<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ _ ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement [ _ ] Confidential, for Use of the Com-
mission Only (as permitted by
Rule 14a-6(e)(2))
[ _ ] Definitive Proxy Statement
[ _ ] Definitive Additional Materials
[ _ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
SunGard Data Systems Inc.
---------------------------------------------------------------
(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>
PRELIMINARY PROXY STATEMENT
[TO APPEAR ON SUNGARD LETTERHEAD]
March 31, 1997
Dear Stockholder:
You are cordially invited to attend the 1997 Annual Meeting of Stockholders of
SunGard Data Systems Inc., which will be held on Friday, May 9, 1997, beginning
at 9:00 a.m., at the Four Seasons Hotel, One Logan Square, Philadelphia,
Pennsylvania. The official notice of the meeting, together with a proxy
statement and proxy card, is enclosed. Please give this information your
careful attention.
Your participation in the Company's affairs is important. To assure your
representation at the meeting, whether or not you expect to be present, please
date and sign the enclosed proxy card and return it as soon as possible in the
envelope provided. Also, please indicate on the proxy card whether you plan to
attend the meeting.
Your copy of the Company's 1996 Annual Report also is enclosed. We appreciate
your interest in the Company.
Sincerely,
/s/ James L. Mann
James L. Mann
Chairman, President and
Chief Executive Officer
- --------------------------------------------------------------------------------
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE DATE AND SIGN YOUR PROXY
CARD AND PROMPTLY RETURN IT IN THE REPLY ENVELOPE PROVIDED (WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES). IF YOU RECEIVE MORE THAN ONE PROXY
CARD BECAUSE YOU OWN SHARES THAT ARE REGISTERED DIFFERENTLY, THEN PLEASE DATE,
SIGN AND RETURN ALL OF THEM. THANK YOU.
- --------------------------------------------------------------------------------
<PAGE>
PRELIMINARY PROXY STATEMENT
SunGard Data Systems Inc.
1285 Drummers Lane
Wayne, Pennsylvania 19087
(610) 341-8700
--------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 9, 1997
--------------------------------------------------
To Our Stockholders:
The 1997 Annual Meeting of Stockholders of SunGard Data Systems Inc. will be
held at 9:00 a.m. local time, on Friday, May 9, 1997, at the Four Seasons Hotel,
One Logan Square, Philadelphia, Pennsylvania 19103, for the following purposes:
1. To elect directors.
2. To vote on approval of an amendment to the Company's Restated Certificate
of Incorporation increasing the number of authorized shares of common
stock by 60,000,000.
3. To act upon such other business as may properly come before the meeting.
Only holders of the Company's common stock at the close of business on March 17,
1997 are entitled to receive notice of the meeting and to vote at the meeting.
You are cordially invited to attend the meeting in person. Whether or not you
plan to attend the meeting, you are urged to date and sign the enclosed proxy
card and promptly return it in the enclosed reply envelope (which requires no
postage if mailed in the United States).
By Order of the Board of Directors,
/s/ Lawrence A. Gross
Lawrence A. Gross
Vice President and General Counsel,
Secretary
March 31, 1997
<PAGE>
PRELIMINARY PROXY STATEMENT
SunGard Data Systems Inc.
1285 Drummers Lane
Wayne, Pennsylvania 19087
(610) 341-8700
PROXY STATEMENT
This proxy statement and the accompanying proxy card are being furnished to the
stockholders of SunGard Data Systems Inc. in connection with the solicitation of
proxies on behalf of the Board of Directors of the Company for use in voting at
the 1997 Annual Meeting of Stockholders to be held at the Four Seasons Hotel,
One Logan Square, Philadelphia, Pennsylvania 19103 on Friday, May 9, 1997, at
9:00 a.m., or at any adjournment or postponement of the meeting. These proxy
materials are first being mailed to stockholders on or about March 31, 1997.
Proxies in the form enclosed, if properly submitted and not revoked, will be
voted as directed on the proxies. Any proxy not directing to the contrary will
be voted "for" the election of the named nominees as directors and "for"
approval of each of the other proposals. Sending in a signed proxy does not
affect a stockholder's right to attend the meeting and vote in person, since the
proxy is revocable. Any stockholder who submits a proxy may revoke it at any
time before it is voted by delivering a later-dated proxy or a written notice of
revocation to the Secretary of the Company at the Company's headquarters or at
the meeting.
At the close of business on March 17, 1997, the record date for the
determination of stockholders of the Company entitled to receive notice of and
to vote at the 1997 Annual Meeting, the Company's outstanding voting securities
consisted of 43,068,568 shares of common stock, held by approximately 2,600
stockholders of record. In order for a quorum to be present at the 1997 Annual
Meeting, a majority of the outstanding shares of the Company's common stock as
of the close of business on the record date must be present in person or
represented by proxy at the meeting. All such shares that are present in person
or represented by proxy at the meeting will be counted in determining whether a
quorum is present, no matter how the shares are voted or whether they abstain
from voting or are broker non-votes.
Holders of common stock are entitled to one vote per share. The election of
directors will be determined by a plurality vote, with the eight nominees
receiving the most "for" votes being elected. Approval of the amendment to the
Company's Restated Certificate of Incorporation requires that the holders of a
majority of the outstanding shares vote "for" the amendment. An abstention or
broker non-vote on any proposal other than the election of directors, therefore,
will have the same legal effect as an "against" vote, although some persons
analyzing the voting results may interpret these actions differently.
The Company will pay the cost of this solicitation, which will be made primarily
by mail. Proxies also may be solicited in person, or by telephone, facsimile or
similar means, by directors, officers or employees of the Company without
additional compensation. In addition, D. F. King & Co., Inc. will provide
solicitation services to the Company for a fee of approximately $4,500 plus out-
of-pocket expenses. The Company will, on request, reimburse stockholders who
are brokers, dealers, banks or voting trustees, or their nominees, for their
reasonable expenses in sending proxy materials and annual reports to the
beneficial owners of the shares they hold of record.
1
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
Eight directors are to be elected at the 1997 Annual Meeting to serve for one-
year terms until the 1998 Annual Meeting and until their respective successors
are elected and qualified. All of the nominees currently are serving as
directors of the Company. The Company knows of no reason why any nominee would
be unable to serve as a director. Each nominee has consented to being named in
this proxy statement and to serve if elected. If any nominee should for any
reason become unable to serve, then all valid proxies will be voted for the
election of such substitute nominee as the Board of Directors may designate, or
the Board may reduce the number of directors to eliminate the vacancy.
The following information about the Company's nominees for election as directors
is based, in part, upon information furnished by the nominees.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Nominee and Current Age Principal Occupations and Employment
Positions with the Company
- ----------------------------------------------------------------------------------------
<S> <C> <C>
========================================================================================
Gregory S. Bentley 41 President and Chairman of the Board (since
Director (since 1991) 1995) and Vice President (1991 to 1995),
Member, Audit Committee Bentley Systems, Inc., Exton, PA (engineering
software company); President (1983 to 1991),
SunGard Systems International Inc., a
subsidiary of the Company since 1987.
- ----------------------------------------------------------------------------------------
Michael C. Brooks 52 Managing Partner (since 1993) and General
Director (since 1985) Partner (since 1985), J. H. Whitney & Co.,
Chairman, Compensation Committee New York, NY (venture capital firm).
Member, Executive Committee
- ----------------------------------------------------------------------------------------
Albert A. Eisenstat 66 General Partner (since 1996), Discovery
Director (since 1991) Ventures, LLC, Menlo Park, CA (venture capital
Member, Compensation firm); Private investor (1993 to 1996);
Committee Executive or Senior Vice President (1985 to
1993) and Vice President and General Counsel
(1980 to 1987), Apple Computer, Inc.,
Cupertino, CA (computer and software company).
- ----------------------------------------------------------------------------------------
Bernard Goldstein 66 Director (since 1997) and Managing Director
Director (since 1994) (1979 to 1996), Broadview Associates LLC,
Member, Compensation Fort Lee, NJ (investment banking firm).
Committee
- ----------------------------------------------------------------------------------------
James L. Mann 62 Chairman of the Board (since 1987) and
Director (since 1983) President and Chief Executive Officer (since
Chairman, Executive Committee 1986) of the Company; President and Chief
Chairman of the Board, President Operating Officer (1983 to 1985) of the
and Chief Executive Officer Company.
- ----------------------------------------------------------------------------------------
Michael Roth 65 Of Counsel (since 1989), Rosenman & Colin
Director (since 1991) LLP, New York, NY (law firm).
Member, Audit Committee
- ----------------------------------------------------------------------------------------
Malcolm I. Ruddock 54 Treasurer (since 1989), Director of Finance
Director (since 1983) (1988 to 1989) and Director of Acquisitions
Chairman, Audit Committee and Divestments (1979 to 1988), Sun Company,
Member, Executive Committee Inc., Philadelphia, PA (independent refiner
and marketer).
- ----------------------------------------------------------------------------------------
Lawrence J. Schoenberg 64 Director of public companies (since 1990);
Director (since 1991) Chairman (1967 to 1991) and Chief Executive
Member, Audit Committee Officer (1967 to 1990), AGS Computers, Inc.,
Mountainside, NJ (software and computer
services company).
- ----------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
Mr. Brooks also is a director of DecisionOne Corporation and Nitinol Medical
Technologies, Inc. Mr. Eisenstat also is a director of all funds in the Benham
Mutual Fund Group, Business Objects, S.A. and Commercial Metals Company. Mr.
Goldstein also is a director of Apple Computer, Inc., Enterprise Systems Inc.,
Franklin Electronic Publishers Inc. and SPSS, Inc. Mr. Mann also is a director
of Integrated Systems Consulting Group and T-Netix, Inc. Mr. Schoenberg also is
a director of Cellular Technical Services, Inc., Government Technology Services
Inc., Merisel Inc. and PennAmerica Group Inc.
Board of Directors and Committee Meetings
During 1996, the Board of Directors held eight meetings, the Audit Committee
held five meetings, the Compensation Committee held five meetings, and the
Executive Committee held one meeting. The Board of Directors does not have a
standing Nominating Committee. During 1996, each director attended at least 92%
of the total number of meetings of the Board of Directors and Committees on
which he served. Meeting attendance averaged 99% among all directors.
The Audit Committee reviews the Company's accounting and financial practices and
policies and the scope and results of the Company's external and internal
audits. The Audit Committee also recommends to the Board of Directors the
selection of the Company's independent public accountants and administers the
Company's business conduct, conflict of interest and related policies. Only
outside directors who are not employees of the Company may serve on the Audit
Committee.
The Compensation Committee establishes the compensation policies for executive
officers of the Company, evaluates and approves the compensation of the chief
executive officer and reviews his recommendations as to the compensation of the
other executive officers. The Equity Award Subcommittee of the Compensation
Committee, composed of Messrs. Brooks (chairman) and Eisenstat, administers the
Company's stock option, purchase and award plans. Only outside directors who
are not employees of the Company may serve on the Compensation Committee.
The Executive Committee reviews certain aspects of transactions and policies
that have been generally approved by the Board of Directors. The Executive
Committee also is authorized to exercise the powers of the Board of Directors
during the intervals between Board meetings, except those powers that are
prohibited by law from being delegated.
Director Compensation
Directors who are employees of the Company do not receive additional
compensation for serving on the Board of Directors or Committees. Each outside
director receives an annual fee of $6,000, fees of $2,000 for each quarterly
meeting of the Board of Directors attended and $500 for each other Board meeting
attended, and reimbursement of applicable travel and other expenses. In
addition, each outside director Committee chairman receives an annual fee of
$2,000, and each outside director Committee member receives fees of $1,000 for
each Committee meeting attended. Directors who serve on subcommittees do not
receive additional compensation.
Under the Company's Restricted Stock Award Plan for Outside Directors,
restricted stock awards are automatically granted to "outside directors" --
those who are not, and were not during the twelve months before election to the
Board, officers or employees of the Company. Each outside director
automatically receives an award of 10,000 shares upon initial election to the
Board, and will automatically receive additional awards of 10,000 shares upon
reelection as an outside director every fifth year thereafter.
The shares awarded are subject to transfer restrictions until they vest, at the
rate of 2,000 shares per year, on the dates of the Company's next five Annual
Meetings following the date of grant. If an
3
<PAGE>
outside director dies or is permanently disabled, or if a change in control of
the Company occurs, then all remaining unvested shares immediately vest. If an
outside director's directorship terminates for any other reason, then all
remaining unvested shares are forfeited.
The Company has entered into indemnification agreements, in the form approved by
the stockholders, with the Company's directors and officers.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table contains certain information about the beneficial ownership
of the Company's common stock as of March 17, 1997 (the record date) by each
person who is known by the Company to beneficially own more than 5% of the
Company's common stock, by each of the Company's directors, by each of the
Company's executive officers named in the Summary Compensation Table below, and
by all of the Company's directors and executive officers as a group.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Number of Shares Beneficially Owned
------------------------------------------------- Percent
Name of Beneficial Owner or Group Voting or Right to of
Direct/(1)/ Investment Power/(2)/ Acquire/(3)/ Class/(4)/
=======================================================================================================================
<S> <C> <C> <C> <C>
FMR Corp./(5)/ -- 4,429,300 /(6)/ -- 10.3%
Edward C. Johnson 3d, Chairman, FMR Corp.
Abigail P. Johnson, Director, FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109
- -----------------------------------------------------------------------------------------------------------------------
Provident Investment Counsel Inc. -- 2,291,429 /(7)/ -- 5.3%
300 North Lake Avenue
Pasadena, California 91101
- -----------------------------------------------------------------------------------------------------------------------
T. Rowe Price Associates, Inc./(5)/ -- 4,037,300 /(8)/ -- 9.4%
100 E. Pratt Street
Baltimore, Maryland 21202
- -----------------------------------------------------------------------------------------------------------------------
Gregory S. Bentley (director) 109,878 -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Michael C. Brooks (director) 22,000 -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Cristobal I. Conde (executive officer) 217,813 -- 15,946 --
- -----------------------------------------------------------------------------------------------------------------------
Albert A. Eisenstat (director) 22,000 -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Bernard Goldstein (director) 19,000 1,000 -- --
- -----------------------------------------------------------------------------------------------------------------------
Lawrence A. Gross (executive officer) 18,456 -- 40,488 --
- -----------------------------------------------------------------------------------------------------------------------
James L. Mann (director and chief executive officer) 450,044 -- 562,500 2.3%
- -----------------------------------------------------------------------------------------------------------------------
Michael F. Mulholland (executive officer) 2,381 -- 29,400 --
- -----------------------------------------------------------------------------------------------------------------------
Michael Roth (director) 20,000 -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Malcolm I. Ruddock (director) 16,500 5,500 -- --
- -----------------------------------------------------------------------------------------------------------------------
Lawrence J. Schoenberg (director) 18,876 -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Richard C. Tarbox (executive officer) 3,896 -- 28,550 --
- -----------------------------------------------------------------------------------------------------------------------
All 19 directors and executive officers 1,108,820 6,620 986,872 4.8%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
(1) Shares held in the beneficial owner's name or jointly with others, or in
the name of a broker, bank, nominee or trustee for the beneficial owner's
account, including shares held under the Company's Employee Stock Purchase
Plan. Includes 4,000, 10,000, 10,000, 6,000, 10,000, 10,000 and 10,000
restricted shares held by Messrs. Bentley, Brooks, Eisenstat, Goldstein,
Roth, Ruddock and Schoenberg, respectively, and 60,000 restricted shares
held by all directors as a group, that are subject to transfer restrictions
and forfeiture (see Director Compensation).
(2) Shares for which the beneficial owner has or may be deemed to have sole or
shared voting and/or investment power.
(3) Shares which the beneficial owner has the right to acquire within 60 days
after the record date by exercising stock options. Includes 2,346, 6,768,
375,000 and 5,600 unvested shares that may be acquired by Messrs. Conde,
Gross, Mann and Tarbox, respectively, and 410,574 unvested shares that may
be acquired by all executive officers as a group which, if acquired, would
be subject to transfer restrictions and repurchase by the Company under the
Company's option and equity plans.
(4) Unless otherwise indicated, the beneficial ownership of any named person
does not exceed one percent of the outstanding shares of common stock.
(5) Each of these beneficial owners, and/or one of its affiliates, is a
customer of the Company, having purchased the Company's software and/or
computer services in the ordinary course of business.
(6) Based upon a Schedule 13G, Amendment No. 3, dated February 14, 1997, filed
by the beneficial owners.
(7) Based upon a Schedule 13G, Amendment No. 1, dated February 10, 1997, filed
by Provident Investment Counsel Inc.
(8) Based upon a Schedule 13G, Amendment No. 5, dated February 14, 1997, filed
by T. Rowe Price Associates, Inc. ("Price Associates"). Includes shares
owned by various individual and institutional investors which Price
Associates serves as investment adviser with power to direct investments
and/or sole power to vote. Price Associates disclaims beneficial ownership
of these shares.
EXECUTIVE COMPENSATION
Report of the Compensation Committee and Equity Award Subcommittee
The Company's compensation policies for executive officers, as determined by the
Compensation Committee, are to (a) provide competitive compensation packages so
as to attract and retain superior executive talent, (b) link a significant
portion of compensation to financial results, so as to reward successful
performance, and (c) provide long-term equity compensation, so as to further
align the interests of executive officers with those of stockholders and further
reward successful performance. The principal components of the Company's
executive officer compensation program are base salary, annual cash incentive
payments, and long-term incentive awards under which stock options may be earned
if performance goals are met.
Cash Compensation. The primary factor used to set cash compensation for the
Company's executive officers is an analysis of competitive executive
compensation based upon general business compensation surveys as well as more
specific compensation surveys of companies of comparable business, size and
complexity to the Company. An independent compensation consultant, whose
services are available to the Compensation Committee, assists the Company with
this analysis of
5
<PAGE>
competitive compensation. Although many of the companies covered by this
analysis are included in the Nasdaq Computer and Data Processing Index (see
Performance Graph), the Index companies are not separately analyzed for
compensation purposes, because compensation data for the Index companies as a
group is not readily available to the Company.
The Company's policy is to pay its executive officers at or somewhat above
competitive compensation averages for comparable positions. Compensation levels
for individual executive officers, however, may be more or less than competitive
averages, depending upon a subjective assessment of individual factors such as
the executive's position, skills, achievements, tenure with the Company and
historical compensation levels. In applying the analysis of competitive
compensation, the Company focuses on total cash compensation. The split between
base salary and annual cash incentive payment also is based upon that analysis,
but it tends to be somewhat more influenced by individual factors such as the
executive's position and historical compensation levels. Generally, previously
granted stock options and other equity awards are not considered in setting cash
compensation levels.
The performance goals for executive officers' 1996 annual cash incentive plans
were set at the beginning of the year and took into account the Company's
overall financial goals for 1996. For corporate officers, the incentive
payments depended solely upon the rate of increase in the Company's earnings per
share over the previous year, except that in one case an additional incentive
payment was based upon a performance goal specific to the executive's function.
For group chief executive officers, the incentive payments depended solely upon
the budgeted operating income of the operating business groups they manage,
except that from 9% to 20% of the incentive payment could be lost depending upon
the group's average number of days sales outstanding in accounts receivable.
On average, total cash compensation at targeted goals for executive officers
increased by 12% in 1996, and incentive payments at targeted goals constituted
38% of total cash compensation. Based upon actual 1996 results, all executive
officers met or exceeded their targeted goals, except for two group chief
executive officers.
Equity Compensation. Historically, the Company granted stock options and awards
at irregular intervals at the discretion of the Compensation Committee. In
evaluating equity compensation for an executive officer, the Compensation
Committee considered primarily the executive's position, skills, achievements
and tenure with the Company, and the level and timing of previously granted
stock options and awards. The Compensation Committee also considered the
Company's total "overhang," which equals (a) the number of shares of common
stock subject to outstanding stock options and awards plus the number of shares
of common stock available for future stock options and awards, divided by (b)
the number of total outstanding shares of common stock plus the number of shares
of common stock described in clause (a), expressed as a percentage. As of
December 31, 1996, the Company's total overhang was 9%, of which 7% was
represented by shares subject to outstanding stock options and awards, and 2%
was represented by shares available for future stock options and awards. The
Equity Award Subcommittee of the Compensation Committee, formed in August 1996
to comply with the new Section 16 rules under the Securities Exchange Action of
1934, as amended, has the authority to approve all grants of stock options and
other equity awards.
In 1994, the Company began a program ("LTIP program") of granting annual long-
term incentive awards to the group chief executive officers ("LTIP awards").
Each LTIP award allows a group chief executive officer to earn stock options if
he achieves certain goals for cumulative growth in his group's operating income
during a three-year period, subject to continued employment during that period.
Changes in 1996. After consultations with the Company's independent
compensation consultant, the Company changed its incentive compensation programs
to more closely align the interests of its key executives with those of its
stockholders and to implement a performance-based equity compensation program
for more of its key executives. Beginning in 1996, the performance criterion
for annual cash incentive payments to corporate officers was changed to growth
in earnings per share rather than
6
<PAGE>
growth in net income. Also beginning in 1996, the LTIP program for group chief
executive officers was extended to cover corporate officers (excluding Mr. Mann
as explained below), business unit presidents and other key executives. The
number of option shares that may be earned by each participant in the LTIP
program is determined on the basis of an analysis of competitive equity
compensation programs. This wider-scope LTIP program is intended to replace, for
most purposes, the Company's prior practice of granting stock options and awards
at irregular intervals, although the Company will continue this practice in
certain circumstances such as for key employees who do not participate in the
LTIP program, for newly hired or promoted executives, and for executives who
join the Company via acquisition. Since most participants in the new LTIP
program cannot earn any options until the beginning of 1999, and in view of the
Company's low overhang at the beginning of 1996 and the previous absence of a
regular stock option grant program, the Compensation Committee also approved the
grant of stock options to executive officers, business unit presidents and
certain other key employees in early 1996 (see Option Grant Table).
Chief Executive Officer's Compensation. Mr. Mann's base salary for 1996 was
$500,000, an increase of $100,000 or 25% over his 1995 base salary. Mr. Mann's
1996 annual cash incentive payment depended solely upon the rate of increase in
the Company's earnings per share. If the Company's 1996 earnings per share had
increased by 15%, then Mr. Mann's 1996 incentive payment would have been
$325,000, yielding total cash compensation at approximately the 65th percentile
of competitive compensation levels based upon the Company's analysis. The
Company's actual 1996 earnings per share (excluding charges for purchased in-
process research and development related to three 1996 acquisitions and other
one-time charges) grew by 20%, yielding an incentive payment to Mr. Mann of
$450,000.
Options to purchase 100,000 shares of the Company's common stock at fair market
value on the date of grant were issued to Mr. Mann at the beginning of 1996.
This grant was part of a larger option award that was approved during 1995, but
could not be fully issued during 1995 due to limitations in the Company's equity
incentive plans (see Option Grant Table). During the four-year vesting period
of this award, Mr. Mann will not participate in the Company's LTIP program.
Deductibility of Certain Compensation. Section 162(m) of the Internal Revenue
Code (the "Code") denies a deduction for certain compensation exceeding
$1,000,000 paid to the chief executive officer and four other highest paid
executive officers, excluding (among other things) certain performance- based
compensation. Through December 31, 1996, this provision has not affected the
Company's tax deductions, but the Company will continue to monitor the potential
impact of Section 162(m) on the Company's ability to deduct executive
compensation.
Compensation Committee: Equity Award Subcommittee:
---------------------- -------------------------
Michael C. Brooks, Chairman Michael C. Brooks, Chairman
Albert A. Eisenstat, Member Albert A. Eisenstat, Member
Bernard Goldstein, Member
7
<PAGE>
Summary Compensation Table
The following table contains certain information about compensation earned
during the last three fiscal years by the Company's chief executive officer and
four other executive officers who were most highly compensated during the most
recent fiscal year. The Company's fiscal year is the calendar year.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
--------------------------------------------------------------------
Other Awards/(2)/ Payouts/(3)/ All
Name and Principal Position Year Salary Bonus Annual -------------------------------- Other
($) ($) Compensa- Securities Long-Term Compensa-
tion ($)/(1)/ Underlying Incentive tion ($)/(4)/
Options/SARs (#) Plans ($)
=================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
JAMES L. MANN 1996 500,000 450,000 8,314 100,000/(5)/ -- 5,429
Chairman of the Board, President 1995 400,000 449,806 73,490 400,000 -- 5,280
and Chief Executive Officer 1994 370,000 389,492 55,578 -- -- 3,684
- ---------------------------------------------------------------------------------------------------------------------------------
CRISTOBAL I. CONDE 1996 320,000 329,450 -- 18,000 368,995 6,000
Chief Executive Officer, SunGard 1995 300,000 425,100 -- -- -- 6,000
Trading Systems Group 1994 297,250 104,013 -- -- -- 5,625
- ---------------------------------------------------------------------------------------------------------------------------------
LAWRENCE A. GROSS 1996 224,000 142,721 5,362 18,000 -- 6,000
Vice President and General Counsel 1995 214,000 100,489 5,661 -- -- 6,000
1994 201,285 86,998 4,890 8,000 -- 5,625
- ---------------------------------------------------------------------------------------------------------------------------------
MICHAEL F. MULHOLLAND/(6)/ 1996 220,000 237,989 8,075 18,000 177,106 6,000
Chief Executive Officer, SunGard 1995 200,000 149,588 9,321 33,000 -- 6,000
Recovery Services Group 1994 -- -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
RICHARD C. TARBOX 1996 180,000 223,958 5,669 18,000 -- 6,000
Vice President-Corporate 1995 153,000 202,868 5,566 -- -- 6,000
Development 1994 144,000 110,662 6,069 14,000 -- 5,625
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Consists of amounts reimbursed in connection with the payment of taxes.
The cost of perquisites is not disclosed for any executive officer named in
the table, because the disclosure threshold (the lower of $50,000 or 10% of
salary plus bonus) was not reached.
(2) Generally, the Company's stock option awards vest over a four- or five-year
period. Upon termination of employment, only vested stock option shares
may be purchased. Upon a change in control of the Company, all unvested
stock options vest six months later or upon an earlier involuntary
termination of employment without cause.
(3) Payouts under the 1994-1996 LTIP awards were based upon the financial
performance of the business units managed by group chief executive
officers. The payouts consisted of non-qualified stock options, earned as
of December 31, 1996 and granted on January 2, 1997, for 13,600 shares and
6,800 shares, respectively, having an exercise price of $12.368 and
$13.455 per share, respectively, for Messrs. Conde and Mulholland. All
option shares are fully vested on the date of grant and fully exercisable
six months thereafter. The value of the payouts equals the difference
between the market value of the option shares on the date earned and the
exercise price of the options shares.
(4) Consists of Company contributions to a defined contribution retirement
plan.
(5) Consists of option shares that were authorized for issuance to Mr. Mann
during 1995, but were not issued until the beginning of 1996 (see Report of
the Compensation Committee and Equity Award Subcommittee).
8
<PAGE>
(6) Mr. Mulholland became Chief Executive Officer of the SunGard Recovery
Services Group in October 1995.
Option Grant Table
The following table contains, for each of the Company's executive officers named
in the Summary Compensation Table, (a) the number of shares of the Company's
common stock underlying options granted during 1996, (b) the percentage that
those options represent of total options granted to employees during 1996, (c)
the exercise price per share, which equals the market value on the date of
grant, (d) the expiration date, and (e) the potential realizable value, assuming
5% and 10% annual rates of appreciation (compounded annually) in the market
value of the Company's common stock throughout the option term.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Potential Realizable Value at
Individual Grants Assumed Annual Rates of Stock
Price Appreciation for Option Term/(1)/
--------------------------------------------------------------------------------------------------
Name Number of % of Total Exercise Expiration
Securities Options or Base Date
Underlying Granted to Price 5% ($) 10% ($)
Options Employees in ($/Sh)
Granted (#) /(2)/ Fiscal Year
==========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
James L. Mann 100,000/(3)/ 6.44% 29.000 1/07/2006 1,823,794 4,621,853
- --------------------------------------------------------------------------------------------------------------------------
Cristobal I. Conde 18,000/(4)/ 1.16% 33.625 2/17/2006 380,638 964,613
- --------------------------------------------------------------------------------------------------------------------------
Lawrence A. Gross 18,000/(5)/ 1.16% 33.625 2/17/2006 380,638 964,613
- --------------------------------------------------------------------------------------------------------------------------
Michael F. Mulholland 18,000/(6)/ 1.16% 33.625 2/17/2006 380,638 964,613
- --------------------------------------------------------------------------------------------------------------------------
Richard C. Tarbox 18,000/(7)/ 1.16% 33.625 2/17/2006 380,638 964,613
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The actual value, if any, which an option holder may realize will depend
upon the amount by which the actual market value on the date of exercise
exceeds the exercise price and also on the option holder's continued
employment through the vesting period. The actual value to be realized by
the option holder may be greater or less than the potential realizable
values stated in this table.
(2) The table excludes options granted as payouts under LTIP awards (see
Summary Compensation Table).
(3) The 100,000 option shares were authorized for issuance to Mr. Mann during
1995, but were not issued until the beginning of 1996 (see Report of the
Compensation Committee and Equity Subcommittee). The options granted to
Mr. Mann are non-qualified stock options which are exercisable in full one
year after the date of grant but are subject to repurchase until they vest
over four years in equal 25% increments.
(4) The options granted are incentive stock options which become exercisable
with respect to 2,973 shares annually from 1996 through 2001 and with
respect to 162 shares in 2001. The options vest over five years in equal
20% increments beginning one year after the date of grant.
(5) The options granted are incentive stock options which become exercisable
with respect to 1,338 shares on the date of grant, with respect to 2,973
shares annually from 1997 through 2001 and with respect to 1,797 shares in
2002. The options vest over five years in equal 20% increments beginning
one year after the date of grant.
9
<PAGE>
(6) The options granted are incentive stock options which become exercisable
and vest in equal 20% increments beginning one year after the date of
grant.
(7) The options granted are incentive stock options which become exercisable
with respect to 854 shares in 1997, with respect to 2,973 shares annually
from 1998 through 2002 and with respect to 2,281 shares in 2003. The
options vest over five years in equal 20% increments beginning one year
after the date of grant.
Aggregated Option Exercises and Year-End Option Value Table
The following table contains, for each of the Company's executive officers named
in the Summary Compensation Table, (a) the number of shares of the Company's
common stock acquired upon the exercise of options during 1996, (b) the value
realized as a result of those exercises (based upon the last sale price on the
date of exercise less the option exercise price), (c) the number of shares of
the Company's common stock underlying unexercised options held on December 31,
1996, and (d) the value of in-the-money options held on December 31, 1996, based
upon the last sale price on December 31, 1996, of $39.50 per share of common
stock.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Shares Number of Securities Underlying Value of Unexercised
Acquired Value Unexercised Options In-The-Money Options
Name on Realized ($) at Year-End (#) at Year-End ($)
Exercise (#) ------------------------------------------------------------------
Exercisable/(1)/ Unexercisable Exercisable/(1)/ Unexercisable
===================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
James L. Mann/(2)/ 14,500 375,188 462,500 -- 7,331,250 --
- -------------------------------------------------------------------------------------------------------------------
Cristobal I. Conde/(2)/ -- -- 12,973 15,027 362,466 88,284
- -------------------------------------------------------------------------------------------------------------------
Lawrence A. Gross 20,000 460,000 40,488 16,662 1,166,470 97,889
- -------------------------------------------------------------------------------------------------------------------
Michael F. Mulholland/(2)/ -- -- 31,600 64,400 904,263 604,050
- -------------------------------------------------------------------------------------------------------------------
Richard C. Tarbox -- -- 24,872 21,678 657,640 179,770
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Exercisable option shares include 300,000, 2,973, 6,768, 9,400 and 5,552
unvested, in-the-money option shares having year-end values of $3,975,000,
$17,466, $121,983, $298,938 and $116,577, respectively, which, if acquired
by Messrs. Mann, Conde, Gross, Mulholland and Tarbox, respectively, would
be subject to transfer restrictions and repurchase by the Company under the
Company's stock option plans.
(2) The table includes 100,000 options that were authorized for grant to Mr.
Mann during 1995, but were not granted until early 1996 (see Report of the
Compensation Committee and Equity Award Subcommittee), and includes options
received by Messrs. Conde and Mulholland as payouts under LTIP awards (see
Summary Compensation Table).
Long-Term Incentive Plan Award Table
The following table contains, for each of the Company's executive officers named
in the Summary Compensation Table, (a) the number of option shares underlying
LTIP awards granted in 1996, (b) the performance period for those LTIP awards,
and (c) the number of option shares that may be earned under those LTIP awards
if certain threshold, target and maximum performance goals for cumulative
operating income growth during 1996 through 1998 are met. Stock options earned
under these LTIP awards will be non-qualified options, will be granted as of the
first trading day after the end of the three-year performance period, will have
a term of ten years beginning on the date of grant, will be
10
<PAGE>
fully vested beginning on the date of grant, and will be fully exercisable no
later than six months after the date of grant.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Number of Estimated Future Payouts
Shares Performance or Other under Non-Stock Price-Based Plans/(1)/
Name Underlying Period Until Maturation or ---------------------------------------------
Options Payout Threshold Target Maximum
Awarded (#) (# of shares) (# of shares) (# of shares)
================================================================================================================
<S> <C> <C> <C> <C> <C>
James L. Mann -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
Cristobal I. Conde 12,200 1/1/96 - 12/31/98 6,100 12,200 12,200
- ----------------------------------------------------------------------------------------------------------------
Lawrence A. Gross 9,300 1/1/96 - 12/31/98 4,650 9,300 9,300
- ----------------------------------------------------------------------------------------------------------------
Michael F. Mulholland 13,600 1/1/96 - 12/31/98 6,800 13,600 13,600
- ----------------------------------------------------------------------------------------------------------------
Richard C. Tarbox 5,700 1/1/96 - 12/31/98 2,850 5,700 5,700
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) If the threshold is not achieved, then no options will be earned. If
actual results are between the threshold and target goals, then the number
of option shares earned will be prorated, and the exercise price will be
$28.54 per share, which is the average of the last reported sale prices of
the Company's common stock on the first ten trading days of 1996. If the
target is exceeded, then the number of option shares earned will be the
target amount, and, in lieu of additional cash compensation, the option
exercise price will be reduced depending upon the amount by which the
target was exceeded, but not below $16.48 per share.
Certain Transactions with Management
In December 1996, in connection with certain tax-related payments, Mr. Mann
received a short-term loan from the Company in the amount of $157,100, which was
repaid in January 1997.
Mr. Mann owns Hawkflight, Inc., which operates a charter Learjet business. The
services of Hawkflight, Inc. will be used by the Company for business travel by
Mr. Mann and other Company executives at arms-length terms to be approved by the
disinterested members of the Board of Directors.
Mr. Goldstein, a current director of the Company, is a Director of Broadview
Associates LLC, an investment banking firm engaged by the Company in connection
with acquisitions.
Mr. Roth, a current director of the Company, is Of Counsel to Rosenman & Colin
LLP, a law firm engaged by the Company from time to time for minor
representations.
Compensation Committee Interlocks and Insider Participation
Messrs. Brooks, Eisenstat and Goldstein have served on the Compensation
Committee since May 1994.
No person who served as a member of the Company's Compensation Committee during
1996 was a current or former officer or employee of the Company. Mr. Goldstein,
a current member of the Company's Compensation Committee, is a Director of
Broadview Associates LLC, an investment banking firm engaged by the Company in
connection with acquisitions.
During 1996, the Company had no compensation committee "interlocks"--meaning
that it was not the case that an executive officer of the Company served as a
director or member of the compensation committee of another entity and an
executive officer of the other entity served as a director or member of the
Compensation Committee of the Company.
11
<PAGE>
Performance Graph
The following graph shows a comparison of the five-year cumulative total return
for the Company's common stock, the S&P 500 Index and the Nasdaq Computer & Data
Processing Index, assuming an investment of $100 in each on December 31, 1991.
The data points used for the performance graph are listed in the chart below.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
PERFORMANCE GRAPH DATA POINTS 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
===========================================================================================================
<S> <C> <C> <C> <C> <C> <C>
SunGard Data Systems Inc. Common Stock 100 158 219 204 302 419
- -----------------------------------------------------------------------------------------------------------
S&P 500 Index/(1)/ 100 108 118 120 165 203
- -----------------------------------------------------------------------------------------------------------
Nasdaq Computer & Data Processing Index/(2)/ 100 108 114 138 211 260
- -----------------------------------------------------------------------------------------------------------
</TABLE>
Sources: (1) Zacks Investment Research, Inc.; (2) The Nasdaq Stock Market.
12
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), requires the Company's directors and officers (and possibly other
persons) to file reports about their beneficial ownership of the Company's
common stock. Based solely upon a review of the copies of such reports
furnished to the Company by its directors and officers during and with respect
to the year 1996, and based upon their written representations that they were
not required to file any other reports for 1996, the Company believes that none
of its directors or officers failed to file on a timely basis any reports
required by Section 16(a) of the Exchange Act with respect to the year 1996.
PROPOSAL TWO
APPROVAL OF AN AMENDMENT TO THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION INCREASING THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK BY 60,000,000
Under the Company's Restated Certificate of Incorporation, the Company currently
is authorized to issue up to 60,000,000 shares of common stock. As of December
31, 1996, there were approximately 12,448,000 authorized shares of the Company's
common stock that were not issued or reserved for future issuance. In addition,
on January 31, 1997, the Company issued approximately 765,000 shares in
connection with an acquisition. In February 1997, the Board of Directors
approved an amendment to the Company's Restated Certificate of Incorporation
that increases the maximum number of authorized shares by 60,000,000 to a total
of 120,000,000 shares, subject to approval by the stockholders of the Company.
The purpose of the amendment is to provide sufficient shares for future stock
splits, stock dividends, recapitalizations, acquisitions and other corporate
transactions. Although the Company does not have any commitments or
understandings that would require the issuance of additional shares of common
stock, the Company periodically evaluates the issuance of additional shares in
connection with acquisitions and potential stock splits. Once authorized, the
additional shares of common stock may be issued with approval of the Board of
Directors but without further approval of the stockholders unless stockholder
approval is required by applicable law, rule or regulation. Accordingly, this
solicitation may be the only opportunity for stockholders to approve such stock
splits, stock dividends, recapitalizations, acquisitions and other corporate
transactions.
Stockholder approval of this proposal is required under Delaware law. Approval
of the amendment to the Company's Restated Certificate of Incorporation
increasing the number of authorized shares of common stock by 60,000,000
requires the affirmative vote of the holders of a majority of the outstanding
shares of common stock. If the stockholders do not approve the amendment, then
the number of authorized shares of the Company's common stock will remain at
60,000,000.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
PROPOSAL TWO.
INDEPENDENT ACCOUNTANTS
The accounting firm of Coopers & Lybrand L.L.P. has acted as the Company's
independent accountants since its inception in 1983 and has been recommended by
the Audit Committee and selected by the Board of Directors to serve as the
Company's independent accountants for 1997. Coopers & Lybrand's services to the
Company for 1996 included the audit of the Company's annual consolidated
financial statements, reviews of certain of the Company's income tax returns,
statutory audits of certain of the Company's foreign subsidiaries, audits or
reviews of many of the Company's
13
<PAGE>
data processing and disaster recovery centers, and consultation on various
accounting, tax, securities and other matters.
A representative of Coopers & Lybrand is expected to be present at the 1997
Annual Meeting, to have the opportunity to make a statement if he desires to do
so, and to be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 1998 Annual
Meeting must be submitted by December 1, 1997 to receive consideration for
inclusion in the Company's 1998 proxy materials.
OTHER MATTERS
The Company currently knows of no other business that will be presented for
consideration at the 1997 Annual Meeting. Nevertheless, the enclosed proxy
confers discretionary authority to vote with respect to those matters described
in Rule 14a-4(c) under the Exchange Act, including matters that the Board of
Directors does not know, a reasonable time before proxy solicitation, are to be
presented at the meeting. If any such matters are presented at the meeting,
then the proxy agents named in the enclosed proxy card will vote in accordance
with their judgment.
EACH PERSON SOLICITED BY THIS PROXY STATEMENT MAY OBTAIN, WITHOUT CHARGE, A COPY
OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR 1996, AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, BY SENDING A WRITTEN REQUEST TO THE
COMPANY'S HEADQUARTERS, ATTENTION: INVESTOR RELATIONS.
By Order of the Board of Directors,
/s/ Lawrence A. Gross
Lawrence A. Gross
Vice President and General Counsel,
Secretary
March 31, 1997
Wayne, Pennsylvania
14
<PAGE>
SunGard(R) Data Systems Inc.
Form of Proxy for 1997 Annual Meeting
- --------------------------------------------------------------------------------
SunGard(R) Data Systems Inc.
1997 Annual Meeting of Stockholders--May 9, 1997
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned hereby appoints James L. Mann and Malcolm I. Ruddock, and each
of them, as attorneys and proxies of the undersigned, with full power of
substitution, for and in the name, place and stead of the undersigned, to
represent the undersigned and to vote, as directed below, all shares of Common
Stock of SunGard Data Systems Inc. (the "Company") held by the undersigned as of
March 17, 1997, at the Company's 1997 Annual Meeting of Stockholders to be held
on May 9, 1997 or at any postponement or adjournment of the meeting.
PROPOSAL 1: [ ] FOR the election of Gregory S. Bentley, Michael C. Brooks,
Albert A. Eisenstat, Bernard Goldstein, James L. Mann, Michael Roth,
Malcolm I. Ruddock and Lawrence J. Schoenberg as directors.
To withhold authority to vote for all nominees, check here: [ ]
To withhold authority to vote for any individual nominee(s), clearly
print his or their names in this space:
---------------------------------------------------------
PROPOSAL 2: [ ] FOR [ ] AGAINST [ ] ABSTAIN the approval of an amendment to
the Company's Restated Certificate of Incorporation to increase the
number of authorized shares of common stock by 60,000,000.
THIS PROXY WILL BE VOTED AS DIRECTED ABOVE.
UNLESS YOU DIRECT OTHERWISE, THIS PROXY WILL BE VOTED "FOR" ALL PROPOSALS.
(continued on reverse side)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(continued from reverse side)
Both proxy agents present and acting in person or by their substitutes (or, if
only one is present and acting, then that one) may exercise all of the powers
conferred by this proxy. DISCRETIONARY AUTHORITY IS CONFERRED BY THIS PROXY
WITH RESPECT TO CERTAIN MATTERS, AS DESCRIBED IN THE COMPANY'S PROXY STATEMENT.
The undersigned hereby acknowledges receipt of the Company's 1996 Annual Report
to Stockholders, Notice of the Company's 1997 Annual Meeting of Stockholders,
and the Company's Proxy Statement dated March 31, 1997.
Date: , 1997
------------------------
(please date this proxy)
----------------------------------
----------------------------------
signature(s)
Please sign your name exactly as it
is printed on this proxy, indicating
any title or other representative
capacity. If more than one name is
printed on this proxy, all must sign.
PLEASE DATE AND SIGN THIS PROXY AND PROMPTLY RETURN IT IN THE ENCLOSED POSTAGE-
PAID ENVELOPE.
PLEASE CHECK HERE IF YOU PLAN TO ATTEND THE COMPANY'S 1997 ANNUAL MEETING: [ ]
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
If you would like to be on our stockholders mailing list to receive 1997
quarterly earnings information, please complete and return the adjacent card.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
SUNGARD (R)
DATA SYSTEMS INC.
Yes, I would like to be on your stockholders mailing list to
receive 1997 quarterly earnings information.
________
Name _______________________________________________________
________
Address ____________________________________________________
________
City, State, Zip ___________________________________________
________ (Please print clearly)
________
________
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
----------
Please
affix
Postage
----------
SunGard Data Systems Inc.
Investor Relations
1285 Drummers Lane - Suite 300
Wayne, PA 19087-1586
- --------------------------------------------------------------------------------
