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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
ROSS SYSTEMS, INC.
- - - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
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/ / 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.:
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(3) Filing Party:
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(4) Date Filed:
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ROSS SYSTEMS, INC.
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 20, 1996
---------------------
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Ross
Systems, Inc. (the "Company") will be held on Wednesday, November 20, 1996 at
9:00 a.m., local time, at the Company's executive offices in Atlanta, Georgia
located at Perimeter 400 Center, 1100 Johnson Ferry Road, Building Two,
Conference Room - Terrace Level, Atlanta, Georgia, 30342, for the following
purposes:
1. To elect directors. The Board of Directors intends to nominate for
re-election the five directors identified in the accompanying Proxy
Statement.
2. To approve an amendment to the 1991 Employee Stock Purchase Plan
increasing the number of shares authorized to be issued by 150,000
shares.
3. To approve an amendment to the Company's Restated Articles of
Incorporation for the purpose of increasing the authorized number of
shares of the Company's Common Stock by 10,000,000 shares.
4. To ratify the appointment of Coopers & Lybrand LLP as independent
auditors of the Company for the fiscal year ending June 30, 1997.
5. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on October 1, 1996 are
entitled to vote at the meeting.
FOR THE BOARD OF DIRECTORS
Dennis V. Vohs, CHAIRMAN OF THE BOARD
Atlanta, Georgia
October 8, 1996
IMPORTANT
TO ENSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED TO MARK, SIGN,
DATE AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE POSTAGE-
PREPAID ENVELOPE ENCLOSED FOR THAT PURPOSE. IF YOU ATTEND THE MEETING, YOU MAY
VOTE IN PERSON EVEN IF YOU RETURN A PROXY.
<PAGE>
ROSS SYSTEMS, INC.
1100 JOHNSON FERRY ROAD
SUITE 750
ATLANTA, GA 30342
------------------------
ANNUAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors of Ross
Systems, Inc. (the "Company") for use at the Annual Meeting of Shareholders to
be held Wednesday, November 20, 1996 at 9:00 a.m., local time, or at any and all
continuation(s) and adjournment(s) thereof, for the purposes set forth herein
and in the accompanying Notice of Annual Meeting of Shareholders (the "Annual
Meeting"). The Annual Meeting will be held at the Company's executive offices in
Atlanta, Georgia located at Perimeter 400 Center, 1100 Johnson Ferry Road,
Building Two, Conference Room - Terrace Level, Atlanta, Georgia 30342. The
telephone number at that location is (404) 851-1872.
These proxy solicitation materials were mailed on or about October 8, 1996
to all shareholders entitled to vote at the meeting.
PURPOSES OF THE ANNUAL MEETING
The purposes of the Annual Meeting are to: (1) elect five directors to serve
for the ensuing year and until their successors are duly qualified and elected;
(2) approve an amendment to the 1991 Employee Stock Purchase Plan increasing the
number of shares reserved for issuance thereunder by 150,000 shares; (3) approve
an amendment to the Company's Restated Articles of Incorporation for the purpose
of increasing the number of authorized shares of Common Stock by 10,000,000
shares; (4) ratify the appointment of Coopers & Lybrand LLP as the Company's
independent accountants for the 1997 fiscal year; and (5) transact such other
business as may properly come before the meeting and any and all continuations
and adjournments thereof.
RECORD DATE AND SHARE OWNERSHIP BY PRINCIPAL SHAREHOLDERS AND MANAGEMENT
Only shareholders of record at the close of business on October 1, 1996 (the
"Record Date") are entitled to receive notice and vote at the Annual Meeting. At
the Record Date, shares of the Company's Common Stock were issued and
outstanding. The closing price of the Company's Common Stock on the Record Date,
as reported by the Nasdaq National Market, was $ per share.
The following table sets forth the beneficial ownership of Common Stock of
the Company as of September 13, 1996 by (a) each director, (b) each of the
executive officers identified in the Summary Compensation Table, (c) all
directors and executive officers as a group, and (d) each person known to the
Company to be a beneficial owner of 5% or more of the shares outstanding on
September 13, 1996. Under the rules of the United States Securities and Exchange
Commission (the "SEC"), beneficial ownership includes any shares as to which the
individual has sole or shared voting power or investment power and
<PAGE>
also any shares which the individual has the right to acquire within 60 days of
September 13, 1996 through the exercise of any stock option.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY APPROXIMATE
NAME OF BENEFICIAL OWNERS (1) OWNED(1) PERCENT OWNED
- - - --------------------------------------------------------------------------------- ----------- -----------------
<S> <C> <C>
Dennis V. Vohs(2)................................................................ 587,692 3.3%
Donald F. Campbell(3)............................................................ 12,500 *%
Mario M. Rosati(4)............................................................... 19,500 *%
Bruce J. Ryan(5)................................................................. 19,500 *%
Joseph L. Southworth(6).......................................................... 67,323 *%
J. Patrick Tinley(7)............................................................. 136,796 *%
A. David Tory(8)................................................................. 19,500 *%
Peter D. Van Houten(9)........................................................... 9,929 *%
All officers and directors as a group (10 persons)(10)........................... 877,740 4.9%
</TABLE>
- - - ------------------------
* Less than 1%.
(1) The table is based upon information supplied by executive officers,
directors and principal shareholders. Unless otherwise indicated, each of
the shareholders named in the table has sole voting investment and/or
dispositive power with respect to all shares of Common Stock shown as
beneficially owned, subject to community property laws where applicable and
to the information contained in the footnotes to this table.
(2) Includes options to purchase 192,294 shares of Common Stock.
(3) Includes options to purchase 12,500 shares of Common Stock.
(4) Includes options to purchase 19,500 shares of Common Stock.
(5) Includes options to purchase 19,500 shares of Common Stock.
(6) Includes options to purchase 60,273 shares of Common Stock.
(7) Includes options to purchase 86,296 shares of Common Stock.
(8) Includes options to purchase 19,500 shares of Common Stock.
(9) Includes options to purchase 4,250 shares of Common Stock.
(10) Includes options to purchase 419,113 shares of Common Stock.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the corporate Secretary of
the Company a written notice of revocation or a duly executed proxy bearing a
later date, or by attending the meeting and voting in person.
VOTING AND SOLICITATION
Each shareholder voting for the election of directors may cumulate his or
her votes, giving one candidate a number of votes equal to the number of
directors to be elected multiplied by the number of shares which the shareholder
is entitled to vote or distributing the shareholder's votes under the same
principle among as many candidates as the shareholder chooses, provided that
votes may not be cast for more than five candidates. However, no shareholder
shall be entitled to cumulate votes for any candidate unless the candidate's
name has been placed in nomination prior to the voting and the shareholder, or
any other shareholder, has given notice at the meeting prior to the voting of
the intention to cumulate the
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shareholder's votes. See "Election of Directors--Nominees". On all other
matters, each share has one vote.
The cost of soliciting proxies will be borne by the Company. The Company may
reimburse brokerage firms and other persons representing beneficial owners of
shares for their expenses in forwarding solicitation material to such beneficial
owners. In addition, the Company's directors, officers and employees, without
additional compensation, may solicit proxies personally or by telephone,
telegraph or facsimile copy. The Company has retained a professional proxy
solicitor to assist in the solicitation of proxies at a cost estimated not to
exceed $8,000.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting is
a majority of the shares of Common Stock issued and outstanding on the Record
Date. Shares that are votes "For" or "Against" a matter are treated as being
present at the meeting for purposes of establishing a quorum and are also
treated as shares "represented and voting" at the Annual Meeting (the "Votes
Cast") with respect to such matter.
While there is no definitive statutory or case law authority in California
as to the proper treatment of abstentions or broker non-votes, the Company
believes that both abstentions and broker non-votes should be counted for
purposes of determining the presence or absence of a quorum for the transaction
of business. The Company further believes that neither abstentions nor broker
non-votes should be counted as shares "represented and voting" with respect to a
particular matter for purposes of determining the total number of Votes Cast
with respect to such matters. In the absence of controlling precedent to the
contrary, the Company intends to treat abstentions and broker non-votes in this
manner. Accordingly, they will not affect the determination as to whether the
requisite majority of Votes Cast has been obtained with respect to a particular
matter.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
A board of five directors has been nominated for election at the meeting.
Unless otherwise instructed, the proxy holders will vote the proxies received by
them for management's five nominees named below, all of whom are presently
directors of the Company. In the event that any nominee of the Company is unable
or declines to serve as a director at the time of the Annual Meeting, the
proxies will be voted for any nominee who shall be designated by the present
Board of Directors to fill the vacancy. It is not expected that any nominee will
be unable or will decline to serve as a director. In the event that additional
persons are nominated for election as directors, the proxy holders intend to
vote all proxies received by them in such a manner in accordance with cumulative
voting as will assure the election of as many of the nominees listed below as
possible. In such event, the specific nominees to be voted for will be
determined by the
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proxy holders. The term of office of each person elected as a director will
continue until the next Annual Meeting of Shareholders or until his successor
has been qualified and appointed.
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION SINCE
- - - -------------------- --- ----------------------------------------------------------------------------- -----------
<S> <C> <C> <C>
Dennis V. Vohs 52 Chairman of the Board and Chief Executive Officer of the Company 1988
Mario M. Rosati 50 Attorney, Wilson Sonsini Goodrich & Rosati, P.C. 1993
Bruce J. Ryan 53 Senior Vice President and Chief Financial Officer of Amdahl Corporation 1992
J. Patrick Tinley 48 President and Chief Operating Officer of the Company 1993
A. David Tory 53 Retired 1993
</TABLE>
There are no family relationships among any directors or executive officers
of the Company.
Mr. Vohs has served as Chairman of the Board and Chief Executive Officer of
the Company since November 1988.
Mr. Rosati has been a member of the law firm Wilson Sonsini Goodrich &
Rosati, Professional Corporation since 1971. Mr. Rosati is a director of Genus,
Inc., a publicly held semiconductor equipment manufacturer and C-ATS Software,
Inc., a publicly held financial database software company.
Mr. Ryan joined Amdahl Corporation as Executive Vice President and Chief
Financial Officer during 1994. Prior to that time, Mr. Ryan held several
positions with Digital Equipment Corporation from 1969 to 1994, most recently as
a Vice President.
Mr. Tinley has served as President and Chief Operating Officer of the
Company since July 1995. Prior to that time, Mr. Tinley served as Executive Vice
President, Product Development and Client Services of the Company from January
1995 to July 1995, as Executive Vice President, Product Development of the
Company from June 1990 to January 1995 and as Executive Vice President for
Business Development of the Company from November 1988 to June 1990.
Mr. Tory retired in September 1995. Prior to that time, Mr. Tory was the
President and Chief Executive Officer of Open Software Foundation and had been
with Open Software Foundation since 1988.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of nine meetings during
the fiscal year ended June 30, 1996. With the exception of Mr. Tory, during
fiscal 1996 each director attended at least 75% of the aggregate of (i) the
total number of meetings of the Board of Directors and (ii) the total number of
meetings held by all committees of the Board of Directors on which such person
served. The Board of Directors has an Audit Committee, a Compensation Committee
and a Stock Option Committee. It does not have a nominating committee or a
committee performing the functions of a nominating committee.
The Audit Committee of the Board consists of directors Rosati, Ryan and Tory
and held three meetings during the fiscal year ended June 30, 1996. Following
the Annual Meeting, the Board plans to reappoint directors Rosati, Ryan and Tory
as members of the Audit Committee, with director Ryan as Committee Chairman. The
Audit Committee recommends engagement of the Company's independent auditors, and
is primarily responsible for approving the services performed by the Company's
independent auditors and for reviewing and evaluating the Company's accounting
principles and its system of internal accounting controls.
The Compensation Committee of the Board consists of directors Vohs, Ryan and
Tory and held two meetings during the fiscal year ended June 30, 1996. Following
the Annual Meeting, the Board intends to reappoint directors Vohs, Ryan and
Tory, with director Tory as Committee Chairman. The Compensation
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Committee makes recommendations to the Board regarding the Company's executive
compensation policy.
The Stock Option Committee consists of directors Rosati, Ryan and Tory and
held seven meetings during the fiscal year ended June 30, 1996. Following the
Annual Meeting, the Board intends to reappoint directors Rosati, Ryan and Tory,
with director Rosati as Committee Chairman. The Stock Option Committee grants
stock options and administers the 1988 Incentive Stock Plan (the "Stock Plan").
COMPENSATION OF DIRECTORS
For the fiscal year ended June 30, 1996, directors were compensated $2,000
for each Board of Directors meeting attended and $1,000 for participating in any
telephonic Board of Directors meetings which were not regularly scheduled. In
addition, directors are reimbursed for travel expenses incurred in connection
with attending Board of Directors meetings.
Annually, each non-employee director is automatically granted 4,000 stock
options to purchase shares of the Company's Common Stock pursuant to the terms
of the Stock Plan. Options granted to Directors under the Stock Plan are
intended by the Company not to qualify as incentive stock options within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). Pursuant to the Stock Plan, on the Annual Meeting date, each
non-employee director who is elected or re-elected at the meeting is granted an
option to purchase 4,000 shares of Common Stock. In addition, any outside
director newly elected to the Board of Directors receives an option for 10,000
shares of Company Common Stock. The 10,000 share option vests 25% a year over
four years and the 4,000 share options are fully vested on the dates of grant.
The price of all options granted is equal to the closing price of the Company's
Common Stock, as quoted on the Nasdaq National Market, on the date of grant.
During fiscal 1996, outside directors were granted a total of 12,000 stock
options at an exercise price of $2.75.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
ELECTION OF DENNIS V. VOHS, MARIO M. ROSATI, BRUCE J. RYAN, J. PATRICK TINLEY
AND A. DAVID TORY AS DIRECTORS.
PROPOSAL NO. 2
APPROVAL OF AMENDMENT TO
1991 EMPLOYEE STOCK PURCHASE PLAN
THE AMENDMENT
The Board has approved an amendment to the 1991 Employee Stock Purchase Plan
(the "Purchase Plan") increasing the number of shares of Common Stock issuable
thereunder by 150,000, to a total of 650,000 shares. The affirmative vote of
holders of a majority of the shares represented and voting at the Annual Meeting
is required for shareholder approval of the amendment to the Purchase Plan.
The Purchase Plan was adopted by the Board of Directors and approved by the
shareholders in March 1991. As of July 1, 1996, 442,024 shares had been sold
under the Purchase Plan. The Board believes that the additional shares are
needed to assure that the Company can continue to provide an opportunity to its
employees to purchase Common Stock of the Company through payroll deductions
under the Purchase Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE AMENDMENT
TO THE PURCHASE PLAN.
SUMMARY OF PURCHASE PLAN
ADMINISTRATION.
The Purchase Plan may be administered by the Board or a committee appointed
by the Board, and is currently being administered by the Board. All questions of
interpretation or application of the plan are
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determined at the sole discretion of the Board or its committee. Members of the
Board who are eligible employees are permitted to participate in the plan but
may not vote on any matter affecting the administration of the plan or the grant
of any option pursuant to the plan. No member of the Board who is eligible to
participate in the plan may be a member of the committee appointed to administer
the plan. Members of the Board receive no additional compensation for their
services in connection with the administration of the Purchase Plan.
ELIGIBILITY.
Any person who is employed by the Company (or by any of its subsidiaries
which are designated from time to time by the Board) for at least twenty (20)
hours per week and more than five (5) months in a calendar year is eligible to
participate in the Purchase Plan, provided that such employee has completed
three months of continuous service prior to the commencement date of the
offering period and subject to certain limitations imposed by Section 423(b) of
the Code. As of October 1, 1996, approximately 400 employees were eligible to
participate in the Purchase Plan.
Notwithstanding the foregoing, no employee shall be permitted to subscribe
for shares under the Purchase Plan if, immediately after the grant of the
option, the employee would own 5% or more of the voting stock or value of all
classes of stock of the Company or its majority-owned subsidiaries (including
stock which may be purchased through subscriptions under the Purchase Plan or
pursuant to any other options), nor shall any employee be granted an option
which would permit his or her rights to purchase stock under all employee stock
purchase plans of the Company to accrue at a rate which exceeds $25,000 of fair
market value of such stock (determined at the fair market value of the shares at
the time the option is granted) for each calendar year in which such option is
outstanding at any time.
OFFERING DATES.
The Purchase Plan is implemented by one offering during each six-month
period of the plan. The offering periods commence approximately July 1 and
January 1 of each year. The initial offering period under the Purchase Plan
began on July 1, 1991.
PARTICIPATION IN THE PLAN.
Eligible employees become participants in the Purchase Plan by delivering to
the Company a subscription agreement authorizing payroll deductions prior to the
applicable offering date, or at such other time as may be determined by the
Board for all eligible employees with respect to a given offering. An employee
who becomes eligible to participate in the Purchase Plan after the commencement
of an offering may not participate in the Purchase Plan until the commencement
of the next offering.
PURCHASE PRICE.
The purchase price per share at which shares are sold under the Purchase
Plan is the lower of 85% of the fair market value of a share of Common Stock on
the date of commencement of the offering period or 85% of the fair market value
of a share of Common Stock on the last day of the offering period. For so long
as the Company's Common Stock is listed on the Nasdaq National Market, the fair
market value of the Common Stock on a given date shall be based upon the closing
price of the Common Stock on the Nasdaq National Market as of such date.
PAYMENT OF PURCHASE PRICE; PAYROLL DEDUCTIONS.
The purchase price of the shares is accumulated by payroll deductions during
the offering period. The deductions may not exceed 10% of a participant's
eligible compensation, which is defined in the Purchase Plan to include all
regular straight time salary in effect at the beginning of the offering period,
exclusive of any payments for overtime, bonuses, commissions or other incentive
compensation. A participant may
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discontinue his or her participation in the Purchase Plan or may decrease, but
not increase, the rate of payroll deductions at any time during the offering
period. Payroll deductions shall commence on the first payday following the
commencement date of the offering and shall continue at the same rate until the
end of the offering period unless sooner terminated or amended as provided in
the Purchase Plan.
All payroll deductions are credited to the participant's account under the
Purchase Plan and are deposited with the general funds of the Company. To the
extent that an employee's payroll deductions exceed the amount required to
purchase the shares subject to option, such excess is added to subsequent
offering period contributions by the employee without interest. All payroll
deductions received or held by the Company may be used by the Company for any
corporate purpose.
PURCHASE OF STOCK; EXERCISE OF OPTION.
At the beginning of each offering period, by executing a subscription
agreement to participate in the Purchase Plan, each employee is in effect
granted an option to purchase shares of Common Stock. The maximum number of
shares placed under option to a participant in an offering shall not exceed the
number of shares determined by dividing $12,500 by the fair market value of the
Common Stock at the beginning of the offering period. See "Payment of Purchase
Price; Payroll Deductions" for limitations on payroll deductions. Unless an
employee withdraws from participation in the Purchase Plan or an employee's
participation is otherwise discontinued, the employee's option for the purchase
of shares will be exercised automatically at the end of the offering period for
the maximum number of shares at the applicable price.
WITHDRAWAL; TERMINATION OF EMPLOYMENT.
While each participant in the Purchase Plan is required to sign a
subscription agreement authorizing payroll deductions, the participant's
interest in a given offering may be terminated in whole, but not in part, by
signing and delivering to the Company a notice of withdrawal from the Purchase
Plan. Such withdrawal may be elected at any time prior to the end of the
applicable six-month offering period. Termination of a participant's continuous
status as an employee for any reason, including retirement or death, cancels his
or her participation in the Purchase Plan immediately. In such event, the
payroll deductions credited to the participant's account will be returned to
such participant or, in the case of death, to the person or persons entitled
thereto as specified by the employee in the subscription agreement.
AMENDMENT AND TERMINATION OF THE PLAN.
The Board may at any time amend or terminate the Purchase Plan, except that
such termination shall not affect options previously granted, nor may any
amendment make any change in an option previously granted which adversely
affects the rights of any participant. To the extent necessary to comply with
SEC Rule 16b-3 or with Section 423 of the Code, (or any other applicable law or
regulation), the Company shall obtain shareholder approval of any amendment of
the Purchase Plan in such a manner and to such a degree as is required. The
Purchase Plan will terminate in 2011.
CERTAIN FEDERAL INCOME TAX INFORMATION.
The Purchase Plan, and the right of participants to make purchases
thereunder, is intended to qualify under the provisions of Sections 421 and 423
of the Code. Under these provisions, no income will be taxable to a participant
at the time of grant of the option or purchase of shares. Upon disposition of
the shares, the participant will generally be subject to tax. If the shares have
been held by the participant for more than two years after the first day of the
offering period and more than one year after the purchase date of the shares,
the lesser of (a) the excess of the fair market value of the shares at the time
of such disposition over the purchase price of the shares subject to option, or
(b) 15% of the fair market value of
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the shares on the first day of the offering period, will be treated as ordinary
income, and any further gain upon such disposition will be treated as long-term
capital gain. If the shares are disposed of before the expiration of the holding
periods described above, the excess of the fair market value of the shares on
the last day of the offering period over the purchase price will be treated as
ordinary income, and any further gain or any loss on such disposition will be
capital gain or loss. Different rules may apply with respect to optionees
subject to Section 16(b) of the Securities Exchange Act of 1934. The Company is
not entitled to a deduction for amounts taxable to a participant, except to the
extent of ordinary income reported by participants upon disposition of shares
prior to the expiration of the holding periods described above.
PROPOSAL NO. 3
APPROVAL OF AMENDMENT TO RESTATED ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED SHARES
GENERAL
The Company's Restated Articles of Incorporation, as amended, as currently
in effect (the "Articles"), provide that the Company is authorized to issues two
classes of stock, consisting of 27,000,000 shares designated as Common Shares,
no par value per share, and 5,000,000 shares designated as Preferred Shares, no
par value per share. The Common Shares are issuable in two classes and currently
consist of 25,000,000 authorized shares of Common Stock (the "Common Stock"),
and 2,000,000 authorized shares of Non-voting Common Stock (the "Non-voting
Common Stock").
On August 22, 1996, the Board of Directors of the Company authorized an
amendment to the Articles (the "Articles Amendment"), subject to shareholder
approval, to increase the authorized number of shares of Common Shares by
10,000,000 shares to a total of 37,000,000 shares with a corresponding increase
in the authorized Common Stock by 10,000,000 shares to a total of 35,000,000
shares. Under the proposed amendment, the third paragraph of Section 2 of the
Articles would be amended to read as follows:
THIRD: CAPITALIZATION. The total number of shares of stock which the
Corporation shall have the authority to issue is 42,000,000 shares,
consisting of 37,000,000 shares of common stock, no par value ("Common
Shares") and 5,000,000 shares of preferred stock, no par value ("Preferred
Shares"). The Common Shares shall be divided into two classes designated as
"Common Stock" and "Non-voting Common Stock", respectively. The number of
shares of Common Stock authorized to be issued is 35,000,000 shares. The
number of shares of Non-voting Common Stock authorized to be issued is
2,000,000 shares. The Preferred Shares may be issued from time to time in
one or more series. The Board of Directors is authorized to determine or
alter the rights, preferences, privileges, and restrictions granted to or
imposed upon any wholly unissued series of Preferred Stock; and to fix the
number of shares of any series of Preferred Stock; and to increase, or to
decrease (within the limits and restrictions stated in any resolution or
resolutions of the Board of Directors originally fixing the number of shares
constituting any series of Preferred Stock, but not below the number of
shares of any such series then outstanding) the number of shares of any such
series subsequent to the issue of shares of that series. In case the number
of shares of any series of Preferred Stock shall be so decreased, the shares
constituting the decrease shall resume the status which they had prior to
the adoption of the resolution originally fixing the number of shares of
such series.
The shareholders are being asked to approve such Articles Amendment. The
proposed Articles Amendment would give the Board of Directors the authority to
issue additional shares of Common Stock without requiring future shareholder
approval of such issuances, except as may otherwise be required by applicable
laws and regulations. The affirmative vote of holders of a majority of the
shares represented and voting at the Annual Meeting is required for approval of
the Articles Amendment.
Of the 25,000,000 currently authorized shares of Common Stock, 17,850,511
shares of Common Stock were issued and outstanding as of September 13, 1996. In
addition, as of such date, approximately
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1,517,003 shares were reserved for issuance upon exercise of outstanding
options; approximately 230,927 options were reserved for future grant under the
Stock Plan; a total of 190,000 shares were reserved for issuance under an
acquisition related stock compensation plan; and 57,976 shares were reserved for
issuance under the 1991 Employee Stock Purchase Plan. Accordingly, as of
September 13, 1996, after giving effect to the reservation of an additional
150,000 shares of Common Stock for issuance under the Purchase Plan (as
described in Proposal No. 2 to this Proxy Statement) but without giving effect
to the approval of Proposal No. 3 to increase the number of authorized shares of
Common Stock by 10,000,000 shares, the Company had only 2,857,461 shares of
authorized but unissued and unreserved Common Stock available for issuance.
PURPOSE AND EFFECT OF THE AMENDMENT
The principal purpose of this proposed amendment to the Company's Articles
to increase the authorized shares of Common Stock is to make such shares
available for use by the Board of Directors as it deems appropriate or
necessary. For example, such shares may be needed in connection with raising
additional capital through the sale of the Company's securities, acquisition of
another company or its business or assets, establishing a strategic relationship
with a corporate partner, or providing options or other stock incentives to the
Company's employees, consultants or others.
Except as noted below, the Board of Directors has no present agreement or
arrangement, plan or understanding with respect to the issuance of any such
shares. If the Articles Amendment is approved by the shareholders, the Board of
Directors does not intend to solicit further shareholder approval prior to the
issuance of any additional shares of Common Stock, except as may be required by
applicable laws and regulations. Holders of the Company's securities as such
have no statutory preemptive rights with respect to issuances of Common Stock.
On December 29, 1995, the Company entered into an agreement with a foreign
institutional investor whereby the investor granted the Company options to
require the investor to purchase shares of the Company's Preferred Stock with an
aggregate value of $4,000,000 during the period from and including July 1, 1996
through and including December 30, 1998. The Company has created and reserved
500,000 shares of its Series B Preferred Stock and 500,000 shares of its Series
C Preferred Stock for issuance and sale to the investor upon exercise of the
options. In addition, the Company granted the investor a warrant to purchase
400,000 shares of the Company's Common Stock at an exercise price of $5.576 per
share. The options are exercisable during the period from and including July 1,
1997 through and including December 29, 2000. In July 1996, the Company
exercised its Series B Preferred Stock Option, and the investor agreed to invest
an additional $2,000,000 under terms similar to those of the original options.
In exchange for the additional investment, the Company granted the investor a
warrant for an additional 640,000 shares of the Company's Common Stock. This
warrant is exercisable from July 1, 1997 through and including December 29,
2000, and will be exercisable at a price between $6.46 and $8.00 per share. The
gross proceeds from the July transactions were $4,000,000.
In addition, the Company is presently investigating alternative sources of
capital available to strengthen its balance sheet and improve its liquidity. The
Company believes it is likely that any amounts raised in connection with these
investigations would require the issuance of additional shares of its Common
Stock.
The increase in authorized Common Stock will not have any immediate effect
on the rights of existing shareholders. To the extent that the additional
authorized shares are issued in the future, they will decrease the existing
shareholders' percentage equity ownership and, depending on the price at which
they are issued, could be dilutive to the existing shareholders.
9
<PAGE>
POTENTIAL ANTI-TAKEOVER EFFECT
The increase in the authorized number of shares of Common Stock and the
subsequent issuance of such shares could have the effect of delaying or
preventing a change-in-control of the Company without further action by the
shareholders. Shares of authorized and unissued Common Stock could (within the
limits imposed by applicable law) be issued in one or more transactions that
would make a change-in-control of the Company more difficult, and therefore,
less likely. Any such issuance of additional stock could have the effect of
diluting the earnings per share and book value per share of outstanding shares
of Common Stock, and such additional shares could be used to dilute the stock
ownership or voting rights of a person seeking to obtain control of the Company.
The Company has previously adopted certain measures that may have the effect of
helping to resist an unsolicited takeover attempt, including provisions of the
Articles authorizing the Board of Directors to issue up to 5,000,000 shares of
Preferred Stock with terms, provisions and rights fixed by the Board of
Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION TO INCREASE THE AUTHORIZED
NUMBER OF SHARES OF COMMON STOCK.
PROPOSAL NO. 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board has selected Coopers & Lybrand L.L.P., independent auditors, to
audit the consolidated financial statements of the Company for the year ending
June 30, 1997. For the year ended June 30, 1996, Coopers & Lybrand L.L.P.
audited the Company's North American financial statements while KPMG Peat
Marwick LLP audited the Company's European financial statements. Representatives
of Coopers & Lybrand L.L.P. are expected to be present at the Annual Meeting
with the opportunity to make a statement if they desire to do so, and are
expected to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS THE COMPANY'S INDEPENDENT AUDITORS
FOR THE FISCAL YEAR ENDING JUNE 30, 1997.
10
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation
earned during each of the Company's last three fiscal years by the Company's
Chief Executive Officer, and each of the Company's four other most highly
compensated executive officers, based on salary and bonus earned during fiscal
1996 (the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION -------------
-------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
COMPENSATION OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY ($) BONUS ($) ($)(1) (#)(2) ($)(3)
- - - ------------------------------------ ----------- ---------- ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Dennis V. Vohs - 1996 $ 289,400 -- -- 50,000 $ 2,200
Chairman of the Board and Chief 1995 278,625 -- -- 204,794 3,200
Executive Officer 1994 277,100 -- -- 2,300
J. Patrick Tinley - 1996 175,000 -- $ 21,000 50,000 44,100
President and Chief Operating 1995 165,000 -- 91,300 90,046 3,200
Officer (4) 1994 165,000 -- 20,400 25,000 2,300
Joseph L. Southworth - 1996 155,300 $ 10,000 -- 10,000 2,100
Senior Vice President, Worldwide 1995 152,000 -- -- 76,523 35,300
Development and Support (5) 1994 152,000 -- -- 25,000 2,300
Donald F. Campbell - 1996 145,000 -- 21,600 20,000 1,500
Vice President, Worldwide 1995 85,400 -- 68,300 30,000 1,000
Marketing (6)
Peter D. Van Houten 1996 117,500 25,700 19,700 30,000 1,900
Vice President, North American 1995 79,200 68,800 34,300 2,250 2,300
Sales (7) 1994 75,000 75,100 28,800 -- 900
Selby F. Little, III - 1996 149,800 -- 25,100 25,000 91,900
Former Vice President, Chief 1995 145,000 -- 27,400 60,000 2,200
Financial Officer and Secretary 1994 140,000 -- 26,000 20,000 2,300
(8)
</TABLE>
- - - ------------------------
(1) Pursuant to SEC rules, no disclosure is made with respect to individuals
whose other annual compensation is the lesser of 10% of total annual salary
and bonus for fiscal 1996 or $50,000.
(2) The Company has not granted any stock appreciation rights (SARs).
(3) Represents amounts contributed to the Company's 401(k) plan on behalf of the
officer by the Company and premiums paid by the Company on behalf of the
officer for term life insurance in fiscal 1996.
(4) The amount shown as All Other Compensation for Mr. Tinley includes $42,000
for the exercise and sale of qualified incentive stock options
(5) Mr. Southworth became an executive officer of the Company in May 1996.
Disclosures include Mr. Southworth's compensation for the entire respective
fiscal year.
(6) Mr. Campbell began his employment with the Company on November 15, 1994. The
amount shown as fiscal 1996 Other Annual Compensation for Mr. Campbell
includes $11,600 for relocation reimbursements.
11
<PAGE>
(7) Mr. Van Houten became an executive officer of the Company in January 1996.
Disclosures include Mr. Van Houten's compensation for the entire respective
fiscal year. Amounts paid to Mr. Van Houten as Bonus in Fiscal 1996 related
to his performance prior to becoming an executive officer. The amount shown
as fiscal 1996 Other Annual Compensation for Mr. Van Houten includes other
payments of $12,500 and an auto allowance of $7,200.
(8) Mr. Little resigned as Vice President, Finance & Administration, Chief
Financial Officer and Secretary on May 31, 1996. The amount shown as fiscal
1996 Other Annual Compensation for Mr. Little includes other payments of
$15,600 and an auto allowance of $9,500. The amount shown as fiscal 1996 All
Other Compensation for Mr. Little includes $90,000 for the exercise and sale
of qualified incentive stock options.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information related to options granted to the
Named Executive Officers during fiscal 1996.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS IN FISCAL 1996
----------------------------------------------------------
NUMBER OF POTENTIAL REALIZABLE
SECURITIES VALUE AT ASSUMED
UNDERLYING PERCENT OF TOTAL ANNUAL RATES OF STOCK
OPTIONS/ OPTIONS/SARS PRICE APPRECIATION FOR
SARS GRANTED TO EXERCISE OPTION TERM(3)
GRANTED EMPLOYEES IN FISCAL PRICE EXPIRATION ----------------------
NAME (#)(1) YEAR(2) ($/SH) DATE 5% 10%
- - - ----------------------------------------- ----------- ------------------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Dennis V. Vohs........................... 50,000 7.24% $ 6.500 9/7/05 $ 204,391 $ 517,966
J. Patrick Tinley........................ 50,000 7.24% 6.375 7/28/05 200,460 508,005
Joseph L. Southworth..................... 10,000 1.45% 2.183 1/24/06 17,688 44,824
Donald F. Campbell....................... 20,000 2.89% 6.375 7/28/05 80,184 203,202
Peter D. Van Houten...................... 10,000 1.45% 6.375 7/28/05 40,092 101,601
20,000 2.89% 2.750 11/16/05 34,589 87,656
Selby F. Little, III..................... 25,000 3.62% 6.375 -- -- --
</TABLE>
- - - ------------------------
(1) The Company has not granted any SARs.
(2) The Company granted options representing 690,957 shares to employees in
fiscal 1996 under the Company's Stock Plan.
(3) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of their
terms assuming the specified compounded rates of appreciation on the
Company's Common Stock over the terms of the options. These numbers are
calculated based on SEC rules and do not reflect the Company's estimate of
future stock price appreciation. Actual gains, if any, are dependent on the
timing of option exercises and the future performance of the Company's
Common Stock. There can be no assurances that the rates of appreciation
assumed in this table can be achieved or that the amounts reflected will be
realized by the individuals.
12
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table provides information related to options exercised by the
Named Executive Officers during fiscal 1996 and the number and value of options
held at June 30, 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS/SARS AT JUNE 30, IN-THE- MONEY OPTIONS/SARS
ACQUIRED ON VALUE 1996 (#)(1) AT JUNE 30, 1996 ($)(2)
EXERCISE REALIZED -------------------------- --------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - - ---------------------------------- ----------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Dennis V. Vohs.................... -- -- 154,794 100,000 $ 328,937 $ 106,250
J. Patrick Tinley................. 20,000 $ 42,000 57,546 82,500 122,285 69,063
Joseph L. Southworth.............. -- -- 44,023 42,500 93,549 98,438
Donald F. Campbell................ -- -- 7,500 42,500 3,750 11,250
Peter D. Van Houten............... -- -- 1,550 30,700 3,294 61,488
Selby F. Little, III.............. 40,000 90,000 -- -- -- --
</TABLE>
- - - ------------------------
(1) The Company has not granted any SARs.
(2) Value is based on the difference between the option exercise price and the
fair market value at June 30, 1996 ($5.750 per share) multiplied by the
number of shares underlying the option.
REPORT OF THE COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE
OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board is comprised of two non-management
directors of the Company, A. David Tory and Bruce J. Ryan, and the Chairman of
the Board and Chief Executive Officer, Dennis V. Vohs. The Stock Option
Committee is comprised of three outside directors, Mario M. Rosati, Bruce J.
Ryan and A. David Tory. Together these committees are responsible for
recommending to the Board the overall compensation plans which govern the
compensation of the key executive officers, including the Chief Executive
Officer, of the Company.
The Company's executive pay programs are designed to provide a strong and
direct link between Company performance and executive compensation. The Company
believes that, in order to attract and retain the most qualified executives in
the industry, its compensation policies must be competitive with companies in a
similar business and of similar size. Accordingly, executive compensation is
based on Company and individual performance in relation to annual goals for the
executive and the Company. The annual goals set for the executive are based on
revenue growth, profitability and cash flow, as appropriate for the executive's
responsibilities. Executives are provided with a combination of one or more of
the following types of compensation: salary, profit sharing and annual bonus,
and long-term incentives.
SALARY: All executive officers (other than the Chief Executive Officer) are
provided with a fixed annual salary that is reviewed on an annual basis by the
Compensation Committee and the Chief Executive Officer. Salary and increases in
salary are determined partially by comparison of the executive's salary to
salaries for similar positions at comparable companies, the executive's annual
performance review, the value of contributions made by the executive and the
executive's and the Company's performance in relation to goals established at
the beginning of the period.
In addition to considering the above factors when setting compensation
increases, the Compensation Committee also considers the overall financial
health of the Company. In years where corporate performance does not equal or
exceed Company expectations, executive salary increases for the coming fiscal
year may be either reduced or eliminated altogether.
PROFIT SHARING AND ANNUAL BONUS: As an incentive to help the Company meet
annual goals and become more profitable, all executive officers have a profit
sharing component included in their compensation plans. The executive can earn
profit sharing if the Company and the executive's organization meet
13
<PAGE>
or exceed annual goals for profitability, revenue growth and cash flow.
Generally, executive compensation plans are structured so that higher level
executives have a larger portion of their total compensation based on profit
sharing. The determination of profit sharing is based on a formula in the
executive's compensation plan which is approved by the Compensation Committee.
The Company feels that tying executive compensation to Company profitability
aligns the overall interests of the shareholders with those of the executive. No
profit sharing has been paid for the last three fiscal years.
The Company also attempts to motivate its executives to make contributions
of outstanding value by providing them the opportunity to earn an annual bonus.
These bonuses, if paid, can represent a significant portion of the executive's
compensation.
Together the Chief Executive Officer and the Compensation Committee
determine the total pool of bonus dollars which can be allocated. In fiscal
1996, individual executive bonuses were targeted to be between 33% and 64%,
excluding profit sharing, of the executive's salary. Each executive can earn a
percentage of their target bonus based on the achievement of Company and their
organization's goals. For all executives, except Mr. Vohs, the executive's
achievements in relation to established goals are evaluated by the Chief
Executive Officer. Mr. Vohs' performance is evaluated by the Compensation
Committee, excluding Mr. Vohs. Like other executives, the decision to grant Mr.
Vohs a bonus is based on the performance of the Company and Mr. Vohs'
contributions to the Company in the past fiscal year. The bonus plan is designed
such that the executive earns a proportionally higher award if the Company and
the executive's organization exceed their goals and a smaller or no award if the
Company and the executive's organization do not exceed their goals. The Company
did not pay any bonuses to its executive officers during fiscal 1996.
LONG-TERM INCENTIVES: The Stock Option Committee of the Board believes that
employee equity ownership provides significant additional motivation to officers
and employees to maximize value for the Company's shareholders, and therefore
periodically grants stock options under the Company's 1988 Incentive Stock Plan.
The Committee grants stock options to executive officers at the prevailing
market price, after considering the recommendation of Mr. Vohs, the positive
effects the executive has made on the overall performance of the Company, stock
option granting policies at companies of similar size in similar industries, and
certain other factors. The stock options granted only have value to the
executive if the Company's stock price increases over the exercise price.
Therefore, the Committee believes that stock options serve to align the
interests of option holders closely with those of shareholders because of the
direct benefit executive officers receive through improved stock performance.
During fiscal 1996, the Committee considered and granted stock options to to the
executive offices of the Company, including Mr. Vohs. Each of the officers
received stock options based on his performance, level of responsibility,
historical and expected contribution to the Company's success and prior grants,
including vested and unvested options.
1996 COMPENSATION OF THE CHIEF EXECUTIVE OFFICER: Mr. Vohs' Salary, Profit
Sharing and Annual Bonus and Long-Term Incentives were determined in accordance
with the criteria described in the "Salary", "Profit Sharing and Annual Bonus,"
and "Long-Term Incentives" sections of this report. These amounts were designed
to compensate Mr. Vohs at prevailing market rates when revenue growth,
profitability and cash flow targets are met and at above market rates when
revenue growth, profitability and cash flow targets were exceeded. However, in
fiscal 1996, the Company failed to achieve its revenue growth, profitability and
cash flow targets. Accordingly, Mr. Vohs and the Company's other executive
officers received no profit sharing or annual bonus for fiscal 1996. Mr. Vohs
did not participate in deliberations concerning his compensation, bonus or stock
option grants.
COMPENSATION LIMITATIONS: Under Section 162(m) of the Code and regulations
adopted thereunder by the Internal Revenue Service in August 1993, publicly-held
companies may be precluded from deducting certain compensation in excess of $1.0
million paid to an executive officer in a single year. The regulations exclude
from this limit performance-based compensation and stock options, provided
certain
14
<PAGE>
requirements, such as stockholder approval, are satisfied. The Company is
studying these regulations and currently intends to take the necessary actions
to cause its compensation programs and stock option plans to qualify for the
exclusions.
<TABLE>
<S> <C>
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
Bruce J. Ryan Bruce J. Ryan
A. David Tory Mario M. Rosati
Dennis V. Vohs A. David Tory
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the Company's fiscal year ended June 30, 1996, Dennis V. Vohs,
Chairman of the Board and Chief Executive Officer, served on the Compensation
Committee. Mr. Vohs did not participate in any discussions regarding his
compensation, bonus or stock option grants. There were no Compensation Committee
"interlocks" within the meaning of the rules of the SEC.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors to file initial reports of share ownership and report changes in
share ownership with the SEC. Such persons are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms which they file.
Based solely on the Company's review of such forms furnished to the Company
and written representations from certain reporting persons, the Company believes
that for the period July 1, 1995 to June 30, 1996, all Section 16(a) filings
were made on a timely basis, except that a Statement of Changes of Beneficial
Ownership of Securities for former officer John B. Koontz for the month of
August 1995 was not filed with the SEC on a timely basis. This late filing was
correted in the subsequent month.
CERTAIN TRANSACTIONS
During fiscal 1996, Mario M. Rosati, a director of the Company, was also an
attorney with Wilson Sonsini Goodrich & Rosati, Professional Corporation
("Counsel"). The Company retained Counsel as its legal advisers during the
fiscal year. The Company plans to retain Counsel as its legal advisers again
during fiscal 1997. The amounts paid by the Company to Counsel were less than 5%
of Counsel's total gross revenues for its last completed fiscal year.
Under the terms of indemnification agreements with each of the Company's
directors, the Company is obligated to indemnify each director against certain
claims and expenses for which the director might be held liable in connection
with past or future service on the Board of Directors. In addition, the
Company's Restated Articles of Incorporation provide that, to the extent
permitted by California law, the directors shall not be liable for monetary
damages for breach of fiduciary duty as a director.
15
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG ROSS SYSTEMS, INC., NASDAQ
COMPOSITE INDEX, AND H&Q TECHNOLOGY INDEX
Set forth below is a line graph comparing the annual percentage change in
the cumulative total return on the Company's Common Stock with the cumulative
total return of the NASDAQ Composite Index and H&Q Technology Index for the
period commencing on June 30, 1991 and ending on June 30, 1996.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ROSS SYSTEMS, INC. NASDAQ COMPOSITE INDEX H&Q TECHNOLOGY INDEX
<S> <C> <C> <C>
6/91 100.00 100.00 100.00
9/91 167.24 111.60 104.23
12/91 168.97 125.03 119.91
3/92 186.21 128.95 123.89
6/92 96.55 120.13 113.63
9/92 79.31 125.07 118.48
12/92 125.86 145.50 137.92
3/93 203.45 148.23 135.91
6/93 170.69 151.08 138.83
9/93 175.86 163.81 141.31
12/93 89.66 167.03 150.51
3/94 74.14 160.00 151.88
6/94 51.72 152.52 140.86
9/94 44.83 165.15 160.70
12/94 72.41 163.27 174.70
3/95 77.59 177.99 194.45
6/95 70.69 203.59 235.88
9/95 94.83 228.10 268.62
12/95 41.38 230.87 262.31
3/96 51.72 241.63 267.55
6/96 79.31 261.37 279.83
</TABLE>
Assumes that $100.00 was invested on June 30, 1991 in the Company's Common
Stock and each index, and that all dividends paid by companies whose shares are
components of the index were reinvested. No dividends have been declared on the
Company's Common Stock. Shareholder returns over the period indicated should not
be considered indicative of future shareholder returns.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of shareholders of the Company which are intended to be presented
by such shareholders at the Company's 1997 Annual Meeting of Shareholders must
be received by the Company no later than June 2, 1997 in order that they may be
included in the proxy statement and form of proxy relating to that meeting.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of proxy to vote the shares they represent as
the Board of Directors may recommend.
THE COMPANY WILL MAIL WITHOUT CHARGE TO ANY SHAREHOLDER UPON REQUEST A COPY
OF THE ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS, SCHEDULES
AND A LIST OF EXHIBITS. REQUESTS SHOULD BE SENT TO THE CORPORATE SECRETARY, ROSS
SYSTEMS, INC., 555 TWIN DOLPHIN DRIVE, REDWOOD CITY, CALIFORNIA 94065.
16
<PAGE>
ROSS SYSTEMS, INC.
1996 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Ross Systems, Inc. hereby acknowledges
receipt of the Notice of Annual Meeting of Shareholders and Proxy Statement,
each dated October 8, 1996, and hereby appoints Dennis V. Vohs and J. Patrick
Tinley, or either of them, proxies, each with full power of substitution, on
behalf and in the name of the undersigned, to represent the undersigned at the
1996 Annual Meeting of Shareholders of Ross Systems, Inc. to be held on
November 20, 1996, and at any adjournment(s) thereof, and to vote all shares of
Common Stock which the undersigned would be entitled to vote if then and there
personally present, on the matters set forth on the reverse side.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
Please mark votes as in this example. /X/
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR THE APPROVAL OF
AMENDMENT TO THE 1991 EMPLOYEE STOCK PURCHASE PLAN INCREASING THE NUMBER OF
SHARES AUTHORIZED TO BE ISSUED, FOR THE APPROVAL OF AN AMENDMENT TO REVISED
ARTICLES OF INCORPORATION INCREASING THE AUTHORIZED NUMBER OF SHARES OF
COMMON STOCK, AND FOR THE RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND
LLP AS INDEPENDENT AUDITORS, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER
MATTERS AS MAY COME BEFORE THE MEETING AND ANY ADJOURNMENT THEREOF.
1. ELECTION OF DIRECTORS
Nominees: Dennis V. Vohs, Mario M. Rosati, Bruce J. Ryan,
J. Patrick Tinley, A. David Tory
/ / FOR / / WITHHELD
- - - -------------------------------------------------------------------------------
For all nominees except as noted above
2. PROPOSAL TO APPROVE AN AMENDMENT TO THE 1991 EMPLOYEE STOCK
PURCHASE PLAN INCREASING THE NUMBER OF SHARES AUTHORIZED TO BE ISSUED:
/ / FOR / / AGAINST / / ABSTAIN
3. PROPOSAL TO APPROVE AN AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION
INCREASING THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK:
/ / FOR / / AGAINST / / ABSTAIN
4. PROPOSAL TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND LLP AS THE
INDEPENDENT AUDITORS OF THE COMPANY:
/ / FOR / / AGAINST / / ABSTAIN
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
This Proxy should be marked, dated, and signed by the shareholder(s)
exactly as the shareholder's name appears on this proxy, and returned
promptly in the enclosed envelope. Persons signing as a trustee, executor,
officer, partner, or other fiduciary should so indicate.
Signature:__________________________ Date: _________________
Signature:_________________________ Date: _________________
