<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
SYSTEMS & COMPUTER TECHNOLOGY CORPORATION.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SYSTEMS & COMPUTER TECHNOLOGY CORPORATION
GREAT VALLEY CORPORATE CENTER
FOUR COUNTRY VIEW ROAD
MALVERN, PENNSYLVANIA 19355
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 26, 1998
----------------
To Our Shareholders:
The Annual Meeting of Shareholders of Systems & Computer Technology
Corporation (the "Company") will be held at 9:00 A.M. on February 26, 1998 at
Two Country View Road, Malvern, Pennsylvania for the following purposes:
1. To elect two directors of the Company;
2. To approve an amendment to the Company's Certificate of Incorporation
increasing the number of authorized shares of the Company's Common Stock
from 24,000,000 to 100,000,000 shares;
3. To approve an amendment to the Company's 1994 Long-Term Incentive Plan
increasing the number of shares of the Company's Common Stock reserved for
issuance thereunder from 1,750,000 to 2,750,000 shares; and
4. To transact such other business as may properly come before the
meeting.
Only holders of the Company's Common Stock at the close of business on
January 16, 1998 are entitled to notice of, and to vote at, the meeting and any
adjournments or postponements thereof. Such shareholders may vote in person or
by proxy. The stock transfer books of the Company will not be closed. The
accompanying form of proxy is solicited by the Board of Directors of the
Company.
By Order of the Board of Directors
Richard A. Blumenthal
Secretary
January 23, 1998
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE
COMPLETE, SIGN AND PROMPTLY RETURN YOUR PROXY. THIS WILL NOT PREVENT YOU
FROM VOTING IN PERSON AT THE MEETING. IT WILL, HOWEVER, HELP ASSURE A QUORUM
AND AVOID ADDED PROXY SOLICITATION COSTS.
<PAGE>
SYSTEMS & COMPUTER TECHNOLOGY CORPORATION
GREAT VALLEY CORPORATE CENTER
FOUR COUNTRY VIEW ROAD
MALVERN, PENNSYLVANIA 19355
----------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
----------------
This Proxy Statement, which is first being mailed to shareholders on
approximately January 23, 1998, is furnished in connection with the
solicitation by the Board of Directors of Systems & Computer Technology
Corporation (the "Company") of Proxies to be used at the Annual Meeting of
Shareholders of the Company (the "Annual Meeting"), to be held at 9:00 A.M. on
February 26, 1998 at Two Country View Road, Malvern, Pennsylvania, and at any
adjournments or postponements thereof. If Proxies in the accompanying form are
properly executed and returned prior to voting at the Annual Meeting, the
shares of Common Stock represented thereby will be voted as instructed on the
Proxy. If no instructions are given on a properly executed and returned Proxy,
the shares of Common Stock represented thereby will be voted for the election
of the nominees for director named below, for the proposal to approve an
amendment to the Company's Certificate of Incorporation increasing the number
of authorized shares of the Company's Common Stock from 24,000,000 to
100,000,000 shares, for the proposal to approve an amendment to the Company's
1994 Long-Term Incentive Plan increasing the number of shares of the Company's
Common Stock reserved for issuance thereunder from 1,750,000 to 2,750,000
shares, and in support of management on such other business as may properly
come before the Annual Meeting or any adjournments or postponements thereof.
Any Proxy may be revoked by a shareholder prior to its exercise upon written
notice to the Secretary of the Company, by delivering a duly executed Proxy
bearing a later date, or by the vote of a shareholder cast in person at the
Annual Meeting.
VOTING
Holders of record of the Company's Common Stock on January 16, 1998 (the
"Record Date") will be entitled to vote at the Annual Meeting or any
adjournments or postponements thereof. As of that date, there were 16,632,965
shares of Common Stock outstanding and entitled to vote. A majority of the
shares entitled to vote, present in person or represented by proxy, will
constitute a quorum for the transaction of business. Each share of Common
Stock entitles the holder thereof to one vote on each matter that may properly
come before the Annual Meeting.
Directors are elected by the affirmative vote of a plurality of the votes of
the shares entitled to vote, present in person or represented by proxy.
Shareholders are not entitled to cumulative voting in the election of
directors. An affirmative vote of a majority of the Common Stock outstanding
on the Record Date is required for approval of Proposal 2, and an affirmative
vote of a majority of the shares entitled to vote, present in person or
represented by proxy, is required for approval of Proposal 3. Abstentions,
votes withheld and broker non-votes (described below) are counted in
determining whether a quorum is present. Abstentions with respect to any
proposal other than the election of directors will have the same effect as
votes against the proposal, because approval requires a vote in favor of the
proposal by a specified majority. Broker non-votes occur when a broker or
other nominee holding shares for a beneficial owner does not vote on a
proposal because the beneficial owner has not checked one of the boxes on the
proxy card. Broker non-votes will have no effect on the outcome of Proposals 1
or 3, and will have the same effect as votes against Proposal 2.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Company's Board of Directors is divided into three classes with
staggered three year terms. The terms of Thomas I. Unterberg and Michael D.
Chamberlain expire at the Annual Meeting, and each is nominated to fill
1
<PAGE>
a term expiring at the 2001 Annual Meeting of Shareholders. The terms of
Michael J. Emmi and Allen R. Freedman expire at 1999 Annual Meeting of
Shareholders, and the term of Gabriel A. Battista expires at the 2000 Annual
Meeting of Shareholders. Unless otherwise specified in the accompanying Proxy,
the shares voted pursuant thereto will be cast for Mr. Unterberg and Mr.
Chamberlain for a term to expire at the 2001 Annual Meeting of Shareholders.
If, for any reason, at the time of election, either Mr. Unterberg or Mr.
Chamberlain should be unable to accept his nomination or election, it is
intended that such Proxy will be voted for the election, in his place, of a
substituted nominee, who would be recommended by the Board of Directors. The
Board of Directors, however, has no reason to believe that either Mr.
Unterberg or Mr. Chamberlain will be unable to serve as a director.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR THE ELECTION OF EACH OF THE NOMINATED DIRECTORS.
The following table sets forth as to the nominees and as to each other
director: (i) his age; (ii) all positions and offices he holds with the
Company; (iii) his principal occupation or employment during the past five
years; (iv) other directorships he holds in public companies; (v) the period
of time he has served as a director of the Company; and (vi) the expiration of
his current term as a director of the Company.
<TABLE>
<CAPTION>
HAS BEEN EXPIRATION
POSITIONS WITH THE COMPANY, PRINCIPAL A DIRECTOR OF
NAME AGE OCCUPATION AND OTHER DIRECTORSHIPS SINCE CURRENT TERM
---- --- ------------------------------------- ---------- ------------
<S> <C> <C> <C> <C>
NOMINEES FOR ELECTION
Thomas I. Unterberg*.... 67 Co-Founder and Managing Director of C.E. 1982 Annual
Unterberg Towbin (formerly Unterberg Meeting (1)
Harris) since June 1989. He is also a director
of The AES Corporation, ECCS, Inc.,
Electronics For Imaging, Inc. and Scanvec, Inc.
Michael D. Chamberlain.. 53 President, SCT Software Group of the 1989 Annual
Company since May 1994; Senior Vice Meeting (1)
President of the Company since July 1990.
DIRECTORS CONTINUING IN OFFICE
Michael J. Emmi......... 55 Chairman of the Board, President and Chief 1985 1999
Executive Officer of the Company since May
1985. Mr. Emmi is also a director of
CompuCom Systems, Inc. and National
Media Corporation
Allen R. Freedman*...... 57 Managing Director, Fortis International N.V. 1982 1999
(formerly AMEV International N.V.) since
January 1987. Chairman and Chief Executive
Officer of Fortis, Inc. (formerly AMEV
Holdings, Inc.) since November 1990. He is also
a director of Genesis Health Ventures and Fortis
Securities, Inc.
Gabriel A. Battista..... 53 Chief Executive Officer of Network Solutions, 1996 2000
Inc. since October 1996. From November 1991
to October 1996, Mr. Battista served in various
executive positions for Cable & Wireless, Inc.,
most recently as Chief Executive Officer and
previously as President and Chief Operating
Officer. Mr. Battista is also a director of Network
Solutions, Inc. and Axent Technologies, Inc.
</TABLE>
2
<PAGE>
- --------
*Member of the Audit and Compensation Committees.
(1) If reelected at the Annual Meeting, this nominee will serve for a term
ending at the 2001 Annual Meeting of Shareholders, or until his successor
is duly elected and qualified.
During the fiscal year ended September 30, 1997 ("fiscal 1997"), the Board
of Directors held four meetings. Each director attended at least 75% of the
aggregate of the total number of meetings of the Board of Directors and
committees of the Board of Directors on which he served.
The Audit Committee consists of Messrs. Unterberg and Freedman. The function
of the Audit Committee is to recommend to the Board of Directors the
accounting firm to be retained to audit the Company's financial statements and
to consult with, and review recommendations made by, such accounting firm with
respect to financial statements, financial records and controls, and to make
such other recommendations to the Board of Directors as it deems appropriate
from time to time. The Audit Committee held one meeting during fiscal 1997.
During fiscal 1997, the Compensation Committee, which consists of Messrs.
Unterberg and Freedman, held one meeting. The Compensation Committee considers
recommendations of the Company's management regarding compensation and fringe
benefits of the senior executives of the Company and determines whether the
recommendations of management are consistent with general policies, practices,
and compensation scales established by the Board of Directors.
The Company does not have a standing nominating committee.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
a registered class of the Company's equity securities ("Reporting Persons"),
to file with the Securities and Exchange Commission initial reports of
ownership and reports of changes in ownership of the Common Stock and other
equity securities of the Company. Reporting Persons are also required to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of Section
16(a) reports furnished to the Company and written representations of
Reporting Persons that no other reports were required with respect to fiscal
1997, all Section 16(a) filing requirements applicable to the Reporting
Persons were met, except that Eric Haskell filed one report late relating to
the conversion of convertible subordinated debentures owned by him as
Custodian for his children.
EXECUTIVE COMPENSATION
CASH AND NON-CASH COMPENSATION PAID TO CERTAIN EXECUTIVE OFFICERS
The following table sets forth, for the fiscal years ended September 30,
1995, 1996 and 1997, respectively, certain compensation information with
respect to: (a) the Company's Chief Executive Officer; (b) each of the four
other most highly compensated executive officers of the Company whose total
annual salary and bonus for fiscal 1997 exceeded $100,000 and who were serving
at the end of fiscal 1997; and (c) one additional individual for whom
disclosures would have been provided pursuant to clause (b) above but for the
fact that she was not serving as an executive officer of the Company at the
end of fiscal 1997 (collectively, the "named executive officers").
3
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL
COMPENSATION AWARDS
----------------- ------------
SECURITIES ALL OTHER
NAME AND PRINCIPAL SALARY BONUS UNDERLYING COMPENSATION
POSITION YEAR ($) ($) OPTIONS (#) ($)
------------------ ---- ------ -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Michael J. Emmi
Chairman of the 1997 $374,500 $337,000 -0- $20,644(1)
Board, President and 1996 $353,500 $110,000 -0- $20,285
Chief Executive Officer 1995 $335,000 $200,000 -0- $21,516
Michael D. Chamberlain 1997 $276,300 $199,500 -0- $ 7,167(1)
Senior Vice President; 1996 $259,800 $ 60,000 -0- $ 6,645
President, SCT
Software Group 1995 $247,050 $110,000 -0- $ 7,331
Eric Haskell
Senior Vice President, 1997 $242,300 $139,000 -0- $ 6,053(1)
Finance and
Administration, 1996 $229,850 $ 40,000 -0- $ 6,002
Treasurer and Chief
Financial Officer 1995 $215,800 $ 70,000 -0- $ 4,550
Richard A. Blumenthal 1997 $188,050 $ 93,000 -0- $ 5,873(1)
Senior Vice President, 1996 $178,300 $ 30,000 -0- $ 5,662
General Counsel and
Secretary 1995 $168,300 $ 55,000 -0- $ 5,424
Susan R. Sheridan
Senior Vice President, 1997(2) $181,393 $ 83,000 -0- $ 1,238(1)
Corporate Marketing and 1996 $143,300 $ 30,000 -0- $ 1,057
Organizational Strategy 1995 $133,300 $ 30,000 50,000 $ 891
Mark A. Cochran
Vice President, 1997(3) $130,818 $ 38,400 7,000 $ 3,183(1)
Human Resources and
Organizational Strategy
</TABLE>
- --------
(1) The amounts shown for fiscal 1997 represent Company matching contributions
to each of the named executive's accounts in the Company's 401(k)
retirement plan in the following amounts: Mr. Emmi, $4,750; Mr.
Chamberlain, $5,050; Mr. Haskell, $4,609; Mr. Blumenthal, $4,946; Ms.
Sheridan, $844; and Mr. Cochran, $3,183, as well as the following premiums
paid by the Company on life insurance policies under which each named
executive officer is the named insured and has the right to name the
beneficiary: Mr. Emmi, $15,894; Mr. Chamberlain, $2,117; Mr. Haskell,
$1,444; Mr. Blumenthal, $927; and Ms. Sheridan, $394.
(2) Ms. Sheridan was appointed Managing Director of SCT International Ltd., a
subsidiary of the Company in August 1997, at which time she no longer
served as an executive officer of the Company.
(3) Mr. Cochran became an executive officer of the Company in September 1997.
STOCK OPTIONS GRANTED TO CERTAIN EXECUTIVE OFFICERS DURING LAST FISCAL YEAR
The following table sets forth certain information regarding options for the
purchase of the Company's common stock that were awarded to the named
executive officers during fiscal 1997.
4
<PAGE>
OPTION GRANTS IN FISCAL YEAR ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION
FOR OPTION TERM
INDIVIDUAL GRANTS (1)
----------------------------------------------------------- ----------------
% OF TOTAL
NUMBER OF SECURITIES OPTIONS GRANTED EXERCISE OR
UNDERLYING OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
---- -------------------- --------------- ----------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Michael J. Emmi......... -0- 0% N/A N/A N/A N/A
Michael D. Chamberlain.. -0- 0% N/A N/A N/A N/A
Eric Haskell............ -0- 0% N/A N/A N/A N/A
Richard A. Blumenthal... -0- 0% N/A N/A N/A N/A
Susan R. Sheridan....... -0- 0% N/A N/A N/A N/A
Mark A. Cochran......... 7,000 2.8% $13.50 11/8/06 $59,431 $150,609
</TABLE>
- --------
(1) The potential realizable value portion of the foregoing table illustrates
value that might be realized upon the exercise of the options immediately
prior to the expiration of their term, assuming the specified compounded
rates of appreciation on the Company's Common Stock over the term of the
options. These numbers do not take into account provisions of certain
options providing for termination of the option following termination of
employment, non-transferability or vesting over a period of years.
STOCK OPTIONS EXERCISED BY CERTAIN EXECUTIVE OFFICERS DURING FISCAL 1997 AND
HELD BY CERTAIN EXECUTIVE OFFICERS AT SEPTEMBER 30, 1997
The following table sets forth certain information regarding options for the
purchase of the Company's common stock that were exercised and/or held by
named executive officers during fiscal 1997.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR ENDED SEPTEMBER 30, 1997 AND FY
1997-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE OPTIONS AT FY-END (#) AT FY-END ($)
NAME EXERCISE (#) REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
---- ----------- ---------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Michael J. Emmi......... 150,492 $3,810,324 193,000/200,000 $7,424,398/$5,137,500
Michael D. Chamberlain.. 15,000 $ 444,375 110,000/150,000 $4,061,070/$3,853,125
Eric Haskell............ 8,000 $ 227,504 69,000/100,000 $2,503,393/$2,568,750
Richard A. Blumenthal... 15,000 $ 342,500 58,000/80,000 $2,168,035/$2,055,000
Susan R. Sheridan....... -0- -0- 23,001/50,000 $ 663,011/$1,253,125
Mark A. Cochran......... 3,000 $ 16,390 0/10,000 0/$ 303,000
</TABLE>
- --------
(1) The values in this column are based on the fair market value price of the
Company's Common Stock of $45.0625 on September 30, 1997, the last day of
fiscal 1997.
COMPENSATION OF DIRECTORS
Members of the Board of Directors who are officers of the Company are not
separately compensated for serving on the Board of Directors. Under the
Company's 1994 Non-Employee Director Stock Option Plan, any person who becomes
a director of the Company, other than an employee of the Company or any of its
subsidiaries, will be entitled to receive an option to purchase 30,000 shares
of Common Stock on the date of
5
<PAGE>
the person's appointment or election to the Board of Directors. The options
vest ratably over the five year period following the date of grant, with the
first one-fifth of such options vesting on the first anniversary of the date
of grant. The per share purchase price payable on the exercise of such option
will be equal to the closing sale price of a share of Common Stock on the date
of the director's appointment or election. However, if the closing sale price
of a share of Common Stock on the date on which an option is awarded is less
than $12.00 or greater than $22.00, then the number of shares obtained upon
the exercise of the option will be equal to the quotient which results from
dividing $600,000 by the closing sale price of a share of Common Stock on the
date of the award; provided, however, that the number of shares purchasable
under any option awarded may not exceed 40,000. Once a non-employee director
has been awarded an option under the Non-Employee Director Plan, the director
is not thereafter entitled to receive an additional award under the Non-
Employee Director Plan.
On November 8, 1996, Mr. Battista was granted an option to purchase 30,000
shares of Common Stock pursuant to the 1994 Non-Employee Director Stock Option
Plan at a per share exercise price of $13.50.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1997, the members of the Compensation Committee of the
Company's Board of Directors were Messrs. Unterberg and Freedman. During
fiscal 1997, the Company paid Fortis Benefits Insurance Company, a wholly
owned subsidiary of Fortis, Inc., the aggregate sum of $788,648 in premiums
for life insurance and long term disability insurance provided to the
Company's employees under the Company's Group Benefits Plan. Mr. Freedman is
Chairman and Chief Executive Officer of Fortis, Inc.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
It is SCT's policy to offer competitive compensation opportunities for its
employees based on a combination of factors, including corporate performance,
group performance, and the individual's personal contribution to the business.
The Compensation Committee of the Company, consisting solely of non-employee
directors, annually reviews and approves the compensation of the Company's
executive officers. A significant part of executive officers' compensation may
be dependent upon the Company's annual financial performance and the price of
the Company's stock.
There are three basic elements to executive officer compensation: base
salary, bonus, and stock incentives, typically in the form of stock options
granted at market and vesting over a period of time. This program rewards
executive officers for long-term strategic management and enhancement of
shareholder value by providing the executive officers an opportunity to
acquire equity ownership in the Company. The program stresses both annual and
long-term performance, and supports a performance oriented environment. In
combination, these elements help the Company to attract and retain qualified
executive management personnel.
The Compensation Committee considers increases in executive officer base
salary based on the recommendation of the Chief Executive Officer, taking into
consideration, among other things, salaries paid to executives of other
companies in comparable positions, the Company's financial performance, and
the individual's personal contribution to the Company.
The Compensation Committee awards bonuses to the Company's executive
officers based predominantly on factors established prior to the commencement
of the Company's fiscal year. Depending on the achievement by the Company of a
targeted percentage (72.07% for fiscal 1997) of budgeted earnings per share,
each executive officer is eligible to receive a bonus, based on an established
percentage of base salary, subject to increase or decrease based on the
recommendation of the Chief Executive Officer.
6
<PAGE>
The Compensation Committee determined shortly after the completion of the
Company's fiscal year ended September 30, 1996 that a 5.9% increase in the
Chief Executive Officer's base salary for fiscal 1997 was appropriate. In
addition, shortly after the completion of the Company's fiscal year ended
September 30, 1997, the Chief Executive Officer was granted a $337,000 bonus
out of a total bonus pool for executive officers of $889,900, based on the
Company's financial performance in fiscal 1997.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), precludes a public corporation from taking a deduction for
compensation paid in excess of $1,000,000 to its Chief Executive Officer or
any of its four other highest paid officers. Certain performance-based
compensation, however, is specifically exempt from the deduction limitation.
Performance-based compensation must be determined by a committee comprised
solely of two or more outside directors. In order to qualify as an outside
director, a person may not be an employee of the Company and generally may not
receive, directly or indirectly, compensation for services other than in that
person's capacity as a director. The Company from time to time has retained
and may continue to retain the services of entities with which members of the
Compensation Committee are affiliated. See Compensation Committee Interlocks
and Insider Participation. In making this determination, the Compensation
Committee considers the benefits derived from utilizing the services of such
entities and the impact of Section 162(m) of the Code.
The foregoing constitutes the report of the Compensation Committee of the
Board of Directors for the Company's fiscal year ended September 30, 1997.
Allen R. Freedman
Thomas I. Unterberg
7
<PAGE>
STOCK PERFORMANCE CHART
The following chart compares the yearly percentage change in the cumulative
total stockholder return on the Company's Common Stock during the five fiscal
years ended September 30, 1997 with the cumulative total return on the
Standard & Poor's 500 Index and the Standard & Poor's Computer Software and
Services Index. The comparison assumes $100 was invested on September 30, 1992
in the Common Stock and in each of the foregoing indices and assumes
reinvestment of dividends. The Company has not paid any dividends on its
Common Stock during this period.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG SYSTEMS & COMPUTER TECHNOLOGY CORP., THE S&P 500 INDEX AND THE
S&P COMPUTERS (SOFTWARE & SERVICES) INDEX
[CHART APPEARS HERE]
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
-----------------------------
9/92 9/93 9/94 9/95 9/96 9/97
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
[ ] Systems & Computer Technology Corporation...... $100 $180 $254 $386 $175 $644
. S&P 500 Index.................................. 100 113 117 152 183 257
+ S&P Computers (Software & Services) Index...... 100 133 158 230 334 549
</TABLE>
- --------
*$100 Invested on 9/30/92 in stock or index including reinvestment of
dividends. Fiscal year ending September 30.
8
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information, as of December 31, 1997, with
respect to the beneficial ownership of shares of Common Stock of the Company
(the only class of outstanding voting security of the Company) by each person
who is known to the Company to be the beneficial owner of more than five
percent of the Company's outstanding Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1)(2) OF CLASS
- ------------------------------------ -------------------------- --------
<S> <C> <C>
CoreStates Investment Advisors, Inc. ...... 1,075,166(3) 6.5%
1500 Market Street
PO Box 7558
Philadelphia, PA 19101-7558
</TABLE>
- --------
(1) Information with respect to beneficial ownership is based upon information
furnished by the shareholder.
(2) Does not include the 1,020,462 shares owned of record by the Company's
Employee Stock Ownership Trust. Mr. Emmi, Mr. Haskell, Mr. Chamberlain and
Mr. Blumenthal are members of the committee that administers the Company's
Employee Stock Ownership Plan. That committee does not have voting or
investment power with respect to the shares held by the Employee Stock
Ownership Trust.
(3) The named beneficial owner has shared voting power with respect to
1,059,131 shares and no dispositive power with respect to 38,900 shares.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information, as of December 31, 1997, with
respect to the beneficial ownership of the Company's Common Stock by each
director or nominee for director, each of the executive officers identified
under the Summary Compensation Table and by all directors and executive
officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT
NAME OF DIRECTOR OWNERSHIP(1) OF CLASS
- ---------------- ----------------- --------
<S> <C> <C>
Michael J. Emmi.................................... 435,983(2) 2.6%
Michael D. Chamberlain............................. 131,967(3) *
Thomas I. Unterberg................................ 152,000(4) *
Gabriel A. Battista................................ -- --
Allen R. Freedman.................................. 141,606(5) *
Eric Haskell....................................... 103,553(6) *
Richard A. Blumenthal.............................. 80,787(7) *
Mark A. Cochran.................................... 2,212(8) *
All directors and executive officers as a group (8
persons).......................................... 1,048,108(9) 6.1%
</TABLE>
- --------
(1) Information with respect to beneficial ownership is based upon information
furnished by each director and officer. Unless otherwise specified, the
named shareholders have sole voting and investment power with respect to
all of the shares indicated.
(2) Includes 1,268 shares with respect to which Mr. Emmi does not have
investment power, 2,000 shares owned by Mr. Emmi as custodian for his
daughter, and options currently exercisable, or which can be exercised
within sixty days of December 31, 1997, to purchase 193,000 shares.
(3) Includes 717 shares with respect to which Mr. Chamberlain does not have
investment power, and options currently exercisable, or which can be
exercised within sixty days of December 31, 1997, to purchase 110,000
shares.
(4) Includes 3,000 shares which are owned by Mr. Unterberg's wife, with
respect to which Mr. Unterberg has neither voting power nor investment
power, and options currently exercisable, or which can be exercised within
sixty days of December 31, 1997, to purchase 24,000 shares.
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(5) Includes options currently exercisable, or which can be exercised within
sixty days of December 31, 1997, to purchase 24,000 shares.
(6) Includes 553 shares with respect to which Mr. Haskell does not have
investment power, 8,000 shares owned by Mr. Haskell as custodian for his
children, and options currently exercisable, or which can be exercised
within sixty days of December 31, 1997, to purchase 69,000 shares.
(7) Includes 769 shares with respect to which Mr. Blumenthal does not have
investment power, 18 shares owned by Mr. Blumenthal as custodian for his
daughter, and options currently exercisable, or which can be exercised
within sixty days of December 31, 1997, to purchase 58,000 shares.
(8) Includes 212 shares with respect to which Mr. Cochran does not have
investment power, and options currently exercisable, or which can be
exercised within sixty days of December 31, 1997, to purchase 2,000
shares.
(9) Includes options currently exercisable, or which can be exercised within
sixty days of December 31, 1997, to purchase 480,000 shares and 6,549
shares with respect to which the group does not have investment power.
AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION
(PROPOSAL 2)
On November 18, 1997, the Board of Directors authorized an amendment of the
Company's Certificate of Incorporation to increase the number of authorized
shares of Common Stock, par value $.01 per share ("Common Stock"), from
24,000,000 to 100,000,000. The stockholders are being asked to approve this
proposed amendment. As of December 31, 1997, 16,619,344 shares of Common Stock
were issued and outstanding, 2,684,175 shares were reserved for issuance under
the Company's various stock incentive plans, and 1,417,061 shares were
reserved for issuance in connection with the conversion of the Company's 5%
Convertible Subordinated Debentures due 2004.
The principal purpose of the proposed amendment to the Certificate is to
provide the Company with more flexibility to authorize additional shares of
Common Stock which will be available in the event that the Board of Directors
determines that it is necessary or appropriate to effect future stock
dividends or stock splits, to raise additional capital through the sale of
securities, to acquire another company or its business or assets through the
issuance of securities, to invest in another company, to provide stock for
management incentive and employee benefit plans and for other general
corporate purposes.
Authorized but unissued shares of the Company's Common Stock may be issued
at such times, for such purposes and for such consideration as the Board of
Directors may determine to be appropriate without further authority or
approval from the Company's stockholders, except as otherwise required by the
Delaware General Corporation Law, the Securities and Exchange Commission or
the Nasdaq Stock Market.
The increase in authorized Common Stock will not have any immediate effect
on the rights of existing stockholders. However, to the extent that the
additional authorized shares are issued in the future, they will decrease the
existing stockholders' percentage equity ownership and, depending upon the
price at which they are issued, could have a dilutive effect on earnings per
share and on the equity ownership of the existing common stockholders. The
holders of Common Stock have no preemptive rights to purchase any stock of the
Company.
Although it is not the purpose of the proposed amendment, the authorized but
unissued shares of Common Stock could have the effect of discouraging,
delaying or making more difficult a change in the control of the Company
without further action by the shareholders. Shares of authorized and unissued
Common Stock could be issued in one or more lawful transactions which would
make a change in control of the Company more difficult, and therefore less
likely. The issuance of additional shares might also serve to dilute the stock
ownership and voting rights of persons seeking to obtain control of the
Company. The Board of Directors is not aware of any pending or proposed effort
to acquire control of the Company.
The approval of the amendment to the Certificate requires the affirmative
vote of a majority of the outstanding shares of Common Stock of the Company as
of the Record Date. An abstention or broker non-vote is not an affirmative
vote and will therefore have the same effect as a vote against the proposal.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THIS PROPOSAL 2 TO
AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION.
AMENDMENT TO THE COMPANY'S 1994 LONG-TERM INCENTIVE PLAN
(PROPOSAL 3)
At the Annual Meeting, the stockholders are being asked to approve the
adoption of an amendment to the Company's 1994 Long-Term Incentive Plan (the
"1994 Plan"), as approved by the Board of Directors, which increases the
number of shares reserved for issuance thereunder from 1,750,000 to 2,750,000
shares of Common Stock (the "Proposed Amendment").
The 1994 Plan is intended to provide additional compensation and incentives
to eligible individuals whose present and potential contributions are
important to the continued success of the Company, to afford such persons an
opportunity to acquire a proprietary interest in the Company and to enable the
Company to continue to attract and retain the best available talent for the
successful conduct of its business. It also provides the Company flexibility
to adapt the compensation of key employees in a changing business environment.
As of December 31, 1997, options to purchase an aggregate of 107,099 shares
of Common Stock issued under the 1994 Plan had been exercised, and options to
purchase 1,487,290 shares were outstanding. Without taking into account the
Proposed Amendment, 155,611 shares remained available for future grants as of
December 31, 1997. If the Proposed Amendment is approved, an additional
1,000,000 shares will be available for future grants under the 1994 Plan.
The table under the caption "Option Grants in Fiscal Year Ended September
30, 1997" above provides information with respect to the grant of options
under the 1994 Plan to the Chief Executive Officer and the other named
executive officers during fiscal 1997. Non-executive officers as a group
(approximately 91 employees) were granted options to purchase an aggregate of
239,850 shares under the 1994 Plan during fiscal 1997.
The following is a summary of the principal provisions of the 1994 Plan, but
it is not intended to be a complete description of all of the terms and
provisions of the 1994 Plan. A copy of the 1994 Plan, as proposed to be
amended pursuant to the Proposed Amendment, is included herein as Appendix
"A", and the description of the principal provisions of the 1994 Plan is
qualified in its entirety by reference thereto. All defined terms used below
not otherwise defined herein, have the meaning set forth in the 1994 Plan,
unless otherwise indicated.
History
The 1994 Plan was adopted by the Company's Board of Directors on January 11,
1994 and was approved by the Company's stockholders on February 25, 1994, and
a total of 1,750,000 shares of the Company's Common Stock were reserved for
issuance thereunder. No award may be made under the 1994 Plan after February
24, 2004.
Purpose
The purpose of the 1994 Plan is to provide eligible employees of the Company
with financial incentives to enhance shareholder value and to enable the
Company to attract, retain and motivate employees.
Administration
The 1994 Plan is currently administered by Board of Directors of the Company
(the "Board"). Subject to the terms of the 1994 Plan, the Board determines the
persons who are to receive awards, the number of
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shares subject to each award, and the terms and conditions of such awards. The
Board also has the authority to adopt, alter and repeal such administrative
rules, guidelines and practices governing the Plan as it shall, from time to
time, deem advisable; to interpret the terms and provisions of the Plan and
any award issued under the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan. Such interpretations are
binding on the Company and on the participants.
The Board may generally amend, alter or discontinue the 1994 Plan at any
time, but no amendment, alteration or discontinuation may be made which would
impair the rights of a participant with respect to an award which has been
made under the 1994 Plan.
Eligibility
Only officers and other employees of the Company (including director-
employees, but excluding any other person who serves the Company only as a
director) and/or its subsidiaries are eligible to be granted awards under the
Plan (collectively, "participants"). No individual may receive, over the term
of the 1994 Plan, more than an aggregate of 30% of the shares of Common Stock
authorized for grant under the 1994 Plan. As of December 31, 1997, the Company
and its subsidiaries employed approximately 2,700 employees, including
officers.
Adjustments to Outstanding Awards; Effect of the Expiration or Termination of
Awards
In the event of any merger, reorganization, recapitalization, stock dividend
or other change in corporate structure affecting the Common Stock, the Board
of Directors may adjust accordingly the number of shares reserved for issuance
under the 1994 Plan, the number and option price of shares subject to
outstanding stock options granted under the 1994 Plan and the number and price
of shares subject to other awards made under the 1994 Plan. In addition, the
shares related to the unexercised or undistributed portion of any terminated,
expired or forfeited award for which no material benefit was received by a
participant in the 1994 Plan also are made available for distribution in
connection with future awards.
Stock Options
The 1994 Plan permits the Board to grant to any participant Incentive Stock
Options and Non-qualified Stock Options ("Stock Options"). The per share
exercise price of a Stock Option shall be determined by the Board when the
Stock Option is granted and may not be less than 100% of the Fair Market Value
(as defined in the 1994 Plan) of the Common Stock at the time of grant (and
not less than 110% in the case of an Incentive Stock Option granted to a
participant who, at the time the Stock Option is granted, owns more than 10%
of the voting power of all classes of stock of the Corporation or of a
Subsidiary (a "10% Owner")).
Subject to the limitations of the 1994 Plan, each Stock Option will be
exercisable at such time or times and in the installments determined by the
Board, commencing not earlier than six months following the date of grant. No
Stock Option shall be exercisable more than ten years after the date it is
granted. An Incentive Stock Option granted to a 10% Owner shall not have a
term of more than five years. Exercise of Incentive Stock Options is subject
to additional restrictions imposed by the Code. In the discretion of the
Board, the purchase price for shares acquired pursuant to the exercise of a
Stock Option may be paid in cash or by shares of Restricted or unrestricted
Common Stock. When a participant gives notice of exercise of an Stock Option,
the Board of Directors may elect to terminate all or part of the portion of
the Stock Option proposed to be exercised, provided the Company pays the
participant an amount in cash equal to the excess of the Fair Market Value of
the Common Stock otherwise issuable over the exercise price of the Stock
Option on the effective date of such cash-out. In addition, the Board of
Directors may require that all or part of the shares to be issued pursuant to
exercise of a Stock Option take the form of Restricted Stock. The Board may
also agree to cooperate in a "cashless exercise" of a Stock Option, which
shall be effected by the participant delivering to a securities broker
instructions to sell a sufficient number of shares of Common Stock to cover
the costs and expenses associated therewith.
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Under the Code, a participant will not recognize taxable income upon grant
or exercise of an Incentive Stock Option and the Company and its Subsidiaries
will not be entitled to any deduction with respect thereto. However, upon the
exercise of an Incentive Stock Option, the excess of the Fair Market Value on
the date of exercise of the shares received over the exercise price of shares
will be treated as an adjustment to alternative minimum taxable income.
Consequently, exercise of an Incentive Stock Option could subject an optionee
to alternative minimum tax or increase an optionee's alternative minimum
taxable income. In order for the exercise of an Incentive Stock Option to
qualify for the foregoing tax treatment, the participant generally must be an
employee of the Company or a subsidiary from the date the Incentive Stock
Option is granted through the date three months before the date of exercise,
except that special rules apply in the case of death or Disability (as defined
in the 1994 Plan).
If the participant has held the shares acquired upon exercise of an
Incentive Stock Option for at least two years after the date of grant and for
at least one year after the date of exercise (the "Incentive Stock Holding
Periods"), upon disposition of the shares by the participant, the difference,
if any, between the sales price of the shares and the exercise price of the
Stock Option will be treated as capital gain or loss. If the shares are held
more than 12 months, the gain will be a mid-term capital gain, for which the
maximum rate is 28%. If the shares are held for more than 18 months, the gain
will be a long-term capital gain, for which the maximum rate is 20%. In
addition, for Stock Options granted after December 31, 2000, the maximum long-
term capital gain tax rate is 18% if the shares are held for more than 5
years, measured from the date of grant. If the participant does not satisfy
the Incentive Stock Option Holding Periods, a "disqualifying disposition"
occurs and the participant will recognize ordinary income at the time of the
disposition of the shares in an amount equal to the excess of the fair market
value of the shares at the time the Stock Option was exercised over the
exercise price of the Stock Option. The balance of gain realized, if any, will
be long-term, short-term or mid-term capital gain, depending upon the holding
period of the shares after the Stock Option was exercised. If the participant
sells the shares prior to the satisfaction of the holding period requirements
but at a price below the fair market value of the shares at the time the Stock
Option was exercised, the amount of ordinary income will be limited to the
amount realized on the sale in excess of the exercise price of the Stock
Option. The Company and its subsidiaries will generally be allowed a deduction
to the extent the participant recognizes ordinary income.
In general, a participant to whom a Non-Qualified Stock Option is granted
will recognize no income when the Stock Option is granted. Upon exercise of a
Non-Qualified Stock Option, the participant will recognize ordinary income
equal to the excess of the Fair Market Value of the shares on the date of
exercise over the exercise price of the Stock Option unless the shares
received are Restricted Stock, in which case the exercising participant may
elect to recognize such income. The Company and its subsidiaries will
generally be entitled to a compensation deduction in the same amount and at
the same time as the participant recognizes ordinary income.
There are no tax consequences to a participant or to the Company if a Stock
Option lapses before it is exercised or forfeited.
Stock Appreciation Rights
The 1994 Plan permits the granting of stock appreciation rights ("Stock
Appreciation Rights") in connection with the grant of Stock Options. A Stock
Appreciation Right or the applicable portion thereof granted with respect to a
given Stock Option shall generally terminate and no longer be exercisable upon
the termination or exercise of the related Stock Option. A Stock Appreciation
Right permits the participant to receive, upon exercise of the Stock
Appreciation Right, an amount in cash and/or shares of Common Stock equal in
value to the excess of the Fair Market Value of one share of Common Stock over
the exercise price per share specified in the related Stock Option, multiplied
by the number of shares in respect of which the Stock Appreciation Right shall
have been exercised. The Board of Directors shall have the right to determine
the form of payment. Stock Appreciation Rights shall be exercisable only at
such time or times and to the extent that the Stock Options to
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which they relate shall be exercisable, provided, however, that any Stock
Appreciation Right granted subsequent to the grant of the related Stock Option
shall, in general, not be exercisable during the first six months of its term.
Upon exercise of a Stock Appreciation Right, the participant will recognize
ordinary income in an amount equal to the cash or the Fair Market Value of the
shares received on the exercise date. The Company and its Subsidiaries will
generally be entitled to a compensation deduction in the same amount and at
the same time as the participant of a Stock Appreciation Right recognizes
ordinary income.
Restricted Stock
Shares of restricted stock ("Restricted Stock") may be issued either alone
or in addition to other awards granted under the 1994 Plan. The Board will
determine the recipients of shares of Restricted Stock, the number of shares
to be awarded, the price (if any) to be paid by such recipient, the time or
times within which such awards may be subject to forfeiture, and all other
conditions of the award. The provisions of Restricted Stock Awards need not be
the same with respect to each recipient. The purchase price for shares of
Restricted Stock may be zero. The Company will issue a certificate
representing the shares of Restricted Stock granted to each recipient, which
certificate in respect of the Restricted Stock shall bear a legend marking
such stock as Restricted Stock. Although such certificate(s) will be held in
custody by the Company until the restrictions thereon have elapsed, such
recipient shall have, with respect to the shares of Restricted Stock, all of
the rights of a shareholder of the Company, including the right to vote the
shares, and the right to receive any cash dividends. The Board of Directors,
at the time of award, may permit or require the payment of cash dividends to
be deferred and reinvested in additional shares of Restricted Stock. During
the Restriction Period (as defined in the 1994 Plan) set by the Board of
Directors, the recipient will not be permitted to transfer or encumber shares
of Restricted Stock; provided that the Board of Directors may provide for the
lapse of such restrictions in installments and may accelerate or waive such
restrictions in whole or in part. Upon the expiration of the Restriction
Period without a prior forfeiture of the Restricted Stock, the certificates
for such shares of Restricted Stock shall be delivered to the recipient of the
award.
Unless the participant elects to recognize income at the time of a
Restricted Stock award, a participant will not realize taxable income and the
Company will not be entitled to a deduction upon the grant of Restricted
Stock. When the shares are no longer subject to a substantial risk of
forfeiture or become transferable, the participant will realize taxable
ordinary income in an amount equal to the excess of the Fair Market Value of
such shares at such time and any amount paid for such Common Stock (the
"Bargain Element"), and the Company will generally be entitled to a deduction
in the same amount. The participant may elect to recognize the Bargain Element
as income in the year of the award by making an election with the Internal
Revenue Service. Dividends received by a participant on Restricted Stock
during the Restriction Period are taxable to the participant as ordinary
compensation income and will be deductible by the Company unless the
aforementioned election is made, rendering dividends taxable as dividends and
nondeductible.
Long-Term Performance Award
The 1994 Plan permits the Board of Directors to grant to any participant
long-term performance awards ("Long-Term Performance Awards"). The Board will
determine in advance the nature, length and starting date of the Performance
Period (as defined in the 1994 Plan) for each Long-Term Performance Award,
which shall be at least two years, and shall determine the performance
objectives to be used in valuing Long-Term Performance Awards and determining
the extent to which such Long-Term Performance Awards have been earned.
Performance objectives may vary from participant to participant and between
groups of participants. In the event of special or unusual events or
circumstances affecting the application of one or more performance objectives
to a Long-Term Performance Award, the Board may revise the performance
objectives and/or underlying factors and criteria applicable to the Long-Term
Performance Awards affected. Long-Term Performance Awards may be denominated
in dollars or in shares of Common Stock, and to the extent that the
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relevant measure of performance is met, payments may be made in the form of
cash or Common Stock, including shares of Restricted Stock, either in a lump
sum payment or in annual installments commencing as soon as practicable after
the end of the relevant Performance Period. Unless otherwise provided in the
applicable award agreement, if a participant terminates employment with the
Company during a Performance Period because of death, Disability or
retirement, the participant shall be entitled to a payment with respect to
each outstanding Long-Term Performance Award at the end of the applicable
Performance Period based upon the participant's performance for the portion of
such Performance Period ending on the date of termination and pro-rated for
the portion of the Performance Period during which the participant was
employed by the Company, as determined by the Board of Directors.
A participant receiving a Long-Term Performance Award will not realize
taxable income until the award is paid, in an amount equal to the amount of
cash received or the Fair Market Value of shares received in payment, and the
Company will generally be entitled to a corresponding deduction at such time.
If Restricted Stock is used in payment of a Long-Term Performance Award, the
participant will have the Federal income tax consequences described above
under "Restricted Stock."
The 1994 Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant by the Company, nothing contained in the 1994 Plan gives any
participant any rights that are greater than those of a general creditor of
the Company.
The affirmative vote of the majority of shares present in person or
represented by proxy at the Annual Meeting and entitled to vote on the
Proposed Amendment is required to approve the Proposed Amendment. An
abstention is not an affirmative vote and will therefore have the same effect
as a vote against the Proposed Amendment. A share with respect to which a
broker non-vote exists on this Proposal 3 is not considered a share "eligible
to vote," and accordingly, a broker non-vote will have no effect on the
outcome of this Proposal 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL 3 TO APPROVE THE
AMENDMENT TO THE COMPANY'S 1994 LONG-TERM INCENTIVE PLAN.
SELECTION OF AUDITORS
The Board of Directors has selected Ernst & Young LLP, independent auditors,
to audit the consolidated financial statements of the Company for the fiscal
year ending September 30, 1998. Ernst & Young LLP has acted as independent
auditors for the Company since 1976. A representative of Ernst & Young LLP is
expected to be present at the Annual Meeting, will have the opportunity to
make a statement, and will be available to respond to appropriate questions.
OTHER BUSINESS
Management knows of no other matters that will be presented at the Annual
Meeting. However, if any other matter properly comes before the Annual
Meeting, or any adjournment or postponement thereof, it is intended that
proxies in the accompanying form will be voted in accordance with the judgment
of the persons named therein.
ANNUAL REPORT
A copy of the Company's Annual Report to Shareholders for fiscal 1997
accompanies this Proxy Statement.
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RESTRICTION ON INCORPORATION BY REFERENCE
The information contained in this Proxy Statement under the captions "Board
Compensation Committee Report on Executive Compensation" and "Stock
Performance Chart" shall not be, or be deemed to be, incorporated by reference
into the Company's Annual Report on Form 10-K for fiscal 1997.
SHAREHOLDER PROPOSALS
To be eligible for inclusion in the Company's proxy materials for the 1999
Annual Meeting of Shareholders, a proposal intended to be presented by a
shareholder for action at that meeting must, in addition to meeting the
shareholder eligibility and other requirements of the Securities and Exchange
Commission's rules governing such proposals, be received not later than
September 29, 1998 by the Secretary of the Company at the Company's principal
executive offices, Great Valley Corporate Center, Four Country View Road,
Malvern, Pennsylvania 19355.
COST OF SOLICITATION
The cost of soliciting Proxies will be borne by the Company. In addition to
solicitation by mail and by the Company's regular officers and employees
personally or by telephone, telegram, facsimile transmission or express mail,
arrangements may be made with brokerage houses and other custodians, nominees
and fiduciaries to send proxies and proxy material to their principals, and
the Company may reimburse them for any attendant expenses. In the event that
the Company engages outside personnel to solicit proxies on its behalf, the
Company will pay their fees and expenses.
It is important that your shares be represented at the meeting. Therefore,
whether or not you expect to be present in person, you are respectfully
requested to complete and sign the enclosed Proxy and promptly return it in
the enclosed stamped addressed envelope. This will not prevent you from voting
in person at the meeting. It will, however, help to assure a quorum and avoid
added proxy solicitation costs.
By Order of the Board of Directors
Richard A. Blumenthal
Secretary
Dated: January 23, 1998
Malvern, Pennsylvania
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APPENDIX A
SYSTEMS & COMPUTER TECHNOLOGY CORPORATION
1994 LONG-TERM INCENTIVE PLAN
Section 1. Purpose; Definitions;. The name of this plan is the Systems &
Computer Technology Corporation 1994 Long-Term Incentive Plan (the "Plan").
The purpose of the Plan is (i) to provide employees of Systems & Computer
Technology Corporation, a Delaware corporation (the "Corporation"), selected
by the Board of Directors of the Corporation, including employees of the
Corporation who are also directors of the Corporation, with financial
incentives to enhance shareholder value and (ii) to enable the Corporation to
attract, retain and motivate employees.
For purposes of the Plan, the following terms shall be defined as set forth
below:
(a) "Affiliate" means, with respect to a person or entity, a person that
directly or indirectly controls, or is controlled by, or is under common
control with such person or entity.
(b) "Board" means the Board of Directors of the Corporation.
(c) "Cause" means a felony conviction of a Participant or the failure of
a Participant to contest prosecution for a felony, or a Participant's
willful misconduct or dishonesty.
(d) "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.
(e) "Committee" means the Board of Directors.
(f) "Disability" means permanent and total disability, as determined
under the Corporation's long-term disability program, except that
Disability of an optionee with respect to an Incentive Stock Option shall
occur if the optionee is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or
can be expected to last for a continuous period of not less than 12 months.
(g) "Fair Market Value" means, as of any given date, the closing price
for a share of Stock, as reported on the National Association of Securities
Dealers Automated Quotation System (or, if the Stock is subsequently listed
on a national securities exchange, the closing price for a share of Stock
on the exchange on the relevant date).
(h) "Incentive Stock Option" means any Stock Option intended to be and
designated as an "Incentive Stock Option" within the meaning of Section 422
of the Code.
(i) "Long-Term Performance Award" or "Long-Term Award" means an award
made pursuant to Section 8 hereof that is payable in cash and/or Stock
(including Restricted Stock) in accordance with the terms of the grant,
based on Corporation, business unit and/or individual performance over a
period of at least two years, in each case as determined by the Committee
and as set forth in the grant letter.
(j) "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(k) "Participant" means an employee of the Corporation or a Subsidiary to
whom an award is granted pursuant to the Plan.
(l) "Restricted Stock" means an award of shares of Stock that is subject
to restrictions pursuant to Section 7 hereof.
(m) "Retirement" means termination of the employment of a Participant
with the Corporation or a Subsidiary other than a termination effected at
the direction of the Corporation (whether or not the Corporation effects
such termination for Cause).
(n) "Securities Broker" means a registered securities broker acceptable
to the Corporation who agrees to effect the cashless exercise of an Option
pursuant to Section 5(k) hereof.
(o) "Stock" means the Common Stock, $.01 par value per share, of the
Corporation.
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(p) "Stock Appreciation Right" means the right, pursuant to an award
granted under Section 6 hereof, to surrender to the Corporation all (or a
portion) of a Stock Option in exchange for an amount equal to the
difference between (i) the Fair Market Value, as of the date such Stock
Option (or such portion thereof) is surrendered, of the shares of Stock
covered by such Stock Option (or such portion thereof) and (ii) the
aggregate exercise price of such Stock Option (or such portion thereof).
(q) "Stock Option" or "Option" means any option to purchase shares of Stock
(including Restricted Stock, if the Committee so determines) granted
pursuant to Section 5 hereof.
(r) "Subsidiary" means, in respect of the Corporation, a subsidiary
corporation, whether now or hereafter existing, as defined in Sections
424(f) and (g) of the Code.
Section 2. Administration. The Plan shall be administered by the Board of
Directors, and all references herein to the Committee shall be construed to
mean the Board of Directors.
The Committee shall have the authority to grant to eligible employees
(including director-employees), pursuant to the terms of the Plan: (i) Stock
Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock and/or (iv)
Long-Term Performance Awards. In particular, the Committee shall have the
authority:
(a) to select the officers and other employees of the Corporation or a
Subsidiary to whom Stock Options, Stock Appreciation Rights, Restricted
Stock and Long-Term Performance Awards may from time to time be granted
hereunder;
(b) to determine whether and to what extent Incentive Stock Options, Non-
Qualified Stock Options, Stock Appreciation Rights, Restricted Stock and
Long-Term Performance Awards, or any combination thereof, are to be granted
hereunder;
(c) to determine the number of shares of Stock to be covered by each such
award granted hereunder;
(d) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder, including, but not
limited to, the share price and any restriction or limitation, or any
vesting acceleration or forfeiture waiver regarding any Stock Option or
other award and/or the shares of Stock relating thereto, based on such
factors as the Committee shall determine, in its sole discretion;
(e) to determine whether and under what circumstances a Stock Option may
be settled in cash or stock, including Restricted Stock under Section 5(j);
(f) to determine whether and under what circumstances a Stock Option may
be exercised without a payment of cash under Section 5(k); and
(g) to determine whether, to what extent and under what circumstances
Stock and other amounts payable with respect to an award under the Plan may
be deferred either automatically or at the election of the Participant.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable; to interpret the terms and provisions of
the Plan and any award issued under the Plan (and any agreements relating
thereto); and to otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the Plan
shall be final and binding on all persons, including the Corporation and
Participants. No member of the Committee shall be liable for any good faith
determination, act or failure to act in connection with the Plan or any award
made under the Plan.
Section 3. Stock Subject to the Plan.
(a) Stock Subject to the Plan. The stock to be subject or related to awards
under the Plan shall be shares of Stock and may be either authorized and
unissued shares of Stock or shares of Stock held in the treasury of
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the Corporation. The maximum number of shares of Stock that may be the subject
of an award under the Plan is 2,750,000 and the Corporation shall reserve for
the purposes of the Plan, out of its authorized and unissued shares of Stock
or out of shares of Stock held in its treasury, or partly out of each, such
number of shares.
Notwithstanding the foregoing, no individual shall receive, over the term of
the Plan, awards for more than an aggregate of 30% of the shares of Stock
authorized for grant under the Plan.
(b) Computation of Stock Available for the Plan. For the purpose of
computing the total number of shares of Stock available under the Plan at any
time during which the Plan is in effect, there shall be debited against the
total number of shares of Stock determined to be available pursuant to
paragraphs (a) and (c) of this Section 3 the maximum number of shares of Stock
subject to issuance upon exercise of Options or other stock based awards made
under the Plan.
(c) Effect of the Expiration or Termination of Awards. If and to the extent
that an award made under the Plan expires, terminates or is cancelled or
forfeited for any reason without having been exercised in full, the shares of
Stock associated with the expired, terminated, cancelled or forfeited portion
of the award shall again become available for award under the Plan. In
addition, during the period that any award remains outstanding under the Plan,
the Committee may make good faith adjustments with respect to the number of
shares of Stock attributable to such awards for purposes of calculating the
maximum number of shares available for the granting of future awards under the
Plan.
(d) Other Adjustments. In the event of any merger, reorganization,
consolidation, recapitalization, Stock dividend, or other change in corporate
structure affecting the Stock, such substitution or adjustment shall be made
in the aggregate number of shares of Stock reserved for issuance under the
Plan, in the number and option price of shares of Stock subject to outstanding
Options granted under the Plan and in the number and price of shares of Stock
subject to other awards made under the Plan, as may be determined to be
appropriate by the Committee in its sole discretion, provided that the number
of shares of Stock subject to any award shall always be a whole number. Such
adjusted option price shall also be used to determine the amount payable by
the Corporation upon the exercise of any Stock Appreciation Right associated
with any Stock Option.
Section 4. Eligibility. Only officers and other employees of the Corporation
(including director-employees, but excluding any other person who serves the
Corporation only as a director) and/or its Subsidiaries are eligible to be
granted awards under the Plan.
Section 5. Stock Options. Stock Options granted under the Plan may be of two
types: (i) Incentive Stock Options or (ii) Non-Qualified Stock Options. Stock
Options may be granted alone, in addition to or in tandem with other awards
granted under the Plan. Any Stock Option granted under the Plan shall be in
such form as the Committee may from time to time approve.
The Committee shall have the authority to grant any optionee Incentive Stock
Options, Non-Qualified Stock Options, or both types of Stock Options (in each
case with or without Stock Appreciation Rights). To the extent that any Stock
Option does not qualify as an Incentive Stock Option, it shall constitute a
separate Non-Qualified Stock Option.
Anything in the Plan to the contrary notwithstanding, no term of the Plan
relating to Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised,
so as to disqualify the Plan under Section 422 of the Code, or, without the
consent of the optionee(s) affected, to disqualify any Incentive Stock Option
under such Section 422.
Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem
appropriate:
(a) Option Price. The exercise price per share of Stock purchasable under
a Stock Option shall be determined by the Committee at the time of grant
but shall be not less than 100% of the Fair Market Value
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of the Stock on the date of the grant. However, any Incentive Stock Option
granted to any optionee who, at the time the Option is granted, owns more
than 10% of the voting power of all classes of stock of the Corporation or
of a Subsidiary, shall have an exercise price per share of not less than
110% of Fair Market Value per share on the date of the grant.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than ten years
after the date the Option is granted. However, any Option granted to any
optionee who, at the time the Option is granted, owns more than 10% of the
voting power of all classes of stock of the Corporation or of a Subsidiary
may not have a term of more than five years. No Option may be exercised by
any person after expiration of the term of the Option.
(c) Exercisability. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by
the Committee at grant; provided, however, that, except as provided in
Section 5(e), unless otherwise determined by the Committee at grant, no
Stock Option shall be exercisable during the six-month period following the
date of the grant of the Option. If the Committee provides, in its
discretion, that any Stock Option is exercisable only in installments, the
Committee may waive such installment exercise provisions at any time at or
after grant, in whole or in part, based on such factors as the Committee
shall determine, in its sole discretion.
(d) Method of Exercise. Subject to the exercise provisions under Section
5(c), Stock Options may be exercised in whole or in part at any time and
from time to time during the term of the Option, by giving written notice
of exercise to the Corporation specifying the number of shares to be
purchased. Such notice shall be accompanied by payment in full of the
purchase price, either by certified or bank check, or such other instrument
as the Committee may accept. As determined by the Committee, in its sole
discretion, at or after grant, payment in full or in part of the exercise
price of a Stock Option may be made in the form of unrestricted Stock based
on the Fair Market Value of the Stock on the date the Option is exercised;
provided, however, that, in the case of an Incentive Stock Option, the
right to make a payment in the form of already owned shares of Stock may be
authorized only at the time the Option is granted.
The Committee, in its sole discretion, may at the time of grant or such
later time as it determines, permit payment of a Stock Option exercise
price of a Non-Qualified Stock Option to be made in whole or in part in the
form of Restricted Stock based on the Fair Market Value of the Stock on the
date the Option is exercised (computed without regard to the restrictions
applicable to the Restricted Stock); provided, however, that in the case of
an Incentive Stock Option, the right to make a payment in the form of
Restricted Stock may be authorized only at the time the Option is granted.
If such payment is permitted, then Stock received upon the exercise of the
Option may be subject to the same forfeiture restrictions as the Restricted
Stock used to make the payment, unless otherwise determined by the
Committee, in its sole discretion, at or after grant.
If payment of the Option exercise price of a Non-Qualified Stock Option
is made in whole or in part in the form of unrestricted Stock already owned
by the Participant, the Corporation may require that the Stock have been
owned by the Participant for a period of six months or longer from the date
of payment.
No shares of Stock shall be issued upon exercise of an Option until full
payment therefor has been made. An optionee shall generally have the rights
to dividends and other rights of a shareholder with respect to shares of
Stock subject to the Option when the optionee has given written notice of
exercise, has paid in full for such shares, and, if requested, has given
the representation described in Section 11(a) hereof.
(e) Termination by Reason of Death. Subject to Section 5(i), if an
optionee's employment by the Corporation or any Subsidiary terminates by
reason of death, any Stock Option held by such optionee may thereafter be
exercised, to the extent then exercisable or on such accelerated basis as
the Committee may determine at or after grant, by the legal representative
of the estate or by the legatee of the optionee under the will of the
optionee, for a period of one year (or such shorter period as the Committee
may specify at grant) from the date of such death or until the expiration
of the stated term of such Stock Option, whichever period is the shorter.
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(f) Termination by Reason of Disability. Subject to Section 5(i), if an
optionee's employment by the Corporation or any Subsidiary terminates by
reason of Disability, any Stock Option held by such optionee may thereafter
be exercised by the optionee or his personal representative, to the extent
it was exercisable at the time of termination, or on such accelerated basis
as the Committee may determine at or after grant, for a period of six
months (or such shorter period as the Committee may specify at grant) from
the date of such termination of employment or until the expiration of the
stated term of such Stock Option, whichever period is shorter; provided,
however, that if the optionee dies within such six-month period (or such
shorter period as the Committee shall specify at grant), any unexercised
Stock Option held by such optionee shall, at the sole discretion of the
Committee, thereafter be exercisable to the extent to which it was
exercisable at the time of death for a period of twelve months from the
date of such death or until the expiration of the stated term of such Stock
Option, whichever period is the shorter.
(g) Termination by Reason of Retirement. Subject to Section 5(i), if an
optionee's employment by the Corporation or any Subsidiary terminates by
reason of Retirement, any Stock Option held by such optionee may thereafter
be exercised by the optionee, to the extent it was exercisable at the time
of such Retirement or on such accelerated basis as the Committee may
determine at or after grant, for a period of thirty (30) days from the date
of such termination of employment, or the stated term of such Stock Option,
whichever period is the shorter.
(h) Other Termination. Unless otherwise determined by the Committee at or
after grant, if an optionee's employment by the Corporation or any
Subsidiary terminates for any reason other than death, Disability or
Retirement, the Stock Option shall thereupon terminate, except that such
Stock Option may thereafter be exercised by the optionee, to the extent it
was exercisable at the time of such termination, if the optionee is
involuntarily terminated by the Corporation or any Subsidiary without
Cause, but only for a period of thirty (30) days from the date of such
termination or employment or the stated term of such Stock Option,
whichever period is shorter.
(i) Incentive Stock Option Limitations. To the extent required for
"incentive stock option" status under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the time of grant) of the
Stock with respect to which Incentive Stock Options are exercisable for the
first time by the optionee during any calendar year under the Plan and/or
any other plan of the Corporation or any Subsidiary shall not exceed
$100,000. For purposes of applying the foregoing limitation, Incentive
Stock Options shall be taken into account in the order granted.
To the extent (if any) permitted under Section 422 of the Code without
causing an Incentive Stock Option to lose its status as such or to be
deemed to be a new Incentive Stock Option under the modification rules of
Section 424(h) of the Code, and subject to any restrictions imposed by the
Committee, if (i) a participant's employment with the Corporation is
terminated by reason of death, Disability or Retirement and (ii) the
portion of any Incentive Stock Option that is otherwise exercisable during
the post-termination period specified under Section 5(e), (f) or (g),
applied without regard to this Section 5(i), is greater than the portion of
such Option that is exercisable as an "incentive stock option" during such
post-termination period under Section 422 after taking the $100,000
limitation into account, such post-termination period of exercisability
shall automatically be extended (but not beyond the original Option term)
to the extent necessary to permit the optionee to exercise such Incentive
Stock Option without violating the $100,000 limitation. The Committee is
also authorized to provide at grant for a similar extension of the post-
termination exercise period in the event of a Change-in-Control.
(j) Cash-out of Option; Settlement of Restricted Stock. On receipt of
written notice to exercise, the Committee may, in its sole discretion,
elect to terminate all or part of the portion of the Option(s) proposed to
be exercised provided that the Corporation pays the optionee an amount in
cash equal to the excess of the Fair Market Value of the Stock otherwise
issuable over the Option price (the "Spread Value") on the effective date
of such cash-out.
In addition, if the option agreement so provides at grant or is amended
after grant and prior to exercise to so provide (with the optionee's
consent), the Committee may require that all or part of the shares to be
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issued upon exercise of an Option take the form of Restricted Stock. For
this purpose, such Restricted Stock shall be valued on the date of exercise
on the basis of the Fair Market Value of such Restricted Stock determined
without regard to the forfeiture restrictions involved.
(k) Cashless Exercise. To the extent permitted under the Rules, and with
the consent of the Committee, the Corporation agrees to cooperate in a
"cashless exercise" of an Option. The cashless exercise shall be affected
by the Participant delivering to the Securities Broker instructions to sell
a sufficient number of shares of Stock to cover the costs and expenses
associated therewith.
Section 6. Stock Appreciation Rights.
(a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan and,
subject to Section 11(g) hereof, shall be transferable only upon transfer of
the related Stock Option. In the case of a Non-Qualified Stock Option, such
rights may be granted either at or after the time of the grant of such Stock
Option. In the case of an Incentive Stock Option, such rights may be granted
only at the time of the grant of such Stock Option.
A Stock Appreciation Right or applicable portion thereof granted with
respect to a given Stock Option shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option, except that,
unless otherwise determined by the Committee, in its sole discretion at the
time of grant, a Stock Appreciation Right granted with respect to less than
the full number of shares covered by a related Stock Option shall not be
reduced until the number of shares covered by an exercise or termination of
the related Stock Option exceeds the number of shares not covered by the Stock
Appreciation Right.
A Stock Appreciation Right may be exercised by an optionee, in accordance
with Section 6(b) of the Plan, by surrendering the applicable portion of the
related Stock Option. Upon such exercise and surrender, the optionee shall be
entitled to receive an amount determined in the manner prescribed in Section
6(b) of the Plan. Stock Options which have been so surrendered, in whole or in
part, shall no longer be exercisable to the extent the related Stock
Appreciation Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be subject to such
terms and conditions, not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Committee, in its sole
discretion, including the following:
(i) Stock Appreciation Rights shall be exercisable only at such time or
times and to the extent that the Stock Options to which they relate shall
be exercisable in accordance with the provisions of Section 5 and this
Section 6 of the Plan; provided, however, that any Stock Appreciation Right
granted subsequent to the grant of the related Stock Option shall not be
exercisable during the first six months of its term, except that this
special limitation shall not apply in the event of death or Disability of
the optionee prior to the expiration of the six-month period.
(ii) Upon the exercise of a Stock Appreciation Right, an optionee shall
be entitled to receive up to, but not more than, an amount in cash and/or
shares of Stock equal in value to the excess of the Fair Market Value of
one share of Stock over the Option price per share specified in the related
Stock Option, multiplied by the number of shares in respect of which the
Stock Appreciation Right shall have been exercised, with the Committee
having the right to determine the form of payment.
(iii) Upon the exercise of a Stock Appreciation Right, the Stock Option
or part thereof to which such Stock Appreciation Right is related, shall be
deemed to have been exercised for the purpose of the limitation set forth
in Section 3 of the Plan on the number of shares of Stock to be issued
under the Plan, but only to the extent of the number of shares issued under
the Stock Appreciation Right at the time of exercise based on the value of
the Stock Appreciation Right at such time.
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(iv) A Stock Appreciation Right granted in connection with a Stock Option
may be exercised only if and when the market price of the Stock subject to
the Stock Option exceeds the exercise price of such Stock Option.
Section 7. Restricted Stock
(a) Administration. Shares of Restricted Stock may be issued either alone or
in addition to other awards granted under the Plan. The Committee shall
determine the officers and key employees of the Corporation and its
Subsidiaries to whom, and the time or times at which, grants of Restricted
Stock will be made, the number of shares to be awarded, the price (if any) to
be paid by the recipient of Restricted Stock, the time or times within which
such awards may be subject to forfeiture, and all other conditions of the
awards.
The Committee may condition the vesting of Restricted Stock upon the
attainment of specified performance goals or such other factors as the
Committee may determine, in its sole discretion, at the time of the award.
The provisions of Restricted Stock awards need not be the same with respect
to each recipient.
(b) Awards and Certificates. The prospective recipient of a Restricted Stock
award shall not have any rights with respect to such award, unless and until
such recipient has executed an agreement evidencing the award and has
delivered a fully executed copy thereof to the Corporation, and has otherwise
complied with the applicable terms and conditions of such award. The purchase
price for shares of Restricted Stock may be zero.
Each Participant receiving a Restricted Stock award shall be issued a stock
certificate in respect of such shares of Restricted Stock. Such certificate
shall be registered in the name of such Participant, and shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such award, substantially in the following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the Systems & Computer Technology Corporation 1994 Long-Term
Incentive Plan and an Agreement entered into between the registered owner
and Systems & Computer Technology Corporation. Copies of such Plan and
Agreement are on file in the offices of Systems & Computer Technology
Corporation."
The Committee shall require that the stock certificates evidencing shares of
Restricted Stock be held in custody by the Corporation until the restrictions
thereon shall have lapsed, and that, as a condition of any Restricted Stock
award, the Participant shall have delivered to the Corporation a stock power,
endorsed in blank, relating to the Stock covered by such award.
(c) Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to this Section 7 shall be subject to the following restrictions and
conditions:
(i) During a period set by the Committee commencing with the date of such
award (the "Restriction Period"), the Participant shall not be permitted to
sell, transfer, pledge, assign or otherwise encumber shares of Restricted
Stock awarded under the Plan. The Committee, in its sole discretion, may
provide for the lapse of such restrictions in installments and may
accelerate or waive such restrictions in whole or in part, based on
service, performance and/or such other factors or criteria as the Committee
may determine, in its sole discretion.
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(ii) Except as provided in this paragraph (ii) and Section 7(c)(i), the
Participant shall have, with respect to the shares of Restricted Stock, all
of the rights of a shareholder of the Corporation, including the right to
vote the shares, and the right to receive any cash dividends. The
Committee, in its sole discretion, as determined at the time of award, may
permit or require the payment of cash dividends to be deferred and, if the
Committee so determines, reinvested in additional Restricted Stock to the
extent shares are available under Section 3 of the Plan.
(iii) Subject to the applicable provisions of the award agreement and
this Section 7, upon termination of a Participant's employment with the
Corporation for any reason during the Restriction Period, all shares of
Restricted Stock still subject to restriction shall be forfeited by the
Participant.
(iv) In the event of hardship or other special circumstances of a
Participant whose employment with the Corporation is involuntarily
terminated (other than for Cause), the Committee may, in its sole
discretion, waive in whole or in part any or all remaining restrictions
with respect to such Participant's shares of Restricted Stock, based on
such factors as the Committee may deem appropriate.
(v) If and when the Restriction Period expires without a prior forfeiture
of the Restricted Stock subject to such Restriction Period, the
certificates for such shares shall be delivered by the Corporation to the
Participant.
Section 8. Long Term Performance Awards.
(a) Awards and Administration. Long Term Performance Awards may be awarded
either alone or in addition to other awards granted under the Plan. Prior to
award of a Long Term Performance Award, the Committee shall determine the
nature, length and starting date of the performance period (the "Performance
Period") for each Long Term Performance Award, which shall be at least two
years (subject to Section 9 below), and shall determine the performance
objectives to be used in valuing Long Term Performance Awards and determining
the extent to which such Long Term Performance Awards have been earned.
Performance objectives may vary from Participant to Participant and between
groups of Participants and shall be based upon such Corporation, business unit
and/or individual performance factors and criteria as the Committee may deem
appropriate, including, but not limited to, earnings per share or return on
equity. Performance Periods may overlap and Participants may participate
simultaneously with respect to Long Term Performance Awards that are subject
to different Performance Periods and/or different performance factors and
criteria.
At the beginning of each Performance Period, the Committee shall determine
for each Long Term Performance Award subject to such Performance Period the
range of dollar values or number of shares of Stock to be awarded to the
Participant at the end of the Performance Period if and to the extent that the
relevant measure(s) of performance for such Long Term Performance Award is
(are) met. Such dollar values or number of shares of Stock may be fixed or may
vary in accordance with such performance and/or other criteria as may be
specified by the Committee, in its sole discretion.
(b) Adjustment of Awards. In the event of special or unusual events or
circumstances affecting the application of one or more performance objectives
to a Long Term Performance Award, the Committee may revise the performance
objectives and/or underlying factors and criteria applicable to the Long Term
Performance Awards affected, to the extent deemed appropriate by the
Committee, in its sole discretion, to avoid unintended windfalls or hardship.
(c) Termination of Employment. Unless otherwise provided in the applicable
award agreement(s), if a Participant terminates employment with the
Corporation during a Performance Period because of death, Disability or
Retirement, such Participant (or his estate) shall be entitled to a payment
with respect to each outstanding Long Term Performance Award at the end of the
applicable Performance Period:
(i) based, to the extent relevant under the terms of the award, upon the
Participant's performance for the portion of such Performance Period ending
on the date of termination and the performance of the applicable business
unit(s) for the entire Performance Period, and
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(ii) pro-rated, where deemed appropriate by the Committee, for the
portion of the Performance Period during which the Participant was employed
by the Corporation, all as determined by the Committee, in its sole
discretion.
However, the Committee may provide for an earlier payment in settlement of
such award in such amount and under such terms and conditions as the Committee
deems appropriate, in its sole discretion.
Subject to Section 9 below, if a Participant terminates employment with the
Corporation during a Performance Period for any other reason, then such
Participant shall not be entitled to any payment with respect to the Long Term
Performance Awards subject to such Performance Period, unless the Committee
shall otherwise determine, in its sole discretion.
(d) Form of Payment. The earned portion of a Long Term Performance Award may
be paid currently or on a deferred basis such interest or earnings equivalent
as may be determined by the Committee, in its sole discretion. Payment shall
be made in the form of cash or whole shares of Stock, including Restricted
Stock, either in a lump sum payment or in annual installments commencing as
soon as practicable after the end of the relevant Performance Period, all as
the Committee shall determine at or after grant. If and to the extent a Long
Term Performance Award is payable in Stock and the full amount of such value
is not paid in Stock, then the shares of Stock representing the portion of the
value of the Long Term Performance Award not paid in Stock shall again become
available for award under the Plan. Prior to any payment, the Committee shall
certify that all of the performance goals or other material terms of the award
have been met.
Section 9. Amendments and Termination. The Committee may amend, alter or
discontinue the Plan at any time and from time to time, but no amendment,
alteration or discontinuation shall be made which would impair the rights of a
Participant with respect to a Stock Option, Stock Appreciation Right,
Restricted Stock or Long Term Performance Award which has been granted under
the Plan, without the Participant's consent, or which, without the approval of
the Corporation's stockholders, would:
(a) except as expressly provided in the Plan, increase the total number
of shares reserved for the purposes of the Plan;
(b) decrease the option price of any Stock Option to less than 100% of
the Fair Market Value on the date of grant;
(c) change the employees or class of employees eligible to participate in
the Plan; or
(d) extend the maximum Option term under Section 5(b) of the Plan.
The Committee may substitute new Stock Options for previously granted Stock
Options, including previously granted Stock Options having higher exercise
prices.
Subject to the above provisions, the Committee shall have broad authority to
amend the Plan to take into account changes in applicable tax laws and
accounting rules, as well as other developments. Notwithstanding the
foregoing, no amendment to the Plan may be made by the Committee without the
approval of the Corporation's stockholders if such approval would be required
under the Rules in order to ensure that transactions effected under the Plan
are eligible for the benefit of Rule 16b-3.
Section 10. Unfunded Status of Plan. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant or optionee by the Corporation, nothing
contained herein shall give any such Participant or optionee any rights that
are greater than those of a general creditor of the Corporation. In its sole
discretion, the Committee may authorize the creation of trusts or other
arrangements to meet the obligations created under the Plan to deliver Stock
or payments in lieu or with respect to awards hereunder, provided, however,
that, unless the Committee otherwise determines, the existence of such trusts
or other arrangements is consistent with the "unfunded" status of the Plan.
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Section 11. General Provisions.
(a) The Committee may require each person acquiring Stock or a Stock based
award under the Plan to represent to and agree with the Corporation in writing
that the Participant is acquiring the Stock or Stock based award for
investment purposes and without a view to distribution thereof and as to such
other matters as the Committee believes are appropriate to ensure compliance
with applicable Federal and state securities laws. The certificate evidencing
such award and any securities issued pursuant thereto may include any legend
which the Committee deems appropriate to reflect any restrictions on transfer
and compliance with securities laws.
All certificates for shares of Stock or other securities delivered under the
Plan shall be subject to such stock-transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities Act of 1933, as amended, the Exchange Act, any
stock exchange upon which the Stock is then listed, and any other applicable
Federal or state securities laws, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to
such restrictions.
(b) Nothing contained in the Plan shall prevent the Board of Directors from
adopting other or additional compensation arrangements, subject to stockholder
approval if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases.
(c) The adoption of the Plan shall not confer upon any employee of the
Corporation or a Subsidiary any right to continued employment with the
Corporation or such Subsidiary, nor shall it interfere in any way with the
right of the Corporation or such Subsidiary to terminate the employment of any
of its employees at any time.
(d) No later than the date as of which an amount first becomes includible in
the gross income of the Participant for Federal income tax purposes with
respect to any award under the Plan, the Participant shall pay to the
Corporation, or make arrangements satisfactory to the Committee regarding the
payment, of any Federal, state or local taxes of any kind required by law to
be withheld with respect to such amount. Unless otherwise determined by the
Committee, the minimum required withholding obligations may be settled with
Stock, including Stock that is part of the award that gives rise to the
withholding requirement. The obligations of the Corporation under the Plan
shall be conditional on such payment or arrangements and the Corporation
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the Participant.
(e) At the time of grant of an award under the Plan, the Committee may
provide that the shares of Stock received as a result of such grant shall be
subject to a right of first refusal, pursuant to which the participant shall
be required to offer to the Corporation any shares that the participant wishes
to sell, with the price being the then Fair Market Value of the Stock, subject
to such other terms and conditions as the Committee may specify at the time of
grant.
(f) The reinvestment of dividends in additional Restricted Stock (or in
other types of Plan awards) at the time of any dividend payment shall only be
permissible if sufficient shares of Stock are available under Section 3 of the
Plan for such reinvestment (taking into account then outstanding Stock Options
and other Plan awards).
(g) Except as may be otherwise determined by the Board with respect to any
particular award under the Plan: (i) no award under the Plan shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution or pursuant to a qualified domestic relations order, as
defined in the Code or Title I of the Employee Retirement Income Security Act,
and (ii) all awards under the Plan shall be exercisable, during the
Participant's lifetime, only by the Participant or, in the event of his
Disability, by his personal representative.
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(h) The Committee shall establish such procedures as it deems appropriate
for a Participant to designate a beneficiary to whom any amounts payable in
the event of the Participant's death are to be paid.
(i) The Plan and all awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of
Delaware.
Section 12. Effective Date of Plan. The Plan shall be effective on the date
it is approved by the affirmative vote of the holders of a majority of the
shares of Stock present, or represented, and entitled to vote on the Plan at a
meeting of stockholders.
Section 13. Term of Plan. No Stock Option, Stock Appreciation Right,
Restricted Stock or Long Term Performance Award shall be granted pursuant to
the Plan on or after the tenth (10th) anniversary of the date of initial
stockholder approval of the Plan, but awards granted prior to such tenth
(10th) anniversary may extend beyond that date.
A-11
<PAGE>
REVOCABLE PROXY
SYSTEMS & COMPUTER TECHNOLOGY CORPORATION
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
ANNUAL MEETING OF SHAREHOLDERS
February 26, 1998
The undersigned, revoking all previous proxies, hereby appoints Michael J.
Emmi and Richard A. Blumenthal, and each of them acting individually, as
attorney and proxy of the undersigned, with full power of substitution, to vote,
as indicated below and in their discretion upon such other matters as may
properly come before the meeting, all shares which the undersigned would be
entitled to vote at the Annual Meeting of the Shareholders of the Company to be
held on February 26, 1998, and at any adjournment or postponement thereof.
-----------------------
Please be sure to sign and date Date
this Proxy in the box below.
- -------------------------------------------------------------------------------
Stockholder sign above Co-holder (if any) sign above
- --- ---------------- ---------
C O M M O N
1. Election of Directors:
Thomas I. Unterberg For [_] Withhold [_] All Accept [_]
Michael D. Chamberlain
For a three-year term expiring at the 2001 Annual Meeting of Shareholders
2. Approval of an Amendment of the Company's Certificate of Incorporation to
Increase the Authorized Shares of Common Stock from 24,000,000 to 100,000,000.
For Against Abstain
[_] [_] [_]
3. Approval of an Amendment to the Company's 1994 Long-Term Incentive Plan
increasing the Number of Shares of Common Stock Reserved for Issuance thereunder
from 1,750,000 to 2,750,000.
For Against Abstain
[_] [_] [_]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. UNLESS OTHERWISE
SPECIFIED, THE SHARES WILL BE VOTED "FOR" THE ELECTION OF THE DIRECTOR NOMINEES
LISTED ABOVE, "FOR" APPROVAL OF AN AMENDMENT OF THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE THE AUTHORIZED SHARES OF COMMON STOCK FROM 24,000,000
TO 100,000,000, AND "FOR" APPROVAL OF AN AMENDMENT TO THE COMPANY'S 1994 LONG-
TERM INCENTIVE PLAN INCREASING THE NUMBER OF SHARES OF COMMON STOCK RESERVED
FOR ISSUANCE THEREUNDER FROM 1,750,000 TO 2,750,000. THIS PROXY ALSO DELEGATES
DISCRETIONARY AUTHORITY WITH RESPECT TO ANY OTHER BUSINESS WHICH MAY PROPERLY
COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING
AND PROXY STATEMENT.
- --------------------------------------------------------------------------------
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
SYSTEMS & COMPUTER TECHNOLOGY CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
NOTE: Please sign this Proxy exactly as name(s) appear on your Stock
Certificate. When signing as attorney-in-fact, executor, administrator,
trustee or guardian, please add your title as such, and if signor is a
corporation, please sign with full corporate name by a duly authorized
officer or officers and affix the corporate seal where stock is issued
in the name of two (2) or more persons. All such persons should sign.
PLEASE ACT PROMPTLY
SIGN, DATE AND MAIL YOUR PROXY CARD TODAY
