SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant [x]
File by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to $240.14a-11(c) or $240.14a-12
Triad Systems Corporation
(Name of Registrant as Specified In Its Charter)
Triad Systems Corporation
3055 Triad Drive
Livermore, CA 94550
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2).
[ ] $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:<F1>
______________________________________________________________
4) Proposed maximum aggregate value of transaction:
_______________________________________________________________
<F1> Set forth the amount on which the filing fee is calculated
and state how it was determined.
[ ] 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:
______________________________________________________________
TRIAD SYSTEMS CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 9, 1995
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of TRIAD
SYSTEMS CORPORATION (the "Corporation") will be held at the offices of the
Corporation, 3055 Triad Drive, Livermore, California, on Thursday, February
9, 1995, at 2:00 p.m. local time for the following purposes:
1. To elect one (1) Class II director to the Board of Directors to hold
office until the Corporation's Annual Meeting of Stockholders in 1998 and
until his successor is elected and qualified. Pursuant to the Corporation's
Certificate of Incorporation, the holders of the Common Stock of the
Corporation shall elect the Class II director.
2. To approve an amendment to the Triad Systems Corporation 1990 Employee
Stock Purchase Plan (the "Purchase Plan") to increase the number of shares
reserved for issuance under the Purchase Plan from 650,000 shares to
1,150,000 shares.
3. To ratify the appointment of Coopers & Lybrand L.L.P. as the
independent accountants of the Corporation for the fiscal year ending
September 30, 1995.
4. To transact such other business as may properly come before the
meeting, or any adjournment thereof.
Stockholders of record at the close of business on December 21, 1994, are
entitled to notice of, and to vote at, this meeting and any adjournments
thereof. For ten days prior to the meeting, a complete list of the
stockholders entitled to vote at the meeting will be available for
examination by any stockholder for any purpose relating to the meeting during
ordinary business hours at the principal office of Triad Systems Corporation.
By Order of the Board of Directors,
/s/ STANLEY F. MARQUIS
---------------------
STANLEY F. MARQUIS
Secretary
Livermore, California
January 5, 1995
IMPORTANT: Please fill in, date, sign and mail promptly the enclosed Proxy in
the post-paid envelope provided to assure that your shares are represented at
the meeting. If you attend the meeting, you may vote in person if you wish to
do so even though you have sent in your Proxy.
Triad Systems Corporation
3055 Triad Drive
Livermore, California 94550
Proxy Statement for Annual Meeting of Stockholders
to be held February 9, 1995
TABLE OF CONTENTS
Page
PROXY STATEMENT
GENERAL INFORMATION
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
ELECTION OF DIRECTORS
EXECUTIVE COMPENSATION AND OTHER MATTERS
SUMMARY COMPENSATION TABLE
AGGREGATE OPTION EXERCISES AND FISCAL YEAR-END VALUES
NEW PLAN BENEFITS TABLE
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPARISON OF STOCKHOLDER RETURN
APPROVAL OF INCREASE OF THE SHARES RESERVED FOR
ISSUANCE UNDER THE 1990 EMPLOYEE STOCK PURCHASE PLAN
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT
ANNUAL MEETING
TRANSACTION OF OTHER BUSINESS
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of Triad
Systems Corporation, a Delaware corporation (the "Corporation"), for use at
the Annual Meeting of Stockholders to be held February 9, 1995, or any
adjournment thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting. The date of this Proxy Statement is January 5, 1995, the
approximate date on which this Proxy Statement and the accompanying form of
proxy were first sent or given to stockholders.
GENERAL INFORMATION
Annual Report. An annual report for the fiscal year ended September 30,
1994, is enclosed with this Proxy Statement.
Voting Securities. Only stockholders of record as of the close of business on
December 21, 1994, will be entitled to vote at the meeting and any
adjournment thereof. As of that date, there were 13,900,973 shares of Common
Stock of the Corporation, par value $.001 per share, and 1,000,000 shares of
Senior Cumulative Convertible Preferred Stock of the Corporation, $.01 par
value (the "Preferred Stock"), issued and outstanding (not including
346,785 treasury shares). Stockholders may vote in person or by proxy.
Each holder of shares of Common Stock is entitled to one vote for each
share of stock held on the proposals presented in this Proxy Statement. Each
holder of shares of Preferred Stock is entitled to one vote for each share of
Preferred Stock held by the individual with respect to all matters to be
acted upon at the meeting, with the exception of the election of the Class II
director. The Corporation's bylaws provide that a majority of all of the
shares of the stock entitled to vote, whether present in person or
represented by proxy, shall constitute a quorum for the transaction of
business at the meeting.
Solicitation of Proxies. The cost of soliciting proxies will be borne by the
Corporation. In addition to soliciting stockholders by mail through its
regular employees, the Corporation will request banks and brokers, and other
custodians, nominees and fiduciaries, to solicit their customers who have
stock of the Corporation registered in the names of such persons and will
reimburse them for their reasonable, out-of-pocket costs. The Corporation may
use the services of its officers, directors and others to solicit proxies,
personally or by telephone, without additional compensation.
Voting of Proxies. All valid proxies received prior to the meeting will be
voted. All shares represented by a proxy will be voted, and where a
stockholder specifies by means of the proxy a choice with respect to any
matter to be acted upon, the shares will be voted in accordance with the
specification so made. If no choice is indicated on the proxy, the shares
will be voted in favor of the proposal. A stockholder giving a proxy has the
power to revoke his or her proxy, at any time prior to the time it is voted,
by delivery to the Secretary of the Corporation of a written instrument
revoking the proxy or a duly executed proxy with a later date, or by
attending the meeting and voting in person.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of October 31, 1994,
with respect to the beneficial ownership of the Corporation's Common Stock
and Senior Cumulative Convertible Preferred Stock by (i) all persons known by
the Corporation to be the beneficial owners of more than 5% of the
outstanding Common Stock or Preferred Stock of the Corporation, (ii) each
director and director-nominee of the Corporation, (iii) the Chief Executive
Officer and the four other most highly compensated executive officers of the
Corporation as of September 30, 1994 whose salary and bonus for the year
ended September 30, 1994 exceeded $100,000, and (iv) all executive officers
and directors of the Corporation as a group.
<TABLE>
<CAPTION>
Amount and Nature of
Name and Address of Beneficial Ownership Percent of Class(2)
Beneficial Owner Common Preferred Common Preferred
<S> <C> <C> <C> <C>
Richard C. Blum 4,504,667(3) 1,000,000 24.1% 100.0%
909 Montgomery Street,
Suite 400
San Francisco,
California 94113
James R. Porter 1,314,000(4) -- 8.8% --
3055 Triad Drive
Livermore, CA 94550
Gabelli Funds, Inc. 1,204,700(5) -- 8.5% --
One Corporate Center
Rye, New York 10580-1434
Wanger Asset Management, L.P. and 900,000(6) -- 6.3% --
Wanger Asset Management, Ltd.
227 West Monroe, Suite 3000
Chicago, Illinois 60606
William W. Stevens 430,340(7) -- 3.0% --
Henry M. Gay 115,069(8) -- (1) --
George O. Harmon 74,667(9) -- (1) --
Shane Gorman 392,325(10) -- 2.7% --
Donald C. Wood 40,000(11) -- (1) --
Thomas A. King 207,989(12) -- 1.4% --
Edward Molkenbuhr 13,000(13) -- (1) --
Ralph C. Montelius 114,707(14) -- (1) --
All Officers and Directors
as a Group
(17 persons, including the above) 7,954,143(15) 1,000,000 38.6% 100.0%
<FN>
(1) Less than 1%
(2) Except as indicated in the footnotes to this table, the persons named in
the table have sole voting and investment power with respect to all shares of
Common Stock shown as beneficially owned by them, subject to community
property laws, where applicable.
(3) Includes 1,000,000 shares of Preferred Stock convertible into 1,000,000
shares of Common Stock, 3,500,000 shares of Common Stock subject to warrants
exercisable within 60 days of October 31, 1994 and 4,667 shares of Common
Stock subject to options vested and exercisable within 60 days of October 31,
1994. Of these shares, (a) The Common Fund for Nonprofit Organizations, 363
Reef Road, Fairchild, Connecticut 06430, beneficially owns 2,250,000 shares
of Common Stock, representing 13.7% of the Common Stock, including 500,000
shares, or 50% of the outstanding Preferred Stock, and 1,750,000 shares of
Common Stock subject to warrants exercisable within 60 days of October 31,
1994; (b) BK Capital Partners IV, L.P. beneficially owns 1,012,500 shares of
Common Stock, representing 6.7% of the Common Stock, including 225,000
shares, or 22.5% of the outstanding Preferred Stock, and 787,500 shares of
Common Stock subject to warrants exercisable within 60 days of October 31,
1994; (c) BK Capital Partners III, Limited Partnership beneficially owns
1,012,500 shares of Common Stock, representing 6.7% of the Common Stock,
including 225,000 shares, or 22.5% of the outstanding Preferred Stock, and
787,500 shares of Common Stock subject to warrants exercisable within 60 days
of October 31, 1994; and (d) BK Capital Partners II, a California limited
partnership ("BK II") beneficially owns 225,000 shares of Common Stock,
representing 1.2% of the Common Stock, including 50,000 shares, or 5.0% of
the outstanding Preferred Stock, and 175,000 shares of Common Stock subject
to warrants exercisable within 60 days of October 31, 1994. By reason of
advisory and other relationships with persons who own the shares, Richard C.
Blum and Richard C. Blum & Associates, L.P. ("RCBA") may be deemed to be
indirect beneficial owners of all such shares and Richard C. Blum and RCBA
each have sole power to dispose of all of such shares. The address of RCBA is
909 Montgomery Street, San Francisco, California 94113, and the address of BK
Capital Partners IV, L.P., BK Capital Partners III, Limited Partnership and
BK II is c/o Richard C. Blum & Associates, L.P., 909 Montgomery Street, San
Francisco, California 94113.
(4) Includes 787,247 shares subject to options vested and exercisable within
60 days of October 31, 1994.
(5) Includes 205,900 shares held by Gabelli Performance Partnership, 117,000
shares held by Gabelli Funds, Inc. and 881,800 shares held by GAMCO Investors
Inc., 76,500 shares of which GAMCO has no power to vote.
(6) By reason of advisory and other relationships with Acorn Investment
Trust, Series Designated Acorn Fund ("Acorn") and other persons who own
shares of the Corporation, Wanger Asset Management, L.P. and Wanger Asset
Management Ltd., its general partner (together, "Wanger"), may be deemed to
be indirect beneficial owners of the reported shares, and have shared voting
and investment power over such shares. Acorn beneficially owns 700,000 shares
of the Corporation's Common Stock, representing 4.9% of the Common Stock. The
address of Acorn is 227 West Monroe, Suite 3000, Chicago, Illinois 60606.
(7) Includes 423,690 shares held as tenant in common with Virda J. Stevens,
of which 6,650 shares are held as custodian for Jean Stevens.
(8) Includes 80,402 shares held by Henry M. Gay and his wife, as trustees of
a family trust, and 34,667 shares subject to options vested and exercisable
within 60 days of October 31, 1994.
(9) Includes 74,667 shares subject to options vested and exercisable within
60 days of October 31, 1994.
(10) Includes 297,000 shares subject to options vested and exercisable
within 60 days of October 31, 1994.
(11) Includes 40,000 shares subject to options vested and exercisable within
60 days of October 31, 1994.
(12) Includes 205,000 shares subject to options vested and exercisable
within 60 days of October 31, 1994.
(13) Includes 10,000 shares subject to options vested and exercisable
within 60 days of October 31, 1994.
(14) Includes 113,000 shares subject to options vested and exercisable
within 60 days of October 31, 1994. Mr. Montelius retired from the
Corporation in September 1994.
(15) Includes 1,000,000 shares of Preferred Stock convertible into 1,000,000
shares of Common Stock, 3,500,000 shares of Common Stock subject to warrants
exercisable within 60 days of October 31, 1994 and 1,961,417 options vested
and exercisable within 60 days of October 31, 1994.
</END TABLE>
Voting Agreement Between the Corporation and the Holders of the Preferred
Stock. At the record date for any meeting of the Corporation's stockholders,
if RCBA, its affiliates and accounts that it manages or advises (the "RCBA
Group") beneficially owns voting stock of the Corporation in excess of
certain specified limits, then the voting stock in excess of those limits is
to be voted with respect to nominees to the Board of Directors of the
Corporation and all other matters in accordance with the recommendations of
the Board of Directors, except that the RCBA Group retains all voting
authority with respect to certain business combinations resulting in a change
of control, any recapitalization or similar transaction, the sale of all or
substantially all of the Corporation's assets, and any matter for which the
Preferred Stock has a separate class vote under the Corporation's Certificate
of Incorporation or applicable law. No shares of voting stock of the
Corporation are currently subject to the voting agreement. The voting
agreement terminates upon the later of August 3, 1997 or such time as the
RCBA Group no longer beneficially owns voting stock or equity securities in
an amount that exceeds certain specified limits.
PROPOSAL ONE
ELECTION OF DIRECTORS
At the Annual Meeting of Stockholders, one director, Henry M. Gay, is
nominated for election to Class II of the Board of Directors by the holders
of the Common Stock. If elected, the nominee will hold office until the
earlier to occur of (i) the annual meeting of stockholders to be held in 1998
and the election and qualification of his successor, or (ii) his resignation
or the vacancy of his office as a result of death, removal or other cause in
accordance with the bylaws of the Corporation. If the nominee to Class II
declines to serve or becomes unavailable for any reason, or if a vacancy
should occur before the election (although management knows of no reason to
anticipate that this will occur), proxies may be voted for such substitute
nominee as management may designate.
If a quorum is present and voting, the nominee for director receiving the
highest number of votes will be elected as director. Abstentions and shares
held by brokers that are present, but not voted because the brokers were
prohibited from exercising discretionary authority, i.e., "broker non-votes,"
will be counted as present for purposes of determining if a quorum is
present.
The following table indicates the age, principal occupation or employment
of each director (including each person nominated to become a director), and
the year in which each director became a director of the Corporation.
Principal Occupation Director
Name During Last Five Years Age Since
Class I Director whose term expires at the 1997 Annual Meeting of
Stockholders:
William W. Stevens Chairman of the Board of the 63 1972
Corporation since 1972. Founder
of the Corporation and President
and Chief Executive Officer from
inception until September 1985.
Class II Director to be elected at the 1995 Annual Meeting of Stockholders:
Henry M. Gay Director of the Corporation. 70 1972
Founder of the Corporation and
Vice President, Marketing until
1980. Secretary from 1972 to
September 1987. Also a Director
of Silicon Valley Bank.
Class III Directors whose terms expire at the 1996 Annual Meeting of
Stockholders:
James R. Porter President and Chief Executive 59 1985
Officer of the Corporation
since 1985. Also a Director of
Brock Control Systems and Silicon
Valley Bank.
George O. Harmon Director of the Corporation. 71 1986
President and Chief Executive
Officer of Harmon Associates
International, Inc., a management
consulting and executive search
corporation, since 1980. Also a
Director of Silicon Valley Bank.
Senior Preferred Director whose term expires at the 1996 Annual Meeting of
Stockholders:
Richard C. Blum Director of the Corporation. 59 1992
President and Chairman of
Richard C. Blum & Associates,
L.P. Also Director of Northwest
Airlines Corporation, ImmuLogic
Pharmaceutical Corporation and
National Education Corporation.
During the fiscal year ended September 30, 1994, the Board of Directors
held four meetings.
The Corporation has an Audit Committee and a Compensation Committee, but
does not have a Nominating Committee.
Messrs. Gay, Harmon and Porter are the members of the Audit Committee,
which held one meeting during fiscal 1994. The functions of the Audit
Committee include recommending to the Board of Directors, subject to
stockholder approval, the independent accountants, reviewing and approving
the planned scope of the annual audit, proposed fee arrangements and the
results of the annual audit, reviewing the adequacy of accounting and
financial controls, reviewing the independence of the independent
accountants, approving all assignments to be performed by the independent
accountants and instructing the independent accountants, as deemed
appropriate, to undertake special assignments.
Messrs. Stevens, Gay and Harmon are the members of the Compensation
Committee, which held three meetings during the fiscal year ended September
30, 1994. The Compensation Committee reviews and recommends salaries for
corporate officers and key employees. In addition, the Compensation Committee
administers the Corporation's Amended and Restated 1982 Stock Option Plan and
the 1990 Stock Option Plan, including the granting of stock options pursuant
thereto, and administers the Amended and Restated Outside Directors' Stock
Option Plan. For additional information concerning the Compensation
Committee, see "COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION."
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth information concerning the compensation of
the Chief Executive Officer of the Corporation and the four other most highly
compensated executive officers of the Corporation as of September 30, 1994
whose total salary and bonus for the year ended September 30, 1994 exceeded
$100,000, for services in all capacities to the Corporation and its
subsidiaries, during the fiscal years ended September 30, 1992, 1993 and
1994:
</TABLE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
All Other
Annual Compensation Compensation(2)
-------------------------------------- -------------
Name and Principal Other Annual
Position Year Salary Bonus Compensation(1)
- - ------------------ ---- ------ ----- --------------- -------------
<S> <C> <C> <C> <C> <C>
James R. Porter 1994 $300,000 $150,734 $97,295 $4,636
President and 1993 296,716 84,603 71,506 4,497
Chief Executive 1992 280,008 112,328 -- 4,364
Officer
Shane Gorman 1994 195,000 97,978 23,498 5,128
Executive 1993 195,000 55,579 -- 4,335
Vice President 1992 171,996 80,005 3,075 4,718
Donald C. Wood 1994 159,996 95,532 -- 5,111
Vice President and 1993 159,996 76,431 -- 3,632
General Manager, 1992 142,999 73,897 -- 2,271
Information Services
Division
Thomas A. King 1994 185,004 60,644 -- 4,808
Vice President, 1993 171,996 42,740 -- 3,755
Product Development 1992 169,489 34,814 -- 3,974
and Manufacturing
Edward Molkenbuhr 1994 140,004 98,236 -- 4,765
Vice President and 1993 2,121(4) -- -- --
General Manager, 1992 -- -- -- --
Service Dealer
Division
Former Executive
Officer
- - ------------------
Ralph C. Montelius(3) 1994 168,996 92,551 24,570 4,498
Former Vice President, 1993 168,996 64,756 11,993 4,375
Customer Support 1992 165,996 64,715 -- 4,273
Services Division
<FN>
(1) Represents a withholding bonus paid with the exercise of stock options
granted before 1987. The bonuses paid were based on 30% of the excess of
$2.50 per share over the option price per share.
(2) Represents matching contributions by the Corporation to the named
officers' 401(k) savings and incentive plans.
(3) Mr. Montelius resigned on September 29, 1994 as an officer of the
Corporation and retired in September 1994.
(4) Mr. Molkenbuhr commenced employment with the Company in September 1993.
</END TABLE>
The following table provides the specified information concerning grants of
options to purchase the Company's Common Stock made during the year ended
September 30, 1994 to the persons named in the Summary Compensation Table:
</TABLE>
<TABLE>
OPTION GRANTS IN THE LAST FISCAL YEAR
<CAPTION>
Individual Grants in Fiscal 1994 Potential Realizable
- - ---------------------------------------------------------- Value at Assumed
% of Total Annual Rates of
Options Stock Price
Granted to Exercise Appreciation for
Employees or Base Option Term(2)
Options in Fiscal Price Expiration --------------------
Name Granted(1) Year ($/Share) Date 5%($) 10%($)
- - --------------- ---------- ---------- ------- --------- ----- --------
<S> <C> <C> <C> <C> <C> <C>
James R. Porter -- -- -- -- -- --
Shane Gorman -- -- -- -- -- --
Donald C. Wood -- -- -- -- -- --
Thomas A. King -- -- -- -- -- --
Edward Molkenbuhr 50,000 14.8% $5.50 10/22/03 $101,682 $324,803
Ralph C. Montelius -- -- -- -- -- --
<FN>
(1) Options granted under the Company's Amended and Restated 1982 Stock
Option Plan (the "Option Plan") generally vest over a five year period at a
rate of 20% per year for each full year of the optionee's continuous
employment with the Company. Under the Option Plan, the Board retains
discretion to modify the terms, including the price, of outstanding options.
(2) Potential gains are net of exercise price, but before taxes associated
with exercise. These amounts represent certain assumed rates of appreciation
only, based on the Securities and Exchange Commission's rules. Actual gains,
if any, on stock option exercises are dependent on the future performance of
the Common Stock, overall market conditions and the optionholders' continued
employment through the vesting period. The amounts reflected in this table
may not necessarily be achieved. One share of stock purchased at $4.625, the
market price on September 30, 1994, would yield profits of $2.91 at 5%
appreciation over ten years, or $7.37 at 10% appreciation over the same
period.
</END TABLE>
The following table provides the specified information concerning exercises
of options to purchase the Corporation's Common Stock in the fiscal year
ended September 30, 1994, and unexercised options held as of September 30,
1994, by the persons named in the Summary Compensation Table:
</TABLE>
<TABLE>
AGGREGATE OPTION EXERCISES AND FISCAL YEAR-END VALUES
<CAPTION>
Number of Value of Unexercised
Shares Unexercised Options In-the-Money Options
Acquired Value at 9/30/94 at 9/30/94(2)
Name on Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
- - ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James R. Porter 342,725 $1,179,235 958,080 -- $2,206,938 --
Shane Gorman 77,000 $ 208,262 297,000 -- $ 717,988 --
Donald C. Wood 40,000 $ 20,000 40,000 20,000 $ 35,000 $17,500
Thomas A. King -- -- 205,000 -- $ 194,375 --
Edward Molkenbuhr -- -- -- 50,000 -- (4)
Ralph C. Montelius(3) 115,500 $ 345,056 113,000 -- $ 166,500 --
<FN>
(1) A tax withholding bonus paid in connection with the exercise of certain
stock options has been excluded from Values Realized and Year-end Values. See
the column entitled "Other Annual Compensation" in the Summary Compensation
Table for information regarding such bonuses paid in the three years ended
September 30, 1994.
(2) Valuation based on the difference between the option exercise price and
the closing sales price of the Common Stock on September 30, 1994 (which was
$4.625 per share, as reported by the NASDAQ National Market System).
(3) On September 30, 1994, the Compensation Committee amended the unexercised
options held by Mr. Montelius to provide that 6,000 options shall remain
exercisable until September 26, 1995 and 107,000 options shall remain
exercisable until September 30, 1995. Mr. Montelius retired from the
Corporation in September 1994.
(4) The exercise price of the options was above the market price of the
Company's Common Stock on September 30, 1994, which was $4.625.
</END TABLE>
Termination and Change of Control Arrangements
In January 1989, the Board of Directors determined that in the event of a
change of control of the Corporation, employees, including executive
officers, would be entitled to certain severance benefits in the event their
employment is terminated.
A change in control is defined as (i) a merger or consolidation in which
the stockholders of the Corporation before the merger or consolidation do not
retain at least a majority of the beneficial interest in the voting stock of
the surviving corporation, (ii) the sale of all or substantially all of the
Corporation's assets, and/or (iii) the direct or indirect sale or exchange by
the stockholders of the Corporation of more than 50% of the stock of the
Corporation to person(s) or entity(ies), other than the Corporation or any
subsidiary or employee benefit plan of the Corporation.
Should there occur such a change in control and the executive officer's
employment is involuntarily terminated, the officer will become entitled to
the following severance benefits:
(1) all outstanding options at the time held by the officer will
immediately accelerate and become fully exercisable for all the option
shares; and
(2) minimum severance pay in the aggregate amount equal to twelve times
the executive officer's monthly salary in effect on the date of termination,
plus the total bonus compensation paid for services rendered in the
immediately preceding fiscal year, payable during the twelve month period
following the date of termination, in twenty-four successive biweekly
payments, net of federal and state tax withholdings; and
(3) all employee benefits which the officer was entitled to receive
immediately prior to the date of termination, for a period of twelve months.
Involuntary termination is defined to mean discharge for any reason
whatsoever, including a change in duties and functions with respect to the
executive officer's position which results in the officer not maintaining an
equivalent or greater role in the management of the Corporation as that
performed by the officer prior to the change in control.
Options granted under the Corporation's Amended and Restated 1992 Stock
Option Plan, 1990 Stock Option Plan and Amended and Restated Outside
Directors' Stock Option Plan contain provisions pursuant to which unexercised
options become immediately exercisable upon a "transfer of control" as
defined under such plans and terminate to the extent they are not exercised
as of consummation of the transfer of control.
Compensation of Directors
Directors who are not employees of the Corporation receive reimbursement of
expenses and an annual retainer fee of $10,000 plus $1,000 for each meeting
of the Board of Directors and $500 for each separate meeting of committees of
the Board of Directors which they attend, in compensation for their services
as members of the Board of Directors of the Corporation.
The Triad Systems Corporation Amended and Restated Outside Directors Stock
Option Plan (the "Directors Plan") provides for the granting of nonqualified
stock options (that is, options which are not intended to satisfy the
requirements of section 422 of the Internal Revenue Code) to directors of the
Corporation who are not employees of the Corporation. A total of 100,000
shares of Common Stock are reserved for issuance under the Directors Plan.
Each person appointed as an Outside Director following the initial adoption
of the Directors Plan (a "Future Outside Director") is automatically granted
an option to purchase 6,000 shares of Common Stock on the date such Outside
Director commences service on the Board. Each Future Outside Director is
automatically granted additional options to purchase 2,000 shares of Common
Stock on each anniversary date of his or her initial grant. No options will
be granted to any person when he or she is no longer serving as an Outside
Director. Options become exercisable in three equal annual installments,
commencing one year after the date of grant. As of October 31, 1994, three
non-employee directors are eligible to participate in the Directors Plan.
Changes to Benefit Plans
1990 Employee Stock Purchase Plan. In October, 1994, the Board of Directors
adopted an amendment to the Triad Systems Corporation 1990 Employee Stock
Purchase Plan (the "Purchase Plan"), subject to stockholder approval, to
increase the number of shares reserved for issuance pursuant to the Purchase
Plan from 650,000 shares to 1,150,000 shares. The New Plan Benefits Table
sets forth purchases of stock under the Purchase Plan during the fiscal year
ended September 30, 1994 by (i) the Chief Executive Officer of the
Corporation and the four other most highly compensated executive officers of
the Corporation as of September 30, 1994 whose total salary and bonus for the
year ended September 30, 1994 exceeded $100,000; (ii) all current executive
officers as a group; (iii) all current directors who are not executive
officers as a group; and (iv) all employees, including all officers who are
not executive officers, as a group. Purchases of stock under the Purchase
Plan are made at the discretion of the participants. Accordingly, future
purchases under the Purchase Plan are not yet determinable.
</TABLE>
<TABLE>
NEW PLAN BENEFITS TABLE
<CAPTION>
Triad Systems Corporation
1990 Employee Stock Purchase Plan
Exercise Price
Name and Principal Position (per share) Number of Shares
- - --------------------------- -------------- ----------------
<S> <C> <C>
James R. Porter (2) (2)
President and Chief Executive
Officer
Shane Gorman $4.25 500
Executive Vice President
Donald C. Wood -- --
Vice President,
Information Services Division
Thomas A. King $4.25 500
Vice President,
Product Development and
Manufacturing
Edward Molkenbuhr $4.25 --
Vice President and
General Manager,
Service Dealer Division
Ralph C. Montelius(3) $4.25 336
Former Vice President,
Customer Support Services
Division
Executive Group (13 persons) $4.25 3,630
Non-Executive Director Group (1) (1)
(4 persons)
Non-Executive Officer
Employee Group $4.25 145,547
<FN>
(1) Non-employee directors are not eligible to participate in the Purchase
Plan.
(2) Mr. Porter owns more than 5% of the Company's outstanding shares,
therefore does not meet the eligibility requirements of this Plan.
(3) Mr. Montelius retired from the Corporation in September 1994.
</END TABLE>
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended ("Section
16(a)"), requires the Corporation's executive officers, directors and persons
who beneficially own more than 10% of a registered class of the Corporation's
equity securities to file with the Securities and Exchange Commission (the
"SEC") initial reports of beneficial ownership on Form 3 and reports of
changes in beneficial ownership on Forms 4 and 5 with respect to the
Corporation's Common Stock and other equity securities. Such officers,
directors and greater-than-10% beneficial owners are also required by SEC
rules to furnish the Corporation with copies of all Section 16(a) reports
they file with the SEC.
Based solely on a review of copies of such forms received by the
Corporation, and written representations from certain reporting persons that
no other reports were required for such persons, the Corporation believes
that all Section 16(a) filing requirements applicable to its officers,
directors and greater-than-10% beneficial owners were complied with during
the fiscal year ended September 30, 1994, with one exception. Edward
Molkenbuhr did not timely file a Form 4 for two transactions but reported
these in a timely filed Form 5.
Compensation Committee Interlocks and Insider Participation
William W. Stevens, Henry M. Gay and George O. Harmon served as members of
the Board of Directors' Compensation Committee during fiscal 1994. Mr.
Stevens was President and Chief Executive Officer of the Corporation from
inception until September 1985. Mr. Gay was Vice President, Marketing from
inception until 1980 and Secretary from 1972 to September 1987.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors sets the base salary
of the Corporation's executive officers and approves bonus programs for
executive officers. Option grants to executive officers are made by the
Compensation Committee. The following is a summary of policies of the
Committee that affect the compensation paid to executive officers, as
reflected in the tables set forth elsewhere in the Proxy Statement.
General Compensation Policy
The Committee's overall policy is to offer the Corporation's executive
officers competitive compensation opportunities based upon their personal
performance, the financial performance of the Corporation and their
contribution to that performance. One of the Committee's primary objectives
is to have a substantial portion of each officer's compensation contingent
upon the Corporation's performance as well as individual level of
performance. Each executive officer's compensation package is comprised of
three elements: (i) base salary which reflects individual performance and is
designed primarily to be competitive with salary levels in the industry, (ii)
annual variable performance awards payable in cash and tied to the
achievement of annual financial performance goals established by the
Committee, and (iii) long-term stock-based incentive awards designed to
strengthen the mutuality of interests between the executive officers and the
Corporation's stockholders. Generally, as an officer's level of
responsibility increases, a greater portion of compensation will be dependent
upon Corporation performance and stock price appreciation rather than salary
base. In setting variable performance awards, the Committee evaluates
aggregate executive compensation as well as compensation for each executive
with similar-sized high technology companies in the Corporation's geographic
location.
The Corporation has considered the potential impact of Section 162(m)
("Section 162(m)") of the Internal Revenue Code adopted under the federal
Revenue Reconciliation Act of 1993. Section 162(m) disallows a tax deduction
for any publicly-held corporation for individual compensation exceeding $1
million in any taxable year for any of the named executive officers, unless
compensation is performance-based. Since the targeted cash compensation of
each of the named executive officers is well below the $1 million threshold
and the Corporation believes that any options granted under the Corporation's
Amended and Restated 1982 Stock Option Plan and 1990 Stock Option Plan will
meet the requirement of being performance-based under the transition
provisions provided in the regulations under Section 162(m), the Committee
believes that Section 162(m) will not reduce the tax deduction available to
the Corporation. The Corporation's policy is to qualify to the extent
reasonable its executive officers' compensation for deductibility under
applicable tax laws.
Factors
The primary factors taken into account in establishing each executive
officer's compensation package for the 1994 fiscal year are summarized below.
The relative weight given to each factor varied with each individual in the
sole discretion of the Committee. The Committee, in its discretion, may apply
entirely different factors to individual compensation, such as varying
attainment criteria based on expected performance of a growth business versus
a mature business.
Base Salary
The base salary for each officer is set on the basis of personal
performance, the salary levels in effect for comparable positions with other
companies in the high tech industry in the Corporation's geographical region
(with the Corporation's individual salaries generally set to correspond with
the executive's experience and performance level) and internal comparability
considerations. As a general matter, year-to-year adjustments to each
executive officer's base salary are based upon personal performance for the
year, changes in the general level of base salaries of persons in positions
comparable to that of the executive officer within the industry and corporate
performance factors. The Corporation's 1993 profitability and existing stock
options outstanding were taken into consideration in establishing base salary
increases for 1994. After taking these issues into account, the majority of
officer's base compensation was held at 1993 base salary levels. In aggregate
the base salary for executive officers increased 1% for 1994.
Annual Incentive Compensation
Annual bonuses are earned by each executive officer on the basis of the
Corporation's achievement of corporate performance targets established by the
Committee at the start of the fiscal year. The individual bonus targets for
fiscal 1994 were based on a percentage of base salary upon attainment of
predetermined achievement targets. The Committee-approved achievement targets
were based on revenue and operating contributions at the corporate, division
and segment levels, tailored to specific responsibilities of each individual.
Long-Term Stock-Based Incentive Compensation
Stock options grants are reviewed annually by the Committee. Grants in a
particular year are designed to align the interests of the executive officer
with those of the stockholders and provide each individual with a significant
incentive to manage the Corporation from the perspective of an owner with an
equity stake in the business. Each grant generally allows the officer to
acquire shares of the Corporation's common stock at a fixed price per share
(the market price on the grant date) over a ten year period, thus providing a
return to the executive officer only if the market price of the shares
appreciates over the option term. Options granted to executive officers vest
at the rate of 20% per year and become fully vested after five years. The
size of the option grant to each executive officer, including the Chief
Executive Officer, is set at a level which is intended to create a meaningful
opportunity for stock ownership based upon the individual's current position
with the Corporation and the base salary associated with that position, the
size of comparable grants made to individuals in similar positions in the
industry, the individual's potential for future responsibility and promotion
over the option term, the individual's personal performance in recent periods
and the number of options held by the individual at the time of grant. The
relative weight given to these factors varies with each individual in the
sole discretion of the Committee.
Stock Ownership by Management
The Committee believes stock ownership further aligns executive officers'
interests with those of the Corporation's shareholders. Consistent with this
philosophy, the Corporation established a policy for fiscal 1994 and
following years that executive officers of the Corporation shall own stock
equivalent to the following compensation standards within a three-year
period, measured from October 1, 1993: President-stock ownership equivalent
to two times 1993 total compensation (salary plus cash bonus); Executive Vice
President and Vice President-stock ownership equivalent to the respective
1993 total compensation; and Other Officers-stock ownership equivalent to the
respective 1993 base salary. Future hires at the Corporate Officer level must
meet the respective stock ownership level within five years from the date of
hire, based on their specific compensation package.
CEO Compensation
In setting the compensation payable to the Corporation's Chief Executive
Officer, James R. Porter, the Committee sought to be competitive with other
companies in the industry, while at the same time assuring that a significant
percentage of such compensation will be tied to Corporation performance and
stock price appreciation.
The Committee established Mr. Porter's base salary based on an evaluation
of his personal performance and the objective of having his base salary keep
pace with salaries being paid to similarly situated chief executive officers.
With respect to Mr. Porter's base salary, it is the Committee's intent to
provide him with a level of stability and certainty each year and not have
this particular component of compensation affected to any significant degree
by the Corporation performance factors.
The remaining components of Mr. Porter's 1994 fiscal year compensation,
however, were dependent upon both individual and corporate performance based
on his individual bonus plan approved by the Committee, and provided no
dollar guarantees. The cash bonus paid to him for the 1994 fiscal year was
based on the Corporation's attainment of performance factors tied to the
level of revenue and operating income.
Submitted by the Compensation Committee of the Corporation's Board of
Directors:
William W. Stevens
Henry M. Gay
George O. Harmon
COMPARISON OF STOCKHOLDER RETURN
Set forth below are line graphs comparing the annual percentage change in
the cumulative total return on Triad Systems Corporation's Stock with the
cumulative total return of the Standard & Poor's 500 Index and a composite
index comprised of the Standard & Poor's (S&P) Software and Service Index and
the S&P Computer Index (i) for the period commencing on September 30, 1989
and ending on September 30, 1994, and (ii) for the period commencing on
September 30, 1985 and ending on September 30, 1994.
STOCKHOLDER RETURNS
1989 - 1994(2)
Graph with the following points:
</TABLE>
<TABLE>
<CAPTION>
Year Ended September 30, 1989 1990 1991 1992 1993 1994
- - ------------------------ ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Triad Systems Corporation 100 42.11 73.68 123.68 110.53 97.37
S&P 500 Index 100 90.76 119.04 132.20 149.39 154.89
Combined Index(1) 100 76.63 98.34 101.51 107.88 135.60
</END TABLE>
In the following graph, the Corporation has presented comparative
stockholder return information over the period from September 30, 1985, the
year James R. Porter joined the Corporation as Chief Executive Officer,
through September 30, 1994. During 1989, the approximate mid-point of this
period, the Corporation faced an unsuccessful hostile takeover attempt and
effected a stockholder-approved Plan of Recapitalization paying $15.00 per
share in cash to all stockholders.
STOCKHOLDER RETURNS
1985 - 1994(2)
Graph with the following points:
</TABLE>
<TABLE>
<CAPTION>
Year Ended September 30, 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
- - ------------------------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Triad Systems Corporation 100 112.70 169.84 190.48 273.20 115.03 201.31 339.91 301.96 266.01
S&P 500 100 131.60 188.67 165.22 219.75 199.44 261.60 290.50 328.28 340.38
Combined Index(1) 100 119.97 173.34 125.34 142.87 105.99 140.66 150.55 168.96 209.28
<FN>
(1) The Combined index was comprised by weighing the S&P Computer Index and
the S&P Software and Service index equally, as prepared by Standard & Poor's
Compustat Services, Inc.
(2) Assumes that $100.00 was invested on September 30, 1989 and September
30, 1985, respectively, at the closing sales price of the Corporation's
Common Stock and in each index, and that all dividends were reinvested.
Returns are measured through the last trading day of each of the
Corporation's fiscal years. No cash dividends have been declared on the
Corporation's Common Stock, except a cash payment of $15.00 per share that
was paid on the Corporation's Common Stock in connection with the
Corporation's recapitalization in August 1989 and is assumed to have been
reinvested. Stockholder returns over the indicated period should not be
considered indicative of future stockholder returns.
Stockholder returns presented in the performance graphs are generally not
necessarily indicative of results. The higher the baseline stock price, the
less volatile the graphic presentation of fluctuations; therefore, Triad's
stock value when compared to S&P 500 and the Combined Index, can fluctuate
more broadly and changes can appear exaggerated in a graphic presentation.
</END TABLE>
PROPOSAL TWO
APPROVAL OF INCREASE OF THE SHARES RESERVED FOR ISSUANCE
UNDER THE 1990 EMPLOYEE STOCK PURCHASE PLAN
General
The Board of Directors of the Corporation adopted the 1990 Employee Stock
Purchase Plan (the "Purchase Plan") by unanimous written consent in March
1990. The Purchase Plan was approved by the stockholders of the Corporation
on February 7, 1991. The Purchase Plan is intended to qualify as an "employee
stock purchase plan" under Section 423 of the Code. The Purchase Plan is
administered by the Board of Directors or a committee of the Board of
Directors. Currently, up to 650,000 shares of the Corporation's Common Stock
may be issued under the Purchase Plan. The Board of Directors approved an
increase in the Plan's share reserve to a total share reserve of 1,150,000
shares of the Corporation's Common Stock on October 26, 1994, subject to
adjustment for stock splits and similar changes in the Corporation's
capitalization or in the event of any merger, sale or other reorganization of
the Corporation, as provided in the Purchase Plan. The stockholders are now
being asked to approve this increase in the Plan's reserve of an additional
500,000 shares of the Corporation's Common Stock.
Management believes that the availability of an adequate number of shares
under the Purchase Plan is an important factor in attracting and retaining
qualified employees essential to the success of the Corporation. As of
September 30, 1994, there were 86,786 shares available for issuance under the
Purchase Plan. Of the 1,386 employees eligible to participate in the Purchase
Plan in fiscal 1994, 445 participated. As of November 30, 1994, the closing
price for the Corporation's Common Stock as reported by NASDAQ National
Market System was $5.00.
Summary of the Provisions of the Purchase Plan
The following summary of the Purchase Plan is qualified in its entirety by
the specific language of such plan, a copy of which is available to any
stockholder upon request.
Any employee of the Corporation or any present or future subsidiary
corporation of the Corporation (including any director who is also an
employee) is eligible to participate in the Purchase Plan so long as the
employee is customarily employed for more than 20 hours per week, has
completed 3 months of continuous employment, and does not own or hold options
to purchase, or as a result of participation in the Purchase Plan would own
or hold options to purchase, 5% or more of the total combined voting power or
value of all classes of stock of the Corporation.
Each offering (an "Offering") of Common Stock under the Purchase Plan is
for a period of 12 months. Shares of the Corporation's Common Stock are
purchased at the end of each Offering. Offerings under the Purchase Plan
commence on the first day of April and end on the last day of March of the
following year. Participation by eligible employees in the Purchase Plan is
limited to those who authorize payroll deductions pursuant to the Purchase
Plan. Such payroll deductions may not exceed 10% of an employee's
compensation. Once an employee becomes a participant in the Purchase Plan,
that employee will automatically participate in each successive Offering
until such time as that employee withdraws from the Purchase Plan, becomes
ineligible to participate in the Purchase Plan, or his or her employment
ceases.
The purchase price per share at which the shares of the Corporation's
Common Stock are sold in an offering generally will be equal to 85% of the
lesser of the fair market value of the Common Stock on the first or the last
day of the Offering. Subject to certain limitations, the number of shares of
the Corporation's Common Stock a participant purchases in each Offering is
determined by dividing the total amount of payroll deductions withheld from
the participant's compensation by the purchase price per share. Participants
may not purchase shares of the Corporation's Common Stock having a fair
market value exceeding $25,000 in any calendar year (measured by the fair
market value of the Corporation's Common Stock on the first day of the
Offering in which the shares are purchased). Furthermore, no participant may
purchase more than 500 shares of the Corporation's Common Stock in any single
Offering. A participant may withdraw from an Offering at any time without
affecting his or her eligibility to participate in future Offerings.
In the event of a "transfer of control" (as defined in the Purchase Plan)
of the Corporation, the Board of Directors may either (i) provide for the
exercise of purchase rights under the plan to the extent of each
participant's accumulated payroll deductions as of a date prior to the
transfer of control or (ii) arrange with the acquiring corporation to assume
the Corporation's rights and obligations under the plan.
The Board of Directors may at any time amend or terminate the Purchase
Plan, except that the approval of the Corporation's stockholders is required
within 12 months of the adoption of any amendment increasing the number of
shares authorized for issuance under the Purchase Plan, changing the
definition of the corporations which may be designated by the Board as
corporations whose employees may purchase shares of the Company's Common
Stock under the Purchase Plan, or permitting payroll deductions for an
Offering in excess of 10% of a participant's compensation. The Purchase Plan
will terminate at the time determined by the Board of Directors or when all
the shares reserved for issuance under the Purchase Plan have been issued.
Summary of Federal Income Tax Consequences of the Purchase Plan
The following summary is intended only as a general guide as to the United
States federal income tax consequences under current law of participation in
the Purchase Plan and does not attempt to describe all potential tax
consequences. Furthermore, the tax consequences are complex and subject to
change, and a taxpayer's particular situation may be such that some variation
of the described rules is applicable. A participant recognizes no taxable
income either as a result of commencing to participate in the Purchase Plan
or purchasing shares of the Corporation's Common Stock under the terms of the
Purchase Plan.
If a participant disposes of shares purchased under the Purchase Plan
within 2 years from the first day of the applicable Offering or within 1 year
from the date of purchase (which is the last day of an Offering) (a
"disqualifying disposition"), the participant will realize ordinary income in
the year of such disposition equal to the amount by which the fair market
value of the shares on the date the shares were purchased exceeds the
purchase price. The amount of the ordinary income will be added to the
participant's basis in the shares, and any additional gain or resulting loss
recognized on the disposition of the shares will be a capital gain or loss. A
capital gain or loss will be long-term if the participant's holding period is
more than 12 months; otherwise it will be short-term.
If the participant disposes of shares purchased under the Purchase Plan at
least 2 years after the first day of the applicable Offering and at least 1
year after the date of purchase, the participant will realize ordinary income
in the year of disposition equal to the lesser of (i) the excess of the fair
market value of the shares on the date of disposition over the purchase price
or (ii) 15% of the fair market value of the shares on the first day of the
applicable Offering. The amount of any ordinary income will be added to the
participant's basis in the shares, and any additional gain recognized upon
the disposition after such basis adjustment will be a long-term capital gain.
If the fair market value of the shares on the date of disposition is less
than the purchase price, there will be no ordinary income and any loss
recognized will be a long-term capital loss.
If the participant still owns the shares at the time of death, the lesser
of (i) the excess of the fair market value of the shares on the date of death
over the purchase price or (ii) 15% of the fair market value of the shares on
the first day of the Offering in which the shares were purchased will
constitute ordinary income in the year of death.
The Corporation generally will be entitled to a deduction in the year of a
disqualifying disposition equal to the amount of ordinary income recognized
by the participant as a result of the disposition. In all other cases, no
deduction is allowed to the Corporation.
Vote Required and Board of Directors' Recommendation
The Board believes that the amendment of the Purchase Plan is in the best
interests of the stockholders and the Corporation for the reasons set forth
above. THEREFORE, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
THIS PROPOSAL TO AMEND THE PURCHASE PLAN TO INCREASE THE NUMBER OF SHARES
RESERVED FOR ISSUANCE UNDER THE PURCHASE PLAN FROM 650,000 SHARES TO
1,150,000 SHARES.
The affirmative vote of a majority of the votes present or represented by
proxy and entitled to vote at the Annual Meeting of Stockholders, at which a
quorum representing a majority of all outstanding shares of Common Stock of
the Corporation is present and voting, either in person or by proxy, is
required for approval of this proposal. Abstentions and broker non-votes will
each be counted as present for purposes of determining the presence of a
quorum. Abstentions will have the same effect as a negative vote. Broker non-
votes, on the other hand, will have no effect on the outcome of the vote.
PROPOSAL THREE
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Corporation has selected Coopers & Lybrand
L.L.P. as the independent accountants of the Corporation for fiscal 1995.
Coopers & Lybrand L.L.P. has acted in such capacity since its appointment for
fiscal 1979. A representative of Coopers & Lybrand L.L.P. will be present at
the Annual Meeting of Stockholders, will be given the opportunity to make a
statement if he or she so desires and will be available to respond to
appropriate questions.
In the event that ratification by the stockholders of the appointment of
Coopers & Lybrand L.L.P. as the Corporations independent accountants is not
obtained, the Board of Directors will reconsider said appointment. The
affirmative vote of a majority of the votes cast at the Annual Meeting of
Stockholders, at which a quorum representing a majority of all outstanding
shares of Common Stock and Preferred Stock of the Corporation, voting
together as a single class, is present and voting, either in person or by
proxy, is required for approval of this proposal. Abstentions and broker
non-votes will each be counted as present for purposes of determining the
presence of a quorum, but will not be counted as having been voted on the
proposal. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS THE CORPORATION'S INDEPENDENT
ACCOUNTANTS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1995.
STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING
Proposals of stockholders intended to be presented at the next Annual
Meeting of Stockholders of the Corporation must be received by the
Corporation at its offices at 3055 Triad Drive, Livermore, California 94550
not later than September 8, 1995, and must satisfy the conditions established
by the Securities and Exchange Commission for stockholder proposals to be
included in the Corporations Proxy Statement for that meeting.
TRANSACTION OF OTHER BUSINESS
At the date of this Proxy Statement, the only business which the Board of
Directors intends to present or knows that others will present at the meeting
is as set forth above. If any other matter or matters are properly brought
before the meeting, or any adjournment thereof, it is the intention of the
persons named in the accompanying form of proxy to vote the proxy on such
matters in accordance with their best judgment.
By Order of the Board of Directors
/s/ STANLEY F. MARQUIS
----------------------
STANLEY F. MARQUIS
Secretary
January 5, 1995
TRIAD SYSTEMS CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE CORPORATION.
The undersigned hereby appoints James R. Porter and Stanley F. Marquis, and
each of them, with full power of substitution to represent the undersigned and
to vote all the shares of the stock of Triad Systems Corporation which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of the
Corporation to be held at the offices of the Corporation located at 3055 Triad
Drive, Livermore, California, on Thursday, February 9, 1995 at 2:00 p.m. local
time, and at any adjournment thereof (1) as hereinafter specified upon the
proposals listed below and as more particularly described in the Corporation's
Proxy Statement and (2) in their discretion upon such other matters as may
properly come before the meeting.
The undersigned hereby acknowledges receipt of: (1) Notice of Annual
Meeting of Stockholders of the Corporation, (2) accompanying Proxy Statement,
and (3) Annual Report of the Corporation for the fiscal year ended September
30, 1994.
Please mark this proxy as indicated on the reverse side to vote on any
item. If you wish to vote in accordance with Board of Directors'
recommendations, please sign the reverse side; no boxes need to be checked.
(Continued and to be signed on reverse side)
____________________________
COMMON
The shares represented hereby shall be voted as specified. If no
specification is made, such shares shall be voted FOR proposals 1, 2 and 3.
1. Election of the following director:
Henry M. Gay
[ ] FOR [ ] WITHHELD FOR ALL
2. To approve an amendment to the Triad Systems Corporation 1990 Employee
Stock Purchase Plan (the "Purchase Plan") to increase the number of shares
reserved for issuance under the Purchase Plan from 650,000 shares to
1,150,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To ratify the appointment of Coopers & Lybrand L.L.P. as independent
accountants of the Corporation for the fiscal year ending September 30, 1995.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
[ ] I PLAN TO ATTEND MEETING
[ ] COMMENTS/ADDRESS CHANGE
Please mark this box if you have written comments/address
change on the reverse side.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO
SIGN AND PROMPTLY MAIL THIS PROXY IN THE RETURN ENVELOPE SO THAT YOUR STOCK
MAY BE REPRESENTED AT THE MEETING.
Signature(s):______________________________________
_________________________________________
Dated:_____________________________________, 1995
Sign exactly as your name(s) appears above. If shares of stock are in the
names of two or more persons or in the name of husband and wife, whether as
joint tenants or otherwise, both or all of such persons should sign the above
Proxy. If shares of stock are held by a corporation, the Proxy should be
executed by the President or Vice President and the Secretary or Assistant
Secretary, and the corporate seal should be affixed thereto. Executors or
administrators or other fiduciaries who execute the above Proxy for a
deceased stockholder should give their full title. Please date the Proxy.
</TABLE>
