BRODERBUND SOFTWARE, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 22, 1998
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Broderbund Software, Inc., a Delaware corporation (the "Company"), will be held
on Thursday, January 22, 1998, at 10:00 a.m., local time, at the Wyndham Garden
Hotel, 1010 Northgate Drive, San Rafael, California 94903, for the following
purposes:
1. To elect directors to serve for the ensuing year and until their
successors are duly elected and qualified.
2. To approve an increase by 1,500,000 shares in the number of shares
authorized under the Company's 1996 Employee and Consultant Stock Option Plan.
3. To ratify the appointment of Ernst & Young LLP, or its intended
successor company, Ernst & Young LLP/KPMG Peat Marwick LLP, as independent
auditors for the Company for the 1998 fiscal year.
4. To transact such other business as may properly come before the meeting
or any and all postponements or adjournments thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on November 28, 1997
are entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to sign and
return the enclosed proxy as promptly as possible in the postage-prepaid
envelope enclosed for that purpose. Any stockholder attending the meeting may
vote in person even if he or she has returned a proxy.
THE BOARD OF DIRECTORS
Novato, California
December 23, 1997
IMPORTANT: Whether or not you plan to attend the meeting, you are requested to
complete and promptly return the enclosed proxy in the envelope provided.
<PAGE>
BRODERBUND SOFTWARE, INC.
500 Redwood Boulevard
Novato, California 94947
MEETING TO BE HELD AT
Wyndham Garden Hotel
1010 Northgate Drive
San Rafael, California 94903
PROXY STATEMENT
GENERAL
Date and Time
This Proxy Statement is furnished to the stockholders of Broderbund
Software, Inc., a Delaware corporation (the "Company"), in connection with the
solicitation of Proxies by the Board of Directors of the Company for use at the
Annual Meeting of Stockholders to be held at 10:00 a.m., local time, on
Thursday, January 22, 1998, and any and all postponements or adjournments
thereof (the "Annual Meeting"). It is anticipated that this Proxy Statement and
the enclosed Proxy card will be sent to such stockholders on or about December
23, 1997.
Purposes of the Annual Meeting
The purposes of the Annual Meeting are to (1) elect a Board of Directors of
the Company, (2) approve an increase by 1,500,000 shares in the number of shares
available for grant under the Company's 1996 Employee and Consultant Stock
Option Plan, (3) ratify the appointment of Ernst & Young LLP, or its intended
successor company, Ernst & Young LLP/KPMG Peat Marwick LLP, as the Company's
independent auditors for the current fiscal year, and (4) transact such other
business as may properly come before the meeting or any and all postponements or
adjournments thereof.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a later
date or by attending the Annual Meeting and voting in person.
Record Date and Principal Share Ownership
Stockholders of record as of the close of business on November 28, 1997
(the "Record Date") are entitled to receive notice of and to vote at the Annual
Meeting. At the Record Date, 20,819,875 shares of the Company's Common Stock
were issued and outstanding. For information regarding security ownership by
principal stockholders and management, see "Other Information -- Share Ownership
by Principal Stockholders and Management."
Voting and Solicitation
Each stockholder is entitled to one vote for each share of Common Stock on
all matters presented at the Annual Meeting.
The cost of soliciting proxies will be borne by the Company. The Company
may also reimburse brokerage firms and other persons representing beneficial
owners of shares for their expenses in forwarding solicitation materials to such
beneficial owners. In addition, the Company's directors, officers and regular
employees, without receiving any additional compensation, may solicit proxies
personally or by telephone or facsimile.
1
<PAGE>
Quorum; Abstentions; Broker Non-Votes
The required quorum for the transaction of business at the Annual Meeting
is a majority of the shares of Common Stock issued and outstanding on the Record
Date. Shares that are voted "FOR" or "AGAINST" a matter are treated as being
present at the meeting for purposes of establishing a quorum and are also
treated as votes eligible to be cast by the Common Stock present in person or
represented by proxy at the meeting and "entitled to vote on the subject matter"
(the "Votes Cast") with respect to such matter.
While there is no definitive statutory or case law authority in Delaware as
to the proper treatment of abstentions in the election of directors, the Company
believes that abstentions should be counted for purposes of determining both the
presence or absence of a quorum for the transaction of business and the total
number of Votes Cast with respect to a particular matter. Accordingly,
abstentions will have the same effect as a vote against proposals set forth in
this Proxy Statement. In the absence of controlling precedent to the contrary,
the Company intends to treat abstentions in this manner. In a 1988 Delaware
case, Berlin v. Emerald Partners, the Delaware Supreme Court held that, while
broker non-votes may be counted for purposes of determining the presence or
absence of a quorum for the transaction of business, broker non-votes should not
be counted for the purposes of determining the number of Votes Cast with respect
to the particular proposal on which the broker has expressly not voted. Broker
non-votes with respect to proposals set forth in this Proxy Statement will
therefore not be considered "Votes Cast" and, accordingly, will not affect the
determination as to whether the requisite majority of Votes Cast has been
obtained with respect to a particular matter.
Deadline for Receipt of Stockholder Proposals
Proposals of stockholders of the Company which are intended to be presented
by such stockholders at the Company's 1999 Annual Meeting of Stockholders must
be received by the Company no later than August 12, 1998 in order that they may
be considered for inclusion in the proxy statement and form of proxy relating to
that meeting.
Fiscal Year End
The Company's fiscal year ends on August 31. The Company's last fiscal year
ended August 31, 1997 and is referred to herein as the "Last Fiscal Year."
2
<PAGE>
PROPOSAL ONE:
ELECTION OF DIRECTORS OF THE COMPANY
Directors and Nominees
The Bylaws of the Company provide for a Board of nine directors. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for management's eight nominees named below, all of whom are presently directors
of the Company. As of the Record Date, management had not determined a qualified
ninth nominee to submit to the Stockholders for election to the Board. Thus,
proxies cannot be voted for more than eight persons. In the event that any
nominee of the Company is unable or declines to serve as a director at the time
of the Annual Meeting, the proxies will be voted for any nominee who shall be
designated by the present Board of Directors to fill the vacancy. It is not
expected that any nominee will be unable or will decline to serve as a director,
however it is expected that after the Annual Meeting the Board will designate a
director or directors to fill any then existing vacancy or vacancies. The term
of office of each person elected as a director will continue until the next
Annual Meeting of Stockholders or until his successor has been elected and
qualified.
Name Age Principal Occupation
---- --- --------------------
Douglas G. Carlston (3) ........ 50 Chairman of the Board of Directors of
the Company
Edmund R. Auer (1)(2) .......... 65 Former President and Chief Operating
Officer of the Company
Gary L. Buckmiller (2) ......... 56 Former Executive Vice President of
Jostens Learning Corporation
Scott D. Cook (1) .............. 45 Chairman of the Board of Directors of
Intuit Inc.
Joseph P. Durrett .............. 52 Chief Executive Officer of the Company
William P. Egan (2) (3) ........ 52 President of Burr, Egan, Deleage & Co.,
Inc.
William M. McDonagh (3) ........ 41 President and Chief Operating Officer
of the Company
Lawrence H. Wilkinson (1) (2) .. 47 President and Chief Executive Officer of
Global Business Network
- ----------
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
(3) Member of the Nominating Committee
Mr. Carlston is a founder of the Company and has served as Chairman of the
Board since November 1989. He also served as Chief Executive Officer of the
Company from November 1989 until October 1996 and as President of the Company
from September 1981 until November 1989.
Mr. Auer has been a director since April 1987. He also served as Senior
Vice President, Chief Operating Officer of the Company from April 1987 to
November 1989 and as President of the Company from November 1989 until his
retirement in April 1994.
Mr. Buckmiller has been a director of the Company since October 1988. He
served as Executive Vice President of Jostens Learning Corporation, from March
1992 to November 1993 and served in various management positions with Jostens,
Inc., from 1971 to March 1992, most recently as Executive Vice President -
Education and Human Resources.
Mr. Cook has been a director of the Company since July 1995 and previously
served as a director of the Company from April 1993 to December 1994. He founded
and has been Chairman of the Board of Directors of Intuit Inc., a financial
software company, since 1983 and served as President and Chief Executive Officer
of Intuit Inc. from 1983 to April 1994. Prior to founding Intuit Inc., Mr. Cook
managed consulting assignments in banking, services and technology for Bain &
Company, a corporate strategy consulting firm.
Mr. Durrett has been a director Chief Executive Officer of the Company
since October 1996. From 1992 to September 1996 he served as President of ADVO,
Inc., a direct marketing company. Prior to September 1996 he held senior
management positions at Kraft General Foods and brand management positions at
Proctor and Gamble.
3
<PAGE>
Mr. Egan has been a director of the Company since 1982. He has been
President of Burr, Egan, Deleage & Co., Inc., a venture capital firm, since
1979. Mr. Egan also serves on the Board of Directors of Cephalon, Inc., a
biotechnology company.
Mr. McDonagh has been a director of the Company since January 1995. He
joined the Company in 1982 as Controller. In April 1987, he was promoted to Vice
President of Finance and in February 1992, he was appointed Senior Vice
President and Chief Financial Officer. In April 1994, Mr. McDonagh was appointed
and continues to serve as President and Chief Operating Officer of the Company.
Mr. Wilkinson has been a director of the Company since July 1991. He is the
President and Chief Executive Officer of Global Business Network, a strategic
planning and consulting services company, which he joined in November 1991.
Vote Required
The eight candidates receiving the highest number of affirmative votes of
the shares present or represented and entitled to be voted for them shall be
elected to the Company's Board of Directors, whether or not such affirmative
votes constitute a majority of the shares voted. Votes withheld from any
director are counted for purposes of determining the presence or absence of a
quorum for the transaction of business, but have no other legal effect under
Delaware law.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
NOMINEES LISTED ABOVE.
Board Meetings and Committees
The Board of Directors held a total of five meetings during the Last Fiscal
Year.
The Audit Committee, which currently consists of Edmund R. Auer, Scott D.
Cook and Lawrence H. Wilkinson, met twice during the Last Fiscal Year. The Audit
Committee reviews financial statements and the internal financial reporting
system and controls of the Company with the Company's management and independent
auditors, recommends the engagement of the Company's independent auditors, and
reviews other matters relating to the relationship of the Company with its
auditors.
The Compensation Committee, which currently consists of Gary L. Buckmiller,
Edmund R. Auer, William P. Egan, and Lawrence H. Wilkinson, met three times
during the Last Fiscal Year. The Compensation Committee makes recommendations to
the Board of Directors regarding the general compensation policy of the Company
for all executive officers of the Company and the administration of the
Company's equity incentive plans and the bonus plan for executive officers.
The Nominating Committee, which currently consists of Douglas G. Carlston,
William P. Egan and William M. McDonagh, met once during the Last Fiscal Year.
The Nominating Committee was established to make recommendations as to the
composition of the Board of Directors.
Each present director attended at least 75% of the aggregate of (i) the
total number of meetings of the Board of Directors held during the Last Fiscal
Year and (ii) the total number of meetings held by all committees of the Board
of Directors during the Last Fiscal Year on which such person served.
Compensation of Directors
Each non-employee director of the Company is paid $1,000 for each Board
meeting attended and $500 for each committee meeting attended. Under the terms
of the 1996 Employee and Consultant Stock Option Plan, each non-employee
director elected to the Board after October 9, 1991 automatically receives a
nonqualified stock option to purchase 40,000 shares of the Company's Common
Stock. In addition, with respect to each non-employee director who was
originally appointed to the Board prior to October 9, 1991 as a representative
of a stockholder of the Company with a contractual right to elect a director
("Director Appointing Stockholder"), such non-employee director shall
automatically receive a
4
<PAGE>
nonqualified stock option to purchase 40,000 shares of Common Stock at such time
as both (a) the Director Appointing Stockholder disposes of substantially all of
its shares of the Company's capital stock and (b) the Board and such
non-employee director determine that the non-employee director shall continue to
serve on the Board. Each option automatically granted to a non-employee director
vests annually over five years.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee is composed of four nonemployee directors, Gary
L. Buckmiller, Edmund R. Auer, William P. Egan, and Lawrence H. Wilkinson. No
interlocking relationship exists between the Company's Board of Directors or
Compensation Committee and the board of directors or compensation committee of
any other company, nor has any such interlocking relationship existed in the
past.
PROPOSAL TWO:
AMENDMENT OF 1996 EMPLOYEE AND CONSULTANT
STOCK OPTION PLAN TO INCREASE AUTHORIZED SHARES
The 1996 Employee and Consultant Stock Option Plan, as amended, (the
"Option Plan") was originally adopted by the Company's Board of Directors and
approved by the Company's stockholders on January 25, 1996. There are currently
a total of 3,000,000 shares of Common Stock reserved for issuance under the
Option Plan. On October 7, 1997, due to past aquisitions and the on-going need
to recruit and retain qualified employees, the Board approved an amendment to
the Option Plan to increase the number of shares of Common Stock authorized for
issuance thereunder by 1,500,000 shares. At the Annual Meeting, the stockholders
are being asked to approve this increase in the number of shares of Common Stock
authorized for issuance under the Option Plan.
As of November 28, 1997, no options to purchase shares of Common Stock have
been exercised under the Option Plan, options to purchase 1,996,150 shares at a
weighted average price of $27.77 per share were outstanding and 1,003,850 shares
remained available for future grants under the Option Plan.
Vote Required; Recommendation of Board of Directors
The approval of the 1,500,000 share increase in the number of shares
available for grant under the Option Plan requires the affirmative vote of a
majority of the shares represented, in person or by proxy, and voting at the
Annual Meeting (which shares voting affirmatively also constitute at least a
majority of the required quorum). An abstention will have the same effect as a
vote against the proposal, and, pursuant to Delaware law, a broker non-vote will
not be treated as voting in person or by proxy on the proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
Summary of the Option Plan
The essential features of the Option Plan are outlined below.
Purposes. The purposes of the Option Plan are to furnish incentive to
individuals chosen to receive options, encourage selected employees and
consultants to accept or continue employment with, or consulting to, the Company
or any parent or subsidiary corporation of the Company (an "Affiliate"),
including the newly acquired T/Maker Company, Living Books and Parsons
Technology Subsidiaries, and increase the interest of selected employees and
consultants in the Company's welfare through their participation in the growth
in value of the Company's Common Stock.
Administration. The Option Plan may be administered by the Board or,
subject to certain conditions, by the President or the Chief Executive Officer
of the Company; provided, however, that with respect to grants of options to
employees who are also officers or directors of the Company, the Option Plan
shall be administered by (i) the Board if the Board may administer the Option
Plan in compliance with the rules
5
<PAGE>
governing a plan intended to qualify thereunder as a discretionary plan under
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"), or any successor rule thereto ("Rule 16b-3"), or (ii) a
committee designated by the Board to administer the Option Plan, which committee
shall be constituted to comply with the rules governing a plan intended to
qualify under Rule 16b-3 as a discretionary plan under Rule 16b-3 (the
"Administrator"). The Option Plan may be administered by different bodies with
respect to directors, officers who are not directors, and employees who are
neither officers nor directors. Presently, the Board of Directors acts as the
Option Plan Administrator.
Except with respect to the automatic grant of options to members of the
Board as described below, the Administrator of the Option Plan has the authority
to select the persons to receive options, to fix the number of shares that each
optionee may purchase, to set the terms and conditions of each option, and to
determine all other matters relating to the Option Plan.
Eligibility. The Option Plan provides that Nonqualified Stock Options may
be granted to employees, including officers, Outside Directors and consultants
of the Company or any Affiliate. Incentive Stock Options may be granted only to
employees, including officers, of the Company or any Affiliate.
Stock Options. The Option Plan permits the granting of stock options that
either qualify as incentive stock options under Section 422 of the Internal
Revenue Code of 1986, as amended ("Incentive Stock Options" or "ISOs"), or do
not so qualify ("Nonqualified Stock Options" or "NSOs").
Except with respect to the automatic grant of options to Outside Directors,
the term of each option is fixed by the Administrator but may not exceed ten
years from the date of grant or five years from the date of grant in the case of
options granted to the owner of Common Stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or any
Affiliate.
All options granted under the Option Plan are evidenced by a stock option
agreement between the Company and the optionee to whom such option is granted.
Automatic Grants to Outside Directors. The Option Plan provides for the
automatic grant of a 40,000 share NSO to each Outside Director on the date first
elected to the Board, if such election occurs after October 9, 1991. The term of
each automatic NSO grant is ten years, is exercisable only while the Outside
Director remains a director of the Company (subject to the terms of the Option
Plan), has a per share exercise price equal to the fair market value of the
Company's Common Stock on the date of grant, and is exercisable in installments
cumulatively with respect to 20% of the shares subject to the NSO on each
anniversary of the date of grant.
Option Price. The option exercise price for each share covered by an ISO or
an NSO may not be less than the fair market value of a share of Common Stock on
the date of grant of such option. In the case of ISOs or NSOs granted to a
stockholder possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any Affiliate, the option exercise price for
each share covered by such option may not be less than 110% of the fair market
value of a share of Common Stock on the date of grant of such option.
Fair Market Value. The fair market value of a share of Common Stock, as
determined by the Plan, is the mean between the highest and lowest selling
prices for the stock on the date of grant (or if there are no sales on the date
of grant, then for the last preceding business day on which there were sales) as
reported in the Wall Street Journal or similar publication.
Consideration. The consideration to be paid for shares issued upon exercise
of options granted under the Option Plan, including the method of payment, is
determined by the Administrator (and, in the case of ISOs, determined at the
time of grant) and may consist entirely of (1) cash, (2) check, (3) promissory
note, (4) shares of Common Stock which, in the case of shares acquired upon
exercise of an option, have been owned by the optionee for at least six months
and have a fair market value on the date of surrender equal to the aggregate
exercise price of the shares being purchased, (5) delivery of a properly
executed exercise notice together with such other documentation as the
Administrator and the broker, if applicable,
6
<PAGE>
shall require to effect an exercise of the option and delivery to the Company of
the sale or loan proceeds required to pay the exercise price, (6) any
combination of the foregoing methods, or (7) such other consideration and method
of payment permitted by applicable laws.
Termination of Relationship with the Company. Under the Option Plan, in the
event of an optionee's termination of employment or consulting relationship or
service as an Outside Director for any reason other than death or disability, an
option may thereafter be exercised, to the extent it was exercisable at the date
of such termination, for three months. If an optionee's employment or consulting
relationship or service as an Outside Director is terminated as a result of the
disability or death of the optionee, the optionee, or the optionee's personal
representative or any other person who acquires the option rights from the
optionee by will or the applicable laws of descent and distribution, may, within
twelve months after the termination of employment, consultancy or service as an
Outside Director, exercise such option rights to the extent they were
exercisable on the date of the termination.
Nontransferability of Options. Options granted pursuant to the Option Plan
are nontransferable by the optionee, other than by will or by the laws of
descent and distribution, and may be exercised, during the lifetime of the
optionee, only by the optionee.
Adjustment Upon Changes in Capitalization. In the event any change, such as
a stock split or dividend, is made in the Company's capitalization which results
in an increase or decrease in the number of outstanding shares of Common Stock,
an appropriate adjustment shall be made in the number of shares which have been
reserved for issuance under the Option Plan and each option outstanding
thereunder and the exercise price of each outstanding option. The Option Plan
provides that in the event of a merger, consolidation, acquisition, separation,
reorganization, liquidation or like transaction involving the Company, each
option may be assumed or an equivalent option substituted by a successor
corporation. If the successor corporation chooses not to assume the options
under the Option Plan, or if the Board determines that the options should not
continue to be outstanding, then the option rights granted shall terminate (a)
upon any dissolution or liquidation of the Company or similar occurrence, or (b)
upon any merger, consolidation, acquisition, separation, or similar occurrence
where the Company will not be a surviving corporation. Each optionee shall be
mailed a notice at least six days prior to such occurrence and shall have at
least four days after the mailing of such notice to exercise any option rights.
Amendment and Termination. The Board may amend, alter, suspend or
discontinue the Option Plan at any time; provided, however, that no amendment,
alteration, suspension or discontinuation shall be made that would impair the
rights of any optionee under any option theretofore granted, without the
optionee's consent, or that, without the approval of the stockholders, would
increase the number of shares reserved for issuance under the Option Plan,
extend the duration of the Option Plan, or change the class of persons eligible
to receive options granted under the Option Plan.
Certain Federal Income Tax Considerations
Options granted under the Option Plan may be either incentive stock
options, as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), or nonstatutory stock options.
An optionee who is granted an ISO will not recognize income either at the
time the option is granted or upon its exercise, although the exercise may
subject the optionee to the alternative minimum tax. Upon a sale or exchange of
the shares more than two years after the grant of the ISO and one year after its
exercise, any gain or loss will be treated as long-term capital gain or loss. If
these holding periods are not satisfied, the optionee will recognize ordinary
income at the time of the sale or exchange equal to the difference between the
exercise price and the lower of (i) the fair market value of the shares on the
date of exercise or (ii) the sale price of the shares. A different rule for
measuring ordinary income upon such a premature disposition may apply if the
optionee is also an officer, director, or 10% stockholder of the Company.
7
<PAGE>
Any gain or loss recognized on such a premature disposition of the shares
in excess of the amount treated as ordinary income will be characterized as
long-term or short-term capital gain or loss, depending on the holding period.
Generally, the Company will be entitled to a deduction in the same amount as the
ordinary income recognized by the optionee at the time of such disposition.
With respect to NSOs, an optionee will not recognize income at the time an
NSO is granted. However, upon its exercise, the optionee will recognize ordinary
income generally measured as the excess of the then fair market value of the
shares over the exercise price. Any ordinary income recognized in connection
with the exercise of an NSO by an optionee who is also an employee of the
Company will be subject to tax withholding by the Company. Generally, the
Company will be entitled to a tax deduction in the same amount as the ordinary
income recognized by the optionee upon exercise of an NSO.
Upon resale of the shares by the optionee, any difference between the sale
price and the optionee's purchase price, to the extent not recognized as
ordinary income as described above, will be treated as long-term or short-term
capital gain or loss, depending on the holding period.
The foregoing is only a summary of the effect of federal income taxation
upon the optionee and the Company with respect to the grant and exercise of
options under the Option Plan. It does not purport to be complete, and it does
not discuss the tax consequences of the optionee's death or the income tax laws
of any municipality, state or foreign country in which an optionee may reside.
PROPOSAL THREE:
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP, independent
auditors, or its intended successor company, Ernst & Young LLP/KPMG Peat Marwick
LLP, to audit the financial statements of the Company for the 1998 fiscal year.
Such nomination is being presented to the stockholders for ratification at the
Annual Meeting. The affirmative vote of the holders of a majority of the shares
present in person or represented by proxy and entitled to vote at the Annual
Meeting is required to ratify the Board's selection. If the stockholders reject
the nomination, the Board will reconsider its selection.
Ernst & Young LLP has audited the Company's financial statements since
1981. The Company has been advised that a representative of Ernst & Young LLP
will be present at the Annual Meeting, will have the opportunity to make a
statement, and is expected to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THIS PROPOSAL.
8
<PAGE>
OTHER INFORMATION
Executive Officers
In addition to Messrs. Durrett and McDonagh, the following persons were
executive officers of the Company as of the Record Date:
Name Age Position
---- --- --------
Thomas L. Marcus ........... 44 Vice President, Business Development,
General Counsel and Secretary
Daniel J. Steever .......... 39 General Manager and Group Vice President
J. Mark Hattendorf ......... 47 Vice President, Finance and Chief
Financial Officer
Mr. Marcus joined the Company in October 1986 as General Counsel. Since
1987, he has served as Vice President, General Counsel and Secretary of the
Company. In June 1994, Mr. Marcus was also appointed Vice President, Business
Development. He had previously served as Vice President of Business Development
from November 1989 to June 1991.
Mr. Steever joined the Company in June 1997 as General Manager and Group
Vice President. In his role, Mr. Steever oversees North American retail sales
and the newly acquired direct-to-consumer division, Parsons Technology. He had
previously served as President and Chief Executive Officer of Marketing Force,
Inc. from 1994 to 1996 and Regional Vice President/General Manager at ADVO, Inc.
west coast region from 1992 to 1994 and northeastern region from 1990 to 1992.
Mr. Hattendorf joined the Company in the first quarter of the Company's
1998 fiscal year as Vice President, Finance and Chief Financial Officer. Mr.
Hattendorf served as Executive Vice President, Chief Financial Officer of
Acclaim Entertainment, Inc. from June 1996 until his employment with Broderbund,
as Vice President-Administration and Chief Financial Officer of Prodigy Services
Company from October 1995 to June 1996, as Senior Vice President and Chief
Financial Officer of Herbalife International, Inc. from September 1993 to
October 1995 and as a financial and general management consultant to various
entertainment, real estate and financial service organizations from May 1991 to
September 1993.
There are no family relationships between any of the Company's directors or
executive officers.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's officers and
directors and persons who own more than 10% of a registered class of the
Company's equity securities to file certain reports regarding ownership of, and
transactions in, the Company's securities with the Securities and Exchange
Commission (the "SEC"). Such officers, directors and 10% stockholders are also
required by SEC rules to furnish the Company with copies of all Section 16(a)
forms that they file.
Based solely on its review of such forms received by it, or written
representations from certain reporting persons, the Company believes that during
the Last Fiscal Year all Section 16(a) filing requirements applicable to its
Officers, directors and 10% stockholders were complied with, except that the
Form 3 required to be filed on behalf of Joseph P. Durrett upon his becoming
Chief Executive Officer of the Company was filed late by the Company.
Share Ownership by Principal Stockholders and Management
The following table sets forth the beneficial ownership of Common Stock of
the Company as of the Record Date, by (i) each person known by the Company to be
the beneficial owner of more than 5% of the Company's Common Stock, (ii) each
current director, all of whom are the Company's nominees for election to the
Board, (iii) each of the named officers in the "Summary Compensation Table", and
(iv) all current directors and executive officers as a group. The number and
percentage of shares beneficially owned is determined under rules of the SEC,
and the information is not necessarily indicative of beneficial ownership for
any other purpose. Under such rules, beneficial ownership includes any shares as
to which the individual has sole or shared voting power or investment power and
also any shares which the individual has the right to acquire within sixty (60)
days of the Record Date through the exercise of any stock option or other right.
Unless otherwise indicated, each person has sole voting and investment power (or
9
<PAGE>
shares such powers with his or her spouse) with respect to the shares shown as
beneficially owned. A total of 20,819,875 shares of the Company's Common Stock
were issued and outstanding as of the Record Date.
<TABLE>
<CAPTION>
Shares Approximate
Beneficially Percent
Name and Address Owned Owned
----------------- ------ ------
<S> <C> <C>
FMR Corp.(1) ......................................................... 3,102,000 14.9%
82 Devonshire Street
Boston, MA 02109
Trimark Investment Management Inc.(2) ................................ 1,235,600 5.9%
One First Canadian Place
Suite 5600, P.O. Box 487
Toronto, ON M5X IE5
Douglas G. Carlston(3) ............................................... 1,867,536 9.0%
c/o Broderbund Software, Inc.
500 Redwood Boulevard
Novato, CA 94947
Edmund R. Auer(4) .................................................... 77,568 *
Gary L. Buckmiller(5) ................................................ 16,100 *
Scott D. Cook(6) ..................................................... 16,000 *
Joseph P. Durrett(7) ................................................. 64,088 *
William P. Egan(8) ................................................... 39,360 *
William M. McDonagh(9) ............................................... 130,527 *
Lawrence H. Wilkinson(10) ............................................ 40,000 *
Thomas L. Marcus(11) ................................................. 48,211 *
Daniel J. Steever .................................................... 0 *
J. Mark Hattendorf ................................................... 0 *
Harry R. Wilker(12) .................................................. 73,094 *
Jan L. Gullett(13) ................................................... 26,340 *
All directors and executive officers as a group (11 persons) (14) .... 2,299,390 10.8%
</TABLE>
- ----------
* Less than one percent (1%).
(1) Based on information received from FMR Corp., as of November 28, 1997, FMR
Corp. had sole voting power as to 3,900 shares.
(2) Based on information received from Trimark Investment Management, Inc., as
of November 28, 1997 Trimark Investment Management, Inc. had sole voting
power as to all 1,235,600 shares.
(3) Includes 15,000 shares which Mr. Carlston has the right to acquire within
60 days of the Record Date upon the exercise of stock options.
(4) Includes 6,668 shares which Mr. Auer has the right to acquire within 60
days of the Record Date upon the exercise of stock options.
(5) Includes 16,000 shares which Mr. Buckmiller has the right to acquire within
60 days of the Record Date upon the exercise of stock options.
(6) Includes 16,000 shares which Mr. Cook has the right to acquire within 60
days of the Record Date upon the exercise of stock options.
(7) Includes 60,000 shares which Mr. Durrett has the right to acquire within 60
days of the Record Date upon the exercise of stock options.
(8) Includes 32,000 shares which Mr. Egan has the right to acquire within 60
days of the Record Date upon the exercise of stock options.
(9) Includes 107,000 shares which Mr. McDonagh has the right to acquire within
60 days of the Record Date upon the exercise of stock options.
(10) Includes 40,000 shares which Mr. Wilkinson has the right to acquire within
60 days of the Record Date upon the exercise of stock options.
(11) Includes 39,000 shares which Mr. Marcus has the right to acquire within 60
days of the Record Date upon the exercise of stock options.
(12) Includes 61,900 shares which Mr. Wilker has the right to acquire within 60
days of the Record Date upon the exercise of stock options.
(13) Includes 25,000 shares which Mr. Gullett has the right to acquire within 60
days of the Record Date upon the exercise of stock options.
(14) Includes 331,668 shares which all directors and executive officers as a
group have the right to acquire within 60 days of the Record Date upon the
exercise of stock options.
10
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
The following table sets forth certain information with respect to the
compensation paid by the Company to (i) those individuals who served as the
Company's Chief Executive Officer during the Last Fiscal Year, (ii) those
persons who were serving as executive officers of the Company at the end of the
Last Fiscal Year, and (iii) Mr. Gullett and Mr. Wilker, who would have been two
of the Company's four most highly compensated executive officers had they been
executive officers of the Company through the end of the Last Fiscal Year.
<TABLE>
<CAPTION>
Annual Compensation Long Term
-------------------------------------------------- Compensation
Awards
Other Annual ------------- All Other
Name and Salary Bonus Compensation Stock Options Compensation
Principal Position Year ($) ($)(1) ($)(2) (#) ($)
---------------- ----- --------- --------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Durrett (3) ......... 1997 375,394 -- 100,000(4) 300,000 14,159(5)
Chief Executive Officer 1996 -- -- -- -- --
1995 -- -- -- -- --
Douglas G. Carlston(6) ........ 1997 181,224 -- -- -- 14,159 (5)
Chairman of the Board and 1996 351,285 55,619 -- 37,500 15,470
Chief Executive Officer 1995 308,472 482,409 -- -- 14,430
William M. McDonagh ........... 1997 303,888 -- -- 75,000(7) 14,159(5)
President and Chief 1996 304,639 48,233 -- 37,500 58,206
Operating Officer 1995 248,981 389,373 -- -- 14,308
Thomas L. Marcus .............. 1997 193,347 -- -- 40,000(7) 13,427(8)
Vice President, Business 1996 188,167 20,855 -- 20,000 51,000
Development and General 1995 160,711 215,427 -- 10,000 14,310
Counsel
Daniel J. Steever ............. 1997 34,615(9) -- 47,900(10) 60,000 --
General Manager and Group 1996 -- -- -- -- --
Vice President 1995 -- -- -- -- --
Harry R. Wilker(11) ........... 1997 226,852 -- -- 50,000(7) 14,159(5)
Senior Vice President 1996 226,260 28,659 -- 25,000 64,917
Broderbund Publishing 1995 194,019 260,074 -- 5,000 14,430
Jan L. Gullett(12) ............ 1997 253,478 -- -- 125,000(7) 14,159(5)
Senior Vice President 1996 226,096 28,638 211,669(13) 95,000 2,477
Marketing and Sales 1995 94,431(14) 126,580 30,000(15) 50,000 47
</TABLE>
- ----------
(1) Includes profit sharing bonus accrued in the applicable fiscal year and
paid after the end of the fiscal year.
(2) Excludes all perquisites and other amounts which, for any executive
officer, in the aggregate did not exceed the lesser of $50,000 or 10% of
the total annual salary and bonus for such executive officer.
(3) Mr. Durrett was hired as Chief Executive Officer of the Company effective
October 1, 1996.
(4) Represents a $100,000 travel allowance.
(5) Represents $2,375 in Company matching 401(k) Plan contributions, $182 in
group term life insurance imputed income and $11,602 in profit sharing
contributions.
(6) Mr. Carlston resigned as Chief Executive Officer in October 1996.
(7) Amount shown reflects options issued in connection with an option repricing
as set forth on page 14.
(8) Includes $1,643 in Company matching 401(k) Plan contributions, $182 in
group term life insurance imputed income and, $11,602 in profit sharing
contributions.
(9) Amount shown reflects pro-rata salary subsequent to June 1997 hire date.
(10) Represents reimbursement of relocation expenses.
(11) Prior to the end of the Last Fiscal Year, Mr. Wilker ceased to be a Section
16 reporting executive officer of the Company.
(12) Prior to the end of the Last Fiscal Year, Mr. Gullett ceased to be an
executive officer of the Company.
(13) Represents reimbursement of relocation expenses.
(14) Amount shown reflects pro rata salary subsequent to February 1995 hire
date.
(15) Represents hiring bonus.
11
<PAGE>
Option Grants in Last Fiscal Year
The following table sets forth, as to the Named Officers, certain
information relating to stock options granted during fiscal 1997.
<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------------
Potential Realizable
Value at Assumed
Number of % of Total Annual Rates of
Securities Options Stock Price
Underlying Granted to Appreciation
Options Employees Exercise for Option Term(3)
Granted in Fiscal Price Expiration ---------------------
Name (#) Year(1) ($/Sh)(2) Date 5% 10%
----- ---------- -------- ---------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Durrett ........... 300,000 14.5% $28.375 10/1/06 $5,353,465 $13,566,732
Douglas G. Carlston ......... -- -- -- -- -- --
William M. McDonagh ......... 37,500 1.8% 27.50 10/31/06 648,547 1,643,546
37,500(4) 1.8% 28.75 11/21/06 678,027 1,718,253
Thomas L. Marcus ............ 20,000 0.9% 27.50 10/31/06 345,892 876,558
20,000(4) 0.9% 28.75 11/21/06 361,614 916,401
Daniel J. Steever ........... 60,000 2.9% 21.69 7/31/07 818,443 2,074,096
Harry R. Wilker ............. 25,000 1.2% 27.50 10/31/06 432,365 1,095,697
25,000(4) 1.2% 28.75 11/21/06 452,018 1,145,502
Jan L. Gullett .............. 25,000 1.2% 27.50 10/31/06 432,365 1,095,697
100,000(4) 4.8% 28.75 11/21/06 1,808,072 4,582,009
</TABLE>
- ----------
(1) The total number of shares subject to options granted to employees in
fiscal 1997 was 2,067,050.
(2) The exercise price per share is equal to the mean between the highest and
lowest selling prices of the Company's Common Stock on the date of grant.
(3) The Potential Realizable Value is calculated based on the fair market value
on the date of grant, which is equal to the exercise price of options
granted in fiscal 1997, assuming that the stock appreciates in value from
the date of grant until the end of the option term at the annual rate
specified (5% and 10%). Potential Realizable Value is net of the option
exercise price. The assumed rates of appreciation are specified in rules of
the SEC, and do not represent the Company's estimate or projection of
future stock price. Actual gains, if any, resulting from stock option
exercises and Common Stock holdings are dependent on the future performance
of the Common Stock, overall stock market conditions, as well as the option
holders' continued employment through the exercise/vesting period. There
can be no assurance that the amounts reflected in this table will be
achieved.
(4) Amount shown reflects options issued in connection with an option repricing
as set forth on page 14.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year End Option Values
The following table provides information with respect to option exercises
in fiscal 1997 by the Named Officers and the value of such officers' unexercised
options at the close of business on August 29, 1997.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal In-the-Money Options at
Shares Year End (#) Fiscal Year End ($) (2)
Acquired on Value -------------------------- --------------------------
Name Exercise (#) Realized ($)(1) Exercisable Unexercisable Exercisable Unexercisable
----- ------------ --------------- ----------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Durrett .......... -- -- -- 300,000 -- 280,500
Douglas G. Carlston ........ -- -- 7,500 30,000 -- --
William M. McDonagh ........ -- -- 90,000 95,000 1,707,024 295,324
Thomas L. Marcus ........... -- -- 28,000 52,000 427,628 69,385
Daniel J. Steever .......... -- -- -- 60,000 -- 457,350
Harry R. Wilker ............ 1,500 29,625 49,300 64,200 634,850 102,422
Jan L. Gullett ............. -- -- -- 170,000 -- 101,250
</TABLE>
- ----------
(1) Market value of underlying securities based on the closing price of the
Company's Common Stock on the date of exercise, minus the exercise price.
(2) Market value of underlying securities based on the average of the high and
low trading price of the Company's Common Stock on August 29, 1997, minus
the exercise price.
12
<PAGE>
CERTAIN TRANSACTIONS
In 1988, the Company founded Broderbund Foundation (the "Foundation"), a
non-profit corporation. Douglas G. Carlston and William M. McDonagh serve on the
three-member Board of Directors of the Foundation. Each year, the Company
donates to the Foundation a percentage of its adjusted pre-tax profits as
determined by the Company's Board of Directors. For the last quarter and the
preceding two years the Company has donated approximately 2% of its adjusted
pretax profits. The Foundation makes grants to qualified non-profit
organizations at the discretion of the Foundation's Board of Directors.
Pursuant to an employment agreement dated October 1, 1996 (the
"Agreement"), Joseph P. Durrett was hired as Chief Executive Officer of the
Company, effective October 1996. Such employment agreement provides, among other
terms, that Mr. Durrett will receive a base salary of $400,000 per year, and may
participate in the Company's executive bonus plan. Pursuant to the Agreement,
Mr. Durrett received an option grant for 300,000 shares as of the date of his
commencement of employment with the Company, which options vest over five years
and which vesting accelerates upon a change in control of the Company.
Pursuant to an arrangement with the Company, the Chief Financial Officer,
Mark Hattendorf, may recieve up to nine months of salary as severence in the
event of an involuntary termination of his employment, and, if such termination
occurs within 18 months of a change in control of the Company, the vesting of
shares subject to options held by Mr. Hattendorf will accelerate, by half if
before October 31, 1998 and in whole thereafter.
The following Compensation Committee Report on executive compensation shall
not be deemed to be incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing under the
Securities Act of 1933, as amended (the "Securities Act"), or under the Exchange
Act, except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
COMPENSATION COMMITTEE REPORT
The Compensation Committee (the "Committee") of the Board of Directors of
the Company is composed of four independent outside directors. There are no
insiders on the Committee and there are no Committee members with interlocking
relationships with the Company or any of its affiliates. The Chief Executive
Officer ("CEO") of the Company is invited to attend and participate in Committee
meetings, except when CEO compensation is being discussed. The CEO may designate
the President (except when the President's compensation is being discussed),
Vice President of Human Resources, Vice President and General Counsel or other
members of management to attend and participate in committee meetings in his
stead. Final decisions regarding executive compensation, including the granting
of stock options to executives, are made by the Board of Directors based on
recommendations of the Committee. Decisions regarding stock option grants to
senior executives are made by the Committee. The Committee and the Board of
Directors have approved guidelines under which management grants options to
other executives and non-executive employees.
The Committee reviews base salary levels and target bonuses for the Named
Officers on or about October 1 of each year. The Committee makes recommendations
to the Board of Directors regarding the general compensation policy of the
Company for the Named Officers. The Committee also makes recommendations to the
Board regarding administration of the equity incentive plans and the Bonus Plan
for the Named Officers. The Committee approves and adopts compensation policies
to assure that the Company can continue to attract, retain and motivate its
executive officers through a balanced compensation program consisting of base
salary, annual incentive bonuses, and long term equity gain. The Committee
believes that the compensation of the Named Officers should be influenced
significantly by the Company's performance. The Committee is responsible for
determining the CEO's compensation package annually and recommending it to the
Board of Directors for approval.
13
<PAGE>
Option Repricings in Last Fiscal Year
The following table provides information with respect to the repricing of
certain outstanding stock options issued to the Named Officers. On November 21,
1996, the Board approved an option repricing which provided that all employees,
including executive officers but not including outside directors, who were
granted options between January 31, 1995 and April 30, 1996, with certain
limited exceptions, could surrender such grants in exchange for an equal number
of options having an exercise price of $28.75, which is the mean between the
highest and lowest selling prices of the Company's Common Stock on such date
(the "Repricing"). In exchange, vesting for repriced options was restarted as of
the date of the Board action approving the Repricing.
<TABLE>
<CAPTION>
Length of
Original
Number of Option Term
Securities Market Price Exercise Remaining
Underlying of Stock at Price at New at Date of
Options Time of Time of Exercise Repricing
Name Date Repriced Repricing($)(1) Repricing($) Price($)(1) (Years)
---- ---- -------- --------------- ------------ ----------- -------
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Durrett ............ -- -- -- -- -- --
Douglas G. Carlston .......... -- -- -- -- -- --
William M. McDonagh .......... 11/21/96 37,500 28.75 69.75 28.75 8.94
Thomas L. Marcus ............. 11/21/96 20,000 28.75 69.75 28.75 8.94
Daniel J. Steever ............ -- -- -- -- -- --
Harry R. Wilker .............. 11/21/96 25,000 28.75 69.75 28.75 8.94
Jan L. Gullett ............... 11/21/96 25,000 28.75 50.75 28.75 8.43
11/21/96 25,000 28.75 72.00 28.75 8.69
11/21/96 25,000 28.75 69.75 28.75 8.94
11/21/96 25,000 28.75 48.00 28.75 9.19
</TABLE>
- ----------
(1) Based on the average of the high and low sales prices of the Company's
Common Stock on the date of the Repricing.
Compensation of Executive Group
The Committee seeks to establish total compensation levels that are
competitive in the Company's industry and in the high technology field as a
whole. To this end, the Committee has determined that its executives should
receive total cash compensation targeted at the 50th percentile or higher,
depending on the Company's performance, when compared to the compensation paid
by comparable and competitive employers. In general, the Committee believes that
cash compensation should vary with the current or short-term performance of the
Company, and any long-term awards should be closely aligned with the long-term
interest of the stockholders. Stock options have value for the executive only if
the price of the Company's stock increases above the fair market value on the
grant date and only if the executive remains employed by the Company for the
period required for the options to vest.
To accomplish this result, the Committee reviews reliable industry-specific
compensation survey studies and the advice of compensation consultants to
establish base salary levels for the executive group. Specifically, the
Committee refers to compensation surveys in assessing salary levels for
executives from a comparability viewpoint. From time to time, the Committee
retains the services of an independent compensation consulting organization to
conduct a competitive compensation study for its executive group.
The executive group participates in an annual incentive bonus program.
Pursuant to such incentive bonus program, a bonus pool is available to the
extent that the Company meets or exceeds certain financial performance goals
which are set by the Board. Because the Company's financial performance did not
meet the goals determined by the Board for the Last Fiscal Year, there was no
executive bonus pool for the executive group in the Last Fiscal Year.
14
<PAGE>
The Company maintains a stock option plan to provide long term incentives
to maximize stockholder value by rewarding employees for the financial success
of the Company. Options granted to executives are generally subject to five (5)
year vesting. In certain limited cases, all or a portion of the options may vest
on an accelerated basis upon the occurrence of certain specified events.
Currently, option grants are made to executives in pre-established amounts in
connection with initial hire, a subsequent grade promotion, or annually. The
pre-established amounts are determined by referring to industry-specific
compensation survey studies as well as competitive pressures to attract
executive personnel.
The total compensation in the last fiscal year for the five most highly
compensated executives is described in this Proxy Statement starting on Page 11,
and the compensation for the Company's chief executive officer is described
below.
Compensation of Chief Executive Officer
Mr. Durrett's prorated base salary of $375,394 during the Last Fiscal Year
was set by the Agreement and was determined by reference to competitive
compensation survey data and internal salary structures. In the Last Fiscal
Year, Mr. Durrett was granted a stock option to purchase 300,000 shares of
Common Stock, vesting ratably over five years from the date of grant unless
earlier accelerated by a change in control of the Company. Based on the
Company's financial results in the Last Fiscal Year. Mr. Durrett did not receive
a bonus at the end of the Last Fiscal Year.
Compensation Committee Members
Gary L. Buckmiller, Chairman
Edmund R. Auer
William P. Egan
Lawrence H. Wilkinson
15
<PAGE>
COMPANY STOCK PRICE PERFORMANCE GRAPH
The graph below compares the cumulative total stockholders' return on the
Company's Common Stock during the five previous fiscal years with the
NASDAQ-U.S. Index and the Hambrecht & Quist Technology Index over the same
period (assuming the investment of $100 in the Company's Common Stock and in the
two other indices, and reinvestment of all dividends).
The comparisons in the graph below are based on historical data and are not
intended to forecast the possible future performance of the Company's Common
Stock.
The graph below shall not be deemed to be incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act or under the Exchange Act, except to the extent
that the Company specifically incorporates this information by reference, and
shall not otherwise be deemed filed under such Acts.
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
HAMBRECHT & QUIST INDEX PRODUCTS AND SER
1997 PROXY PERFORMANCE GRAPH DATA
MONTHLY DATA SERIES
ACTUAL PRICES
Nasdaq Stock
DATES Broderbund H&Q Technology Market -U.S.
- --------------------------------------------------------------------------------
Aug-92 12.38 320.45 180.632
Sep-92 14.75 334.77 187.346
Oct-92 18.00 354.05 194.725
Nov-92 19.75 379.18 210.221
Dec-92 21.25 396.79 217.960
Jan-93 21.56 429.85 224.165
Feb-93 20.13 415.17 215.802
Mar-93 22.13 421.59 222.048
Apr-93 17.63 396.59 212.572
May-93 19.25 437.96 225.270
Jun-93 19.50 432.34 226.312
Jul-93 17.38 407.52 226.579
Aug-93 18.00 433.57 238.290
Sep-93 19.88 441.52 245.387
Oct-93 28.25 449.08 250.902
Nov-93 25.38 455.69 243.419
Dec-93 17.25 465.88 250.205
Jan-94 18.25 494.64 257.800
Feb-94 20.13 510.98 255.394
Mar-94 20.50 483.05 239.689
Apr-94 17.13 470.62 236.580
May-94 22.00 472.00 237.157
Jun-94 22.63 441.91 228.485
Jul-94 24.25 458.40 233.171
Aug-94 27.75 505.56 248.036
Sep-94 26.75 503.92 247.401
Oct-94 32.00 550.09 252.263
Nov-94 35.75 545.37 243.895
Dec-94 46.75 559.63 244.579
Jan-95 46.75 551.45 245.950
Feb-95 51.88 599.25 258.957
Mar-95 51.88 626.68 266.632
Apr-95 49.50 673.62 275.027
May-95 45.00 697.75 282.119
Jun-95 63.75 781.75 304.982
Jul-95 72.00 853.13 327.399
Aug-95 73.63 862.91 334.035
Sep-95 76.13 883.50 341.716
Oct-95 69.38 895.90 339.758
Nov-95 64.75 884.90 347.736
Dec-95 60.75 836.78 345.885
Jan-96 48.50 849.15 347.590
Feb-96 45.25 891.69 360.823
Mar-96 37.75 852.89 362.018
Apr-96 44.00 970.78 392.052
May-96 47.13 985.41 410.054
Jun-96 32.25 913.62 391.569
Jul-96 32.88 819.73 356.693
Aug-96 30.13 869.35 376.678
Sep-96 29.00 969.86 405.491
Oct-96 28.13 955.98 401.011
Nov-96 30.00 1068.70 425.802
Dec-96 29.75 1040.00 425.421
Jan-97 30.88 1151.37 455.659
Feb-97 29.38 1057.35 430.471
Mar-97 21.88 991.30 402.368
Apr-97 18.75 1027.99 414.952
May-97 25.13 1182.70 461.999
Jun-97 24.69 1193.17 476.132
Jul-97 21.69 1385.12 526.407
Aug-97 29.50 1389.07 525.529
Sep-97 34.00 1446.03 556.615
Aug-92 100 100 100
Sep-92 119.19 104.47 103.72
Oct-92 145.45 110.49 107.80
Nov-92 159.60 118.33 116.38
Dec-92 171.72 123.82 120.67
Jan-93 174.24 134.14 124.10
Feb-93 162.63 129.56 119.47
Mar-93 178.79 131.56 122.93
Apr-93 142.42 123.76 117.68
May-93 155.56 136.67 124.71
Jun-93 157.58 134.92 125.29
Jul-93 140.40 127.17 125.44
Aug-93 145.45 135.30 131.92
Sep-93 160.61 137.78 135.85
Oct-93 228.28 140.14 138.90
Nov-93 205.05 142.20 134.76
Dec-93 139.39 145.38 138.52
Jan-94 147.47 154.36 142.72
Feb-94 162.63 159.46 141.39
Mar-94 165.66 150.74 132.69
Apr-94 138.38 146.86 130.97
May-94 177.78 147.29 131.29
Jun-94 189.83 137.90 126.49
Jul-94 195.96 143.05 129.09
Aug-94 224.24 157.77 137.32
Sep-94 216.16 157.25 136.96
Oct-94 258.59 171.66 139.66
Nov-94 288.89 170.19 135.02
Dec-94 377.78 174.64 135.40
Jan-95 373.74 172.09 136.16
Feb-95 419.19 187.00 143.36
Mar-95 419.19 195.56 147.61
Apr-95 400.00 210.71 152.26
May-95 363.64 217.74 156.18
Jun-95 515.15 243.95 168.84
Jul-95 581.82 266.23 181.25
Aug-95 594.95 269.28 184.93
Sep-95 615.15 275.71 189.18
Oct-95 560.61 279.58 188.09
Nov-95 523.23 276.14 192.51
Dec-95 490.91 261.13 191.49
Jan-96 391.92 264.99 l92.43
Feb-96 365.66 278.26 199.76
Mar-96 305.05 266.15 200.42
Apr-96 355.56 302.94 217.04
May-96 340.40 307.51 227.01
Jun-96 260.61 285.11 216.78
Jul-96 265.66 255.81 197.47
Aug-96 243.43 271.29 208.53
Sep-96 234.34 302.66 224.48
Oct-96 227.27 298.32 222.00
Nov-96 242.42 333.50 235.73
Dec-96 240.40 324.54 235.52
Jan-97 249.49 359.30 252.26
Feb-97 237.37 329.96 238.31
Mar-97 176.77 309.35 222.76
Apr-97 l5l.52 320.80 229.72
May-97 203.03 369.08 255.77
Jun-97 199.49 372.34 263.59
Jul-97 175.25 432.24 291.43
Aug-97 238.38 433.48 290.94
Sep-97 274.75 451.25 308.15
16
<PAGE>
OTHER MATTERS
The Company knows of no other matters to be submitted to the stockholders
at the Annual Meeting. If any other matters properly come before the Annual
Meeting, it is the intention of the persons named in the enclosed form of Proxy
to vote the shares they represent as the Board of Directors may recommend.
THE BOARD OF DIRECTORS
Novato, California
December 23, 1997
17
<PAGE>
PROXY PROXY
BRODERBUND SOFTWARE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
BRODERBUND SOFTWARE, INC.
The undersigned stockholder of BRODERBUND SOFTWARE, INC., a Delaware
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated December 23, 1997, and hereby
appoints Douglas G. Carlston and Thomas L. Marcus, and each of them, proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the Annual Meeting of
Stockholders of BRODERBUND SOFTWARE, INC. to be held on January 22, 1998, at
10:00 a.m., at Wyndham Garden Hotel, 1010 Northgate Drive, San Rafael,
California 94903 and at any adjournments thereof, and to vote all shares of
Common Stock which the undersigned would be entitled to vote if then and there
personally present, on the matters set forth below:
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS INDICATED, WILL
BE VOTED "FOR" THE ELECTION OF DIRECTORS NAMED HEREIN, "FOR" EACH PROPOSAL
LISTED, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME
BEFORE THE MEETING.
<PAGE>
BRODERBUND SOFTWARE, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /
<TABLE>
<S> <C> <C> <C>
For Withheld For All
All All Except
/ / / / / /
1. ELECTION OF DIRECTORS:
If you wish to withhold authority to vote for any individual nominee, strike a
line through that nominee's name in the list below:
Douglas G. Carlston, Edmund R. Auer, Gary L. Buckmiller,
Scott D. Cook, Joseph P. Durrett, William P. Egan,
William M. McDonagh, Lawrence H. Wilkinson
For Against Abstain
/ / / / / /
2. PROPOSAL TO APPROVE THE INCREASE BY 1,500,000 SHARES IN THE NUMBER OF
SHARES AVAILABLE FOR GRANT UNDER THE COMPANY'S 1996 EMPLOYEE AND CONSULTANT
STOCK OPTION PLAN:
For Against Abstain
/ / / / / /
3. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP, OR ITS INTENDED
SUCCESSOR COMPANY, ERNST & YOUNG LLP/KPMG PEAT MARWICK LLP, AS THE
INDEPENDENT AUDITORS OF THE COMPANY FOR THE 1997 FISCAL YEAR and upon such
other matter or matters which may properly come before the meeting and any
adjournments thereof:
Dated: _______199___
Signature(s)_____________________________
_________________________________________
NOTE: Please sign as name appears hereon.
Joint owners should each sign. When
signing as attorney, executor,
administrator, trustee or guardian, give
full title as such.
</TABLE>
