<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to Rule 14a-11(c) or Rule 14a-12
BARRA, 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] 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 indextify the filling 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:
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<PAGE>
BARRA, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
---------------------------------------------
DATE: WEDNESDAY, AUGUST 4, 1999
TIME: 2:00 P.M.
PLACE: CLAREMONT RESORT
41 TUNNEL ROAD
BERKELEY, CA 94705
---------------------------------------------
Fellow stockholder:
You are cordially invited to attend the 1999 Annual Meeting of Stockholders of
BARRA, Inc. At our Annual Meeting, we will ask you to:
- Elect six directors;
- Ratify Deloitte & Touche LLP as our independent auditors for the
fiscal year ended March 31, 2000; and
- Transact any other business properly presented at the Annual Meeting.
You can vote if you are a stockholder of record at the close of business on June
7, 1999.
You are invited to attend the meeting in person. Whether or not you plan to
attend the meeting, it is very important that your shares be represented and
voted. PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT AS SOON
AS POSSIBLE IN THE ENCLOSED ENVELOPE. Any stockholder attending the meeting may
vote in person even if he or she has already returned a proxy.
Sincerely yours,
/s/ Andrew Rudd
Andrew Rudd
Chairman of the Board and Chief Executive Officer
Berkeley, California
June 29, 1999
<PAGE>
BARRA, INC.
2100 MILVIA STREET
BERKELEY, CALIFORNIA 94704
PROXY STATEMENT
GENERAL
The enclosed Proxy is solicited on behalf of BARRA, Inc., a Delaware corporation
("BARRA", the "Company", "we", "us" or "our"), for our 1999 Annual Meeting of
Stockholders or at any adjournment or postponement of the meeting.
You are invited to attend our Annual Meeting, which will be held on August 4,
1999, beginning at 2:00 p.m. The meeting will be held at the Claremont Resort,
located at 41 Tunnel Road, Berkeley, California.
These proxy solicitation materials are being mailed starting June 29, 1999,
together with BARRA's Annual Report on Form 10-K for the fiscal year ended March
31, 1999.
RECORD DATE
Stockholders of record at the close of business on June 7, 1999 are entitled to
receive this notice and to vote their shares at the Annual Meeting. On the
record date there were 14,107,751 shares of BARRA's common stock outstanding.
VOTING
Your vote is important. The shares represented by the proxies we receive will be
voted as you instruct. If you give no voting instructions, the shares will be
voted as the Board of Directors recommends.
You may revoke your proxy any time before it is exercised by (1) delivering
written notice of revocation to the Secretary of the Company, (2) timely
delivery of a valid, later-dated proxy card or (3) attending the Annual Meeting
and voting in person. If your shares are held in the name of a bank, broker or
other holder of record, you must obtain a proxy card, executed in your favor,
from the holder of record to be able to vote at the Annual Meeting.
YOU MAY SAVE US THE EXPENSE OF A SECOND MAILING BY VOTING PROMPTLY. Simply mark
your proxy card, date and sign it, and return it in the enclosed postage-paid
envelope.
Each stockholder is entitled to 1 vote per share on each matter submitted at the
meeting. The holders of a majority of the outstanding shares of common stock,
present in person or by proxy, will constitute a quorum for the transaction of
business at the Annual Meeting. Approval of the proposals described in this
Proxy Statement requires the affirmative vote of a majority of the shares
present (in person or by proxy) at the Annual Meeting and entitled to vote.
All shares that have been properly voted and not revoked will be voted at the
Annual Meeting as our stockholders direct. If you sign your proxy card but do
not give voting instructions, the shares represented by that proxy will be voted
as recommended by the Board of Directors. If you expressly abstain from voting
on any matter, or if a broker returns a "non-vote" proxy on any matter, then the
shares will be deemed present at the meeting for purposes of determining a
quorum but will be excluded when counting the vote on that matter. However,
because stockholder approval requires the affirmative vote of at least a
majority of the number of shares constituting a quorum, in certain cases an
abstention or broker non-vote can have the same effect as a negative vote.
If any other matters properly come before the Annual Meeting, the persons named
in the enclosed proxy card will have the discretion to vote on those matters for
you. It is their intention in such situations to vote the shares represented by
the proxies as the Board of Directors recommends. On the date this proxy
statement went to press, we did not know of any other matter to be raised at the
Annual Meeting.
SOLICITATION
We will pay the expenses of soliciting proxies. We may reimburse brokerage firms
and other persons representing beneficial owners of shares for their expenses in
forwarding solicitation materials to those owners. Our directors, officers or
employees, without additional compensation may also solicit proxies on our
behalf, personally or by telephone, electronic transmission or fax. Except as
described in this paragraph, we do not currently intend to solicit proxies other
than by mail.
<PAGE>
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR YEAR 2000 ANNUAL MEETING
The Company must receive stockholder proposals intended to be included in
BARRA's proxy statement for the Year 2000 Annual Meeting of Stockholders no
later than February 26, 2000. Stockholders who want to present a proposal at the
Year 2000 Annual Meeting that is not included in BARRA's proxy statement should
notify the Secretary of the Company of the proposal by May 11, 2000. Without
that notice, proxy holders appointed by the Board of Directors will be entitled
to exercise their discretionary voting authority when the proposal is raised at
the annual meeting, without any mention of the proposal in the proxy statement.
STOCK SPLIT
Unless the context requires otherwise, all share and per share amounts in this
Proxy Statement are adjusted to reflect a 3-for-2 stock split of our common
stock effective September 22, 1997.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
NOMINEES
Our Bylaws provide that the Board of Directors have between 4 and 7 persons,
with the exact number to be fixed by the Board of Directors or stockholders. The
currently authorized number of directors is 6. A board of 6 directors is to be
elected at the Annual Meeting. Unless otherwise instructed, the proxy holders
will vote the proxies received by them for the 6 nominees named below, all of
whom are currently directors of BARRA.
We are not aware of any nominee who will be unable or will decline to serve as a
director. If any nominee is unable or declines to serve as a director at the
time of the Annual Meeting, the proxies will be voted for any nominee designated
by the Board of Directors to fill the vacancy. The term of office of each
director will continue until the next Annual Meeting of Stockholders or until
his or her successor is duly elected and qualified.
Below is certain information regarding BARRA's nominees for director:
<TABLE>
<CAPTION>
Name Age Principal Occupation Director Since
- ---- --- -------------------- --------------
<S> <C> <C> <C>
A. George Battle (1)(2)(3) 55 Senior Fellow, Aspen Institute and Retired Managing 1996
Partner of Market Development, Andersen Consulting
John F. Casey 56 Chairman of BARRA RogersCasey, Inc., a subsidiary 1996
of BARRA
M. Blair Hull(1)(2)(4) 57 Managing Principal of Hull Trading Company, L.L.C. 1992
Norman J. Laboe(3)(4) 60 Of Counsel to Mackenzie & Albritton, LLP 1986
Ronald J. Lanstein(1)(2) 65 Retired 1986
Andrew Rudd(3)(4) 49 Chairman of the Board and CEO of BARRA 1986
</TABLE>
- -----------------------------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
(3) Member of Search Committee.
(4) Member of Nominating Committee.
BUSINESS EXPERIENCE OF THE DIRECTORS
GEORGE BATTLE
Served from 1968 until his retirement in June 1995 in various roles of
increasing responsibility with Andersen Consulting; Senior Fellow at the Aspen
Institute, an international nonprofit educational institution; Director of
PeopleSoft, Inc., Fair Isaac Company, Masters Select Equities Fund and Masters
Select International Equities Fund.
2
<PAGE>
JOHN F. CASEY
Chairman of our subsidiary BARRA RogersCasey, Inc.; associated with Rogers Casey
& Associates, Inc. ("RogersCasey"), an investment consulting and special assets
advisory firm, since its formation in 1976 through its acquisition by BARRA in
1996; President and CEO of RogersCasey from 1989 until April 1998; previously
worked at Dreher Rogers & Associates; founder of investment manager research at
Paine, Webber, Jackson & Curtis; past director and manager of research at Callan
Associates.
M. BLAIR HULL
Founder and Managing Principal since its inception in 1985 of Hull and
Associates, L.L.C., a global market maker in equities and equity derivatives,
with related businesses in agency execution services and asset management;
member of the Board of Trustees of the Cincinnati Stock Exchange; on the Board
of Trustees of the University of California Santa Barbara Foundation and the
Investment Committee of Santa Clara University; on the Board of Directors of
Options Clearing Corporation from 1992 until 1998; on the Illinois Institute of
Technology's Financial Markets and Trading Board of Advisors; on Vanderbilt
University's Advisory Committee of the Financial Markets Research Center.
NORMAN J. LABOE
Of Counsel to the law firm Mackenzie & Albritton, LLP since April 1994; partner
in the law firm Graham & James from 1971 until April 1994.
RONALD J. LANSTEIN
Our Vice-Chairman from 1993 until 1998; associated with BARRA and its
predecessors since 1978; BARRA's Chief Financial Officer and a Vice President
until retiring in December 1993.
ANDREW RUDD
Our Chairman since 1992; associated with BARRA and its predecessors since 1975;
CEO of BARRA and its predecessors since 1984; President of BARRA and its
predecessors from 1984 to 1992; professor of finance and operations research at
Cornell University between 1977 and 1982. In March 1999, we announced plans to
conduct a search for a new Chief Executive Officer. That search was continuing
as of the mailing date of these proxy materials. Following the appointment of a
new Chief Executive Officer, we expect Dr. Rudd to remain as Chairman.
There are no family relationships among any of our directors or executive
officers. The directors who are not our employees are reimbursed for their
expenses for traveling to meetings. They receive compensation of $2,000 for each
quarterly meeting and $500 for each special meeting they attend. Also, each
non-employee director who has been granted options to purchase BARRA's common
stock ("Directors Options") under the BARRA, Inc. Directors Option Plan (the
"Directors Option Plan") is automatically granted on each anniversary date
following the initial option grant Directors Options to purchase 2,000 shares of
common stock. All Directors Options granted under these automatic provisions are
immediately exercisable, non-statutory options.
BOARD MEETINGS AND COMMITTEES
Our Board of Directors held 6 meetings during the fiscal year ended March 31,
1999. The Board of Directors has an Audit Committee, a Compensation Committee, a
Search Committee and a Nominating Committee. During the fiscal year ended March
31, 1999, each director attended 75% or more of the total number of meetings of
the Board of Directors and the committees on which he served.
The Audit Committee includes Messrs. Battle, Hull and Lanstein. The Audit
Committee recommends the engagement of independent auditors, consults with the
auditors regarding the scope and results of annual audits and the reviews of our
system of internal accounting controls. The Audit Committee met 3 times during
the fiscal year ended March 31, 1999.
The Compensation Committee includes Messrs. Battle, Hull and Lanstein. The
Compensation Committee ratifies the compensation paid to our executive officers,
approves grants of options to purchase BARRA's common stock ("Options") under
the BARRA, Inc. Stock Option Plan (the "Option Plan") and administers the
automatic and new grants of Directors Options under the Directors Option Plan.
The Compensation Committee also administers our Employee Stock Purchase Plan and
the Rogers, Casey & Associates, Inc. 1992 Stock Option Plan. The Compensation
Committee met 4 times during the fiscal year ended March 31, 1999.
3
<PAGE>
As noted above, we are currently conducting a search for a new Chief Executive
Officer. The Board of Directors has established a Search Committee to review and
recommend candidates for this position. The Search Committee includes Messrs.
Battle, Laboe and Rudd, as well as C.E. Beckers (President of BARRA
International, Ltd.) and James D. Kirsner (Chief Financial Officer).
The Board of Directors has established a Nominating Committee to review and
recommend candidates for the Board of Directors. The Nominating Committee
includes Messrs. Hull, Laboe and Rudd, but is not currently an active committee
and did not meet during the fiscal year ended March 31, 1999. If our
stockholders recommend candidates to the Board of Directors, we expect that the
full Board of Directors, not the Nominating Committee, will consider those
recommendations.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE ABOVE
NOMINEES AS DIRECTORS.
PROPOSAL NO. 2 - APPROVAL OF AUDITORS
The Board of Directors has selected Deloitte & Touche LLP as our independent
auditors for the fiscal year ending March 31, 2000, subject to the approval of
our stockholders. If a majority of our stockholders do not ratify the selection
of Deloitte & Touche LLP as our independent auditors, the Board of Directors
will reconsider its selection.
Deloitte & Touche LLP has audited our financial statements since 1986. Its
representatives are expected to be at the Annual Meeting to answer appropriate
questions. They will also have the opportunity to make a statement if they
desire to do so.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE SELECTION OF
DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS.
PRINCIPAL STOCKHOLDERS AND SHARE OWNERSHIP BY MANAGEMENT
The table below gives certain information as of June 7, 1999 regarding the
beneficial ownership of our common stock by (1) each person who is known by us
to be the beneficial owner of more than 5% of the outstanding shares of common
stock, (2) each executive officer named in the tables under "Executive
Compensation" below, (3) each director, and (4) all executive officers and
directors as a group:
<TABLE>
<CAPTION>
Number of
Name Address Shares Owned(1) Percent(2)
- ----- ---------- --------------- ----------
<S> <C> <C> <C>
Andrew Rudd(3) c/o BARRA, Inc. 2,836,476 20.07%
2100 Milvia Street
Berkeley, California 94704
Edward D. Baker 395 Hampton Road 975,650 6.92%
Piedmont, California 94611
C.E. Beckers(4) N/A 555,001 3.91%
Kamal Duggirala(5) N/A 538,650 3.80%
Ronald J. Lanstein(6) N/A 518,250 3.67%
John F. Casey(7) N/A 181,983 1.29%
James D. Kirsner(8) N/A 144,604 1.02%
M. Blair Hull(9) N/A 40,000 *
A. George Battle(10) N/A 24,750 *
Norman J. Laboe(11) N/A 18,500 *
Andrew Huddart(12) N/A 6,698 *
All executive officers and N/A 5,211,262 35.83%
directors as a group
(13 persons)(13)
</TABLE>
- ---------------------
* Less than 1.0%.
4
<PAGE>
(1) Except as indicated in the above chart, the related footnotes or
applicable community property laws, we believe that all persons named in
the table have sole voting and investment power over all shares of common
stock beneficially owned by them.
(2) Based on a total of 14,107,751 shares of common stock outstanding as of
June 7, 1999 plus shares issuable upon exercise of options granted under
the Option Plan and the Directors Option Plan where the options are
currently exercisable or will become exercisable within 60 days after June
7, 1999. There are no options to purchase common stock under our Employee
Stock Purchase Plan or the Rogers, Casey & Associates, Inc. 1992 Stock
Option Plan that are held by any person referred to in the table and that
will become exercisable within 60 days after June 7, 1999.
(3) Includes the following: (i) 2,653,200 shares held of record by the Rudd
Family Trust, dated September 12, 1997, which was formed for the benefit
of Dr. Rudd and his wife Virginia Rudd (each of whom are trustees of the
Rudd Family Trust), and for the benefit of certain other members of the
Rudd family, (ii) 23,028 shares issuable upon exercise of Options granted
under the Option Plan that are currently exercisable or that will become
exercisable within 60 days after June 7, 1999, (iii) 72,300 shares held in
the Cann 1997 Trust, dated January 10, 1997, which was formed for the
benefit of Dr. Rudd's four children with Dr. Rudd's brother and
brother-in-law as trustees, (iv) 50,448 shares held in trust under the
California Uniform Transfers to Minors Act for Dr. Rudd's four children,
and (v) 37,500 shares held in the Rudd Family Foundation with Dr. Rudd and
his wife acting as trustees. Dr. Rudd disclaims beneficial ownership of
the 72,300 shares held in the Cann 1997 Trust and the 50,448 shares held
in the California Uniform Transfers to Minors Act for the benefit of his
children.
(4) Includes 457,500 shares held of record by Dr. Beckers and his wife in
joint tenancy with right of survivorship, 1,351 shares held of record
solely by Dr. Beckers and 96,150 shares issuable upon exercise of Options
granted under the Option Plan that are currently exercisable or that will
become exercisable within 60 days after June 7, 1999.
(5) Includes 457,500 shares held by Mr. Duggirala and his wife in joint
tenancy with right of survivorship, and 81,150 shares issuable upon
exercise of Options granted under the Option Plan that are currently
exercisable or that will become exercisable within 60 days after June 7,
1999.
(6) Includes 3,000 shares issuable upon exercise of Options granted under the
Option Plan and 7,000 shares issuable upon exercise of Directors Options
granted under the Directors Option Plan that are currently exercisable or
that will become exercisable within 60 days after June 7, 1999. Mr.
Lanstein with his wife holds all of the shares of common stock of record
in joint tenancy with right of survivorship.
(7) Includes 110,793 shares held of record by Mr. Casey and 71,190 shares
held of record by Mr. Casey's wife.
(8) Includes 45,000 shares held in the Kirsner Family Trust UTA, dated May 24,
1993, with Mr. Kirsner and his wife as trustees, 664 shares held of record
solely by Mr. Kirsner and 98,940 shares issuable upon exercise of Options
granted under the Option Plan that are currently exercisable or that will
become exercisable within 60 days after June 7, 1999.
(9) Includes 3,000 shares issuable upon exercise of Options granted under the
Option Plan and 7,000 shares issuable upon exercise of Directors Options
granted under the Directors Option Plan that are currently exercisable or
that will become exercisable within 60 days after June 7, 1999. Also
includes 15,000 shares held of record by Mr. Hull and 15,000 shares held
of record by Mr. Hull and his ex-wife in joint tenancy with right of
survivorship.
(10) Includes 3,000 shares issuable upon exercise of Options granted under the
Option Plan and 7,000 shares issuable upon exercise of Directors Options
granted under the Directors Option Plan that are currently exercisable or
that will become exercisable within 60 days after June 7, 1999. Also
includes 14,000 shares held of record by Mr. Battle and 750 shares held in
the Daniel KW Battle Trust, which was formed in 1996 for the benefit of
Mr. Battle's son with Mr. Battle as trustee.
(11) Includes 3,000 shares issuable upon exercise of Options granted under the
Option Plan and 7,000 shares issuable upon exercise of Directors Options
granted under the Directors Option Plan that are currently exercisable or
that will become exercisable within 60 days after June 7, 1999.
(12) Includes 4,000 shares issuable upon exercise of Options granted under the
Option Plan that are currently exercisable or that will become exercisable
within 60 days after June 7, 1999.
5
<PAGE>
(13) Includes 410,458 shares issuable upon exercise of Options granted under
the Option Plan and 28,000 shares issuable upon exercise of Directors
Options granted under the Directors Option Plan that are currently
exercisable or that will become exercisable within 60 days after June 7,
1999.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers, and stockholders who beneficially own more than 10% of
BARRA's common stock, to file with the Securities and Exchange Commission
("SEC") reports of holdings and transactions in our common stock. Our officers,
directors and greater than 10% stockholders are required by SEC regulation to
furnish us with copies of all reports they file under Section 16(a).
Based on our records and other information, we believe that during the fiscal
year ended March 31, 1999 our directors and executive officers, as well as our
greater than 10% stockholders, met all applicable SEC filing requirements.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
This summarizes compensation paid or accrued by us to our CEO and each of our 4
other most highly compensated executive officers, determined as of the end of
the last fiscal year (collectively, the "Named Officers"), during the fiscal
years ended March 31, 1997, 1998 and 1999:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION(1) COMPENSATION
------------------------------------------------------------- ---------------
OTHER SHARES
NAME AND ANNUAL UNDERLYING
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS(#)(2)
- ------------------- ------- ---------- --------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
Andrew Rudd 1999 225,000 350,000 N/A 30,000
Chairman and Chief 1998 225,000 367,500 N/A 37,500
Executive Officer 1997 225,000 525,000 N/A 0
C.E. Beckers(3) 1999 166,519 275,000 N/A 20,000
President of BARRA 1998 165,510 281,250 N/A 32,250
International, Ltd. 1997 188,234 375,000 N/A 0
Kamal Duggirala 1999 175,000 295,000 N/A 20,000
President 1998 175,000 281,250 N/A 32,250
1997 175,000 375,000 N/A 0
James D. Kirsner 1999 152,500 222,500 N/A 20,000
Chief Financial Officer 1998 152,500 212,500 N/A 19,650
1997 152,500 232,500 N/A 0
Andrew Huddart(4) 1999 200,000 129,000 N/A 30,000
Senior Vice President 1998 126,667 25,000 N/A 20,000
President, Investment 1997 -- -- N/A --
Data Products
</TABLE>
- ----------------
(1) Includes amounts deferred under our 401(k) Plan.
(2) All Options granted to date under the Option Plan are non-statutory options.
(3) A portion of Dr. Beckers' cash compensation is not paid in U.S. Dollars.
For the above table, that portion of Dr. Beckers' cash compensation has
been converted into U.S. Dollars at applicable month-end exchange rates.
(4) Mr. Huddart joined BARRA and became an executive officer in August 1997.
The $126,667 salary amount listed for fiscal 1998 represents actual cash
salary paid during his term of employment through March 31, 1998, based on
an annualized salary for that fiscal year of $190,000.
6
<PAGE>
STOCK OPTION GRANTS
This table gives information regarding Option grants to the Named Officers
during the fiscal year ended March 31, 1999:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term(1)
--------------------------------------------------------------- -----------------------
Number of % of Total
Shares Options
Underlying Granted to Exercise
Options Employees in Price(3) Expiration
Name Granted(#)(2) Fiscal Year ($/Share) Date(2) 5%($) 10%($)
- ---- ------------- ----------------- --------------------------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Andrew Rudd(4) 30,000 5.40 23.5125 02/04/2004 113,040 327,365
C.E. Beckers(4) 20,000 3.60 21.3750 02/05/2009 268,851 681,324
Kamal Duggirala(4) 20,000 3.60 21.3750 02/05/2009 268,851 681,324
James D. Kirsner(4) 20,000 3.60 21.3750 02/05/2009 268,851 681,324
Andrew Huddart(4) 30,000 5.40 21.3750 02/05/2009 403,276 1,021,986
</TABLE>
- --------------------------------
(1) Gains are reported net of the Option exercise price but before taxes
associated with the exercise. The potential realizable values presented in
the table are at assumed stock price appreciation rates of 5% and 10%,
compounded annually over the maximum term of the Options. The 5% and 10%
appreciation rates are disclosed in accordance with SEC rules and are not
intended to forecast possible future appreciation, if any, in our stock
price. Actual gains, if any, on Option exercises are dependent on future
performance of our common stock and the optionee's continued employment
through the vesting period.
(2) Options become exercisable in 5 equal annual installments beginning on the
first anniversary of the grant date. Except for the Options granted to Dr.
Rudd (which expire 5 years from the grant date), all Options expire 10
years and a day from the grant date.
(3) The exercise price of each Option is based on the closing price of BARRA's
common stock as quoted on The Nasdaq Stock Market ("NASDAQ") on the date of
the grant, or if NASDAQ is closed on the date of grant, the next day that
NASDAQ is open (the "FMV"). Except for the Options granted to Dr. Rudd
(which were granted with an exercise price of 110% of the FMV), all other
Options granted to Named Officers were granted with an exercise price equal
to the FMV.
(4) Options were granted on February 4, 1999.
7
<PAGE>
OPTION EXERCISES AND YEAR-END HOLDINGS
This table gives information regarding Options exercised by each of the Named
Officers during the last fiscal year, and the value (stock price less exercise
price) of the remaining options held by those executive officers as of March 31,
1999 (the end of our last fiscal year):
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money
Options at Fiscal Options at Fiscal
Year End(#) Year End($)(1)
Shares ----------------------------- ----------------------------
Acquired on Value
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Andrew Rudd 26,472 486,455 11,028 94,500 107,223 2,184,014
C.E. Beckers -- -- 78,600 59,900 1,154,412 388,836
Kamal Duggirala -- -- 68,100 70,400 1,080,162 507,899
James D. Kirsner -- -- 88,740 49,760 1,684,755 368,370
Andrew Huddart -- -- 4,000 46,000 -- 97,500
</TABLE>
- --------------------------
(1) Based on the closing price of BARRA's common stock as reported
on NASDAQ on March 31, 1999 ($24.625) less the exercise price.
COMPENSATION COMMITTEE INTERLOCKS, INSIDER PARTICIPATION AND OTHER TRANSACTIONS
During the fiscal year ended March 31, 1999, the Compensation Committee included
Messrs. Battle, Hull and Lanstein, who are each members of our Board of
Directors and who are not currently executive officers of BARRA.
During the fiscal year ended March 31, 1999, our entire Board of Directors, as
well as the Compensation Committee, deliberated and took action on matters
regarding executive compensation. Of our executive officers, Dr. Rudd
participated, as a member of the Board of Directors, in deliberations concerning
certain executive compensation for the fiscal year ended March 31, 1999.
Norman J. Laboe, a director, is Of Counsel to the law firm Mackenzie & Albritton
LLP, which we paid approximately $161,683 in fees and expenses during the fiscal
year ended March 31, 1999. We have also retained Mackenzie & Albritton LLP
during the current fiscal year. Prior to that Mr. Laboe was a partner of Graham
& James, which was and continues to be retained by BARRA.
M. Blair Hull, a director, is the Managing Principal of Hull Trading Company,
L.L.C. During the fiscal year ended March 31, 1999, BARRA and its affiliates
received approximately $499,890 in revenue from certain proprietary software and
related data licensed to Hull Trading Company, L.L.C. and its affiliates.
A. George Battle, a director, provides certain consulting services as we request
from time to time. During the fiscal year ended March 31, 1999, Mr. Battle
received approximately $16,161 in fees and expenses from us for such consulting
services.
On April 24, 1998, Messrs. Battle, Lanstein, Laboe and Hull were each granted
Directors Options under automatic granting provisions of the Directors Option
Plan to purchase 2,000 shares of common stock at an exercise price of $20.50
(the average of the last reported bid and asked prices on that date). These
Directors Options are immediately exercisable, non-statutory options and
expire 10 years from the grant date.
8
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE AND
OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Compensation Committee currently includes 3 members of the Board of
Directors. It evaluates our executive compensation philosophies and monitors and
approves base salary and incentive compensation programs for executive
management, including Option Plan awards and payouts under our annual cash bonus
plan. In general, a committee of our senior management (the "Executive
Committee") provides recommendations to the Compensation Committee regarding:
(1) the total amount to be awarded under our incentive compensation programs,
(2) the base salaries and bonuses for all executive officers other than the CEO,
and (3) Option Plan awards for all employees. These recommendations are based
upon the compensation philosophies mentioned below, which have been adopted by
the Compensation Committee. For the fiscal year ended March 31, 1999, the
Executive Committee included Andrew Rudd (CEO), Kamal Duggirala (President),
James D. Kirsner (Chief Financial Officer), C.E. Beckers (President of BARRA
International, Ltd., a BARRA subsidiary), Sean Dickinson (Chief Technical
Officer as of February 3, 1999), Andrew Huddart (the head of our Investment Data
Products division) and Robert Honeycutt (Chief Operating Officer -- Mr.
Honeycutt resigned from BARRA as of February 2, 1999).
All decisions regarding the base salary and bonus of our CEO are made by the
Compensation Committee and ratified by the Board of Directors.
Our executive compensation philosophy recognizes a strong link among several
factors. These include the value received by our stockholders, our overall
financial health, customer satisfaction, employee morale and the need to
maintain a compensation program which will enable us to attract, retain,
motivate and reward executive officers who are likely to contribute to our long
term success. That philosophy involves the following three forms of
compensation:
1. BASE SALARIES. The base salaries of all of BARRA's executive officers,
including our CEO, are based on the person's qualifications and experience. In
the past, the base salaries of our executives have been kept below market
levels, with our annual bonus program providing the necessary equalizing factor.
Most executive base salaries have not been adjusted during the past two or more
fiscal years and they remain well below market levels. Base salaries are
reviewed annually and adjustments, if any, are effective in July. After the most
recent fiscal year, the compensation committee decided to increase the portion
of total compensation that comprises the base pay and decrease the portion of
short-term cash incentive pay. This was done to bring the executive compensation
practices more in line with those of similar companies, but still maintain a
very significant exposure to performance-based measures for each executive. This
program will be implemented in the fiscal year ending March 31, 2000.
2. MANAGEMENT BONUS PROGRAM. Our annual bonus plan has historically provided
substantial rewards for executive officers. Taken together with base salaries,
the bonus plan is designed so that each officer's overall compensation is
competitive and commensurate with his or her qualitative performance and the
resulting value returned to BARRA and our stockholders. Short-term cash
incentives for the CEO and each senior executive have components tied to the
following: achievement of BARRA's overall performance targets, business area or
area of responsibility performance, and individual performance. The awards made
for the fiscal year ended March 31, 1999 to our executive officers, including
our CEO, reflect the evaluation of these factors.
3. STOCK OPTION AWARDS. Long-term incentives in the form of Option Plan awards
recognize on-going contributions by our senior and middle management to BARRA's
value. As a result, these awards are primarily based on a person's position and
his or her relative base salary, but also depend on sustained -- and the
potential for above average -- levels of performance over time.
BOARD OF DIRECTORS
A. George Battle* John F. Casey M. Blair Hull*
Norman J. Laboe Ronald J. Lanstein* Andrew Rudd
- ------------------------
* Member of the Compensation Committee
9
<PAGE>
PERFORMANCE GRAPH
The graph below compares the five-year total return to stockholders (stock price
appreciation plus reinvested dividends) for BARRA common stock with the
comparable returns of two indexes: the Frank Russell 2000 Index and the Nasdaq
Computer & Data Processing Services Index. The graph assumes that you invested
$100 in BARRA common stock and in each of the indexes on March 31, 1994, and
that all dividends were reinvested. Points on the graph represent the
performance as of March 31st of each of the years indicated. PLEASE NOTE THAT
INTERNET COMPANIES, WHICH HAVE RECENTLY EXPERIENCED SIGNIFICANT FLUCTUATIONS IN
THEIR STOCK PRICES, ARE INCLUDED IN BOTH THE FRANK RUSSELL 2000 AND THE NASDAQ
COMPUTER & DATA PROCESSING SERVICES INDEX.
[GRAPHIC]
<TABLE>
<CAPTION>
------------------------------------------------------------------
MAR-94 MAR-95 MAR-96 MAR-97 MAR-98 MAR-99
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NASDAQ $100.00 $134.80 $190.91 $208.88 $365.36 $593.19
- -------------------------------------------------------------------------------------------
BARRA $100.00 $125.00 $235.94 $337.50 $534.38 $461.72
- -------------------------------------------------------------------------------------------
FRANK RUSSELL 2000 $100.00 $105.46 $135.85 $142.77 $207.21 $172.84
- -------------------------------------------------------------------------------------------
</TABLE>
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Andrew Rudd
Andrew Rudd
Chairman of the Board and CEO
June 29, 1999
10
<PAGE>
BARRA, INC. - PROXY
ANNUAL MEETING
AUGUST 4, 1999
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Andrew Rudd, Ronald J. Lanstein and Norman J.
Laboe, or any of them, each with full power of substitution, the lawful
attorneys and proxies of the undersigned to vote all of the shares of Common
Stock of BARRA, Inc. which the undersigned shall be entitled to vote at the
Annual Meeting of Stockholders to be held at the Claremont Resort, 41 Tunnel
Road, Berkeley, CA 94705, on Wednesday, August 4, 1999 at 2:00 p.m., local
time, and at any adjournments and postponements, with all the powers the
undersigned would possess if personally present, upon matters noted below.
The shares represented by this Proxy shall be voted as follows:
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE>
Please mark
your votes as
indicated in
this example /X/
FOR all WITHHOLD AUTHORITY
nominees to vote for all the
listed below nominees listed below
1. To elect as Directors of
BARRA, Inc. the nominees / / / /
listed below:
A. George Battle, John F. Casey, M. Blair Hull, Norman J. Laboe, Ronald J.
Lanstein, Andrew Rudd
NOTE: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE
THROUGH THAT NOMINEE'S NAME. UNLESS THE AUTHORITY TO VOTE FOR ALL THE
FOREGOING NOMINEES IS WITHHELD, THIS PROXY WILL BE DEEMED TO CONFER AUTHORITY
FOR EVERY NOMINEE WHOSE NAME IS NOT STRUCK.
FOR AGAINST ABSTAIN
2. To ratify the appointment of
Deloitte & Touche LLP as the / / / / / /
Independent Auditors of
BARRA, Inc. for the fiscal
year ending March 31, 2000.
3. In their discretion, the proxies
are authorized to vote upon such
other business as may properly
come before the meeting or any
postponement or adjournment.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER OF BARRA, INC. UNLESS OTHERWISE SPECIFIED, THE
SHARES SUBJECT TO THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2. THE BOARD
OF DIRECTORS OF BARRA, INC. RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
I/We do / / or do not / /
expect to attend the annual meeting at the Claremont Resort, 41 Tunnel Road,
Berkeley, CA 94705, on Wednesday, August 4, 1999 at 2:00 p.m., local time.
NOTE: Signature(s) should agree with name as printed on stock certificate(s).
Executors, administrators, trustees and other fiduciaries should so indicate
when signing. If more than one fiduciary, all should sign. ALL JOINT OWNERS
MUST SIGN.
Signature(s) Date
---------------------------------------- -----------
- -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
