<PAGE> 1
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
<TABLE>
<S> <C>
Filed by the Registrant [X] [ ] Confidential, for Use of the
Filed by a Party other than the Commission Only (as permitted by
Registrant [ ] Rule 14a-6(e)(2))
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a-11 or section 240.14a-12
</TABLE>
BMC Software, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set for the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
previously paid. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------------
(3) Filing Party:
--------------------------------------------------------------------------------
(4) Date Filed:
--------------------------------------------------------------------------------
<PAGE> 2
[BMC LOGO]
BMC SOFTWARE, INC.
HOUSTON, TEXAS
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 28, 2000
To the Stockholders of
BMC Software, Inc.:
The annual meeting of stockholders of BMC Software, Inc., a Delaware
corporation (the "Company"), will be held at 2101 CityWest Boulevard, Houston,
Texas, 77042-2827 on August 28, 2000 at 10:00 a.m., Central Daylight Time, for
the following purposes:
1. To elect seven directors of the Company, each to serve until the
next annual meeting or until his respective successor has been duly elected
and qualified;
2. To ratify the Board of Directors' appointment of Arthur Andersen
LLP as the Company's independent accountants;
3. To approve an amendment to the BMC Software, Inc. 1996 Employee
Stock Purchase Plan to remove the six-month employment requirement for
participation; and
4. To consider and act upon such other business as may properly come
before the meeting or any adjournments thereof.
A record of stockholders has been taken as of the close of business on July
10, 2000, and only those stockholders of record on that date will be entitled to
notice of and to vote at the meeting. A list of stockholders will be available
commencing July 14, 2000 and may be inspected during normal business hours prior
to the annual meeting at the offices of the Company, 2101 CityWest Boulevard,
Houston, Texas 77042-2827 and at the time and place of the annual meeting.
By Order of the Board of Directors,
/s/ M. BRINKLEY MORSE
------------------------------
July 24, 2000 M. Brinkley Morse
Secretary
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING REGARDLESS OF
THE NUMBER OF SHARES YOU HOLD. YOU MAY VOTE YOUR SHARES BY COMPLETING AND
RETURNING THE ACCOMPANYING PROXY CARD, BY A TELEPHONE VOTE, OR BY VOTING
ELECTRONICALLY VIA THE INTERNET. PLEASE SEE THE ACCOMPANYING INSTRUCTIONS FOR
DETAILS ON TELEPHONE AND ELECTRONIC VOTING. RETURNING YOUR PROXY PROMPTLY WILL
ASSIST THE COMPANY IN REDUCING THE EXPENSES OF ADDITIONAL PROXY SOLICITATION.
BY SUBMITTING YOUR PROXY (EITHER BY EXECUTING AND RETURNING THE PAPER PROXY
CARD, BY A TELEPHONE VOTE, OR BY VOTING ELECTRONICALLY VIA THE INTERNET), YOU
AUTHORIZE MANAGEMENT TO REPRESENT YOU AND VOTE YOUR SHARES AT THE MEETING IN
ACCORDANCE WITH YOUR INSTRUCTIONS. SUBMITTING YOUR PROXY DOES NOT AFFECT YOUR
RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING. IF YOU ATTEND THE MEETING,
YOU MAY VOTE IN PERSON, REGARDLESS OF WHETHER YOU HAVE SUBMITTED A PROXY. IN
ADDITION, YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE ITS EXERCISE AT THE
MEETING BY DELIVERING A WRITTEN NOTICE OF REVOCATION TO THE COMPANY'S SECRETARY
OR BY SUBMITTING A LATER-DATED PROXY.
THIS PROXY STATEMENT AND THE ACCOMPANYING MATERIALS WILL BE MADE AVAILABLE
ON THE INTERNET (WWW.BMC.COM/CORPORATE/INVRELS) ON OR ABOUT JULY 24, 2000.
<PAGE> 3
BMC SOFTWARE, INC.
2101 CITYWEST BOULEVARD
HOUSTON, TEXAS 77042-2827
JULY 24, 2000
PROXY STATEMENT
GENERAL INFORMATION
PROXY SOLICITATION
This proxy statement is furnished to the stockholders of BMC Software,
Inc., a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company (the "Board").
The proxies are to be voted at the 2000 Annual Meeting of Stockholders of the
Company (the "Annual Meeting") to be held at 2101 CityWest Boulevard, Houston,
Texas 77042-2827, at 10:00 a.m., Central Daylight Time, on August 28, 2000, and
any adjournments thereof, for the purposes set forth in the accompanying notice.
The Board is not aware of any other matters to be presented at the meeting. If
any other matter should be presented at the meeting upon which a vote properly
may be taken, shares represented by all duly executed proxies received by the
Company will be voted with respect thereto in accordance with the best judgment
of the persons designated as the proxies. This proxy statement and the
accompanying form of proxy have been mailed to stockholders on or about July 24,
2000.
RECORD DATE AND VOTING RIGHTS
As of July 10, 2000, the record date for the determination of stockholders
entitled to notice of and to vote at the meeting, there were outstanding and
entitled to vote 246,704,032 shares of the common stock, $.01 par value, of the
Company (the "Common Stock"). Each share of Common Stock entitles the holder to
one vote on each matter presented at the meeting. A majority of the outstanding
shares will constitute a quorum at the meeting. Abstentions and broker non-votes
are counted for purposes of determining the presence or absence of a quorum for
the transaction of business. Abstentions are counted in tabulations of the votes
cast on proposals presented to stockholders and will have the same effect as a
vote against the proposals, whereas broker non-votes are not counted for
purposes of determining whether a proposal has been approved.
VOTING OF PROXY; REVOCABILITY
Proxies will be voted in accordance with the directions specified thereon
and otherwise in accordance with the judgment of the persons designated as
proxies. Any proxy on which no direction is specified will be voted FOR the
election of the nominees named herein to the Board, FOR the ratification of the
appointment of Arthur Andersen LLP as the Company's independent accountants and
FOR the approval of an amendment to the Company's 1996 Employee Stock Purchase
Plan. Any proxy may be revoked at any time prior to its exercise by delivery to
the Secretary of the Company of written notice of revocation or a duly executed
proxy bearing a later date, or by voting in person at the meeting.
ANNUAL REPORT
An Annual Report to Stockholders on Form 10-K (the "Annual Report"),
containing financial statements for the fiscal year ended March 31, 2000,
accompanies this proxy statement.
Stockholders are referred to the Annual Report for financial and other
information about the activities of the Company. The Annual Report is not
incorporated by reference into this proxy statement and is not deemed to be a
part hereof.
<PAGE> 4
ITEM ONE: ELECTION OF DIRECTORS
NOMINEES
Each of the persons named below has been nominated for election as a
director of the Company until the next Annual Meeting of Stockholders or until
his successor has been duly elected and qualified. Each of the nominees listed
below was elected by the stockholders at the last annual meeting and is
currently a director. All directors serve one year terms. No proxy may be voted
for more persons than the number of nominees listed below. Shares represented by
all duly executed proxies received by the Company and not marked to withhold
authority to vote for any individual director or for all directors will be voted
FOR the election of all the nominees named below. The Board knows of no reason
why any such nominee should be unable or unwilling to serve, but if such should
be the case, the shares represented by duly executed proxies received by the
Company will be voted for the election of a substitute nominee selected by the
Board. The nominees receiving a majority of the votes cast at the meeting will
be elected as directors. Stockholders may not cumulate their votes in the
election of directors.
Certain information concerning the nominees is set forth below:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION AND OFFICES OF THE COMPANY SINCE
---- --- ----------------------------------- --------
<S> <C> <C> <C>
Max P. Watson Jr. ................ 54 Chairman of the Board, President 1990
and Chief Executive Officer
John W. Barter.................... 53 Director 1988
B. Garland Cupp................... 59 Director 1989
Meldon K. Gafner.................. 52 Director 1987
L. W. Gray........................ 63 Director 1991
George F. Raymond................. 63 Director 1987
Tom C. Tinsley.................... 47 Director 1997
</TABLE>
Mr. Watson joined the Company in October 1985 and has served as President
and Chief Executive Officer since April 1990 and as Chairman of the Board since
January 1992. He served as Executive Vice President and Chief Operating Officer
from January 1989 to April 1990 and as Senior Vice President, North American
Sales and Marketing from February 1987 to December 1988.
Mr. Barter has been a director of Kestrel Solutions, Inc. since October
1998 and its Chief Financial Officer since January 2000. Kestrel Solutions is a
privately held manufacturer of high speed fiber optic communications systems for
advanced public and private networks. Prior to joining Kestrel Solutions
full-time in January 2000, Mr. Barter had been since January 1998 a consultant
and private investor. Mr. Barter was employed from 1977 until his retirement in
December 1997 with AlliedSignal, Inc. in various financial and executive
capacities. From July 1988 to September 1994 he served as Senior Vice President
and Chief Financial Officer of AlliedSignal, Inc., and from October 1994 to
December 1997 he served as Executive Vice President of AlliedSignal, Inc. and
President of AlliedSignal Automotive.
Mr. Cupp was employed by the American Express Corporation from 1978 to 1995
in various executive positions, his last position before retiring in 1995 was
Executive Vice President -- TRS Technologies and Chief Information Officer at
the Travel Related Services subsidiary of American Express Corporation. Mr. Cupp
is currently a private investor. Mr. Cupp is Chairman of the Board of Apex
Mortgage Company, a bank holding company, and a director of Edmond Bank and
Trust Company.
Mr. Gafner is Chairman of the Board of Kestrel Solutions. He was President,
CEO and Chairman of the Board of Comstream Corporation, a manufacturer of high
speed satellite earth stations for data distribution, from July 1988 to July
1997.
Mr. Gray is a private investor. He was employed from 1961 to 1987 by the
International Business Machines Corporation ("IBM") in various executive
capacities including President, National Marketing Division. He was a corporate
vice president of IBM from 1983 to 1987.
2
<PAGE> 5
Mr. Raymond is a private investor and a director of several public and
privately held software companies. He founded Automatic Business Centers, Inc.
("ABC"), a payroll processing company in 1972 and sold the company to CIGNA
Corporation ("CIGNA") in 1983. Mr. Raymond and other members of ABC's management
repurchased ABC in 1986 from CIGNA and sold ABC to Automatic Data Processing
Corporation in 1989. Mr. Raymond is a director of DocuCorp International, Inc.
and Atlantic Data Services, Inc.
Mr. Tinsley is a Special Advisor with General Atlantic Partners, a private
equity investment firm. From November 1995 to July 1999, he served in various
executive positions at Baan Company N.V., a leading provider of enterprise
software applications. Most recently, he served as Chairman and Chief Executive
of the Management Board of Baan. Prior to joining Baan, he was a Director at
McKinsey & Company, Inc., where he was employed for eighteen years. Mr. Tinsley
is a director of Meta-4, Philanthropic Research Inc., Talus Solutions,
Internosis, Ztango.com, X-changing and Avisent.
BOARD ORGANIZATION AND MEETINGS
The Board met seven times in fiscal 2000. No Board member attended fewer
than 75% of the total number of meetings of the Board and of the committees on
which he served.
The Board has established an Audit Committee and a Compensation Committee
to act on behalf of the Board and to advise the Board with respect to specific
matters. The Board does not have a standing nominating committee or a committee
that performs a similar function. The responsibilities of the Audit Committee
and Compensation Committee are as follows:
Audit Committee. The Audit Committee is comprised entirely of directors who
are not officers of the Company. The Audit Committee has been established to
discuss the scope and plan of the annual audit of the books and records of the
Company; to review, evaluate and advise the Board with respect to the engagement
of independent public accountants; to review the adequacy of internal accounting
procedures; and to review audit results. Messrs. Barter, Raymond and Tinsley are
members of the Audit Committee, which held seven meetings in fiscal 2000.
Compensation Committee. The Compensation Committee is comprised entirely of
directors who are not officers of the Company. The Compensation Committee's
function is to review the compensation levels of the Company's executive
officers; to administer the Company's stock option and incentive stock plans;
and to authorize bonuses and awards under such plans and any other form of
remuneration. Messrs. Barter, Gafner and Cupp are members of the Compensation
Committee, which held nine meetings in fiscal 2000.
COMPENSATION OF DIRECTORS
Board members (other than those employed by the Company) receive a fixed
annual fee of $25,000. All board members are reimbursed for travel and certain
other expenses incurred in connection with their duties as directors of the
Company.
In August 1994, the Company's stockholders approved the BMC Software, Inc.
1994 Nonemployee Directors' Stock Option Plan (the "1994 Directors' Plan"). The
1994 Directors' Plan provides for automatic grants of "nonqualified" stock
options to nonemployee directors, with a one-time 40,000 share grant to a newly
elected director and annual 20,000 share grants to each existing director upon
his or her annual re-election. The 1994 Directors' Plan has 800,000 shares
reserved for issuance. All options granted under the 1994 Directors' Plan have
an exercise price equal to fair market value on the grant date and vest
quarterly in 6.25% increments over four years from the grant date.
THE BOARD RECOMMENDS A VOTE FOR EACH OF THE DIRECTOR NOMINEES.
3
<PAGE> 6
ITEM TWO: PROPOSAL TO RATIFY THE SELECTION OF
INDEPENDENT AUDITORS
APPOINTMENT OF ARTHUR ANDERSEN LLP
The Board, upon recommendation of the Audit Committee, has appointed Arthur
Andersen LLP, independent public accountants, as the Company's independent
accountants for the fiscal year ending March 31, 2001, subject to ratification
of this appointment by the stockholders of the Company. Arthur Andersen LLP
performed audit services in connection with the examination of the financial
statements of the Company and its subsidiaries for the fiscal year ended March
31, 2000 and is considered by management of the Company to be well qualified. If
this proposal does not receive a majority vote at the meeting, the Board will
reconsider the appointment. Representatives of Arthur Andersen LLP will be
present at the 2000 Annual Meeting of Stockholders. They will have an
opportunity to make a statement if they desire to do so and to answer
appropriate questions.
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE SELECTION OF
INDEPENDENT AUDITORS.
ITEM THREE: APPROVAL OF THE THIRD AMENDMENT TO THE
BMC SOFTWARE, INC. 1996 EMPLOYEE STOCK PURCHASE PLAN
The Third Amendment to the BMC Software, Inc. 1996 Employee Stock Purchase
Plan (the "Amendment") removes the six-month employment requirement for
participation. The Amendment was approved by the Board on July 17, 2000, subject
to stockholder approval at the Annual Meeting, and is effective January 1, 2001.
SUMMARY OF THE AMENDMENT
The BMC Software, Inc. 1996 Employee Stock Purchase Plan (the "Plan")
currently provides for grants of options as of each January 1 and July 1 (each
such date a "Date of Grant") with six-month terms beginning on the Date of Grant
(the "Option Period") to employees of the Company and its participating
subsidiaries who have been continuously employed for at least six months as of
the applicable Date of Grant and who are scheduled to work more than twenty
hours per week during the applicable Option Period. However, an employee may not
be granted an option under the Plan if after the granting of the option such
employee would be deemed to own 5% or more of the combined voting power or value
of all classes of stock of the Company. Further, an employee who is both highly
compensated (within the meaning of the Internal Revenue Code (the "Code")
provisions applicable to employee benefit plans) and an officer of the Company
or a participating subsidiary at or above the level of Vice President is not
eligible to participate in the Plan.
If the Amendment is approved by the stockholders of the Company, then,
effective January 1, 2001, employees of the Company and its participating
subsidiaries who have been continuously employed for the required employment
period as of the Date of Grant and who are scheduled to work more than twenty
hours per week during the applicable Option Period will be eligible to
participate in the Plan. The Amendment defines the "required employment period"
as the period beginning on the business day before the first day of the payroll
period next preceding the applicable Date of Grant and ending on such Date of
Grant. Thus, the Amendment substitutes a payroll period employment requirement
for the six-month employment requirement. However, the Amendment retains the 5%
stock ownership and highly compensated employee/Vice President eligibility
exclusions described in the preceding paragraph.
SUMMARY OF THE PLAN
In 1996, the Board of Directors and the stockholders of the Company adopted
the Plan. The Plan authorizes the issuance of up to 1,000,000 shares of Common
Stock (subject to adjustment in the event of stock dividends, stock splits and
certain other events) and provides that no options may be granted under the Plan
after June 3, 2006. A committee appointed by the Board of Directors (the
"Committee") is charged with
4
<PAGE> 7
the general administration of the Plan and has the authority to designate any
present or future subsidiary of the Company as a participating subsidiary.
For each Option Period during the term of the Plan, unless the Committee
determines otherwise, each eligible employee may authorize payroll deductions to
be made during the Option Period, which amounts are used at the end of the
Option Period to acquire shares of Common Stock at 85% of the fair market value
of the Common Stock on the first or the last day of the Option Period, whichever
amount is lesser. Employees have discretion to determine the amount of their
payroll deduction under the Plan, subject to the limit that not more than 10% of
compensation may be deducted in any Option Period and other limitations set
forth in Section 423 of the Code. However, no more than 3,000 shares of Common
Stock (subject to adjustment in the event of stock dividends, stock splits and
certain other events) may be subject to an option granted for any Option Period.
Further, no employee may purchase Common Stock under the Plan valued at more
than $25,000 for each calendar year in accordance with the provisions of the
Code. An employee may withdraw from the Plan, in whole but not in part, at any
time prior to the first day of the payroll period that contains the last day of
an Option Period, by delivering a withdrawal notice to the Company, in which
event the Company will refund the entire amount of the payroll deductions during
the Option Period, without interest.
As of July 1, 2000, 5,492 employees were eligible to participate in the
Plan and 2,719 employees participated. As of July 1, 2000, there were 344,000
shares of Common Stock (exclusive of shares subject to options granted on July
1, 2000) available for issuance pursuant to the Plan.
TEXT OF THE AMENDMENT
The Amendment deleted Paragraph 4 of the Plan and in its place substituted
the following:
"4. Eligibility. All individuals who have been continuously employed
(including any authorized leave of absence) by the Company or any
Participating Company for the required employment period (defined below) as
of the applicable date of grant (defined below) and who are scheduled to
work more than 20 hours per week during the applicable option period
(defined below) shall be eligible to participate in the Plan; provided,
however, that no option shall be granted to an employee if such employee,
immediately after the option is granted, (a) owns stock possessing five
percent or more of the total combined voting power or value of all classes
of stock of the Company or of its parent or subsidiary corporation (within
the meaning of Sections 423(b)(3) and 424(d) of the Code) or (b) is both a
highly compensated employee (within the meaning of Section 414(q) of the
Code) and an officer of the Company or a Participating Company at or above
the level of Vice President. The term required employment period means,
with respect to each date of grant, the period beginning on the business
day before the first day of the payroll period next preceding such date of
grant and ending on such date of grant."
Prior to the Amendment, Paragraph 4 read as follows:
"4. Eligibility. All employees of the Company and the Participating
Companies who have been continuously employed by the Company or any
Participating Company for at least six months (including any authorized
leave of absence meeting the requirements of Treasury Regulation
1.421-7(h)(2)) as of the applicable date of grant (defined below) and who
are scheduled to work more than 20 hours per week during the applicable
option period (defined below) shall be eligible to participate in the Plan;
provided, however, that no option shall be granted to an employee if such
employee, immediately after the option is granted, (a) owns stock
possessing five percent or more of the total combined voting power or value
of all classes of stock of the Company or of its parent or subsidiary
corporation (within the meaning of Sections 423(b)(3) and 424(d) of the
Code) or (b) is both a highly compensated employee (within the meaning of
Section 414(q) of the Code) and an officer of the Company or a
Participating Company at or above the level of Vice President."
5
<PAGE> 8
VOTE REQUIRED
The proposal to approve the Amendment requires the affirmative vote of the
holders of a majority of the Common Stock present or represented by proxy and
entitled to vote at the Annual Meeting. Under Delaware law, an abstention would
have the same effect as a vote against the proposal, but a broker non-vote would
not be counted for purposes of determining whether a majority had been achieved.
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE THIRD AMENDMENT TO THE BMC
SOFTWARE, INC. 1996 EMPLOYEE STOCK PURCHASE PLAN.
ITEM FOUR: OTHER MATTERS
The Board of Directors does not know of any other matters that are to be
presented for action at the 2000 Annual Meeting of Stockholders. However, if any
other matter should be presented at the meeting upon which a vote properly may
be taken, shares represented by all duly executed proxies received by the
Company will be voted with respect thereto in accordance with the best judgment
of the persons designated as the proxies.
6
<PAGE> 9
OTHER INFORMATION
CERTAIN STOCKHOLDERS
The following table sets forth as of July 10, 2000 certain information
regarding beneficial ownership of the Common Stock by each stockholder known by
the Company to be the beneficial owner of more than 5% of its Common Stock, each
director, the Chief Executive Officer, each of the four other most highly
compensated executive officers and all directors and officers as a group. Unless
otherwise indicated, the stockholders have sole voting and investment power with
respect to shares beneficially owned by them, subject to community property
laws, where applicable.
<TABLE>
<CAPTION>
COMMON
STOCK
NAME OWNED PERCENT
---- ---------- -------
<S> <C> <C>
Massachusetts Financial Services Company.................... 24,493,293 9.9%
500 Bolyston Street
Boston, MA 02116
T. Rowe Price Associates, Inc. ............................. 13,284,216 5.4%
100 East Pratt Street
Baltimore, MD 21202
Max P. Watson Jr.(1)........................................ 3,175,180 1.3%
William M. Austin(2)........................................ 343,504 *
Robert E. Beauchamp(3)...................................... 347,028 *
Darroll Buytenhuys(4)....................................... 47,000 *
Kevin M. Weiss(5)........................................... 162,200 *
John W. Barter(6)........................................... 174,000 *
B. Garland Cupp(7).......................................... 200,218 *
Meldon K. Gafner(8)......................................... 130,000 *
L. W. Gray(9)............................................... 182,000 *
George F. Raymond(10)....................................... 135,912 *
Tom C. Tinsley(11).......................................... 62,500 *
All directors and officers as a group (17 persons)(12)...... 5,836,312 2.3%
</TABLE>
---------------
* Represents less than 1%.
(1) Includes 2,315,000 shares subject to employee stock options exercisable
within 60 days after July 10, 2000 and 160,000 shares held by trusts for
the benefit of Mr. Watson's children, of which he is one of two trustees
and shares voting and investment powers. Mr. Watson disclaims beneficial
ownership of the shares held by trusts for the benefit of his children.
(2) Includes 195,000 shares subject to employee stock options exercisable
within 60 days after July 10, 2000 and 115,000 shares of restricted stock.
(3) Includes 272,028 shares subject to employee stock options exercisable
within 60 days after July 10, 2000 and 75,000 shares of restricted stock.
(4) Includes 7,000 shares subject to employee stock options exercisable within
60 days after July 10, 2000 and 40,000 shares of restricted stock.
(5) Includes 106,200 shares subject to employee stock options exercisable
within 60 days after July 10, 2000 and 45,000 shares of restricted stock.
(6) Includes 150,000 shares subject to nonemployee director stock options
exercisable within 60 days after July 10, 2000.
(7) Includes 190,000 shares subject to nonemployee director stock options
exercisable within 60 days after July 10, 2000.
(8) Includes 130,000 shares subject to nonemployee director stock options
exercisable within 60 days after July 10, 2000.
7
<PAGE> 10
(9) Includes 182,000 shares subject to nonemployee director stock options
exercisable within 60 days after July 10, 2000.
(10) Includes 124,000 shares subject to nonemployee director stock options
exercisable within 60 days after July 10, 2000.
(11) Includes 62,500 shares subject to nonemployee director stock options
exercisable within 60 days after July 10, 2000.
(12) Includes 4,478,414 shares subject to stock options exercisable within 60
days after July 10, 2000 and 356,366 shares of restricted stock.
EXECUTIVE OFFICERS
The executive officers are elected to serve annual terms. Certain
information concerning the Company's executive officers as of the date of this
proxy statement is set forth below, except that information concerning Mr.
Watson is set forth above under Item One: "Election of Directors."
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
William M. Austin........... 54 Senior Vice President, Chief Financial Officer
Robert E. Beauchamp......... 40 Senior Vice President, Product Management and
Development
Darroll Buytenhuys.......... 52 Senior Vice President, Field
Operations -- International
M. Brinkley Morse........... 42 Senior Vice President, Corporate Development
Debra A. Tummins............ 48 Senior Vice President, Field Operations -- Americas
Robert H. Whilden, Jr. ..... 65 Senior Vice President, General Counsel
Roy J. Wilson............... 44 Senior Vice President, Human Resources
John W. Cox................. 41 Vice President, Chief Accounting Officer
Wayne S. Morris............. 43 Vice President, Corporate Marketing
Stephen B. Solcher.......... 39 Vice President, Treasurer
</TABLE>
Mr. Austin has been Senior Vice President and Chief Financial Officer since
January 1997. Prior to joining the Company, Mr. Austin was employed since 1991
with McDonnell Douglas Corporation in various senior financial positions, lastly
as Vice President and Chief Financial Officer of McDonnell Douglas Aerospace, a
division of McDonnell Douglas Corporation. From 1973 to 1991, Mr. Austin was
employed with Bankers Trust Company in various positions, serving as Managing
Director -- Acquisition and Structured Finance from 1989 to 1991.
Mr. Beauchamp has been Senior Vice President, Product Management and
Development since August 1997. He has been employed by the Company since 1988,
when he joined the Company as a senior sales representative. During his
employment with the Company, he has served in various senior sales, marketing
and strategic planning positions, and was Vice President, Business Strategy,
prior to his appointment to his current position.
Mr. Buytenhuys joined the Company in April 1999 with the Company's
acquisition of New Dimension Software Ltd. From April 1999 to January 2000, he
served as Vice President, IT Process Automation, and he was appointed Senior
Vice President, Field Operations -- International in January 2000. Prior to
joining the Company, Mr. Buytenhuys served as President of New Dimension, Inc.,
the United States subsidiary of New Dimension Software Ltd., since 1995.
Mr. Morse joined the Company in November 1988 as General Counsel and
Secretary and served as General Counsel from November 1988 to September 1998,
when he became Senior Vice President, Corporate Development. He continues to
serve as Secretary.
Ms. Tummins was appointed Senior Vice President, Field
Operations -- Americas in July 2000. She joined the Company in 1987 and has
served in a variety of sales and senior sales management positions, most
recently as Vice President, from 1995 until March 2000. In her most recent
capacity she was responsible for the Company's North American Eastern division,
strategic accounts, and North American channels.
8
<PAGE> 11
Mr. Whilden joined the Company in January 2000 as Senior Vice President,
General Counsel. Prior to joining the Company, he had been a partner with the
law firm of Vinson & Elkins, L.L.P. in Houston, Texas for more than five years.
Mr. Wilson joined the Company in September 1997 as Senior Vice President,
Human Resources. He was employed by Compaq Computer Corporation as Vice
President, Human Resources, from 1993 to September 1997 and by the Pearle Vision
subsidiary of Grand Metropolitan PLC from 1990 to 1993 as Senior Vice President,
Human Resources.
Mr. Cox was appointed Vice President, Chief Accounting Officer in December
1999. He has been employed by the Company since 1989, when he joined the Company
as manager of taxation. During his employment with the Company, he has served in
various senior taxation and finance positions, and was Vice President of
Taxation and Investor Relations, prior to his appointment to his current
position.
Mr. Morris has served as Vice President, Corporate Marketing since July
1998. He joined the Company in January 1995 and has held several senior
marketing positions. Prior to joining the Company he was Vice President of
Marketing for Enterprise Software Corporation and a marketing and business unit
manager for Hewlett-Packard Company.
Mr. Solcher joined the Company as Assistant Treasurer in September 1991 and
has served as Treasurer since April 1992 and Vice President since 1998. Prior to
joining the Company, Mr. Solcher was employed as an audit manager by Arthur
Andersen LLP, the Company's independent auditors, from 1983 to 1991.
9
<PAGE> 12
EXECUTIVE COMPENSATION
The following tables and notes thereto present information concerning the
cash compensation, restricted stock grants, stock option grants and stock option
exercises of the Company's Chief Executive Officer and the four most highly
compensated executive officers of the Company, other than the Chief Executive
Officer, serving as executive officers at the end of fiscal year 2000 (the
"Named Executive Officers"). The Company's compensation policies are discussed
below under the caption "-- Report of the Compensation Committee of the Board."
SUMMARY COMPENSATION
<TABLE>
<CAPTION>
SECURITIES
OTHER ANNUAL RESTRICTED UNDERLYING
FISCAL SALARY BONUS COMPENSATION STOCK AWARD OPTIONS
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)(1) ($) (#)
--------------------------- ------ ------- --------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Max P. Watson Jr. ................ 2000 400,000 817,348 5,000 0 0
Chairman of the Board, President 1999 400,000 1,903,901 5,000 0 500,000
and Chief Executive Officer 1998 240,000 848,191 5,000 0 0
William M. Austin(2).............. 2000 200,000 272,576 5,000 0 0
Senior Vice President, 1999 190,000 668,509 5,000 0 225,000
Chief Financial Officer 1998 140,000 368,409 5,000 0 0
Robert E. Beauchamp............... 2000 220,000 329,652 5,000 0 0
Senior Vice President, Product 1999 220,000 839,926 5,000 0 225,000
Management and Development 1998 120,000 394,522 5,000 0 0
Darroll Buytenhuys(3)............. 2000 145,417 385,654 20,769(4) 0 135,000
Senior Vice President, 1999 -- -- -- -- --
Field Operations --
International 1998 -- -- -- -- --
Kevin M. Weiss.................... 2000 197,083 318,850 5,000 0 100,000
Special Assistant to the
President 1999 128,750 540,486 5,000 0 25,000
1998 100,000 393,041 5,000 0 48,000
</TABLE>
---------------
(1) Represents nondiscriminatory Board authorized matching contributions under
the Company's 401(k) plan.
(2) At March 31, 2000, Mr. Austin held 40,000 shares of restricted stock valued
at $1,975,000 using the closing market price of $49.375.
(3) Mr. Buytenhuys joined the Company in April 1999 with the Company's
acquisition of New Dimension Software Ltd.
(4) Represents $20,769 of vacation pay and relocation bonus.
10
<PAGE> 13
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information on option grants in
fiscal 2000 to the Named Executive Officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(2)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -----------------------
GRANTED(#)(1) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
------------- ------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Max P. Watson Jr. ..... -- -- -- -- -- --
William M. Austin...... -- -- -- -- -- --
Robert E. Beauchamp.... -- -- -- -- -- --
Darroll Buytenhuys..... 35,000 0.4% 35.875 4/14/09 789,656 2,001,143
100,000 1.0% 46.0938 1/21/10 2,898,814 7,346,165
Kevin M. Weiss......... 25,000 0.3% 52.125 8/10/09 819,528 2,076,846
75,000 0.8% 46.0938 1/21/10 2,174,111 5,509,623
</TABLE>
---------------
(1) All options listed were granted pursuant to the 1994 Employee Incentive
Plan. The option exercise price is the market price when granted; the
options have a term of 10 years and vest in 20% annual increments on the
first through fifth anniversaries of the grant date.
(2) Potential realizable values are based on assumed annual rates of return
specified by the Securities and Exchange Commission. Such increases in
values are based on speculative assumptions and should not inflate
expectations of the future market value of the Company's Common Stock.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information on option exercises in fiscal 2000
by the Named Executive Officers and the value of such officers' unexercised
options at March 31, 2000 using the closing market price of $49.375.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES FISCAL YEAR-END(#) FISCAL YEAR-END($)
ACQUIRED ON VALUE --------------------------- ---------------------------
EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Max P. Watson Jr. ..... 230,000 11,718,000 2,435,724 400,000 102,719,575 1,366,000
William M. Austin...... 55,000 1,109,462 205,000 340,000 4,604,075 5,065,100
Robert E. Beauchamp.... 75,852 3,691,837 264,028 484,000 5,409,316 7,626,780
Darroll Buytenhuys..... -- -- 0 135,000 0 800,620
Kevin M. Weiss......... 36,000 1,934,160 77,200 264,800 2,201,690 5,971,668
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD
The Compensation Committee is composed of three nonmanagement directors,
who are "independent directors" under Section 16 of the Securities Exchange Act
of 1934. The Compensation Committee designs and administers the compensation
programs for the Company's executive officers and other key employees and makes
grants under the Company's equity compensation plans. The Compensation
Committee, with the aid of internal staff and independent compensation
consultants, at least annually reviews and evaluates the Company's compensation
programs to determine their effectiveness in attracting, motivating and
retaining highly skilled executive officers.
Compensation Philosophy. The Company's compensation program for its
executive officers is designed to preserve and enhance stockholder value by
heavily emphasizing performance-based compensation. The program is directed
towards motivating executives to achieve the Company's business objectives, to
reward
11
<PAGE> 14
them for their achievement and to attract and retain executive officers who
contribute to the Company's long-term success. Competition is intense for senior
executives within the high technology and computer software industries, with
established companies and start-ups aggressively recruiting management talent. A
key design criterion for the Company's compensation programs is therefore the
retention of its senior management and other key employees.
Compensation Components. The Company's executive compensation program has
three primary components: base salary, annual cash incentive bonuses and
long-term incentives. Each is discussed below.
Base Salary. The level of base salary paid to executive officers is
determined on the basis of the importance of the position and on market data.
The salaries have historically been set at the low end of the competitive
market. Messrs. Buytenhuys and Weiss received salary increases at the time of
their promotion as an executive officer. No base salary increases were made
during fiscal year 2000 for the other Named Executive Officers of the Company.
Annual Cash Incentive Bonuses. Since 1990, the Company has employed an
annual cash incentive compensation program under which bonus amounts are based
on year-over-year increases in pre-tax earnings (excluding one-time charges and
extraordinary items). Under this program, approximately 4% of the increase in
such pre-tax earnings is allocated to a bonus pool. The Compensation Committee
establishes targeted bonus amounts for each participating executive at the
beginning of the fiscal year. The individual executive officer's percentage
participation in this pool is based primarily on the ratio of his targeted
annual bonus amount to the total targeted bonus amounts of all participating
executives.
This plan has historically generated annual bonuses in the 90th percentile
of peer companies because of the Company's success and financial performance.
Taken with the executive officers' low relative salary levels, this program
heavily weights a participant's total targeted annual cash compensation to the
performance-based bonus amount. The Compensation Committee has targeted a ratio
between base salary and the targeted annual cash bonus of one to between three
and four.
For fiscal 2000, the Compensation Committee determined not to adjust the
annual bonus plan and made no material changes to the plan. In reaching this
decision, the Compensation Committee projected bonuses for fiscal 2000 using
estimates of pre-tax earnings growth. These estimates indicated that pre-tax
earnings growth in the range of 25% would generate bonuses significantly higher
than prior period bonuses. The Company's actual pre-tax earnings growth in
fiscal 2000 was below its beginning of the year projections of earnings growth;
consequently, the actual annual bonuses for fiscal 2000 were significantly less
than the targeted bonus amounts established at the beginning of the fiscal year.
Long Term Incentives. The Company granted equity-based incentives in fiscal
2000 to Messrs. Buytenhuys and Weiss in connection with their respective
promotions to executive officer. No other grants of equity-based incentives were
made to any of the other Named Executive Officers, including the Chief Executive
Officer, during fiscal 2000.
Compensation of the Chief Executive Officer. As described above, the
Company determines compensation for all executives, including the Chief
Executive Officer, considering both a pay-for-performance philosophy and market
rates of compensation. Mr. Watson's base salary was $400,000 for fiscal 2000,
which the Company believes is in the bottom quartile of base salaries of chief
executive officers of peer companies. The Chief Executive Officer's annual cash
bonus was based on his individual targeted amount of the annual incentive pool
as described above.
Deductibility. Internal Revenue Code Section 162(m) precludes a public
corporation from taking a deduction in excess of $1 million for its chief
executive officer or any of its four other highest paid officers.
Performance-based compensation meeting criteria in Section 162(m), however, is
specifically exempt from the deduction limit. The Company's long-term incentive
grants to the Named Executive Officers have all been designed to qualify as
exempt performance-based compensation. The Company has not taken actions
necessary to qualify its annual cash incentive plan for the exclusion to Section
162(m). The Company's performance in fiscal 2000 caused the total cash
compensation of Mr. Watson to exceed the Section 162(m) limit by $217,348. While
the Company intends to pursue a strategy of maximizing the deductibility of
12
<PAGE> 15
compensation paid to executive officers in fiscal 2000, it also intends to
maintain the flexibility to take actions that it considers to be in the
Company's best interests and to take into consideration factors other than tax
deductibility.
Respectfully submitted by the Compensation Committee of the Board of
Directors of the Company:
John W. Barter
B. Garland Cupp
Meldon K. Gafner
PERFORMANCE GRAPH
The following indexed graph indicates the Company's total return to its
stockholders for the five year period ended March 31, 2000, as compared to the
total return over such period for the Standard & Poor's 500 Composite Index and
the Standard & Poor's Computer Software & Services Composite Index. This graph
assumes a $100 investment at the beginning of such period and the reinvestment
of all dividends.
[CHART]
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BMC Software 100.00 171.77 289.40 525.86 465.08 619.59
S&P 500 100.00 132.10 158.29 234.26 277.51 327.30
S&P Computer
Software/Services 100.00 146.75 226.67 336.45 489.69 804.40
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company believes that, during the fiscal year ended March 31, 2000, all
filing requirements of Section 16(a) of the Securities Exchange Act of 1934
applicable to the Company's directors, executive officers and greater than
ten-percent beneficial owners were complied with except that Roy Wilson reported
late on Form 5 the exercise of employee stock options to purchase 14,200 shares
of Common Stock and the sale of those shares and Kevin M. Weiss reported late on
Form 4 the grant of employee stock options to purchase 25,000 shares of Common
Stock.
13
<PAGE> 16
RELATED TRANSACTIONS
John S. Watson, the brother of Max P. Watson Jr., the Company's Chairman of
the Board, President and Chief Executive Officer, is a partner in the law firm
of Vinson & Elkins L.L.P., which is the Company's principal outside counsel.
Vinson & Elkins invoiced the Company approximately $2,626,000 for legal services
rendered in fiscal 2000.
STOCKHOLDER PROPOSALS
Proposals received from the stockholders are given careful consideration by
the Company in accordance with Rule 14a-8 under the Securities Exchange Act of
1934, as amended. Stockholder proposals are eligible for consideration for
inclusion in the proxy statement for the 2001 Annual Meeting of Stockholders if
they are received by the Company on or before March 26, 2001. Any stockholder
proposal should be directed to the attention of the Secretary of the Company, at
the address indicated on page 1 of this proxy statement. In order for a
stockholder proposal submitted outside of Rule 14a-8 to be considered "timely"
within the meaning of Rule 14a-4(c), such proposal must be received by the
Company on or prior to June 9, 2001. The Company will have discretionary
authority with respect to stockholder proposals submitted for consideration at
the 2001 Annual Meeting of Stockholders that are not "timely" within the meaning
of Rule 14a-4(c).
ANNUAL REPORT ON FORM 10-K
The Company has furnished a copy of the Company's Annual Report, as filed
with the Securities and Exchange Commission, including the financial statements
and the financial statement schedule thereto to each person whose proxy is being
solicited. The Company will furnish to any such person any exhibit described in
the list accompanying the Annual Report, upon the payment, in advance, of the
specified reasonable fees related to the Company's furnishing of such
exhibit(s). Requests for copies of such report and/or exhibit(s) should be
directed to Mr. M. Brinkley Morse, Secretary of the Company, at the Company's
principal address as shown on page 1 of this proxy statement.
OTHER INFORMATION
Internet and telephone voting. Stockholders have the opportunity to vote
via the Internet or by telephone. Votes submitted electronically via the
Internet or by telephone must be received by midnight Eastern Daylight Time, on
August 27, 2000. Submitting a proxy will not affect your right to vote in person
should you decide to attend the Annual Meeting of Stockholders. To vote via the
Internet or by telephone, please refer to the accompanying instructions.
The Internet voting procedures are designed to authenticate stockholder
identities, to allow stockholders to give their voting instructions and to
confirm that stockholders' instructions have been recorded properly.
Stockholders voting via the Internet should understand that there may be costs
associated with electronic access, such as usage charges from Internet access
providers and telephone companies, that must be borne by the stockholder.
Transfer Agent. Stockholders should direct communications regarding change
of address, transfer of stock ownership or lost stock certificates to: Fleet
National Bank, c/o Equiserve, Limited Partnership, P.O. Box 8040, Boston, MA
02266-8040. The Company's transfer agent may also be reached via the Internet at
www.equiserve.com, by telephone at (781) 575-3120 or by facsimile at (781)
828-8813.
OTHER MATTERS
The Annual Report for the fiscal year ended March 31, 2000 has been mailed
to each stockholder entitled to vote at the Annual Meeting.
The cost of soliciting proxies in the accompanying form will be borne by
the Company. The Company has engaged Corporate Investor Communications, Inc. to
act as its proxy solicitor and anticipates that its fees will
14
<PAGE> 17
be approximately $10,000 in connection therewith. In addition to solicitations
by mail, a number of officers, directors and regular employees of the Company
may, if necessary to ensure the presence of a quorum and at no additional
expense to the Company, solicit proxies in person or by telephone. The Company
also will make arrangements with brokerage firms, banks and other nominees to
forward proxy materials to beneficial owners of shares and will reimburse such
nominees for their reasonable costs.
The persons designated to vote shares covered by proxies intend to exercise
their judgment in voting such shares on other matters that may come before the
meeting adjourns. Management does not expect, however, that any matters other
than those referred to in this proxy statement will be presented for action at
the meeting.
By Order of the Board of Directors
/s/ M. BRINKLEY MORSE
----------------------------
M. Brinkley Morse
Secretary
Houston, Texas
July 24, 2000
15
<PAGE> 18
[BMC LOGO]
2210-PS-00
<PAGE> 19
DETACH HERE
PROXY
BMC SOFTWARE, INC.
PROXY FOR 2000 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Max P. Watson Jr. and M. Brinkley Morse,
and each of them, with or without the others, with full power of substitution,
to vote all shares of stock that the undersigned is entitled to vote at the
2000 Annual Meeting of Stockholders of BMC Software, Inc. (the "Company"), to
be held at 2101 CityWest Boulevard, Houston, Texas, on August 28, 2000, at 10:00
a.m., Central Daylight Time, and all adjournments and postponements thereof as
follows on the reverse side.
This Proxy will be voted as you specify on the reverse side. If no
specification is made, this Proxy will be voted with respect to item (1) FOR the
nominees listed, with respect to item (2) FOR ratification of the appointment of
Arthur Andersen LLP as the Company's independent accountants for the year ended
March 31, 2001 and with respect to item (3) FOR approval of the amendment to the
BMC Software, Inc. 1996 Employee Stock Purchase Plan to remove the six-month
employment requirement for participation. The undersigned hereby acknowledges
receipt of the Notice of the 2000 Annual Meeting and related Proxy Statement and
the Company's 2000 Annual Report to Stockholders.
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERS SIDE SIDE
<PAGE> 20
<TABLE>
<S> <C>
------------------- ------------------
VOTE BY TELEPHONE VOTE BY INTERNET
------------------- ------------------
It's fast, convenient, and immediate! It's fast, convenient, and your vote is immediately
Call Toll-Free on a Touch-Tone Phone confirmed and posted.
1-877-PRX-VOTE (1-877-779-8683).
------------------------------------------------------------ -----------------------------------------------------------------
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy Statement and 1. Read the accompanying Proxy Statement and
Proxy Card. Proxy Card.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). http://www.eproxyvote.com/bmcs
3. Enter your 14-digit Voter Control Number 3. Enter your 14-digit Voter Control Number
located on your Proxy Card above your name. located on your Proxy Card above your name.
4. Follow the recorded instructions. 4. Follow the instructions provided.
------------------------------------------------------------ -----------------------------------------------------------------
YOUR VOTE IS IMPORTANT! YOUR VOTE IS IMPORTANT!
Call 1-877-PRX-VOTE anytime! Go to http://www/eproxyvote.com/bmcs anytime!
DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET
DETACH HERE
[X] PLEASE MARK -------|
VOTES AS IN |
THIS EXAMPLE. |
1. Election of seven directors to serve until the Company's 2001 Annual Meeting.
Nominees: (01)Max P. Watson Jr., (02)John W. Barter, 2. Proposal to ratify the appointment by the FOR AGAINST ABSTAIN
(03)B. Garland Cupp, (04)Meldon K. Gainer, Board of Directors of Arthur Andersen LLP [ ] [ ] [ ]
L.W. Gray, (06)George F. Raymond, as the Company's independent accountants
(07)Tom C. Tinsley for the year ended March 31, 2001.
FOR all nominees [ ] [ ] WITHHOLD AUTHORITY 3. To approve an amendment to the BMC [ ] [ ] [ ]
(listed except to vote for Software, Inc. 1996 Employee Stock
as marked to all nominees Purchase Plan to remove the six-month
the contrary) listed employment requirement for participation.
[ ] 4. In their discretion, upon any other business as may properly come
-------------------------------------------------- before said meeting.
(INSTRUCTION: To withhold authority for any individual
nominee, with that nominee's name in the line above.)
NARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
(PLEASE RETURN THIS SIGNED PROXY CARD IN THE ACCOMPANYING
ADDRESSED ENVELOPE)
Note: Joint owners must each sign. Please sign your name exactly as
it appears on your stock certificate. When signing as attorney,
executor, administrator, trustee or guardian, please give full
title. If held by a corporation, please sign in the full corporate
name by the president or other authorized officer.
Signature: Date: Signature: Date:
---------------------------------- ------------ --------------------------------------- -----------
</TABLE>
