SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
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File by a Party other than the Registrant [ ]
Check the appropriate box:
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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):
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[ ] $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>
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<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
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TRIAD SYSTEMS CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 8, 1996
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 8, 1996, at 2:00 p.m. local time for the
following purposes:
1. To elect two (2) Class III directors to the Board of Directors
to hold office until the Corporation's Annual Meeting of Stockholders
in 1999 and until their successors are elected and qualified.
2. To approve an amendment to the Triad Systems Corporation Amended
and Restated 1982 Stock Option Plan (the "Option Plan") to increase
the maximum number of shares which may be issued under the Option
Plan from 7,375,000 shares to 7,725,000 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, 1996.
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 20, 1995,
are entitled to notice of, and to vote at, this meeting and any
adjournments thereof.
By Order of the Board of Directors,
STANLEY F. MARQUIS
STANLEY F. MARQUIS
Secretary
Livermore, California
January 5, 1996
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 8, 1996
TABLE OF CONTENTS
Page
PROXY STATEMENT 1
GENERAL INFORMATION 1
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 2
ELECTION OF DIRECTORS (Proposal 1) 4
EXECUTIVE COMPENSATION AND OTHER MATTERS 6
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION 10
COMPARISON OF STOCKHOLDER RETURN 13
APPROVAL OF INCREASE OF THE MAXIMUM NUMBER OF SHARES RESERVED FOR
ISSUANCE UNDER THE AMENDED AND RESTATED 1982 STOCK OPTION PLAN
(Proposal 2) 15
APPOINTMENT OF INDEPENDENT ACCOUNTANTS (Proposal 3) 18
STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING 18
TRANSACTION OF OTHER BUSINESS 19
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 8, 1996,
or any adjournment or postponement thereof, for the purposes set forth in
the accompanying Notice of Annual Meeting. The date of this Proxy Statement
is January 5, 1996, 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 on Form 10-K for the fiscal year ended
September 30, 1995, is attached to this Proxy Statement as Appendix A.
Voting Securities. Only stockholders of record as of the close of
business on December 20, 1995, will be entitled to vote at the meeting and
any adjournment thereof. As of that date, there were 17,402,215 shares of
Common Stock of the Corporation, par value $.001 per share ("Common
Stock"), issued and outstanding (not including 599,398 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 each
of the matters presented in this Proxy Statement. Pursuant to the
Corporation's bylaws, a majority of the outstanding shares of Common Stock
entitled to vote at the meeting, whether present in person or represented
by proxy, constitutes 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 with respect
to any matter, the shares will be voted for the election of directors or in
favor of the proposal, as the case may be. 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,
1995, with respect to the beneficial ownership of the Corporation's
Common Stock by (i) all persons known by the Corporation to be the
beneficial owners of more than 5% of the outstanding Common 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, 1995 whose total
annual compensation for the year ended September 30, 1995 exceeded $100,000,
and (iv) all executive officers and directors of the Corporation as a group.
Amount and Nature of
Name and Address of Beneficial Ownership
Beneficial Owner of Common Stock Percent of Class<F1>
Richard C. Blum 2,230,223 <F3> 12.4%
909 Montgomery Street, Suite 400
San Francisco, California 94113
Gabelli Funds, Inc. 1,228,200 <F4> 6.8%
One Corporate Center
Rye, New York 10580-1434
James R. Porter 954,200 <F5> 5.2%
3055 Triad Drive
Livermore, CA 94550
Wanger Asset Management, L.P. and 900,000 <F6> 5.0%
Wanger Asset Management, Ltd.
227 West Monroe, Suite 3000
Chicago, Illinois 60606
William W. Stevens 430,340 <F7> 2.4%
Henry M. Gay 88,397 <F8> <F2>
George O. Harmon 78,001 <F9> <F2>
Shane Gorman 254,788 <F10> 1.4%
Chad A. Schneller 20,000 <F11> <F2>
Donald C. Wood 60,000 <F12> <F2>
Stanley F. Marquis 160,794 <F13> <F2>
All Executive Officers and
Directors as a Group 4,768,730 <F14> 25.0%
<F1> 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.
<F2> Less than 1%.
<F3> Includes 8,001 shares of Common Stock subject to options vested
and exercisable within 60 days of October 31, 1995. Of these shares,
(a) The Common Fund for Nonprofit Organizations, 363 Reef Road,
Fairchild, Connecticut 06430, beneficially owns 1,111,111 shares of
Common Stock, representing 6.2% of the Common Stock; (b) BK Capital
Partners IV, L.P. beneficially owns 500,000 shares of Common Stock,
representing 2.8% of the Common Stock; (c) BK Capital Partners III,
Limited Partnership beneficially owns 500,000 shares of Common Stock,
representing 2.8% of the Common Stock; and (d) BK Capital Partners II,
a California limited partnership ("BK II") beneficially owns
111,111 shares of Common Stock, representing 0.6% of the Common
Stock. 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.
<F4> Includes 205,900 shares, representing 1.2% of the Common Stock, held
by Gabelli Performance Partnership, 117,000 shares, representing 0.6%
of the Common Stock, held by Gabelli Funds, Inc., 5,000 shares,
representing .03% of the Common Stock, held by Gabelli International
Limited II and 900,300 shares, representing 5.0% of the Common Stock,
held by GAMCO Investors Inc., 76,500 shares of which GAMCO has no
power to vote.
<F5> Includes 349,736 shares subject to options vested and exercisable
within 60 days of October 31, 1995.
<F6> 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 3.89% of the Common Stock.
The address of Acorn is 227 West Monroe, Suite 3000, Chicago,
Illinois 60606.
<F7> 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.
<F8> Includes 50,396 shares held by Henry M. Gay and his wife, as trustees
of a family trust, and 38,001 shares subject to options vested and
exercisable within 60 days of October 31, 1995.
<F9> Includes 78,001 shares subject to options vested and exercisable
within 60 days of October 31, 1995.
<F10> Includes 78,500 shares subject to options vested and exercisable
within 60 days of October 31, 1995.
<F11> Includes 20,000 shares subject to options vested and exercisable
within 60 days of October 31, 1995.
<F12> Includes 60,000 shares subject to options vested and exercisable
within 60 days of October 31, 1995.
<F13> Includes 99,869 shares subject to options vested and exercisable
within 60 days of October 31, 1995.
<F14> Includes 1,097,608 shares subject to options vested and exercisable
within 60 days of October 31, 1995.
Voting Agreement Between the Corporation and the RCBA Group. 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, and the sale of all or
substantially all of the Corporation's assets. At the present time the RCBA
Group does not own sufficient voting stock to trigger the preceding 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, two directors, James R. Porter
and George O. Harmon, will be nominated for election to Class III of the
Board of Directors. If elected, each of the nominees will hold office until
the earlier to occur of (i) the annual meeting of stockholders to be held in
1999 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 any
Class III nominee declines to serve or becomes unavailable for any reason,
or if a vacancy should occur before the election (although the Board knows
of no reason to anticipate that this will occur), proxies may be voted for
such substitute nominee as the Board may designate.
If a quorum is present and voting, the two nominees 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 64 1972
Corporation since 1972. Founder
of the Corporation and President
and Chief Executive Officer from
inception until September 1985.
Class II Directors whose terms expire at the 1998 Annual Meeting
of Stockholders:
Henry M. Gay Director of the Corporation. 71 1972
Founder of the Corporation and
Vice President, Marketing until
1980. Secretary from 1972 to
September 1987. Also a Director
of Silicon Valley Bank.
Richard C. Blum Director of the Corporation. 60 1992
President and Chairman of Richard
C. Blum & Associates, L.P. Also
Director of Northwest Airlines
Corporation, URS Corporation and
National Education Corporation.
Class III Directors to be elected at the 1996 Annual Meeting of
Stockholders:
James R. Porter President and Chief Executive 60 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. 72 1986
President and Chief Executive
Officer of Harmon Associates
International, Inc. Also serves
on the Board of Directors of
Interscience Inc. and various
privately held companies.
During the fiscal year ended September 30, 1995, the Board of Directors
held five meetings. During the 1995 fiscal year, each director attended at
least 75% of the aggregate of the total number of all meetings of the Board
of Directors and the total number of all meetings of committees of the
Board of Directors on which he served held during the periods such director
served, with the exception of Mr. Blum who attended 67% of such 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 1995. 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 one meeting during the fiscal year ended September 30,
1995. 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, including the granting of stock options pursuant thereto, and
administers the 1990 Employee Stock Purchase Plan and 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,
1995 whose total annual compensation for the year ended September 30, 1995
exceeded $100,000, for services in all capacities to the Corporation and
its subsidiaries, during the fiscal years ended September 30, 1993, 1994
and 1995:
SUMMARY COMPENSATION TABLE
All Other
Annual Compensation Compensation<F2>
--------------------------------------- ---------------
Bonus
----------------------
Name and Principal
Position Year Salary Performance Other<F1>
- ------------------ ---- -------- ----------- ---------
James R. Porter 1995 $300,000 $155,216 $100,074 $2,984
President and 1994 300,000 150,734 97,295 4,636
Chief Executive 1993 296,716 84,603 71,506 4,497
Officer
Shane Gorman 1995 195,000 76,985 43,290 2,979
Executive Vice 1994 195,000 97,978 23,498 5,128
President 1993 195,000 55,579 - 4,335
Automotive
Operations
Chad A.
Schneller<F3> 1995 180,000 89,982 - 3,750
Vice President 1994 32,500 48,750 - 450
Hardlines and
Lumber Operations
Donald C. Wood 1995 159,996 87,694 - 3,177
Vice President 1994 159,996 95,532 - 5,111
and General Manager 1993 159,996 76,431 - 3,632
Information
Services Division
Stanley F. Marquis 1995 166,879 66,556 18,281 3,848
Vice President, 1994 155,004 65,666 2,925 4,065
Finance 1993 155,004 40,527 1,463 3,675
Chief Financial
Officer Corporate
Secretary and
Treasurer
President, Triad
Systems Financial
Corporation
<F1> Represents 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.
<F2> Represents matching contributions by the Corporation to the named
officers' 401(k) savings and incentive plans.
<F3> Mr. Schneller commenced employment with the Company in July 1994.
During the fiscal year ended September 30, 1995, there were no option
grants to the chief executive of the corporation and the four other most
highly compensated executive officers. 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, 1995, and
unexercised options held as of September 30, 1995, by the persons named in
the Summary Compensation Table:
<TABLE>
AGGREGATE OPTION EXERCISES AND FISCAL YEAR-END VALUES
<CAPTION>
Value of Unexercised
Shares Number of Unexercised In-the-Money Options
Acquired Value Options at 9/30/95 at 9/30/95(2)
Name on Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James R. Porter 608,344 $2,265,151 349,736 - $957,421 -
Shane Gorman 218,500 870,329 78,500 - 197,688 -
Chad A. Schneller - - 20,000 80,000 20,000 80,000
Donald C. Wood - - 60,000 - 120,000 -
Stanley F. Marquis 92,500 381,622 99,869 - 262,246 -
<FN>
(1) A 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 "Bonus-Other" in the Summary Compensation
Table for information regarding such bonus paid in the year ended
September 30, 1995.
(2) Valuation based on the difference between the option exercise price
and the closing sales price of the Common Stock on September 29,
1995, the last trading day of the fiscal year (which was $5.75 per
share, as reported by the NASDAQ National Market System).
</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 1982
Stock Option Plan, 1990 Employee Stock Purchase 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, 1995, three non-employee directors are eligible to
participate in the Directors Plan. However, unless the Directors Plan is
amended to increase the number of shares of Common Stock reserved for
issuance under the Directors Plan and to further extend the date after which
options cannot be granted under the Directors Plan, no additional options
can be granted under the Directors Plan after May 1, 1996.
Changes to Benefit Plans
1982 Stock Option Plan. In October, 1995, the Board of Directors adopted
an amendment to the Triad Systems Corporation Amended and Restated 1982
Stock Option Plan (the "Option Plan"), subject to stockholder approval, to
increase the maximum number of shares which may be issued under the Option
Plan from 7,375,000 shares to 7,725,000 shares. The New Plan Benefits Table
sets forth options granted under the Option Plan during the fiscal year
ended September 30, 1995 to (i) the Chief Executive Officer of the
Corporation and the four other most highly compensated executive officers
of the Corporation as of September 30, 1995 whose total salary and bonus for
the year ended September 30, 1995 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. Exercises of options
under the Option Plan are made at the discretion of the participants.
Accordingly, future exercises under the Option Plan are not yet determinable.
On November 30, 1995, the closing sale price of the corporation's common
stock as reported on the NASDAQ national market system was $5.50.
NEW PLAN BENEFITS TABLE
Triad Systems Corporation
Amended and Restated
1982 Stock Option Plan
Option Exercise Price Number of
Name and Principal Position (per share) Shares
- -------------------------------- ---------------------- ---------
James R. Porter - -
President and Chief
Executive Officer
Shane Gorman - -
Executive Vice President
Automotive Operations
Chad A. Schneller - -
Vice President
Hardlines and Lumber Operations
Donald C. Wood - -
Vice President,
Information Services Division
Stanley F. Marquis - -
Vice President, Finance
Chief Financial Officer
Corporate Secretary and
Treasurer
President, Triad Systems
Financial Corporation
Executive Group From $5.00 to $5.50 40,000
Non-Executive Director Group - -
Non-Executive Officer
Employee Group From $5.00 to $5.50 131,050
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. 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,
1995.
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 1995. 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 affected 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
executive officer's compensation contingent upon the Corporation's
performance as well as the executive officer's individual level of
performance. Each executive officer's compensation package is comprised of
three elements: (i) base salary which reflects individual performance and
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 executive officer's level of responsibility increases, a
greater portion of compensation will be dependent upon the Corporation's
financial performance and stock price appreciation rather than salary base.
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 remuneration
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 executive officers identified in the summary
compensation table 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 Employee Stock
Purchase Plan will be excluded from the executive officer's remuneration
for purposes of 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 1995 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 each individual's compensation,
such as varying the 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 similarly-situated executives
at high technology companies in the Corporation's geographic area with whom
the Corporation competes to hire and retain executives (with the respective
executive officer's 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 prior
salary adjustments. The Corporation's fiscal 1994 financial performance was
also a factor in establishing base salary increases for fiscal 1995. After
taking these factors into account, base compensation was held at 1994 base
salary levels for all but two executive officers. In aggregate the base
salaries for executive officers increased 1% for fiscal 1995.
Annual Incentive Compensation
In setting annual bonus compensation, the Committee considered the
historical, aggregate executive compensation for each executive officer,
the aggregate compensation paid to similarly-situated executives at high
technology companies in the Corporation's geographic area with whom the
Corporation competes to hire and retain executives and the Corporation's
fiscal 1994 financial performance. 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 1995 were based on
percentages of base salary tied to attainment of designated achievement
targets. The Committee-approved achievement targets were based on revenue
and operating contributions at the corporate, division and segment levels,
varying by executive officer in light of the differing positions and
responsibilities of each executive officer.
Long-Term Stock-Based Incentive Compensation
Stock option 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 executive 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 generally 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, the size of comparable grants made to individuals in similar
positions in the industry, 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 previously established a policy that
executive officers of the Corporation are to 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. Hires subsequent to October 31, 1993 at the
officer level must meet the respective stock ownership level within five
years from the date of hire, based on the first full fiscal year's
compensation after hire or promotion. Eight of the current executive
officers are required to meet the stock ownership target by October 1, 1996.
As of October 1, 1995, five have already achieved the target.
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 CEOs at high technology companies in the Corporation's
geographic area, while at the same time assuring that a significant
percentage of such compensation was tied to Corporation's financial
performance and stock price appreciation.
The Committee established Mr. Porter's base salary in the same manner and
applying the same criteria that it used generally to establish the base
salaries of the other executive officers. Accordingly, in setting
Mr. Porter's base salary, the Committee considered his personal performance
for the year, changes in the general level of base salaries of CEOs at high
technology companies in the Corporation's geographic area, prior salary
adjustments and corporate performance factors.
The remaining component of Mr. Porter's 1995 fiscal year compensation
was dependent upon achieving certain corporate performance targets as
set forth in his Committee-approved bonus plan. The amount of any cash
bonus to be paid to him for the 1995 fiscal year was dependent upon the
Corporation's attainment of performance factors tied to its levels 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
Common 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, 1990 and ending on September 30, 1995,
and (ii) for the period commencing on September 30, 1985 and ending on
September 30, 1995.
(Chart here)
STOCKHOLDER RETURNS 1990-1995<F2>
Year Ended September 30, 1990 1991 1992 1993 1994 1995
- ------------------------- ------ ------ ------ ------ ------ ------
Triad Systems Corporation 100.00 175.00 293.75 262.50 231.25 287.50
S&P 500 Index 100.00 131.17 145.66 164.60 170.66 221.43
Combined Index<F1> 100.00 132.02 140.53 156.47 194.21 282.12
<F1> 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.
<F2> Assumes that $100.00 was invested on September 30, 1990 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, the Corporation'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.
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, 1995. During 1989, 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.
(Chart here)
</TABLE>
<TABLE>
STOCKHOLDER RETURNS 1985-1995(2)
<CAPTION>
Year Ended September 30, 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Triad Systems Corporation 100 112.70 169.84 190.48 273.20 115.03 201.31 339.91 301.96 266.01 330.71
S&P 500 Index 100 131.60 188.67 165.22 219.75 199.44 261.60 290.50 328.28 340.38 441.62
Combined Index(1) 100 119.97 173.34 125.34 142.87 105.99 140.66 150.55 168.96 209.28 304.05
<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, 1990 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, the Corporation'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 MAXIMUM NUMBER OF SHARES RESERVED FOR
ISSUANCE UNDER THE AMENDED AND RESTATED 1982 STOCK OPTION PLAN
General
In January 1983, the Corporation's stockholders approved the merging
of the Corporation's 1979 Nonqualified Stock Option Plan, 1981 Incentive
Option Plan and 1981 Nonqualified Stock Option Plan into the 1982 Stock
Option Plan ("Option Plan") and approved the reservation of 750,000 shares
of Common Stock for issuance thereunder. In March 1984 and February 1988,
the Corporation's stockholders approved amendments to the Corporation's
Option Plan to increase from 750,000 to 1,250,000 and then to 1,475,000 the
number of shares of the Corporation's Common Stock reserved for issuance
pursuant to exercise of options granted thereunder. As a result of the
Corporation's August 1989 recapitalization, the number of shares reserved
under the Option Plan was increased five-fold to 7,375,000. The proposed
amendment would increase the maximum number of shares reserved for issuance
pursuant to exercise of options from 7,375,000 to 7,725,000.
The Option Plan permits the issuance of "incentive stock options",
that is, options which meet the requirements of Section 422 of the Internal
Revenue Code of 1986 (the "Code") and of nonqualified stock options, that
is, options which do not meet those requirements.
Management believes the availability of additional shares for issuance
pursuant to exercise of options granted under the Option Plan is important
to attracting and retaining qualified employees essential to the success of
the Corporation. Therefore, management recommends a vote "FOR" this proposal.
Summary of the Provisions of the Option Plan
The following summary of the Option Plan, as it is proposed to be
amended, is qualified in its entirety by the specific language of the Option
Plan, a copy of which is available to any stockholder upon request.
The Option Plan is administered by the Compensation Committee of the
Board of Directors. Alternatively, it may be administered by the Board of
Directors or another committee of members of the Board of Directors
appointed by the Board. Options granted may be either nonqualified stock
options or incentive stock options.
All employees (approximately 1,453) and directors of the Corporation
and its present subsidiaries and future parent and/or subsidiary
corporations may be granted options under the Option Plan. A director
is eligible only for the grant of nonqualified stock options unless he is
also an employee of the Corporation. No employee, however, is eligible to
receive an incentive stock option if such employee owns stock possessing
more than 10% of the total combined voting power of all classes of stock of
the Corporation. In addition, the following three restrictions apply to
options granted to directors. First, no director who is not an employee
may be granted an option unless the Option Plan is being administered by a
Board of Directors of which the majority consists of persons who at the
time are not, and during the previous year were not, eligible for grants of
stock, stock options or stock appreciation rights under the Option Plan or
any other plan of the Corporation or by a committee of the Board of which
all the members are such persons. Second, no director who is appointed a
member of the committee of the Board administering the Option Plan may
receive an option. The maximum number of shares of the Corporation's Common
Stock reserved for issuance pursuant to the exercise of options granted
under the Option Plan is presently 7,375,000 and, under the proposed
amendment of the Option Plan, will be 7,725,000 shares (subject to
adjustment in the event of stock dividends, splits, reverse splits,
recapitalizations, mergers or other similar changes in the Corporation's
capital structure). All options must be granted, if at all, not later than
December 10, 2001. The fair market value of the stock for which an employee
may be granted incentive stock options in any calendar year may not exceed
$100,000 plus certain carryover amounts from prior years and/or shall
not become exercisable at a rate faster than $100,000 per calendar year.
Options granted under the Option Plan are evidenced by written
agreements specifying the number of shares covered thereby and the option
price, which shall not be less than the fair market value of the shares as
of the date of grant of the option. Separate forms of agreement are used to
grant nonqualified stock options and incentive stock options. The Board has
the power to set the time within which each option may be exercisable or
the event or events upon occurrence of which all or a portion of each
option shall be exercisable and the term of each option (which may not
exceed ten years). Unless otherwise specified by the Board of Directors,
options are exercisable in five equal annual installments, beginning one
year after the date of grant and terminating ten years from the date of
grant, except that if an optionee's employment or directorship is
terminated because of his or her death, any option held by such optionee
that has not terminated will become immediately exercisable in its entirety.
Options may be exercised by payment of the option price in cash, by
tender of shares of common stock of the Corporation having a fair market
value equal to the option price or by such other consideration as the Board
may approve at the time the option is granted. No option may be exercised
until the optionee has made adequate provision for federal and state
withholding obligations, if any, of the Corporation relating to the
exercise of the option.
During a lifetime of the optionee, an option is exercisable only by
the optionee. An option may not be transferred or assigned, except by
will or the laws of descent and distribution.
In the event an optionee ceases to be an employee of the Corporation
for any reason, except death or disability, the optionee may exercise
an option (to the extent exercisable on the date of termination of
employment), generally within three (3) months after the date of
termination of employment, but in no event later than the date of
expiration of the Option term. In the event of termination of employment
due to death or disability, an optionee (or his legal representative) may
exercise an option within twelve months after such date of termination of
employment (to the extent exercisable on that date), but in no event later
than the date of expiration of the Option term. Notwithstanding the
foregoing, options held by executive officers, directors and more than 10%
shareholders of the Corporation terminate when the optionee ceases to be
an employee or director of the Corporation.
Upon exercise of a nonqualified stock option granted prior to
November 1987, an optionee is entitled to receive a stock appreciation
right (the "SAR"), as described below, unless the SAR feature was modified
by the Board of Directors at the time the nonqualified stock option was
granted. The SAR is equal to 30% of the Option Spread. The Option Spread
is the excess of (i) the fair market value of the shares of stock for which
the option was exercised on the date the optionee recognizes taxable income
pursuant to the exercise of the nonqualified stock option over (ii) the
exercise price for such shares. The Corporation may withhold 100% of the
SAR for federal and state employment tax purposes. The SAR is payable on
the date the Option Spread is determined. On November 12, 1987 the Board of
Directors amended the Option Plan to delete the provisions granting SAR's.
The Board of Directors may terminate the Option Plan at any time,
but, without the approval of its stockholders, the Board of Directors may
not amend the Option Plan to increase the number of shares subject thereto
or to change the class of persons eligible to receive options under the
Option Plan.
Summary of Federal Income Tax Consequences of the Option Plan
The federal tax consequences of incentive stock options and
nonqualified stock options are different and are discussed separately
below. The discussion is only a summary of certain aspects of the highly
complex federal income tax rules applicable to an individual participating
in a stock option plan and does not deal with other taxes which may affect
such an individual, such as federal and state estate taxes, inheritance and
gift taxes, and foreign taxes.
Incentive Stock Options. No taxable income is recognized by the
optionee upon grant or exercise of an incentive stock option (unless the
alternative minimum tax rules apply). If Common Stock is issued to an
optionee pursuant to the exercise of an incentive stock option, and if no
disqualifying disposition of the shares is made by the optionee within two
years after the date of grant of the option or within one year after the
transfer of the shares to the optionee, then (i) upon the resale of the
shares, any amount realized in excess of the option exercise price will be
treated as long term capital gain and any loss sustained will be long term
capital loss, and (ii) no deduction will be allowed to the Corporation for
federal income tax purposes. The exercise of an incentive stock option may
result in alternative minimum tax liability for the optionee.
If Common Stock acquired upon the exercise of an incentive stock
option is disposed of before the expiration of both holding periods
described above, generally (i) the optionee will recognize ordinary income
in the year of disposition in an amount equal to the excess (if any) of
the fair market value of the shares at exercise (or, if less, the amount
realized on the disposition of the shares) over the option exercise price
paid for the shares, and (ii) the Corporation is entitled to a tax
deduction in the same amount. Any further gain or loss realized by the
optionee will be taxed as short term or long term capital gain or loss, as
the case may be, and will not result in any deduction for the Corporation.
Different rules may apply if shares are purchased by an optionee who is
also an Insider. See the discussion below under "Special Rules Applicable
to Corporate Insiders."
Nonqualified Stock Options. Except as noted below, with respect to
nonqualified stock options, (i) no income is recognized by the optionee at
the time the option is granted, (ii) generally, at exercise, ordinary
income is recognized by the optionee in an amount equal to the difference
between the option exercise price paid for the shares and the fair market
value of the shares on the date of exercise, and the Corporation is
entitled to a tax deduction in the same amount, and (iii) at disposition,
any gain or loss is treated as capital gain or loss. However, different
rules may apply if restricted stock is purchased or if shares are purchased
by an optionee who is also an Insider. See the discussion below under
"Special Rules Applicable to Corporate Insiders."
Special Rules Applicable to Corporate Insiders. Generally, "Insiders"
(i.e., persons who are subject to Section 16 of the Securities Exchange
Act of 1934) may have their recognition of compensation income and the
beginning of their capital gains holding period deferred until a date that
is up to six months after the option exercise date (the "Deferral Date").
The excess of the fair market value of the stock determined as of the
Deferral Date over the purchase price will be taxed as ordinary income,
and the tax holding period for any subsequent gain or loss will begin on
the Deferral Date. However, an Insider who so elects under Internal
Revenue Code section 83(b) on a timely basis may instead be taxed on the
difference between the excess of the fair market value on the date of
option exercise over the purchase price, with the tax holding period
beginning on such date. Similar rules apply for alternative minimum tax
purposes with respect to the exercise of an incentive stock option by an
Insider.
Vote Required and Board of Directors' Recommendation
The Board believes that the amendment of the Option 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 OPTION PLAN TO INCREASE THE MAXIMUM
NUMBER OF SHARES RESERVED FOR ISSUANCE PURSUANT TO EXERCISE OF OPTIONS
FROM 7,375,000 TO 7,725,000.
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 1996. 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 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. 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, 1996.
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 7, 1996, and must satisfy the conditions
established by the Securities and Exchange Commission for stockholder
proposals to be included in the Corporation's 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
STANLEY F. MARQUIS
Secretary
January 5, 1996
A COPY OF THE CORPORATION'S FORM 10-K REPORT FOR FISCAL YEAR 1995,
CONTAINING INFORMATION ON OPERATIONS, FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, IS INCLUDED IN THIS BOOKLET AS APPENDIX A
HERETO, BEGINNING ON THE NEXT PAGE. TO OBTAIN ADDITIONAL COPIES,
PLEASE WRITE TO:
Investor Relations Department
Triad Systems Corporation
3055 Triad Drive
Livermore, California 94550
The following Form 10-K is Appendix A
</TABLE>
