as the existing level of stock option held by each executive.

      Stock option grants to Mr. Ganster and the other executive officers in fiscal year 1999 were based on the Committee’s desire to increase the executives’ incentive to continue to work to improve the Company’s performance. The Committee awarded Mr. Ganster options to purchase 40,000 shares of Common Stock and all of the Senior Vice Presidents options to purchase 20,000 shares of Common Stock in June 1999. These option grants were in part an acceleration of a portion of the stock options that the Committee would otherwise have expected to grant to Mr. Ganster and the other executive officers in fiscal years 2000 and 2001. The Committee accelerated the grant date of these options in order to strengthen the long-term incentive opportunities of the executive team. These awards were in addition to the annual awards of options to the executive officers made in February 1999, of 30,000 shares to Mr. Ganster, awards of 15,000 to Ms. Jehle and awards of 12,000 to Messrs. Neuman, Starkey and King.

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 Code 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 Expired 1988 Plan and the 1998 Plan includes restrictions required by the Code to except option grants under these plans from the limit on deductibility. The Committee does not presently believe that the 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, other than the Company’s severance arrangements following certain changes in control of the Company, and therefore has concluded that no further action with respect to qualifying such compensation for deductibility is necessary at this time.

Dated: October 14, 1999

	COMPENSATION COMMITTEE, as of June 30, 1999
	W. John Driscoll, Chair
	Geoffrey B. Bloom
	Stanley R. Day

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      Set forth below is a graph comparing the cumulative total return on the Company’s Common Stock from July 1, 1994 through June 30, 1999 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, 1994 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

[PERFORMANCE CHART]

*	$100 invested on June 30, 1994 in Stock or Index — including reinvestment of dividends. Fiscal year ending June 30.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The 1994 Executive Stock Purchase 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 and the Nasdaq Stock Market on the day preceding the purchase. The purchase price for shares is paid in cash. During the fiscal year 1999, Mr. Ganster, President and Chief Executive Officer of the Company, and a nominee for election to the Board of Directors of the Company, purchased 50,000 shares at a price of $3.25 per share, and Ms. Jehle, an executive officer of the Company and a nominee for election to the Board of Directors of the Company, purchased 8,000 shares at a price of $4.50 per share pursuant to the 1994 Executive Stock Purchase Program.

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, 2000 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, as amended (the “Exchange Act”) 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.

      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 July 1, 1998 to June 30, 1999, all of these applicable requirements were complied with by each of its directors, officers and greater than ten percent beneficial owners.

SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING

      Shareholder proposals intended to be presented at the 2000 Annual Meeting which are eligible for inclusion in the Company’s Proxy Statement for that meeting under Rule 14a promulgated under the Exchange Act must be received by the Company not later than June 13, 2000 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. Shareholder proposals intended to be presented at the 2000 Annual Meeting which are not eligible for inclusion in the Company’s Proxy Statement for that meeting under Rule 14a-8 promulgated under the Exchange Act must satisfy the requirements applicable to shareholder proposals contained in the Company’s bylaws. Such proposals must be addressed to the Secretary at the Company’s principal executive offices and must be received at the Company’s principal executive offices not less than fifty days nor more than seventy days prior to the date of the 2000 Annual Meeting for which at least sixty-five days’ prior public disclosure has been made to the shareholders.

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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 properly 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 14, 1999

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PROXY

COMSHARE, INCORPORATED
555 Briarwood Circle, Ann Arbor, Michigan 48108

SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS

ON NOVEMBER 22, 1999

The undersigned hereby appoints Dennis G. Ganster and Kathryn A. Jehle, 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 Monday, November 22, 1999, 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 proposals 1, 2, 3 and 4.

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, 1999. 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.