<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
------------------------------------------------
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ /Preliminary Proxy Statement / / Confidential, For Use of Commission Only
(as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ALTRIS SOFTWARE, 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:
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
-------------------------------------------------------------------------
(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:
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(4) Date Filed:
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<PAGE>
ALTRIS SOFTWARE, INC.
9339 CARROLL PARK DRIVE
SAN DIEGO, CALIFORNIA 92121
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 29, 1997
The Annual Meeting of Shareholders of Altris Software, Inc., a California
corporation (the "Company"), will be held at the Company's headquarters at 9339
Carroll Park Drive, San Diego, California, at 1:30 p.m. on Thursday, May 29,
l997 for the following purposes:
1. To elect seven directors to hold office until the next succeeding
Annual Meeting and until their successors have been elected and
qualified.
2. To transact such other business as may properly come before the Annual
Meeting and any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on April 25, 1997 as
the record date for the determination of shareholders entitled to receive notice
of, and to vote at, the Annual Meeting and any adjournments or postponements
thereof, and only holders of record of the Company's Common Stock at the close
of business on that date will be entitled to receive notice of, and to vote at,
the Annual Meeting.
WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING OR NOT, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE. THIS WILL
ENSURE THAT YOUR SHARES ARE VOTED IN ACCORDANCE WITH YOUR WISHES AND THAT A
QUORUM WILL BE PRESENT. YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING, AND YOU
MAY VOTE IN PERSON EVEN THOUGH YOU HAVE RETURNED YOUR PROXY.
By Order of the Board of Directors,
John W. Low
Secretary
May 1, 1997
<PAGE>
ALTRIS SOFTWARE, INC.
9339 CARROLL PARK DRIVE
SAN DIEGO, CALIFORNIA 92121
---------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 29, 1997
---------------------------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Altris Software, Inc. (the "Company") for
use at the Annual Meeting of Shareholders to be held at the Company's
headquarters at 9339 Carroll Park Drive, San Diego, California, on Thursday, May
29, 1997 at 1:30 p.m., or at any adjournments or postponements thereof, for the
purposes set forth herein and in the foregoing Notice. This Proxy Statement and
the accompanying proxy were first sent to shareholders on or about May 1,
1997.
PROXY INFORMATION
Shares represented by properly executed proxies, if received in time and
not revoked or suspended, will be voted in accordance with the instructions
indicated thereon or, if no instructions are given for any or all of the
proposals, will be voted in favor of the election of all persons named in, or
otherwise nominated as set forth in, this Proxy Statement to serve as directors.
A shareholder giving a proxy has the power to revoke it at any time before it is
exercised by attending and voting at the Annual Meeting or by filing with the
Secretary of the Company either a written notice of revocation or a duly
executed proxy bearing a later date.
RECORD DATE AND VOTING
Each shareholder of record of the Company's common stock, no par value
(the "Common Stock") at the close of business on April 25, 1997 is entitled
to vote on all matters submitted to a vote of the shareholders at the Annual
Meeting. At the close of business on April 25, 1997, there were approximately
9,578,870 shares of Common Stock outstanding held of record by approximately
437 shareholders. Directors will be elected by a plurality of the votes of
the shares of Common Stock represented and voting on the election of
directors. In all matters other than the election of directors, the
affirmative vote of a majority of shares of Common Stock represented and
voting on a particular matter (assuming such affirmative votes constitute a
majority of the votes required for a quorum of the shareholders) shall be the
act of the shareholders. In general, abstentions will have no effect on the
outcome of the voting with respect to any matter. As to certain matters
other than the election of directors, New York Stock Exchange and American
Stock Exchange
1
<PAGE>
rules generally require when shares are registered in street or nominee name
that their member brokers receive specific instructions from the beneficial
owners in order to vote on such a proposal. If a member broker indicates on the
proxy that such broker does not have discretionary authority as to certain
shares to vote on a particular matter, those shares will not be considered as
present and entitled to vote with respect to that matter.
Holders of Common Stock have one vote for each share on all matters
submitted to the shareholders at the Annual Meeting, except that shareholders
may cumulate votes in the election of directors if any shareholder gives notice
to the Secretary prior to the voting of his or her intention to cumulate votes.
Under cumulative voting, each shareholder may give any one candidate whose name
was placed in nomination prior to the commencement of voting a number of votes
equal to the number of directors to be elected, multiplied by the number of
votes to which the shareholder's shares are normally entitled, or distribute
such number of votes on the same principle among as many candidates as the
shareholder sees fit. The proxy holders will have authority, in their
discretion, to vote cumulatively for less than all of the nominees.
2
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to shares of the Company's
Common Stock owned as of March 31, 1997 by (i) each current director and nominee
for director, (ii) each Named Executive Officer (as defined below) who is
presently an employee of the Company, (iii) all current directors and executive
officers as a group and (iv) each person who, to the extent known to the
Company, beneficially owned more than 5% of the outstanding shares of Common
Stock. Unless otherwise indicated in the footnotes following the table, the
persons as to whom the information is given have sole voting and investment
power over the shares shown as beneficially owned, subject to community property
laws where applicable.
NUMBER OF PERCENT OF
NAME SHARES(1) CLASS(1)
- ---- ---------- ----------
Jay V. Tanna . . . . . . . . . . . . 71,875 *
John W. Low. . . . . . . . . . . . . 96,750 1.0%
Roger H. Erickson. . . . . . . . . . 89,750 *
D. Ross Hamilton . . . . . . . . . . 190,250 2.0%
Michael J. McGovern. . . . . . . . . 407,275(2) 4.2%
Larry D. Unruh . . . . . . . . . . . 11,797 *
Norwood H. Davis, Jr.. . . . . . . . 18,500 *
Robert H. Smith. . . . . . . . . . . 7,500 *
Martin P. Atkinson . . . . . . . . . - -
All Current Directors and Executive
Officers as a Group (11 persons) . . 923,678 9.4%
- -----------
*Less than one percent.
(1) Amounts and percentages include shares of Common Stock that may be acquired
within 60 days through the exercise of stock options. Such stock included
in the computation of beneficial ownership is 46,875 shares for Mr. Tanna,
48,750 shares for Mr. Low, 38,750 shares for Mr. Erickson, 18,750 shares
for Mr. Hamilton, 7,500 shares for Mr. Unruh, 7,500 shares for Mr. Davis,
7,500 shares for Mr. Smith, 7,500 shares for Mr. McGovern and 210,625 shares
for all current directors and executive officers as a group.
(2) Does not include 54,000 shares held in trust for the benefit of Mr.
McGovern's adult children, as to which Mr. McGovern disclaims beneficial
ownership.
3
<PAGE>
ELECTION OF DIRECTORS
Seven directors are to be elected at the Annual Meeting to hold office
until the next Annual Meeting and until their successors are elected and
qualified. In the election of directors, the proxy holders intend to vote for
the election of the nominees named below. Should any nominee decline or become
unavailable to serve as a director or should any vacancy occur before the
election (which events are not anticipated), the proxies will be voted, in the
absence of instructions to the contrary, for the election of the remaining
nominees named in this Proxy Statement.
The following table sets forth certain information concerning each person
nominated for election as a director:
Name Age Position
- ---- --- --------
Jay V. Tanna . . . . . . 58 President and Chief Executive Officer, Director
D. Ross Hamilton . . . . 59 Chairman of the Board of Directors
Michael J. McGovern. . . 67 Director
Larry D. Unruh . . . . . 46 Director
Norwood H. Davis, Jr.. . 57 Director
Robert H. Smith. . . . . 61 Director
Martin P. Atkinson . . . 50 Nominated Director
MR. TANNA has served as a Director of the Company since the Company's
acquisition of Trimco Group plc ("Trimco") in December 1995. Mr. Tanna became
the President and Chief Executive Officer of the Company effective April 16,
1996. Prior to that date, Mr. Tanna served as the Executive Vice President of
the Company since December 1995 and the Chief Operating Officer of the Company
since February 1996. Prior to the Trimco acquisition, Mr. Tanna served as
Managing Director of Trimco, beginning in 1988. Prior to his employment with
Trimco, Mr. Tanna held the positions of Managing Director of Sorco Engineering
Ltd., a construction engineering firm, from 1985 to 1987, and Director of
Projects of Lummus Co. Ltd., a construction engineering firm, from 1979 to 1985.
Mr. Tanna earned a B.S.C. degree in Engineering with Honors from London
University in 1963.
MR. HAMILTON has served as Chairman of the Board of the Company since
January 1997 and as a Director of the Company since June 1994. Since 1983 Mr.
Hamilton has served as President of Hamilton Research, Inc., an investment
banking firm. Mr. Hamilton currently serves as a director of IncStar
Corporation, a medical diagnostic company, and Luther Medical Products, Inc., a
medical device manufacturer. Mr. Hamilton received a B.S. degree in Economics
from Auburn University in 1961.
MR. MCGOVERN has served as a Director of the Company since he founded
the Company in February 1981, and served as the Company's Chairman and Chief
Executive Officer from its inception until December 1987. In addition, Mr.
McGovern has served as a Managing Partner of McRel & Associates since
December 1987, a firm which provides engineering and management consulting
services to small and start-up companies in the computer and
telecommunication technologies areas. Mr. McGovern was a founder of
Autologic, Inc. in 1968, where he developed a computer-driven CRT
phototypesetter, which is now widely used in the newspaper and publishing
industries. Mr. McGovern also serves as a director of Qtel, Inc. (since
March 1997) and as a director of Alpha Data Tech (since April 1997). He
received a B.S.E.E. degree from City University of New York in 1952 and an
M.S.E.E. degree from Arizona State University in 1959.
4
<PAGE>
MR. UNRUH has served as a Director of the Company since May 1988. He is a
partner of Hein & Associates, certified public accountants, and has been its
Managing Tax Partner since 1982. Mr. Unruh currently serves as a director of
Basin Exploration, Inc., an oil exploration and development company, and also
serves as a director of LK Business Services Inc., a specialty automobile
lubricant manufacturer. Mr. Unruh received a B.S. degree in Accounting from the
University of Denver in 1973.
MR. DAVIS has served as a Director of the Company since December 1996. Mr.
Davis has served as the President and Chief Executive Officer of Trigon Blue
Cross Blue Shield since 1981, and as Chairman of the Board since 1995. He has
been a director of Trigon Blue Cross Blue Shield since 1975. Mr. Davis is a
director of Signet Banking Corporation and Hilb, Rogal & Hamilton Co. He
received a B.S. degree from Hampden-Sydney College in 1963 and an LL.B. (law)
degree from the University of Virginia in 1966.
MR. SMITH has served as a Director of the Company since February 1997.
Mr. Smith is a Managing Director of Smith & Crowley, Inc., an investment banking
firm specializing in banking. Previously, Mr. Smith served as Chairman of
the Board and Chief Executive Officer of Security Pacific Corporation and
Security Pacific National Bank prior to their merger with BankAmerica
Corporation in April 1992. He then served as President, Chief Operating
Officer and a director of BankAmerica Corporation until October 1992. Mr.
Smith is a director of Edison International, Inc., J.G. Boswell Company,
Oasis Residential, Inc., Pinkerton, Inc. and Marine National Bank. He
received a B.S. degree from the University of Southern California in 1957 and
a law degree from Van Norman University in 1966.
MR. ATKINSON presently runs a consulting firm based in Kent, England
that advises middle-market companies on banking and corporate finance
matters. Prior to establishing his consulting firm, Mr. Atkinson was
employed by Lloyds Bank for 28 years until his retirement from there (at the
senior executive level) in December 1996. While at Lloyds, Mr. Atkinson was
the Head of Risk Control of Lloyds Merchant Bank Limited, a Director of
Lloyds' Capital Markets Group, where he was responsible for arranging several
multi-million pound syndicated loans, and from 1992 to 1996, he was
responsible for Lloyds' middle-market activities in certain counties in
England. Mr. Atkinson is an Associate of the Institute of Bankers, England.
He received a law degree from Nottingham University in England in 1968.
All directors are elected annually and serve until the next annual meeting
of shareholders and until their successors have been elected and qualified.
5
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS
The following table and discussion set forth certain information with
regard to the Company's executive officers.
Name Age Position
- -----------------------. --- ----------------------------------------
Jay V. Tanna . . . . . . 58 President and Chief Executive Officer
Roger H. Erickson. . . . 40 Vice President, Operations
John W. Low. . . . . . . 40 Chief Financial Officer and Secretary
Steven D. Clark. . . . . 45 Vice President, North American Sales
Timothy A. Wright. . . . 39 Managing Director, U.K. Operations
MR. TANNA has served as a Director of the Company since the Company's
acquisition of Trimco in December 1995. Mr. Tanna became the President and
Chief Executive Officer of the Company effective April 16, 1996. Prior to that
date, Mr. Tanna served as the Executive Vice President of the Company since
December 1995 and the Chief Operating Officer of the Company since February
1996. Prior to the Trimco acquisition, Mr. Tanna served as Managing Director of
Trimco, beginning in 1988. Prior to his employment with Trimco, Mr. Tanna held
the positions of Managing Director of Sorco Engineering Ltd., a construction
engineering firm, from 1985 to 1987, and Director of Projects of Lummus Co.
Ltd., a construction engineering firm, from 1979 to 1985. Mr. Tanna earned a
B.S.C. degree in Engineering with Honors from London University in 1963.
MR. ERICKSON was appointed Vice President, Operations in June 1996. From
February 1996 to June 1996, Mr. Erickson served as Vice President, Alliances and
General Manager, PDM Business Unit, and from April 1995 to February 1996, he
served as Vice President, Worldwide Channel Sales, with responsibility for
alternate channel and international sales. Prior to April 1995, Mr. Erickson
served as Executive Vice President, Marketing and Sales from September 1993. He
was also a Director of the Company from July 1990 to June 1995. From October
1991 to August 1993, Mr. Erickson served as Chief Executive Officer and
President of the Company. From June 1990 to October 1991, Mr. Erickson served
as Vice President, Engineering. From
6
<PAGE>
1984 until March 1990, Mr. Erickson served the Company in several positions
including Senior Systems Engineer and Director of Technical Projects. Mr.
Erickson earned a M.S. degree in Computer Science from the University of
California, Santa Barbara in 1982 and a B.A. degree in Mathematics from Westmont
College in 1978.
MR. LOW has served as Chief Financial Officer and Secretary since June
1990. Previously, Mr. Low had served as Corporate Controller since joining the
Company in August 1987. From 1980 until joining the Company, Mr. Low was with
Price Waterhouse, most recently as a manager working with middle-market and
growing companies. Mr. Low, a certified public accountant, earned a B.A. degree
in Economics from the University of California, Los Angeles in 1978.
MR. CLARK was appointed Vice President, North American Sales, in January
1997. From 1994 through 1996, Mr. Clark was Director of U.S. Sales for the
Company. From 1992 to 1994, Mr. Clark served as Vice President of West Coast
Operations at PRC, a systems integration firm. From 1987 to 1992, Mr. Clark was
Director of Marketing for Optigraphics Corporation, which the Company
subsequently acquired in 1993. From 1975 to 1983, Mr. Clark held various
positions with Dun & Bradstreet Petroleum Information. Mr. Clark earned a B.A.
degree in Geography from the University of Colorado in 1974.
MR. WRIGHT was appointed Managing Director of U.K. Operations in January
1997. Since joining the Company in January 1996, Mr. Wright has served as
Director of U.K. Sales from January 1996 to April 1996, and as Deputy Managing
Director of U.K. Operations from April 1996 to January 1997. From 1985 until
joining the Company in January 1996, Mr. Wright was employed by British
Petroleum Group plc ("BP"), where since 1990 he held the positions of Head of
Applications Support, Head of Planning and Development and Senior
Consultant--Engineering Information and Systems within the BP Engineering
department. Within the two years prior to leaving BP, Mr. Wright was a member
of BP's Global IT Consultancy group where he was the world-wide lead for both
Document Management and Maintenance Management Systems, responsible for
integrating the many disparate information sources relied upon by BP's
engineering and technical professionals. Mr. Wright has been a member of the
Institution of Mechanical Engineers (based in the U.K.) since 1984 and a member
of the British Computer Society since 1992. He received a B.S. degree in
Mechanical Engineering from City University in London in 1980.
7
<PAGE>
EXECUTIVE OFFICERS' COMPENSATION
The following table sets forth certain information concerning the annual
and long-term compensation for services rendered in all capacities to the
Company for the three fiscal years ended December 31, 1996 of (i) both
individuals who served as the Company's Chief Executive Officer during 1996,
(ii) the three other most highly compensated executive officers of the Company
having compensation of $100,000 or more during 1996 and (iii) a former executive
officer and director of the Company who would have been included in (ii) above
but for the fact that he was not serving as an executive officer at the end of
1996 (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------------------------
LONG-TERM
OTHER COMPENSATION
ANNUAL AWARDS--
COMPENSATION STOCK OPTIONS
NAME AND PRINCIPAL POSITION YEAR Salary($) Bonus($) ($)(1) (# Shares)
- --------------------------- ---- -------- ------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Jay V. Tanna 1996 $205,865 - - 112,500
President and Chief 1995 - - - -
Executive Officer(2) 1994 - - - -
Stephen P. Gardner 1996 $ 66,153 - $127,838(4) -
Former President and Chief 1995 172,000 - 48,266(5) 125,000
Executive Officer(3) 1994 - - - -
Roger H. Erickson 1996 $185,427 - - 25,000
Vice President, Operations 1995 138,252 - - -
1994 146,308 - - -
John W. Low 1996 $142,535 - - 25,000
Chief Financial Officer 1995 131,904 - - 10,000
and Secretary 1994 126,769 - $ 36,594(6) -
Robert T. Bruce 1996 $146,654 - - 25,000
Former Chief Executive 1995 173,077 $250,000(8) - -
Officer, Chairman of the 1994 241,694 - - -
Board of Directors(7)
Terrence P. Theobald 1996 $114,805 - - -
Former Vice President, 1995 - - - -
Engineering(9) 1994 - - - -
</TABLE>
- ------------------
(1) Excludes compensation in the form of other personal benefits, which for
each of the executive officers (with the exception of Mr. Low in 1994 and
Mr. Gardner in 1995 and 1996) did not exceed the lesser of $50,000 or 10%
of the total annual salary and bonus reported for each year.
(2) Mr. Tanna became President and Chief Executive Officer of the Company
effective April 16, 1996.
(3) Mr. Gardner became President and Chief Executive Officer of the Company in
March 1995 and resigned from that position effective April 16, 1996.
8
<PAGE>
(4) Consists of severance payments made to Mr. Gardner in the form of the
continuation of Mr. Gardner's salary and certain other benefits from the
time of his resignation until September 16, 1996.
(5) Includes $45,023 for reimbursement of relocation costs incurred in
connection with a move at the time of joining the Company.
(6) Includes $36,325 for reimbursement of relocation costs incurred in
connection with a move for the benefit of the Company.
(7) Mr. Bruce resigned as Chief Executive Officer in March 1995 upon Mr.
Gardner joining the Company. The salary amounts paid to Mr. Bruce in 1995
and 1996 include amounts paid to him after such resignation in return for
various services rendered to the Company, including consulting services.
(8) A bonus was awarded to Mr. Bruce in recognition of his considerable efforts
in connection with the acquisition of Trimco Group plc in December 1995.
This bonus is currently being paid to Mr. Bruce in equal monthly
installments of $10,000, although the Company may, in its sole discretion,
accelerate such payments (such amounts are not included in Mr. Bruce's
compensation for 1996).
(9) Mr. Theobald resigned his employment with the Company in January 1997.
Compensation figures are not reported for Mr. Theobald in 1994 and 1995 as
he was not made an executive officer of the Company until 1996, and Mr.
Theobald's total compensation in each of 1994 and 1995 did not exceed
$100,000.
OPTION GRANTS IN 1996
Shown below is information concerning grants of options issued by the
Company to the Named Executive Officers during 1996:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM (2)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ----------------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
- ----------------------------- ------------- ------------ --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Jay V. Tanna. . . . . . 112,500 25% $5.94 11/27/01(3) $263,170 $626,998
Stephen P. Gardner. . . - - - - - -
Roger H. Erickson . . . 25,000 6% $5.94 11/27/06 $ 93,381 $236,671
John W. Low . . . . . . 25,000 6% $5.94 11/27/01 $ 41,028 $90,661
Terrence P. Theobald. . - - - - - -
Robert T. Bruce . . . . 25,000 6% $9.00 05/08/01 $ 62,163 $137,365
</TABLE>
- ----------------
(1) The options granted to Messrs. Tanna, Erickson and Low were granted in
November 1996, and the options granted to Mr. Bruce were granted in May
1996. All such options reflected above were granted with an exercise price
equal to the closing sale price of the Common Stock as reported on the
Nasdaq National Market on the date of grant. All grants vest 25% 90 days
from the date of grant and in additional annual installments of 25%
commencing on the first anniversary of the date of grant.
(2) The 5% and 10% assumed rates of appreciation are specified under the rules
of the Securities and Exchange Commission and do not represent the
Company's estimate or projection of the future price of its Common Stock.
The actual value, if any, which a Named Executive Officer may realize upon
the exercise of stock options will be based upon the difference between the
market price of the Company's Common Stock on the date of exercise and the
exercise price.
(3) Of the 112,500 options granted to Mr. Tanna, (i) options to purchase 75,000
shares of Common Stock expire on 11/27/01 and (ii) options to purchase
37,500 shares of Common Stock expire on 11/27/06.
9
<PAGE>
AGGREGATED OPTION EXERCISES IN 1996 AND 1996 YEAR-END OPTION VALUES
The following table sets forth for the Named Executive Officers information
with respect to unexercised options and year-end option values, in each case
with respect to options to purchase shares of the Company's Common Stock:
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED HELD AS OF DECEMBER 31, 1996 AT DECEMBER 31, 1996 (1)
ON VALUE ---------------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE NONEXERCISABLE EXERCISABLE NONEXERCISABLE
---- -------- -------- ----------- -------------- ----------- --------------
<S>. <C> <C> <C> <C> <C> <C>
Jay V. Tanna . . . . . . - - - 112,500 - $63,000
Stephen P. Gardner . . . 61,250 $428,281 - - - -
Roger H. Erickson. . . . 52,500 $355,313 32,500 25,000 $100,200 $14,000
John W. Low. . . . . . . 42,500 $248,750 31,000 39,000 $95,850 $56,600
Terrence P. Theobald . . 5,000 $25,620 15,625 4,375 $47,084 $13,731
Robert T. Bruce. . . . . 35,000 $206,250 41,250 18,750 $105,000 -
</TABLE>
- ------------
(1) Based on the closing sale price of the Company's Common Stock on the Nasdaq
National Market on December 31, 1996 of $6.50 per share.
BOARD COMMITTEES AND ATTENDANCE AT MEETINGS
The Board of Directors has an Audit Committee which makes recommendations
regarding the selection of independent public accountants and reviews with them
the scope and results of the audit engagement. In 1996, the Audit Committee was
comprised of Robert T. Bruce, Michael J. McGovern and Larry D. Unruh. The Audit
Committee held one meeting during 1996. In February 1997, Robert H. Smith was
elected to the Audit Committee to replace Mr. Bruce, who retired from the Board
of Directors effective December 31, 1996.
The Board of Directors also has a Compensation Committee which reviews
compensation of officers. In 1996, the Compensation Committee was comprised of
Michael McGovern, D. Ross Hamilton, Larry D. Unruh and Dominic K. Chan (Dr. Chan
retired from the Board of Directors in September 1996). The Compensation
Committee held two meetings during 1996.
In addition, the Board of Directors has a Stock Option Committee which
generally administers the Company's Amended and Restated 1996 Stock Incentive
Plan and 1987 Stock Option Plan. The Stock Option Committee was comprised of
Larry D. Unruh and Michael J. McGovern in 1996. The Stock Option Committee held
two meetings in 1996. Norwood H. Davis, Jr. was elected to the Stock Option
Committee in February 1997.
The Board of Directors does not have a standing Nominating Committee or any
other committee which performs a similar function.
During 1996, the Board of Directors held ten meetings. Each director
attended at least 75% of the aggregate of (i) the total number of meetings of
the Board held during the period for which he was a director, and (ii) the total
number of meetings held by all committees of the Board on which he served during
the period he served.
10
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors and persons who own more than 10% of the
Company's common stock to file reports of ownership and changes in ownership on
Forms 3, 4 and 5 with the Securities and Exchange Commission (the "SEC").
Executive officers, directors and 10% shareholders are required by the SEC to
furnish the Company with copies of all Forms 3, 4 and 5 that they file.
Based solely on the Company's review of the copies of such forms it has
received and written representations from certain reporting persons that they
were not required to file a Form 5 for specified fiscal years, the Company
believes that all of its executive officers, directors and greater than 10%
shareholders have complied with all of the filing requirements applicable to
them with respect to transactions during 1996.
INDEMNITY TRUST
In 1988, the Company adopted a form of indemnity agreement (the "Indemnity
Agreement"), which was approved at the 1988 Annual Meeting of Shareholders. The
Company subsequently entered into Indemnity Agreements with certain of its
officers and directors. Because the Company was unable to obtain director and
officer liability insurance at a reasonable cost and in order to enable the
Company to attract and retain qualified officers and directors, on October 12,
1989, the Company established an indemnity trust (the "Indemnity Trust") with an
initial principal amount of $250,000 to serve as a vehicle for funding any
indemnification required to be paid by the Company to its officers elected by
the Board of Directors who have served on or after May 31, 1989, as well as the
Company's directors who have served on or after such date. The trustee of the
Indemnity Trust is Bank of America. The Indemnity Trust is irrevocable but may
terminate after the occurrence of certain events, including the Company's
obtaining of a director and officer liability insurance policy comparable in
scope to the coverage of the Indemnity Trust, or the Company's achieving certain
financial results. In any event, the Indemnity Trust terminates on December 31,
1999.
COMPENSATION OF DIRECTORS
Each director, other than directors who are also employees of the Company
or are precluded from accepting a fee by their employers, receives a $5,000
annual fee plus a $1,000 meeting fee for four paid meetings a year. In addition,
each director is reimbursed for all reasonable expenses incurred in connection
with attendance at such meetings. Directors who are employees of the Company
are not compensated for serving as directors.
During 1996, Mr. Hamilton, through Hamilton Research, Inc., provided
consulting services to the Company, primarily in connection with investment
banking and investor relations. Under this arrangement, the Company paid
Hamilton Research, Inc. $40,727 for Mr. Hamilton's consulting services in 1996,
plus reimbursement of out-of-pocket expenses for such services. This consulting
arrangement, which was terminable by the Company at any time, was terminated by
mutual agreement of the parties in December 1996.
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<PAGE>
PERFORMANCE GRAPH
The stock performance graph 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, or under
the Securities Exchange Act of 1934, 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 graph shows the Company's total
return to shareholders compared to the NASDAQ Market Value Index(1) and a Peer
Group Index(2) over the period from January 1, 1992 to December 31, 1996.
[GRAPH]
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN AMONG
ALTRIS SOFTWARE, INC., NASDAQ MARKET INDEX AND PEER GROUP INDEX
FY 1991 FY 1992 FY 1993 FY 1994 FY 1995 FY 1996
Altris Software, Inc. $100.00 $ 76.39 $ 70.84 $ 86.11 $216.67 $144.44
NASDAQ MARKET INDEX $100.00 $100.98 $121.13 $127.17 $164.96 $204.98
Peer Group Index $100.00 $109.26 $116.66 $142.75 $212.37 $263.96
- ------------------
1 Includes all issues trading over the NASDAQ National Market and Over the
Counter Markets during the period from January 1, 1992 through December 31,
1996, weighted annually by market capitalization (shares outstanding
multiplied by stock price).
2 A Peer Group Index compiled and published by Media General Financial
Services, Inc. comprised of all computer software and data processing
companies that were publicly traded in the United States at December 31,
1996, weighted annually by market capitalization (shares outstanding
multiplied by stock price). Copies of this index can be obtained by
ordering MG Industry Group 03 from Media General Financial Services, Inc.,
P.O. Box 85333, Richmond, VA, 23293, telephone number (804) 649-6097, and
paying their standard fee.
12
<PAGE>
The cumulative total return on the stock performance graph indicates
historical results only and is not necessarily indicative of future results.
Each line on the stock performance graph assumes that $100 was invested in
the Company's Common Stock and the respective indices on January 1, 1992. The
graph then tracks the value of these investments, assuming reinvestment of
dividends, through each of the fiscal years ending December 31, 1992, 1993,
1994, 1995 and 1996.
COMPENSATION COMMITTEE REPORT TO SHAREHOLDERS ON EXECUTIVE COMPENSATION
The report of the Compensation Committee given below shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933, as
amended, or under the Securities Exchange Act of 1934, except to the extent that
the Company specifically incorporates this information by reference, and shall
not otherwise be deemed filed under such acts.
The Compensation Committee of the Board of Directors, which was comprised
of three non-employee directors at year-end 1996, is responsible for
establishing the base salary of the Chief Executive Officer and for approving
and monitoring the criteria used in establishing the base salaries and other
compensation of the Company's other executive officers. Set forth below is a
report, submitted by Messrs. McGovern, Hamilton and Unruh, in their capacity as
the Board's Compensation Committee, addressing the Company's compensation
policies for 1996 as they affected Mr. Tanna and the other executive officers
named in the Summary Compensation Table appearing elsewhere herein
(collectively, the "Executive Officers").
COMPENSATION POLICIES TOWARDS EXECUTIVE OFFICERS
The compensation programs of the Company historically have been comprised
of only a cash component, awarded primarily based on individual performance.
However, the Compensation Committee believes that the most effective executive
compensation program is one that provides incentives to achieve both current and
long-term strategic management goals of the Company, with the ultimate objective
of enhancing shareholder value. In this regard, the Compensation Committee
believes executive compensation should be comprised of cash as well as
equity-based and other incentive programs. With respect to equity-based
compensation, the Compensation Committee believes that an integral part of the
Company's compensation program is the ownership and retention of the Company's
Common Stock by its Executive Officers. By providing Executive Officers with a
meaningful stake in the Company, the value of which is dependent on the
Company's long-term success, a commonality of interests between the Company's
Executive Officers and its shareholders is fostered. The Compensation Committee
intends to further increase the orientation of executive compensation policies
toward long-term performance and to increase the utilization of objective
performance criteria.
13
<PAGE>
SALARIES AWARDED TO THE CHIEF EXECUTIVE OFFICER AND OTHER EXECUTIVE OFFICERS
The Board of Directors has delegated to the Compensation Committee the
authority to establish compensation levels for the Company's Executive Officers.
The Compensation Committee has established a policy of setting the salary of Mr.
Tanna while reviewing the base salaries of the other Executive Officers as
determined and proposed by Mr. Tanna. The Compensation Committee based Mr.
Tanna's salary on the salary of his predecessor and on the salaries of chief
executive officers at comparable companies. For Executive Officers other than
Mr. Tanna, individual salary levels take into account the knowledge required for
the position, the problem-solving abilities necessary to satisfactorily achieve
the assigned duties and responsibilities, the accountability of the positions
and their impact on the operations and profitability of the Company.
Mr. Tanna determines and proposes salary ranges and increases for each of
the other Executive Officers based, in part, on his understanding of competitive
conditions. The Compensation Committee reviews such proposals and ultimately
authorizes salaries for the Executive Officers other than Mr. Tanna. Small
annual percentage increases in base salaries have been awarded to the Executive
Officers within the range of percentage increases given to all of the Company's
personnel. Increases to each Executive Officer have been determined by, among
other things, a subjective evaluation of such Executive Officer's performance.
BONUSES
As evidenced in the Summary Compensation Table contained herein, other than
a one-time bonus payable to Mr. Bruce for his efforts in connection with the
Trimco acquisition, no bonuses have been paid to the Executive Officers during
the last three years. The Compensation Committee will consider the payment of
bonuses to executive officers in the future based on both an evaluation of
individual performance and overall corporate performance.
LONG-TERM INCENTIVE COMPENSATION
In 1996, the Stock Option Committee and the Board of Directors, in
consultation with the Compensation Committee, authorized long-term incentive
grants to senior executives of the Company (through the issuance of stock
options) in order to promote the Company's long-term performance.
THE COMPENSATION COMMITTEE
D. Ross Hamilton
Michael J. McGovern
Larry D. Unruh
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<PAGE>
CERTAIN TRANSACTIONS
In October 1996, the Company loaned (i) Roger H. Erickson, Vice President
of Operations, $92,812 and (ii) John W. Low, Chief Financial Officer and
Secretary, $61,875. Each loan is at a simple interest rate of 9.25% with a
maturity date of March 31, 1998. The loans were made to Messrs. Erickson and
Low in connection with their exercise of stock options that were due to expire.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP has audited the Company's 1996 financial statements.
A representative of Price Waterhouse LLP is expected to be present at the Annual
Meeting to make a statement if such person so desires and to be available to
respond to appropriate questions that may be asked by shareholders. The
selection of independent accountants to audit the Company's 1997 financial
statements will be made in the second half of 1997 after an evaluation of the
audit fee proposal.
ANNUAL REPORT
The Company's Annual Report on Form 10-K including financial statements and
related schedules for the year ended December 31, 1996 filed with the Securities
and Exchange Commission is being mailed to all shareholders. Any shareholder
who has not received a copy may obtain one by writing to the Company at 9339
Carroll Park Drive, San Diego, California 92121, Attention: Shareholder
Relations.
SHAREHOLDER PROPOSALS
A proposal of a shareholder intended to be presented at the 1998 Annual
Meeting of Shareholders and to be included in the Proxy Statement for that
meeting must be received on or before January 1, 1998 at the Company's
principal offices, 9339 Carroll Park Drive, San Diego, California 92121.
OTHER MATTERS
The Company knows of no other matters to be brought before the Annual
Meeting. However, if any other matters are properly presented for action, the
persons named in the accompanying proxy intend to vote on such matters in their
discretion.
SOLICITATION OF PROXIES
The cost of this solicitation of proxies will be borne by the Company.
Solicitation will be made by mail, telephone or telegram and personally by
directors, officers and other employees of the Company, but such persons will
not receive compensation for such services over and above their regular
salaries. The Company will reimburse brokers, banks, custodians, nominees and
fiduciaries holding stock in their names or in the names of their nominees for
their reasonable charges and expenses in forwarding proxy material to the
beneficial owners of such stock.
15
<PAGE>
PROXY
ALTRIS SOFTWARE, INC.
9339 CARROLL PARK DRIVE
SAN DIEGO, CALIFORNIA 92121
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF ALTRIS SOFTWARE, INC.
The undersigned hereby appoints Jay V. Tanna and John W. Low, and each
of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes each of them to represent and vote as designated below, all
the shares of Common Stock of Altris Software, Inc., a California corporation
(the "Company") held of record by the undersigned on April 25, 1997, at the
Annual Meeting of Shareholders to be held on May 29, 1997 and any
postponements or adjournments thereof.
PLEASE DATE, SIGN ON REVERSE SIDE AND RETURN IN THE ACCOMPANYING ENVELOPE.
<PAGE>
/X/
1. Election of Directors:
FOR all nominees listed below
(EXCEPT AS MARKED TO THE CONTRARY
BELOW).
/ /
WITHHOLD AUTHORITY
TO VOTE FOR ALL NOMINEES
LISTED BELOW.
/ /
INSTRUCTION: To withhold authority to vote for any individual nominee
strike a line through the nominee's name in the listed below.
D. ROSS HAMILTON ROBERT H. SMITH
JAY V. TANNA NORWOOD H.DAVIS, JR.
MICHAEL J. MCGOVERN MARTIN P. ATKINSON
LARRY D. UNRUH
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before such meeting and any and all
postponements or adjournments thereof.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVOLOPE.
DO YOU PLAN TO ATTEND THE MEETING? YES NO
/ / / /
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THE STOCK CERTIFICATE(S). WHEN
SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL TITLE AS
SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY THE PRESIDENT OR
OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP OR LIMITED LIABILITY COMPANY, PLEASE
SIGN IN THE PARTNERSHIP'S OR LIMITED LIABILITY COMPANY'S NAME BY AN AUTHORIZED
PERSON.
Dated:__________________________, 1997
______________________________________
Signature
______________________________________
(Signature if held jointly)
