<PAGE>
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
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
SCOPUS TECHNOLOGY, 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:
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(2) Aggregate number of securities to which transaction applies:
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(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:
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(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:
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(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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Notes:
<PAGE>
[LOGO OF SCOPUS TECHOLOGY]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 15, 1996
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Scopus
Technology, Inc., a California corporation (the "Company"), will be held on
Thursday, August 15, 1996, at 2:00 p.m., local time, at the Berkeley Marina
Marriott, 200 Marina Boulevard, Berkeley, California 94710 for the following
purposes:
1. To elect five (5) directors to serve for the ensuing year and until
their successors are duly elected and qualified.
2. To amend the Company's 1991 Stock Option Plan to increase the number
of shares available for issuance thereunder by 500,000 shares to an
aggregate of 3,700,000 shares.
3. To ratify the appointment of Coopers & Lybrand L.L.P. as independent
accountants for the Company for the 1997 fiscal year.
4. 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 July 17, 1996 are
entitled to notice of and to vote at the meeting.
All shareholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to sign and
return the enclosed proxy as promptly as possible in the postage-prepaid
envelope enclosed for that purpose. Any shareholder attending the meeting may
vote in person if he or she has returned a proxy.
By Order of the Board of Directors
A. Aaron Omid
Corporate Secretary
Emeryville, California
July 22, 1996
- - --------------------------------------------------------------------------------
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO
COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
- - --------------------------------------------------------------------------------
<PAGE>
SCOPUS TECHNOLOGY, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 15, 1996
The enclosed Proxy is solicited on behalf of the Board of Directors of
Scopus Technology, Inc. (the "Company") for use at the Annual Meeting of
Shareholders to be held on Thursday, August 15, 1996, at 2:00 p.m. local time,
or at any adjournment thereof, for the purpose set forth herein and in the
accompanying Notice of Annual Meeting of Shareholders. The Annual Meeting will
be held at the Berkeley Marina Marriott, 200 Marina Boulevard, Berkeley,
California 94710.
The proxy solicitation materials were mailed on or about July 22, 1996 to
all shareholders of record on July 17, 1996.
INFORMATION CONCERNING SOLICITATION AND VOTING
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it any time before its use by delivering to the Secretary of the Company,
Scopus Technology, Inc., Suite 700, 1900 Powell Street, Emeryville, California
94608, written notice of revocation or a duly executed proxy bearing a later
date, or by attending the meeting and voting in person.
RECORD DATE AND PRINCIPAL STOCK OWNERSHIP
Shareholders of record at the close of business on July 17, 1996 are
entitled to vote at the Annual Meeting. The issued and outstanding stock of the
Company on July 17, 1996 consisted of 11,876,147 shares of Common Stock, par
value $0.001 per share.
VOTING AND SOLICITATION
Proxies properly executed, duly returned to the Company and not revoked,
will be voted in accordance with the specifications made. Where no
specifications are given, such proxies will be voted as the management of the
Company may propose. If any matter not described in this proxy is properly
presented for action at the meeting, the persons named in the enclosed form of
proxy will have discretionary authority to vote according to their best
judgment.
With regard to the election of directors, votes may be cast in favor of or
withheld from each nominee; votes that are withheld will be excluded entirely
from the vote and will have no effect. Abstentions may be specified on the other
proposals and will be counted as present for the purposes of determining the
existence of a quorum regarding such item.
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<PAGE>
Except with respect to the election or removal of directors, each share of
Common Stock is entitled to one vote per share and the affirmative vote of a
majority of the shares present in person or by proxy is required for the
approval of any matters voted upon at the meeting or any adjournments thereof. A
quorum of shareholders is constituted by the presence, in person or by proxy, of
holders of record of Common Stock representing a majority of the aggregate
number of votes entitled to be cast.
The expense of the solicitation of proxies for this meeting, including the
cost of the mailing, will be borne by the Company. The Company requests that
brokerage houses and other custodians, nominees and fiduciaries forward
materials to the beneficial owners of shares of common stock held of record by
such persons and will reimburse such broker and other fiduciaries for their
reasonable out-of-pocket expenses incurred when the solicitation materials are
forwarded.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the next Annual
Meeting must be received by the Secretary, Scopus Technology, Inc., Suite 700,
1900 Powell Street, Emeryville, California 94608, no later than March 24, 1997.
PROPOSAL ONE:
ELECTION OF DIRECTORS
VOTE REQUIRED; RECOMMENDATION OF BOARD OF DIRECTORS
Each shareholder voting in the selection of directors may cumulate such
shareholder's votes and give one candidate a number of votes equal to the number
of directors to be elected multiplied by the number of votes to which such
shareholder's shares are entitled, or may distribute such votes on the same
principal among as many candidates as the shareholder chooses, provided that
votes cannot be cast for more than the total number of directors to be elected
at the meeting. However, no shareholder may cumulate votes for any candidate
unless the candidate's name has been placed in nomination prior to the voting
and at least one shareholder at the meeting has given notice of the intention to
cumulate votes prior to the voting.
A board of five (5) directors is to be elected at the Annual Meeting. The
Company's Board of Directors currently consists of five (5) persons. The five
(5) nominees receiving the highest number of Votes Cast will be elected as
directors for the ensuing year. For this purpose, the "Votes Cast" are defined
under California law to be the shares of the Company's Common Stock represented
and "voting" at the Annual Meeting. Votes that are withheld from any director
will be counted for purposes of determining the presence or absence of a quorum,
but have no legal effect under California law. While there is no definitive
statutory or case law authority in California as to the proper treatment of
abstentions in the counting of votes with respect to the election of directors,
the Company believes that abstentions should be counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
In the absence of controlling precedent to the contrary, the Company intends to
treat
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<PAGE>
abstentions in this manner. Broker non-votes will also be counted for purposes
of determining the presence or absence of a quorum for the transaction of
business.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE NOMINEES
LISTED BELOW:
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION
- - ---------------------- --- ------------------------------------------------------
<S> <C> <C>
Ori Sasson................. 33 Chairman of the Board, Chief Executive Officer and
President of the Company
J. Michael Cline........... 35 Director, General Partner of General Atlantic Partners
Christopher R. Gibbons..... 46 Director, Chief Information Officer of Microsoft
Corporation
Mark Gorenberg............. 40 Director, General Partner of Hummer Winblad Equity
Partners II
Max D. Hopper.............. 60 Director, Retired Chairman of SABRE Group
</TABLE>
Except as set forth below, each nominee has been engaged in his
principal occupation described above during the past five (5) years.
Ori Sasson is a co-founder of the Company and has served as the
Company's Chairman of the Board since the Company's inception in March 1991.
Mr. Sasson has also served as the Company's Chief Executive Officer and
President since February 1994 and as Secretary from March 1991 to February 1992.
From January 1990 to March 1991 and from September 1986 to January 1989, Mr.
Sasson was an independent software design consultant. From January 1989 to
January 1990, Mr. Sasson was a software engineer at Sybase Corporation, a
client/server relational database management software Company. From December
1984 to August 1986, Mr. Sasson was a support engineer at Hewlett Packard
Company, a manufacturer of computers and related products. Mr. Sasson earned a
B.A. degree in Computer Science and a M.S.C. degree in Engineering both from the
University of California at Berkeley.
J. Michael Cline has been a director of the Company since June 1994.
Mr. Cline has been a general partner at General Atlantic Partners ("GAP"), a
private investment firm, since September 1989. Mr. Cline earned a B.S. degree in
Business from Cornell University and a M.B.A. degree from Harvard Business
School. Mr. Cline is also a director of Digital Tools, Inc., FICS, Inc.,
Management Information Technology, Inc. and Manugistics.
Christopher R. Gibbons has been a director of the Company since
September 1995. Mr. Gibbons has been the Chief Information Officer at Microsoft
Corporation, a packaged software developer, since July 1993. From December 1989
to June 1993, Mr. Gibbons was Senior Vice President and Chief Information
Officer at Promus Companies, an operator of hotels, casinos and related service
providers. Mr. Gibbons earned a B.A. degree in Economics from Lawrence
University, and a M.S. degree in Accounting and Information Systems from the
J.L. Kellogg Graduate School of Management at Northwestern University.
-3-
<PAGE>
Mark Gorenberg has been a director of the Company since October 1992.
Since July 1993, Mr. Gorenberg has been a general partner of Hummer Winblad
Equity Partners II, an investment partnership, and, since July 1990, Mr.
Gorenberg has been an associate of Hummer Winblad Equity Partners. Mr.
Gorenberg earned a B.S. degree in Electrical Engineering from the Massachusetts
Institute of Technology, a M.S. degree in Electrical Engineering from the
University of Minnesota and a M.S. degree in Engineering Management from
Stanford University. Mr. Gorenberg is also a director of Escalade Corporation,
Integrity QA Software, Pop Rocket, Inc., ReliaSoft Corporation, Spider
Technologies Inc. and Viewpoint DataLabs.
Max D. Hopper has been a director of the Company since April 1995.
From November 1985 to January 1995, Mr. Hopper served in various positions at
American Airlines, a subsidiary of AMR Corporation, an international travel
provider, most recently serving as Senior Vice President, Information Systems
and Chairman, The SABRE Group. Mr. Hopper earned a B.S. degree in Mathematics
from the University of Houston. Mr. Hopper is also a director of BBN Planet,
Computer Language Research, Convex Corporation, Gartner Group, Gupta
Corporation, USDATA Corporation and VTEL Corporation.
All directors hold office until the next annual meeting of
shareholders or until their successors have been elected and qualified.
Officers serve at the discretion of the Board. Ori Sasson and A. Aaron Omid,
the Company's Vice President, Sales and Secretary, are brothers. There are no
other family relationships among any of the executive officers or directors of
the Company.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held six (6) meetings during
fiscal 1996.
The Audit Committee, which currently consists of Messrs. Cline and
Gorenberg, held two (2) meetings during fiscal 1996. The Audit Committee
assists the Board in fulfilling its oversight responsibilities by meeting
regularly with the Company's independent accountants and operating and financial
management. The Audit Committee reviews the audit performed by the Company's
independent accountants and reports the results of such audit to the Board. The
Audit Committee reviews the Company's annual financial statements and all
material financial reports provided to the shareholders; reviews the Company's
internal auditing, accounting and financial controls; and reviews the Company's
policies governing compliance with laws, regulations, and rules of ethics and
conflicts of interest.
The Compensation Committee, which currently consists of Messrs. Cline
and Hopper, held two meetings during fiscal 1996. The Compensation Committee
makes recommendations to the Board of Directors regarding the Company's
executive compensation policies, establishes and approves salaries paid to the
executive officers of the Company and administers the Company's Employee Stock
Purchase Plan and 1991 Stock Option Plan, in which capacity the Compensation
Committee reviews and approves all stock option grants to employees.
The Board of Directors currently has no nominating committee or
committee performing a similar function.
-4-
<PAGE>
No director attended fewer than 75% of the aggregate of (i) the total
number of meetings of the Board of Directors held during fiscal 1996 and (ii)
the total number of meetings held by all committees of the Board of Directors
during fiscal 1996 on which such director served.
DIRECTOR COMPENSATION
Directors receive no cash remuneration for serving on the Board other
than reimbursement of certain expenses incurred in connection with attendance of
Board meetings. Non-employee directors are entitled to participate in the
Company's Director Option Plan (the "Director Plan"). The Director Plan
provides for the grant of nonstatutory stock options to non-employee directors
of the Company. Under the Director Plan, each new non-employee director is
automatically granted a nonstatutory option to purchase 15,000 shares of Common
Stock on the date upon which such person first becomes a non-employee director.
In addition, on the date of each non-employee director's annual reelection to
the Board, each director who has been a non-employee director for at least six
(6) months will automatically receive a nonstatutory option to purchase 3,750
shares of the Company's Common Stock. The exercise price of each option granted
under the Director Plan is equal to the fair market value of the Common Stock on
the date of grant. The initial 15,000 share option grant vests as to 25% of the
shares on the first anniversary of the date of grant and as to an additional
1/48th of the shares subject to such option each month thereafter. The 3,750
share annual grant vests in full four (4) years following the grant date. The
principal terms of the Director Plan are described in Appendix A hereto. No
----------
options have been granted to date under the Director Plan. On April 12, 1995,
Mr. Hopper was granted an option under the Company's 1991 Stock Option Plan (the
"Option Plan") to purchase 15,000 shares of Common Stock at an exercise price of
$0.816 per share which equaled the fair market value of the Common Stock on the
date of grant as determined by the Company's Board of Directors. The option
granted to Mr. Hopper vests over a four (4) year period.
-5-
<PAGE>
EXECUTIVE OFFICERS
Listed below are the executive officers of the Company as of May 31, 1996:
<TABLE>
<CAPTION>
NAME AGE TITLE
- - ------------------- --- -----------------------------------------------
<S> <C> <C>
Ori Sasson 33 Chairman, Chief Executive Officer and President
A. Aaron Omid 36 Vice President, Sales and Secretary
William C. Leetham 43 Chief Financial Officer
Mark J. Barrenechea 30 Vice President, Product Development
Jeffrey G. Bork 38 Vice President, Marketing
Lyle D. York 54 Vice President, Customer Services
Steve Jacob 41 Vice President, Europe
</TABLE>
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during fiscal 1995 were
Messrs. Cline and Hopper, each of whom is a non-employee director. No member of
the Compensation Committee has a relationship that would constitute an
interlocking relationship with executive officers or directors of another
entity.
COMPENSATION OF DIRECTORS
Non-employee directors receive no cash remuneration for serving on the
Board of Directors. Non-employee directors are entitled to participate in the
Company's Director Stock Option Plan.
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows, as to the Chief Executive Officer and each
of the three other most highly compensated executive officers during the 1996
fiscal year (collectively, the "Named Executive Officers"), information
concerning compensation paid for services to the Company in all capacities
during the fiscal year ended March 31, 1996, as well as total compensation paid
to the Named Executive Officers for the Company's previous two fiscal years:
-6-
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION (1) ------------
FISCAL ------------------- OPTIONS
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(2) GRANTED
- - -------------------------------------------------- ------ -------- -------- ------------
<S> <C> <C> <C> <C>
Ori Sasson 1996 $ 96,000 $40,000 150,000
Chairman , Chief Executive Officer and President 1995 96,000 5,000 --
William C. Leetham(3) 1996 115,008 -- 50,000
Chief Financial Officer 1995 5,000 -- --
A. Aaron Omid 1996 96,000 60,000 --
Vice President, Sales and Secretary 1995 96,000 5,000 --
Lyle D. York 1996 96,000 23,000 15,000
Vice President, Customer Service 1995 91,696 5,000 --
</TABLE>
- - -------------------
(1) Excludes certain perquisites and other personal benefits, such as life
insurance premiums paid by the Company. These amounts, in the aggregate,
did not exceed the lesser of $50,000 or 10% of the total annual salary and
bonus for such executive officer.
(2) Includes bonus amounts earned in the fiscal year indicated even though such
bonus amounts may be paid in a subsequent fiscal year.
(3) Mr. Leetham joined the Company in March 1995.
OPTIONS GRANTED AND OPTIONS EXERCISED IN THE LAST FISCAL YEAR
The following tables set forth information regarding stock options granted
to and exercised by the Named Executive Officers during the last fiscal year, as
well as options held by such officers as of March 31, 1996, the last day of the
Company's 1996 fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS(1) FOR OPTION TERM (2)
-------------------------------------------------------- ------------------------
% OF TOTAL OPTIONS
GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES BASE PRICE EXPIRATION
NAME GRANTED IN FISCAL YEAR PER SHARE DATE 5% 10%
- - ------------------- ------- ------------------ ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Ori Sasson 50,000 4.5% $6.80 9/13/05 $ 66,458.90 $105,824.69
Ori Sasson 100,000 8.9% $0.816 4/12/05 $132,917.80 $211,649.38
William C. Leetham 50,000 4.5% $0.816 4/12/05 $ 66,458.90 $105,824.69
A. Aaron Omid -- -- -- -- -- --
Lyle D. York 15,000 1.3% $4.00 8/31/05 $ 97,733.68 $155,624.54
</TABLE>
- - -------------------
(1) Each of these options was granted pursuant to the Company's Option Plan
and is subject to the terms of such plan as described in Appendix A
----------
hereto.
(2) In accordance with the rules of the Securities and Exchange Commission (the
"Commission"), shown are the hypothetical gains or "option spreads" that
would exist for the respective options. These gains are based on assumed
rates of annual compounded stock price appreciation of 5% and 10% from the
date the option was granted over the full option term. The 5% and 10%
assumed rates of appreciation are mandated by the rules of the Commission
and do not represent the Company's estimate or projection of future
increases in the price of its Common Stock.
-7-
<PAGE>
AGGREGATE UNEXERCISED OPTIONS AT FISCAL YEAR-END
<TABLE>
<CAPTION>
FISCAL YEAR-END OPTION VALUES
----------------------------------------------------------
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR END: AT FISCAL YEAR END (1):
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ------------------- ----------- ---------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Ori Sasson -- -- 33,333 116,667 $472,795.27 $1,355,604.73
William C. Leetham -- -- 12,500 37,500 $177,300.00 $ 531,900.00
A. Aaron Omid -- -- -- -- -- --
Lyle D. York 5,000 $70,920.00 15,833 34,167 $224,575.27 $ 436,864.73
</TABLE>
- - -------------------
(1) The values for "in-the-money" options represent the difference between the
exercise price of the options and the closing price of the Company's Common
Stock on March 31, 1996, which was $15 per share.
EMPLOYEE BENEFIT PLANS
1991 Stock Option Plan. Each Named Executive Officer is entitled to
participate in the Company's Option Plan. The Option Plan was adopted by the
Board of Directors and the shareholders in November 1991 and amended in October
1992, April 1995, and September 1995. Prior to the proposed amendment to the
Option Plan being voted on at the Annual Meeting, a total of 3,200,000 shares of
Common Stock had been reserved for issuance thereunder. As of June 15, 1996,
1,271,521 shares were subject to outstanding options under the Option Plan and
650,972 shares were available for future grant. The principal terms of the
Option Plan are described in Appendix A hereto.
----------
Employee Stock Purchase Plan. Each Named Executive Officer is
entitled to participate in the Company's Employee Stock Purchase Plan (the
"Purchase Plan"). The Purchase Plan was adopted by the Board of Directors and
the shareholders in September 1995. A total of 200,000 shares of Common Stock
has been reserved for issuance under the Purchase Plan. As of June 15, 1996,
42,080 shares had been issued under the Purchase Plan. The principal terms of
the Purchase Plan are described in Appendix C hereto.
----------
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors consists of J.
Michael Cline and Max D. Hopper, neither of whom is an employee of the Company.
The Board has delegated to the Compensation Committee the responsibility for
establishing and administering the Company's executive compensation plans,
subject to Board approval of major new compensation programs and the Chief
Executive Officer's compensation. In discharging these responsibilities, the
Committee consults with outside compensation consultants, attorneys and other
specialists.
The Company's compensation philosophy is that cash compensation should
be substantially linked to the short-term performance of the Company and that
longer-term incentives, such as stock options and stock ownership, should be
aligned with the Company's objective to enhance shareholder value over the long
term. The Company believes that the use of stock options and stock ownership
links the interest of officers and employees of the Company to the interest of
the shareholders. In addition, the Compensation Committee believes that the
total compensation package must be competitive with other
-8-
<PAGE>
companies in the industry to ensure that the Company can continue to attract,
retain and motivate key executives who are critical to the long-term success of
the Company.
Compensation for the Company's executive officers consists of three
principal components: base salary, cash bonuses and stock options.
Base Salary. The base salaries of executive officers are initially
determined by evaluating the responsibilities of the position held and the
experience and performance of the individual, with reference to the competitive
marketplace for executive talent, including a comparison to base salaries for
comparable positions based on the Compensation Committee's periodic surveys of
the industry.
Cash Bonuses. The Company's executive cash bonus plan is designed to
reward executive officers for the achievement of Company performance objectives,
as well as the executive officer's individual performance objectives. For
fiscal 1996, bonuses were determined by the Compensation Committee based upon a
total executive bonus pool determined based upon overall Company financial
performance and, with respect to allocation of the bonus pool among executive
officers, an evaluation of individual performance. For fiscal 1997, a bonus
pool will be established based upon the Company's operating profit for the
fiscal year and individual executive bonuses will be allocated out of this pool
based upon individual performance, the executive's base salary and the
Committee's assessment of the executive's contribution to the Company. This plan
emphasizes the Compensation Committee's belief that, when the Company is
successful, the executives should be appropriately compensated. Conversely, if
the Company is not sufficiently profitable, no bonuses will be paid.
Stock Options. The principal equity compensation components of
executive compensation are options granted under the Company's stock option
programs. Stock options are generally granted when an executive joins the
Company, with additional options granted from time to time for promotions and
performance. The initial option granted to the executive vests over a period of
four years. The Compensation Committee believes that the stock option
participation provides a method of retention and motivation for the senior level
executives of the Company and also aligns senior management's objectives with
long-term stock price appreciation. Executives are also eligible to participate
in a payroll deduction employee stock purchase plan pursuant to which stock may
be purchased at 85% of the lower of the closing sale price for the Common Stock
reported on the Nasdaq National Market at the beginning or end of each six-month
offering (up to a maximum stock value of $25,000 per calendar year or 10 percent
of salary, whichever is less).
CEO Compensation. Compensation of the Company's Chief Executive
Officer is determined by the Compensation Committee, subject to Board approval.
Mr. Sasson's compensation package in 1996 consisted of the same benefits program
as other executive officers, as itemized above, including base salary, cash
bonus, stock options and other employee benefit programs. Mr. Sasson received
no material compensation or benefits in 1996 not provided to all executive
officers. Mr. Sasson's compensation package was designed, however, to provide
for a higher proportion of his compensation to be dependent on Company
performance as compared to other executive officers. In this regard, Mr. Sasson
received no increase in base salary in 1996 as compared to 1995, while the
Committee provided to Mr. Sasson the opportunity to achieve a significant bonus
based upon Company performance. The Committee has also
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<PAGE>
sought to provide to Mr. Sasson incentive to promote long-term shareholder
value, through Mr. Sasson's participation in the Company's stock option
programs.
The Compensation Committee has considered the potential impact of
Section 162(m) of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder (the "Section"). The Section disallows a tax deduction
for any publicly-held corporation for individual compensation exceeding $1
million in any taxable year for any of the Named Executive Officers, unless such
compensation is performance-based. Since the cash compensation of each of the
Named Executive Officers is below the $1 million threshold and the Compensation
Committee believes that any options granted under the Option Plan will meet the
requirements of being performance-based, the Compensation Committee believes
that the Section will not reduce the tax deduction available to the Company.
The Company's policy is to qualify, to the extent reasonable, its executive
officers' compensation for deductibility under applicable tax laws. However,
the Compensation Committee believes that its primary responsibility is to
provide a compensation program that will attract, retain and reward the
executive talent necessary to the Company's success. Consequently, the
Compensation Committee recognizes that the loss of a tax deduction could be
necessary in some circumstances.
Other elements of executive compensation include participation in a
Company-wide life insurance program, including a long-term disability insurance
program. Executives are also eligible for Company-wide medical benefits and
participation in a 401(k) plan under which the Company currently provides no
matching contributions.
COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS
J. Michael Cline
Max D. Hopper
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<PAGE>
COMPARISON OF TOTAL CUMULATIVE SHAREHOLDER RETURN
The following graph sets forth the Company's total cumulative
shareholder return as compared to the Standard and Poors 500 Stock Index (the
"S&P 500") and the Morgan Stanley Tech-35 Index through June 30, 1996. Total
shareholder return assumes $100 invested in common stock of the Company on
November 16, 1995, the date of the Company's initial public offering, at the
$12.00 initial public offering price, and a similar amount invested on such date
in the stocks represented in the S&P 500 Index and the Morgan Stanley Tech-35
Index. Total return also assumes reinvestment of dividends; the Company has
paid no cash dividends on its common stock. Historical stock price performance
should not be relied upon as indicative of future stock price performance.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG SCOPUS TECHNOLOGY, INC., S&P 500 INDEX
AND MORGAN STANLEY TECH-35 INDEX
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period SCOPUS S&P MORGAN STANLEY
(Fiscal Year Covered) TECHNOLOGY 500 INDEX TECH-35 INDEX
- - --------------------- ---------- --------- --------------
<S> <C> <C> <C>
Measurement Pt- 11/17/95 $100 $100 $100
FYE 12/95 $210 $103 $92
FYE 03/96 $125 $108 $92
FYE 06/96 $129 $112 $94
</TABLE>
-11-
<PAGE>
PROPOSAL TWO:
APPROVAL OF AMENDMENT TO 1991 STOCK OPTION PLAN
The Company's Board of Directors and shareholders have previously
adopted and approved the Company's Option Plan. A total of 3,200,000 shares of
Common Stock are presently reserved for issuance under the Option Plan. On July
17, 1996, the Board of Directors approved an amendment to the Option Plan,
subject to shareholder approval, to increase the shares reserved for issuance
thereunder by 500,000 shares, bringing the total number of shares issuable under
the Option Plan to 3,700,000.
As of June 15, 1996, 650,972 shares were available for future issuance
under the Option Plan.
At the Annual Meeting, the shareholders are being requested to
consider and approve the proposed amendment to the Option Plan to increase the
number of shares of Common Stock reserved for issuance thereunder by 500,000
shares, bringing the total number of shares issuable under the Option Plan to
3,700,000. The Board believes that the amendment will enable the Company to
continue its policy of widespread employee stock ownership as a means to
motivate high levels of performance and to recognize key employee
accomplishments.
For a description of the principal features of the Option Plan, see
"Appendix A--Description of 1991 Stock Option Plan."
VOTE REQUIRED; RECOMMENDATION OF BOARD OF DIRECTORS
The approval of the amendment to the Option Plan requires the
affirmative vote of a majority of the Votes Cast on the proposal at the Annual
Meeting. An abstention will have the same effect as a vote against the proposal,
and, pursuant to California law, a broker non-vote will not be treated as a Vote
Cast on the proposal.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR"
THE AMENDMENT OF THE OPTION PLAN TO INCREASE THE NUMBER OF SHARES RESERVED FOR
ISSUANCE THEREUNDER.
PROPOSAL THREE:
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Coopers & Lybrand L.L.P.,
independent accountants, to audit the financial statements of the Company for
the 1996 fiscal year. This nomination is being presented to the shareholders for
ratification at the meeting. Coopers & Lybrand L.L.P. has audited the Company's
financial statements since 1992. A representative of Coopers & Lybrand L.L.P. is
expected to be present at the meeting, will have the opportunity to make a
statement, and is expected to be available to respond to appropriate questions.
-12-
<PAGE>
VOTE REQUIRED; RECOMMENDATION OF BOARD OF DIRECTORS
The affirmative vote of a majority of the shares represented, in
person or by proxy, and voting at the Annual Meeting (which shares voting
affirmatively also constitute at least a majority of the required quorum) is
required to ratify the Board's selection. If the shareholders reject the
nomination, the Board will reconsider its selection.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE APPOINTMENT OF
COOPERS & LYBRAND L.L.P. AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR FISCAL
1997 AND RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THIS PROPOSAL.
-13-
<PAGE>
OTHER INFORMATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, based on review of
information on file with the Securities and Exchange Commission and Company
stock records, with respect to beneficial ownership of the Company's voting
stock as of June 15, 1996, (i) by each person (or group of affiliated persons)
which is known by the Company to own beneficially more than five percent of the
Company's voting stock, (ii) by each of the Company's directors, (iii) by each
executive officer named in the Summary Compensation Table, and (iv) by all
directors and executive officers as a group. Except as indicated in the
footnotes to this table, the persons named in the table have sole voting and
investment power with respect to all shares shown as beneficially owned by them,
subject to community property laws where applicable.
<TABLE>
<CAPTION>
PERCENT
BENEFICIAL OWNER NUMBER OF SHARES OWNERSHIP
- - -------------------------------------------------- ---------------- ---------
<S> <C> <C>
Ori Sasson(1)(2).................................. 1,303,750 11.0%
A. Aaron Omid(1)(3)............................... 1,018,000 8.6%
Sharam Sasson(1)(4)............................... 1,035,000 8.7%
Bahram Nour-Omid(1)(5)............................ 857,121 7.2%
David C. Schwab(1)(6)............................. 765,000 6.5%
General Atlantic Partners(7)
125 East 56th Street
New York, NY 1002
J. Michael Cline................................ 2,366,666 20.0%
Christopher R. Gibbons............................ -0- *
Mark Gorenberg (8)................................ 36,325 *
Max D. Hopper(9).................................. 10,000 *
All executive officers and directors as a group
(12 persons) (10)............................... 4,186,859 35.1%
</TABLE>
- - -------------------
(1) The shareholder's address is c/o Scopus Technology, Inc., Suite 700, 1900
Powell Street, Emeryville, CA 94608.
(2) Includes 290,000 shares subject to options held by GAP and 43,750 shares
issuable upon the exercise of options held by Mr. Ori Sasson which are
exercisable within 60 days of June 15, 1996. Also includes 570,000 held by
Mr. Ori Sasson and Ms. Susan Sasson as trustees for their own benefit and
400,000 shares held in trust by Mr. Ori Sasson as trustee for the benefit
of Mr. Sharam Sasson's minor children. Excludes 400,000 shares held in
trust for the benefit of Mr. Ori Sasson's minor children. Mr. Sharam
Sasson is the trustee of such trust and Mr. Ori Sasson disclaims beneficial
ownership of such shares.
(3) Includes 290,000 shares subject to options held by GAP.
(4) Includes 290,000 shares subject to options held by GAP. Also includes
345,000 shares held in trust by Mr. Sharam Sasson and Ms. Fariba Sasson as
trustees for their own benefit and 400,000 shares held in trust by Mr.
Sharam Sasson as trustee for the benefit of Mr. Ori Sasson's minor
children. Excludes 400,000 shares held in trust for the benefit of Mr.
Sharam Sasson's minor children. Mr. Ori Sasson is the trustee of such trust
and Mr. Sharam Sasson disclaims beneficial ownership of such shares.
(5) Includes 290,000 shares subject to options held by GAP. Excludes 450,000
shares held in trust for the benefit of Dr. Nour-Omid's minor children. Mr.
Iraj Barkohanai is the trustee of such trust and Dr. Nour-Omid disclaims
beneficial ownership of such shares.
(6) Includes 40,000 shares subject to options held by GAP.
(7) Includes 1,066,371 shares held by General Atlantic Partners 13, L.P. and
100,295 shares held by GAP Coinvestment Partners, L.P. Includes 1,200,000
shares transferable to GAP upon the exercise of options held by funds
affiliated with GAP. The general partner of General Atlantic Partners 13,
L.P. is General Atlantic Partners, a New York general partnership. The
general partners of General Atlantic Partners are Steven A. Denning, David
C. Hodgson, Stephen P. Reynolds, J. Michael Cline, William O. Grabe and
William E. Ford. The same individuals are the general partners of GAP
Coinvestment Partners, L.P. Mr. Cline disclaims beneficial
-14-
<PAGE>
ownership of shares owned by General Atlantic Partners 13, L.P., GAP
Coinvestment Partners, L.P. and the other GAP funds except to the extent of
his pecuniary interest therein.
(8) Includes 29,167 shares held by funds affiliated with Hummer Winblad Venture
Partners. Mr. Gorenberg disclaims beneficial ownership of such shares
except to the extent of his pecuniary interest therein.
(9) Includes 5,000 shares issuable upon the exercise of options held by Mr.
Hopper which are exercisable within 60 days of June 15, 1996.
(10) Includes 78,917 shares issuable upon the exercise of options which are
exercisable within 60 days of June 15, 1996 and 620,000 shares transferable
to GAP from shareholders of the Company who are not officers or directors
upon the exercise of options held by funds affiliated with GAP.
-15-
<PAGE>
CERTAIN TRANSACTIONS
The Company and Microsoft Corporation are parties to a software license
agreement dated January 1, 1995. In fiscal 1996, the Company recognized
approximately $465,000 of revenues from such contract. Christopher Gibbons, a
director of the Company, is an officer of Microsoft Corporation.
OTHER MATTERS
The Company knows of no other matters to be submitted at the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy card to vote the shares they represent as
the Board of Directors of the Company may recommend.
SECTION 16(A) REPORTING DELINQUENCIES
Based solely on its review of copies of filings under Section 16(a) of the
Securities Exchange Act of 1934, as amended, received by it, or written
representations from certain reporting persons, the Company believes that during
fiscal 1996 all Section 16 filing requirements were met, with the exception that
Ori Sasson, A. Aaron Omid, Max D. Hopper and Lyle York each filed one late Form
4.
MISCELLANEOUS
The Company's Annual Report for the fiscal year ended March 31, 1996 is
being mailed to the shareholders of record concurrently with this Proxy
Statement. The Annual Report is not part of this Proxy Statement.
THE BOARD OF DIRECTORS
SCOPUS TECHNOLOGY, INC.
Emeryville, California
July 22, 1996
-16-
<PAGE>
APPENDIX A
DESCRIPTION OF THE 1991 STOCK OPTION PLAN
General. The Option Plan authorizes the Board of Directors (the "Board"),
-------
or one or more committees which the Board may appoint among its members (the
"Committee"), to grant (1) stock options, (2) stock purchase rights, (3) stock
appreciation rights ("SARs"), and (4) Long-Term Performance Awards. Options
granted under the Option Plan may be either "incentive stock options" as defined
in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
nonstatutory stock options, as determined by the Board or the Committee (the
"Administrator").
Purpose. The general purpose of the Option Plan is to attract and retain
-------
the best available personnel for positions of substantial responsibility, to
provide additional incentive to employees, consultants and officers, and to
promote the success of the Company's business.
Administration. The Option Plan may be administered by the Board or the
--------------
Committee. Subject to the other provisions of the Option Plan, the
Administrator has the authority to: (i) interpret the plan and apply its
provisions; (ii) prescribe, amend or rescind rules and regulations relating to
the plan; (iii) select the persons to whom options and SARs are to be granted;
(iv) determine the number of shares to be made subject to each option and SAR;
(v) determine whether and to what extent options and SARs are to be granted;
(vi) prescribe the terms and conditions of each option and SAR (including the
exercise price, whether an option will be classified as an incentive stock
option or a nonstatutory option and the provisions of the stock option or stock
purchase agreement to be entered into between the Company and the grantee);
(vii) amend any outstanding option or SAR subject to applicable legal
restrictions; (viii) authorize any person to execute, on behalf of the Company,
any instrument required to effect the grant of an option or SAR; and (ix) take
any other actions deemed necessary or advisable for the administration of the
Option Plan. All decisions, interpretations and other actions of the
Administrator shall be final and binding on all holders of options or SARs and
on all persons deriving their rights therefrom.
Eligibility. The Option Plan provides that options and SARs may be granted
-----------
to the Company's employees and consultants (as such terms are defined in the
Option Plan). Incentive stock options may be granted only to employees. Any
optionee who owns more than 10 percent of the combined voting power of all
classes of outstanding stock of the Company (a "10% Shareholder") is not
eligible for the grant of an incentive stock option unless the exercise price of
the option is at least 10 percent of the fair market value of the Common Stock
on the date of grant.
Terms and Conditions of Options. Each option granted under the Option Plan
-------------------------------
is evidenced by a written stock option agreement between the optionee and the
Company and is subject to the following terms and conditions:
(a) Exercise Price. The Administrator determines the exercise price of
--------------
options to purchase shares of Common Stock at the time the options are granted.
However, excluding options issued to 10% Shareholders, the exercise price under
an incentive stock option must not be less than 100 percent of the
A-1
<PAGE>
fair market value of the Common Stock on the date the option is granted. If the
Common Stock is listed on any established stock exchange or a national market
system, the fair market value shall be the average of the means between the high
bid and low asked prices for the Common Stock on the five market trading days
immediately preceding the day of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable; provided,
however, that in the event the fair market value as so determined is more than
20 percent greater or more than 20 percent less than the mean between the high
bid and low asked prices for such stock as so quoted on the date of
determination, then the Administrator shall be entitled to determine the fair
market value in good faith, at a price within the range of prices from the fair
market value as otherwise determined above to the mean between the high bid and
low asked prices on the date of determination. If the Common Stock is traded on
the over-the-counter market, the fair market value shall be the average of the
closing sales prices for such stock (or the average of the closing bids, if no
sales were reported) as quoted on such system or exchange (or the exchange with
the greatest volume of trading in Common Stock) on the five market trading days
immediately preceding the date of determination, as reported in The Wall Street
Journal or such other source as the Administrator of the Plan deems reliable;
provided, however, that in the event the fair market value as so determined is
more than 20 percent greater or more than 20 percent less than the closing sales
price for such stock (or the closing bid, if no sales were reported) as so
quoted on the date of determination, then the Administrator shall be entitled to
determine the fair market value in good faith, at a price within the range of
prices from the fair market value as otherwise determined above to the closing
price (or closing bid, as applicable) on the date of determination.
(b) Form of Consideration. The means of payment for shares issued upon
---------------------
exercise of an option is specified in each option agreement and generally may be
made by cash, check, a full-recourse promissory note, other shares of Common
Stock of the Company owned by the optionee, delivery of an exercise notice
together with irrevocable instructions to a broker to deliver the exercise price
to the Company from sale or loan proceeds, or by a combination thereof.
(c) Exercise of the Option. Each stock option agreement will specify the
----------------------
term of the option and the date when the option is to become exercisable.
However, in no event shall an option granted under the Option Plan be exercised
more than 10 years after the date of grant. Moreover, in the case of an
incentive stock option granted to a 10 percent Shareholder, the term of the
option shall be for no more than five years from the date of grant.
(d) Termination of Employment. If an optionee's employment terminates for
-------------------------
any reason (other than death or permanent disability), the optionee may exercise
his or her option or SAR, but only within such period of time as is determined
by the Administrator at the time of grant, not to exceed six (6) months (three
(3) months in the case of an Incentive Stock Option) from the date of such
termination, and only to the extent that the optionee was entitled to exercise
it at the date of such termination (but in no event later than the expiration of
the term of such option or SAR as set forth in the option or SAR Agreement). To
the extent that the optionee was not entitled to exercise an option or SAR at
the date of such termination, and to the extent that the optionee does not
exercise such option or SAR (to the extent otherwise so entitled) within the
time specified herein, the option or SAR shall terminate.
A-2
<PAGE>
(e) Permanent Disability. If an employee is unable to continue employment
--------------------
with the Company as a result of permanent and total disability (as defined in
the Code), then all options and SARs held by such optionee under the Option Plan
shall expire upon the earlier of (i) six months after the date of termination of
the optionee's employment or (ii) the expiration date of the option or SAR. The
optionee may exercise all or part of his or her option or SAR at any time before
such expiration to the extent that such option or SAR was exercisable at the
time of termination of employment.
(f) Death. If an optionee dies while employed by the Company, the
-----
optionee's estate or a person who acquired the right to exercise the deceased
optionee's option or SAR may exercise the option or SAR, but only within six (6)
months (or such lesser period as the option or SAR agreement may provide, or
such longer period, not to exceed twelve (12) months, as the option or SAR
agreement may provide) following the date of death, and only to the extent the
optionee was entitled to exercise it at the date of death. To the extent that
the optionee was not entitled to exercise an option or SAR at the time of death,
and to the extent that the optionee's estate or a person who acquired the right
to exercise such option does not exercise such option or SAR within the period
described above, the option or SAR shall terminate.
(g) Termination of Options. Each stock option agreement will specify the
----------------------
term of the option and the date when all or any installment of the option is to
become exercisable. Notwithstanding the foregoing, however, the term of any
incentive stock option shall not exceed 10 years from the date of grant. No
option may be exercised by any person after the expiration of its term.
(h) Nontransferability of Options. During an optionee's lifetime, his or
-----------------------------
her option(s) shall be exercisable only by the optionee and shall not be
transferable other than by will or laws of descent and distribution.
(i) Value Limitation. If the aggregate fair market value of all shares of
----------------
Common Stock subject to an optionee's incentive stock option which are
exercisable for the first time during any calendar year exceeds $100,000, the
excess options shall be treated as nonstatutory options.
(j) Other Provisions. The stock option agreement may contain such terms,
----------------
provisions and conditions not inconsistent with the Option Plan as may be
determined by the Administrator.
Stock Appreciation Rights. The Option Plan permits the Company to grant
-------------------------
SARs in connection with all or any part of an option, either concurrently with
the grant of the option or at any time thereafter during the term of the option.
The SAR shall entitle the optionee to exercise the SAR by surrendering to the
Company unexercised a portion of the related option. The optionee shall receive
in exchange from the Company an amount equal to the excess of (1) the fair
market value on the date of exercise of the SAR of the Common Stock covered by
the surrendered portion of the related option over (2) the exercise price of the
Common Stock covered by the surrendered portion of the related option. The
Administrator may place limits on the amount that may be paid upon exercise of
an SAR; provided, however, that such limits shall not restrict the
exercisability of the related option. When an SAR is exercised, the related
option, to the extent surrendered, shall cease to be exercisable. An SAR may
only be exercised at a time
A-3
<PAGE>
when the fair market value of the Common Stock covered by the related option
exceeds the exercise price of the Common Stock covered by the related option.
At the discretion of the Administrator, SARs may be granted without related
options. Such an SAR shall entitle the optionee, by exercising the SAR, to
receive from the Company an amount equal to the excess of (1) the fair market
value of the Common Stock covered by the exercised portion of the SAR, as of the
date of such exercise, over (2) the fair market value of the Common Stock
covered by the exercised portion of the SAR, as of the last market trading date
prior to the date on which the SAR was granted; provided, however, that the
Administrator may place limits on the aggregate amount that may be paid upon
exercise of an SAR. SARs shall be exercisable, in whole or in part, at such
times as the Administrator shall specify in the optionee's SAR agreement.
Stock Purchase Rights. The Option Plan permits the Company to grant rights
---------------------
to purchase Common Stock either alone or in combination with other awards
granted under the Option Plan or in combination with cash awards made outside of
the Option Plan. After the Administrator determines that it will offer Stock
Purchase Rights under the Plan, it shall advise the offeree in writing of the
terms, conditions and restrictions related to the offer, including the number of
Shares that the offeree shall be entitled to purchase, the price to be paid, and
the time within which the offeree must accept such offer, which shall in no
event exceed thirty (30) days from the date upon which the Administrator made
the determination to grant the Stock Purchase Right. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the form
determined by the Administrator.
Unless the Administrator determines otherwise, the Restricted Stock
Purchase Agreement shall grant the Company a repurchase option exercisable upon
the voluntary or involuntary termination of the purchaser's employment with the
Company for any reason (including death or disability). The purchase price for
shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be
the original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option shall lapse
at such rate as the Administrator may determine.
Long-Term Performance Awards. Long-Term Performance Awards are cash or
----------------------------
stock bonus awards that may be granted either alone or in addition to other
awards granted under the Option Plan. Such awards shall be granted for no cash
consideration. The Administrator shall determine the nature, length and
starting date of any performance period (the "Performance Period") for each
Long-Term Performance Award, and shall determine the performance or employment
factors, if any, to be used in the determination of Long-Term Performance Awards
and the extent to which such Long-Tenn Performance Awards are valued or have
been earned. Long-Term Performance Awards may vary from participant to
participant and between groups of participants and shall be based upon the
achievement of the Company and individual performance factors or such other
criteria or combination of criteria as the Administrator may deem appropriate.
Performance Periods may overlap and participants may participate simultaneously
with respect to Long-Term Performance Awards that are subject to different
Performance Periods and different performance factors and criteria. Long-Term
Performance Awards shall be confirmed by, and be subject to the terms of, a
Long-Term Performance Award agreement. The terms of such awards need not be the
same with respect to each participant.
A-4
<PAGE>
At the beginning of each Performance Period, the Administrator may
determine for each Long-Term Performance Award subject to such Performance
Period the range of dollar values or number of shares of Common Stock to be
awarded to the participant at the end of the Performance Period if and to the
extent that the relevant measures of performance for such Long-Term Performance
Award are met. Such dollar values or number of shares of Common Stock may be
fixed or may vary in accordance with such performance or other criteria as may
be determined by the Administrator.
Adjustment Upon Changes in Capitalization and Corporate Transactions. In
--------------------------------------------------------------------
the event that the stock of the Company is changed by reason of any stock split,
reverse stock split, stock dividend, recapitalization or other change in the
capital structure of the Company, appropriate proportional adjustments shall be
made in the number and class of shares of stock subject to the Option Plan, the
number and class of shares of stock subject to any option or right outstanding
under the Option Plan, and the exercise price of any such outstanding option or
right. Any such adjustment shall be made upon approval of the Board and, if
required, the shareholders of the Company, whose determination shall be
conclusive. Notwithstanding the above, in connection with any merger,
consolidation, acquisition of assets or like event involving the Company, each
outstanding option and right shall be assumed or an equivalent option or right
substituted by a successor corporation. If the successor corporation does not
assume the options or substitute substantially equivalent options, or if the
Administrator determines in its sole discretion that the options should not
continue to be outstanding, then the exercisability of all outstanding options
and rights shall be automatically accelerated. In the event of a Change in
Control of the Company (as defined in the Option Plan, and which includes a
merger or a sale of all or substantially all of the Company's assets), if the
Board of Directors so determines in its discretion, outstanding options and
rights shall have their exercisability fully accelerated and/or the option and
right holders may be paid in cash the excess of the change in control price over
the option or right exercise price.
Amendments, Suspensions and Termination of the Option Plan. The Board may
----------------------------------------------------------
amend, suspend or terminate the Option Plan at any time; provided, however, that
shareholder approval is required for any amendment to the extent necessary to
comply with Rule 16b-3 promulgated under the Securities Exchange Act of 1934
("Rule 16b-3") or Section 422 of the Code, or any similar rule or statute. In
any event, the Option Plan will terminate automatically in 2001.
Federal Tax Information for Option Plan. Options granted under the Option
---------------------------------------
Plan may be either "incentive stock options," as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or nonstatutory options.
An optionee who is granted an incentive stock option will not recognize
taxable income either at the time the option is granted or upon its exercise,
although the exercise may subject the optionee to the alternative minimum tax.
Upon the sale or exchange of the shares more than two years after grant of the
option and one year after exercising the option, any gain or loss will be
treated as long term capital gain or loss. If these holding periods are not
satisfied, the optionee will recognize ordinary income at the time of sale or
exchange equal to the difference between the exercise price and the lower of (i)
the fair market value of the shares at the date of the option exercise or (ii)
the sale price of the shares. A different rule for measuring ordinary income
upon such a premature disposition may apply if the optionee is also
A-5
<PAGE>
an officer, director, or 10% Shareholder of the Company. The Company will be
entitled to a deduction in the same amount as the ordinary income recognized by
the optionee. Any gain or loss recognized on such a premature disposition of
the shares in excess of the amount treated as ordinary income will be
characterized as long-term or short-term capital gain or loss, depending on the
holding period.
All other options which do not qualify as incentive stock options are
referred to as nonstatutory options. An optionee will not recognize any taxable
income at the time he or she is granted a nonstatutory option. However, upon
its exercise, the optionee generally will recognize taxable income measured as
the excess of the then fair market value of the shares purchased over the
purchase price. Any taxable income recognized in connection with an option
exercise by an optionee who is also an employee of the Company may be subject to
tax withholding by the Company. Upon resale of such shares by the optionee, any
difference between the sales price and the optionee's purchase price, to the
extent not recognized as taxable income as described above, will be treated as
long-term or short-term capital gain or loss, depending on the holding period.
The Company will be entitled to a tax deduction in the same amount as the
ordinary income recognized by the optionee with respect to shares acquired upon
exercise of a nonstatutory option.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION
UPON THE OPTIONEE AND THE COMPANY WITH RESPECT TO THE GRANT AND EXERCISE OF
OPTIONS UNDER THE OPTION PLAN, DOES NOT PURPORT TO BE COMPLETE, AND DOES NOT
DISCUSS THE TAX CONSEQUENCES OF THE OPTIONEE'S DEATH OR THE INCOME TAX LAWS OF
ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH AN OPTIONEE MAY RESIDE.
A-6
<PAGE>
APPENDIX B
DESCRIPTION OF THE 1995 DIRECTOR OPTION PLAN
The essential features of the Director Plan are outlined below.
The 1995 Director Option Plan (the "Director Plan") was adopted by the
Board and the shareholders in September 1995. A total of 75,000 shares of the
Company's Common Stock have been reserved for issuance under the Director Plan
and are available for grant as of the date hereof.
PURPOSE
The purposes of the Director Plan are to attract and retain the best
available individuals for service as non-employee directors of the Company
("Outside Directors"), to provide additional incentive to the Outside Directors
and to encourage their continued service on the Board.
ADMINISTRATION
The Director Plan is administered by the Board of Directors, who receive no
additional compensation for such service. All grants of options under the
Director Plan are automatic and non discretionary pursuant to the terms of the
Director Plan. All questions of interpretation or application of the Director
Plan are determined by the Board, whose decisions are final and binding upon all
participants.
ELIGIBILITY
Options under the Director Plan may be granted only to Outside Directors of
the Company. As of the date hereof, there were 3 Outside Directors of the
Company, all of whom have been nominated to serve as directors for the following
year. These individuals were eligible to receive grants of options as of the
effective date of the Director Plan, which date was September 13, 1995.
PARTICIPATION
The Director Plan provides for grants of options to be made in two ways:
a. Each Outside Director elected to the Board after the effective date of
the public offering (November 16, 1995) is automatically granted an option to
purchase 15,000 shares (the "First Option") upon the date on which such
individual first becomes a director, whether through election by the
shareholders of the Company or by appointment by the Board of Directors in order
to fill a vacancy. However, directors who have been employees of the Company
while serving on the Board will not receive a First Option upon becoming an
Outside Director.
B-1
<PAGE>
b. Each Outside Director who has served on the Board for at least six
months is automatically granted an option to purchase 3,750 shares (the
"Subsequent Option") on the date of such Outside Director's annual re-election
to the Board.
TERMS OF OPTIONS
Each option granted under the Director Plan is evidenced by a written stock
option agreement between the Company and the optionee. Options are generally
subject to the terms and conditions listed below.
Exercise of the Option. Twenty-five percent (25%) of the shares subject
to the First Option become exercisable on the first anniversary of its date of
grant, and one forty-eighth (1/48th) of the shares subject to the First Option
become exercisable monthly thereafter, with the effect that the option becomes
exercisable as to the full number of shares on the fourth anniversary of the
date of its grant. The Subsequent Option becomes exercisable for all of the
shares subject to such Subsequent Option on the fourth anniversary of its date
of grant. Options granted under the Director Plan expire ten years after the
date of grant. An option is exercised by giving written notice of exercise to
the Company specifying the number of whole shares of Common Stock to be
purchased and by tendering payment of the purchase price. Payment for shares
purchased upon exercise of an option is in the form of cash, check, certain
other shares of the Company's Common Stock, a "cashless exercise" or any
combination of these payment methods.
Exercise Price. The per share exercise price for shares to be issued
pursuant to exercise of an option under the Director Plan is 100% of the fair
market value per share of the Company's Common Stock on the date of grant of the
option. The fair market value is determined to be the closing sales price on
any established stock exchange or national market system on which the Common
Stock is listed on the date of the grant of the option, as reported in The Wall
Street Journal, or such other source as the Board deems reliable.
Termination of Status as Director. If an optionee ceases to serve as a
director (other than upon optionee's death or total and permanent disability),
he or she may, but only within three months after the date he or she ceases to
be a director of the Company, exercise his or her option to the extent that he
or she was entitled to exercise it at the date of such termination (but in no
event later than the expiration of its ten year term). In the event an optionee
ceases to serve as a director due to the optionee's death or total and permanent
disability (as defined in the Internal Revenue Code), the option will remain
exercisable (to the extent the option was exercisable at the date the optionee
ceased to be a director) for twelve months after the date the optionee ceases to
be a director (but in no event later than the expiration of the option's ten
year term). To the extent that the director was not entitled to exercise the
option at the date of such termination, or if he or she does not exercise such
option within the time specified, the option terminates.
Capital Changes. In the event of any changes made in the Company's
capitalization which result in an exchange of Common Stock for a greater or
lesser number of shares without receipt of consideration, appropriate adjustment
shall be made in the exercise price and in the number of shares
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subject to options outstanding under the Director Plan, as well as the number of
shares reserved for issuance under the Director Plan.
Liquidation or Dissolution. In the event of a proposed liquidation or
dissolution of the Company, options under the Director Plan shall terminate
immediately prior to the consummation of such proposed action.
Merger or Asset Sale. In the event of a merger of the Company or the sale
of substantially all of the assets of the Company, each option may be assumed or
an equivalent option substituted by the successor corporation. If the successor
does not agree to assume or substitute the option, each option shall also become
fully exercisable for a period of thirty days from the date the Board notifies
the optionee of the option's full exercisability, after which period the option
shall terminate.
Nontransferability of Option. Options granted pursuant to the Director
Plan may not be sold, pledged, assigned, hypothecated, transferred or disposed
of in any manner other than by will or by the laws of descent or distribution
and may be exercised, during the lifetime of the optionee, only by the optionee.
Other Provisions. The option agreement may contain such other terms,
provisions and conditions not inconsistent with the Director Plan as may be
determined by the Board.
AMENDMENT AND TERMINATION OF THE DIRECTOR PLAN
The Board may at any time amend, alter, suspend or discontinue the Director
Plan, but no amendment, alteration, suspension or discontinuance shall be made
which would impair the rights of any optionee under any grant theretofore made
without such optionee's consent. In addition, to the extent necessary and
desirable to comply with any applicable law or regulation, including the
requirements of an established stock exchange or quotation system, the Company
shall obtain shareholder approval of any amendment to the Director Plan in such
a manner and to such a degree as required.
TAX INFORMATION - THE DIRECTOR PLAN
Options granted pursuant to the Director Plan are "nonstatutory options"
and will not qualify for any special tax benefits to the optionee.
An optionee will not recognize any taxable income at the time the option is
granted. Upon exercise of the option, the optionee will generally recognize
ordinary income for federal tax purposes measured by the excess, if any, of the
fair market value of the shares over the exercise price. Because shares held by
directors might be subject to restrictions on resale under Section 16(b) of the
Exchange Act, the date of taxation may be deferred unless the optionee files an
election with the Internal Revenue Service pursuant to Section 83(b) of the Code
within thirty days after the date of exercise.
Upon a resale of shares acquired pursuant to an option under the Director
Plan, any difference between the sales price and the exercise price, to the
extent not recognized as ordinary income as
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provided above, will be treated as capital gain or loss. The tax rate on net
capital gain (net long-term capital gain minus net short-term capital loss) is
capped at 28%. Capital losses are allowed in full against capital gains plus
$3,000 of other income.
The Company will be entitled to a tax deduction in the amount and at the
time that the optionee recognizes ordinary income with respect to shares
acquired upon exercise of an option under the Director Plan. The Company is not
required to withhold any amount for tax purposes on any such income included by
the optionee.
THE FOREGOING SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION UPON THE
OPTIONEE AND THE COMPANY WITH RESPECT TO THE GRANT OF OPTIONS UNDER THE DIRECTOR
PLAN DOES NOT PURPORT TO BE COMPLETE, AND REFERENCE SHOULD BE MADE TO THE
APPLICABLE PROVISIONS OF THE CODE. IN ADDITION, THIS SUMMARY DOES NOT DISCUSS
THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN
COUNTRY IN WHICH THE OPTIONEE MAY RESIDE.
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APPENDIX C
DESCRIPTION OF THE 1995 EMPLOYEE STOCK PURCHASE PLAN
General. The 1995 Employee Stock Purchase Plan (the "Purchase Plan") was
adopted by the Board of Directors and approved by the shareholders on September
13, 1995. A total of 200,000 shares of Common Stock have been reserved for
issuance under the Purchase Plan. The purpose of the Purchase Plan is to
provide employees with an opportunity to purchase Common Stock of the Company
through payroll deductions in a manner that qualifies under Section 423 of the
Internal Revenue Code (the "Code").
Administration. The Purchase Plan is administered by the Board of
Directors or a Committee of the Board (collectively, the "Administrator").
Eligibility. Only employees employed by the Company or its subsidiaries on
the first day of an offering period may participate in the Purchase Plan. For
this purpose, an "employee" is any person who is regularly employed at least
twenty hours per week and at least five months per calendar year by the Company
or any of its subsidiaries. No employee shall be granted an option under the
Purchase Plan if: (i) immediately after the grant of the option, the employee
(or any other person whose stock would be attributed to the employee pursuant to
Section 424(d) of the Code) would own five percent or more of the total combined
voting power or value of the stock of the Company or any of its subsidiaries; or
(ii) which permits such participant's rights to purchase stock under all
employee stock purchase plans of the Company and its subsidiaries to accrue at a
rate which exceeds $25,000 worth of stock (determined with reference to the fair
market value of the Common Stock at the time of grant) in a calendar year.
Subject to these eligibility criteria, the Purchase Plan permits eligible
employees to purchase Common Stock through payroll deductions subject to certain
limitations described below. See "Payment of Purchase Price; Payroll
Deductions."
Offering Period. The Administrator determines the start and end dates of
each offering period, except that an offering period cannot exceed twenty-seven
months in length. The Administrator may also create purchase periods during an
offering period. Normally, a participant's payroll deductions are accumulated
throughout a purchase period and, at the end of the purchase period, shares of
the Company's Common Stock are purchased with the accumulated payroll
deductions. The first offering period began on the effective date of the
Company's initial public offering and will end on the last trading day on or
before October 31, 1996. The first offering period consists of two purchase
periods which began on the effective date of the Company's initial public
offering and on May 1, 1996, respectively.
Purchase Price. The purchase price per share at which shares will be sold
in an offering under the Purchase Plan is the lower of (i) 85% of the fair
market value of a share of Common Stock on the first day of an offering period,
or (ii) 85% of the fair market value of a share of Common Stock on the last day
of each purchase period. The fair market value of the Common Stock on a given
date is generally the closing sale price of the Common Stock as reported on the
Nasdaq National Market for such date.
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Payment of Purchase Price; Payroll Deductions. The purchase price of the
shares is accumulated by payroll deductions over the purchase period. The
Purchase Plan provides that the aggregate of such payroll deductions during the
purchase period shall not exceed 10% of the participant's compensation during
any offering period, nor $21,250 in any purchase period. During the offering
period, a participant may discontinue his or her participation in the Purchase
Plan, and may decrease or increase the rate of payroll deductions in an offering
period within limits set by the Administrator.
All payroll deductions made for a participant are credited to the
participant's account under the Purchase Plan, are withheld in whole percentages
only and are included with the general funds of the Company. Funds received by
the Company pursuant to exercises under the Purchase Plan are also used for
general corporate purposes. A participant may not make any additional payments
into his or her account.
Withdrawal. A participant may terminate his or her participation in the
Purchase Plan at any time by giving the Company a written notice of withdrawal.
In such event, the payroll deductions credited to the participant's account will
be returned, without interest, to such participant. Payroll deductions will not
resume unless a new subscription agreement is delivered in connection with a
subsequent offering period.
Termination of Employment. Termination of a participant's employment for
any reason, including 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 without interest to such participant, his
or her designated beneficiaries or the executors or administrators of his or her
estate.
Adjustments Upon Changes in Capitalization. In the event of any changes in
the capitalization of the Company effected without receipt of consideration by
the Company, such as a stock split, stock dividend, combination or
reclassification of the Common Stock, resulting in an increase or decrease in
the number of shares of Common Stock, proportionate adjustments will be made by
the Board in the shares subject to purchase and in the price per share under the
Purchase Plan. In the event of liquidation or dissolution of the Company, the
offering periods then in progress will terminate immediately prior to the
consummation of such event unless otherwise provided by the Board. In the event
of a sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, each option under the
Purchase Plan shall be assumed or an equivalent option shall be substituted by
such successor corporation or a parent or subsidiary of such successor
corporation, unless the Administrator determines to shorten the offering period
then in progress by setting a new exercise date. If the Administrator shortens
the offering period in lieu of assumption or substitution in the event of a
merger or sale of assets, the Administrator shall provide notice to each
participant at least ten business days prior to the new exercise date that the
Exercise Date has been changed to the new Exercise Date and that his or her
option will be automatically exercised on the new Exercise Date unless prior to
such date the participant has withdrawn from the offering period.
Amendment and Termination. The Board may at any time and for any reason
amend or terminate the Purchase Plan, except that no such termination shall
affect options previously granted and no amendment shall make any change in an
option granted prior thereto which adversely affects the rights
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of any participant. Shareholder approval for amendments to the Purchase Plan
shall be obtained in such a manner and to such a degree as required to comply
with all applicable laws or regulations. The Plan will terminate in May 2005,
unless terminated earlier by the Board in accordance with the Purchase Plan.
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 until the shares purchased under the
Purchase Plan are sold or otherwise disposed of. Upon sale or other disposition
of the shares, the participant will generally be subject to tax in an amount
that depends upon the holding period. If the shares are sold or otherwise
disposed of more than two years from the Enrollment Date and one year from the
applicable Exercise Date, the participant will recognize ordinary income
measured as the lesser of (a) the excess of the fair market value of the shares
at the time of such sale or disposition over the purchase price, or (b) an
amount equal to 15% of the fair market value of the shares as of the Enrollment
Date. Any additional gain will be treated as long-term capital gain. If the
shares are sold or otherwise disposed of before the expiration of these holding
periods, the participant will recognize ordinary income generally measured as
the excess of the fair market value of the shares on the date the shares are
purchased over the purchase price. Any additional gain or loss on such sale or
disposition will be long-term or short-term capital gain or loss, depending on
the holding period. The Company generally is not entitled to a deduction for
amounts taxed as ordinary income or capital gain to a participant except to the
extent of ordinary income recognized by participants upon a sale or disposition
of shares prior to the expiration of the holding periods described above.
THE FOREGOING BRIEF SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION UPON
THE PARTICIPANT AND THE COMPANY WITH RESPECT TO THE SHARES PURCHASED UNDER THE
PURCHASE PLAN DOES NOT PURPORT TO BE COMPLETE, AND DOES NOT DISCUSS THE TAX
CONSEQUENCES OF A PARTICIPANT'S DEATH OR THE INCOME TAX LAWS OF ANY STATE OR
FOREIGN COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE.
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<PAGE>
PROXY
SCOPUS TECHNOLOGY, INC.
PROXY for Annual Meeting of Shareholders
To Be Held August 15, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of SCOPUS TECHNOLOGY, INC., a California
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each dated July 17, 1996, and hereby appoints
Ori Sasson and William C. Leetham, proxies and attorneys-in-fact, each with full
power of substitution, on behalf of the undersigned, to represent the
undersigned at the Annual Meeting of Shareholders of SCOPUS TECHNOLOGY, INC. to
be held at the Berkeley Marina Marriott Hotel, 200 Marina Boulevard, Berkeley,
California 94710, on Thursday, August 15, 1996 at 2:00 p.m., local time, and at
any adjournment or adjournments thereof, and to vote all shares of Common Stock
that the undersigned would be entitled to vote if then and there personally
present, on all matters set forth on the reverse side hereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE HEREIN. IF NO SPECIFICATION IS INDICATED, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED FOR EACH OF THE PERSONS AND THE
PROPOSALS ON THE REVERSE SIDE HEREOF AND FOR SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING AS THE PROXYHOLDER DEEMS ADVISABLE.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE
SIDE
<PAGE>
[X] Please mark votes as in this example.
1. Election of Directors
Nominees: Ori Sasson, J. Michael Cline, Christopher R. Gibbons, Mark Gorenberg,
Max D. Hopper
FOR WITHHELD
[_] [_]
[_]
-----------------------------------
For all nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW [_]
2. Proposal to amend the Company's 1991 Stock Option Plan to increase the
number of shares available for issuance thereunder by 500,000 shares to an
aggregate of 3,700,000 shares.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. Proposal to ratify the appointment of Coopers & Lybrand L.L.P. as
independent accountants for the fiscal year ending March 31, 1997.
FOR AGAINST ABSTAIN
[_] [_] [_]
4. To vote or otherwise represent the shares on any and all other business
which may properly come before the meeting or any adjournment or
adjournments thereof, according and in the discretion of the proxyholder.
Please mark, sign, date and return the proxy card promptly using the enclosed
envelope.
Note: Please sign exactly as your name appears on your stock certificate. If
the stock is registered in the names of two or more persons, each should sign.
Executors, administrators, trustees, guardians, attorneys and corporate officers
should insert their titles.
Signature:_______________________________ Date:_______________
Signature:_______________________________ Date:_______________
