<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1 to
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31,
1999 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from ______ to
_________.
Commission File Number: 0-22419
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CARDIMA, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3177883
- ---------------------------------------- -----------------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
47266 Benicia Street, Fremont, CA 94538-7330
- ---------------------------------------- -----------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (510) 354-0300
SECURITIES REGISTERED PURSUANT TO SECTION 12 (B) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12 (G) OF THE ACT:
Common Stock, $.001 par value
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) had been subject to such filing
requirements for the past 90 days. X Yes No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of the
registrant was $77,825,589 based on the last reported sales price of the Common
Stock on the Nasdaq National Market on March 13, 2000
As of March 13, 2000, there were 21,233,587 shares of Registrant's Common Stock
outstanding.
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
None
Item 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Company are elected annually by the Board of
Directors of the Company (the "Board") and serve at the discretion of the Board.
The directors of the Company are elected annually by stockholders. There are
no family relationships among any of the executive officers or directors of
the Company.
Mr. Phillip Radlick, Ph.D. (age 62) has been the President, Chief Executive
Officer and a Director of Cardima since November 1994. Prior to joining the
Company, from November 1992 until October 1994, Mr. Radlick was the President
and Chief Executive Officer of Hepatix, Inc., a start-up medical device company.
From November 1986 until November 1992, Mr. Radlick was the President of Edwards
Cardiovascular Surgery Division, a division of Baxter Healthcare responsible for
the development, manufacture and sale of cardiovascular products. Mr. Radlick
received a B.S. in Chemistry and a Ph.D. in Organic Chemistry from University of
California, Los Angeles.
Mr. Gabriel Vegh (age 60), the founder of the Company, has been a Director of
Cardima since November 1992. Mr. Vegh has been the Chief Operating Officer of
Cardima since November 1994, and the Executive Vice President since January
1995. From May 1993 until November 1994, Mr. Vegh was the Company's President,
and from May 1993 until July 1996, he served as the Company's Chief Financial
Officer. Prior to joining the Company, from August 1985 until May 1993, Mr.
Vegh was the Vice President, Operations of Target, and from February 1983 until
August 1985, Mr. Vegh was General Manager, Pilot Operations of Advanced
Cardiovascular Systems. Mr. Vegh received a B.S. in Mechanical Engineering from
the New Jersey Institute of Technology.
Mr. Jeharajah has served as a Director of Cardima since May 1998. Mr.
Jeharajah has served as the Vice President of Financial Planning and Investor
Relations of Baxter International, Inc. (Baxter), an international
cardiovascular company, since 1994. Mr. Jeharajah has been with Baxter since
1982. Mr. Jeharajah received a B.S. in Philosophy from Jnana Deepa Vidyapeeth
Pune, India and a B.S. in Accounting from Institute of Cost and Management,
United Kingdom. Mr. Jeharajah also received an M.B.A. from Claremont
University in California.
Dr. Quijano has served as a Director of Cardima since November 1999. Dr.
Quijano has served as the Founder and Chief Technical Officer of VenPro, Inc.
since 1997 and President and Chief Technical Officer of 3F Therapeutics, Inc.
since 1998. Dr. Quijano serves on the Board of Directors of Fore Flow, Inc.,
of which he is also the Founder. Prior to Dr. Quijano's current positions, he
was the General Manager of Hepatix, AG, from 1993 to 1994 and from 1987 to
1993 was the Vice President of Research and Development, Regulatory Affairs
and Clinical Research for the Edwards Cardiovascular Surgery Division of
Baxter Healthcare. Dr. Quijano received a B.S. in Chemistry from the
University of Alabama and a Ph.D. in Biochemistry from the University of
Central America.
Mr. Allan Abati, Ph.D. (age 55) has been the Vice President, Regulatory Affairs,
Clinical Programs and Quality Assurance of Cardima since February 1996. Prior
to joining the Company, from February 1992 until February 1996, Mr. Abati was
the Vice President, Regulatory Affairs and Quality Assurance of Johnson &
Johnson Professional, Inc., a manufacturer of neurosurgical and orthopedic
medical devices. From August 1989 until February 1992, Mr. Abati was the
Director, Regulatory and Clinical Affairs of Shiley Inc., a Pfizer company and
manufacturer of interventional cardiology products. From June 1986 until August
1989, Mr. Abati was the Manager, Regulatory Affairs and Clinical Programs, and
from November 1982 until June 1986 he was Senior Regulatory and Clinical Affairs
Specialist, of Edwards Critical-Care Division, a division of Baxter Healthcare
responsible for the development, manufacture and sale of critical care and
interventional cardiology products. Mr. Abati received a B.S. in Zoology and an
M.A. in Biology from California State University, Long Beach and a Ph.D. in
Physiology from Rutgers University.
<PAGE>
Mr. Victor J. Barajas (age 36) has been the Vice President of Operations of
Cardima since August 1997 and is responsible for all operations and
manufacturing activity. From September 1995 until August 1997, Mr. Barajas was
the Director of Operations, from May 1994 until September 1995, Mr. Barajas was
the Manager of Operations, and from June 1993 until May 1994, Mr. Barajas was a
senior engineer for Cardima. Prior to joining the company, from 1990 until June
1993, Mr. Barajas was Process Development Engineer and then Project Leader and
Manager of the Engineering Department for Target Therapeutics, Inc. From 1988
until 1990, Mr. Barajas was employed by Critikon, Inc. as an R&D/Manufacturing
Engineer in the medical disposables area. Mr. Barajas received his B.S. degree
in Industrial Technology from San Jose State University.
Mr. Ronald Bourquin (age 49) has been the Vice President and Chief Financial
Officer of Cardima since July 1996. Prior to joining the Company, from July
1993 until July 1996, Mr. Bourquin was the Corporate Controller of EP
Technologies, Inc. ("EPT"), an electrophysiology catheter manufacturer that was
acquired by Boston Scientific in January 1996. From April 1993 until July 1993,
Mr. Bourquin served as a consultant to EPT. From December 1991 until February
1993, Mr. Bourquin was the Controller of the Endoscopy Division of Stryker
Corporation, a medical instrument company. From January 1979 until December
1991, Mr. Bourquin held various positions of increasing responsibility at
Coherent, Inc., a manufacturer of lasers, ultimately serving as the Director of
Finance of the Medical Group from November 1985 to December 1991. Mr. Bourquin
is a Certified Management Accountant and received a B.A. in Accounting and a
M.B.A. in Finance from Golden Gate University.
Mr. Eric Chan, Ph.D. (age 42) has been the Vice President of Product Development
of Cardima since June 1998. Prior to joining the Company, from August 1991 to
March 1993, Mr. Chan was the Director of Engineering and from April 1993 to May
1998, Vice President of Engineering at Arrhythmia Research Technology, Inc.
where he coordinated and directed the development of computerized cardiac
electrophysiology, high resolution ECG and cathlab systems. Mr. Chan received
his B.S.E.E. from Purdue University, his M.S.E. in Biomedical Engineering from
the University of Texas at Austin, and his Ph.D. in Biomedical Engineering from
the University of Texas at Austin.
Mr. David Smith (age 46) has been the Vice President, World Wide Sales of
Cardima since March 1996. Prior to joining the Company, from January 1994 until
December 1995, Mr. Smith was the Director of Marketing of Baxter Healthcare,
International Cardiology Division, a manufacturer and distributor of
interventional cardiology products. From June 1991 until December 1993, Mr.
Smith was the Business Unit Manager, Germany, and from April 1990 until May
1991, he was the National Sales Manager, Endovascular Products, of Baxter
Healthcare, Less Invasive Surgery Division. Mr. Smith has a B.S. in Business
Administration from Michigan State University.
Compensation of Directors
Directors currently receive no cash fees for services provided in that
capacity but are reimbursed for reasonable expenses incurred in connection
with attendance at meetings of the Board. The Company's 1997 Directors' Stock
Option Plan (the "Directors' Plan") provides that each person who becomes a
non-employee director of the Company will be granted a nonstatutory stock
option to purchase 20,000 shares of Common Stock on the date on which such
person first becomes a non-employee director of the Company. This initial
grant is fully exercisable on the initial date of the grant. In addition, on
the date of each annual meeting of the Company's stockholders at which such
director is reelected, each such non-employee director shall be granted an
additional option to purchase 2,000 shares of Common Stock if, on such date,
he or she shall have served on the Company's Board of Directors for at least
three months during the current fiscal year, such option will become
exercisable in full on the date of grant. Each of the nominees for director
will have served for more than three months at the time of Annual Meeting, and
so each will receive options to purchase 2,000 shares of the Company's Common
Stock under the Directors' Plan if they are re-elected to the Board at the
Annual Meeting. As of March 27, 2000, 104,000 shares had been issued under
this plan.
<PAGE>
ITEM 11 EXECUTIVE COMPENSATION
Directors currently receive no cash fees for services provided in that capacity
but are reimbursed for reasonable expenses incurred in connection with
attendance at meetings of the Board. The Company's 1997 Directors' Stock Option
Plan (the "Directors' Plan) provides that each person who becomes a non-employee
director of the Company will be granted a nonstatutory stock option to purchase
20,000 shares of Common Stock on the date on which such person first becomes a
non employee director of the Company. The initial grant is fully exercisable on
the initial date of the grant. In addition, on the date of each annual meeting
of the Company's stockholders at which such director is reelected, each such
non-employee director shall be granted an additional option to purchase 2,000
shares of Common Stock if, on such date, he or she shall have served on the
Company's Board of Directors for at least three months during the current fiscal
year, such option will become exercisable in full on the date of grant. Each of
the nominees for director will have served for more than three months at the
time of the Annual Meeting, and so each will receive options to purchase 2,000
shares of the Company's Common Stock under the Directors' Plan if they are re-
elected to the Board at the Annual Meeting. As of March 27, 2000, 104,000
shares had been issued under this plan.
EMPLOYMENT AND CHANGE IN CONTROL AGREEMENTS
In October, 1994, the Company entered into an employment agreement with Dr.
Radlick which provides for, among other things, an annual salary of $175,000,
bonus compensation as may from time to time be awarded by the Board of Directors
and participation in all employee benefit plans sponsored by the Company.
Additionally, if Dr. Radlick's employment is terminated other than for "good
cause" (as defined in the employment agreement), Dr. Radlick shall immediately
resign from all positions with the Company and enter into a six month consulting
arrangement with the Company. Stock options held by Dr. Radlick would continue
to vest over such six-month period. Under this consulting arrangement, Dr.
Radlick would be paid a consulting fee in an amount equal to the salary in
effect at the time of his resignation, and would be eligible to continue to
receive Company benefits. If Dr. Radlick were to obtain new employment during
such period, the consulting fee payable to Dr. Radlick would be reduced by the
amount of compensation payable to Dr. Radlick under such new arrangement.
In May 1993, the Company entered into an employment agreement with Mr. Vegh
which provides for, among other things, an annual salary, bonus compensation as
may from time to time be awarded by the Board of Directors and participation in
all employee benefit plans sponsored by the Company. Additionally, if Mr.
Vegh's employment is terminated other than for "good cause" (as defined in the
employment agreement), Mr. Vegh shall immediately resign from all positions with
the Company and enter into a six month consulting arrangement with the Company.
Stock options held by Mr. Vegh would continue to vest over such six-month
period. Under this consulting arrangement, Mr. Vegh would be paid a consulting
fee in an amount equal to the salary in effect at the time of his resignation,
and would be eligible to continue to receive Company benefits. If Mr. Vegh were
to obtain new employment during such period, the consulting fee payable to Mr.
Vegh would be reduced by the amount of compensation payable to Mr. Vegh under
such new arrangement and the continued vesting of his option would terminate.
Option/SAR Grants in LAST Fiscal Year
The Company granted stock options representing 715,239 shares of the Company's
Common Stock to employees in the last fiscal year. The following table sets
forth further information on grants of stock options to purchase the Company's
Common Stock to the five Named Officers pursuant to the Company's 1993 Stock
Option Plan during the fiscal year ended December 31, 1999. This information is
also reflected in the Summary Compensation Table on page 13.
<PAGE>
<TABLE>
<CAPTION>
Exercise or Potential Realizable
Number of Shares Percent of Total ----------- Value at Assumed
Underlying Options Granted to Base Price Annual Rates of Stock
Options Employees in ---------- Price Appreciation for
Name Granted (1) Fiscal 1999 Per Share Expiration Date Option Term (2)
----------- ----------- --------------- ---------------
/5%/ /10%/
<S> <C> <C> <C> <C> <C> <C>
Phillip C. Radlick, Ph.D....... 62,500 8.7% $1.91 7/6/09 75,074 190,253
62,500 8.7% $2.56 4/28/09 100,623 254,999
Gabriel B. Vegh 62,500 8.7% $1.91 7/6/09 75,074 190,253
62,500 8.7% $2.56 4/28/09 100,623 254,999
Allan L. Abati, Ph.D. 10,000 1.4% $2.56 4/28/09 16,100 40,800
Victor J. Barajas 20,000 2.8% $2.56 4/28/09 32,199 81,600
Ronald E. Bourquin 40,000 5.6% $2.56 4/28/09 64,398 163,199
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information with respect to stock options
exercised by the Named Executive Officers during the fiscal year ended December
31, 1999. In addition, the table sets forth the number of shares covered by
stock options as of the fiscal year ended December 31, 1999 and the value of
"in-the-money" stock options, which represents the positive spread between the
exercise price of a stock option and the market price of the shares subject to
such option at the end of the fiscal year ended December 31, 1999.
<TABLE>
<CAPTION>
Number of Value of
Unexercised Unexercised
Options/SARs at In-the-Money
Shares Fiscal Year End (#) Options/SARs at
Acquired on Value Exercisable/ Fiscal Year End ($)
Name Exercise (#) Realized ($) Unexercisable Exercisable/Unexercisable(1)
- ---------------------------- ---------------- --------------- ---------------------- -----------------------------
<S> <C> <C> <C> <C>
Phillip C. Radlick, Ph.D.... -- -- 249,955 / 144,271 $103,452 / $0
Gabriel B. Vegh............. -- -- 183,288 / 144,271 $ 52,618 / $0
Allan L. Abati, Ph.D........ -- -- 71,426 / 14,270 $ 69,277 / $0
Victor J. Barajas........... -- -- 55,010/ 25,563 $ 20,087 / $0
Ronald E. Bourquin.......... -- -- 59,431 / 39,270 $ 2,731 / $0
</TABLE>
__________________
(1) Based on the $1.8125 per share closing price of the Company's Common Stock
on the Nasdaq National Market on December 31, 1999, less the exercise price
of the options.
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
-------------------- ----------------------
Fiscal Salary Bonus Securities Underlying All Other
Name & Principal Position Year ($) ($) Options/SARs (#) Compensation ($)
- ------------------------- ------ ------ ----- ---------------------- ----------------
(1) (2) (3)
<S> <C> <C> <C> <C> <C>
Phillip C. Radlick, Ph.D. (3).............. 1999 224,263 60,000 125,000 --
- ------------------------- 1998 225,456 50,000 -- --
President, Chief Executive Officer and 1997 195,344 25,000 75,000 --
Director
Gabriel B. Vegh (4)........................ 1999 188,509 50,000 125,000 --
- --------------- 1998 187,875 35,000 -- --
Executive Vice President, Chief Operating 1997 175,417 -- 75,000 --
Officer and Director
Allan L. Abati, Ph.D....................... 162,843 -- 10,000 --
- --------------------- 1999 146,679 -- -- --
Vice President, Regulatory Affairs, 1998 140,835 -- 15,000 --
Clinical Programs and Quality Assurance 1997
Victor J. Barajas.......................... 1999 124,830 20,000 20,000 --
- ----------------- 1998 106,939 20,000 -- --
Vice President, Operations 1997 87,895 -- 25,000 --
Ronald E. Bourquin......................... 1999 125,515 30,000 40,000 --
- ------------------ 1998 125,549 25,000 -- --
Vice President, Chief Financial Officer 1997(6) 115,830 15,000 15,000 --
and Secretary
</TABLE>
(1) Includes amounts deferred under the Company's 401(k) plan.
(2) Includes bonuses earned in the indicated year and paid in the subsequent
year. Excludes bonuses paid in the
<PAGE>
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information that has been provided to the Company
with respect to beneficial ownership of shares of the Company's Common Stock as
of March 31, 2000 for (i) each person who is known by the Company to own
beneficially more than five percent of the outstanding shares of Common Stock,
(ii) each director and nominee of the Company, (iii) each of the executive
officers named in the Summary Compensation Table of this proxy statement (the
"Named Executive Officers"), and (iv) all directors and executive officers of
- -------------------------
the Company as a group.
<TABLE>
<CAPTION>
Shares Beneficially
Name and Address Owned(1) Percent of Common Stock(1)(2)
- ------------------------------------------ -------------------------- --------------------------------
<S> <C> <C>
Special Situations Funds, 2,133,333 9.8%
L.P.(3)...................................
153 East 53rd St.
New York, NY 10022
St. Jude Medical, 1,600,000 7.4%
Inc.(4)...................................
One Lillehei Plaza
St. Paul, MN 55117
Kleiner Perkins Caufield & Byers VI(5).... 1,252,056 5.7%
2750 Sand Hill Road
Menlo Park, CA 94025
The Goldman Sachs Group, L.P.(6).......... 1,132,050 5.3
85 Broad Street
New York, NY 10004
Phillip C. Radlick, Ph.D.(7).............. 201,513 *
Gabriel B. Vegh(8)........................ 262,187 1.2%
Allan L. Abati, Ph.D.(9).................. 63,404 *
Victor J. Barajas(10) 41,990 *
Ronald E. Bourquin (11)................... 60,245 *
Neville J. Jeharajah(12).................. 22,000 *
Rudolfo C. Quijano, Ph.D. (13) 20,000 *
All Directors and executive officers as a 729,305 3.3%
group (9 persons)(14)
</TABLE>
_____________________
* Less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In determining the number of shares
beneficially owned by a person, options or warrants to purchase Common Stock
held by that person that are currently exercisable, or become exercisable
within 60 days following March 31, 2000, are deemed outstanding; however,
such shares are not deemed outstanding for purposes of computing the
percentage ownership of any other person. The Company believes that all of
the persons named in this table have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them,
subject to community property laws where applicable and except as indicated
in the other footnotes to this table.
(2) As of March 31, 2000 21,471,420 shares of Common Stock were issued and
outstanding.
(3) Includes 355,556 shares issuable upon the exercise of outstanding warrants
held by Special Situations Fund, L. P.
<PAGE>
(4) Includes 266,667 shares issuable upon the exercise of outstanding warrants
held by St. Jude Medical, Inc.
(5) Includes 317,321 shares issuable upon the exercise of outstanding warrants
held by Kleiner Perkins Caufield &Byers VI, L.P. a California limited
partnership ("KPCB VI"), and exercisable within 60 days of March 31, 2000.
Joseph S. Lacob is a general partner of KPVB VI Associates, L.P., the
general partner of Kleiner Perkins Caufield & Byers VI, L.P., and, as such,
may be deemed to share voting and investment power with respect to such
shares. Mr. Lacob disclaims beneficial ownership of such shares, except to
the extent of his pecuniary interest in such shares.
(6) Represents 1,132,050 shares owned by certain investment partnerships, of
which affiliates of The Goldman Sachs Group, L.P. ("GS Group") are the
general partner, managing general partner or investment manager. Includes
710,248 shares held by GS Capital Partners II, L.P., 282,333 shares held by
GS Capital Partners II Offshore, L.P., 26,151 shares held by Goldman, Sachs
& Co. Verwaltungs GmbH, 76,280 shares held by Stone Street Fund 1997, L.P.
and 37,038 shares held by Bridge Street Fund 1997, L.P. Each of such
investment partnership shares voting and investment power with certain of
its respective affiliates.
(7) Includes 200,513 shares issuable upon exercise of options exercisable
within 60 days of March 31, 2000.
(8) Includes 128,341shares held by Gabriel B. Vegh and Kathleen G. Vegh,
tenants in common and 133,846shares issuable upon exercise of options
within 60 days of March 31, 2000.
(9) Includes 63,404 shares issuable upon exercise of options exercisable within
60 days of March 31, 2000.
(10) Includes 41,990shares issuable upon exercise of options exercisable within
60 days of March 31, 2000.
(11) Includes 54,535 shares issuable upon exercise of options exercisable
within 60 days of March 31, 2000.
(12) Includes 22,000 shares issuable upon exercise of options excercisable
within 60 days of March 31, 2000.
(13) Includes 20,000 shares issuable upon exercise of options excercisable
within 60 days of March 31, 2000.
(14) Includes shares referred to in footnotes and (5)-(8).
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In December 1997, the Company loaned $300,000 to Phillip C. Radlick, Ph.D., its
President and Chief Executive Officer, to facilitate the purchase of a principal
residence in the Bay Area. The note bears interest at the minimum applicable
federal rate and matures in December 2001. As security interest, Dr. Radlick
granted the Company a security interest in his vested stock options. As of
December 31, 1999, there is approximately $339,000 outstanding on the note.
The Company has entered into indemnification agreements with its officers and
directors containing provisions which may require the Company, among other
things, to indemnify its officers and directors (other than liabilities arising
from willful misconduct of a culpable nature) and to advance their expenses
incurred as a result of any proceeding against them as to which they could be
indemnified.
<PAGE>
SIGNATURES
for Form 10-K/A
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this ammended report to be signed on its behalf by
the undersigned thereunto duly authorized.
DATE: April 28, 2000 CARDIMA, INC.
/s/ Phillip C. Radlick
------------------------------
PHILLIP C. RADLICK, Ph.D.
President, Chief Executive Officer
and Director
