<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
ABR Information Services, 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):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[LOGO] ABR INFORMATION SERVICES, INC.
34125 U.S. HIGHWAY 19 NORTH
PALM HARBOR, FLORIDA 34684
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 6, 1996
---------------------
To the Shareholders of ABR Information Services, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of ABR Information Services, Inc. (the "Company") will be held at the
Hyatt Regency Westshore, 6200 Courtney Campbell Causeway, Tampa, Florida on
Friday, December 6, 1996 at 10:00 a.m. Eastern Standard Time for the following
purposes:
1. To elect two directors to hold office until the 1999 Annual Meeting
of Shareholders and until each of their respective successors is duly
elected and qualified and to elect one director to hold office until the
1998 Annual Meeting of Shareholders and until his successor is duly elected
and qualified;
2. To approve an amendment to the Company's Articles of Incorporation
increasing the number of authorized shares of voting Common Stock, $0.01
par value per share, from 20,000,000 to 100,000,000;
3. To approve the Company's 1996 Non-Employee Director Stock Option
Plan; and
4. To transact any other business as may properly come before the
Annual Meeting.
Shareholders of record as of the close of business on October 18, 1996 will
be entitled to vote at the Annual Meeting or any adjournment or postponement
thereof. Information relating to the matters to be considered and voted on at
the Annual Meeting is set forth in the proxy statement accompanying this Notice.
By Order of the Board of Directors,
SUZANNE M. MACDOUGALD
Secretary
November 8, 1996
YOUR VOTE IS IMPORTANT. TO ASSURE YOUR REPRESENTATION
AT THE ANNUAL MEETING, PLEASE VOTE ON THE MATTERS TO BE CONSIDERED
AT THE ANNUAL MEETING BY COMPLETING THE ENCLOSED PROXY AND MAILING IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE> 3
[LOGO] ABR INFORMATION SERVICES, INC.
34125 U.S. HIGHWAY 19 NORTH
PALM HARBOR, FLORIDA 34684
---------------------
PROXY STATEMENT
---------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of ABR Information Services, Inc.
(the "Company") for the Annual Meeting of Shareholders (the "Annual Meeting") to
be held on Friday, December 6, 1996 at 10:00 a.m. Eastern Standard Time, or any
adjournment thereof.
If the accompanying proxy form ("Proxy") is completed, signed and returned,
the shares represented thereby will be voted at the Annual Meeting. The giving
of the Proxy does not affect the right to vote in person should the shareholder
be able to attend the Annual Meeting. The shareholder may revoke the Proxy at
any time prior to the voting thereof.
The annual report to shareholders of the Company for the fiscal year ended
July 31, 1996 along with this Proxy Statement are first being mailed on or about
November 8, 1996 to shareholders entitled to vote at the Annual Meeting.
SHAREHOLDERS ENTITLED TO VOTE
Shareholders of record as of the close of business on October 18, 1996 (the
"Record Date") are entitled to notice of and to vote at the Annual Meeting. At
that date, there were 13,619,895 shares of voting Common Stock outstanding and
entitled to vote. Each outstanding share of voting Common Stock is entitled to
one vote on all matters submitted to a vote of shareholders.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the inspector of elections appointed for the Annual Meeting who will also
determine whether a quorum is present for the transaction of business. The
Company's Bylaws provide that a quorum is present if the holders of a majority
of the issued and outstanding shares of voting Common Stock entitled to vote at
the meeting are present in person or represented by proxy. Abstentions will be
counted as shares that are present and entitled to vote for purposes of
determining whether a quorum is present. Shares held by nominees for beneficial
owners will also be counted for purposes of determining whether a quorum is
present if the nominee has the discretion to vote on at least one of the matters
presented, even though the nominee may not exercise discretionary voting power
with respect to other matters and even though voting instructions have not been
received from the beneficial owner (a "broker non-vote"). Neither abstentions
nor broker non-votes are counted in determining whether a proposal has been
approved.
Under Florida law, if a quorum exists, directors are elected by a plurality
of the votes cast by the shares entitled to vote in the election. The proposals
set forth herein to approve (i) an amendment (the "Amendment") to the Company's
Articles of Incorporation increasing the number of authorized shares of voting
Common Stock, $0.01 par value per share, from 20,000,000 to 100,000,000 and (ii)
the Company's 1996 Non-Employee Director Stock Option Plan (the "1996 Plan")
will be adopted if a majority of the total votes present, or represented, and
entitled to vote at the Annual Meeting vote in favor of such proposals.
<PAGE> 4
Shareholders are requested to vote by completing the enclosed Proxy and
returning it signed and dated in the enclosed postage-paid envelope.
Shareholders are urged to indicate their votes in the spaces provided on the
Proxy. Proxies solicited by the Board of Directors of the Company will be voted
in accordance with the directions given therein. Where no instructions are
indicated, signed Proxies will be voted FOR each of the proposals listed in the
Notice of Annual Meeting of Shareholders which are set forth more completely
herein. Returning your completed Proxy will not prevent you from voting in
person at the Annual Meeting should you be present and wish to do so.
Any shareholder giving a Proxy has the power to revoke it at any time
before it is exercised by: (i) filing with the Secretary of the Company written
notice thereof; (ii) submitting a duly executed Proxy bearing a later date; or
(iii) appearing at the Annual Meeting and giving the Secretary notice of his or
her intention to vote in person. Proxies solicited hereby may be exercised only
at the Annual Meeting and any adjournment thereof and will not be used for any
other meeting. Proxies solicited hereby will be returned to the Board of
Directors and will be tabulated by inspectors of election designated by the
Board of Directors who will not be employed by the Company or any of its
affiliates.
The cost of solicitation of Proxies by mail on behalf of the Board of
Directors will be borne by the Company. Proxies also may be solicited by
personal interview or by telephone, in addition to the use of the mails, by
directors, officers and regular employees of the Company without additional
compensation therefor. The Company also has made arrangements with brokerage
firms, banks, nominees and other fiduciaries to forward proxy solicitation
materials for shares of voting Common Stock held of record to the beneficial
owners of such shares. The Company will reimburse such record holders for their
reasonable out-of-pocket expenses.
ITEM 1: ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THE FOLLOWING NOMINEES FOR ELECTION AS
DIRECTORS AND URGES EACH SHAREHOLDER TO VOTE "FOR" THE NOMINEES. PROXIES IN THE
ACCOMPANYING FORM WILL BE VOTED AT THE ANNUAL MEETING, UNLESS AUTHORITY TO DO SO
IS WITHHELD, IN FAVOR OF THE ELECTION AS DIRECTORS OF THE NOMINEES NAMED BELOW.
The Company's Board of Directors is divided into three classes with each
class serving three-year terms expiring at the third annual meeting of
shareholders after their elections. Two directors are to be elected at the
Annual Meeting to hold office for a term of three years expiring at the 1999
Annual Meeting of Shareholders, and until each of their respective successors
shall have been duly elected and qualified. In addition, another director was
appointed by the Company's Board of Directors to fill the vacancy created by the
resignation of Stephen R. Hood, who retired effective August 3, 1996. Pursuant
to Florida law, the term of a director appointed to fill a vacancy expires at
the next shareholders' meeting at which directors are elected. This director is
to be elected at the Annual Meeting to hold office for a remaining term of two
years expiring at the 1998 Annual Meeting of Shareholders, and until his
successor shall have been duly elected and qualified. In the event any of such
nominees is unable to serve, the persons designated as proxies will cast votes
for such other person in their discretion as a substitute nominee. The Board of
Directors has no reason to believe that the nominees named below will be
unavailable, or if elected, will decline to serve.
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<PAGE> 5
Certain information is given for the nominees for directors, as well as
each director whose term of office will continue after the Annual Meeting.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AGE AND OTHER INFORMATION
- -------------------------- --- -----------------------------------------------------------
<S> <C> <C>
NOMINEE FOR DIRECTOR -- TERM TO EXPIRE 1998
Vincent Addonisio......... 41 Mr. Addonisio has served as Executive Vice President, Chief
Financial Officer, Treasurer and a Director of the Company
since October, 1996, and served as Senior Vice President,
Chief Financial Officer and Treasurer of the Company from
1993 to October, 1996. From 1992 to 1993, Mr. Addonisio
served as Vice President and Chief Financial Officer of AER
Energy Resources, Inc., a manufacturer of rechargeable
batteries. From 1991 to 1992, Mr. Addonisio served as Vice
President of Finance and Administration and Chief Financial
Officer of IQ Software Corporation, a software development
company. From 1983 to 1991, he served as Chief Financial
Officer and a director of Proto Systems, a manufacturer of
printed circuit boards and a publisher of high technology
journals. Prior to 1983, Mr. Addonisio was employed by W.R.
Grace Company and Arthur Andersen & Co. Mr. Addonisio is a
certified public accountant.
NOMINEES FOR DIRECTORS -- TERMS TO EXPIRE 1999
James E. MacDougald....... 53 Mr. MacDougald has served as Chairman of the Board,
President, Chief Executive Officer and a Director of the
Company (including its predecessors) since 1982. From 1965
to 1982, he served in various sales and sales management
positions, most recently as Group Vice President of Sales,
with Home Life Insurance Company of New York.
Thomas F. Costello........ 55 Mr. Costello has served as a Director of the Company
(including its predecessors) since 1989. For the past five
years, Mr. Costello has served as Chairman and Chief
Executive Officer of the Costello Group, New York, New
York, an insurance and real estate brokerage company.
DIRECTOR CONTINUING IN OFFICE -- TERM TO EXPIRE 1997
Suzanne M. MacDougald..... 52 Mrs. MacDougald has served as Senior Vice President,
Secretary and a Director of the Company (and its
predecessors) since 1982.
DIRECTOR CONTINUING IN OFFICE -- TERM TO EXPIRE 1998
Mark M. Goldman........... 54 Mr. Goldman has served as a Director of the Company (and
its predecessors) since 1989. For the past five years, Mr.
Goldman has served as Vice Chairman and Chief Financial
Officer of Phone Programs, Inc., Elmont, New York, a
telephone marketing and promotions company.
</TABLE>
ITEM 2: APPROVAL OF THE AMENDMENT
THE BOARD OF DIRECTORS RECOMMENDS THE APPROVAL OF THE AMENDMENT AND URGES
EACH SHAREHOLDER TO VOTE "FOR" THE AMENDMENT. EXECUTED AND UNMARKED PROXIES IN
THE ACCOMPANYING FORM WILL BE VOTED AT THE ANNUAL MEETING IN FAVOR OF THE
APPROVAL OF THE AMENDMENT.
The sole purpose of the Amendment is to increase the number of authorized
shares of voting Common Stock, as set forth in Section 3.1 of Article III of the
Company's Articles of Incorporation, from 20,000,000 to 100,000,000. The
Amendment is attached to this Proxy Statement as Exhibit A.
Of the 20,000,000 shares of voting Common Stock presently authorized,
13,619,895 shares were issued and outstanding and 1,115,241 shares were reserved
for issuance, as of the Record Date, under the Company's existing 1987 and 1993
Stock Option Plans and the 1996 Non-Employee Director Stock Option Plan. The
increase in authorized shares of voting Common Stock will provide shares for
various purposes, including,
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<PAGE> 6
without limitation: possible future stock splits or stock dividends; issuances
from time to time in the event opportunities are presented for the acquisition
of other companies; possible future public offerings or private placements;
possible adoption of a rights plan; and possible future employee stock option or
benefit plans. Except as otherwise indicated herein, there are no
understandings, agreements, plans or commitments relating to the issuance of
additional shares of voting Common Stock at this time.
The Amendment was approved by the Board of Directors. The Board of
Directors has determined, after giving due consideration to the foregoing, that
the adoption of the Amendment would be in the best interests of the Company and
its shareholders. If the Amendment is approved by the Company's shareholders,
the Company will file a certificate to that effect with the Department of State
of Florida. Upon acceptance of that filing, the Amendment would become
effective.
In the event the Amendment is approved by the shareholders and the increase
in authorized shares becomes effective, such shares can be issued at such times
and for such consideration not less than the par value thereof ($0.01 per share)
as the Board of Directors, in its discretion, determines without further
shareholder action, except as may be required by applicable law. Since the
Company's Articles of Incorporation do not provide for preemptive rights,
shareholders will not have a preferential right to subscribe for their
proportionate share of any new issue of stock unless so provided by the Board of
Directors. Issuance of any of the proposed additional authorized shares, other
than as a pro rata distribution to existing shareholders, would dilute the
proportionate voting power of existing shareholders.
The Company does not view the Amendment as part of an "anti-takeover"
strategy. The Amendment is not being advanced as a result of any known effort by
any party to accumulate shares of the Company's voting Common Stock or to obtain
control of the Company. Nevertheless, the Amendment might have the effect of
discouraging an attempt by another person or entity, through the acquisition of
a substantial number of shares of the Company's voting Common Stock, to acquire
control of the Company with a view to imposing a merger, sale of all or any part
of the Company's assets or a similar transaction, since the issuance of new
shares could be used to dilute the stock ownership of such person or entity.
Furthermore, certain corporations have issued preferred stock or warrants or
other rights to acquire preferred stock or common stock to the holders of their
common stock pursuant to rights plans having terms designed to protect against
the adverse consequences to shareholders of partial takeovers and front-end
loaded two-step takeovers and freezeouts. The purpose of such a rights plan is
to ensure that shareholders receive a fair price for their shares in the event
of a takeover, by requiring any person who seeks to acquire a significant block
of the corporation's stock to obtain a waiver of the rights plan from its board
of directors. The Company's Board of Directors is considering adopting a rights
plan for the Company, and assuming that such a plan is adopted, the additional
authorized and unissued shares of voting Common Stock contemplated by the
Amendment would be available for issuance pursuant thereto.
ITEM 3: APPROVAL OF THE 1996 PLAN
THE BOARD OF DIRECTORS RECOMMENDS THE APPROVAL OF THE 1996 PLAN AND URGES
EACH SHAREHOLDER TO VOTE "FOR" THE 1996 PLAN. EXECUTED AND UNMARKED PROXIES IN
THE ACCOMPANYING FORM WILL BE VOTED AT THE ANNUAL MEETING IN FAVOR OF THE
APPROVAL OF THE 1996 PLAN.
GENERAL
The Board of Directors of the Company approved the 1996 Plan on August 23,
1996 (the "Effective Date") to replace the Company's 1995 Non-Employee Director
Stock Option Plan, which was approved by the Company's shareholders at the 1995
Annual Meeting of Shareholders. The 1996 Plan provides for the grant of options
in the form of nonqualified stock options. Such options do not meet the
applicable statutory requirements of the Internal Revenue Code of 1986, as
amended (the "Code"). The 1996 Plan is attached to this Proxy Statement as
Exhibit B and the summary of the 1996 Plan set forth herein is qualified in its
entirety by reference to the 1996 Plan. The purpose of shareholder approval of
the 1996 Plan is to comply with the shareholder approval requirements of Rule
16b-3 under Section 16(b) of the Securities Exchange Act of 1934, as amended.
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<PAGE> 7
PURPOSE
The purpose of the 1996 Plan is to enable the Company and its subsidiaries
to compete successfully in attracting, motivating and retaining members of the
Company's Board of Directors, who are not employees of the Company or any of its
subsidiaries (each a "Non-Employee Director"), with outstanding abilities by
making it possible for them to purchase shares of voting Common Stock on terms
which will give them a direct and continuing interest in the future success of
the businesses of the Company and its subsidiaries and encourage them to remain
as directors of the Company or one or more of its subsidiaries.
SHARES SUBJECT TO OPTIONS
The 1996 Plan currently permits options to be granted to purchase up to
200,000 shares of voting Common Stock. Subject to shareholder approval, options
to purchase 10,000 shares have been granted as of the Effective Date, with each
Non-Employee Director receiving an option to purchase 5,000 shares of voting
Common Stock. To the extent that options granted under the 1996 Plan expire or
terminate without having been exercised in full, the voting Common Stock subject
thereto will become available for future grants under the 1996 Plan. Provision
is made under the 1996 Plan (the "Antidilution Provisions") for appropriate
adjustment in the number of shares of voting Common Stock covered by the 1996
Plan and by each option granted thereunder and the related option price, in the
event of any change in the voting Common Stock by reason of a stock dividend,
merger, reorganization, stock split, recapitalization, combination, exchange of
shares or other similar event.
ADMINISTRATION AND DURATION OF THE 1996 PLAN
The 1996 Plan is intended to be self-governing. Therefore, the 1996 Plan
requires no discretionary action by any administrative body with regard to any
transaction under the 1996 Plan. To the extent, if any, that any questions of
interpretation arise, these shall be resolved by the Board of Directors.
The 1996 Plan will terminate on August 23, 2006, unless sooner terminated
by the Board of Directors. Upon such termination, the outstanding options
granted pursuant to the 1996 Plan will remain in effect until their exercise or
expiration. The Board may, in its discretion, suspend or terminate the 1996 Plan
at any time prior to such date, but such termination or suspension shall not
adversely affect any right or obligation with respect to any outstanding option.
GRANTING AND TERMS OF OPTIONS
On the date on which a Non-Employee Director, other than a Non-Employee
Director who was serving as such on the Effective Date, is first elected or
appointed as a Non-Employee Director during the existence of the 1996 Plan, such
Non-Employee Director shall automatically be granted an option to purchase 5,000
shares of voting Common Stock. Each Non-Employee Director (i.e., Messrs. Goldman
and Costello) as of the Effective Date has been granted an option to purchase
5,000 shares of voting Common Stock.
In subsequent years after the year in which a Non-Employee Director is
first elected or appointed (or has otherwise received options as provided in the
preceding paragraph), such Non-Employee Director shall, on the day following the
annual meeting of shareholders in each year during the time the 1996 Plan is in
effect, automatically be granted an option to purchase 5,000 shares of voting
Common Stock.
EXERCISE PRICE
The per share exercise price of each option granted pursuant to the 1996
Plan shall be an amount equal to 100% of the fair market value of the voting
Common Stock on the date that the option is granted (subject to adjustment as
provided under the Antidilution Provisions). For purposes of the 1996 Plan, the
"fair market value" of a share of voting Common Stock is defined as the average
closing price of the voting Common Stock on an established national or regional
stock exchange or automated quotation system, including, without limitation, the
Nasdaq National Market, during the five trading days immediately preceding the
date that the
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<PAGE> 8
option is granted. If the voting Common Stock is not listed on such an exchange
or quoted on such a quotation system, the fair market value of the voting Common
Stock will be determined by the Board of Directors.
VESTING SCHEDULE
Options granted pursuant to the 1996 Plan may be exercised, in whole or in
part, as follows: (i) the option may not be exercised to any extent prior to one
year following the date of grant; (ii) the option may be exercised to the extent
of 25% of the shares subject to such option after one year following the date of
grant and may be exercised to the extent of an additional 25% of the shares
subject to such option after each of the second, third, and fourth years
following the date of grant.
OPTION PERIOD
The term of each option granted pursuant to the 1996 Plan shall be for a
period of 10 years from the date of its grant. In certain circumstances
involving certain (i) mergers and reorganizations and (ii) transactions
involving the sale or transfer of substantially all of the assets of the Company
or the acquisition of more than 50% of the voting Common Stock by any person or
group of related persons without the prior approval of the Board, options that
have been granted under the 1996 Plan shall become immediately exercisable in
full.
METHOD OF PAYMENT
Payment of the option price may be made in cash or by check, or by delivery
of shares of voting Common Stock equivalent in fair market value to the option
price, or by a combination of cash and shares of voting Common Stock, at the
election of the Non-Employee Director and subject to the terms of the applicable
stock option agreement.
METHOD OF EXERCISE AND PAYMENT TERMS
Subject to the terms of each stock option agreement, options granted under
the 1996 Plan may be exercised in whole or in part. Upon exercise of an option,
the Non-Employee Director must pay in full the option price for the shares of
voting Common Stock being purchased.
LIMITATIONS ON TRANSFERABILITY AND EFFECT OF DEATH OR RESIGNATION
Options granted under the 1996 Plan are not transferable other than by will
or by the laws of descent and distribution.
During the lifetime of a Non-Employee Director, an option granted under the
1996 Plan shall be exercisable only by such Non-Employee Director and only while
he is a member of the Company's Board of Directors, or, if after termination of
service as a Non-Employee Director, either within (i) one month after the date
on which he ceases to be a Non-Employee Director, other than by reason of death
or resignation from the Board with the consent of the Company, or (ii) three
months after his death or resignation from the Board with the prior consent of
the Company, but only if and to the extent the option was exercisable prior to
death or resignation. If a Non-Employee Director is removed as a director for
"cause" (as defined in the Company's Articles of Incorporation, as amended from
time to time), all options of such Non-Employee Director shall terminate
immediately on the date of removal. If a Non-Employee Director dies within a
period during which a stock option could have been exercised under the 1996
Plan, the stock option may be exercised after his death by those entitled to
exercise such option under the Non-Employee Director's will or the laws of
descent and distribution, but only if and to the extent such stock option was
exercisable immediately prior to his death.
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<PAGE> 9
The above exceptions to the general rule that options granted under the
1996 Plan must be exercised while the Non-Employee Director is a member of the
Board are further limited by the requirement that no option may be exercised
after its expiration.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary, but not a complete discussion, of certain of
the federal income tax consequences of stock options granted under the 1996
Plan. Future legislative changes or changes in administrative or judicial
interpretation, some or all of which may be retroactive, could significantly
alter the tax treatment discussed herein. No discussion of state income tax law
has been included. The 1996 Plan is not required to be qualified under Section
401(a) of the Code and is not subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended (commonly known as "ERISA").
Nonqualified Stock Options -- General. The grant of a nonqualified stock
option will generally result in the recognition of ordinary income by an
optionee at the time of exercise in an amount equal to the excess of the fair
market value of the voting Common Stock acquired at such time over the exercise
price paid for such shares. The Company will generally be entitled to a
deduction in the same amount and at the same time as ordinary income is
recognized by the optionee. A subsequent disposition of the voting Common Stock
by the optionee will typically give rise to capital gain or loss to the extent
the amount realized from the sale differs from the optionee's tax basis, which
is usually the fair market value of the voting Common Stock acquired on the date
of exercise. This capital gain or loss will be a long-term gain or loss if the
voting Common Stock sold had been held for more than one year after the date of
exercise.
Payment of Option Price in Voting Common Stock. An optionee who pays all
or a portion of the exercise price of a nonqualified stock option by using
previously owned stock is subject to Internal Revenue Service rules concerning
recognition of income or gain and determination of basis with respect to the
stock received.
Withholding. If the Company determines that it is required to withhold
state or federal income tax as a result of the exercise of any option, it may
require the optionee to make arrangements satisfactory to the Company in order
to enable the Company to satisfy such withholding requirements. If such
arrangements are not made, the Company may refuse to issue or transfer shares of
stock upon exercise of the option.
If an optionee satisfies such withholding requirements by tendering
previously owned shares of voting Common Stock or requesting the Company to
withhold shares of voting Common Stock from the exercised option stock, the
transaction will be treated as a redemption of the voting Common Stock by the
Company. If the redemption meets one of three tests, the employee will be
entitled to treat the transaction in the same manner as a taxable sale of the
voting Common Stock. Accordingly, the difference between the fair market value
on the date income is recognized on the option shares and the tax basis of such
delivered shares will be a long-term or short-term capital gain or loss,
depending on the holding period of the delivered shares. If the redemption does
not meet any of these three tests, the amount of the withholding obligation
satisfied by tendering or withholding shares of voting Common Stock will be
treated as a distribution taxable as a dividend to the extent of the Company's
earnings and profits. Absent unusual circumstances, however, the redemption
should be treated as a taxable sale and not as a distribution.
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<PAGE> 10
STOCK PRICE PERFORMANCE GRAPH
The following graph presents a comparison of the cumulative total
shareholder return on the voting Common Stock with the Nasdaq Stock Market
(U.S.) Index and the Nasdaq Computer and DP Index. This graph assumes that $100
was invested on May 26, 1994, the date of the Company's initial public offering.
The stock price performance shown below is not necessarily indicative of future
price performance.
[GRAPH]
<TABLE>
<CAPTION>
5/26/94 7/31/94 7/31/95 7/31/96
-------- -------- -------- --------
<S> <C> <C> <C> <C>
ABR INFORMATION SERVICES, INC. $100 $118 $323 $1,171
NASDAQ STOCK MARKET-US INDEX $100 $ 99 $139 $ 151
NASDAQ COMPUTER & DP INDEX $100 $ 95 $164 $ 184
</TABLE>
The stock price performance graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Acts, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under the Acts.
8
<PAGE> 11
BOARD OF DIRECTORS
GENERAL
The Board of Directors has established Audit, Compensation and Stock Option
Committees. The Audit Committee, which is comprised of Messrs. Costello and
Goldman, is responsible for recommending to the Board of Directors the
appointment of independent auditors, reviewing with the independent auditors the
scope of the annual audit engagement, and establishing and reviewing the
Company's financial policies and control procedures. The Compensation Committee,
which is comprised of Messrs. Costello, Goldman and MacDougald, is responsible
for establishing the compensation of the Company's directors, officers and other
managerial personnel, including salaries, bonuses and other forms of
compensation. The Stock Option Committee, which is comprised of Messrs. Costello
and Goldman, is responsible for administering the Company's stock option plans.
The Board of Directors held four meetings during the fiscal year ended July
31, 1996. The Board of Directors also took certain actions by unanimous written
consent in lieu of a meeting, as permitted by Florida law. The Audit Committee,
the Compensation Committee and the Stock Option Committee each met once. All
directors attended all meetings of the Board of Directors and all Committees on
which they served during the fiscal year ended July 31, 1996, except Mr. Hood,
who attended two of the four meetings of the Board of Directors. Mr. Hood
retired as Executive Vice President and a Director of the Company effective
August 3, 1996.
DIRECTOR COMPENSATION
Directors who are executive officers of the Company receive no compensation
for service as members of either the Board of Directors or committees thereof.
Directors who are not executive officers of the Company receive an annual fee of
$6,000, plus $1,000 for each board meeting attended and $1,000 per committee
meeting attended.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
During the fiscal year ended July 31, 1996, the executive officers and
directors of the Company filed with the Securities and Exchange Commission
(the"Commission") on a timely basis all required reports relating to
transactions involving equity securities of the Company beneficially owned by
them. The Company has relied on the written representation of its executive
officers and directors and copies of the reports they have filed with the
Commission in providing this information.
9
<PAGE> 12
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of voting Common Stock as of the Record Date, with respect to: (i)
each of the Company's directors; (ii) each of the Company's executive officers
named in the Summary Compensation Table below; (iii) all directors and executive
officers of the Company as a group; and (iv) each person known by the Company to
own beneficially more than 5% of the voting Common Stock. Except as otherwise
indicated, each of the shareholders listed below has sole voting and investment
power over the shares beneficially owned.
<TABLE>
<CAPTION>
BENEFICIALLY OWNED
-----------------------
SHARES PERCENT
--------- -------
<S> <C> <C>
James E. MacDougald(1)(2)(3)........................................... 378,361 2.8%
Vincent Addonisio(1)(4)................................................ 51,671 *
Suzanne M. MacDougald(1)(5)(6)......................................... 362,090 2.7
Randolph C. Metcalfe(7)................................................ 138,494 1.0
Stephen R. Hood(8)(9).................................................. 370,718 2.7
Thomas F. Costello(10)................................................. 356,438 2.6
Mark M. Goldman(11)(12)................................................ 172,237 1.3
Putnam Investments, Inc.(13)........................................... 1,476,700 10.8
Directors and executive officers as a group (seven persons)(14)........ 1,830,009 13.3
</TABLE>
- ---------------
* Less than 1%.
(1) The business address of Messrs. MacDougald and Addonisio and Mrs.
MacDougald is 34125 U.S. Highway 19 North, Palm Harbor, Florida 34684.
(2) Excludes 362,090 shares beneficially owned by his wife, Suzanne M.
MacDougald, and reported elsewhere in this table.
(3) Includes 22,393 shares issuable under currently exercisable options.
(4) Includes 50,416 shares issuable under currently exercisable options.
(5) Excludes 378,361 shares beneficially owned by her husband, James E.
MacDougald, and reported elsewhere in this table.
(6) Includes 10,435 shares issuable under currently exercisable options.
(7) Includes 19,736 shares issuable under currently exercisable options.
(8) Includes 33,860 shares owned of record by Mr. Hood's minor children.
(9) Includes 16,532 shares issuable under currently exercisable options. Mr.
Hood retired as Executive Vice President and a Director of the Company
effective August 3, 1996.
(10) Includes 1,875 shares issuable under currently exercisable options.
(11) Includes 15,350 shares owned of record by Mr. Goldman's wife.
(12) Includes 1,875 shares issuable under exercisable options.
(13) The business address of Putnam Investments, Inc. is One Post Office Square,
Boston, Massachusetts 02107.
(14) See notes (2) to (12) above.
10
<PAGE> 13
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning compensation
paid to or earned by the Company's President and Chief Executive Officer and
each of the Company's four other most highly compensated executive officers who
earned more than $100,000 for the fiscal years ended July 31, 1996, 1995 and
1994.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION NUMBER OF
FISCAL ------------------- OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS SARS COMPENSATION(1)
- ----------------------------------------- ------ -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
James E. MacDougald, 1996 $175,000 $315,000 90,000 $ 4,396
President and Chief Executive Officer 1995 152,000 148,856 35,723 3,800
ABR Information Services, Inc. 1994 152,400 55,998 9,170 3,810
Vincent Addonisio, 1996 130,812 155,000 30,000 3,653
Executive Vice President, 1995 115,500 99,479 33,758 2,888
Chief Financial Officer and Treasurer 1994 105,438 27,999 2,876 6,448
ABR Information Services, Inc.
Stephen R. Hood,(2) 1996 126,225 45,000 -- 2,933
Executive Vice President 1995 123,400 99,479 26,424 3,085
ABR Information Services, Inc. 1994 123,400 27,999 6,983 3,085
Randolph C. Metcalfe, 1996 126,250 111,000 10,000 3,670
Executive Vice President 1995 116,813 99,479 26,159 2,920
ABR CobraServ, Inc. 1994 111,000 27,999 5,511 2,775
Suzanne M. MacDougald, 1996 67,000 58,000 15,000 1,686
Senior Vice President and Secretary 1995 65,000 47,189 24,458 1,625
ABR Information Services, Inc. 1994 60,000 9,333 2,852 1,500
</TABLE>
- ---------------
(1) Includes allocations to the accounts of the executive officers under the
Company's defined contribution savings plan. See "-- Savings Plan."
(2) Mr. Hood retired as Executive Vice President and a Director of the Company
effective August 3, 1996.
11
<PAGE> 14
The following table sets forth information with respect to grants of stock
options during fiscal 1996 to the executive officers named in the Summary
Compensation Table.
OPTION GRANTS IN FISCAL 1996
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATES OF
------------------------------------------------------------ STOCK PRICE
% OF TOTAL OPTIONS APPRECIATION FOR
GRANTED TO EMPLOYEES EXERCISE OPTION TERMS
OPTIONS IN FISCAL PRICE -----------------------
NAME GRANTED 1996 PER SHARE EXPIRATION DATE 5%(2) 10%(2)
- ----------------------- ------- -------------------- --------- --------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
James E. MacDougald.... 30,000 10.5% $ 13.53 8/11/05 $ 255,268 $ 646,900
60,000 21.0 33.25 2/20/06 1,254,644 3,179,517
Vincent Addonisio...... 30,000 10.5 33.25 2/20/06 627,322 1,589,759
Stephen R. Hood(3)..... -- -- -- -- -- --
Randolph C. Metcalfe... 10,000 3.5 33.25 2/20/06 209,107 529,920
Suzanne M. MacDougald.. 15,000 5.3 33.25 2/20/06 313,661 794,879
</TABLE>
- ---------------
(1) Options granted under the Company's 1987 Stock Option Plan and 1993 Stock
Option Plan (the "Plans") are exercisable by the named executive officer to
the extent of 25% of the shares subject to such options each year beginning
one year after the date of grant subject to certain conditions.
(2) Assumes rates of voting Common Stock price appreciation that are prescribed
by the Commission.
(3) Mr. Hood retired as Executive Vice President and a Director of the Company
effective August 3, 1996.
The following table sets forth information with respect to the aggregate
stock option exercises by the executive officers named in the Summary
Compensation Table during fiscal 1996 and the year-end value of unexercised
options held by such executive officers.
AGGREGATED OPTION EXERCISES IN FISCAL 1996
AND YEAR-END OPTIONS VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
NUMBER OF OPTIONS IN-THE-MONEY OPTIONS AT
SHARES AT YEAR-END YEAR-END (1)
ACQUIRED ON VALUE -------------------------- --------------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------------- ----------- -------- ----------- ------------ ---------------- -------------
<S> <C> <C> <C> <C> <C> <C>
James E. MacDougald................... -- -- 22,393 112,500 $ 954,541 $ 3,016,650
Vincent Addonisio..................... -- -- 50,416 52,500 2,306,282 1,375,050
Steven R. Hood(2)..................... -- -- 16,532 16,875 705,144 637,538
Randolph C. Metcalfe.................. 2,672 $ 99,265 19,736 26,875 860,674 812,538
Suzanne M. MacDougald................. -- -- 10,435 31,875 428,844 900,038
</TABLE>
- ---------------
(1) Represents the number of shares of voting Common Stock that may be acquired
upon the exercise of options, multiplied by the difference between (i) the
closing sales price per share of the voting Common Stock as of the end of
fiscal 1996 ($50.75 per share) and (ii) the exercise price per share.
(2) Mr. Hood retired as Executive Vice President and a Director of the Company
effective August 3, 1996.
12
<PAGE> 15
EMPLOYMENT AND SEVERANCE AGREEMENTS WITH NAMED EXECUTIVE OFFICERS
In March, 1994, the Company entered into one-year employment agreements
with each of James E. MacDougald, Vincent Addonisio, Stephen R. Hood, Randolph
C. Metcalfe and Suzanne M. MacDougald. These agreements have been renewed
annually, most recently in March, 1996 for an additional one-year term, and
currently provide for annual base salaries of $190,000, $140,000, $127,600,
$130,000, and $40,000, respectively. Each employment agreement provides that
during a period of not less than one year nor more than two years following
termination of employment, as determined by the Company's Board of Directors,
the executive officer will not, in any area in which the Company's business is
then conducted, directly or indirectly compete with the Company, or participate
as an officer, employee, partner, director or otherwise, or have any financial
interest, in any business that is in competition with the business of the
Company, subject to certain limitations. Each employment agreement automatically
renews for successive one-year terms unless terminated by either party, and
provides that if the employment agreement is terminated for any reason other
than the executive officer's death or disability, or for cause (as defined
therein), the Company will pay the executive officer severance during the period
following termination of employment in which the executive officer is required
not to compete with the Company, based on the executive officer's annual base
salary during the year of termination. Such severance payment may, upon the
executive officer's election, be paid in one lump sum. Under each employment
agreement, the executive officer is entitled to participate in such bonus
programs and other benefit plans as are generally made available to senior
management of the Company.
Mr. Hood retired as Executive Vice President and a Director of the Company
effective August 3, 1996. Subsequently, Mr. Hood was paid a severance payment in
accordance with his employment agreement.
The Company also has an employment and severance agreement with each of
Messrs. MacDougald and Addonisio. Each of these agreements provides, among other
things, that the executive officer is entitled to benefits if, within five years
after a "change in control of the Company," the officer's employment is ended
through (i) termination by the Company, other than by reason of death or
disability or for cause (as defined in the agreements), or (ii) termination by
the officer due to a material breach of the agreement by the Company or a
significant change in the officer's responsibilities. The benefits provided are:
(i) a cash termination payment of up to five times the sum of the executive
officer's annual salary at the time of termination and his average annual bonus
during the three years before the termination and (ii) continuation for up to
five years of equivalent hospital, medical, dental, accident, disability and
life insurance coverage as in effect at the time of termination. Among other
situations, a "change of control of the Company" will be deemed to have occurred
for purposes of the agreements if: (i) a person (other than with respect to an
employee benefit plan of the Company) becomes the beneficial owner of 50% or
more of the voting power of the Company's securities; (ii) at any time one-half
or more of the directors of the Company are not Continuing Directors (as defined
in the agreements); (iii) there is consummated any merger of the Company or
share exchange involving the Company, whether or not the Company is the
surviving corporation and/or pursuant to which shares of voting Common Stock are
converted into cash, securities or other property, unless the holders of voting
Common Stock receive at least 50% of the voting power of the voting Common Stock
of the surviving corporation immediately after the merger or share exchange;
(iv) the Company sells or otherwise disposes of all or substantially all of its
assets; or (v) the shareholders of the Company approve a plan of liquidation or
dissolution for the Company. Each agreement provides that if any portion of the
benefits under the agreement or under any other agreement for the officer would
constitute an "excess parachute payment" for purposes of the Internal Revenue
Code, benefits will be reduced so that the officer will be entitled to receive
$1 less than the maximum amount which he could receive without becoming subject
to the 20% excise tax imposed by the Code, or which the Company may pay without
loss of deduction under the Code. With respect to each of Mr. MacDougald and Mr.
Addonisio, any benefits payable under his employment and severance agreement are
in lieu of the severance payments that may be due under his employment
agreement.
13
<PAGE> 16
INCENTIVE BONUS PLAN
Effective August 1, 1993, the Company adopted an Incentive Bonus Plan,
which provides for the discretionary payment of annual incentive awards to key
employees pursuant to a formula related to the Company's pre-tax profits (income
before income taxes), based on the attainment of pre-established goals related
to the Company's pre-tax margin (income before income taxes divided by revenues)
and its revenue growth (based on annual increases in revenues). Payments under
the Incentive Bonus Plan are discretionary, based on the determination of the
Board of Directors of the Company, and are subject to certain limitations as
provided in the Incentive Bonus Plan. Quarterly advances against estimated
annual payments may be made at the Company's discretion. No bonus can be earned
under the Incentive Bonus Plan in any fiscal year unless the Company's revenues
increase by at least 20% over the prior fiscal year, and the Company's pre-tax
margin is at least 16%, including the effect of the bonus on pre-tax margin. The
maximum amount of the bonus pool in any fiscal year is limited to the amount
that would be determined if revenue growth were 50% over the prior fiscal year,
and the pre-tax margin is 20%, including the effect of the bonus on pre-tax
margin. Under the Incentive Bonus Plan, 90% of the amount of bonus pool
distributions are based on established allocations for each eligible executive
officer, and the remaining 10% is distributed based on the recommendation of the
Chief Executive Officer.
SAVINGS PLAN
Effective January 1, 1992, the Company established a defined contribution
savings plan (the "Savings Plan") covering substantially all employees. The
Savings Plan consists of an employee elective contribution and a company
matching contribution for each eligible participant. The Company's matching
contribution is determined by the Board of Directors on a discretionary basis.
The Company's contributions under the Savings Plan in fiscal 1994, 1995 and 1996
were approximately $54,000, $124,500 and $167,969, respectively.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
James E. MacDougald, the Company's Chairman of the Board, President and
Chief Executive Officer, is a member of the Compensation Committee of the Board
of Directors. As a result, Mr. MacDougald participated in deliberations
regarding the compensation to be paid to executive officers of the Company
during fiscal 1994, 1995 and 1996.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
INTRODUCTION
Under the rules of the Commission, the Company is required to provide
certain information concerning compensation provided to the Company's chief
executive officer and its executive officers. The disclosure requirements for
the executive officers include the use of tables and a report of the Committee
responsible for compensation decisions for the named executive officers,
explaining the rationale and considerations that led to those compensation
decisions. Therefore, the Compensation Committee of the Board of Directors has
prepared the following report for inclusion in this Proxy Statement.
COMPENSATION COMMITTEE ROLE
The Compensation Committee of the Board of Directors and the Stock Option
Committee are responsible for separate aspects of the Company's compensation
program for its executive officers, including the named executive officers. The
Compensation Committee is responsible for making recommendations to the Board of
Directors concerning the salaries of executive officers. The Compensation
Committee is also responsible for overseeing other forms of cash compensation
and benefits to other senior officers. The Compensation Committee's
responsibilities include reviewing salaries, benefits and other compensation of
senior officers and making recommendations to the full Board of Directors with
respect to these matters. Since the completion of the Company's initial public
offering, the Stock Option Committee is responsible for making stock option
grants under the Company's stock option plans to executive officers of the
Company.
14
<PAGE> 17
Prior to the Company's initial public offering: (i) the Company's chief
executive officer made recommendations to the Board of Directors with respect to
stock option grants to executive officers other than the chief executive
officer; and (ii) the Board of Directors (excluding the chief executive officer)
made decisions with respect to stock option grants to the chief executive
officer.
COMPENSATION PHILOSOPHY
The compensation philosophy for executive officers conforms generally to
the compensation philosophy followed for all of the Company's employees. The
Company's compensation is designed to maintain executive compensation programs
and policies that enable the Company to attract and retain the services of
highly qualified executives. In addition to base salaries, executive
compensation programs and policies consisting of discretionary cash bonuses and
periodic grants of stock options are designed to reward and provide incentives
for individual contributions as well as overall Company performance.
The Compensation Committee monitors the operation of the Company's
executive compensation policies. In August, 1993, the Company implemented the
recommendations of independent compensation consultants that were retained by
the Company to assess the effectiveness of the Company's executive compensation
programs by comparing the Company's compensation programs to various other
information services companies and other companies with similar growth
characteristics to those of the Company. Key elements of the Company's
compensation program consists of base salary, discretionary annual cash bonuses
and periodic grants of stock options. The Company's policies with respect to
these elements, including the basis for the compensation awarded the Company's
chief executive officer, are discussed below. While the elements of compensation
described below are considered separately, the Compensation Committee takes into
account the full compensation package offered by the Company to the individual,
including healthcare and other insurance benefits and contributions made by the
Company under the Company's Savings Plan. See "Executive Compensation -- Savings
Plan."
Base Salaries. The Company has established competitive annual base
salaries for all executive officers, including the named executive officers. The
Company has entered into one-year employment agreements with each of the
executive officers. Each employment agreement automatically renews for
successive one-year terms unless terminated by either party. See "Executive
Compensation-Employment Agreements." The annual base salaries for each of the
Company's executive officers, including the Company's chief executive officer,
reflect both the recommendations of the Company's compensation consultants and
the subjective judgment of the Compensation Committee based on the consideration
of the executive officer's position with the Company, the executive officer's
tenure, the Company's needs, and the executive officer's individual performance,
achievements and contributions to the growth of the Company.
Mr. MacDougald's annual base salary as the Company's chief executive
officer is currently $190,000. The Compensation Committee believes that this
annual base salary is consistent with the salary range established for this
position based on the Company's discussions with outside consultants, the
factors noted above and Mr. MacDougald's prior experience and managerial
expertise, his knowledge of the Company's operations and the industry in which
it operates.
Annual Bonus. The Company's executive officers are eligible for an annual
cash bonus under the Company's Incentive Bonus Plan, which was implemented based
on its discussions with independent compensation consultants in August, 1993.
The Incentive Bonus Plan provides for the discretionary payment of annual
incentive awards to key employees, including executive officers of the Company,
pursuant to a formula related to the Company's pre-tax profits (income before
income taxes), based on the attainment of preestablished goals related to the
Company's pre-tax margin (income before income taxes divided by revenues) and
its revenue growth (based on annual increases in revenues). Payments under the
Incentive Bonus Plan are discretionary, and are subject to certain limitations
as provided in the Incentive Bonus Plan. Under the Incentive Bonus Plan, 90% of
the amount of bonus pool distributions are based on established allocations for
each eligible executive officer, and the remaining 10% is distributed based on
the recommendation of the Company's chief executive officer.
15
<PAGE> 18
The amount of the cash bonus paid to Mr. MacDougald as the Company's chief
executive officer under the Incentive Bonus Plan was $315,000 for the fiscal
year ended July 31, 1996, and was determined in accordance with the provisions
of the Incentive Bonus Plan.
Stock Options. Under the Plans, stock options may be granted to key
employees, including executive officers of the Company. Prior to the Company's
initial public offering, the Company's chief executive officer made
recommendations to the Board of Directors with respect to the granting of stock
options to employees, including executive officers of the Company other than the
chief executive officer, for approval or disapproval by the Board of Directors.
Since the Company's initial public offering, the Plans are administered by the
Stock Option Committee in accordance with the requirements of Rule 16b-3.
Prior to the Company's initial public offering, the principal factors
considered in determining the granting of stock options to executive officers of
the Company, including the Company's chief executive officer, were the executive
officer's tenure with the Company, his or her total cash compensation for the
prior year, the executive officer's acceptance of additional responsibilities
and his or her contributions toward the Company's attainment of strategic goals.
All stock options granted under the Plans were made at fair market value on the
date of grant and were not exercisable for a vesting period of one to four years
following the date of grant.
During the fiscal year ended July 31, 1996, options to purchase 90,000
shares of voting Common Stock under the Plans were granted to Mr. MacDougald.
SECTION 162(M) LIMITATIONS
Under Section 162(m) of the Internal Revenue Code, a tax deduction by
corporate taxpayers, such as the Company, is limited with respect to the
compensation of certain executive officers unless such compensation is based
upon performance objectives meeting certain regulatory criteria or is otherwise
excluded from the limitation. Based upon the Compensation Committee's commitment
to link compensation with performance as described in this report, the
Compensation Committee currently intends to qualify compensation paid to the
Company's executive officers for deductibility by the Company under Section
162(m).
COMPENSATION COMMITTEE
Thomas F. Costello
Mark M. Goldman
James E. MacDougald
October 11, 1996
The report of the Compensation Committee shall not be deemed incorporated
by reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934 (together, the "Acts"), except to the extent
that the Company specifically incorporates this information by reference, and
shall not otherwise be deemed filed under such Acts.
16
<PAGE> 19
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Grant Thornton LLP as the Company's
independent auditors for fiscal 1997. A representative of Grant Thornton LLP
will be present at the Annual Meeting. Such representative will be available to
respond to appropriate questions and may make a statement if he or she so
desires.
SHAREHOLDER PROPOSALS
Proposals which shareholders intend to present at the 1997 Annual Meeting
of Shareholders must be received by the Company no later than June 30, 1997 to
be eligible for inclusion in the proxy material for that meeting.
OTHER MATTERS
Management knows of no matter to be brought before the Annual Meeting which
is not referred to in the Notice of Annual Meeting. If any other matters
properly come before the Annual Meeting, it is intended that the shares
represented by Proxy will be voted with respect thereto in accordance with the
judgment of the persons voting them.
By Order of the Board of Directors,
SUZANNE M. MACDOUGALD
Secretary
17
<PAGE> 20
EXHIBIT A
AMENDMENT TO ARTICLE III
OF THE ARTICLES OF INCORPORATION
OF ABR INFORMATION SERVICES, INC.
The Articles of Incorporation of ABR Information Services, Inc. are hereby
amended to delete the first two sentences of Section 3.1 of Article III in their
entirety and replace them with the following:
"The total number of shares of all classes of capital stock that the
Corporation shall have the authority to issue shall be 102,250,000 shares, of
which 100,250,000 shares shall be Common Stock having a par value of $0.01 per
share ("Common Stock") and 2,000,000 shares shall be Preferred Stock having a
par value of $0.01 per share ("Preferred Stock"). Of the Common Stock,
100,000,000 shares shall be voting shares ("Voting Common Stock") and 250,000
shares shall be nonvoting shares ("Nonvoting Common Stock")."
A-1
<PAGE> 21
EXHIBIT B
ABR INFORMATION SERVICES, INC.
1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. PURPOSE OF PLAN
The purpose of this Plan is to enable ABR Information Services, Inc. (the
"Company") and its Subsidiaries to compete successfully in attracting,
motivating and retaining Non-Employee Directors with outstanding abilities by
making it possible for them to purchase Shares on terms that will give them a
direct and continuing interest in the future success of the businesses of the
Company and its Subsidiaries and encourage them to remain as directors of the
Company or one or more of its Subsidiaries.
2. DEFINITIONS
For purposes of the Plan, except where the context clearly indicates
otherwise, the following terms shall have the meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the United States Internal Revenue Code of 1986, as
amended.
(c) "Effective Date" means the date the Plan is adopted by the Board.
(d) "Fair Market Value" means, with respect to a Share, if the Shares
are then listed and traded on a registered national or regional securities
exchange, or quoted on The National Association of Securities Dealers'
Automated Quotation System (including The Nasdaq Stock Market's National
Market), the average closing price of a Share on such exchange or quotation
system for the five trading days immediately preceding the date of grant of
an Option, or, if Fair Market Value is used herein in connection with any
event other than the grant of an Option, then such average closing price
for the ten trading days immediately preceding the date of such event. If
the Shares are not traded on a registered securities exchange or quoted in
such a quotation system, the Board shall determine the Fair Market Value of
a Share.
(e) "Non-Employee Director" shall mean any member of the Company's
Board of Directors who is not an employee of the Company or any Subsidiary.
(f) "Option" means an option granted under this Plan, which Option
shall not be an incentive stock option within the meaning of Section 422 of
the Code, or the corresponding provision of any subsequently enacted tax
statute.
(g) "Optionee" means any person who has been granted an Option which
Option has not expired or been fully exercised or surrendered.
(h) "Plan" means the Company's 1996 Non-Employee Director Stock Option
Plan.
(i) "Rule 16b-3" means Rule 16b-3 promulgated pursuant to Section
16(b) of the Securities Exchange Act of 1934, as amended, or any successor
rule.
(j) "Share" means one share of voting common stock, par value $.01 per
share, of the Company, and such other stock or securities that may be
substituted therefor pursuant to Section 5 hereof.
(k) "Subsidiary" means any "subsidiary corporation" within the meaning
of Section 424(f) of the Code.
3. LIMITS ON OPTIONS
The total number of Shares with respect to which Options may be granted
under the Plan shall not exceed in the aggregate 200,000 Shares, subject to
adjustment as provided in Section 5 hereof. If any Option
B-1
<PAGE> 22
expires, terminates or is terminated for any reason prior to its exercise in
full, the Shares that were subject to the unexercised portion of such Option
shall be available for future grants under the Plan.
4. GRANTING AND TERMS OF OPTIONS
(a) On the date on which a Non-Employee Director, other than a Non-Employee
Director who is serving as such on the Effective Date, is first elected or
appointed as a Non-Employee Director during the existence of the Plan, such
Non-Employee Director shall automatically be granted an Option to purchase 5,000
Shares. Each Non-Employee Director as of the Effective Date shall, on the
Effective Date, automatically be granted an Option to purchase 5,000 Shares.
(b) Each Non-Employee Director (if he or she continues to serve in such
capacity) shall, on the day following the annual meeting of shareholders in each
year during the time the Plan is in effect, automatically be granted an Option
to purchase 5,000 Shares; provided, however, that a Non-Employee Director who
receives, in any year, an Option pursuant to Section 4.(a) hereof shall not be
eligible to begin to receive grants pursuant to this Section 4.(b) until the
following year.
(c) Notwithstanding the provisions of Section 4.(a) and 4.(b) hereof,
Options shall be automatically granted to Non-Employee Directors under the Plan
only for so long as the Plan remains in effect and a sufficient number of Shares
are available hereunder for the granting of such Options.
(d) The exercise price of each Share subject to an Option shall be equal to
100% of the Fair Market Value of the Shares on the date of grant of such Option.
(e) Options shall not be assignable or transferable by the Optionee other
than by will or by the laws of descent and distribution.
(f) Each Option shall expire and all rights thereunder shall end at the
expiration of ten (10) years after the date on which it was granted, subject in
all cases to earlier expiration as provided in subsections (g) and (h) of this
Section 4.
(g) During the life of an Optionee, an Option shall be exercisable only by
such Optionee and only within one (1) month after the date on which the Optionee
ceases to be a Non-Employee Director, other than by reason of the Optionee's
death or resignation from the Board with the consent of the Company as provided
in subsection (h) of this Section 4, but only if and to the extent the Option
was exercisable immediately prior to such date, and subject to the provisions of
the subsections (f) and (i) of this Section 4. If the Optionee is removed as a
Director for cause (as defined in the Company's Articles of Incorporation, as
amended from time to time), all Options of the Optionee shall terminate
immediately on the date of removal.
(h) If an Optionee: (i) dies while a Non-Employee Director or within the
period when an Option could have otherwise been exercised by the Optionee; or
(ii) ceases to be a Non-Employee Director as a result of such Optionee's
resignation from the Board, provided that the Company has consented in writing
to such Optionee's resignation, then, in each such case, such Optionee, or the
duly authorized representatives of such Optionee, shall have the right, at any
time within three (3) months after the death or after such resignation of the
Optionee, as the case may be, and prior to the termination of the Option
pursuant to subsections (f) and (i) of this Section 4, to exercise any Option to
the extent such Option was exercisable by the Optionee immediately prior to such
Optionee's death or resignation.
(i) The Optionee may exercise the Option (subject to the limitations on
exercise set forth in subsection (f) of this Section 4), in whole or in part, as
follows: (i) the Option may not be exercised to any extent prior to one (1) year
following the date of grant; and (ii) the Option may be exercised to the extent
of 25% of the Shares subject to such Option after one year following the date of
grant and may be exercised to the extent of an additional 25% of the Shares
subject to such Option after each of the second, third and fourth years
following the date of grant.
(j) An Option may be exercised in whole at one time or in part from time to
time, subject to subsection (i) of this Section 4.
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5. EFFECT OF CHANGES IN CAPITALIZATION
(a) If the number of outstanding Shares is increased or decreased or
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of any recapitalization, reclassification,
stock split, combination of shares, exchange of shares, stock dividend or other
distribution payable in capital stock, or other increase or decrease in such
shares effected without receipt of consideration by the Company, a proportionate
and appropriate adjustment shall be made by the Board of Directors in (i) the
number and type of Shares subject to the Plan and which thereafter may be made
the subject of Options under the Plan, and (ii) the number and kind of shares
for which Options are outstanding, so that the proportionate interest of the
Optionee immediately following such event shall, to the extent practicable, be
the same as immediately prior to such event. Any such adjustment in outstanding
Options shall not change the aggregate option price payable with respect to
Shares subject to the unexercised portion of the Options outstanding but shall
include a corresponding proportionate adjustment in the option price per Share.
(b) Subject to Section 5.(c) hereof, if the Company shall be the surviving
corporation in any reorganization, merger, share exchange or consolidation of
the Company with one or more other corporations or other entities, any Option
theretofore granted shall pertain to and apply to the securities to which a
holder of the number of Shares subject to such Option would have been entitled
immediately following such reorganization, merger, share exchange or
consolidation, with a corresponding proportionate adjustment of the option price
per Share so that the aggregate option price thereafter shall be the same as the
aggregate option price of the Shares remaining subject to the Option immediately
prior to such reorganization, merger, share exchange or consolidation.
(c) In the event of: (i) the adoption of a plan of reorganization, merger,
share exchange or consolidation of the Company with one or more other
corporations or other entities as a result of which the holders of the Shares as
a group would receive less than fifty percent (50%) of the voting power of the
capital stock or other interests of the surviving or resulting corporation or
entity; (ii) the adoption of a plan of liquidation or the approval of the
dissolution of the Company; (iii) the approval by the Board of an agreement
providing for the sale or transfer of the assets of the Company; or (iv) the
acquisition of more than fifty percent (50%) of the outstanding shares by any
person within the meaning of Rule 13(d)(3) under the Securities Exchange Act of
1934 if such acquisition is not preceded by a prior expression of approval by
the Board, then, in each such case, any Option granted hereunder shall become
immediately exercisable in full, subject to any appropriate adjustments in the
number of Shares subject to such Option and the option price, regardless of any
provision contained in the Plan with respect thereto limiting the exercisability
of the Option for any length of time. Notwithstanding the foregoing, if a
successor corporation or other entity as contemplated in clause (i) or (iii) of
the preceding sentence agrees to assume the outstanding Options or to substitute
substantially equivalent options, then the outstanding Options issued hereunder
shall not be immediately exercisable, but shall remain exercisable in accordance
with the terms of the Plan and the applicable stock option agreements.
(d) Adjustments under this Section 5 relating to Shares or securities of
the Company shall be made by the Board, whose determination in that respect
shall be final and conclusive. Options subject to grant or previously granted
under the Plan at the time of any event described in this Section 5 shall be
subject to only such adjustments as shall be necessary to maintain the
proportionate interest of the Options and preserve, without exceeding, the value
of such Options. No fractional Shares or units of other securities shall be
issued pursuant to any such adjustment, and any fractions resulting from any
such adjustment shall be eliminated in each case by rounding upward to the
nearest whole Share or unit.
(e) The grant of an Option pursuant to the Plan shall not affect or limit
in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, consolidate, dissolve or liquidate, or to sell or
transfer all or any part of its business or assets.
6. DELIVERY AND PAYMENT FOR SHARES
(a) No Shares shall be delivered upon the exercise of an Option until the
option price for the Shares acquired has been paid in full. No shares shall be
issued or transferred under the Plan unless and until all legal
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<PAGE> 24
requirements applicable to the issuance or transfer of such Shares have been
complied with to the satisfaction of the Board. Any Shares issued by the Company
to an Optionee upon exercise of an Option may be made only in strict compliance
with and in accordance with applicable state and federal securities laws.
(b) Payment of the option price for the Shares purchased pursuant to the
exercise of an Option shall be made: (i) in cash or by check payable to the
order of the Company; (ii) through the tender to the Company of Shares, which
Shares shall be valued, for purposes of determining the extent to which the
option price has been paid thereby, at their Fair Market Value on the date of
exercise; or (iii) by a combination of the methods described in (i) and (ii)
hereof.
7. NO CONTINUATION AS A DIRECTOR AND DISCLAIMER OF RIGHTS
No provision in the Plan or in any Option granted or option agreement
entered into pursuant to the Plan shall be construed to confer upon any
individual the right to remain a director of the Company or any Subsidiary. The
Plan shall in no way be interpreted to require the Company to transfer any
amounts to a third party trustee or otherwise hold any amounts in trust or
escrow for payment to any Optionee or beneficiary under the terms of the Plan.
An Optionee shall have none of the rights of a shareholder of the Company until
all or some of the Shares covered by an Option are fully paid and issued to such
Optionee.
8. ADMINISTRATION
The Plan is intended to meet the requirements of Rule 16b-3(c)(2)(ii)
adopted under the Securities Exchange Act of 1934, as amended, and accordingly
is intended to be self-governing. To this end, the Plan requires no
discretionary action by any administrative body with regard to any transaction
under the Plan. To the extent, if any, that any questions of interpretation
arise, these shall be resolved by the Board.
9. NO RESERVATION OF SHARES
The Company shall be under no obligation to reserve or to retain in its
treasury any particular number of Shares in connection with its obligations
hereunder.
10. AMENDMENT OF PLAN
The Board, without further action by the shareholders, may amend this Plan
from time to time as it deems desirable; provided, that (i) no such amendment
shall be made without shareholder approval if such approval would be required to
comply with Rule 16b-3 and (ii) the provisions of Sections 4.(a) and 4.(b) shall
not be amended more than once every six months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act of 1974, as
amended, or the rules and regulations promulgated thereunder.
11. TERMINATION OF PLAN
This Plan shall terminate ten (10) years from the Effective Date. The Board
may, in its discretion, suspend or terminate the Plan at any time prior to such
date, but such termination or suspension shall not adversely affect any right or
obligation with respect to any outstanding Option.
12. EFFECTIVE DATE
The Plan shall become effective on the Effective Date and Options hereunder
may be granted at any time on or after that date, subject to approval of the
Plan by the Company's shareholders within one year after the Effective Date by a
majority of the votes cast at a duly held meeting of the shareholders of the
Company at which a quorum representing a majority of all outstanding stock is
present, either in person or by proxy, and in a manner that satisfies the
requirements of Rule 16b-3. Upon approval of the Plan by the shareholders of the
Company as set forth above, all Options granted under the Plan on or after the
Effective Date shall be fully effective as if the shareholders of the Company
had approved the Plan on the Effective Date.
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APPENDIX A
1996 ANNUAL MEETING OF SHAREHOLDERS OF
ABR INFORMATION SERVICES, INC.
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
The undersigned hereby appoints James E. MacDougald and Vincent Addonisio,
and each of them, as proxies, each with full power of substitution, to represent
and to vote all shares of voting common stock of ABR INFORMATION SERVICES, INC.,
a Florida corporation, (the "Company"), at the Annual Meeting of Shareholders of
the Company to be held on Friday, December 6, 1996, at 10:00 a.m., EST, and at
any adjournment thereof, hereby revoking any and all heretofore given:
1. Election of directors for terms expiring in 1998:
[ ] FOR THE ELECTION OF VINCENT ADDONISIO for term expiring in 1998 and
FOR THE ELECTION OF JAMES E. MACDOUGALD and THOMAS F. COSTELLO for
term expiring in 1999 (collectively, the "Nominees")
[ ] WITHHOLD AUTHORITY TO VOTE FOR THE NOMINEES
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list above.)
2. Approval of an amendment to the Company's Articles of Incorporation
increasing the number of authorized shares of voting common stock from
20,000,000 to 100,000,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of the Company's 1996 Non-Employee Director Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
(continued, and to be signed on reverse side)
(continued from other side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE NOMINEES, FOR THE APPROVAL OF THE AMENDMENT TO THE COMPANY'S
ARTICLES OF INCORPORATION AND FOR THE APPROVAL OF THE 1996 NON-EMPLOYEE DIRECTOR
STOCK OPTION PLAN.
DATED: 1996
--------------------,
--------------------------------
Signature of Shareholder
--------------------------------
Signature of Shareholder if held
jointly
Please sign exactly as your name appears hereon. If shares owned by more
than one person, all owners should sign. Persons signing as executors,
administrators, trustees or in similar capacities should so indicate. If a
corporation, please sign full corporate name by the president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED POSTAGE PAID ENVELOPE.
