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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:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of Commission Only
(as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to [Section]240.14a-11(c) or
[Section]240.14a-12
BGS SYSTEMS, INC.
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(Name of Registrant as Specified In Its Charter)
C. RUSSEL HANSEN, JR., VICE PRESIDENT, GENERAL COUNSEL
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(Name of Person Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), 14a6(i)(2) or Item
22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and how it was determined):
/ / Check box if any part of the filing fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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BGS SYSTEMS, INC.
128 TECHNOLOGY CENTER
WALTHAM, MASSACHUSETTS 02254-9111
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 11, 1996
The Annual Meeting of the Stockholders of BGS Systems, Inc. ("BGS" or the
"Company") will be held at the corporate offices of the Company, 128 Technology
Center, Waltham, Massachusetts on Tuesday, June 11, 1996, at 10:00 a.m. local
time, for the following purposes:
1. To fix the number of directors at four and to elect two members of
the Board of Directors to serve as the Class I directors for a term of
three years.
2. To transact such other business, if any, as may properly come
before the meeting.
Only holders of BGS Common Stock of record at the close of business on
April 15, 1996 will be entitled to notice of and to vote at the Annual Meeting.
The stock transfer books of the Company will remain open.
All stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors
JEFFREY P. BUZEN, Clerk
Waltham, Massachusetts
May 7, 1996
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE AND MAIL
THE ENCLOSED PROXY CARD PROMPTLY IN ORDER TO ASSURE REPRESENTATION OF YOUR
SHARES. THE ENCLOSED RETURN ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE U.S.A.
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BGS SYSTEMS, INC.
128 TECHNOLOGY CENTER
WALTHAM, MASSACHUSETTS 02254-9111
PROXY STATEMENT
FOR THE
1996 ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of BGS Systems, Inc. ("BGS" or the "Company")
for the 1996 Annual Meeting of Stockholders to be held on June 11, 1996, and at
any adjournment thereof (the "Meeting").
As of April 15, 1996, the record date for the Meeting, there were 3,123,729
shares of Common Stock, $.10 par value per share, of the Company ("Common
Stock") outstanding and entitled to be voted at the Meeting. Each such share is
entitled to one vote on each matter to be voted upon. To be voted, proxies must
be filed with the Clerk prior to voting. A majority of such shares, present in
person or represented by proxy, will constitute a quorum at the meeting.
Directors will be elected by a plurality of the votes cast. For all other
matters to be voted upon at the Meeting, the affirmative vote of a majority of
shares present in person or represented by proxy, and entitled to vote on the
matter, is necessary for approval. For purposes of determining the outcome of
the vote on these matters, an instruction to "abstain" from voting on a proposal
will be treated as shares present and entitled to vote, and will have the same
effect as a vote against a proposal. "Broker non-votes" which occur when brokers
are prohibited from exercising discretionary voting authority for beneficial
owners who have not provided voting instructions, are not counted for the
purpose of determining the number of shares present in person or represented by
proxy on a voting matter and have no effect on the outcome of the vote.
Properly executed and dated proxies received will be voted in accordance
with instructions thereon. If the proxy card is signed and returned and no
instructions are given on the proxy with respect to the matters to be acted
upon, the shares represented by the proxy will be voted for the election of the
nominees for Director designated below and in the discretion of the proxy
holders on any other matters that properly come before the Meeting. A
Stockholder giving a proxy may revoke it at any time before it is exercised by
filing with the Clerk of BGS an instrument of revocation or a duly executed
proxy bearing a later date. A proxy may also be revoked by attending the Meeting
of Stockholders and voting in person. Attendance at the Meeting will not in and
of itself constitute the revocation of a proxy.
Votes will be counted by the Inspector of Election appointed at the Meeting
and the Company's Transfer Agent, The First National Bank of Boston. The
Inspector of Election has customarily been Normand Bilodeau, the Company's Chief
Financial Officer.
This Proxy Statement, the accompanying Proxy card, and the Annual Report of
BGS, including financial statements for the fiscal year 1996, are first being
mailed to stockholders on or about May 7, 1996.
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I. ELECTION OF DIRECTORS
The Board of Directors of BGS is divided into three classes, with the term
of office of each class ending in successive years. The term of the Class I
Directors expires with this Annual Meeting of Stockholders. The nominees for
Class I, if elected, will serve three years until the 1999 Annual Meeting and
until successors have been elected and qualified. The current Directors of
Classes II and III will continue in office until the 1997 and 1998 Annual
Meetings respectively.
As the Class I Directors, Messrs. Buzen and Duncan are the nominees for
election to the Board of Directors at the 1996 Annual Meeting. The Class I
Directors will be elected to hold office until the annual meeting of
stockholders in 1999 and until their successors are duly elected and qualified.
Unless otherwise instructed, the persons named in the accompanying proxy will
vote, as permitted by the By-Laws of the Company, to fix the directors at four
and to elect Messrs. Buzen and Duncan as the Class I Directors. Proxies may not
be voted for a greater number of persons than the number of nominees named.
If a Class I Director becomes unavailable, the person acting under the
proxy may vote the proxy for the election of a substitute. It is not presently
contemplated that either Class I director will be unavailable.
NOMINEES FOR ELECTION AT THIS MEETING TO A TERM EXPIRING IN 1999 (CLASS I
DIRECTORS):
JEFFREY P. BUZEN
Dr. Buzen, 52, has been a director since 1975. He is Chief Scientist, Senior
Vice President, and Treasurer of the Company and has served as Clerk and
Director since 1975. Dr. Buzen developed the mathematical techniques upon which
many of the Company's products are based. In addition to his work at the
Company, Dr. Buzen has held faculty positions at Harvard and Brown Universities
and has published numerous articles on the theory and practice of capacity
management. Dr. Buzen received a Ph.D. in Applied Mathematics from Harvard
University in 1971.
PAUL R. DUNCAN
Mr. Duncan, 55, has been a director since 1988. He has been Executive Vice
President of Reebok International Ltd., a publicly-held athletic footwear
corporation based in Stoughton, Massachusetts since 1990. He is President of the
Reebok Specialty Business Group (since October 1995) and had been Chief
Operating Officer of the Reebok division from June 1995 to October 1995 and
Chief Financial Officer from 1985 to June 1995. Mr. Duncan is also a director of
Reebok International Ltd. and Cabletron Systems, Inc. Mr. Duncan is Chairman of
the Audit and Compensation Committees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE CLASS I NOMINEES LISTED
ABOVE.
DIRECTOR WHOSE TERM CONTINUES UNTIL 1997 (CLASS II DIRECTOR):
JUDITH N. GOLDBERG
Mrs. Goldberg, 49, has been a director since April 1994. Mrs. Goldberg has been
a private investor for over five years. She received her A.B. from
Harvard-Radcliffe College in 1968 and her M.A.T. from Yale University in 1969.
Mrs. Goldberg is a member of the Audit and Compensation Committees.
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DIRECTOR WHOSE TERM CONTINUES UNTIL 1998 (CLASS III DIRECTOR):
HAROLD S. SCHWENK, JR.
Dr. Schwenk, 54, has been a director since 1975. He is Chairman of the Board,
Chief Executive Officer and President of the Company. He has been Chairman and
President since 1975 and Chief Executive Officer since 1983. He also served as
the acting Chief Financial Officer from April 1985 to April 1990. Dr. Schwenk
received his Ph.D. in Applied Mathematics from Harvard University in 1972. Dr.
Schwenk serves ex officio on the Compensation Committee.
ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS
MEETINGS AND COMMITTEES
The Board of Directors met four times and acted by written consent three
times during fiscal 1996. For the incumbent Board of Directors as a whole,
attendance was 100% of the aggregate of (1) the total number of meetings of the
Board of Directors and (2) the total number of meetings of all committees of the
Board on which they served (during the periods they served). In addition, the
Company's directors frequently take part in the consideration of Company matters
and documents and in communications with the Chairman of the Board and others
wholly apart from such meetings.
Each director who is not an employee of the Company is paid an annual
retainer of $7,000 and a fee of $500 for each Board of Directors meeting
attended. Non-employee directors (Mr. Duncan and Mrs. Goldberg) who serve on the
committees of the Board receive an additional $4,000 per year for each committee
on which they serve.
The Audit Committee, which is composed entirely of the non-employee
directors, held one meeting during fiscal 1996. The responsibilities of the
Audit Committee are to make recommendations to the Board of Directors regarding
the engagement of the Company's independent auditors, to review and approve any
major accounting policy changes affecting the Company's operating results, to
review the arrangements for and scope of the independent audit and the results
of the audit, to review the scope of non-audit activities performed by the
independent auditors, to assure that the auditors are in fact independent and to
establish and monitor policies to prohibit unethical, questionable or illegal
activities by employees of the Company.
The Compensation Committee, composed of the non-employee directors, held
three meetings in fiscal 1996. The Committee administers the Company's stock
option plans, determines the compensation of the Chief Executive Officer and
reviews the compensation of certain other senior executives. Dr. Schwenk, Chief
Executive Officer and President serves ex officio. See "Compensation Committee
Interlocks and Insider Participation" below.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Paul R. Duncan and Judith N. Goldberg are the current members of the
Compensation Committee. Dr. Schwenk, Chief Executive Officer and President,
serves ex officio. See "Certain Transactions" on page 10 regarding Dr. Schwenk's
compensation and "Report of the Compensation Committee of the Board of Directors
on Executive Compensation" under the captain "General" on page 6 for a
description of Dr. Schwenk's ex officio service.
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SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of April 15, 1996,
with respect to the beneficial ownership of the Company's Common Stock by (i)
each stockholder known by the Company to be the beneficial owner of more than 5%
of the Company's Common Stock, (ii) each director and nominee, (iii) each of the
executives named in the Summary Compensation Table and (iv) all directors and
executive officers as a group.
SHARES OF
COMMON STOCK
BENEFICIALLY PERCENTAGE
OWNED AT OF
NAME AND ADDRESS OF APRIL 15, COMMON STOCK
BENEFICIAL OWNER 1996 OUTSTANDING
---------------- ---- -----------
Jeffrey P. Buzen..................................... 644,757(1) 20.7
128 Technology Center, Waltham, MA 02254-9111
Paul R. Duncan....................................... 18,000(2) *
Judith N. Goldberg................................... 593,257(3) 19.0
128 Technology Center, Waltham, MA 02254-9111
Harold S. Schwenk, Jr................................ 639,575(4) 20.5
128 Technology Center, Waltham, MA 02254-9111
James S. McGuire..................................... 6,398(5) *
C. Russel Hansen, Jr................................. 589,397(6) 18.9
128 Technology Center, Waltham, MA 02254-9111
Normand Bilodeau..................................... 405(7) *
John P. Pryor........................................ 0(8) *
Robert P. Goldberg Revocable Trust #2................ 519,661(9) 16.7
128 Technology Center, Waltham, MA 02254-9111
Wellington Management Company........................ 313,960(10) 10.0
75 State Street, Boston, MA 02109
Directors and Executive Officers
as a Group (7 persons)............................. 1,910,968(11) 61.2
<FN>
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* Represents less than 1% of the Common Stock outstanding.
(1) Includes 40,000 shares of Common Stock subject to options which are
presently exercisable. Excludes 10,000 shares of Common Stock subject to
options which are not presently exercisable.
(2) Includes: (a) 14,000 shares of Common Stock subject to options which are
presently exercisable, and (b) 2,000 shares of Common Stock which Mr.
Duncan, if he remains in office at the June 11, 1996 Annual Meeting, will
have the right to acquire within 60 days of April 15, 1996, through the
exercise of options. Excludes 8,000 shares of Common Stock subject to
options which are not presently exercisable.
(3) Includes: (a) 519,661 shares of Common Stock owned by the Robert P.
Goldberg Revocable Trust #2, with respect to which shares Mrs. Goldberg as
co-trustee, has shared power to vote and control the disposition and (b)
4,000 shares of Common Stock subject to options which are presently
exercisable and (c) 2,000 shares of Common Stock which Mrs. Goldberg, if
she remains in office at the June 11, 1996 Annual Meeting, will have the
right to acquire within 60 days of April 15, 1996, through the exercise of
options. Excludes 8,000 shares of Common Stock subject to
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options which are not presently exercisable. The shares also include (a)
6,436 shares of Common Stock owned by Mrs. Goldberg's children and (b)
61,160 shares of Common Stock held by two unrelated co-trustees of four
irrevocable trusts (15,290 in each trust) for the benefit of Mrs.
Goldberg's children. Mrs. Goldberg disclaims beneficial ownership of all
67,596 shares.
(4) Includes: (a) 9,180 shares of Common Stock held of record by Dr. Schwenk as
custodian for the benefit of his daughters (b) 2,750 shares held of record
by Dr. Schwenk's wife as custodian for the benefit of their son, and (c)
3,235 shares of Common Stock held of record by Dr. Schwenk's wife. Dr.
Schwenk disclaims beneficial ownership of all of such 15,165 shares. Also
includes: 40,000 shares of Common Stock subject to options which are
presently exercisable and 118,646 shares of Common Stock held in the Harold
S. Schwenk, Jr. Qualified Annuity Trust -- 1995 with respect to which
shares Dr. Schwenk as grantor-trustee, has sole power to vote and control
the disposition. Excludes (a) 10,000 shares of Common Stock subject to
options which are not presently exercisable and (b) 525 shares held by Dr.
Schwenk's son who is of the age of majority and does not share Dr.
Schwenk's household.
(5) Includes 5,000 shares of Common Stock subject to options which are
presently exercisable. Excludes 65,000 shares of Common Stock subject to
options which are not presently exercisable.
(6) Includes: (a) 519,661 shares of Common Stock owned by the Robert P.
Goldberg Revocable Trust #2, with respect to which shares Mr. Hansen as
co-trustee, has shared power to vote and control the disposition and (b)
61,160 shares of Common Stock held of record by four irrevocable trusts of
which Mr. Hansen is a co-trustee for the benefit of children who are not
related to Mr. Hansen. Mr. Hansen disclaims beneficial ownership of all
580,821 shares. Also includes 6,000 shares of Common Stock subject to
options which are presently exercisable. Excludes 4,000 shares of Common
Stock subject to options which are not presently exercisable.
(7) Includes 5 shares of Common Stock held of record by Mr. Bilodeau's wife.
Mr. Bilodeau disclaims beneficial ownership of all 5 shares.
(8) Excludes 10,000 shares of Common Stock subject to options which are not
exercisable within 60 days of April 15, 1996.
(9) Mr. Hansen and Mrs. Goldberg as trustees with equal voting rights, have
shared power (by majority vote) to vote and control the disposition of all
of the 519,661 shares of Common Stock owned by the Trust.
(10) Represents holdings as of January 31, 1996, based on information contained
in a Schedule 13G filed by Wellington Management Company with the
Securities and Exchange Commission.
(11) Includes 109,000 shares subject to options which are presently exercisable
and 4,000 shares that may be acquired within 60 days of the record date
through the exercise of stock options. Excludes 115,000 shares of Common
Stock subject to options which are not presently exercisable.
There are no arrangements known to the Company which may result at a later
date in a change in control of the Company.
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REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD
OF DIRECTORS ON EXECUTIVE COMPENSATION
General
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The Compensation Committee is composed of the two outside, independent
directors, Paul R. Duncan (Chairman) and Judith N Goldberg. The Chief Executive
Officer, Harold S. Schwenk, Jr., sits ex officio. The Committee's
responsibilities include setting the compensation of the Chief Executive Officer
and reviewing the compensation for selected executive officers of the Company.
The Committee also grants all stock options to executive officers and other
employees. Dr. Schwenk provides compensation information and other material
requested by the Committee. He makes recommendations to the Committee on the
compensation of the selected executive officers, and he participates in the
discussions regarding these officers. He does not attend or participate in the
discussions regarding his own compensation and makes no recommendation with
respect thereto. He does not vote on the Compensation Committee. He does not
administer the Company's stock option plans.
Compensation Philosophy
- -----------------------
The Committee reviews an officer's bonus on the basis of the quantitative
performance of the Company (e.g. earnings per share and earnings per share
growth) and each selected officer's contribution to that performance (e.g.
contribution to revenue and revenue growth, cost control and relative
contribution to margin levels). The Committee also considers qualitative
accomplishments of such officer and the Company as a whole (e.g. effort,
development of management and development and execution of strategic plans). The
relative weights of these factors are imprecise and vary from year to year. In
fiscal 1996, the Committee did not consider material changes to base
compensation of selected officers and thus did consider the compensation levels
of other officers with roughly comparable job descriptions in other companies.
In fiscal 1996, the single most important factor in determining the bonuses of
the selected officers reviewed by the Committee was corporate
performance-principally earnings per share and the growth in earnings per share.
The compensation of Mr. McGuire is determined under an employment
agreement. The base pay and the bonus were initially established under that
agreement, and they are currently reviewed and determined, on the basis of the
compensation policies noted above. The agreement reflects these policies and is
terminable at any time by the Company or Mr. McGuire. See "Employment
Agreements" on page 10.
Determination of the Chief Executive Officer's Compensation for the Last Fiscal
- -------------------------------------------------------------------------------
Year
- ----
The Committee has complete discretion in determining the compensation of
the Chief Executive Officer. In determining such compensation for the last
fiscal year on a quantitative basis, the Committee considered the Company's
corporate performance. Earnings per share grew from $2.38 in fiscal 1995 to
$2.55 in fiscal 1996, an increase of 7%. Qualitatively, the Committee considered
the pace and impact of the introduction of new products in areas of strategic
importance and the pursuit of new technology in other new areas. Having
previously granted Dr. Schwenk long term stock options, the Committee did not
grant Dr. Schwenk any equity compensation in fiscal 1996.
Compensation Methods
- --------------------
Base salaries and bonuses for selected executive officers are viewed as
appropriate remuneration vehicles to enhance performance on an annual basis. The
Company has utilized stock options for such executive officers to provide longer
term performance-related incentives, in order to link their rewards
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directly to shareholder gains over a longer period of time. These options are
generally granted at a premium to the market price on the date of grant. The
size and duration of the grants is based or prior grants of stock options, if
any, to the particular individual and historical and current grants to all other
past and current option holders, taking into account the Company's preference
for long-term stock performance based compensation.
On June 13, 1995, the Committee determined to grant Mr. McGuire options to
acquire 45,000 shares. On November 15, 1995, the Committee granted Mr. Pryor
options to acquire 10,000 shares. See "Option Grants in Last Fiscal Year" on
page 9. The Committee made no new stock option grants to other executive
officers during fiscal 1996. The Committee believes that the executive officers
have been granted appropriate options to date, and it will periodically continue
to consider additional grants in the future.
Deductibility of Compensation Expense
- -------------------------------------
The Committee has reviewed Section 162(m) of the Internal Revenue Code
added by the Omnibus Budget Reconciliation Act of 1993. The Committee has
decided to take no action at this time with respect to the Company's
compensation program as a result of this change in the tax law but to continue
to evaluate the possible effects of the new provisions. Aggregate compensation
for any executive officer is unlikely to exceed the one million dollar limit
under existing compensation agreements.
Paul R. Duncan, Chairman
Judith N. Goldberg
Harold S. Schwenk, Jr., ex officio member
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EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded, earned or paid for
services rendered in all capacities to the Company and its subsidiaries during
each of fiscal 1994, 1995 and 1996 to the Company's Chief Executive Officer and
the Company's five most highly compensated executive officers other than the
Chief Executive Officer who were serving as executive officers at the end of
fiscal 1996.(1) This information includes the dollar values for base salaries,
bonus awards, and certain other compensation, if any, whether paid or deferred.
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SUMMARY COMPENSATION TABLE
Long Term
Compensation
--------------
Annual Compensation Awards
---------------------------------------
Securities All Other
Name and Bonus Underlying Compensation
Principal Position Year Salary($) ($) Options(#) ($)(2)
- ----------------------------------------------------------------------------------------------------------
Harold S. Schwenk, Jr. 1996 216,300 96,000 -- 854
Chairman, Chief Executive 1995 216,300 90,000 -- 1,332
Officer and President 1994 216,300 60,000 -- 1,659
Jeffrey P. Buzen 1996 216,300 96,000 -- 854
Chief Scientist and Senior 1995 216,300 90,000 -- 1,332
Vice President 1994 216,300 60,000 -- 1,657
James S. McGuire 1996 150,000 71,250 45,000 854
Chief Operating Officer 1995 150,000 75,000 25,000 1,145
1994 150,000 50,000 -- 1,710
John P. Pryor(1) 1996 91,000 49,967 10,000 --
Vice President, 1995 -- -- -- --
Marketing and Sales 1994 -- -- -- --
Normand Bilodeau 1996 93,741 28,000 -- 711
Chief Financial Officer 1995 92,650 30,000 -- 564
1994 90,001 5,000 -- 634
C. Russel Hansen, Jr. 1996 130,000 -- -- 797
Vice President and General 1995 130,000 12,000 -- 896
Counsel 1994 130,000 26,667 -- 891
- ----------------------------------------------------------------------------------------------------------
<FN>
(1) Mr. Pryor was first determined to be an executive officer for Section 16
purposes on February 13, 1996.
(2) Represents amounts allocated under the Company's Profit-Sharing Retirement
Plan and Trust.
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OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning options
granted during 1996 to the named executives:
INDIVIDUAL GRANTS
------------------------ POTENTIAL REALIZABLE VALUE
% OF TOTAL
NUMBER OF OPTIONS AT ASSUMED ANNUAL RATES OF
SECURITIES GRANTED TO EXERCISE STOCK PRICE APPRECIATION
UNDERLYING EMPLOYEES OR BASE FOR OPTION TERM
OPTIONS IN FISCAL PRICE EXPIRATION ---------------
GRANTED YEAR ($/SHARE) DATE 5% ($) 10% ($)
------- ---- ------- ---- ----- ------
Harold S. Schwenk, Jr...... 0
Jeffrey P. Buzen........... 0
James S. McGuire(1)........ 45,000 82% $35.00 6/13/99 990,675 2,510,550
John P. Pryor(2)........... 10,000 18% $38.75 12/15/05 243,738 617,675
Normand Bilodeau........... 0
C. Russel Hansen, Jr....... 0
<FN>
- ---------------
(1) The options were granted for a term of approximately ten years, subject to
earlier termination in certain events related to termination of employment.
30,000 options are exercisable commencing on June 13, 1997 and 15,000
options are exercisable on June 13, 1998. The fair market value was $30.75
per share on the grant date (June 13, 1995). The Compensation Committee
retains the discretion, but not the obligation, to accelerate the vesting of
these options at any time for any or no reason.
(2) The options were granted for a term of approximately ten years, subject to
earlier termination in certain events related to termination of employment.
The options are exercisable in 2,000 share increments on November 15 of each
year commencing November 15, 1996. The fair market value was $40.125 per
share on the grant date (November 15, 1995). The Compensation Committee
retains the discretion, but not the obligation, to accelerate the vesting of
these options at any time for any or no reason.
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OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth certain information regarding the number and
value at January 31, 1996, of unexercised options held by each of the executive
officers named in the Summary Compensation Table above.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
Number of Securities
Underlying Value of Unexercised
Unexercised Options In-the-Money
at FY-End (#) Options at FY-End ($)
--------------------- ------------------------
Exercisable(E)/ Exercisable/
Name Unexercisable(U) Unexercisable
- --------------------------------------------------------------------------
Harold S. Schwenk, Jr. 30,000 E/20,000 U 189,600/47,400
Jeffrey P. Buzen....... 30,000 E/20,000 U 189,600/47,400
James S. McGuire....... 5,000 E/65,000 U 25,000/93,600
John P. Pryor.......... 0 E/10,000 U 0/0
Normand Bilodeau....... 0 E/0 U 0/0
C. Russel Hansen, Jr... 4,000 E/6,000 U 0/0
CERTAIN TRANSACTIONS
From February 1, 1995, to the present, there have been no (and there are no
currently proposed) transactions in which the amount involved exceeds $60,000 to
which the Company or any of its subsidiaries was (or is to be) a party and in
which any executive officer, director, beneficial owner of the Company's Common
Stock or member of the immediate family of any of the foregoing persons had (or
will have) a direct or indirect material interest, except as set forth below and
payments set forth under "Executive Compensation" above.
EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with Mr. McGuire on
December 5, 1990. The agreement is terminable at any time by the Company or Mr.
McGuire. In the event the Company terminates Mr. McGuire's employment without
cause, the Company has agreed to make decreasing salary continuation payments
over a 36 month period (ranging from 100% of base monthly salary in the first 6
months to 33 1/3% in the last 24) or until Mr. McGuire finds other employment
(which he has agreed to make reasonable efforts to do), whichever first occurs.
The agreement provides for an annual base salary of $150,000, and participation
in an incentive plan whereby Mr. McGuire could receive up to an additional
$75,000 in incentive payments, in the event that Mr. McGuire achieves the higher
goals established in the program. The Company has the discretion to make
additional payments for additional performance.
TERMINATION OF EMPLOYMENT ARRANGEMENTS
The Company's policy on involuntary termination with respect to all other
officers and other employees is to determine the amount of payments made, if
any, in connection therewith on a case by case basis. Although the policy makes
reference to a maximum payment of one week's pay for each six months' employment
(plus four weeks' pay if four weeks notice is not given), the actual amounts may
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be greater or lower or nothing at all depending on the unique facts of each
termination. See "Employment Agreements" above for a discussion of termination
arrangements for Mr. McGuire.
GRAPHICAL COMPARISONS OF COMMON STOCK TO MARKET INDICES
The following graph sets forth the yearly percentage change in the
cumulative stockholder return on BGS Common Stock during the five fiscal years
ended January 31, 1996 with the cumulative total return on the CRSP Total Return
Index for The NASDAQ Stock Market (US & Foreign) and the CRSP Total Return Index
for NASDAQ Computer & Data Processing Stocks. The CRSP Index for NASDAQ Computer
and Data Processing Stocks includes all companies within SIC Code 737. The
comparison assumes $100 was invested on January 31, 1991 in BGS Common Stock and
in each of such indices, and assumes reinvestment of dividends.
[STOCK PERFORMANCE GRAPH APPEARS HERE]
Measurement Period CRSP Total Return Index for Nasdaq
(Fiscal Year Covered) BGS Systems,Inc. Stock Market Computer and Data
------------------- --------------- ------------ -----------------
1991 100.0 100.0 100.0
1992 153.8 152.9 176.5
1993 158.9 172.4 186.2
1994 101.7 199.9 198.9
1995 103.1 188.1 223.6
1996 143.3 261.2 346.8
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who beneficially own
more than ten percent of the Company's stock, to
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14
file initial reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission (the "SEC") and The NASDAQ Stock Market.
Executive officers, directors and greater than ten percent beneficial owners are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file. The Company assists its executive officers and directors
with these filings. Based solely on the information furnished to the Company by
the Company's executive officers and directors, the Company believes that during
fiscal year 1996, all Section 16(a) reports were filed on a timely basis.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 1997 Annual
Meeting of Stockholders pursuant to Rule 14a-8 promulgated by the Securities and
Exchange Commission must be received by the Company at its executive offices,
attention of the Clerk, on or Before January 9, 1997.
RELATIONSHIPS WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Ernst & Young LLP, independent public accountants, has audited
the accounts of the Company and subsidiaries since 1978 and has been selected to
do so for fiscal year 1997. A representative of Ernst & Young is expected to be
present at the Meeting with the opportunity to make a statement if she desires
to do so and to be available to respond to appropriate questions.
OTHER BUSINESS
Management does not know of any other matters which may come before the
meeting. However, if any other matters are properly presented to the Meeting, it
is the intention of the persons named in the accompanying proxy to vote, or
otherwise act, in accordance with their judgment on such matters.
EXPENSES OF SOLICITATION
All expenses of soliciting proxies will be paid by the Company. Proxies may
be solicited personally, or by telephone, by employees of the Company, but the
Company will not pay any compensation for such solicitations. The Company will
reimburse brokers, banks and other persons holding shares in their names or in
the names of nominees for their expenses for sending material to principals and
obtaining their proxies.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED JANUARY 31, 1996, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
EXCLUDING CERTAIN EXHIBITS THERETO, MAY BE OBTAINED WITHOUT CHARGE BY CONTACTING
THE OFFICE OF INVESTOR RELATIONS, BGS SYSTEMS, INC., 128 TECHNOLOGY CENTER,
WALTHAM, MASSACHUSETTS 02254-9111. THE COMPANY HAS ESTABLISHED A PUBLICLY
ACCESSIBLE HOME PAGE ON THE INTERNET WORLD WIDE WEB FOR COMPANY PRODUCT AND
FINANCIAL INFORMATION. BGS INFORMATION CAN BE OBTAINED BY REFERENCE TO THE WORLD
WIDE WEB URL HTTP://WWW.BGS.COM.
By Order of the Board of Directors
JEFFREY P. BUZEN, Clerk
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APPENDIX
BGS SYSTEMS, INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 11, 1996
The undersigned, having received notice of the meeting and management's
proxy statement therefor, and revoking all prior proxies, hereby appoint(s)
Jeffrey P. Buzen, Harold S. Schwenk, Jr. and C. Russel Hansen, Jr. and each of
them, attorneys or attorney of the undersigned (with full power of substitution)
for and in the name(s) of the undersigned to attend the Annual Meeting of
Stockholders of BGS Systems, Inc. (the "Company") to be held at the corporate
offices of the Company, 128 Technology Center, Waltham, Massachusetts on June
11, 1996 and any adjourned sessions thereof, and there to vote and act upon the
following matters in respect of all shares of stock of the Company which the
undersigned will be entitled to vote or act upon, with all powers the
undersigned would possess if personally present.
Attendance of the undersigned at the meeting or at any adjourned session
thereof will not be deemed to revoke this proxy unless the undersigned shall
affirmatively indicate at the meeting the intention of the undersigned to vote
said shares in person. If the undersigned hold(s) any of the shares of the
Company in fiduciary, custodial or joint capacity or capacities, this proxy is
signed by the undersigned in every such capacity as well as individually.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY CONTINUED AND TO BE SIGNED ON REVERSE SIDE
16
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE.
The shares represented by this proxy will be voted as directed by the
undersigned. If no direction is given with respect to any election or proposal
specified below, this proxy will be voted for such election or proposal.
1. To fix the number of directors at four and elect the two nominees listed
below to serve as Class I Directors.
Nominees: Jeffrey P. Buzen and Paul R. Duncan
/ / FOR / / WITHHELD
- --------------------------------------------------------------------------------
For, all nominees except as noted above
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before said meeting or any adjournments
thereof.
/ / MARK HERE IF YOU PLAN TO ATTEND THE MEETING
/ / MARK HERE FOR ADDRESS CHANGE AND MARK BELOW.
In signing, please write (name) exactly as appearing hereon. When signing as
attorney, executor, administrator or other fiduciary, please give your full
title as such. Joint owners should each sign personally.
Signature: Date:
--------------------------------- -------------------
Signature: Date:
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