SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
<Table>
[ ] Preliminary proxy statement [ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
</Table>
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
COMSHARE, INCORPORATED
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(Name of Registrant as Specified in Its Charter)
COMSHARE, INCORPORATED
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
(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:
--------------------------------------------------------------------------------
(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
--------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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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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COMSHARE, INCORPORATED
555 Briarwood Circle
Ann Arbor, Michigan 48108
(734) 994-4800
-------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 19, 2001
The Annual Meeting of Shareholders of Comshare, Incorporated, a Michigan
corporation, will be held at the Comshare Training Center, 555 Briarwood Circle,
Ann Arbor, Michigan 48108 on Monday, November 19, 2001 at 11:00 a.m., for the
following purposes:
1. To elect seven directors.
2. To consider and act upon a proposal to amend the Employee Stock
Purchase Plan to increase the number of shares of Common Stock of the
Company to be reserved for issuance under the Employee Stock Purchase Plan
by 800,000 shares.
3. To consider and act upon a proposal to amend the Directors Stock
Option Plan to (i) increase the annual option grant made to the
non-employee directors of the Company from 5,000 to 10,000 shares of Common
Stock of the Company, and (ii) increase the option grant made to the
non-employee directors of the Company when they are first elected to the
Company's Board of Directors from 7,500 to 15,000 shares of Common Stock of
the Company.
4. To vote upon such other matters as may properly come before the
meeting or any adjournment or adjournments thereof.
The determination of shareholders entitled to notice of and to vote at the
meeting was made as of the close of business on October 2, 2001, the record date
fixed by the Board of Directors for such purpose.
You are invited to attend the meeting. Whether or not you expect to be
present, please execute and return the enclosed proxy, which is solicited by the
Board of Directors of the Company. The proxy is revocable and will not affect
your right to vote in person if you attend the meeting.
By Order of the Board of Directors
JANET L. NEARY
Secretary
October 18, 2001
Ann Arbor, Michigan
COMSHARE, INCORPORATED
-------------------------
PROXY STATEMENT
2001 ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is provided in connection with the solicitation of
proxies by the Board of Directors of Comshare, Incorporated, a Michigan
corporation (the "Company"), to be used at the Annual Meeting of Shareholders of
the Company to be held on Monday, November 19, 2001 or at any adjournment or
adjournments thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting of Shareholders and in this Proxy Statement. In addition to the
solicitation by mail, proxies may be solicited in person or by telephone,
telegraph or facsimile by officers, directors and employees. The Company's
officers, directors and employees will not be additionally compensated, but may
be reimbursed for out-of-pocket expenses in connection with such solicitation.
The cost of soliciting proxies will be borne by the Company. The principal
executive offices of the Company are located at 555 Briarwood Circle, Ann Arbor,
Michigan 48108. This Proxy Statement and the accompanying form of proxy were
first given or sent to shareholders on or about October 18, 2001.
The Company's Annual Report to Shareholders for the year ended June 30,
2001 is enclosed with this Proxy Statement.
Shareholders are urged to read this Proxy Statement carefully and vote
their shares on each matter by returning their signed proxy cards before the
close of business on November 16, 2001. United States and Canadian shareholders
of record may vote their shares either by calling a toll-free telephone number
or by mailing their signed proxy cards. Shareholders who vote by telephone do
not need to mail their proxy cards. The telephone voting procedures are designed
to authenticate shareholders' identities, allow shareholders to give their
voting instructions and confirm that shareholders' instructions have been
recorded properly. Specific instructions for shareholders of record who wish to
use the telephone voting procedures are included on the enclosed proxy card. A
proxy may be revoked at any time prior to the voting at the 2001 Annual Meeting
by submitting a later-dated proxy (including a proxy by telephone), by giving
written notice of such revocation to the Corporate Secretary of the Company, or
by voting in person at the 2001 Annual Meeting.
Only holders of record of Common Stock of the Company at the close of
business on October 2, 2001 (the "Record Date") are entitled to vote at the
meeting or any adjournment or adjournments thereof. On that date, 10,112,835
shares of Common Stock were issued and outstanding. Each shareholder is entitled
to one vote for each share of Common Stock held of record on the Record Date.
Shares cannot be voted at the meeting unless the holder is present in person or
by telephone or represented by proxy. Shares may not be voted cumulatively for
the election of directors.
If no specific instructions are given and a proxy is properly given
(including a proxy by telephone), all shares covered by the proxy will be voted
by Dennis G. Ganster and Brian J. Jarzynski (i) for the election of all of the
Board's nominees for director; (ii) for approval of the amendment to the
Employee Stock Purchase Plan; and (iii) for approval of the amendment to the
Directors Stock Option Plan. Unless otherwise indicated by the shareholder, a
proxy (including a proxy by telephone) also gives Mr. Ganster and Mr. Jarzynski
discretionary authority to vote all shares of Common Stock represented by the
proxy on any other matter that is properly presented for action at the meeting.
The Board of Directors does not intend to present any other matters at the
Annual Meeting.
Abstentions, and withheld votes with respect to the election of directors,
are counted only for purposes of determining whether a quorum is present at the
2001 Annual Meeting. Broker non-votes are not counted for any purpose. Directors
are elected by a plurality of the votes cast, so that only votes cast "for"
directors are counted in determining which directors are elected. For purposes
of determining the number of votes cast with respect to any other matter that is
properly presented for action at the meeting, only those cast "for" or "against"
are included, and abstentions and broker non-votes are not counted for this
purpose.
MATTERS TO COME BEFORE THE MEETING
(1) ELECTION OF DIRECTORS
Seven directors will be elected, each to hold office until the next Annual
Meeting of Shareholders and until his or her successor is elected and qualified,
or until the director's resignation or removal. The individuals who will be
nominated by the Board of Directors for election at the Annual Meeting are
listed in the table below. Each of the nominees for election is presently a
director of the Company.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE NOMINATED
DIRECTORS.
Shares represented by proxies in the form accompanying this Proxy Statement
or by telephone vote will be voted for the election of the nominees listed below
unless the proxy is marked (in accordance with the instructions thereon) to
indicate that authority to do so is withheld. If, as a result of circumstances
not now known or foreseen, any of the nominees shall be unavailable to serve as
a director, proxies will be voted for the election of such other person or
persons as the Board of Directors may select. Each shareholder is entitled to
one vote for each share of Common Stock held.
<Table>
<Caption>
YEAR FIRST
ELECTED OR
APPOINTED
NAME AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION DIRECTOR
---- --- ------------------------------------------ ----------
Geoffrey B. Bloom........... 60 Chairman of the Board, Wolverine World Wide, Inc., a 1995
manufacturer and seller of footwear, Rockford,
Michigan
Daniel T. Carroll........... 75 Chairman of The Carroll Group, a management 1986
consulting company, Avon, Colorado
Richard L. Crandall......... 58 Managing Director of Arbor Partners, LLC, a venture 1968
capital firm, Ann Arbor, Michigan
Dennis G. Ganster........... 50 Chairman of the Board, President and Chief Executive 1997
Officer of the Company
Kathryn A. Jehle............ 49 Partner, Tatum CFO Partners, LLC, a provider of chief 1998
financial officer services, Charlotte, North
Carolina
Alan G. Merten.............. 59 President, George Mason University, Fairfax, Virginia 1985
John F. Rockart............. 70 Senior Lecturer, Sloan School of Management, 1989
Massachusetts Institute of Technology, Cambridge,
Massachusetts
</Table>
Mr. Bloom assumed the position of Chairman of the Board of Wolverine World
Wide, Inc. in April 2000, after having served as its Chairman and CEO from 1996
to 2000, President and Chief Executive Officer from 1993 to April 1996 and as
its Chief Operating Officer from 1987 to 1993. Mr. Bloom also serves as a
director of Coachmen Industries, Inc.
Mr. Carroll served as Chairman of the Board of the Company from March 1997
until August 2001. Mr. Carroll also serves as a director of the following
corporations: A.M. Castle & Co., American Woodmark Corporation, Oshkosh Truck
Corporation, Wolverine World Wide, Inc. and Woodhead Industries, Inc.
Mr. Crandall assumed the position of Managing Director of Arbor Partners,
LLC in November 1997. Mr. Crandall served as Chairman of the Board of the
Company from April 1994 to March 1997 and served as President and Chief
Executive Officer of the Company from 1970 to 1994. Mr. Crandall also serves as
a director of Diebold, Incorporated, and Giga Information Group, Inc.
Mr. Ganster assumed the position of Chairman of the Board of the Company in
August 2001. Mr. Ganster was appointed President and Chief Executive Officer of
the Company in August 1997, after having served as Senior Vice President of the
Company since July 1994. He had previously served as Vice President and Chief
Technology Officer of the Company from April 1993 to July 1994, and Vice
President of
2
Product Management from July 1988 to April 1993. Mr. Ganster has been with the
Company in various positions since 1972, with positions of responsibility in
sales, marketing and product development.
Ms. Jehle joined Tatum CFO Partners, LLC, as a partner in the Charlotte, NC
region in February 2001. Prior to joining Tatum, Ms. Jehle was Senior Vice
President and Chief Financial Officer of the Company from 1994 through February
2001.
Dr. Merten became the President of George Mason University on July 1, 1996.
Dr. Merten also serves as a director of BTG, Inc. and as trustee for Smith
Barney Citi Mutual Fund Trust.
Dr. Rockart assumed the position of Senior Lecturer, Center for Information
Systems Research, Sloan School of Management, Massachusetts Institute of
Technology, Cambridge, Massachusetts in July 2000. Dr. Rockart served as Senior
Lecturer and Director for the Center for Information Systems Research from July
1996 to July 2000. Dr. Rockart also serves as a director of Keane, Inc.
MEETINGS AND COMMITTEES OF THE BOARD
During the Company's fiscal year ended June 30, 2001, the Board of
Directors held six meetings. All of the Directors attended at least 75% of the
total number of meetings of the Board, and of any committees on which they
served, held during the period in which they served as Directors or members of
any such committees. The Company anticipates that regardless of the schedule
chosen for its regular meetings, there will be occasions on which not all
Directors are available. Furthermore, special meetings of the Board are
sometimes held on relatively short notice and Directors, particularly those
located outside the Detroit-Ann Arbor area, may sometimes be unable to attend
such meetings because of prior commitments.
The Compensation Committee of the Board met four times during the Company's
last fiscal year. The Compensation Committee is responsible for determining or
approving the salaries or range of salaries, bonus compensation and other
compensation arrangements for officers of the Company, and performing such
functions as may be delegated to it under the provisions of any bonus, stock
option or other compensation plans adopted by the Company. The members of the
Compensation Committee are Mr. Bloom and Drs. Merten and Rockart.
The Nominating Committee of the Board did not meet during the Company's
last year. This committee is responsible for identifying and recommending to the
Board qualified candidates for election as Directors of the Company. In carrying
out its responsibilities, the Nominating Committee will consider candidates
suggested by other Directors, employees and shareholders. Suggestions for
candidates, accompanied by biographical material for evaluation, may be sent to
the Secretary of the Company at the Company's principal executive offices. The
members of the Nominating Committee are Messrs. Crandall and Ganster and Dr.
Rockart.
The Audit Committee of the Board met six times during the Company's last
fiscal year. The Audit Committee's responsibilities include the following:
approve the independent auditors to be selected to audit the financial
statements of the Company; meet with the independent auditors and financial
management of the Company to review the scope of the Company's audit and
quarterly financial reviews, including the procedures to be utilized,
appropriateness of the auditor's compensation and, at the conclusion thereof,
review the findings of the audit or review, including comments or
recommendations of the auditors; report the results of the Company's annual
audit to the Board; annually obtain from the independent auditors a written
delineation of their relationships and professional services and take, or
recommend that the Board take, appropriate action to ensure the continuing
independence of the auditors; review with the independent auditors and the
Company's financial and accounting personnel the adequacy and effectiveness of
the Company's accounting and financial controls, and elicit recommendations for
improvements; inquire of management and the independent auditors about
significant risks and exposures to the Company and assess steps management can
take to minimize such risks; review quarterly and annual financial statements of
the Company to determine that the independent auditors do not take exception to
the disclosure and content of the quarterly financial statements, and that they
are satisfied with the disclosure and content of the annual financial
statements; review with financial management of the Company and the independent
auditors the results of their timely analysis of significant
3
financial reporting issues and practices, and the quality, not just
acceptability, of accounting principles and the clarity of the financial
disclosure practices used or proposed to be used; review reports received from
regulators and other legal and regulatory matters that may have a material
effect on the financial statements or related Company compliance policies;
investigate any matter related to the scope of the Committee's duties; appraise,
at least annually, the performance of the Company's Chief Financial Officer and
report the results to the Board; review the adequacy of resources and quality of
the Company's accounting and financial human resources; and annually review a
summary of the expenses of senior management. Members of the Audit Committee are
Mr. Carroll and Drs. Merten and Rockart.
AUDIT COMMITTEE REPORT
In accordance with its charter, the Audit Committee provides assistance to
the Board in fulfilling its responsibility to the shareholders, potential
shareholders and investment community relating to corporate accounting,
reporting practices of the Company and the quality and integrity of the
financial reports of the Company. In doing so, it is the responsibility of the
Audit Committee to maintain free and open communication between the Board, the
Company's independent auditors, the internal auditors and the financial
management of the Company. Each Audit Committee member is "independent," as
defined in Rule 4200(a)(14) of the National Association of Securities Dealers
Listing Standards.
The Audit Committee reviewed a formal written statement from the
independent auditors describing all relationships between the auditors and the
Company that might bear on the auditors' independence consistent with
Independence Standards Board Standard No. 1, "Independence Discussions with
Audit Committees," discussed with the auditors any relationships that may impact
their objectivity and independence and satisfied itself as to the auditors'
independence.
The Audit Committee discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees," and, with and without management present,
reviewed and discussed the results of the independent auditors' examination of
the financial statements.
The Audit Committee reviewed and discussed with management and the
independent auditors the audited financial statements of the Company for the
fiscal year ended June 30, 2001, including the quality of accounting principles
and significant judgments affecting the financial statements.
The Audit Committee has fulfilled its responsibilities under its charter
for the year ended June 30, 2001 and, based on the above-mentioned reviews and
discussions with management and the independent auditors, recommended to the
Board of Directors that the Company's audited financial statements be included
in its Annual Report on Form 10-K for the year ended June 30, 2001 for filing
with the Securities and Exchange Commission.
AUDIT COMMITTEE: ALAN G. MERTEN, CHAIR
DANIEL T. CARROLL
JOHN F. ROCKART
4
(2) PROPOSAL TO AMEND THE COMPANY'S EMPLOYEE STOCK PURCHASE PLAN
The Employee Stock Purchase Plan, as amended (the "Employee Stock Plan")
was initially approved by the shareholders of the Company at the 1994 Annual
Meeting of Shareholders held on November 17, 1994. The Employee Stock Plan
provides eligible employees of the Company with the means to purchase, through
payroll deductions, up to an aggregate of 800,000 shares of the Company's Common
Stock at a discount of 15% from the lower of the fair market value on either the
beginning date of the purchase period or the last day of the purchase period.
The Employee Stock Plan also permits non-employee directors to make semi-annual
elections, prior to the end of each December and June of each calendar year, to
purchase shares of Common Stock of the Company instead of receiving all or a
portion of his or her base cash compensation in cash. The purchase price of the
stock for non-employee directors is 100% of the fair market value of the
Company's Common Stock on the date of issuance. Eligible employees and directors
who participate in the Employee Stock Plan purchase Company Common Stock
directly from the Company and save brokerage fees and commissions. The purpose
of the Employee Stock Plan is to encourage increased ownership of the Company's
Common Stock by employees of the Company, including its executive officers, and
by non-employee directors to further align their interests with those of the
Company's shareholders.
PROPOSED AMENDMENT
AMENDMENT TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK OF THE COMPANY
RESERVED FOR ISSUANCE UNDER THE EMPLOYEE STOCK PLAN
At the June 26, 2001 meeting of the Board of Directors, the Board
authorized the management of the Company to seek approval from the shareholders
of the Company of an amendment to the Employee Stock Plan to increase the number
of shares of the Company's Common Stock reserved for issuance under the Employee
Stock Plan by 800,000 shares.
The increase in the number of shares authorized for issuance under the
Employee Stock Plan will allow the Company to continue to offer employees and
non-employee directors the opportunity to purchase additional shares of Common
Stock of the Company under the Employee Stock Plan. As of June 30, 2001, there
were 2,519 shares of the Company's Common Stock reserved for future issuance
under the Employee Stock Plan. Approximately 40% of the eligible employees of
the Company currently participate in the Employee Stock Plan. Six of the
non-employee directors have participated in the Employee Stock Plan, including
Kathryn A. Jehle, who participated while an employee of the Company. During
fiscal year 2001, eligible employees and non-employee directors elected to
purchase a total of 322,763 shares of the Company's Common Stock under the
Employee Stock Plan. Accordingly, if the Employee Stock Plan is not amended to
increase the number of shares reserved for issuance under the plan, there will
be insufficient shares available to satisfy current and future elections by the
Company's employees and non-employee directors to participate in the Employee
Stock Plan and the plan will have to be discontinued.
The management of the Company and the Board of Directors believe that this
proposed amendment to the Employee Stock Plan will assist the Company in its
efforts to attract and retain qualified employees and will further the Company's
goal of aligning the interests of the employees and non-employee directors with
those of the shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THE SHAREHOLDERS VOTE FOR THE APPROVAL OF
THE PROPOSED AMENDMENT TO THE EMPLOYEE STOCK PLAN.
TERMS OF THE EMPLOYEE STOCK PLAN
The following is a summary of the principal provisions of the Employee
Stock Plan, but it is not intended to be a complete description of all of the
terms and provisions of the Employee Stock Plan. A copy of the Employee Stock
Plan will be furnished to any shareholder upon written request to the Secretary
of the Company at the executive offices of the Company in Ann Arbor, Michigan.
5
ELIGIBLE PARTICIPANTS
Subject to the limited exceptions described below, all full-time employees
of the Company and its subsidiaries (as determined in accordance with section
423 of the Internal Revenue Code of 1986, as amended (the "Code")), are eligible
to participate in the Employee Stock Plan. In addition, the Company's non-
employee directors are also eligible to participate in the Employee Stock Plan.
As of October 2, 2001, there were 378 employees eligible to participate in the
Employee Stock Plan. Employees may not participate in the Employee Stock Plan to
the extent they own or hold Common Stock and options to purchase Common Stock
equal to 5% or more of the outstanding Common Stock. In addition, employees may
not purchase more than $25,000 of Common Stock under the Employee Stock Plan
(and any future plan qualified under Section 423 of the Code) in any calendar
year.
The Employee Stock Plan is administered by the Compensation Committee (the
"Committee"). Employees may elect to participate in the Employee Stock Plan by
presenting an election form and payroll deduction form specifying the percentage
of his or her cash compensation that the Company is authorized to withhold.
Payroll deductions are made in installments over a six-month purchase period
(the "Purchase Period"). The minimum payroll deduction that a participating
employee may authorize in any Purchase Period is one percent of his or her cash
compensation. An employee may suspend contributions during the Purchase Period
only with the approval of the Company in the event of an unforeseen hardship. On
the last day of the Purchase Period the contributions made by each participating
employee will be used to purchase shares of Common Stock of the Company at 85%
of the lower of the fair market value of the Common Stock of the Company on (i)
the beginning date of the Purchase Period; or (ii) the last day of the Purchase
Period. For purposes of the Employee Stock Plan, the fair market value of the
Common Stock is determined by the last sale price of shares of the Company's
Common Stock on the Nasdaq National Market(R), as reported in The Wall Street
Journal for the applicable days. As of the close of business on October 2, 2001,
the price per share of Common Stock as quoted on the Nasdaq National Market(R)
was $2.82. In the event that there are insufficient shares available for
purchase under the Employee Stock Plan at the end of a Purchase Period, the
shares available for purchase will be allocated to participating employees in
accordance with their compensation.
Non-employee directors may elect to participate in the Employee Stock Plan
by submitting a semi-annual election to the Company prior to the end of December
and June of each calendar year. The election covers the base cash compensation
(comprising semi-annual retainer and Board/Committee meeting fees) for the
six-month period ending on the June 30 or December 31 next following the date on
which the election is submitted. As of October 2, 2001, there were six
non-employee directors eligible to participate in the Employee Stock Plan. The
Common Stock of the Company purchased by a non-employee director shall have a
purchase price equal to 100% of the fair market value of the Company's Common
Stock on the date of issuance, which shall be February 15 or August 15 (or, if
later, two business days after the release of the Company's earnings for the
prior fiscal quarter), as applicable. For purposes of the Employee Stock Plan
with respect to non-employee directors, the fair market value of the Common
Stock is determined by the last sale price of shares of the Company's Common
Stock on the Nasdaq National Market(R), as reported in The Wall Street Journal,
for the date prior to the date of issuance or, if there are no sales on such
date, on the last date immediately preceding the issuance date on which there
were sales.
In the event of any change in the number of outstanding shares of Common
Stock of the Company due to a stock dividend, subdivision or combination of
shares, or reclassification of shares, the aggregate number of shares of stock
for which options may be granted and number of shares subject to each
outstanding option and the stated option price shall be appropriately adjusted
by the Committee, whose determination shall be conclusive. In the event of a
merger in which the Company is the surviving corporation, an employee shall be
entitled to exercise his or her option for the number of shares of stock or
other securities which such employee would have been entitled to receive if at
the time of merger such employee had been a holder of record of the number of
shares of Common Stock underlying the option. If the Company liquidates, or is
not the surviving corporation in the event of a merger, then the Purchase Period
for any option granted shall terminate but each employee shall have the right,
immediately prior to such event, to exercise his or her option for such Purchase
6
Period in full on the earlier to occur of the effective date of such merger or
liquidation or the last day of the Purchase Period.
If an employee participating in the Employee Stock Plan dies, becomes
disabled or ceases to be employed by the Company for any reason, the aggregate
amount of such employee's payroll deductions during the Purchase Period will be
returned to such employee or his or her executor or other legal representative.
If a non-employee director participating in the Employee Stock Plan ceases
to remain on the Board for any reason, including but not limited to, voluntary
or forced resignation, death, disability or retirement, the Company shall issue
a check to the former non-employee director (or executor, administrator or legal
representative, if applicable) in the aggregate amount of any accrued but unpaid
non-employee director's fees that had not yet been paid in the form of Common
Stock of the Company as of the non-employee director's date of termination on
the Board.
Unless previously terminated, the Employee Stock Plan will terminate on
July 31, 2004. The Board may at any time prior to that date terminate or
discontinue the Employee Stock Plan, or from time to time alter, amend or modify
the Employee Stock Plan; provided, however, that the Board may not, without the
approval of the shareholders of the Company, amend the Employee Stock Plan in
any manner that would disqualify the Employee Stock Plan under Section 423 of
the Code. No amendment or termination shall affect any option previously granted
without the consent of the holder.
The following table sets forth information with respect to shares purchased
under the Employee Stock Plan during fiscal year 2001 by each person or group of
persons listed in the table. No other person other than those listed in the
table purchased more than 5% of the shares of Common Stock of the Company
purchased under the Employee Stock Plan in fiscal year 2001.
<Table>
<Caption>
WEIGHTED AVERAGE SHARES
IDENTITY OF PERSON OR GROUP PURCHASE PRICE PURCHASED
--------------------------- ---------------- ---------
Dennis G. Ganster, ......................................... $2.2313 4,761
Director, Director Nominee and Chairman, President and
Chief Executive Officer
Brian Hartlen, ............................................. $2.2313 741
Senior Vice President, Marketing
Brian J. Jarzynski, ........................................ $2.2313 896
Vice President, Chief Financial Officer and Treasurer
David R. King, ............................................. $2.2313 4,302
Senior Vice President, Product Development and Chief
Technology Officer
Stanley R. Starkey, ........................................ $2.2313 2,732
Senior Vice President, Field Operations
Kathryn A. Jehle, .......................................... $2.2313 4,146
Director, Director Nominee and Former Senior Vice
President,
Chief Financial Officer and Treasurer
Norman R. Neuman, Jr., ..................................... $ -- --
Former Senior Vice President, Marketing
Geoffrey B. Bloom, ......................................... $ 3.734 4,820
Director and Director Nominee
Daniel T. Carroll, ......................................... $ 3.734 4,820
Director and Director Nominee
Richard L. Crandall, ....................................... $ 3.734 3,749
Director and Director Nominee
Alan G. Merten, ............................................ $ 3.734 4,820
Director and Director Nominee
</Table>
7
<Table>
<Caption>
WEIGHTED AVERAGE SHARES
IDENTITY OF PERSON OR GROUP PURCHASE PRICE PURCHASED
--------------------------- ---------------- ---------
John F. Rockart, ........................................... $ 3.734 4,820
Director and Director Nominee
All current executive officers as a group (5 persons)....... $2.2313 13,432
All current non-employee directors as a group (6 persons)... $3.5047 27,175
All other employees as a group (approximately 113
persons).................................................. $2.2313 282,156
</Table>
FEDERAL INCOME TAX CONSEQUENCES
The Employee Stock Plan is not a retirement plan qualified under Section
401 of the Code, but is intended to be a qualified employee stock plan under
Section 423 of the Code for employees participating in the plan. The plan is not
a qualified employee stock plan under Section 423 of the Code for participating
non-employee directors. An employee will not recognize taxable income prior to
the sale or other disposition of the shares of Common Stock purchased under the
Employee Stock Plan. If the Common Stock has been held by the employee for two
years from the date of grant and one year from the date of transfer (the
"Holding Period"), upon the sale or other disposition of such Common Stock, the
employee will recognize ordinary income in an amount equal to the difference
between the purchase price and the lower of (i) the fair market value of the
Common Stock on the date of grant or (ii) the disposition price. The employee
will also receive long or short-term capital gains on the amount by which the
disposition price exceeds the fair market value of the Common Stock on the date
of grant, if any. If the disposition price is less than the purchase price, the
employee will not recognize ordinary income and will have a long-term capital
loss in the amount of the difference between the disposition price and the
purchase price. If the employee disposes of the shares prior to satisfying the
Holding Period requirements, the employee will recognize ordinary income on the
difference between the purchase price and the fair market value of the shares on
the date of exercise, and the Company will receive a corresponding compensation
deduction. Any amount received on disposition in excess of the fair market value
of the Common Stock on the date of exercise will be taxed to the employee as
capital gain. A non-employee director who elects to use all or a portion of his
or her base directors' fees to purchase Common Stock under the Employee Stock
Plan, will recognize taxable ordinary income on the date of issuance equal to
100% of the fair market value of the shares on the date of issuance, and the
Company will receive a corresponding compensation tax deduction. Upon
disposition of the shares of Common Stock, the non-employee director will be
accorded capital gain or loss treatment on the difference between the
disposition price and the fair market value of the shares on the date of
issuance.
(3) PROPOSAL TO AMEND THE COMPANY'S DIRECTORS STOCK OPTION PLAN
The Directors Stock Option Plan, as amended (the "Directors Plan") was
initially approved by the shareholders of the Company at the 1994 Annual Meeting
of Shareholders held on November 17, 1994. The Directors Plan was adopted to
encourage increased ownership of the Company's Common Stock by the Company's
non-employee directors, and to provide such directors with incentive-based
compensation so as to further align their interests with the interests of the
Company's shareholders.
The Directors Plan provides for the issuance of options to purchase up to
200,000 shares of the Common Stock of the Company to non-employee directors of
the Company. Non-employee directors are granted options under the Directors Plan
in addition to their annual retainers and meeting fees.
AMENDMENT TO INCREASE THE GRANT OF OPTIONS TO NON-EMPLOYEE DIRECTORS UNDER
THE DIRECTORS STOCK PLAN
At the August 14, 2001 meeting of the Board of Directors, the Board
authorized the management of the Company to seek approval from the shareholders
of the Company for an amendment to the Directors Plan to increase the annual
stock option grants to non-employee directors under the Directors Plan from
5,000 shares to 10,000 shares of Company Common Stock per year and to change the
initial stock option grant to non-employee directors when they are first elected
to the Board from 7,500 shares to 15,000 shares. The Company and the Board of
Directors believe that this amendment will assist the Company in its efforts to
attract and
8
retain highly qualified non-employee directors by making the Company's
compensation package for such directors competitive with that of other companies
of similar size and in similar markets. In addition, the proposed amendment will
further the Company's goal of aligning the interests of its non-employee
directors with those of the shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THE SHAREHOLDERS VOTE FOR THE APPROVAL OF
THE AMENDMENT TO THE DIRECTORS PLAN.
TERMS OF THE DIRECTORS PLAN
The following is a summary of the principal provisions of the Directors
Plan, but it is not intended to be a complete description of all of the terms
and provisions of the Directors Plan. A copy of the Directors Plan will be
furnished to any shareholder upon written request to the Secretary of the
Company at the executive offices of the Company in Ann Arbor, Michigan.
ELIGIBLE PARTICIPANTS
Only directors who are not employees of the Company or any subsidiary of
the Company are eligible to participate in the Directors Plan. There are
currently six directors eligible to participate in the Directors Plan. Neither
the Named Officers, nor any other executives or employees of the Company, are
eligible to participate in the Directors Plan.
Under the Directors Plan, each non-employee director who is first elected
or appointed after November 17, 1994 to the Board of Directors will receive an
option to purchase 7,500 shares of Common Stock (proposed to be amended to
15,000 shares of Common Stock) ("Initial Option") on the date of the first Board
of Directors meeting following his or her election or appointment; provided that
he or she is still serving on the Board at the time of such Board meeting. In
addition, each non-employee director who has been a director for six months
before January 1 following the date of each Annual Meeting of Shareholders held
during the term of the Directors Plan, and who has not received his or her
Initial Option within six months before the January 1 following the Annual
Meeting, automatically shall be granted, as of January 1 following each such
Annual Meeting, an option to purchase an additional 5,000 shares of Common Stock
(proposed to be amended to 10,000 shares of Common Stock) ("Annual Option") if
he or she is still serving on the Board as of each January 1.
Grants of options under the Directors Plan shall be at exercise prices
equal to the last sale price per share of the Company's Common Stock on the
Nasdaq National Market(R), as reported in The Wall Street Journal on the date of
grant. As of the close of business on October 2, 2001, the price per share of
Common Stock as quoted on the Nasdaq National Market(R) was $2.82.
Each option granted under the Directors Plan becomes exercisable in four
annual increments of 25% of the shares subject to the option, and expires five
years from the date of grant, unless earlier terminated (the "Option Period").
If a non-employee director's service terminates for any reason prior to the date
the option or portion thereof becomes exercisable, such option or portion
thereof shall terminate. To the extent that an option is exercisable and is
unexercised on the date the non-employee director's service terminates, the
option shall terminate on the earlier of (i) the expiration date of the option
or (ii) two months after such non-employee director's termination; provided,
however, that the exercise period in clause (ii) shall be extended to one year
after termination if termination is due to the non-employee director's death or
disability. During the period from the non-employee director's termination until
the termination of the option, the non-employee director or the person or
persons to whom the option shall have been transferred by will or the laws of
descent and distribution, may exercise the option only to the extent that such
option was exercisable on the date of the non-employee director's termination.
The option exercise price is payable in cash, by certified check, bank
draft or money order, in Common Stock having a fair market value equal to the
option exercise price, or by any combination of the foregoing.
The Directors Plan provides that in the event of any merger or
consolidation in which the Company is the surviving corporation, the
non-employee director will be entitled to receive the number and class of shares
of
9
stock or other securities which the non-employee director would have been
entitled to receive if, at the time of such merger or consolidation, the
non-employee director had been a record holder of the number of shares of Common
Stock underlying the option; provided that a period of 12 months from the date
of grant has expired. In addition, options granted under the Directors Plan
become immediately exercisable, if not otherwise exercisable, upon the
dissolution or liquidation of the Company or upon any merger or consolidation in
which the Company is not the surviving corporation, provided that a period of 12
months from the date of grant has expired.
In the event of any dividend or subdivision or combination of shares,
reclassification or merger or consolidation in which the Company is the
surviving corporation, the aggregate number of shares of stock for which options
may be granted and the number of shares subject to each outstanding option and
the stated option price shall be appropriately adjusted; provided, however, that
no adjustment shall be made to the extent such adjustment would cause the
non-employee director to no longer be deemed "disinterested" for purposes of
Securities and Exchange Commission Rule 16b-3.
Options granted under the Directors Plan are not transferable except by
will or by the laws of descent and distribution, and may be exercised during a
non-employee director's lifetime only by such non-employee director.
The Directors Plan is administered by the Compensation Committee. The
Committee is authorized to construe the provisions of the Directors Plan, but
shall have no discretion with respect to the terms of grants made automatically
under the Directors Plan, except to the extent such discretion would not result
in the Directors Plan failing to qualify for the exemption provided under the
Securities and Exchange Commission Rule 16b-3.
Unless previously terminated, the Directors Plan will terminate on July 31,
2004. The Board may at any time prior to that date terminate or discontinue the
Directors Plan or from time to time alter, amend or modify the Directors Plan;
provided, however, that unless otherwise permitted under Securities and Exchange
Commission Rule 16b-3 without shareholder approval, no amendment or
modification, without the approval of the shareholders of the Company, shall (i)
materially increase the benefits accruing to non-employee directors under the
Directors Plan; (ii) increase the amount of Common Stock for which grants may be
made under the Directors Plan (other than as permitted under the Directors Plan
for anti-dilution purposes); or (iii) change the provisions relating to
eligibility of individuals to whom grants may be made under the Directors Plan.
No amendment or termination shall affect any option previously granted to a
non-employee director without the consent of such non-employee director.
The following table sets forth information with respect to options which
would be granted under the Directors Plan in fiscal year 2002 if the current
director nominees serve as members of the Board of Directors of the Company
through January 1, 2003, to each person or group of persons listed in the table.
No options were granted under the Directors Plan in the fiscal year 2001 because
of the acceleration of those options in fiscal year 2000. See "Further
Information -- Director Compensation." None of the Company's executive officers
or other employees participate in the Directors Plan. No associates of the
directors, executive officers or other employees participate in the Directors
Plan.
<Table>
<Caption>
FISCAL YEAR 2002
IDENTITY OF PERSON OR GROUP OPTION GRANTS
--------------------------- ----------------
Geoffrey B. Bloom................................ 10,000
Daniel T. Carroll................................ 10,000
Richard L. Crandall.............................. 10,000
Kathryn A. Jehle................................. 10,000
Alan G. Merten................................... 10,000
John F. Rockart.................................. 10,000
All current non-employee directors as a group (6
persons)....................................... 60,000
</Table>
10
FEDERAL INCOME TAX CONSEQUENCES
Upon the exercise of an option granted under the Directors Plan, a
non-employee director will recognize ordinary income equal to the difference
between the option price and the fair market value of the Common Stock at the
time of exercise, and the Company will receive a corresponding compensation tax
deduction. Upon disposition of the shares acquired upon exercise of the option,
the optionee will be accorded capital gain or loss treatment on the difference
between the fair market value of the Company's Common Stock on the date of the
disposition and the fair market value of the Company's Common Stock on the
option exercise date.
FURTHER INFORMATION
PRINCIPAL SHAREHOLDERS
The Common Stock is the only voting security of the Company. The following
table sets forth information with respect to beneficial ownership of the Common
Stock by each person known by management of the Company to be the beneficial
owner of more than five percent of its outstanding Common Stock. The number of
shares reported is as of the date indicated in the footnote below. The
percentage of class is based on 10,112,835 shares of Common Stock outstanding on
October 2, 2001. Except as where otherwise indicated, each person has sole
voting power and sole investment power with respect to all shares beneficially
owned by such person.
<Table>
<Caption>
AMOUNT AND NATURE OF NAME AND ADDRESS PERCENT
BENEFICIAL OWNERSHIP OF BENEFICIAL OWNER OF CLASS
-------------------- ------------------- --------
671,800(1) Benson Associates, LLC 6.64
111 S.W. Fifth Avenue
Suite 2130
Portland, Oregon 97204
936,200(2) Codec Systems Limited 9.26
Hyde House, Adelaide Road
Dublin 2, Ireland
630,150(3) Dimensional Fund Advisors Inc. 6.23
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
843,640(4) Kennedy Capital Management, Inc. 8.34
10829 Olive Blvd.
St. Louis, Missouri 63141
</Table>
-------------------------
(1) Based upon information contained in a Schedule 13G/A filed on February 13,
2001.
(2) Based upon information contained in a Schedule 13D/A filed on September 28,
2001.
(3) Based upon information contained in a Schedule 13G filed on February 2,
2001, Dimensional Fund Advisors Inc. ("Dimensional") furnishes investment
advice to four investment companies registered under the Investment Company
Act of 1940, and serves as investment manager to certain other commingled
group trusts and separate accounts (the "Funds") and possesses sole voting
and/or investment power over the securities of the Company described in the
schedule that are owned by the Funds. All securities reported in the
schedule are owned by the Funds, none of which individually owns more than
five percent of the shares of Common Stock. Dimensional disclaims beneficial
ownership of such securities.
(4) Based upon information contained in a Schedule 13G filed on February 14,
2001.
11
STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of shares of the
Company's Common Stock as of October 2, 2001 by each of the Company's directors,
Named Officers (as defined below) and by all executive officers and directors of
the Company as a group:
<Table>
<Caption>
COMMON STOCK OF
THE COMPANY
OWNED PERCENT OF
NAME BENEFICIALLY(1) CLASS
---- --------------- ----------
Geoffrey B. Bloom(2)........................................ 35,649 *
Daniel T. Carroll(3)........................................ 22,854 *
Richard. L. Crandall(4)..................................... 73,134 *
Dennis G. Ganster(5)........................................ 237,181 2.32
Brian Hartlen(6)............................................ 16,426 *
Brian J. Jarzynski(7)....................................... 5,276 *
Kathryn A. Jehle(8)......................................... 56,122 *
David R. King(9)............................................ 69,735 *
Alan G. Merten(10).......................................... 24,574 *
Norman R. Neuman, Jr.(11)................................... 168,121 1.66
John F. Rockart(12)......................................... 43,649 *
Stanley R. Starkey(13)...................................... 83,367 *
All executive officers and directors as a group (11
persons)(14).............................................. 667,967 6.41
</Table>
-------------------------
(1) To the best of the Company's knowledge, based on information reported by
such directors and officers or contained in the Company's shareholder
records. Unless otherwise indicated by any additional information included
in the footnotes to the table, each of the named persons is presumed to have
sole voting and investment power with respect to all shares shown.
(2) Includes 8,375 shares which Mr. Bloom has, or within 60 days of October 2,
2001 will have the right to acquire pursuant to the presently exercisable
portion of options granted under the Directors Plan.
(3) Includes 8,375 shares which Mr. Carroll has, or within 60 days of October 2,
2001 will have the right to acquire pursuant to the presently exercisable
portion of options granted under the Directors Plan.
(4) Includes 4,375 shares which Mr. Crandall has, or within 60 days of October
2, 2001 will have the right to acquire pursuant to the presently exercisable
portion of options granted under the Directors Plan.
(5) Includes 118,750 shares which Mr. Ganster has or within 60 days of October
2, 2001 will have the right to acquire pursuant to the presently exercisable
portion of options granted under the Company's Expired 1988 Stock Option
Plan and the Company's 1998 Stock Option Plan (collectively, the "Option
Plans") and 1,296 shares which are owned by him under the Company's Profit
Sharing Plan. Mr. Ganster disclaims beneficial ownership of 3,700 shares
reflected in the table that are owned by his spouse.
(6) Includes 14,125 shares which Mr. Hartlen has, or within 60 days of October
2, 2001 will have, the right to acquire pursuant to the presently
exercisable portion of options granted under the Company's Option Plans and
273 shares which are owned by him under the Company's Profit Sharing Plan.
(7) Includes 4,313 shares which Mr. Jarzynski has, or within 60 days of October
2, 2001 will have the right to acquire pursuant to the presently exercisable
portion of options granted under the Company's Option Plans.
(8) Includes 31,250 shares which Ms. Jehle has or within 60 days of October 2,
2001 will have the right to acquire pursuant to the presently exercisable
portion of options granted under the Company's Option Plans.
(9) Includes 57,250 shares which Dr. King has, or within 60 days of October 2,
2001 will have, the right to acquire pursuant to the presently exercisable
portion of options granted under the Company's Option Plans and 7,058 shares
which are owned by him under the Company's Profit Sharing Plan.
12
(10) Includes 8,375 shares which Dr. Merten has or within 60 days of October 2,
2001 will have the right to acquire pursuant to the presently exercisable
portion of options granted under the Company's Directors Plan.
(11) Includes 41,000 shares which Mr. Neuman has or within 60 days of October 2,
2001 will have the right to acquire pursuant to the presently exercisable
portion of options granted under the Company's Option Plans and 100,189
shares under the Company's Profit Sharing Plan.
(12) Includes 8,375 shares which Dr. Rockart has or within 60 days of October 2,
2001 will have the right to acquire pursuant to the presently exercisable
portion of options granted under the Company's Directors Plan. Dr. Rockart
disclaims beneficial ownership of 8,000 shares reflected in the table that
are owned by his spouse.
(13) Includes 49,750 shares which Mr. Starkey has or within 60 days of October
2, 2001 will have the right to acquire pursuant to the presently
exercisable portion of options granted under the Company's Option Plans and
1,447 shares which are owned by him under the Company's Profit Sharing
Plan.
(14) Includes 313,313 shares which certain current executive officers and
directors have or within 60 days of October 2, 2001 will have the right to
acquire pursuant to the presently exercisable portion of options granted
under the Company's Directors Plan and Option Plans; 10,074 shares which
are owned by certain executive officers under the Company's Profit Sharing
Plan; and 11,700 shares referred to in Notes (5) and (12) above under
"Stock Ownership of Management" as to which beneficial ownership is
disclaimed.
EXECUTIVE OFFICERS
The persons listed below currently are the executive officers of the
Company.
<Table>
<Caption>
NAME OFFICER(S) AGE
---- ---------- ---
Dennis G. Ganster....... Chairman of the Board, President and Chief Executive Officer 50
Brian Hartlen........... Senior Vice President, Marketing 43
Brian J. Jarzynski...... Vice President, Chief Financial Officer and Treasurer 34
Senior Vice President, Product Development and Chief
David R. King........... Technology Officer 57
Stanley R. Starkey...... Senior Vice President, Field Operations 53
</Table>
Mr. Ganster was named President and Chief Executive Officer of the Company
in August 1997, and assumed the position of Chairman of the Board of the Company
in August 2001. See "Election of Directors" for further information concerning
Mr. Ganster.
Mr. Hartlen was named Senior Vice President, Marketing of the Company in
February 2001. He has been with the Company in various marketing, customer
support and customer relations positions since 1976.
Mr. Jarzynski was named Vice President, Chief Financial Officer and
Treasurer of the Company in February 2001, after having served as the Company's
Controller and Chief Accounting Officer since August 1999. From 1989 until he
joined the Company in August 1999, Mr. Jarzynski held various positions at Ernst
& Young LLP.
Dr. King was named Senior Vice President, Product Development and Chief
Technology Officer of the Company in August 1997, after having served as
Director of Research and Innovation of the Company since July 1995. He has been
with the Company in various positions since March 1991 when the Company
purchased the operating assets of Execucom Systems Corporation. Prior to the
acquisition, Dr. King held various positions with Execucom Systems Corporation,
including Director of Research and Development, from 1982 through 1991.
Mr. Starkey was named Senior Vice President, Field Operations in October
1998 after serving as Senior Vice President, Americas Operations of the Company
from January 1, 1998 to October 1998. From July 1996 to January 1998, Mr.
Starkey was Vice President of Sales for Gentia Software, Inc., a client/server
software company. From 1972 through July 1996, he was employed by the Company in
various positions including Vice President of Industry Solutions Group Sales,
Vice President of Industry Service Group Marketing and Vice President Sales,
Western Region.
The executive officers of the Company serve at the pleasure of the Board of
Directors.
13
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides summary information concerning compensation
paid by the Company and its subsidiaries to (or accrued on behalf of) (i) the
Company's Chief Executive Officer, (ii) the four other most highly compensated
executive officers who were serving as executive officers at the end of fiscal
year 2001, and (iii) up to two additional individuals for whom disclosures would
have been provided but for the fact that the individual was not serving as an
executive officer of the Company at the end of fiscal year 2001 (the "Named
Officers").
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG TERM
COMPENSATION
--------------------
AWARDS PAYOUTS
---------- -------
ANNUAL COMPENSATION SECURITIES
-------------------------- UNDERLYING LTIP ALL OTHER
FISCAL SALARY BONUS OPTIONS PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($) ($)(1)
--------------------------- ------ ------ ----- ---------- ------- ------------
Dennis G. Ganster............................ 2001 300,000 100,000 20,000 14,386
Chairman, President and 2000 300,000 90,000 20,000 12,759
Chief Executive Officer 1999 300,000 -- 70,000 14,183
Brian Hartlen(2)............................. 2001 135,169 35,300 20,000 8,901
Senior Vice President, Marketing 2000 117,700 39,000 -- 7,680
1999 110,000 24,000 10,000 6,666
Brian J. Jarzynski(3)........................ 2001 122,023 23,200 15,000 5,158
Vice President, Chief Financial Officer 2000 85,385 24,500 9,750 --
and Treasurer
David R. King................................ 2001 200,000 54,600 -- 12,713
Senior Vice President, 2000 187,000 44,880 -- 10,712
Product Development and Chief Technology 1999 170,000 -- 32,000 10,313
Officer
Stanley R. Starkey........................... 2001 240,000 64,000 -- 13,218
Senior Vice President, Field Operations 2000 225,000 54,000 -- 10,777
1999 200,000 -- 32,000 11,340
Kathryn A. Jehle(4).......................... 2001 151,442 -- -- 8,580
Former Senior Vice President, 2000 225,000 54,000 10,000 54,900 9,655
Chief Financial Officer and Treasurer 1999 225,000 -- 35,000 10,546
Norman R. Neuman, Jr.(5)..................... 2001 188,437 -- -- 9,110
Former Senior Vice President, 2000 200,000 48,000 -- 12,081
Marketing 1999 200,000 -- 32,000 11,375
</Table>
-------------------------
(1) "All Other Compensation" for fiscal year 2001 is comprised of: (i)
contributions made by the Company to the accounts (or accrued by the Company
on behalf) of each of the Named Officers for each period presented under the
Company's and its subsidiaries' profit sharing plans as follows: Mr. Ganster
$13,150, Mr. Hartlen $8,901, Mr. Jarzynski $5,158, Dr. King $11,333, Mr.
Starkey $11,838, Ms. Jehle $8,580 and Mr. Neuman $8,210, and (ii) the dollar
value of any premiums paid by the Company during each period presented with
respect to term life insurance for the benefit of each of the Named Officers
(other than group life plans which do not discriminate in scope, terms of
operations in favor of the executive officers that are generally available
to all salaried employees) as follows: Mr. Ganster $1,236, Dr. King $1,380,
Mr. Starkey $1,380 and Mr. Neuman $900.
14
(2) The amounts indicated for Mr. Hartlen reflect compensation paid to him in
his capacity as Vice President of Marketing through February 2001 and Senior
Vice President, Marketing for the remainder of fiscal year 2001.
(3) The amounts indicated for Mr. Jarzynski reflect compensation paid to him in
his capacity as Corporate Controller and Chief Accounting Officer of the
Company from August 1999, when he was hired by the Company, through February
2001, and Vice President, Chief Financial Officer and Treasurer of the
Company for the remainder of fiscal year 2001.
(4) The amounts indicated for Ms. Jehle reflect compensation paid to her in her
capacity as Senior Vice President, Chief Financial Officer and Treasurer of
the Company through February 2001.
(5) The amounts indicated for Mr. Neuman reflect compensation paid to him in his
capacity as Senior Vice President, Marketing of the Company through February
2001. In addition, the amounts indicated for Mr. Neuman under the heading
"Annual Compensation -- Salary" for fiscal year 2001 include salary
continuation payments of $51,514 paid to Mr. Neuman after his termination of
employment with the Company.
OPTION GRANTS AND RELATED INFORMATION
The following table provides information with respect to options granted to
the Named Officers during fiscal year 2001.
OPTION GRANTS IN LAST FISCAL YEAR
<Table>
<Caption>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(2)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -----------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SH.) DATE 5%($) 10%($)
---- ------------- ------------ ----------- ---------- ----- ------
Dennis G. Ganster.......... 20,000 7.79% 3.06 6/15/2006 16,908 34,488
Brian Hartlen.............. 20,000 7.79% 2.75 2/09/2006 15,195 34,589
Brian J. Jarzynski......... 15,000 5.84% 2.875 2/16/2006 11,915 27,121
David R. King.............. -- -- -- -- -- --
Stanley R. Starkey......... -- -- -- -- -- --
Kathryn A. Jehle........... -- -- -- -- -- --
Norman R. Neuman, Jr. ..... -- -- -- -- -- --
</Table>
-------------------------
(1) All of these options, which were granted pursuant to the Company's 1998
Global Employee Stock Option Plan (the "1998 Plan"), were granted at market
value on the date of grant, become exercisable annually in 25% increments
beginning one year after the grant date and have a term of five years. The
exercisability of certain of these options may be accelerated in the event
of a change in control of the Company. See "Employment Agreements and
Termination/Change in Control Agreements."
(2) Represents value of option at the end of a five-year term, assuming the
market price of the Company's Common Stock appreciates at an annually
compounded rate of 5% or 10%. These amounts represent assumed rates of
appreciation only. Actual gains, if any, will be dependent on overall market
conditions and on future performance of the Company's Common Stock. There
can be no assurance that the amounts reflected in the table will be
achieved.
15
OPTION EXERCISES AND HOLDINGS
The following table contains information regarding options exercised by the
Named Officers during fiscal year 2001, and the value of options held by such
officers as of June 30, 2001 measured in terms of the closing price of the
Company's Common Stock on June 30, 2001.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<Table>
<Caption>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES YEAR END(#) FISCAL YEAR END($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
Dennis G. Ganster.......... 0 0 116,500 92,500 2,324 5,324
Brian Hartlen.............. 0 0 13,875 27,625 349 9,549
Brian J. Jarzynski......... 0 0 2,438 22,312 0 5,025
David R. King.............. 0 0 49,750 27,250 1,162 1,162
Stanley R. Starkey......... 0 0 49,750 27,250 1,162 1,162
Kathryn A. Jehle........... 0 0 47,000 31,000 1,162 1,162
Norman R. Neuman, Jr. ..... 0 0 46,000 0 581 0
</Table>
-------------------------
(1) Calculated on the basis of the number of shares subject to each such option
multiplied by the excess of the fair market value of a share of Common Stock
at June 30, 2001 over the exercise price of such option.
EMPLOYMENT AGREEMENTS AND TERMINATION/CHANGE IN CONTROL ARRANGEMENTS
Under the Company's expired 1988 Stock Option Plan (the "Expired 1988
Plan"), incentive stock options were granted to key employees (including the
Named Officers) and such stock options become fully exercisable, even if not
otherwise exercisable, upon the dissolution or liquidation of the Company or
upon any merger or consolidation in which the Company is not the surviving
corporation, if a period of twelve months from the date of grant has expired. No
further options (or SARs) may be granted under the Expired 1988 Plan as it
expired June 1998. As of October 2, 2001, 365,000 shares of the Company's Common
Stock were still subject to outstanding options under the Expired 1988 Plan.
Under the 1998 Global Employee Stock Option Plan (the "1998 Plan"), stock
options were granted to employees (including the Named Officers) and such stock
options become fully exercisable, even if not otherwise exercisable, in the
event of a change in control. As of October 2, 2001, 951,800 shares of the
Company's Common Stock were subject to outstanding options under the 1998 Plan.
As of June 1, 1998, the Company entered into Change in Control Severance
Agreements with the following officers: Dennis G. Ganster, Dr. David R. King,
Stanley R. Starkey, Kathryn A. Jehle and Norman E. Neuman, Jr. The Change in
Control Severance Agreements were amended as of November 30, 1999. The Change in
Control Severance Agreements with Ms. Jehle and Mr. Neuman terminated upon the
termination of their employment with the Company in February 2001. The Company
entered into Change in Control Severance Agreements with Brian Hartlen and Brian
J. Jarzynski as of February 9 and February 16, 2001, respectively. The Change in
Control Severance Agreements that the Company has entered into with its officers
are collectively referred to as the "Change in Control Agreements."
The Change in Control Agreement between Mr. Ganster, the Chairman,
President and Chief Executive Officer, and the Company generally provides that
in the event of termination of Mr. Ganster's employment within two years
following a change in control of the Company, Mr. Ganster will be entitled to a
cash severance benefit equal to three times his annual base salary as in effect
at the time of the change in control, plus an amount equal to three times the
average of his incentive bonus (excluding any special bonus payments) paid for
the three fiscal years immediately preceding the fiscal year of the change in
control. This severance payment is to be paid in a lump sum cash payment within
ten days following Mr. Ganster's
16
termination of employment. Payments made later than this ten-day period will be
subject to interest at the prime rate plus two percent, which begins to accrue
on the tenth day following the termination of employment.
The Change in Control Agreements between the Company and each of Messrs.
Hartlen, Jarzynski and Starkey and Dr. King are substantially similar. The
Agreements each generally provide that in the event of termination of such
officers' employment within two years following a change in control of the
Company, such officer will be entitled to a cash severance benefit equal to two
times such officer's annual base salary, as in effect at the time of the change
in control, plus an amount equal to two times the average of their annual
incentive bonus paid for the immediately preceding three fiscal years and
bonuses paid for a period of time during which they were not senior executives
reporting to the President of the Company (excluding any special bonus
payments). Bonuses paid for a partial fiscal year of service shall be
proportionately increased so as to give the bonuses the effect of an amount for
a full fiscal year. Such severance payments are to be paid in a lump sum cash
payment within ten days following such officer's termination of employment.
Payments made later than this ten-day period will be subject to interest at the
prime rate plus two percent, which begins to accrue on the tenth day following
the termination of employment.
Each of the Change in Control Agreements provides that payments under this
Agreement or any other plans, agreements or policies of the Company shall not be
subject to the golden parachute cap under Sections 280G and 4999 of the Code. To
the extent that the aggregate parachute payments equal or exceed the golden
parachute cap set forth in Sections 280G and 4999 of the Code, the Company shall
pay the executive an amount equal to the federal excise tax owed by the
executive on behalf of payments under the Change in Control Agreements or other
golden parachute amounts.
For purposes of the 1998 Plan and each of the Change in Control Agreements,
the term "change in control" means (a) the election of a Board of Directors of
the Company, a majority of the members of which were nominees of a person
(including an individual, a corporation, partnership, joint venture, trust or
other entity) or a group of persons acting together (other than persons who were
members of the Board of Directors or officers of the Company as of August 14,
1998 for the 1998 Plan and as of June 1, 1998 for the Change in Control
Agreements, or certain tax-qualified retirement plans of the Company
(collectively, the "Exempted Persons")), following the acquisition by such
person of twenty-five percent, or more, of the outstanding Common Stock of the
Company; (b) the acquisition of ownership by a person (other than Exempted
Persons) of fifty-one percent or more of the outstanding Common Stock of the
Company; (c) a sale of all or substantially all of the assets of the Company to
any entity not controlled by persons who were members of the Board of Directors
or officers of the Company as of August 14, 1998 for the 1998 Plan and as of
June 1, 1998 for the Change in Control Agreements, or by any tax-qualified
retirement plan for the benefit of employees of the Company; or (d) a merger,
consolidation or other similar transaction between the Company and another
entity if a majority of the members of the Board of Directors of the surviving
company were not Continuing Directors. Continuing Directors means persons (x)
who were members of the Board of Directors of the Company immediately before the
change in control, and (y) who also were members of the Board of Directors of
the Company as of August 14, 1998 for the 1998 Plan and as of June 1, 1998 for
the Change in Control Agreements, or are new directors whose election by the
Board of Directors, or nomination for election by the Company's shareholders,
was approved by a vote of at least a majority of the directors in office at the
time of such election or nomination who either were directors as of August 14,
1998 for the 1998 Plan and as of June 1, 1998 for the Change in Control
Agreements or whose election or nomination for election was previously approved
as provided above.
For purposes of each of the Change in Control Agreements, the term
"termination of employment" is defined as (a) the officer's involuntary
termination by the Company for any reason other than death, disability,
retirement or cause; or (b) the officer's termination for (i) any reassignment
or change in the identity or corporate position to whom the officer reports, or
a change in title (other than a promotion); (ii) any reduction in the officer's
base salary or failure by the Company to continue any bonus, stock or incentive
plans; (iii) the discontinuance or reduction in benefits to the officer of any
qualified or nonqualified retirement or welfare plan or the discontinuance of
any fringe benefits or other perquisites; (iv) the required relocation of the
officer's principal place of employment by more than fifty miles or more
frequent and/or longer required business
17
traveling (other than on account of a promotion); or (v) the Company's breach of
any provision of the Change in Control Agreement.
In connection with Norman Neuman, Jr.'s separation from the Company, the
Company agreed to pay Mr. Neuman bi-weekly salary continuation payments of
$5,723.83 until April 16, 2004 and a car allowance of $945 per month until
February 9, 2002; to continue his health insurance coverage until April 16,
2004, or until he is eligible for group health insurance coverage from another
employer; to allow him to exercise his rights under the Company's Benefit
Adjustment Plan; and to extend the period of time that he has to exercise his
vested stock options until the expiration date stated in the related option
agreements, which is generally five or ten years from the date of grant.
In April 2001 the Company agreed to extend the period of time that Kathryn
A. Jehle has to exercise vested stock options following her termination of
employment with the Company until the expiration date stated in the related
option agreements, which is generally five or ten years from the date of grant.
DIRECTOR COMPENSATION
In fiscal year 2001 each director who was not an officer or employee of the
Company received for his or her services as such a semi-annual retainer of
$4,000, plus $1,000 for each Board or committee meeting attended. In addition,
the Chairman of each standing committee received a semi-annual retainer of
$2,500 for serving as such. Mr. Carroll, the Chairman of the Board of the
Company until August 14, 2001, received an additional $5,000 per month for his
services as Chairman of the Board and of the Executive Committee.
Non-employee directors may make semi-annual elections, prior to the end of
each December and June of each calendar year, to purchase shares of Common Stock
of the Company instead of receiving all or a portion of his or her base cash
compensation. In fiscal year 2001, Messrs. Bloom, Carroll, and Crandall and Drs.
Merten and Rockart, non-employee directors of the Company, elected to purchase a
total of 23,029 shares of Common Stock of the Company at a weighted average
purchase price of $3.73 per share in lieu of compensation.
Directors who are officers or employees of the Company receive no
compensation (beyond their compensation for services as an officer or employee)
for serving as directors.
The Company's Directors Plan provides for the issuance of options to
purchase up to 200,000 shares of the Company's Common Stock to non-employee
directors of the Company. Under the Directors Plan, each non-employee director
serving on the Board of Directors on November 17, 1994 was granted an option to
purchase 7,500 shares of the Company's Common Stock at an exercise price of
$8.33 per share. Any non-employee director who is first elected or appointed to
the Board of Directors after November 17, 1994 will receive an option to
purchase 7,500 (proposed to be increased to 15,000) shares of the Company's
Common Stock on the date of the first Board of Directors meeting following his
or her election or appointment. In addition, each non-employee director who has
been a director for six months before the January 1 following the date of each
Annual Meeting of Shareholders held during the term of the Directors Plan
automatically shall be granted, as of the January 1 following each such Annual
Meeting beginning January 1, 2002, an option to purchase an additional 5,000
(proposed to be increased to 10,000) shares of Common Stock. On November 23,
1999, options to purchase 10,000 shares at an exercise price of $5.5625 were
granted to each of Messrs. Bloom, Carroll and Crandall and Drs. Merten and
Rockart. These options were an acceleration of the options that these directors
were scheduled to receive under the Directors Plan in January 2000 and 2001.
Options under the Directors Plan are granted at the last sale price per share of
the Company's Common Stock on the Nasdaq National Market(R) on the date of
grant, are exercisable at a rate of 25% per year beginning one year from the
date of grant and have a term of five years. Options granted under the Directors
Plan become immediately exercisable, if not otherwise exercisable, upon the
dissolution or liquidation of the Company or upon any merger or consolidation in
which the Company is not the surviving corporation, provided that a period of 12
months from the date of grant has elapsed. As of October 2, 2001, 72,500 options
were outstanding under the Directors Plan.
18
Certain proposed amendments to the Directors Plan will have an effect on
Director Compensation. For a discussion of the proposed amendment to the
Directors Plan, please see Item 3 of this Proxy Statement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently consists of Mr. Bloom and Drs. Merten
and Rockart. During fiscal year 2001, no member of the Compensation Committee
served as an officer or employee of the Company or any of its subsidiaries nor
had any member of the Compensation Committee formerly served as an officer of
the Company or any of its subsidiaries. During fiscal year 2001, none of the
executive officers of the Company served on the board of directors or on the
compensation committee of any other entity, any of whose executive officers
served either on the Board of Directors or on the Compensation Committee of the
Company.
COMPENSATION COMMITTEE REPORT
The responsibilities of the Compensation Committee include recommending to
the Board of Directors the compensation for the executive officers of the
Company, who during all or part of fiscal year 2001 were Mr. Ganster, Mr.
Hartlen, Mr. Jarzynski, Dr. King, Mr. Starkey, Ms. Jehle and Mr. Neuman. The
Committee also considers recommendations from the Chief Executive Officer for
compensation of other officers of the Company and recommends to the Board of
Directors approval or changes in those recommendations. The Committee also
grants stock options to officers and employees under the 1998 Plan.
The Committee met four times in fiscal year 2001. Executive officers were
not present during the Committee's consideration of their individual
compensation.
The Company's executive compensation program is designed to give executives
a balanced incentive package which encourages the achievement of both short-term
and long-term performance goals and which rewards improvement in shareholder
value. The Committee believes that the compensation program is essential to the
Company's effort to attract and retain key executives. The Committee also
believes that the Company's compensation program should encourage the executive
officers to align their interests with the shareholders by conditioning a
significant portion of executive compensation on increases in shareholder value.
The executive compensation program consists of three main components: base
salary, performance bonuses and stock-based incentives. In addition, the
executive officers participate in the Company's employee benefit plans generally
on the same terms as other Company employees.
BASE SALARY
The base compensation of Mr. Ganster as the chief executive officer of the
Company was established when he was appointed to that position in August 1997,
and at his request that amount has remained the same each year through fiscal
year 2001. Three of the four senior vice presidents in office at the beginning
of fiscal year 2001 were given raises of between 5% and 6.9% in recognition of
their performance; the fourth, Ms. Jehle, received no increase, at her request.
During the fiscal year Ms. Jehle and Mr. Neuman left office and were replaced
through internal promotions. The two new executive officers, Mr. Hartlen and Mr.
Jarzynski, were given increases in base salary of 25% and 34%, respectively, to
reflect the increased responsibilities of their new positions in senior
management.
PERFORMANCE BONUSES
The Committee adopted an incentive plan for executive officers for fiscal
year 2001 that called for payments equal to 50% of base salary for the Chief
Executive Officer and 40% of base salary for the other executive officers if the
Company achieved budgeted revenue growth and earnings per share (after allowance
for nonrecurring charges and events). The incentive payment target amounts were
based 50% on revenue growth targets and 50% on earnings per share targets. The
Company achieved the earnings per share target but did not fully achieve the
revenue growth target, so the executive officers received 67% of their target
performance bonuses.
19
STOCK OPTION AWARDS
Stock option awards are an important means by which the Committee directly
links executive officers' compensation to the appreciation in value realized by
all of the Company's shareholders. Under the Company's stock option plans,
options are granted at exercise prices equal to the market price on the date of
grant and therefore have no value to the executive unless the Company's stock
appreciates. In making awards, the Committee considers each executive's
responsibilities, performance and potential as well as the existing level of
stock options held by each executive.
As previously reported, in fiscal year 1999 the Committee accelerated the
stock options that the Committee would otherwise have expected to grant to the
executive officers in fiscal years 2000 and 2001, in order to strengthen the
long-term incentive opportunities of the executive team. As a result, no stock
options were granted in fiscal year 2001 to Dr. King, Mr. Starkey, Ms. Jehle or
Mr. Neuman. However, in June 2001 the Committee granted options of 20,000 shares
to Mr. Ganster, in recognition of the fact that Mr. Ganster did not accept a
salary increase for fiscal year 2001 and of the Company's improved performance
in fiscal year 2001. To reflect their new positions and responsibilities, Mr.
Hartlen and Mr. Jarzynski were granted options of 20,000 and 15,000 shares,
respectively, upon their appointments as executive officers in February 2001.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Company from time to time reviews the extent to which its executive
compensation arrangements are subject to the provisions of the Code and related
regulations limiting the deductibility of executive compensation in excess of
$1,000,000 paid to any of the five most highly compensated executive officers of
the Company in any fiscal year which does not qualify for an exemption under the
statute or proposed regulations. The Expired 1988 Plan and the 1998 Plan include
restrictions required by the Code to except option grants under these plans from
the limit on deductibility. The Committee does not presently believe that the
other components of the Company's compensation program are likely to result in
payments to any executive officer in any year in excess of $1,000,000, other
than the Company's severance arrangements following certain changes in control
of the Company, and therefore has concluded that no further action with respect
to qualifying such compensation for deductibility is necessary at this time.
COMPENSATION COMMITTEE: GEOFFREY B. BLOOM, CHAIR
ALAN G. MERTEN
JOHN F. ROCKART
20
SHAREHOLDER RETURN
Set forth below is a graph comparing the cumulative total return on the
Company's Common Stock from July 1, 1996 through June 30, 2001 with the Standard
and Poor's Computers (Software & Services) Index (the "S&P Computer Software
Index") and The Nasdaq Stock Market (U.S.) Index (the "Nasdaq US Index"). The
graph assumes that the value of the investment in the Company's Common Stock,
the S&P Computer Software Index and the Nasdaq US Index was $100 on July 1, 1996
and that all dividends were reinvested.
The graph displayed below is presented in accordance with Securities and
Exchange Commission requirements. Stockholders are cautioned against drawing any
conclusions from the data contained therein, as past results are not necessarily
indicative of future performance. This graph in no way reflects the Company's
forecast of future financial performance.
[PERFORMANCE CHART]
<Table>
<Caption>
S & P COMPUTERS
COMSHARE, NASDAQ STOCK (SOFTWARE &
INCORPORATED MARKET (U.S.) SERVICES)
------------ ------------- ---------------
6/96 100.00 100.00 100.00
6/97 39.92 121.60 166.18
6/98 25.20 160.06 257.73
6/99 9.88 230.22 395.87
6/00 15.32 340.37 445.95
6/01 10.35 184.51 320.86
</Table>
* $100 invested on 6/30/96 in Stock or Index -- including reinvestment of
dividends. Fiscal year ending June 30.
<Table>
<Caption>
------------------------------------------------------------
Cumulative Total Return
--------------------------------------------------------------------------------------------------------------------
6/96 6/97 6/98 6/99 6/00 6/01
--------------------------------------------------------------------------------------------------------------------
COMSHARE, INCORPORATED 100.00 39.92 25.20 9.88 15.32 10.35
--------------------------------------------------------------------------------------------------------------------
NASDAQ STOCK MARKET (U.S.) 100.00 121.60 160.06 230.22 340.37 184.51
--------------------------------------------------------------------------------------------------------------------
S & P COMPUTERS (SOFTWARE & SERVICES) 100.00 166.18 257.73 395.87 445.95 320.86
--------------------------------------------------------------------------------------------------------------------
</Table>
ACCOUNTANTS
GENERAL
Arthur Andersen LLP, independent public accountants, have audited the
financial statements of the Company since 1972. Representatives from Arthur
Andersen LLP will be present at the Annual Meeting, will have an opportunity to
make a statement if they wish, and will be available to respond to appropriate
questions. In accordance with the Company's past practice, the selection of
independent public accountants to audit the financial statements of the Company
for the fiscal year ending June 30, 2002 will be made by the Board of Directors
at a later date.
21
FEES PAID TO INDEPENDENT AUDITORS
AUDIT FEES. Arthur Andersen LLP billed the Company $125,703 for
professional services in connection with the audit of the Company's fiscal year
2001 financial statements.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. Arthur
Andersen LLP did not bill the Company for operating, designing or supervising
the Company's computer, financial or information systems during fiscal year
2001.
ALL OTHER FEES. Arthur Andersen LLP billed the Company $31,467 for other
services rendered during fiscal year 2001. These fees were for tax consultation
services. The Audit Committee of the Board does not consider the provision of
the services described above by Arthur Andersen LLP to be incompatible with the
maintenance of Arthur Andersen LLP's independence.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's officers and directors, and persons who
own more than 10 percent of a registered class of the Company's equity
securities, to file reports of their ownership with the Securities and Exchange
Commission (the "SEC"). Officers, directors and greater than ten percent
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) reports they file. Specific due dates for these reports
have been established and the Company is required to report in this proxy
statement any delinquent filings and failures to file such reports.
Based solely on its review of the copies of such reports received by it and
written representations of its incumbent directors and officers, the Company
believes that, during the period from July 1, 2000 to June 30, 2001, all of
these applicable requirements were complied with by each of its directors,
officers and greater than ten percent beneficial owners, except the Form 3 for
Kristin L.G. Marsh, Corporate Controller and Chief Accounting Officer, and the
Form 5 for Dennis G. Ganster, Chairman, President and Chief Executive Officer
were filed late.
SHAREHOLDER PROPOSALS FOR 2002 ANNUAL MEETING
Shareholder proposals intended to be presented at the 2002 Annual Meeting
which are eligible for inclusion in the Company's Proxy Statement for that
meeting under Rule 14a-8 promulgated under the Exchange Act must be received by
the Company not later than June 20, 2002 if they are to be included in the
Company's Proxy Statement relating to that meeting. Such proposals should be
addressed to the Secretary at the Company's principal executive offices and
should satisfy the requirements applicable to shareholder proposals contained in
the Company's bylaws. Shareholder proposals intended to be presented at the 2002
Annual Meeting which are not eligible for inclusion in the Company's Proxy
Statement for that meeting under Rule 14a-8 promulgated under the Exchange Act
must satisfy the requirements applicable to shareholder proposals contained in
the Company's bylaws. Such proposals must be addressed to the Secretary at the
Company's principal executive offices and must be received at the Company's
principal executive offices not less than ninety days prior to the anniversary
of the preceding year's annual meeting, which date will be August 21, 2002. The
Company also expects the persons named as proxies for the 2002 annual meeting to
use their discretionary voting authority with respect to any proposal presented
or offered to be presented at that meeting by a shareholder who does not provide
the Company with written notice of such proposal during the period provided in
the Company's bylaws.
22
GENERAL
The Board does not intend to present any matters at the Annual Meeting
other than those described above. However, if any other matters should properly
come before the meeting, including any shareholder proposal that has been
omitted from this Proxy Statement in accordance with the rules of the Securities
and Exchange Commission, it is the intention of the persons named in the
accompanying proxy to vote in accordance with their judgment on such matters.
October 18, 2001
Ann Arbor, Michigan
23
PROXY
COMSHARE, INCORPORATED
555 BRIARWOOD CIRCLE, ANN ARBOR, MICHIGAN 48108
SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS
ON NOVEMBER 19, 2001
The undersigned hereby appoints Dennis G. Ganster and Brian J.
Jarzynski, or any one of them, proxies with full power of substitution to vote,
as designated on the reverse side, all shares of Common Stock that the
undersigned is entitled to vote at the Annual Meeting of Shareholders of
Comshare, Incorporated to be held on Monday, November 19, 2001 or at any
adjournment or adjournments thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED. IF NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR ELECTION AS
DIRECTORS AND FOR PROPOSALS 2 AND 3.
Discretionary authority is hereby conferred as to any other matters as may
properly come before the Annual Meeting. The undersigned acknowledges receipt of
the Notice of Annual Meeting, the Proxy Statement and the Annual Report of
Shareholders of Comshare, Incorporated for the year ending June 30, 2001. The
undersigned ratifies all that the proxies or any of them or their substitutes
may lawfully do or cause to be done by virtue hereof and revokes all former
proxies.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
--------------------
| SEE REVERSE SIDE |
--------------------
0002RC
--------------------------------------------------------------------------------
INSTRUCTIONS FOR VOTING BY TELEPHONE
Comshare, Incorporated encourages you to take advantage of the convenient
telephone voting method to vote your shares for the proposals to be covered at
the Annual Meeting of Shareholders. Voting by telephone confers discretionary
authority as to any other matters as may properly come before the meeting.
Please take the opportunity to use this voting method as outlined below to cast
your ballot.
-------------------------------------------------------
TO VOTE BY TELEPHONE | Call toll free 1-888-297-9637 in the United States or
| Canada any time on a touch tone telephone. There is
| NO CHARGE to you for this call. Have your proxy card
| in hand when you call.
|
| Enter the 6-digit Control Number located below.
|
| Option #1: To vote as the Board of Directors
| recommends on ALL proposals, Press 1.
| When asked, please confirm your vote by
| pressing 1.
|
| Option #2: If you choose to vote on each proposal
| separately, press 0 and follow the
| recorded instructions.
|
-------------------------------------------------------
IF YOU VOTE BY TELEPHONE, DO NOT MAIL BACK THE PROXY CARD.
THANK YOU FOR VOTING
CONTROL NUMBER
--------------------------------------------------------------------------------
+ COMSHARE, INCORPORATED
NOVEMBER 19, 2001
0002QC
------------------------------------------------------------------------------------------------------------------------------------
CONTROL NUMBER
[ ] Mark this box with an X if you have made changes to your name or
address details below.
000000 0000000000 0 0000
000000000.000 ext A0771
Mr A Sample 000000000.000 ext
Designation (if any) 000000000.000 ext
Add1 000000000.000 ext
Add2 000000000.000 ext
add3 000000000.000 ext
add4 000000000.000 ext
add5 000000000.000 ext
add6
C1234567890
------------------------------------------------------------------------------------------------------------------------------------
PROXY CARD
------------------------------------------------------------------------------------------------------------------------------------
PLEASE MARK VOTE IN BOX IN THE FOLLOWING MANNER USING DARK INK ONLY. X
------------------------------------------------------------------------- ----------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE LISTED NOMINEES. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
------------------------------------------------------------------------- FOLLOWING PROPOSALS.
----------------------------------------------------
1. ELECTION OF DIRECTORS: FOR WITHHOLD FOR AGAINST ABSTAIN
01-Geoffrey B. Bloom [ ] [ ] 2. Approval of the Amendment [ ] [ ] [ ]
to the Employee Stock Purchase
02-Daniel T. Carroll [ ] [ ] Plan to increase the number of
shares reserved for issuance by
03-Richard L. Crandall [ ] [ ] 800,000 shares.
04-Dennis G. Ganster [ ] [ ] 3. Approval of the Amendment to [ ] ] ] [ ]
the Directors Stock Option Plan
05-Kathryn A. Jehle [ ] [ ] to (i) increase the annual
option grant to the non-employee
06-Alan G. Merten [ ] [ ] directors of the Company to
10,000 shares and (ii) increase
07-John F. Rockart [ ] [ ] the initial option grant to the
non-employee directors of the
Company to 15,000 shares.
PLEASE REFER TO THE REVERSE SIDE FOR TELEPHONE VOTING INSTRUCTIONS.
NOTE: Please sign exactly as your name appears hereon. Joint owners should each sign. When signing as an attorney, executor,
administrator, trustee or guardian, please give full title as such.
Signature Signature Date
|-------------------------| |------------------------| |---------------------|
| | | | | / / |
|-------------------------| |------------------------| |---------------------|
+ +
Appendix I
COMSHARE, INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE. The purpose of the Comshare, Incorporated Employee Stock
Purchase Plan (the "Plan") is to promote the best interests of Comshare,
Incorporated (the "Company") and its shareholders by encouraging employees of
the Company and its subsidiaries to acquire a proprietary interest in the
Company, thus identifying their interests with those of shareholders and
encouraging the employees to make even greater efforts on behalf of the
Company. The Plan is intended to constitute an "employee stock purchase plan"
under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code").
2. CERTAIN DEFINITIONS. As used in this Plan, the term "subsidiary" of
the Company means any "subsidiary corporation" as defined in Section 424(f) of
the Code; the term "employee" means an individual with an "employment
relationship" with the Company or any subsidiary as defined in Regulation
1.421-7(h) of the Income Tax Regulations; the term "employment" means
employment with the Company or a subsidiary of the company; the term "Purchase
Period" means a six month offering period commencing each January 1 and July 1;
and the term "compensation" means base salary, plus incentive bonuses and
commissions, but excluding non-compete payments.
3. STOCK. The stock subject to option and purchase under the Plan shall
be the Common Stock of the Company (the "Common Stock"), and may be either
authorized and unissued shares or shares that have been reacquired by the
Company. The total amount of Common Stock on which options may be granted under
the Plan shall not exceed 200,000 shares, subject to Stock subject to any
unexercised portion of a terminated, cancelled or expired option granted under
the Plan may again be used for option grants under the Plan.
4. ADMINISTRATION. The Plan shall be administered by the Compensation
Committee of the Board of Directors ("Board"), comprised of no fewer than two
(2) disinterested members of the Board, as defined in Rule 16b-3 of the
Securities Exchange Act of 1934, as amended ("Exchange Act"). The Committee may
prescribe rules and regulations from time to time for the administration of the
Plan and may decide questions which may arise with respect to its
interpretation or application. The decisions of the Committee in interpreting
the Plan shall be final, conclusive and binding on all persons,
including the Company, its subsidiaries, employees and optionees. The
Committee, from time to time, shall grant to eligible employees on a uniform
basis, options to purchase Common Stock pursuant to the terms and conditions of
the Plan. In the event of insufficient shares during a Purchase Period, the
Committee shall allocate shares proportionately on the basis of compensation.
5. PARTICIPANTS. Except as provided in Section 6, below, any employee
who is in the employ of the Company, or any subsidiary of the Company on the
offering dates, (i) whose customary employment with the Company or a subsidiary
is 20 hours or more per week and (ii) whose customary employment with the
Company or a subsidiary is for five or more months per calendar year, is
eligible to participate in the Plan in accordance with its terms. Employees of
subsidiaries located outside of the United States shall be subject to the
additional requirements set forth in the appendices hereto.
6. OWNERSHIP AND PURCHASE LIMITATIONS. Notwithstanding anything herein
to the contrary, no employee shall be entitled to participate in an offering
under this Plan, would, in the aggregate, own or hold options to purchase
shares of Common Stock equal to or exceeding five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Company or
of its subsidiary corporations. For the foregoing purposes, the rules of
Section 424(d) of the Code shall apply in determining stock ownership. With
respect to individual employees, Section 424(d) provides that an employee shall
be considered as owning the stock owned directly or indirectly, by or for his
brothers and sisters (whether by the whole or half blood), spouse, ancestors,
and lineal descendants. No employee shall be granted an option under the Plan
which, together with options granted under all employee stock purchase plans
(qualified under Section 423 of the Code) of the Company and its subsidiaries
permits the employee to accrue option rights to purchase shares in any calendar
year in excess of $25,000 of fair market value of such shares (determined at the
time an option is granted). For purposes of this Plan, the "grant date" shall be
the first day of each Purchase Period, as defined in Section 9(b), below.
7. OPTION PRICE. The option price of the shares shall be 85% of the
fair market value of shares of the Company's Common Stock on the date of grant.
For purposes of this paragraph, the fair market value of the shares shall be
determined by the last sale price of the shares of the Company's Common Stock
on the NASDAQ National Market, as reported in The Wall Street Journal, for the
date on which the option is granted or, if there are no sales on such date, on
the last date immediately preceding the grant date on which there were sales.
2
8. PAYMENT FOR OPTION SHARES.
(a) SHARES UNDER OPTION. An eligible employee may elect to
participate in an offering by delivering to the Company an election to
participate and a payroll deduction form within a certain period of time, which
period shall be designated by the Committee prior to each offering date (the
"Election Period"). An eligible employee's election to participate and payroll
deduction form from the preceding Election Period automatically shall carry
over to the next Election Period unless affirmatively revoked by the employee.
An employee who elects to participate may not authorize payroll deductions
which, in the aggregate, are less than one percent (1%) of the employee's cash
compensation. Only whole shares of Common Stock may be purchased under the Plan.
(b) A participating employee must authorize payroll deductions over
a minimum six month Purchase Period. An employee may suspend payroll deductions
during a Purchase Period only at the discretion of the Company in the event of
an unforeseen hardship; provided, however, that payroll deductions made prior
to approval of the suspension by the Company shall still be used to purchase
Common Stock for the employee at the end of the Purchase Period.
(c) Payroll deductions shall commence on the first payroll date in
the Purchase Period and shall continue until the last payroll date in the
Purchase Period; provided, however, that unless an election is revoked, such
election shall continue into successive six month Purchase Periods.
(d) A participating employee's option shall be deemed to have been
exercised on the last business day of the Purchase Period.
(e) The Company retains the right to designate an exclusive broker
to handle the Common Stock transactions under the Plan. As soon as practicable
after the end of the Purchase Period, the Company shall deliver to each
employee or a designated brokerage account, through a certificate or electronic
transfer, the shares of Common Stock that such employee has purchased. Any
amount that has been deducted and withheld in excess of the option price
automatically shall be applied toward the purchase of option shares in the next
Purchase Period. An employee who elects not to participate in the following
Purchase Period shall receive a check from the Company for any amount that has
been deducted and withheld in excess of the cost of shares.
3
9. INTEREST. No interest shall accrue or be paid on any amounts paid by
payroll deduction by any participating employee.
10. TERMINATION OF EMPLOYMENT, UNPAID LEAVE OF ABSENCE OR LAYOFF. If a
participating employee ceases to be employed by the Company for any reason
(with or without severance pay), including but not limited to, voluntary or
forced resignation, retirement, death, layoff, or if an employee is on an unpaid
leave of absence, or during any period of severance, within a reasonable time
after notice of the termination or unpaid leave of absence, the Company shall
issue a check to the former employee (or executor, administrator or legal
representative, if applicable) in the aggregate amount of the employee's
payroll deductions that had not yet been applied towards the purchase of shares
as of the employee's date of separation.
11. NON-ASSIGNABILITY. No option shall be transferable by an employee,
and an option shall be exercised only by an employee. Upon the death of a
participating employee, his or her executor, administrator or other legal
representative shall receive a check from the Company representing the
aggregate amount of the deceased employee's payroll deductions that had not yet
been applied towards the purchase of option shares as of the date of death.
12. ADJUSTMENTS. The total amount of Common Stock for which options may
be granted under the Plan, and the number of shares subject to any option
granted to a participant (both as to the number of shares of Common Stock and
the option price), shall be appropriately adjusted for any increase or decrease
in the number of outstanding shares of Common Stock resulting from payment of a
stock dividend on Common Stock, a subdivision or combination of shares of
Common Stock, or a reclassification of Common Stock, and, pursuant to the
paragraph below, in the event of a merger in which the Company shall be the
surviving corporation.
After any merger of one or more corporations into the Company, or after any
consolidation of the Company and one or more corporations in which the Company
shall be the surviving corporation, each participant shall, at no additional
cost, be entitled upon the exercise of an option, to receive (subject to any
required action by shareholders), in lieu of the number of shares to which such
option shall then be exercised, the number and class of shares of stock or other
securities to which such participant would have been entitled to receive
pursuant to the terms of the agreement of merger or consolidation if at the time
of such merger or consolidation such participant had been a holder of record of
a number of shares of Common Stock equal to the number of shares to which such
option shall then be so exercised. Comparable rights shall accrue to each
participant in the event of successive mergers or consolidations of the
character described above.
4
Anything contained herein to the contrary, upon the dissolution or
liquidation of the Company or upon any merger or consolidation in which the
Company is not the surviving corporation, the Purchase Period for any option
granted under this Plan shall terminate as of the date of the aforementioned
event, but each participant who is then an employee of the Company or a
subsidiary shall have the right, immediately prior to such dissolution,
liquidation, merger or consolidation, to exercise his option for such Purchase
Period in full on the earlier of the date of the merger or liquidation or the
last day of the Purchase Period.
The foregoing adjustments and the manner of application of the foregoing
provisions shall be determined by the Committee in its sole discretion. Any
such adjustment may provide for the elimination of any fractional share which
might otherwise become subject to an option.
13. TERMINATION AND AMENDMENT. The Board may terminate the Plan, or the
granting of options under the Plan, at any time. No option shall be granted
under the Plan after July 31, 2004.
The Board may amend or modify the Plan at any time and from time to time,
but no amendment or modification shall disqualify the Plan under Section 423 of
the Code.
No amendment, modification, or termination of the Plan shall in any manner
affect any option granted under the Plan without the consent of the participant
holding the option.
14. RULE 16b-3 REQUIREMENTS. Notwithstanding any other provision of the
Plan, the Committee may impose such conditions on the exercise of an option as
may be required to satisfy the requirements of Rule 16b-3 of the Exchange Act,
as amended from time to time (or any successor rule).
15. RIGHTS PRIOR TO DELIVERY OF SHARES. No participant shall have any
rights as a shareholder with respect to shares covered by an option until the
issuance of a stock certificate or electronic transfer to the employee or his
brokerage account of such shares. No adjustment shall be made for dividends or
other rights with respect to such shares for which the record date is prior to
the date the certificate is issued or the shares electronically delivered to a
brokerage account.
5
16. SECURITIES LAWS. Anything to the contrary herein notwithstanding,
the Company's obligation to sell and deliver stock pursuant to the exercise of
an option is subject to such compliance with federal and state laws, rules and
regulations applying to the authorization, issuance or sale of securities as
the Company deems necessary or advisable. The Company shall not be required to
sell and deliver stock unless and until it receives satisfactory assurance that
the issuance or transfer of such shares will not violate any of the provisions
of the Securities Act of 1933 or the Securities Exchange Act of 1934, or the
rules and regulations of the Securities Exchange Commission promulgated
thereunder or those of any stock exchange on which the stock may be listed, the
provisions of any state laws governing the sale of securities, or that there has
been compliance with the provisions of such acts, rules, regulations and laws.
The Board may impose such restrictions on any shares of Common Stock
acquired pursuant to the exercise of an option under the Plan as it may deem
advisable, including, without limitation, restrictions (a) under applicable
federal securities laws, (b) under the requirements of any stock exchange or
other recognized trading market upon which such shares of Common Stock are then
listed or traded, and (c) under any blue sky or state securities laws applicable
to such shares. No shares shall be issued until counsel for the Company has
determined that the Company has complied with all requirements under appropriate
securities laws.
17. APPROVAL OF PLAN. The Plan shall be subject to the approval of the
holders of at least a majority of the Common Stock of the Company present and
entitled to vote at a meeting of shareholders of the Company held within 12
months after adoption of the Plan by the Board. If not approved by shareholders
within such 12-month period, the Plan and any options granted hereunder shall
become void and of no effect.
18. EFFECT ON EMPLOYMENT. Neither the adoption of the Plan nor the
granting of an option pursuant to it shall be deemed to create any right in any
employee to be retained or continued in the employment of the Company, parent
or a subsidiary.
19. USE OF PROCEEDS. The proceeds received from the sale of Shares
pursuant to the Plan shall be used for corporate purposes by the Company.
6
THIS EMPLOYEE STOCK PURCHASE PLAN is hereby executed on this the 13 day of
October, 1994.
COMSHARE, INCORPORATED
BY: /s/ Kathryn A. Jehle
-------------------------
Kathryn A. Jehle
Senior Vice President and
Chief Financial Officer
BOARD OF DIRECTORS APPROVAL: 8/1/94
SHAREHOLDER APPROVAL: 11/17/94
7
FIRST AMENDMENT TO THE
COMSHARE INCORPORATED EMPLOYEE
STOCK PURCHASE PLAN
Effective January 1, 1997, Section 7 of the Plan shall be amended and restated
in its entirety as follows:
"7. Option Price. The option price of the shares shall be 85% of the
average of the fair market value of the Company's Common Stock the ten business
trading days immediately preceding the six month Purchase Period.
For purposes of this section of the Plan, the fair market value of the shares
shall be determined by the last sale price of the shares of the Company's
Common Stock on the NASDAQ National Market, as reported in The Wall Street
Journal for the applicable dates."
This amendment to the Comshare Incorporated Employee Stock Purchase Plan is
hereby executed on November 11, 1996.
COMSHARE, INCORPORATED
BY: /s/ Kathryn A. Jehle
--------------------
Kathryn A. Jehle
Senior Vice President and
Chief Financial Officer
BOARD APPROVAL: 11/8/96
SECOND AMENDMENT TO THE
COMSHARE INCORPORATED EMPLOYEE
STOCK PURCHASE PLAN
Effective January 1, 1998, Section 7 of the Plan shall be amended in its
entirety and restated as follows:
"7. Option Price. The option price of the shares shall be set at 85% of
the lower of:
a) The fair market value of the Company's Common Stock on the first day
of the applicable six month Purchase Period, or
b) The fair market value of the Company's Common Stock on the last day
of the applicable six month Purchase Period.
For purposes of this section of the Plan, the fair market value of the shares
shall be determined by the last sale price of the shares of the Company's
Common Stock on the NASDAQ National Market, as reported in The Wall Street
Journal for the applicable days described above. If there are no sales on such
dates, then the fair market value will be determined on the last date
immediately preceding on which there were sales."
This amendment to the Comshare, Incorporated Employee Stock Purchase Plan is
hereby executed on November 6, 1997.
COMSHARE, INCORPORATED
BY: /s/ Kathryn A. Jehle
-------------------------
Kathryn A. Jehle
Senior Vice President and
Chief Financial Officer
BOARD APPROVAL: 11/6/97
THIRD AMENDMENT TO THE
COMSHARE, INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
Pursuant to resolutions adopted by the Board of Directors of Comshare,
Incorporated on June 24, 1999 and subject to shareholder approval at the Annual
Meeting of Shareholders on November 22, 1999, the Comshare, Incorporated
Employee Stock Purchase Plan (the "Plan") is amended as set forth below.
1. Effective November 22, 1999, the Section 1 of the Plan "Purpose"
shall be amended with the addition of a new sentence at the end of the Section
to read as follows:
On and after November 22, 1999, non-employee directors of the
Company may purchase Common Stock under the Plan in lieu of a
portion or all of their cash compensation from the Company. Stock
purchases by non-employee directors shall not constitute purchases
under Code Section 423. The inclusion of non-employee directors
under the Plan is intended to attract qualified non-employee
directors and further align their interests with those of
shareholders.
2. Effective November 22, 1999, the second sentence in Section 3 of the
Plan ("Stock") shall be amended and restated in its entirety to read as follows:
The total amount of Common Stock on which options may be granted
under the Plan shall not exceed 800,000 shares, subject to
adjustment in accordance with Section 12.
3. Effective November 22, 1999, Section 5 of the Plan "Participants"
shall be amended by the addition of a new sentence at the end of the Section to
read as follows:
On and after November 22, 1999, non-employee directors of the
Company also may participate in the Plan for purposes of purchasing
Common Stock in accordance with Section 20; provided, however, that
such purchases shall not constitute purchases under Code Section
423.
4. Effective November 22, 1999, a new Section 20, entitled "Director
Stock Purchases" shall be added to the Plan as set forth below.
20. DIRECTOR STOCK PURCHASES.
(a) ELIGIBILITY. Effective November 22,
1999, a non-employee director of the Company may
purchase shares of Common Stock under the Plan from
either 50% or 100% of his or her base directors' fees
(comprising semi-annual retainer and Board/Committee
meeting fees) on behalf of services for which the
non-employee director has not yet received payment.
(b) ELECTIONS. Elections to purchase Common
Stock under the Plan in lieu of cash compensation may
be submitted to the Company semi-annually, prior to
the end of December and June of each calendar year.
An election covers base cash compensation for the
six-month period ending on the June 30 or December 31
next following the date on which the election is
submitted.
(c) PURCHASE PRICE. Common Stock purchased
by a non-employee director hereunder shall have a
purchase price equal to 100% of the fair market value
of the Company's Common Stock on the date of
issuance, which shall be February 15th or August 15th
(or, if later, two business days after the release of
the Company's earnings for the prior fiscal quarter),
as applicable. Fair market value for purposes of this
paragraph shall be determined by the last sale price
of the shares of the Company's Common Stock on the
NASDAQ National Market, as reported in The Wall
Street Journal, for the date prior to the date of
issuance or, if there are no sales on such date, on
the last date immediately preceding the issuance date
on which there were sales.
(d) TERMINATION OF SERVICES. If a
non-employee director ceases to remain on the Board
for any reason, including but not limited to,
voluntary or forced resignation, death, disability or
retirement, within a reasonable time after notice of
the termination, the Company shall issue a check to
the former non-employee director (or executor,
administrator or legal representative, if applicable)
2
in the aggregate amount of any accrued but unpaid
non-employee directors fees that had not yet been
paid in the form of Company Common Stock as of the
non-employee director's date of termination on the
Board.
(e) NON-ASSIGNABILITY. Any non-employee
director Common Stock purchase right granted
hereunder shall be exercised by the non-employee
director only and is nontransferable. Upon the death
of a non-employee director, any unpaid directors'
fees on behalf of such individual shall be paid to
the non-employee director's executor, administrator
or legal representative in accordance with paragraph
(d), above.
(f) ADJUSTMENTS. The total amount of Common
Stock available for purchase under the Plan shall be
appropriately adjusted for any increase or decrease
in the number of outstanding shares of Common Stock
resulting from payment of a stock dividend on Common
Stock, a subdivision or combination of shares of
Common Stock, or a reclassification of Common Stock
and, in the event of a merger in which the Company
shall be the surviving corporation. The foregoing
adjustments and the manner of application of the
foregoing provisions shall be determined by the
Committee in its sole discretion. Any such adjustment
may provide for the elimination of any fractional
share.
(g) TERMINATION AND AMENDMENT OF
NON-EMPLOYEE DIRECTOR PURCHASE RIGHTS. The Board may
amend or terminate the Plan or this Section 20 of the
Plan at any time. No Common Stock may be issued under
Section 20 of the Plan after July 31, 2004.
(h) RULE 16B-3 REQUIREMENTS.
Notwithstanding any provision of the Plan, the
Committee may impose such conditions on the purchase
of shares of Common Stock hereunder as may be
required to satisfy the requirements of Rule
3
16b-3 of the Exchange Act, as amended from time to
time (or any successor rule).
(i) RIGHTS PRIOR TO DELIVERY OF SHARES. No
participant shall have any rights as a shareholder
with respect to shares covered by a purchase right
until the issuance of a stock certificate or
electronic transfer to the non-employee director or
his brokerage account of such shares. No adjustment
shall be made for dividends or other rights with
respect to such shares for which the record date is
prior to the date the certificate is issued or the
shares electronically delivered to a brokerage
account.
(j) SECURITIES LAWS. Anything to the
contrary herein notwithstanding, the Company's
obligation to sell and deliver stock pursuant to a
purchase right hereunder is subject to such
compliance with federal and state laws, rules and
regulations applying to the authorization, issuance
or sale of securities as the Company deems necessary
or advisable. The Company shall not be required to
sell and deliver stock unless and until it receives
satisfactory assurance that the issuance or transfer
of such shares shall not violate any of the
provisions of the Securities Act of 1933 or the
Securities Exchange Act of 1934, or the rules and
regulations of the Securities Exchange Commission
promulgated thereunder or those of any stock exchange
on which the stock may be listed, the provisions of
any state laws governing the sale of securities, or
that there has been compliance with the provisions of
such acts, rules, regulations and laws.
(k) EFFECT ON SERVICES. Neither the
adoption of Section 20 of the Plan nor the Common
Stock purchase rights granted hereunder shall be
deemed to create any right in any non-employee
director to be retained or continued on the Board.
4
(l) ADMINISTRATION AND DEFINITIONS. This Section 20 of
the Plan shall be administered in conformance with Section 4
of the Plan and definitions set forth in other Sections of
the Plan shall apply to Section 20. For purposes of Section 4
of the Plan, the term "employees" shall include non-employee
directors.
THIS THIRD AMENDMENT to the Comshare, Incorporated Employee Stock
Purchase Plan is hereby executed on this the 14th day of October, 1999.
COMSHARE, INCORPORATED
By: /s/ KATHRYN A. JEHLE
--------------------
Kathryn A. Jehle
Senior Vice President and
Chief Financial Officer
5
FOURTH AMENDMENT TO THE
COMSHARE, INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
Pursuant to resolutions adopted by the Board of Directors of Comshare,
Incorporated on June 26, 2001 and subject to shareholder approval at the Annual
Meeting of Shareholders on November 19, 2001, the Comshare, Incorporated
Employee Stock Purchase Plan (the "Plan") is amended as set forth below.
Effective November 19, 2001, the second sentence in Section 3 of the
Plan ("Stock") shall be amended and restated in its entirety to read as follows:
The total amount of Common Stock on which options may be
granted under the Plan shall not exceed 1,600,000 shares,
subject to adjustment in accordance with Section 12.
THIS FOURTH AMENDMENT to the Comshare, Incorporated Employee Stock
Purchase Plan is hereby executed on this 18th day of October, 2001.
COMSHARE, INCORPORATED
By: /s/ Brian J. Jarzynski
-----------------------------------
Brian J. Jarzynski, Vice President,
Chief Financial Officer
and Treasurer
Appendix II
COMSHARE, INCORPORATED
DIRECTORS' STOCK OPTION PLAN
I. GENERAL PROVISIONS
1.1 PURPOSE. The purpose of the Comshare, Incorporated Directors'
Stock Option Plan ("Plan") is to promote the best interests of the Company and
its stockholders by attracting and motivating highly qualified individuals to
serve as Directors and to encourage Directors to acquire an ownership interest
in the Company, thus identifying their interests with those of shareholders.
1.2 DEFINITIONS. As used in this Plan, the following terms have
the meaning described below:
(a) "AGREEMENT" means the written agreement that sets
forth the terms of a Participant's Option.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as
amended from time to time.
(d) "COMMITTEE" means the Compensation Committee of the
Company, which shall be comprised of two or more disinterested members of the
Board, as defined in Rule 16b-3.
(e) "COMMON STOCK" means shares of the Company's
authorized Common Stock.
(f) "COMPANY" means Comshare, Incorporated.
(g) "DIRECTOR" means a member of the Company's Board of
Directors.
(h) "DISABILITY" means total and permanent disability, as
defined in Code Section 22(e).
(i) "EFFECTIVE DATE" means November 17, 1994.
(j) "EMPLOYEE" means a salaried employee of the Company or
its Subsidiaries, who has an "employment relationship" with the Company or its
Subsidiaries, as defined in Treasury Regulation 1.421-7(h), and the term
"employment" means employment with the Company or its subsidiaries.
(k) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended from time to time and any successor thereto.
(l) "EXPIRATION DATE" means the date set forth in the Agreement
relating to an Option on which the right to exercise such Option shall expire
absent a termination of the Participant's term of office as a Nonemployee
Director. Unless otherwise provided in the Agreement, the Expiration Date for an
Option shall be the fifth anniversary of its Grant Date.
(m) "FAIR MARKET VALUE" means, for purposes of determining the
value of Common Stock on the Grant Date, the last sale price on the NASDAQ
National Market, as reported in The Wall Street Journal for the Grant Date. In
the event that there were no Common Stock transactions on such date, the Fair
Market Value shall be determined as of the immediately preceding date on which
there were Common Stock transactions.
(n) "GRANT DATE" means the date on which the Option was
automatically awarded pursuant to Section 2.1.
(o) "NONEMPLOYEE DIRECTOR" means a Director who is not an Employee.
(p) "NONQUALIFIED STOCK OPTION" means an Option that is not
intended to meet the requirements of Section 422 of the Code.
(q) "OPTION" means a Nonqualified Stock Option to purchase Common
Stock granted under this Plan.
(r) "PARTICIPANT" means each of the Nonemployee Directors of the
Company serving from time to time.
(s) "PLAN" means the Comshare, Incorporated Directors' Stock Option
Plan, the terms of which are set forth herein, and any amendments hereto.
(t) "RULE 16B-3" means Rule 16b-3 under the Exchange Act, as in
effect from time to time.
1.3 ADMINISTRATION. To the extent permitted by Rule 16b-3, the Plan
shall be administered by the Committee. The Committee shall interpret the Plan,
prescribe, amend, and rescind rules and regulations relating to the Plan, and
make all other determinations necessary or advisable for its administration. The
decision of the Committee on any question concerning the interpretation of the
Plan or its administration with respect to any Option granted under the Plan
shall be final and binding upon all Participants.
1.4 STOCK. The total number of shares of Common Stock available for
grants under the Plan shall not, in the aggregate, exceed 100,000 shares of
Common Stock, as adjusted from time to time in accordance with Article IV.
Shares subject to any unexercised portion of a terminated, forfeited, cancelled
or expired Option granted hereunder shall be available for subsequent grants
under the Plan to the extent permitted under Rule 16b-3.
1.5 AGREEMENT. No person shall have any rights under any grant made
pursuant to the Plan unless and until the Company and the recipient of the grant
have executed and delivered an agreement expressly granting benefits to such
person pursuant to the Plan and containing the provisions required under the
Plan to be set forth in the Agreement. The terms of the Plan shall govern in the
event any provision of any Agreement conflicts with any term in this Plan as
constituted on the Grant Date.
II. STOCK OPTIONS FOR NONEMPLOYEE DIRECTORS
2.1 AUTOMATIC GRANTS OF OPTIONS.
(a) INITIAL GRANT. Each Nonemployee Director who is serving on the
Board on the Effective Date of the Plan shall be granted an Option to purchase
5,000 shares of the Company's Common Stock on the Effective Date. Any
Nonemployee Director who is first elected or appointed after the Effective Date
shall receive an Option to purchase 5,000 shares of the Company's Common Stock
on the date of the first Directors meeting following his or her election or
appointment, provided that such Nonemployee Director is still serving on the
Board as of such date.
(b) SUBSEQUENT GRANTS. After the initial grant and during the term
of the Plan, a Nonemployee Director who has been a Director for six months
before the January 1 following the date of an Annual Meeting of Stockholders
(not including the Annual Meeting on November 17, 1994) and who has not received
his or her initial grant within six months before the January 1 following the
Annual Meeting, automatically shall be granted, as of the January 1 following
the Annual Meeting, an additional Option to purchase 1,000 shares of the
Company's Common Stock, provided that the Nonemployee Director is still serving
on the Board as of such January 1. A Participant may hold more than one Option
under the Plan.
2.2 OPTION AGREEMENT. Each Option granted pursuant to this Article II
shall be evidenced by an Agreement that shall specify the exercise price, the
term of the Option, date or dates on which the Option becomes exercisable, the
number of shares to which the Option relates, and other such provisions as the
Committee shall determine.
2.3 OPTION PRICE. The purchase price per share of Common Stock for an
Option granted pursuant to this Article II shall be equal to the Fair Market
Value per share of Common Stock on the Grant Date.
2.4 DURATION OF OPTIONS. The Expiration Date of each Option granted
pursuant to this Article II shall be the fifth anniversary of its Grant Date.
2.5 EXERCISE OF SHARES SUBJECT TO OPTION. Options granted under this
Article II shall become exercisable according to the following schedule:
one-fourth of the Option shall become exercisable on the first anniversary of
the Grant Date, and one-fourth of the Option shall become exercisable on each of
the second, third, and fourth anniversaries of the Grant Date of each Option.
Once exercisable, such Options may be exercised at any time and from time to
time until the Expiration Date of such Options, unless earlier terminated
pursuant to Sections 3.1.
2.6 PAYMENT FOR OPTION SHARES. The purchase price for shares of Common
Stock to be acquired upon exercise of an Option granted hereunder shall be paid
in full at the time of exercise in any of the following ways: (a) in cash, (b)
by certified check, bank draft or money order, (c) by delivery to the Company of
previously-acquired shares of the Company's Common Stock with a Fair Market
Value (determined on the last trading date immediately preceding the date of
exercise) equal to the exercise price; or (d) by any combination of the
foregoing.
2.7 NO DISCRETION. Notwithstanding any provision in the Plan to the
contrary, the Committee shall have no discretion with respect to the terms of
grants made pursuant to this Article II, except to the extent such discretion
would not result in the grant or the Plan failing to qualify for the exemption
provided under Rule 16b-3.
III. TERMINATION
3.1. PRIOR TO EXERCISABILITY. If a Participant's term of office as a
Nonemployee Director is terminated for any reason prior to the date that an
Option or a portion thereof first becomes exercisable, such Option or portion
thereof shall terminate and all rights thereunder shall cease.
3.2 AFTER EXERCISABILITY. To the extent an Option is exercisable and
unexercised on the date a Participant's term of office as a Nonemployee Director
is terminated for any reason, the Option shall terminate on the earlier of (i)
the Expiration Date of the Option, and (ii) two months after such Participant's
termination; provided, however, that the exercise period in clause (ii) shall be
extended to one year after termination if the termination is due to the
Participant's death or Disability.
3.3 POST-TERMINATION EXERCISE. During the period from the Participant's
termination until the termination of the Option, the Participant, or the person
or persons to whom the Option shall have been transferred by will or by the laws
of descent and distribution, may exercise the Option only to the extent that
such Option was exercisable on the date of the Participant's termination.
IV. ADJUSTMENTS AND CHANGE IN CONTROL
4.1 ADJUSTMENTS AND CHANGE IN CONTROL. In the event of any stock
dividend on the Common Stock, subdivision or combination of shares of the Common
Stock, reclassification of the Common Stock, and (in accordance with the
provisions of the next Paragraph of this Section 4.1) in the event of a merger
or consolidation in which the Company shall be the surviving corporation, the
aggregate number and class of shares available for the granting of Options under
the Plan, the number and class of shares subject to each outstanding Option and
the Option prices, shall be proportionately adjusted.
After any merger of one or more corporations into the Company, or after
any consolidation of the Company and one or more corporations in which the
Company shall be the surviving corporation, each Participant shall, at no
additional cost, be entitled upon any exercise of his Option, to receive
(subject to any required action by stockholders), in lieu of the number of
shares as to which such Option shall then be so exercised, the number and class
of shares of stock or other securities to which such Participant would have been
entitled pursuant to the terms of the agreement of merger or consolidation if at
the time of such merger or consolidation such Participant had been a holder of
record of a number of shares of Stock of the Company equal to the number of
shares as to which such Option shall then be so exercised. Comparable rights
shall accrue to each Participant in the event of successive mergers or
consolidations of the character described above. Anything contained herein to
the contrary notwithstanding, upon the dissolution or liquidation of the Company
or upon any merger or consolidation in which the Company is not the surviving
corporation, any Option granted under this Plan shall terminate; but if a period
of twelve (12) months from the date of the grant of any such Option shall have
expired, each Participant who is then a Nonemployee Director of the Company
shall have the right, immediately prior to such dissolution, liquidation, merger
or consolidation, to exercise this Option in full to the extent not theretofore
exercised regardless of any installment provision applicable to his Option.
Any foregoing adjustment may provide for the elimination of any
fractional share which might otherwise become subject to any Option and no
adjustment shall be made to the extent such adjustment would cause the
Nonemployee Director to no longer be deemed "disinterested" for purposes of Rule
16b-3.
V. MISCELLANEOUS
5.1 PARTIAL EXERCISE. The Committee shall permit, and shall
establish procedures for, the partial exercise of Options under the Plan.
5.2 RULE 16B-3 REQUIREMENTS. Notwithstanding any other provision
of the Plan, the Committee may impose such conditions on the exercise of an
Option as may be required to satisfy the requirements of Rule 16b-3.
5.3 RIGHTS PRIOR TO ISSUANCE OF SHARES. No Participant shall have
any rights as a stockholder with respect to shares covered by an Option until
and only to the extent that the Option is exercised.
5.4 NON-ASSIGNABILITY. No Option shall be transferable by a
Participant except by will or the laws of descent and distribution. During the
lifetime of a Participant, an Option shall be exercised only by the Participant.
No transfer of an Option by will or the laws of descent and distribution shall
be effective to bind the Company unless the Company shall have been furnished
with written notice thereof and a copy of the will or such evidence as the
Company may deem necessary to establish the validity of the transfer and the
acceptance by the transferee of the terms and conditions of the Option.
5.5. SECURITIES LAWS.
(a) Anything to the contrary herein notwithstanding, the
Company's obligation to sell and deliver Common Stock pursuant to the exercise
of an Option is subject to such compliance with federal and state laws, rules
and regulations applying to the authorization, issuance or sale of securities as
the Company deems necessary or advisable. The Company shall not be required to
sell and deliver Common Stock unless and until it receives satisfactory
assurance that the issuance or transfer of such shares shall not violate any of
the provisions of the Securities Act of 1933 or the Exchange Act, or the rules
and regulations of the Securities and Exchange Commission promulgated thereunder
or those of the National Association of Securities Dealers, Inc. or any stock
exchange on which the Common Stock may be listed, the provisions of any state
laws governing the sale of securities, or that there has been compliance with
the provisions of such acts, rules, regulations and laws.
(b) The Committee may impose such restrictions on any shares
of Common Stock acquired pursuant to the exercise of an Option as it may deem
advisable, including, without limitation, restrictions (i) under applicable
federal securities laws, (ii) required by the NASDAQ Stock Market (including,
without limitation, with respect to securities traded on the NASDAQ National
Market or the NASDAQ Small Cap Market) or any stock exchange or other recognized
trading market upon which such shares of Common Stock are then listed or traded,
and (iii) under any blue sky or state securities laws applicable to such shares.
No shares shall be issued until counsel for the Company has determined that the
Company has complied with all requirements under appropriate securities laws.
5.6 TERMINATION AND AMENDMENT.
(a) The Board may terminate the Plan, or the granting of
Options under the Plan, at any time. No new grants shall be made under the Plan
after July 31, 2004.
(b) The Board may amend or modify the Plan at any time and
from time to time, but, unless otherwise permitted under Rule 16b-3 without
shareholder approval, no amendment or modification, without the approval of the
shareholders of the Company, shall (i) materially increase the benefits accruing
to Participants under the Plan, (ii) increase the amount of Common Stock for
which grants may be made under the Plan, except as permitted under Sections 1.4
and 4.1, or (iii) change the provisions relating to the eligibility of
individuals to whom grants may be made under the Plan. Unless otherwise
permitted under Rule 16b-3, this Plan shall not be amended more than once in any
six month period other than to comply with changes in the Code.
(c) No amendment, modification or termination of the Plan
shall adversely affect any Option granted under the Plan without the consent of
the Participant holding the Option.
5.8 EFFECT ON SERVICES. Neither the adoption of the Plan nor the
granting of any Option pursuant to the Plan shall be deemed to create any right
in any individual to be retained as a Nonemployee Director.
5.9 USE OF PROCEEDS. The proceeds received from the sale of Common
Stock pursuant to the Plan shall be used for general corporate purposes of the
Company.
5.10 APPROVAL OF PLAN. The Plan shall be subject to the approval of the
holders of at least a majority of the shares of Common Stock of the Company
present and entitled to vote at a meeting of Shareholders of the Company held
within 12 months after adoption of the Plan by the Board. Any Option granted
under the Plan prior to such stockholder approval, shall be conditioned upon
receipt of such approval, and may not be exercised in whole or in part unless
the Plan has been approved by the stockholders as provided herein. If not
approved by stockholders within 12 months after approval by the Board, the Plan
shall be rescinded, and any Options granted under the Plan shall be void
retroactive to the Grant Date.
THIS DIRECTORS' STOCK OPTION PLAN is hereby executed on this the 13th
day of October, 1994.
COMSHARE, INCORPORATED
By: /s/ KATHRYN A. JEHLE
---------------------------------------------------------
Kathryn A. Jehle
Senior Vice President and Chief Financial Officer
BOARD APPROVAL: 8/1/94
SHAREHOLDER APPROVAL: 11/17/94
FIRST AMENDMENT TO THE
COMSHARE, INCORPORATED
DIRECTORS' STOCK OPTION PLAN
Pursuant to resolutions adopted by the Board of Directors of
Comshare, Incorporated on June 24, 1999 and subject to shareholder approval at
the Annual Meeting of Shareholders on November 22, 1999, the Comshare,
Incorporated Directors' Stock Option Plan (the "Plan") is hereby amended as set
forth below.
1. Effective November 22, 1999, the first sentence in Section 1.4
of the Plan ("Stock") is amended and restated in its entirety to read as
follows:
The total number of shares of Common Stock available
for grants under the Plan shall not, in the aggregate, exceed
200,000 shares of Common Stock, as adjusted from time to time
in accordance with Article IV.
2. Effective November 22, 1999, paragraph (b) ("Subsequent
Grants") of Section 2.1 ("Automatic Grants of Options") shall be amended and
restated in its entirety to read as follows:
(b) SUBSEQUENT GRANTS. After the initial grant and
during the term of the Plan, a Nonemployee Director who has
been a Director for six months before the January 1 following
the date of an Annual Meeting of Stockholders, automatically
shall be granted, as of the January 1 following the Annual
Meeting, an additional Option to purchase 5,000 shares of the
Company's Common Stock, provided that the Nonemployee Director
is still serving on the Board as of such January 1.
Notwithstanding the foregoing, a Nonemployee Director is
elected at the 1999 Annual Meeting shall receive a one-time
accelerated grant of 10,000 shares on the first business day
after the 1999 Annual Meeting, representing the January 1,
2000 and January 1, 2001 grants. A Nonemployee Director who
first becomes eligible for Option grants after January 1, 2000
shall receive Option grants in accordance with the regular
terms of the Plan. A Participant may hold more than one Option
under the Plan.
THIS FIRST AMENDMENT to the Comshare, Incorporated Directors' Stock
Option Plan is executed on this the 14th day of October, 1999.
COMSHARE, INCORPORATED
By:/s/ KATHRYN A. JEHLE
---------------------
Kathryn A. Jehle
Senior Vice President and
Chief Financial Officer
SECOND AMENDMENT TO THE
COMSHARE, INCORPORATED
DIRECTORS' STOCK OPTION PLAN
Pursuant to approval of the Board of Directors on February 16, 2001,
the Comshare Incorporated Directors' Stock Option Plan (the "Plan") is hereby
amended, effective February 16, 2001, by the addition of a new Section 4.2 to
read as follows:
4.2. Change in Control Acceleration. The portion of any
outstanding option (including any option that has not been
outstanding for twelve (12) months) that has not expired or
been exercised, terminated, canceled, forfeited or surrendered
shall become exercisable in full in the event of a Change in
Control. For this purpose, Change in Control shall be defined
as the occurrence of any of the following events:
(a) the election of a Board of Directors of the
Company, a majority of the members of which were nominees of a
person (including an individual, a corporation, partnership,
joint venture, trust or other entity) or a group of persons
acting together (other than persons who were members of the
Board of Directors or officers of the Company as of August 14,
1998 or a tax-qualified retirement plan approved by the Board
of Directors of the Company (including at least a majority of
the Incumbent Directors ("Exempted Persons")), following the
acquisition by such person, group of persons or plan of
ownership (directly or indirectly, beneficially or of record)
of twenty-five (25%) percent, or more, of the outstanding
Common Stock of the Company;
(b) the acquisition of ownership by a person or group
of persons described in subparagraph (a) above (other than
Exempted Persons) of fifty-one (51%) percent, or more of the
outstanding Common Stock of the Company;
(c) a sale of all or substantially all of the assets
of the Company to any entity not controlled by persons who
were members of the Board of Directors or officers of the
Company as of August 14, 1998 or by any tax-qualified
retirement plan for the benefit of employees of the Company;
or
(d) a merger, consolidation or other similar
transaction between the Company and another entity if a
majority of the members of the Board of Directors of the
surviving company are not Continuing Members.
The term "Incumbent Directors" means members of the Board of
Directors of the Company as of August 14, 1998 or new
directors whose election by the Board of Directors, or
nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors in
office at the time of such election or nomination, who either
were directors as of August 14, 1998, or whose election or
nomination was previously approved as provided above. In the
event that a majority of the Incumbent Directors do not
approve the tax-qualified retirement plan or there are no
Incumbent Directors, the tax-qualified retirement plan shall
not be an Exempted Person. The term "Continuing Directors"
means persons (A) who are members of the Board of Directors
immediately before the change in control and (B) who also were
members of the Board of Directors of the Company as of August
14, 1998 or are new directors whose election by the Board of
Directors, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of
the directors in office at the time of such election or
nomination who either were directors as of August 14, 1998 or
whose election or nomination for election was previously
approved as provided above.
THIS SECOND AMENDMENT to the Comshare, Incorporated Directors' Stock
Option Plan is hereby executed as of February 16, 2001.
COMSHARE, INCORPORATED
By: /s/ Brian Jarzynski
---------------------
Brian Jarzynski
Vice President and Chief Financial Officer
2
THIRD AMENDMENT TO THE
COMSHARE, INCORPORATED
DIRECTORS' STOCK OPTION PLAN
Pursuant to resolutions adopted by the Board of Directors of Comshare,
Incorporated on August 14, 2001 and subject to shareholder approval at the
Annual Meeting of Shareholders on November 19, 2001, the Comshare, Incorporated
Directors' Stock Option Plan (the "Plan") is hereby amended as set forth below.
1. Effective November 19, 2001, the second sentence in Section 2.1(a)
of the Plan ("Initial Grant") is amended and restated in its entirety to read as
follows:
Any Nonemployee Director who is first elected or appointed
after the Effective Date shall receive an Option to purchase
15,000 shares of the Company's Common Stock on the date of the
first Directors meeting following his or her election or
appointment, provided that such Nonemployee Director is still
serving on the Board as of such date.
2. Effective November 19, 2001, the first sentence in Section 2.1(b) of
the Plan ("Subsequent Grants") shall be amended and restated in its entirety to
read as follows:
After the initial grant and during the term of the Plan, a
Nonemployee Director who has been a Director for six months
before the January 1 following the date of an Annual Meeting
of Stockholders, automatically shall be granted, as of the
January 1 following the Annual Meeting, an additional Option
to purchase 10,000 shares of the Company's Common Stock,
provided that the Nonemployee Director is still serving on the
Board as of such January 1.
THIS THIRD AMENDMENT to the Comshare, Incorporated Directors' Stock
Option Plan is executed on this 18th day of October, 2001.
COMSHARE, INCORPORATED
By: /s/ Brian J. Jarzynski
-----------------------------------
Brian J. Jarzynski, Vice President,
Chief Financial Officer
and Treasurer