UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, For Use of the
[x] Definitive Proxy Statement Commission Only (as permitted
[_] Definitive Additional Materials by Rule 14a-6(e)(2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
TSCI Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
5) Total fee paid:
________________________________________________________________________________
[_] Fee paid previously with preliminary materials:
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:_______________________________________
2) Form, Schedule or Registration Statement No.:_________________
3) Filing Party:_________________________________________________
4) Date Filed:___________________________________________________
<PAGE>
TCSI Corporation
1080 Marina Village Parkway
Alameda, California 94501
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 6, 1999
TO OUR SHAREHOLDERS:
You are cordially invited to the Annual Meeting of Shareholders of TCSI
Corporation (the "Company") which will be held at 3:00 p.m. (local time) on
Thursday, May 6, 1999, at the Company's principal corporate offices at 1080
Marina Village Parkway, Alameda, California 94501, for the following purposes as
described in the accompanying Proxy Statement:
1. To elect seven directors to the Board of Directors;
2. To ratify the appointment of Ernst & Young LLP as independent auditors
for the Company for the year ending December 31, 1999; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Shareholders of record at the close of business on March 12, 1999 are
entitled to notice of, and to vote at the meeting or any adjournments thereof.
Your vote is important to the Company. Please complete, sign, date, and
return the enclosed proxy card in the enclosed, postage-paid envelope. If you
attend the meeting and wish to vote in person, you may withdraw your proxy and
vote your shares in person.
Sincerely,
/s/ R. Banin
Ram A. Banin, Ph.D.
President and Chief Executive Officer
April 2, 1999
<PAGE>
Mailed to shareholders on
or about April 6, 1999
TCSI CORPORATION
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of the Company, for use at the 1999 Annual
Meeting of Shareholders ("Annual Meeting") to be held at 3:00 p.m. (local time)
on Thursday, May 6, 1999, at 1080 Marina Village Parkway, Alameda, California
94501, the Company's principal corporate offices.
Each shareholder of record of Common Stock of the Company ("Common Stock")
on March 12, 1999 ("Record Date") is entitled to vote at the Annual Meeting and
will have one vote for each share of Common Stock held at the close of business
on the Record Date. A majority of the shares entitled to vote will constitute a
quorum. On March 12, 1999, there were 22,572,532 shares of Common Stock
outstanding. All references to share numbers herein give effect to the Company's
three-for-two stock split in May 1996.
Shareholders unable to attend the Annual Meeting may vote by proxy. The
proxies will vote such shares according to your instructions. If a shareholder
returns a properly signed and dated proxy card but does not mark a choice on one
or more items, such shareholder's shares will be voted in accordance with the
recommendations of the Board of Directors as set forth in this Proxy Statement.
The proxy card gives authority to the proxies to vote shares at their discretion
on any other matter presented at the Annual Meeting.
Shareholders may revoke proxies at any time prior to voting at the Annual
Meeting by delivering written notice to the Secretary of the Company, by
submitting a subsequently dated proxy, or by attending the meeting and voting in
person at the meeting. Under applicable state law and the bylaws of the Company,
a quorum is required for the matters to be acted upon at the Annual Meeting. A
quorum is defined as a majority of the shares entitled to vote, represented in
person or by proxy, at the meeting. To pass, each matter submitted to a vote,
except the election of directors, must be approved by a majority of the shares
represented and voting in person or by proxy at the meeting. Shares represented
by proxies which are marked "abstain" or in a manner so as to deny discretionary
authority on any matter will be counted as shares present for purposes of
determining the presence of a quorum; such shares will also be counted as shares
present and entitled to vote, which will have the same effect as a vote against
any matter other than election of directors. Proxies relating to "street name"
shares which are not voted by brokers on one or more matters will not be treated
as shares present for purposes of determining the presence of a quorum unless
they are voted by the broker on at least one matter. Such non-voted shares will
not be treated as shares represented at this meeting as to any matter for which
non-vote is indicated on the broker's proxy. Director nominees must receive a
plurality of the votes cast at the meeting, which means that a vote withheld
will not affect the outcome of the election.
The Company will bear the cost of preparing, handling, printing, and
mailing this Proxy Statement, the accompanying proxy card, and any additional
material which may be furnished to shareholders, and the actual expense incurred
by brokerage houses, fiduciaries, and custodians in forwarding such materials to
beneficial owners of Common Stock held in their names. The solicitation of
proxies will be made by the use of the mails and through direct communication
with certain shareholders or their representatives, by officers, directors, or
employees of the Company who will receive no additional compensation therefor.
PROPOSAL 1: ELECTION OF DIRECTORS
At the Annual Meeting, seven directors of the Company are to be elected to
serve until the next annual meeting or until their respective successors are
elected or appointed. The authorized number of directors of the Company has been
fixed at seven by the Board of Directors.
Unless otherwise instructed, the proxy holders will vote the proxies
received by them FOR the seven nominees of the Board of Directors named below.
In the event that any nominee of the Company is unable to 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 to 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 FOR the remaining nominees and such proxies may be
voted for the election of a substitute nominee recommended by the Board of
Directors.
<PAGE>
<TABLE>
<CAPTION>
Name Age Title Director Since
---- --- ----- --------------
<S> <C> <C> <C>
John C. Bolger 52 Chairman of the Board 1992
Ram A. Banin, Ph.D. 57 President, Chief Executive Officer and Director 1997
Norman E. Friedmann, Ph.D. 70 Director 1998
Donald Green 67 Director 1998
William A. Hasler 57 Director 1993
David G. Messerschmitt, Ph.D. 53 Director 1991
Harvey E. Wagner 62 Director 1989
</TABLE>
Except as set forth below, each of the directors has been engaged in the
principal occupation described below. There are no family relationships among
any of the directors listed above.
John C. Bolger was appointed Chairman of the Board in February 1998 and has
been a member of the Board of Directors since July 1992. Mr. Bolger, now a
private investor, served as Vice President, Finance and Administration, and
Secretary of Cisco Systems, Inc. from 1989 until his retirement in 1992. Mr.
Bolger is also a member of the Board of Directors for Sanmina Corporation,
Integrated Systems, Inc., Mission West Properties, Inc., and Integrated Device
Technology, Inc.
Ram A. Banin, Ph.D., became a member of the Board of Directors in July
1997. Dr. Banin joined TCSI in May 1992 and has served as President since
December 1996 and Chief Executive Officer since July 1997. Prior to joining
TCSI, Dr. Banin founded and operated Banin Associates for three years. Dr. Banin
was also Co-Founder and Chief Executive Officer of Atherton Technology from 1986
to 1989, as well as Co-Founder and Senior Vice President of Daisy Systems from
1980 to 1985. Dr. Banin has a Ph.D. and an M.A. in Computer Science from the
University of California at Berkeley, and an M.S. and a B.S. in Physics and
Physics Mathematics, respectively, from the Hebrew University of Jerusalem,
Israel.
Norman E. Friedmann, Ph.D., became a member of the Board of Directors in
February 1998. He has served as a management consultant to the Company for the
past two years. Dr. Friedmann currently manages Friedmann Enterprises, and
previously served as Executive Vice President and Chief Operating Officer of
Herbalife International, Inc. from 1992 until his retirement in 1995. Dr.
Friedmann founded and managed Friedmann Enterprises from 1990 to 1992, he served
as President, Chief Executive Officer, and member of the Board of Directors of
Daisy Systems from 1987 to 1989, and he also founded and served as President,
Chief Executive Officer, and Chairman of the Board of Cordura Corporation from
1965 to 1987.
Donald Green became a member of the Board of Directors in August 1998. Mr
Green is the Chairman of the Board and Co-Founder of Advanced Fibre
Communications ("AFC"). From May 1992 to June 1997, Mr. Green was the Chief
Executive Officer of AFC. Mr. Green founded Optilink Corporation in 1987, where
he was President and Chief Executive Officer until its acquisition by DSC
Communications Corporation ("DSC") in 1990. Following the acquisition, Mr. Green
became Vice President and General Manager of the Access Products division of
DSC.
William A. Hasler became a member of the Board of Directors in May 1993. In
1998, Mr. Hasler was appointed Co-Chief Executive Officer of Aphton Corporation.
Mr. Hasler was the Dean of the Walter Haas School of Business at the University
of California at Berkeley from 1991 to 1998. Mr. Hasler joined the firm of KPMG
Peat Marwick in 1972 and served in various executive positions and as a member
of the Board of Directors. Mr. Hasler also serves on the Board of Governors of
the Pacific Stock Exchange and the Board of Directors for Aphton Corporation,
Asia Pacific Wire and Cable Corporation Limited, Quickturn Design Systems, Inc.,
Solectron Corporation, TENERA, Inc. and Walker Interactive Systems.
David G. Messerschmitt, Ph.D., became a member of the Board of Directors in
May 1991. He is currently Professor in the Electrical Engineering and Computer
Science Department at the University of California at Berkeley. Dr.
Messerschmitt has served on such faculty since 1977.
Harvey E. Wagner became a member of the Board of Directors in 1989 and was
Chairman of the Board of Directors from March 1989 to March 1996. Mr. Wagner is
Chairman of the Board, Chief Executive Officer, and President of Teknekron
Corporation, which he founded in 1968.
2
<PAGE>
MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF
THE NOMINEES LISTED ABOVE.
Board Meetings, Committees, and Director Compensation
The Board of Directors (the "Board") held six meetings during 1998. Each
Board member attended all meetings of the Board of Directors and of the
committees of the Board on which he served, with the exception of William A.
Hasler who was absent from the September 28, 1998 meeting.
Among the standing committees of the Board of Directors of the Company are
the Compensation Committee, the Audit Committee, and the Administrative
Committee. The Board of Directors does not have a Nominating Committee.
Selection of nominees for the Company's Board of Directors is made by the entire
Board of Directors.
The Board of Directors has a Compensation Committee which is currently
comprised of two non-employee directors: Norman E. Friedmann, Ph.D., and William
A. Hasler. Dr. Friedmann replaced Mr. Bolger as Chairman of the Compensation
Committee on December 14, 1998. The Compensation Committee is responsible for
establishing and reviewing annually the compensation levels of executive
officers of the Company and reviewing recommendations made by Company management
concerning salaries and incentive compensation for employees of the Company. The
Compensation Committee met once in 1998.
The Board of Directors has an Audit Committee comprised of two members,
John C. Bolger and William A. Hasler. The Audit Committee reviews the results
and scope of the audit and other services provided by the Company's independent
auditors and recommends the appointment of independent auditors to the Board of
Directors. See Proposal 2. The Audit Committee met once in 1998.
The Board of Directors has an Administrative Committee of the Company's
1991 Stock Incentive Plan which is comprised of two members, John C. Bolger and
William A. Hasler. The Administrative Committee did not meet in 1998.
Directors who are not employees of the Company received a fee of $1,000 per
meeting of the Board or committee of the Board attended in 1998, plus
reimbursement of expenses incurred in attending such meetings. If the Board of
Directors meeting and a committee meeting occur on the same day, directors who
attend both meetings receive only one fee. During 1998, each non-employee
director also received a quarterly retainer fee of $2,500. In addition, Dr.
Friedmann received $69,024 for consulting work he performed for the Company
during 1998. No other consulting fees were paid to directors for work performed
for the Company during 1998.
Under the 1994 Outside Directors Stock Option Plan (as amended in May 1998)
each eligible director is granted options to purchase 20,000 shares upon
appointment or election to the Board of Directors. Each year, eligible directors
are granted options to purchase an additional 5,000 shares. Prior to the May
1998 amendment, each eligible director was granted options to purchase 31,500
shares upon appointment or election to the Board of Directors; each year, each
eligible director was granted options to purchase an additional 6,000 shares.
Options vest monthly over a three-year period. Pursuant to this plan, each
director as of December 31, 1998, except Dr. Friedmann who joined the Board in
February 1998, and Mr. Green who joined in August 1998, received options to
purchase 5,000 shares of the Company's Common Stock at an exercise price of
$2.3938 per share during the year ended December 31, 1998. Dr. Friedmann
received options to purchase 31,500 shares at $7.5252 per share and Mr. Green
received options to purchase 20,000 shares at $4.8376 per share.
3
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS, OFFICERS, AND PRINCIPAL SHAREHOLDERS
The following table sets forth information as of January 11, 1999
concerning ownership of Common Stock by each director, each nominee, and the
Named Executive Officers (as defined below), all director nominees and Named
Executive Officers as a group, and the only persons known by the Company to own
5% or more of the outstanding shares of its Common Stock. Unless otherwise
noted, the listed persons have sole voting and dispositive powers with respect
to the shares shown as beneficially owned, subject to community property laws if
applicable.
Amount and Nature of
Beneficial Ownership(5)
-----------------------------
Name Number Percent
---- ------ -------
Beneficial Owners and Management
State of Wisconsin Investment Board (1) 2,690,000 11.98
121 East Wilson Street
Madison, WI 53702
Dimensional Fund Advisors Inc. (2) 1,561,100 6.95
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Harvey E. Wagner (3) 628,791 2.80
Ram A. Banin, Ph.D. (3) 538,750 2.35
David G. Messerschmitt, Ph.D. (3) (4) 189,521 *
William A. Hasler (3) 61,417 *
John C. Bolger (3) 50,917 *
Norman E. Friedmann, Ph.D. (3) 20,639 *
Donald Green (3) 3,890 *
Arthur H. Wilder (3) 37,000 *
All directors and named executive officers
as a group (eight persons) (3) 1,530,925 6.61
- ----------
* Less than 1%
(1) Based on a Schedule 13G/A filed with the Securities and Exchange Commission
on February 2, 1999 by the State of Wisconsin Investment Board
("Wisconsin"). Wisconsin has the sole power to vote and dispose of all
2,690,000 shares.
(2) Based on a Schedule 13G filed with the Securities and Exchange Commission
on February 11, 1999 by Dimensional Fund Advisors Inc. ("Dimensional").
Dimensional has the sole power to vote and dispose of all 1,561,100 shares.
(3) Includes shares issuable upon exercise of options to purchase the Company's
Common Stock under the Company's stock option plans that are exercisable
within 60 days of January 11, 1999.
(4) Includes shares held in a family trust/family foundation in which the
director controls or shares investment and voting power.
(5) Beneficial ownership is determined in accordance with the rules of the SEC.
In computing the number of shares beneficially owned by a person and the
percentage ownership of that person, shares of Common Stock subject to
options or warrants held by that person that are currently exercisable or
exercisable within 60 days of January 11, 1999 are deemed outstanding. Such
shares, however, are not deemed outstanding for the purposes of computing
the percentage ownership of any other person. Except as indicated in the
footnotes to this table and pursuant to applicable community property laws,
each shareholder named in the table has sole voting and investment power
with respect to the shares set forth opposite such shareholder's name.
Percentage ownership is based on 22,452,606 shares of Common Stock
outstanding on January 11, 1999.
4
<PAGE>
COMPENSATION COMMITTEE REPORT
The report of the Compensation Committee (the "Committee") shall not be
deemed incorporated by reference by any general statement into any filing under
the Securities Act of 1933 or under the Securities Exchange Act of 1934 and
shall not be otherwise deemed filed under such Acts.
The Company's compensation program is reevaluated annually. The program,
designed to encourage teamwork and cooperation and to motivate key personnel,
establishes a base salary for each executive with annual cash incentives to be
paid based on attainment of defined performance goals. The overall structure of
the plan is the same for corporate staff, functional leaders, and other key
personnel in that specific targets are set for each individual. The target bonus
(up to 30% of salary) is paid to an individual achieving expected performance.
Higher percentages may be paid for extraordinary performance.
The annual targets are set by the Committee based on recommendations from
members of executive management at the end of the previous year and include
between two and five specific performance measures focused in the individual's
area of responsibility. The performance of executive officers is measured based
on overall Company performance, including earnings per share. All compensation
awarded is at the discretion of the Board of Directors.
The Committee recognizes that stock options are considered a standard
component of competitive compensation packages throughout the industry. As part
of the Company's longer term incentive compensation program, generally all key
employees, including executive officers, are eligible for awards under the
Company's 1991 Stock Incentive Plan, which permits the grant of stock options or
restricted stock. As the options provide value to the owner only when the price
of the Company's stock increases above the grant price of the options, senior
management attains the perspective of a shareholder with regard to the Company's
financial position. Stock option grants are based on a median competitive grant
level dependent only on a threshold level of corporate performance. Stock
options are generally granted at a price equal to the fair market value on the
date of the grant. The Committee has the authority to grant additional options
at year-end (within ranges established at the beginning of the year) for
individuals believed to have exhibited extraordinary performance during the
year.
Senior management also participates in Company-wide employee benefit plans,
including the Company's Profit Sharing/401(k) Plan. Benefits under these plans
are not dependent upon individual performance.
The Committee believes that executive compensation should not only be
within competitive norms, but also be highly related to individual and corporate
performance. The 1999 base salaries for Dr. Ram Banin, the Chief Executive
Officer, and all other executive officers were established at a meeting of the
Compensation Committee of the Board of Directors held on February 16, 1999 based
upon the Company's 1998 performance. The 1997 and 1998 base salary for Dr. Banin
was $230,000 and $250,000, respectively. Effective January 1, 1999, Dr. Banin's
base salary was increased to $262,500 for his leadership effort and commitment
to the company and he was also granted the right to purchase an additional
120,000 shares of Common Stock.
Compensation Committee
John C. Bolger (1)
Norman E. Friedmann, Ph.D. (2)
William A. Hasler
February 16, 1999
- ----------
(1) Mr. Bolger was Chairman of the Compensation Committee through December 13,
1998.
(2) The Board of Directors elected Dr. Friedmann as Chairman of the
Compensation Committee on December 14, 1998.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to stock
option grants during fiscal years ended December 31, 1998, 1997, and 1996 to the
Company's Chief Executive Officer and the Company's other most highly
compensated executive officers (collectively, the "Named Executive Officers").
In accordance with the rules of the SEC, also shown below is the potential
realizable value over the term of the option (the period from the grant date to
the expiration date) based on assumed rates of stock appreciation from the
option exercise price of 5% and 10%, compounded annually. These amounts are
based on certain assumed rates of appreciation and do not represent the
Company's estimate of future stock price. Actual gains, if any, on stock option
exercises will depend on the future performance of the Common Stock.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
-------------------------------------- ---------------
Number
of Securities
Other Underlying
Annual Options/ All Other
Name and Principal Position Year Salary ($) Bonus ($) Compensation ($) SARs(#) (1) (2) Compensation ($) (3)
- --------------------------- ---- ---------- --------- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ram A. Banin, Ph.D. 1998 250,000 -- -- -- 5,000
President and Chief 1997 230,000 -- -- 625,000(6) 4,750
Executive Officer (4) 1996 230,000 -- 20,696(5) 75,000 4,750
Arthur H. Wilder, 1998 165,000 -- -- -- 5,000
Chief Financial Officer, 1997 17,558 -- -- 110,000(8) --
Secretary, and Treasurer (7) 1996 -- -- -- -- --
</TABLE>
- ----------
(1) Reflects options only. No SARs have been issued.
(2) Options have been adjusted for the three-for-two split in May of 1996.
(3) These amounts represent the amounts accrued for the Company's contributions
to the Company's Profit Sharing/401(k) Plan for 1998, 1997, and 1996,
respectively, and allocated to the named executive officers.
(4) Dr. Banin was appointed as Chief Executive Officer and elected to serve on
TCSI's Board of Directors effective July 1, 1997.
(5) Represents cash paid in lieu of accrued vacation.
(6) This amount includes a bonus of 500,000 options in accordance with Dr.
Banin's amended employment agreement dated June 11, 1997.
(7) Mr. Wilder joined TCSI on November 21, 1997.
(8) This amount includes 85,000 options granted as part of Mr. Wilder's
employment agreement.
OPTION/SAR GRANTS IN FISCAL YEAR ENDED DECEMBER 31, 1998
None.
6
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR ENDED
DECEMBER 31, 1998 AND OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised In-the-
Shares Options/SARs at Money Options/SARs at
Acquired on Value December 31, 1998 (#) December 31, 1998 ($)
Name Exercise (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable (1)
---- ------------ ------------ ------------------------- -----------------------------
<S> <C> <C> <C> <C>
Ram A. Banin, Ph.D. 15,000 43,751 188,750/571,250 0/0
Arthur H. Wilder -- -- 21,250/88,750 0/0
</TABLE>
- ----------
(1) The market closing price at December 31, 1998 was $2.094.
TEN-YEAR OPTION/SAR REPRICINGS
<TABLE>
<CAPTION>
Length of
Original Option
Market Price Term Remaining
Number of of Stock at Exercise Price at Date of
Options/SARs Time of at Time of New Repricing or
Repriced or Repricing or Repricing or Exercise Amendment
Name and Principal Position Date Amended (#) Amendment Amendment Price (yrs)
- --------------------------- ---- ----------- ------------ -------------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Ram A. Banin, Ph.D.,
President and CEO (2) 1/28/97 75,000 $6.625 $11.1667 $6.625 4.9
</TABLE>
- ----------
(2) On January 13, 1997, the Board of Directors approved an exchange of
outstanding stock options for new options with an exercise price equal to
the fair market value of the Company's Common Stock on January 28, 1997.
This exchange offer was open to all employees of the Company. The new
options were issued January 28, 1997 with a six-year life. Executive
options vest at 25 percent per year for four years; non-executive options
vest 50 percent the first year, then 25 percent each year thereafter until
fully vested.
7
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG TCSI CORPORATION,
NASDAQ MARKET INDEX AND THE NASDAQ TOTAL RETURN INDEX FOR
COMPUTER & DATA PROCESSING SERVICES
The Comparison Stock Performance Graph below shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934, except to the extent the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts. The following graph assumes $100 invested on
December 31, 1993. The graph further assumes all dividends are reinvested. The
comparison indices utilized are the Nasdaq CRSP Total Return Index for the
Nasdaq Stock Market, U.S. companies (the "Nasdaq Market Index") and the Nasdaq
CRSP Total Return Index for Computer & Data Processing Services, SIC 737 (the
"Peer Group"). Historic stock price performance should not be considered
indicative of future stock price performance.
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
TCSI Nasdaq Market Index Peer Group
---- ------------------- ----------
Dec-93 100 100 100
Dec-94 144 98 121
Dec-95 260 138 185
Dec-96 132 170 228
Dec-97 168 208 280
Dec-98 44 294 502
Source: Center for Research in Security Prices (CRSP) at the University of
Chicago and the Nasdaq Stock Market. In previous years, data was
obtained from Media General Financial Services, Inc.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None.
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Ernst & Young LLP as independent
auditors of the Company for the year ending December 31, 1999. If the
shareholders fail to ratify the appointment, the Board of Directors will
reconsider whether or not to retain that firm. Ernst & Young LLP or its
predecessor has audited the Company's financial statements since 1987.
Representatives of Ernst & Young LLP are expected to be at the Annual Meeting.
These representatives will have the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2.
8
<PAGE>
SHAREHOLDER PROPOSALS
Proposals of shareholders that are intended to be presented at the
Company's 2000 Annual Meeting of Shareholders must be received by the Company no
later than December 8, 1999. These proposals may be included in next year's
Proxy Statement if they comply with certain rules and regulations promulgated by
the Securities and Exchange Commission.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and Securities and
Exchange Commission regulations requires the Company's directors, certain
officers and greater than ten percent stockholders to file initial reports of
ownership of Common Stock and equity securities of the Company on Form 3 and
changes in ownership of Common Stock and equity securities of the Company on
Forms 4 or 5 with the Securities and Exchange Commission. The Company undertakes
to file such forms on behalf of the reporting person pursuant to a power of
attorney given to certain attorneys-in-fact. Such reporting officers, directors
and greater than ten-percent stockholders are also required by Securities and
Exchange Commission rules to furnish the Company with copies of all Section
16(a) reports they file.
Based solely on its review of copies of such reports received or written
representations that no other reports were required from such executive
officers, directors and ten percent stockholders, the Company believes that all
Section 16(a) filing requirements applicable to its directors, executive
officers and greater than ten-percent stockholders were complied with during
fiscal year 1998.
ANNUAL REPORT TO SHAREHOLDERS
The Company's 1998 Annual Report on Form 10-K and 1998 Annual Report to
Shareholders accompany this Proxy Statement.
OTHER BUSINESS
The Board of Directors knows of no other matters to be presented at the
Annual Meeting, but if any other matters should properly come before the
meeting, it is intended that the persons named in the accompanying proxy will
vote the same in accordance with their best judgment.
By Order of the Board of Directors
/s/ Arthur H. Wilder
Arthur H. Wilder
Chief Financial Officer,
Treasurer, and Secretary
April 2, 1999
9
