THIS RE-SUBMISSION IS TO CORRECT PRE 14A TO DEF 14A
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders (the "Annual Meeting") of National
Data Corporation, a Delaware corporation (the "Company"), will beheld
at the Company's offices at National Data Plaza, Atlanta, Georgia, on
November 17, 1994, at 11:00 A.M., Atlanta time, for the following
purposes:
1. To elect two directors in Class II to serve until the annual
meeting of stockholders in 1997, or in the case of each
director, until his successor is duly elected and qualified;
2. To vote on a proposal to amend the National Data Corporation
1981 Employee Stock Purchase Plan to increase the number of
shares that may be issued thereunder from 600,000 to 900,000.
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
Only stockholders of record at the close of business on September 19,
1994 are entitled to notice of, and to vote at, the Annual Meeting.
The transfer books will not be closed. A complete list of
stockholders entitled to vote at the Annual Meeting will be available
for inspection by stockholders at the offices of the Company during
the ten days prior to the Annual Meeting.
By Order of the Board of Directors
E. MICHAEL INGRAM, Secretary
Dated: September 20, 1994
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING IN
PERSON, PLEASE VOTE, SIGN, DATE, AND RETURN THE ENCLOSED PROXY
PROMPTLY IN THE ENCLOSED BUSINESS REPLY ENVELOPE. IF YOU DO ATTEND
THE MEETING, YOU MAY, IF YOU WISH, WITHDRAW YOUR PROXY AND VOTE IN
PERSON.
<PAGE>
NATIONAL DATA CORPORATION
PROXY STATEMENT
ANNUAL MEETING - NOVEMBER 17, 1994
The enclosed proxy is solicited by the Board of Directors of National
Data Corporation (the "Company") for use at the Annual Meeting of
Stockholders (the "Annual Meeting") of the Company to be held on
November 17, 1994, and at any adjournments thereof. The enclosed
proxy is revocable at any time before its exercise at the Annual
Meeting by (i) written notice to the Secretary of the Company, (ii)
properly submitting to the Company a duly executed proxy bearing a
later date, or (iii) attending the Annual Meeting and voting in
person.
This Proxy Statement is being mailed by the Company to its
stockholders on or about September 21, 1994. The Company's Annual
Report to Stockholders for the fiscal year ended May 31, 1994,
including financial statements, is being sent to
the stockholders with this Proxy Statement.
Only holders of record of the Company's Common Stock, par value $.125
per share (the "Common Stock"), as of the close of the business on
September 19, 1994 (the "Record Date") are entitled to notice of, and
to vote at, the Annual Meeting. As of the Record Date the Company had
12,697,018 shares of Common Stock outstanding and entitled to be
voted at the Annual Meeting. A stockholder is entitled to one vote
for each share of Common Stock held.
1. ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three classes,
with the term of office of each class ending in successive years. The
terms of directors of Class II expire with this Annual Meeting. The
directors in Class III and Class I expire at the 1995 and 1996
annual meetings of stockholders. The stockholders are being asked to
vote on the election to Class II of Messrs. Edward L. Barlow and Neil
Williams, both of whom are currently Class II directors.
Each Class II director will be elected to hold office until the 1997
annual meeting of stockholders and thereafter until his successor has
been duly elected and qualified. The persons named in the enclosed
proxy intend to vote the shares represented thereby in favor of the
election to the Board of each of the two Class II nominees whose
names appear below, unless authority to vote for either or both of
the nominees is withheld or such proxy has previously been revoked.
It is anticipated that management stockholders of the Company will
grant authority to vote for the election of both nominees. In the
event that either nominee is unable to serve (which is not
anticipated), the persons designated as proxies will cast votes for
the remaining nominee and for such
other persons as they may select.
The affirmative vote of the holders of a majority of the shares of
Common Stock represented and entitled to vote at the Annual Meeting
at which a quorum is present is required for the election of the
nominees. With respect to abstentions, the shares are considered
present at the meeting, but since they are not affirmative votes,
they will have the same effect as votes against the proposal. With
respect to broker non-votes, the shares are not considered present at
the meeting for the particular proposal for which the broker withheld
authority.
The Board of Directors recommends that stockholders check "Authority
Granted" to vote for the election of both of the nominees. If a
choice is specified on the proxy by the stockholder, the shares will
be voted as specified. If no specification is made, the shares will
be voted "FOR" both of the nominees.
Certain Information Concerning Nominees and Directors
The following table sets forth the names of the nominees and the
directors continuing in office, their ages, the month and year in
which they first became directors of the Company, their positions
with the Company, their principal occupations and employers for at
least the past five years, and any other directorships held by them
in companies that are subject to the reporting requirements of the
Securities Exchange Act of 1934 or any company registered as an
investment company under the Investment Company Act of 1940. For
information concerning membership on committees of the Board, see
"Other Information About the Board and its Committees" below.
Month and Positions with the Company,
Year First Principal Occupations During
Became a at Least Past Five Years,
Name and Age Director and Other Directorships
NOMINEES FOR DIRECTOR
Class II
For Three-Year Term Expiring Annual Meeting 1997
Edward L. Barlow January 1969 Director of the Company
(59) General Partner, Whitcom
Partners
(an investment partnership), New
York.
Neil Williams April 1977 Director of the Company
(58) Managing Partner, Alston & Bird
(Attorneys and Counsel
for the Company), Atlanta.
MEMBERS OF THE BOARD OF DIRECTORS
CONTINUING IN OFFICE
Class III
Term Expiring Annual Meeting 1995
Don W. Sands September 1989 Director of the Company
(68) Chairman, Georgia World Congress
Center, Atlanta (since 1993);
Chief Executive
Officer Emeritus and Counselor
to the Board of Directors
of Gold Kist Inc. (a diversified
agricultural co-operative
association), Atlanta
(since November 1991);
President, Chief Executive
Officer, and Chairman of the
Management Executive
Committee of Gold Kist Inc.
(1988-1991)
Director of Golden Poultry Co.
Ira C. Herbert July 1990 Director of the Company
Retired
Former President, Coca-Cola
North America and
other executive positions, The
Coca-Cola
Company, Atlanta (1965-1992).
Class I
Term Expiring Annual Meeting 1996
Robert A. Yellowlees April 1985 Chairman of the Board (since
June 1992) and
(55) Chief Executive Officer and
President and
Chief Opeating Officer (since
May 1992)
of the Company
Various management and executive
positions
with International Business
Machines
Corporation (1960-1982);
Chairman,
Spectrum Research Group, Inc.
(consultants on the
management of technology),
Atlanta
Director of John H. Harland Co.
James B. Edwards January 1989 Director of the Company
(67) President, The Medical
University of South
Carolina
Director of Phillips Petroleum
Company;
Brendle's, Inc.; SCANA
Corporation;
Chemical Waste Management, Inc.;
Imo Industries, Inc.; and
Communications Satellite
Corporation.
Other Information About the Board and Its Committees
Meetings and Compensation. During the fiscal year ended May 31, 1994,
the Company's Board of Directors held 14 meetings. The Company's
policy regarding the compensation of directors is to pay directors
who are not also employees of the Company $2,000 per month plus
$1,000 per meeting attended. Each member of the Audit and
Compensation Committees receives $1,000 per Audit or Compensation
Committee meeting attended in addition to his other compensation
as a director.
Non-employee directors are also eligible for certain retirement
benefits. Upon reaching retirement age (70 years of age), each
non-employee director with five or more years of service to the
Company as a director will receive a retirement benefit which will
generally continue annually thereafter for the lesser of (i) the
number of years equal to the number of years the individual served as
a director or (ii) ten years. In the case of non-employee directors
with greater than ten years service as a director on the effective
date of the retirement plan (December 18, 1991), however, the
retirement benefit will continue for fifteen years. The retirement
benefit will be calculated from a base amount equal to the annual
retainer for non-employee directors in effect on the date of a
director's retirement. The retired director would receive as the
retirement benefit 50% of the base amount plus 10% for each year of
service up to 100% of the base amount for ten years' service. As of
September 19, 1994, Messrs. Barlow, Williams, Edwards, Sands and
Herbert had 25-8/12, 17-5/12, 5-8/12, 5 and 4-2/12 years of service
as directors for purposes of the Directors Retirement Plan. In the
event of a change in control of the Company, each non-employee
director will be deemed to have completed 10 years of service as a
director and will be paid the retirement benefit if his service as a
director of the Company is terminated, with his benefit commencing
upon his termination as a director.
The Company also maintains the 1984 Non-Employee Directors Stock
Option Plan (the "Directors Plan"), which was approved by the
stockholders in 1984 and amended by the stockholders in 1989. The
Directors Plan currently provides that non-employee directors may be
granted options for up to a total of 230,000 shares of Common Stock
under the Directors Plan; that each eligible director may receive up
to five options to purchase 5,000 shares, one for each year of
service as a director; and that each newly elected director be
granted an option to acquire 5,000 shares after the first annual
meeting of stockholders following such director's election. Options
granted under the Directors Plan are exercisable immediately at a
price equal to the fair market value (as defined in the Directors
Plan) of Common Stock at the date of the grant.
During the 1994 fiscal year (which ended on May 31, 1994), options
for 25,000 shares of Common Stock were granted under the Directors
Plan to non-employee directors at a purchase price per share of
$16.25. In the 1994 fiscal year, no options were exercised under the
Directors Plan.
Committees. The Company's Board of Directors has an Audit Committee,
a Stock Option Committee and a Compensation Committee. The Company
does not have a nominating committee. The full Board of Directors
performs the function which would be performed by a nominating
committee. Certain information regarding the functions of the Board's
Committees and their present membership is provided below.
Audit Committee. The Company's Board of Directors has an Audit
Committee composed of Messrs. Barlow (Chairman), Sands and Williams.
The Audit Committee annually reviews and recommends to the Board the
firm to be engaged as independent auditors for the next fiscal year,
reviews with the independent auditors the plan and results of the
auditing engagement, reviews the scope and results of the Company's
procedures for internal auditing, and inquires as to the adequacy of
the Company's internal accounting controls. During the fiscal year
ended May 31, 1994, the Audit Committee held three meetings, each of
which was separate from regular Board meetings.
Stock Option Committee. The Board of Directors has a Stock Option
Committee composed of Messrs. Edwards, Herbert (Chairman) and Sands
to administer the Company's 1982 Incentive Stock Option Plan, the
Company's 1983 Restricted Stock Plan, and the Company's 1987 Stock
Option Plan. During the fiscal year ended May 31, 1994, the Stock
Option Committee held seven meetings, each of which was held at
regular Board meetings.
Compensation Committee Interlocks and Insider Participation. The
Board of Directors also has a Compensation Committee composed of
Messrs. Edwards and Herbert (Chairman). This Committee reviews and
recommends to the Board levels of compensation for the Company's
executive officers. During the fiscal year ended May 31, 1994, the
Compensation Committee held six meetings, all of which were separate
from regular Board meetings. Neither of the members of the
Compensation Committee served as an officer or an employee of the
Company during the fiscal year ended May 31, 1994.
Common Stock Ownership of Management
The following table sets forth information as of September 19, 1994
with respect to the beneficial ownership of Common Stock by the
directors of the Company, by each of the executive officers named in
the Summary Compensation Table on page 9, and by the 15 persons, as
a group, who were directors and/or executive officers of the Company
on September 19, 1994.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name Beneficial Ownership <F1> Class <F1>
<S> <C> <C> <C>
Edward L. Barlow 75,000 <F2> *
Neil Williams 50,890 <F3> *
Robert A. Yellowlees 291,431 <F4> 2.3%
James B. Edwards 25,300 <F5> *
Don W. Sands 32,500 <F6> *
Ira C. Herbert 20,000 <F7> *
J. David Lyons 0 -
James R. Henderson 9,250 <F8> *
Jerry W. Braxt 18,496 <F9> *
Kevin C. Shea 36,005 <F10> *
All Directors and
Executive Officers
(15 persons) as a Group 593,336 <F11> 4.5%
*Less than one percent.
<FN>
<F1> The amounts and percentages of Common Stock beneficially owned
are reported on the basis of regulations of the Securities and
Exchange Commission governing the determination of beneficial
ownership of securities. The beneficial owner has both voting
and investment power over the shares, unless otherwise
indicated.
<F2> This amount includes 40,000 shares of Common Stock of which Mr.
Barlow has the right to acquire beneficial ownership.
<F3> This amount includes 40,000 shares of Common Stock of which Mr.
Williams has the right to acquire beneficial ownership.
<F4> This amount includes 153,000 shares of Common Stock of which Mr.
Yellowlees has the right to acquire beneficial ownership, 62,333
shares of restricted stock over which he currently has sole
voting power only and 1,893 shares held by Mr. Yellowlees' wife
as to which he disclaims all beneficial ownership.
<F5> This amount includes 25,000 shares of Common Stock of which Mr.
Edwards has the right to acquire beneficial ownership.
<F6> This amount includes 25,000 shares of Common Stock of which Mr.
Sands has the right to acquire beneficial ownership.
<F7> This amount consists of 20,000 shares of Common Stock of which
Mr. Herbert has the right to acquire beneficial ownership.
<F8> This amount consists of 6,250 shares of Common Stock of which
Mr. Henderson has the right to acquire beneficial ownership and
3,000 shares of restricted stock over which he currently has
sole voting power only.
<F9> This amount includes 13,500 shares of Common Stock of which Mr.
Braxton has the right to acquire beneficial ownershipand 3,000
shares of restricted stock over which he currently has sole
voting power only.
<F10> This amount includes 28,417 shares of Common Stock of which
Mr. Shea has the right to acquire beneficial ownership and
3,000 shares of restricted stock over which he currently
has sole voting power only.
<F11> This amount includes 372,253 shares of Common Stock of
which the directors and executive officers, as a group,
have the right to acquire beneficial ownership and 77,833
shares of restricted stock over which the beneficial owners
have sole voting power only.
</FN>
</TABLE>
Common Stock Ownership by Certain Other Persons
The following table sets forth information as of the date indicated
with respect to the only persons who are known by the Company to be
the beneficial owners of more than 5% of the outstanding shares of
Common Stock.
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent
of Beneficial Owner Date of Beneficial Ownership of Class
<S> <C> <C> <C>
Joseph L. Harrosh <F1> April 8, 1994 817,100 6.8%
40900 Grimmer Blvd.
Fremont, CA 94538
Montgomery Asset <F2> February 11, 1994 787,482 6.4%
Management, L.P.
600 Montgomery Street
San Francisco, CA 94111
<FN>
<F1> This information is contained in an amendment dated April 18,
1994, to a Schedule 13D originally dated October 14, 1992 filed
by Mr. Harrosh with the Securities and Exchange Commission,
copies of which were received by the Company. Such Schedule 13D,
as amended, states that the reporting person has sole
dispositive and voting power with respect to all such shares.
<F2> This information is contained in a Schedule 13G dated February
11, 1994 filed by Montgomery Asset Management, L.P. with the
Securities and Exchange Commission, a copy of which was received
by the Company. Such Schedule 13G states that Montgomery Asset
Management has sole voting and dispositive power with respect to
all such shares.
</FN>
</TABLE>
Report of the Compensation and Stock Option Committees
Decisions on compensation of the Company's executive officers
generally are made by the two-member Compensation Committee of the
Board. Decisions on the stock-based plans are made by the
three-member Stock Option Committee. All decisions by the
Compensation Committee relating to the compensation of the Company's
executive officers are reviewed by the full Board. Decisions of the
Stock Option Committee are made solely by that committee in order for
awards or grants under the Company's equity-based plans to satisfy
Rule 16b-3 pursuant to the Securities Exchange Act of 1934, as
amended.
The Company's primary objective in designing and implementing its
compensation programs is to maximize stockholder value over time
through alignment of employee compensation with this objective. To
accomplish this objective, the Company has adopted a comprehensive
business strategy. The overall goal of the Compensation and Stock
Option Committees is to develop executive compensation policies and
equity-based programs which are consistent with and linked to the
Company's strategic and annual business objectives.
Compensation Philosophy
The Compensation and Stock Option Committees have adopted certain
principles which they apply in structuring the compensation
opportunity for executive officers. These are:
Long Term and At-Risk Focus. A significant percentage of total
compensation for executive officers should be composed of long term,
at-risk rewards to focus senior management on the long term interests
of stockholders. Equity-based plans should comprise a major part of
the long term, at-risk portion of total compensation to encourage
stockholder value-based management decisions, and to link
compensation to Company performance and stockholder interests.
Short Term and At Risk Focus. A significant portion of cash
compensation for executives is linked to achievement of the annual
business plan. This includes cash bonuses that may be approved by the
Compensation Committee relating to those objectives. There is real
risk in bonuses paid under this plan, recognizing variability in
individual, unit and overall company performance.
Competitiveness. Base pay and total compensation should be
competitive with other similar companies based upon size, products
and markets. A proxy survey of peer group companies is conducted
periodically. The peer group surveyed is a subset of the companies
contained in the Standard and Poor's Computer Software and Services
Index used in the stockholder return analysis shown later.
Stock Option Awards and Restricted Stock Grants
Equity-based compensation comprises a significant portion of the
Company's executive officer compensation programs. These plans are
administered solely by the Stock Option Committee. There are two
Company plans utilized for this component of executive officer, long
term, equity-oriented compensation. These involve Stock Options and
Restricted Stock grants:
Stock Options. Options provide executive officers with the
opportunity to achieve an equity interest in the Company. Stock
options are granted at 100% of fair market value on the date of grant
and have 10-year terms. In the past, stock options generally became
exercisable in one-fourth increments annually beginning one year
after grant. Effective with grants after May 31, 1994, the Stock
Option Committee adopted an extended vesting schedule under which
options vest 20% two years after the date of grant, an additional 25%
after three years, an additional 25% after four years, and the
remaining 30% after five years. The objective of this change was to
further emphasize a long term focus by executive officers in the
acquisition and holding of Common Stock. The number of stock options
granted to an individual is based upon the responsibility level of
the individual's position, the individual's potential and current
per-formance and external competitive conditions, with an objective
of fostering broad-based equity participation. Annual grant amounts
vary as a result of the individual's prior year and potential future
performance and the number of options required to achieve target
grant values based on the prevailing fair market value of the Common
Stock.
Restricted Stock. Restricted stock grants are designed to further
focus executive officers on the longer term performance of the
Company. Grants of restricted shares are subject to forfeiture if an
executive officer, among other conditions, fails to perform or leaves
the Company prior to expiration of the restricted period. Restricted
periods are generally from two to three years.
New Target Stock Ownership Plan
The Company's Board of Directors and management believe that
significant stock ownership is a major incentive in building
stockholder value and aligning the interests of executives and
stockholders. The Board has therefore recently adopted guidelines for
minimum stock ownership by senior executives.
To encourage this growth in stockholder wealth, the Company believes
that senior executives who are in a position to make a significant
contribution to the long term success of the Company should have a
significant stake in its ongoing success. Guidelines are based upon
a multiple of base salary and range from .8 to 3 times annual salary
amounts. Executives are encouraged to achieve these guidelines by
building stock ownership over a period of approximately five years.
Chief Executive Officer's Compensation
Mr. Yellowlees' fiscal year 1994 compensation derived primarily from
commitments under Mr. Yellowlees' employment agreement (see
"Employment Agreements -Robert A. Yellowlees" below) entered into
prior to fiscal year 1994. The only decisions affecting compensation
made after that date related to Mr. Yellowlees' fiscal year 1994
incentive bonus payment, and grants of stock options and restricted
stock.
Mr. Yellowlees' target annual bonus was set in his employment
agreement, based upon non-specific quantitative and qualitative
performance. In deciding upon Mr. Yellowlees' fiscal year 1994 bonus
payment, the factors given the greatest weight were the Company's 31%
improvement from year to year in earnings per share, 22% improvement
in productivity (as measured by comparative gross margins), 16%
increase in market valuation, and the reversal of negative revenue
trends. In addition, the Compensation Committee recognized the
progress made in developing strategies and focusing the Company's
energies in areas designed to produce sustained future growth.
Mr. Yellowlees' base salary was established in May 1992, when he
accepted the positions of chairman and chief executive officer, and
president and chief operating officer. It was based upon the
Company's previous history for compensation of the executives that
he succeeded, as well as information gathered regarding base salaries
of comparable executives at other companies in the Company's
industry. Effective June 1, 1993, Mr. Yellowlees received a base
compensation increase of 10%. This increase was based upon the
Compensation Committee's evaluation of Mr. Yellowlees' performance
regarding revenue and profit results for fiscal year 1993, and
achievements in repositioning the Company. During a six month period
beginning March 1994, Mr. Yellowlees waived 10% of his base
compensation in recognition of the need to set a leadership example
in the continuing effort to reduce expenses.
The Compensation Committee's general approach in setting Mr.
Yellowlees' target annual compensation is to seek to be competitive
with other companies in the Company's industry, but to have a large
percentage of his target compensation based upon current year
performance as well as actions to provide sustained long term growth
in stockholder value. To accomplish this a mix of cash and stock
options are provided to Mr. Yellowlees, which include a significant
element of risk that is based upon the Company's performance. In
accordance with this general approach, and in recognition of Mr.
Yellowlees' performance regarding revenue and profit results in
fiscal year 1993, the Stock Option Committee awarded Mr. Yellowlees
26,000 shares of restricted stock and granted him options to purchase
116,000 shares of Common Stock.
In May 1994, the Compensation Committee recommended, and the full
Board of Directors initiated action, to extend Mr. Yellowlees'
employment agreement for a term of three years from the expiration of
his existing agreement. See "Employment Agreements" below. The
decision to renew Mr. Yellowlees' employment agreement was based on
several factors. Included among the considerations were the progress
made in developing a new strategy for the Company focusing on revenue
growth and productivity improvements, as well as the Company's
financial and market valuation performance during the first two years
of Mr. Yellowlees' tenure and the outlook for continuation of these
trends. Also considered was the requirement in Mr. Yellowlees'
existing agreement that its renewal be negotiated by the end of the
second year of the current agreement. The Compensation Committee
believes that it is in the best interests of the Company's
stockholders to ensure the retention of Mr. Yellowlees for this
renewal term.
COMPENSATION COMMITTEE
James B. Edwards
Ira C. Herbert
STOCK OPTION COMMITTEE
James B. Edwards
Ira C. Herbert
Don W. Sands
Compensation and Other Benefits
The following table presents certain summary information concerning
compensation paid or accrued by the Company for services rendered in
all capacities during the fiscal years ended May 31, 1994 ("1994
fiscal year"), 1993 ("1993 fiscal year") and 1992 ("1992 fiscal
year"), for (i) the Chief Executive Officer of the Company; and (ii)
each of the four other most highly compensated executive officers of
the Company (determined as of the end of the last fiscal year) whose
total annual salary and bonus exceeded $100,000 (collectively, the
"Named Executive Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards
Restricted Stock All Other
Name and Fiscal Award(s) Options Compensation
Principal Position Year<F1> Salary ($) Bonus ($) ($)<F2> (#)<F3> ($)<F4>
<S> <C> <C> <C> <C> <C> <C>
Robert A. Yellowlees 1994 $427,806 $175,000 $396,500 116,000 $66,488
Chairman and Chief 1993 399,557 95,000 1,259,250 138,000 57,131
Executive Officer and 1992<F5> - - - 90,000 -
President and Chief
Operating Officer
J. David Lyons 1994 168,635 55,917<F6> - 25,000 1,440
Executive Vice 1993<F7> - - - - -
President, 1992<F7> - - - - -
Marketing & Sales
James R. Henderson 1994 185,000 19,500 45,750 13,000 1,114
Executive Vice 1993 131,032 45,000 - 25,000 310
President, Health Care 1992<F8> - - - - -
Application Systems
and Services
Jerry W. Braxton 1994 158,077 20,000 45,750 10,000 5,321
Executive Vice 1993 145,976 40,000 - 12,000 834
President and Chief 1992<F9> 62,293 - - 15,000 -
Financial Officer
Kevin C. Shea 1994 144,200 19,000 45,750 10,000 488
Executive Vice 1993 141,741 40,000 - 18,667 1,027
President, Retail 1992 134,178 - - 15,000 -
Applications Systems
and Services
<FN>
<F1> In accordance with the transitional provisions applicable to the
revised rules on executive officers and director compensation
disclosure adopted by the Securities and Exchange Commission,
amounts of Other Annual Compensation and All Other Compensation
are excluded for the Company's 1992 fiscal year.
<F2> All awards of restricted shares to the Named Executive Officers
have been made under the National Data Corporation 1983
Restricted Stock Plan and are valued in the table based upon the
closing market prices of the Common Stock on the grant dates.
Grantees have the right to vote and dividends are payable to the
grantees with respect to all awards of restricted shares
reported in this column. As of May 31, 1994, the shares listed
in the table were the only outstanding grants of restricted
shares. The restrictions on 36,334 and 36,333 shares awarded to
Mr. Yellowlees expired on June 1, 1993, and June 1, 1994,
respectively, and the restrictions on 36,333 and 26,000 shares
will expire on June 1, 1995 and May 17, 1995, respectively. The
restrictions on the awards to Messrs. Henderson, Braxton and
Shea all expire on June 27, 1995. The value of the restricted
stock held by the Named Executive Officers at May 31, 1994
was $1,652,656, $50,250, $50,250 and $50,250 for Messrs.
Yellowlees, Henderson, Braxton and Shea, respectively. The
numbers of shares of restricted stock held by Messrs.
Yellowlees, Henderson, Braxton and Shea at May 31, 1994 were
98,666, 3,000, 3,000, and 3,000, respectively.
<F3> All option awards granted to the Named Executive Officers were
made under the National Data Corporation 1987 Stock Option Plan.
<F4> For the 1994 fiscal year, includes for each of the indicated
individuals the following amounts representing (i) Company
contributions to the Company's Employee Savings Plan: Mr.
Yellowlees - $4,500 and Mr. Braxton - $4,422 and (ii) insurance
premiums paid by the Company for term life insurance policies
for the benefit of the Named Executive Officer: Mr. Yellowlees
- $61,988; Mr. Lyons - $1,440; Mr. Henderson - $1,114; Mr.
Braxton - $899 and Mr. Shea - $488.
<F5> Mr. Yellowlees became an executive officer in May 1992.
<F6> Mr. Lyons received $47,917 of his bonus amount as a one-time
award made pursuant to the terms of his initial employment
arrangements.
<F7> Mr. Lyons became an executive officer in June 1993.
<F8> Mr. Henderson became an executive officer in September 1992.
<F9> Mr. Braxton became an executive officer in January 1992.
</FN>
</TABLE>
Option Grants. The following table sets forth information on options
granted to the Named Executive Officers in the 1994 fiscal year.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in or Base Expiration Grant Date
Name Granted (#)<F1><F2>) Fiscal Year Price ($/Sh) Date Present Value ($)<F3>
<S> <C> <C> <C> <C> <C>
Robert A. Yellowlees 116,000 24.0% $14.50 6/01/03 $800,400
J. David Lyons 25,000 5.2% 15.25 6/24/03 181,500
James R. Henderson 13,000 2.7% 14.50 6/01/03 89,700
Jerry W. Braxton 10,000 2.1% 14.50 6/01/03 69,000
Kevin C. Shea 10,000 2.1% 14.50 6/01/03 69,000
<FN>
<F1> The total number of shares covered by options granted to employees in
the 1994 fiscal year was 484,900.
<F2> These options were granted under the Company's 1987 Stock Option
Plan. The option agreements governing these grants provide that
during each of the three successive twelve-month periods of continued
employment commencing on the grant date, the option becomes
exercisable as to cumulative amounts equal to one-third of the total
shares covered by such option grant. Pursuant to the 1987 Stock
Option Plan, the Stock Option Committee of the Company's Board of
Directors at any time before the termination of an option may
accelerate the time or times at which such option may be exercised,
in whole or in part.
<F3> These grant date values, based on the Black-Scholes option pricing
model, are for illustrative purposes only, and are not intended to be
a forecast of what future performance will be. The values are based
upon the following assumptions: (i) an expected stock price
volatility of 0.48%; (ii) a risk-free rate of return of 6.15%; (iii)
a current dividend yield of 2.7%; and (iv) a term of grant of 10
years.
</FN>
</TABLE>
Option Exercises and Fiscal Year-End Values. The following table sets
forth information on the number and value of unexercised options held by
the Named Executive Officers as of May 31, 1994. None of the Named
Executive Officers exercised options during the fiscal year ended May 31,
1994.
<TABLE>
<CAPTION>
FY-End Option Values
Number of Securities
Underlying Unexercised Value of Unexercised
Options In-the-Money Options
at Fiscal Year-End (#) at Fiscal Year-End ($)
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Robert A. Yellowlees 153,000 215,000 $966,375 $951,750
J. David Lyons 0 25,000 0 37,500
James R. Henderson 6,250 31,750 54,688 193,312
Jerry W. Braxton 13,500 23,500 63,000 85,500
Kevin C. Shea 28,417 28,250 168,752 125,500
</TABLE>
Retirement Plan. The Company maintains the National Data Corporation
Employees' Retirement Plan (the "Retirement Plan"), which provides monthly
benefits upon retirement to eligible employees, including officers. Most
employees become participants in the Retirement Plan after meeting certain
minimal eligibility requirements. The benefits provided upon normal
retirement at age 65 are equal to the sum of (i) a basic benefit based
solely on the number of the employee's completed years of continuous
service at his normal retirement date and (ii) a supplemental benefit
calculated under a formula based on years of continuous service and the
employee's average earnings during the five years of highest compensation
during the ten years preceding his retirement, reduced by an amount equal
to 75% of the primary social security benefits to which the employee is
entitled. The term "earnings" for purposes of the Retirement Plan means
compensation of any kind paid by the Company to the participating employee
as reported on Internal Revenue Service Form W-2, but excluding the cost
of certain employee benefits (as defined) and excluding amounts which
become taxable to the employee under a stock option or other stock plan.
The Retirement Plan covers all eligible employees retiring after its
effective date. The following table shows estimated annual retirement
benefits payable to participants in the Retirement Plan on a straight life
annuity basis upon retirement in specified years of continuous service and
remuneration classes. The annual benefit amounts have been computed by
multiplying the monthly benefit payable under the Retirement Plan by 12.
<TABLE>
<CAPTION>
Highest Estimated Annual Retirement Benefits
Five-Year Average Years of Continuous Service <F1>
Annual Earnings 15 20 25 30 35
<C> <C> <C> <C> <C> <C>
$144,000 $33,120 $44,160 $ 55,200 $ 66,240 $ 77,280
192,000 43,620 58,560 73,200 87,840 102,480
240,000 54,720 72,960 91,200 109,440 127,680
288,000 65,520 87,360 109,200 131,040 152,880
336,000 76,320 101,760 127,200 152,640 178,080
384,000 87,120 116,160 145,200 174,280 203,280
432,000 97,920 130,560 163,200 195,480 228,480
480,000 108,720 144,960 181,200 217,440 253,680
<FN>
<F1> The average annual earnings for the highest five years over the last
10-year period and the eligible years of credited service as of May
31, 1994 for each of the Named Executive Officers was as follows: Mr.
Yellowlees (2 years) $548,682; Mr. Lyons (1 year) $224,552; Mr.
Henderson (1-9/12 years) $190,266; Mr. Braxton (2-4/12 years)
$142,115; Mr. Shea (7-2/12 years) $159,706. The amounts shown in the
column "Salary" in the Summary Compensation Table above are
substantially equal to the compensation of the individuals named in
such table for purposes of the Retirement Plan.
</FN>
</TABLE>
The amounts shown in the foregoing table are subject to reduction by an
amount equal to a portion of the Social Security benefits payable to
participants. Also, under current law the retirement benefit for an
employee at age 65 cannot exceed $112,221 per year.
Employment Agreements.
Robert A. Yellowlees. The Company entered into an employment agreement
with Robert A. Yellowlees, effective as of May 18, 1992, providing for his
employment as Chief Executive Officer for a term continuing through May
17, 1995. The agreement also provides that Mr. Yellowlees will serve as
Chairman of the Board and that during the term of the agreement the
Company will use its best efforts to cause him to be nominated and elected
as a director of the Company.
The agreement provides for a minimum annual base salary of $395,000,
subject to yearly review, and additional annual bonus targets equal to Mr.
Yellowlees' base salary for each year for which the bonus is to be paid.
The actual bonus paid for any year may range from none to 150% of the
target amount and will be based upon qualitative and quantitative
standards agreed upon by Mr. Yellowlees and the Company, upon
recommendation by the Compensation Committee of the Board of Directors and
approval by the Board. The bonus will be paid, at Mr. Yellowlees'
election, in whole or in part, in shares of Common Stock. Mr. Yellowlees
is also entitled to participate in all other benefit plans maintained by
the Company for executive officers, and his years of service as a director
while an employee will be included in his years of service for purposes of
determination of eligibility for benefits under and computation of the
amount of benefits payable under the Retirement Plan for Non-Employee
Directors described above. See "Retirement Plan for Non-Employee
Directors." In addition, the Company is required to maintain on behalf of
Mr. Yellowlees, or reimburse Mr. Yellowlees for the premiums paid for,
specified life insurance and additional disability insurance coverage,
with the Company's payments not to exceed $55,000 per year.
Pursuant to the agreement, Mr. Yellowlees was granted an initial option
for 90,000 shares of Common Stock at an option price of $9.25 per share
under the Company's 1987 Stock Option Plan and was awarded 109,000 shares
of Common Stock as Restricted Stock under the Company's 1983 Restricted
Stock Plan. Of the shares of Restricted Stock, 36,334 were released from
escrow on June 1, 1993, 36,333 were released from escrow June 1, 1994 and
the remainder will be released from escrow on June 1, 1995.
Upon termination of the agreement prior to expiration of its term (i) as
a result of Mr. Yellowlees' physical or mental incapacity, (ii) by the
Company other than as a result of specified misconduct by Mr. Yellowlees,
or (iii) by Mr. Yellowlees following a significant change in his
employment duties or conditions within three years after a change in
control of the Company, (a) the Company will be required to pay Mr.
Yellowlees a severance benefit equal to three times the greater of (A) his
average annual compensation during the preceding three years or (B) his
current year compensation plus a bonus amount equal to 75% of his current
year salary, (b) the Restricted Stock awarded to him will be fully and
immediately vested, (c) all stock options held by Mr. Yellowlees will be
fully and immediately vested, and (d) the Company will pay Mr. Yellowlees
75% of the target amount of the bonus for the fiscal year in which his
employment was terminated. For purposes of this provision of the
agreement, Mr. Yellowlees' average annual compensation is currently
$548,682. Also, upon termination of the agreement by the Company than as
a result of specified misconduct by Mr. Yellowlees or by Mr. Yellowlees
following a significant change in his employment duties or conditions with
years after a change in control of the Company, the Company is required to
maintain Mr. Yellowlees' participation in existing employee benefit plans
until the earlier of three years after his termination of employment or
commencement of his full-time employment with a new employer.
The Company, during fiscal year 1994, entered into a first renewal
employment agreement with Mr. Yellowlees, as contemplated in the initial
employment agreement described above. The three-year renewal agreement
will become effective as of May 18, 1995, and is essentially identical to
the original employment agreement, except as follows. The renewal
agreement provides for a minimum annual base salary of $470,000 which is
subject to review by the Board on or about May 18, 1995. Under the renewal
agreement, the Company has agreed to grant an additional 300,000 share
non-qualified stock option for the three period of the renewal agreement
in lieu of three separate grants. The grant contains a premium grant price
feature that provides added incentive to increase stockholder value. The
option agreement will include the following provisions:
(A) One-third of the shares subject to the option will have an
exercise price equal to the closing price of the Common Stock on
the date the grant is formally approved by the Board,
contemplated to be May/June of 1995, but not less than $15.00
per share. The shares subject to this grant will vest as
follows: 20% on May 17, 1997, an additional 25% on May 17, 1998,
an additional 25% on May 17, 1999, and an additional 30% on May
17, 2000.
(B) One-third of the shares subject to the option will have an
exercise price equal to 112% of the exercise price for the
shares described in (A) above. The shares subject to the grant
under this paragraph will vest as follows: 20% on May 17, 1998,
an additional 25% on May 17, 1999, an additional 25% on May 17,
2000, and an additional 30% on May 17, 2001.
(C) One-third of the shares subject to the option will have an
exercise price equal to 124% of the exercise price for the
shares described in (A) above. The shares subject to the grant
under this paragraph will vest as follows: 20% on May 17, 1999,
an additional 25% on May 17, 2000, an additional 25% on May 17,
2001, and an additional 30% on May 17, 2002.
The option agreement will also provide for the immediate and full vesting
of the options in the event of (i) a change in control of the company,
(ii) the death or physical or mental incapacity of Mr. Yellowlees, (iii)
the termination of employment of Mr. Yellowlees or (iv) non-renewal of his
employment agreement for an additional three year term upon the expiration
of the renewal agreement on May 17, 1998.
Executive Severance Agreements. In addition to Mr. Yellowlees' employment
agreement described above, the Company has entered into compensation
agreements with Messrs. Henderson, Braxton and Shea and certain other key
Company officers. The agreements provide that in the event that the
executive officer is terminated other than for cause (as defined in the
agreements), by reason of death or by reason of disability (as defined in
the agreements), or if the officer resigns after a significant change in
his employment conditions as specified by the agreements during the three
year period following a change in control (as defined in the agreements)
of the Company, the officer would be entitled to payment of a severance
benefit. The severance benefit would be equal to approximately three times
the officer's average annual taxable compensation from the Company during
the five year period immediately preceding the officer's termination as
described above, with such multiple of three reduced by the number of
years, if any, that the officer remained employed by the Company following
such change of control. In addition, the Company would be required to
maintain the officer's participation in existing group life, medical,
accident, and equivalent plans for a period of three years (reduced by the
number of years the officer remained employed by the Company following the
change of control) or until the executive had earlier taken other full
time employment. The amounts of the average annual taxable compensation
during the five fiscal years ended May 31, 1994 for the Named Executive
Officers who are parties to such agreements were approximately the
following: Mr. Henderson $190,266; Mr. Braxton $142,115 and Mr. Shea
$159,706.
Stockholder Return Analysis.
The following line-graph presentation compares cumulative stockholder
returns of the Company with Standard & Poor's Computer Software and
Services Index and Standard and Poor's 500 Stock Index for the five year
period beginning on May 31, 1989 (assuming the investment of $100 in the
Company's Common Stock, Standard & Poor's Computer Software and Services
Index and Standard and Poor's 500 Stock Index and reinvestment of all
dividends).
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
5/89 5/90 5/91 5/92 5/93 5/94
<S> <C> <C> <C> <C> <C> <C>
National Data Corp 100 46 41 37 49 58
S & P 500 100 117 130 143 160 167
S & P CMPTR SOFTWR & SVCS 100 114 105 123 165 198
</TABLE>
2. AMENDMENT TO 1981 EMPLOYEE STOCK PURCHASE PLAN
The Company's 1981 Employee Stock Purchase Plan (the "1981 Stock Purchase
Plan") was approved by the stockholders of the Company at the 1981 Annual
Meeting of Stockholders. At the 1990 Annual Meeting of Stockholders, an
amendment to the 1981 Stock Purchase Plan was approved that increased the
maximum number of shares of Common Stock as to which options may be
granted under the 1981 Stock Purchase Plan from 300,000 to 600,000 shares.
On July 20, 1994, the Board of Directors approved an amendment to the 1981
Stock Purchase Plan (the "1981 Stock Purchase Plan Amendment") and
directed that such amendment be submitted to the stockholders for approval
at the Annual Meeting. It is anticipated that management stockholders of
the company will grant authority to vote for approval of the 1981 Stock
Purchase Plan Amendment.
The 1981 Stock Purchase Plan currently provides that a maximum of 600,000
shares of Common Stock shall be reserved and made available for sale
thereunder. Of such reserved shares, 564,106 shares have been issued to
employees pursuant to previous purchase periods under the 1981 Stock
Purchase Plan. The remaining 35,894 shares are subject to options
outstanding in connection with the current purchase period which began on
October 1, 1993, and will extend through September 30, 1994. The 1981
Stock Purchase Plan Amendment would increase the maximum number of shares
of Common Stock as to which options may be granted under the 1981 Stock
Purchase Plan (except by operation of the adjustment provisions of the
1981 Stock Purchase Plan) from 600,000 to 900,000 shares, thereby making
an additional 300,000 shares available for issuance under the 1981 Stock
Purchase Plan.
Under the 1981 Stock Purchase Plan, participating employees are granted
options on the first day of each purchase period designated by the
Company's Board of Directors which are automatically exercised on the last
day of such purchase period for the purchases of shares of Common Stock
through the application of payroll deductions accumulated during such
purchase period. With certain specified exceptions for part-time employees
and others, all regular employees of the Company and its subsidiaries (a
group of approximately 1,500 persons) are eligible to purchase shares
under the 1981 Stock Purchase Plan. The price for shares purchased under
the 1981 Stock Purchase Plan is the lower of (i) 85% of the average market
price of the Common Stock on the first day of the applicable purchase
period or (ii) 85% of the average market price of the Common Stock on the
last business day of the month in which such purchase period ends. The
average market price per share of the Common Stock, as defined for
purposes of the 1981 Stock Purchase Plan, was $17.38 on October 1, 1993.
The market value of the Common Stock was $20.63 as of September 8, 1994.
The 1981 Stock Purchase Plan is administered by the Stock Option Committee
of the Board of Directors of the Company. The Stock Option Committee has
full authority to make, administer and interpret equitable rules and
regulations regarding the 1981 Stock Purchase Plan or to make amendments
to the 1981 Stock Purchase Plan as it may deem advisable.
The following tabulation shows as to the Named Executive Officers, all
current executive officers as a group, and all employees of the Company as
a group (i) the aggregate number of shares of Common Stock subject to
options granted under the 1981 Stock Purchase Plan during the period from
June 1, 1993 through May 31, 1994 and the average maximum per share Option
Exercise Price thereof and (ii) the net value of shares of the Common
Stock (market value less exercise price) realized for options exercised
during such period (which options are not necessarily the options granted
during the period).
<TABLE>
<CAPTION>
Options Granted Options Exercised
Aggregate Net
Name and Position Shares (#) Price ($/sh) Value Realized ($)
<S> <C> <C> <C>
Robert A. Yellowlees
Chairman and Chief
Executive Officer, President 1,438 $14.77 $30,116
and Chief Operating Officer
J. David Lyons
Executive Vice President,
Marketing & Sales - - -
James R. Henderson
Executive Vice President,
Health Care Application - - -
Systems and Services
Jerry W. Braxton
Executive Vice President
and Chief Financial Officer 528 14.77 17,010
Kevin C. Shea
Executive Vice President,
Retail Applications Systems
and Services 704 14.77 13,606
All current executive
officers 2,670 14.77 67,530
All employees 62,150 14.77 1,024,094
</TABLE>
The 1981 Stock Purchase Plan is designed to qualify as an Employee
Purchase Plan under Section 423 of the Internal Revenue Code of 1986, as
amended. A general summary of the federal income tax consequences
regarding the 1981 Stock Purchase Plan is stated below.
Neither the grant nor the exercise of options granted under the 1981 Stock
Purchase Plan will have a tax impact on the participant or the Company. If
an employee disposes of the stock acquired upon the exercise of his option
any time after two-years from the date of grant, then the employee will
recognize ordinary income equal to the difference between (a) the lesser
of the fair market value of the stock at the time of disposition or the
fair market value of the stock at the date the option is granted and (b)
the purchase price of the Common Stock. Any gain in addition to this
amount will be treated as long term capital gain. If an employee holds
Common Stock at the time of the employee's death, the holding period
requirements are automatically deemed to have been satisfied and ordinary
income must be realized by the employee's estate equal to the difference
between (a) the lesser of the fair market value of the Common Stock at the
time of death or the fair market value of the Common Stock at the date the
option is granted and (b) the purchase price of the Common Stock. The
Company will not be allowed a deduction if the holding period requirements
are satisfied. If an employee disposes of Common Stock before expiration
of two years from the date the option is granted, then the employee must
treat as ordinary income the excess of the market value of the Common
Stock on the date of exercise of the option over purchase price of the
Common Stock. Any additional gain will be treated as long term or
short-term capital gain or loss, as the case may be. The Company will
allowed a deduction equal to the amount of ordinary income recognized by
employee.
The affirmative vote of the holders of a majority of the shares of Common
Stock represented and entitled to vote at the Annual Meeting at which a
quorum is present is required for the approval of Proposal 2. With respect
to abstentions, the shares are considered present at the meeting, but
since they are not affirmative votes, they will have the same effect as
votes against the proposal. With respect to broker non-votes, the shares
are not considered present at the meeting for the particular proposal for
which the broker withheld authority.
The Board of Directors recommends that stockholders grant authority to
vote "FOR" approval of the proposed amendment to the 1981 Employee Stock
Purchase Plan. If a choice is specified on the proxy by the stockholder,
the shares will be voted as specified. If no specification is made, the
shares will be voted "FOR" the proposal.
AUDITORS
Arthur Andersen & Co. served as the Company's auditors for the three
fiscal years ended May 31, 1994, and that firm of independent public
accountants is serving as auditors for the Company for the current fiscal
year which began June 1, 1994. Representatives of Arthur Andersen & Co.
are expected to be present at the Annual Meeting and will have an
opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.
SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by the Company. In addition
to solicitation of stockholders of record by mail, telephone, or personal
contact, arrangements will be made with brokerage houses to furnish proxy
materials to their principals, and the Company may reimburse them for
mailing expenses. Custodians and fiduciaries will be supplied with proxy
materials to forward to beneficial owners of stock. The Company has also
engaged Georgeson & Co. to solicit proxies on behalf of the Company, and
it is estimated that Georgeson & Co.'s fees for its services will not
exceed $6,000.
OTHER MATTERS
Management does not know of any matters to be brought before the Annual
Meeting other than those referred to above. If any other matters properly
come before the meeting, the persons designated as proxies will vote on
such matters in accordance with their best judgment.
Whether or not you expect to be present at the meeting in person, please
vote, sign, date, and return promptly the enclosed proxy in the enclosed
envelope. No postage is necessary if the proxy is mailed in the United
States.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented for consideration at
the 1995 Annual Meeting of Stockholders of the Company must be received by
the Company at its principal executive offices on or before May 25
included in the Company's proxy statement and form of proxy relating to
the 1995 Annual Meeting of Stockholders.
SECTION 16(a) REPORTING
Based solely on a review of the copies of reporting forms furnished to the
Company, or written representations that no annual forms (Form 5) were
required, the Company believes that, during the 1994 fiscal year, all of
its officers, directors and 10% stockholders complied with the reporting
requirements of the SEC regarding their ownership and changes in ownership
of Common Stock (as required pursuant to Section 16(a) of the Securities
Exchange Act of 1934.)
NATIONAL DATA CORPORATION
1981 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE
The purpose of the National Data Corporation 1981 Employee Stock Purchase
Plan (the "Plan") is to encourage and enable eligible
employees of National Data Corporation (the "Company")
and its subsidiaries to acquire proprietary interests
in the Company through the ownership of Common Stock of
the Company. The Company believes that employees who
participate in the Plan will have a closer
identification with the Company by virtue of their
ability as stockholders to participate in the Company's
growth and earnings. The Plan also is designed to
provide motivation for participating employees to
remain in the employ of and to give greater effort on
behalf of the Company. It is the intention of the
Company to have the Plan qualify as an "employee stock
purchase plan" under Section 423 of the Internal
Revenue Code of 1954. Accordingly, the provisions of
the Plan shall be construed so as to extend and limit
participation in a manner consistent with the
requirements of that section of the Code.
2. DEFINITIONS
The following words or terms shall have the following
meanings:
(a) "Plan" shall mean this National Data Corporation
1981 Employee Stock Purchase Plan.
(b) "Company" shall mean National Data Corporation.
(c) "Board of Directors" shall mean the Board of Directors
of the Company or the Executive Committee of such Board.
(d) "Shares," "Stock" or "Common Stock" shall mean shares
of $1.25 par value Common Stock of the Company.
(e) "The Committee" shall mean the committee appointed by the
President of the Company to administer the Plan.
(f) "Subsidiary" shall mean any corporation, if the Company
owns or controls, directly or indirectly, more than a majority of
the voting stock of such corporation.
(g) "Eligible Employee" shall mean a person regularly
employed by the Company or a Subsidiary on the effective date of
any offering of stock pursuant to the Plan; provided, however,
that no person shall be considered an Eligible Employee unless he
is customarily employed by the Company or a Subsidiary for more
than twenty hours per week and more than five months in a
calendar year; and provided further, that the Board of Directors
may exclude the employees of any specified Subsidiaries from any
offering under the Plan.
(h) "Purchase Period" shall mean the number of calendar
months during which installment payments for stock purchased
under the Plan shall be made.
(i) "Options" shall mean the right or rights granted to
Eligible Employees to purchase the Company's Common Stock under
an offering made under the Plan pursuant to their elections to
purchase.
(j) "Subscription Period" shall mean that period of time
prescribed in any offer of stock under the Plan beginning on the
first day employees may elect to purchase shares and ending on
the last day such elections to purchase are authorized to be
received and accepted.
(k) "Average Market Price" shall mean the mean between the
high "bid" and low "ask" prices for the Company's shares of
Common Stock in the over-the-counter market, as reported by the
National Quotation Bureau, Inc. (or other national quotation
service). If the Company's Common Stock is not regularly traded
in the over-the-counter market but is registered on a national
securities exchange, "Average Market Price" shall mean the
closing price of the Company's Common Stock on such national
securities exchange.
(l) "Annual Pay" shall mean an amount equal to the sum
of (i) the annual basic rate
of pay of an Eligible Employee as determined from the
payroll records of the Company or a Subsidiary on the
effective date of an offer of stock made pursuant to
the Plan, and (ii) the amount paid to the Eligible
Employee by the Company or a Subsidiary under any
incentive compensation or bonus plan during the twelve
month period immediately preceding the effective date
of an offer of stock made pursuant to the Plan.
3. SHARES RESERVED FOR PLAN
The shares of the Company's Common Stock to be sold
to Eligible Employees under the
Plan may, at the election of the Company, be either
treasury shares or shares originally issued for such
purpose. The maximum number of shares which shall be
reserved and made available for sale under the Plan
shall be 300,000. The shares so reserved may be issued
and sold pursuant to one or more offerings under the
Plan. The Board of Directors will specify the total
number of shares to be made available for purchase
under each offering. With respect to each offering,
the Board of Directors will specify the number of
shares to be made available, the length of the
Subscription Period, the length of the Purchase Period
and such other terms and conditions not inconsistent
with the Plan as may be necessary or appropriate. In
no event shall the Subscription Period and the Purchase
Period together exceed 27 months for any offering.
In the event of a subdivision or combination of the
Company's shares, the maximum number of shares that may
thereafter be issued and sold under the Plan and the
number of shares under elections to purchase at the
time of such subdivision or combination will be
proportionately increased or decreased, the terms
relating to the price at which shares under elections
to purchase will be sold will be appropriately
adjusted, and such other action will be taken as in the
opinion of the Board of Directors is appropriate under
the circumstances. In case of a reclassification or
other change in the Company's shares, the Board of
Directors also will make appropriate adjustments.
4. ADMINISTRATION OF THE PLAN
The Plan shall be administered by a Committee consisting of not less than
three members who shall be appointed by the President
of the Company. Each member of the Committee shall be
a director, officer or employee of the Company. The
Committee shall be vested with full authority to make,
administer and interpret such equitable rules and
regulations regarding the Plan or to make amendments to
the Plan itself as it may deem advisable. Any
determination, decision, or action of the Committee in
connection with the construction, interpretation,
administration, or application of the Plan shall be
final, conclusive, and binding upon all Eligible
Employees and any and all persons claiming under or
through an Eligible Employee.
The Committee may act by a majority vote at a
regular or special meeting of the
Committee or by decision reduced to writing and signed
by a majority of the members of the Committee without
holding a formal meeting. Vacancies in the membership
of the Committee arising from death, resignation or
other inability to serve shall be filled by appointment
by the President of the Company.
5. PARTICIPATION IN THE PLAN
Options to purchase the Company's Common
Stock under the Plan shall be granted only to Eligible
Employees. Options to purchase shares will be granted
to all Eligible Employees of the Company or any of its
Subsidiaries whose Eligible Employees are granted such
rights; provided however, that the Board of Directors
may determine that any offering of Common Stock under
the Plan will not be extended to directors, officers,
or highly paid employees of the Company or its
Subsidiaries or to those employees whose principal
duties consist of supervising the work of other
employees.
6. PURCHASE PRICE
The purchase price for shares purchased pursuant to the Plan (except as
otherwise provided herein) will be 85% of the Average
Market Price on the last business day of the month in
which the Purchase Period ends or, if no shares were
traded on that day, on the last day prior thereto on
which shares were traded, provided, however, that the
purchase price for shares purchased pursuant to the
Plan shall not be more than 85% of the Average Market
Price on the first day of the Purchase Period or, if no
shares were traded on that day, on the last day prior
thereto on which shares were traded.
7. METHOD OF PAYMENT
Payment for shares purchased pursuant to the
Plan shall be made in installments through payroll
deductions, with no right of prepayment. Each Eligible
Employee electing to purchase shares will authorize the
Company to withhold a designated amount from his
regular weekly, biweekly, semimonthly or monthly pay
for each payroll period during the Purchase Period.
All such payroll deductions made for an Eligible
Employee shall be credited to his account under the
Plan. At the end of the Purchase Period, each Eligible
Employee shall receive in cash the balance remaining in
his account, if any, after the purchase of the number
of shares covered by his option to purchase shares.
8. EMPLOYEE'S ELECTION TO PURCHASE - GRANT OF OPTIONS
In order to participate in the Plan, an
Eligible Employee must sign an election to purchase
shares on a form provided by the Company stating the
Eligible Employee's desire to purchase shares under the
Plan and showing the amount which the Eligible Employee
elects to have withheld from his pay for each payroll
period during the Purchase Period. The election to
purchase shares must be delivered on or before the last
day of the Subscription Period to the person or office
designated to receive and accept such elections.
Subject to the limitations set forth in Paragraph 9,
each participating Eligible Employee shall be granted
an option to purchase a fixed maximum number of shares
determined by the following procedure:
Step 1 - Determine the aggregate amount which will be withheld from
the Eligible Employee's pay during the Purchase Period;
Step 2 - Determine the figure that represents 85% of
the Average Market Price on the first
day of the Purchase Period;
Step 3 - Divide the figure determined in Step 1 by
the figure determined in
Step 2 and round off the quotient to the nearest whole
number. This final figure shall be the fixed maximum
number of shares which the Eligible Employee may be
granted an option to purchase.
The date on which the option is granted to each participating Eligible
Employee shall be the first day of the Purchase Period.
Notice that an option has been granted shall be given
to each participating Eligible Employee and shall show
the maximum number of shares covered by the option and
the amount to be withheld from such Eligible Employee's
pay for each payroll period during the Purchase
Period.
In the event the total maximum number of
shares resulting from all elections to purchase under
any offering of shares under the Plan exceeds the
number of shares offered, the Company reserves the
right to reduce the maximum number of shares that
Eligible Employees may purchase pursuant to their
elections to purchase, to allot the shares available in
such manner as it shall determine and to grant options
to purchase only for such reduced number of shares.
All shares included in any offering under the Plan in
excess of the total number of shares that all Eligible
Employees elect to purchase and all shares with respect
to which elections to purchase are cancelled as
provided in Paragraph 12 shall continue to be reserved
for the Plan and shall be available for inclusion in
any subsequent offering under the Plan.
9. LIMITATIONS ON NUMBER OF SHARES
THAT MAY BE PURCHASED
The following limitations shall apply with respect to the
number of shares that may be purchased by each Eligible
Employee who elects to participate in an offering under
the Plan:
(a) No Eligible Employee may purchase shares
during any one offering pursuant to the Plan for an
aggregate purchase price (which shall be computed on an
annual basis in the event the Purchase Period is more
or less than 12 months) in excess of 20% of his Annual
Pay; and
(b) No Eligible Employee shall be granted an
option to purchase shares under the Plan if such
Eligible Employee, immediately after such option is
granted, owns stock or holds options to purchase stock
possessing 5% or more of the total combined voting
power or value of the capital stock of the Company or
of any Subsidiary; and
(c) No Eligible Employee may be granted an
option to purchase shares that permits
his rights to purchase stock under the Plan and all
other such plans of the Company and of any Subsidiary
to accrue at a rate that exceeds in any one calendar
year $25,000 of the fair market value of such stock
(determined on the date the option to purchase is
granted).
An Eligible Employee may elect to purchase
less than the total number of shares that he is
entitled to elect to purchase.
10. RIGHTS OF STOCKHOLDER
An Eligible Employee will become a
stockholder of the Company with respect to shares for
which payment has been completed at the close of
business on the last business day of the Purchase
Period. An Eligible Employee will become a stockholder
with respect to shares purchased in case of
cancellation of an election to purchase at the time the
purchase of such shares becomes effective as
hereinafter provided. An Eligible Employee will have
no rights as a stockholder with respect to shares under
an election to purchase shares until he has become a
stockholder as provided above. A certificate for the
shares purchased will be issued as soon as practicable
after an Eligible Employee becomes a stockholder.
11. RIGHTS TO PURCHASE SHARES NOT TRANSFERABLE
An Eligible Employee's rights under his election to
purchase shares may not be sold, pledged, assigned or
transferred in any manner otherwise than by will or the
laws of descent and distribution. If this provision is
violated, the right of the Eligible Employee to
purchase shares shall terminate and the only right
remaining under such Eligible Employee's election to
purchase will be to have paid over to the person
entitled thereto the amount then credited to the
Eligible Employee's account.
12. CANCELLATION OF ELECTION TO PURCHASE
An Eligible Employee who has elected to purchase
shares may cancel his election in
its entirety or may partially cancel his election by
reducing the amount that he has authorized the Company
to withhold from his pay for each payroll period during
the Purchase Period. Any such full or partial
cancellation shall be effective upon the delivery by
the Eligible Employee of written notice of cancellation
to the office or person designated to receive
elections. Such notice of cancellation must be so
delivered before the close of business on the last
business day of the Purchase Period. If an Eligible
Employee partially cancels his original election by
reducing the amount authorized to be withheld from his
pay, he shall continue to make installment payments at
the reduced rate for the remainder of the Purchase
Period. Only one partial cancellation may be made
during a Purchase Period.
Upon the cancellation of an Eligible Employee's
election to purchase shares,
such Eligible Employee may receive in cash, as soon as
practicable after delivery of the notice of
cancellation, the amount then credited to his account,
except, in the case of a partial cancellation, he must
retain in his account an amount equal to the amount of
his new payroll deduction times the number of payroll
periods in the Purchase Period through the date of
cancellation.
13. LEAVE OF ABSENCE OR LAYOFF
An Eligible Employee purchasing stock under the Plan who
is granted a leave of absence (including a military
leave) or is laid off during the Purchase Period may at
that time (on a form provided by the Company) elect one
of the following:
(a) He may suspend payments during
the leave of absence or, in the case of a layoff, he
may suspend payments for not more than 90 days, but not
in either case beyond the last month of the Purchase
Period; or
(b) He may make his installment
payments in cash but not, in case of leave of absence,
for longer than his leave nor more than 90 days in case
of a layoff.
If option (a) is elected, the Eligible
Employee at the end of the suspension period must make
up the deficiency in his account either by immediate
lump sum payment (with installment payments to be made
thereafter) or by uniformly increased installment
payments so that, assuming the maximum purchase price
per share, payment for the maximum number of shares
covered by his option will be completed in the last
month of the Purchase Period. If the Eligible Employee
elects to make increased installment payments, he may,
nevertheless, at any time make up his remaining
deficiency by a lump sum payment.
If an Eligible Employee who has elected either of options (a) or (b)
does not return to active service upon the expiration
of his leave of absence or within 90 days from the date
of his layoff, his election to purchase shall be deemed
to have been cancelled at that time except to the
extent that within a reasonable time thereafter (but no
more than three months and not later than the last day
of the Purchase Period), he elects to obtain shares as
provided in Paragraph 12.
If no event shall an Eligible Employee be permitted to complete payment
for
any shares after 27 months from the date of the
commencement of the Subscription Period.
14. EFFECT OF FAILURE TO MAKE PAYMENTS WHEN DUE
If in any payroll period, for any reason not set forth in
Paragraph 13, an Eligible Employee who has filed an
election to purchase shares under the Plan has no pay
or his pay is insufficient (after other authorized
deductions) to permit deduction of his installment
payment, such payment may be made in cash at the time.
If not so made, the Eligible Employee, when his pay is
again sufficient to permit the resumption of
installment payments, must pay in cash the amount of
the deficiency in his account or arrange for uniformly
increased installment payments so that, assuming the
maximum purchase price per share, payment for the
maximum number of shares covered by his option will be
completed in the last month of the Purchase Period. If
the Eligible Employee elects to make increased
installment payments, he may, nevertheless, at any time
make up the remaining deficiency by a lump sum
payment.
Subject to the above and other provisions of
the Plan permitting postponement, the Company may treat
the failure by an Eligible Employee to make any payment
as a cancellation of his election to purchase shares.
Such cancellation will be effected by mailing notice to
him at his last known business or home address. Upon
such mailing, his only right will be to receive in cash
the amount credited to his account.
15. RETIREMENT
If an Eligible Employee officially
retires and has an election to purchase shares in
effect at the time of his retirement, he may, within
three months after the date of his retirement (but in
no event later than the end of the Purchase Period), by
delivering written notice to the office or person
designated to receive elections, elect to:
(a) complete the remaining installment payments in cash,
(b) make a lump sum payment in the amount of any deficiency
for the remaining portion of the Purchase Period, or
(c) cancel his election to purchase shares in
accordance with the provisions of Paragraph 12.
If no such notice is given within such period, the election
will be deemed cancelled as of the date of retirement
and the only right of the Eligible Employee will be to
receive in cash the amount credited to his account.
16. DEATH
If an Eligible Employee, including a
retired Eligible Employee, dies and has an election to
purchase shares in effect at the time of his death, the
legal representative of the deceased Eligible Employee
may, within three months from the date of death (but in
no event later than the end of the Purchase Period), by
delivering written notice to the office or person
designated to receive elections, elect to:
(a) complete the remaining installment payments in cash,
(b) make a lump sum payment in the amount of any deficiency
for the remaining portion of the Purchase Period, or
(c) cancel the election to purchase shares in
accordance with the provisions of Paragraph 12.
If no such notice is given within such period, the election
will be deemed cancelled as of the date of death, and
the only right of such legal representative will be to
receive in cash the amount credited to the deceased
Eligible Employee's account.
17. TERMINATION OF EMPLOYMENT OTHER
THAN FOR RETIREMENT OR DEATH
If an Eligible Employee's employment is terminated for any
reason other than retirement or death prior to the end
of the Purchase Period, his election to purchase shall
thereupon be deemed cancelled as of the date on which
his employment ended. In such an event, no further
payments under such election will be permitted, and the
Eligible Employee's only right will be to receive in
cash the amount credited to his account.
18. APPLICATION OF FUNDS
All funds received by the Company in payment
for shares purchased under the Plan
and held by the Company at any time may be used for any
valid corporate purpose.
19. GOVERNMENTAL APPROVALS OR CONSENTS
The Plan shall not be effective unless it is
approved by the stockholders of the Company within 12
months after the Plan is adopted by the Board of
Directors of the Company. The Plan and any offerings
and sales to Eligible Employees under it are subject to
any governmental approvals or consents that may be or
become applicable in connection therewith. The Board
of Directors of the Company may make such changes in
the Plan and include such terms in any offering under
the Plan as may be necessary or desirable, in the
opinion of counsel, so that the Plan will comply with
the rules or regulations of any governmental authority
and so that Eligible Employees participating in the
Plan will be eligible for tax benefits under the United
States Internal Revenue Code of 1954, as amended, or
the laws of any state.
EXHIBIT A
NATIONAL DATA CORPORATION
1981 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE
The purpose of the National Data Corporation 1981 Employee
Stock Purchase Plan (the "Plan") is to encourage and
enable eligible employees of National Data Corporation
(the "Company") and its subsidiaries to acquire
proprietary interests in the Company through the
ownership of Common Stock of the Company. The Company
believes that employees who participate in the Plan
will have a closer identification with the Company by
virtue of their ability as stockholders to participate
in the Company;'s growth and earnings. The Plan also
is designed to provide motivation for participating
employees to remain in the employ of and to give
greater effort on behalf of the Company. It is the
intention of the Company to have the Plan qualify as an
"employee stock purchase plan" under Section 423 of the
Internal Revenue Code of 1954. Accordingly, the
provisions of the Plan shall be construed so as to
extend and limit participation in a manner consistent
with the requirements of that section of the Code.
2. DEFINITIONS
The following words or terms shall have the following meanings:
(a) "Plan" shall mean this National Data
Corporation 1981 Employee Stock
Purchase Plan.
(b) "Company" shall mean National Data
Corporation.
AMENDMENT NUMBER ONE
TO
NATIONAL DATA CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
THIS AMENDMENT to the National Data Corporation 1981
Employee Stock Purchase Plan (the "Plan") is adopted by
National Data Corporation (hereinafter referred to as
the "Company"), effective as of the dates indicated
herein.
W I T N E S S E T H:
WHEREAS, the Company desires to amend the Plan to effect certain changes
relating to partial and full cancellation by employees
participating in the Plan; and
WHEREAS, the Securities and Exchange Commission has approved the
proposed Amendment;
NOW, THEREFORE the Company hereby amends the Plan as follows:
1. The second paragraph of Section 12 is
deleted in its entirety and a new
paragraph is substituted therefor as follows:
"Upon the full cancellation of an Eligible Employee's
election to purchase shares, such Eligible Employee may
elect to: (i) receive in cash, as soon as practicable
after delivery of the notice of cancellation, the full
amount then credited to his account, or (ii) retain in
his account the full amount then credited to his
account. In the case of a partial cancellation, such
Eligible Employee may elect to retain up to the full
amount then credited to his account in such account,
but in no case shall the amount retained in his account
be less than an amount equal to the amount of his new
payroll deduction times the number of payroll periods
in the Purchase Period through the date of such partial
cancellation. Any amounts remaining in such Eligible
Employee's account at the end of the Purchase Period
shall be applied to purchase shares under the Plan."
2. This Amendment to the Plan shall be effective as
of October 1, 1987. Except as amended herein, the Plan
shall continue in full force and effect.
IN WITNESS WHEREOF, the undersigned Company has
adopted this Amendment on the date shown below, but
effective as of the date indicated above.
NATIONAL DATA CORPORATION
By: /s/ D. J. Blankers
Title: Senior Vice President
Date: 9/23/87
ATTEST:
/s/E. M. Ingram
Secretary
<ATTACHMENT>
[DESCRIPTION] PROXY CARD
PROXY
NATIONAL DATA CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
For Annual Meeting of Stockholders to be Held on November 17, 1994
The undersigned hereby appoints Robert A. Yellowlees and E. Michael
Ingram, or either of them, with individual power of substitution, proxies
to vote all shares of the Common Stock of National Data Corporation (the
"Company") that the undersigned may be entitled to vote at the Annual
Meeting of Stockholders (the "Annual Meeting") of the Company to be held
in Atlanta, Georgia on November 17, 1994, at 11:00 A.M., Atlanta time, and
any adjournment thereof:
1. Authority Granted (except as indicated to the contrary below) ( ),
Authority Withheld ( ) to vote for the election as directors of the
Company in Class II of the two nominees set forth below to serve
until the 1997 Annual Meeting of Stockholders, or in the case of each
nominee until his successor is duly elected and qualified, as set
forth in the accompanying Proxy Statement:
Edward L. Barlow
Neil Williams
(INSTRUCTION: To withhold authority to vote for any individual nominee(s),
list name(s) below.)
2. For ( ), Against ( ), Abstain from voting on ( ) approval of the
proposed amendment to the National Data Corporation 1981 Employee
Stock Purchase Plan to increase the maximum number of shares of
Common Stock available from 600,000 shares to 900,000 shares, as set
forth and described in the accompanying Proxy Statement.
3. In accordance with their best judgment upon such other matters as may
properly come before the meeting.
[Continued and to be signed on reverse side]
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED AFFIRMATIVELY ON PROPOSALS 1 AND 2.
IMPORTANT: Please date this proxy and sign exactly as your name or names
appear(s) hereon. If the stock is held jointly, signatures should include
both names. Executors, administrators, trustees, guardians, and others
signing in a representative capacity should give full title. In order to
insure that your shares will be represented at the Annual Meeting, please
vote, sign, date, and return this proxy promptly in the enclosed business
reply envelope. If you do attend the Annual Meeting, you may, if you wish,
withdraw your proxy and vote in person.
DATED: , 1994 Signature of Stockholder (SEAL)
DATED: , 1994 Signature of Stockholder (SEAL)
