SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 1 ON FORM 10-K/A
TO FORM 10-K
FOR ANNUAL AND TRANSITIONAL REPORTS
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year Ended June 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File No. 0-24077
Mobius Management Systems, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-3078745
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
120 Old Post Road, Rye, New York 10580
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (914) 921-7200
----------------------
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
Common Stock, $.0001 par value NASDAQ
Securities registered pursuant to Section 12(g) of the Act:
NONE
----------------------
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) has been subject to such filing
requirements for the past 90 days.
Yes [X] 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 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. [ ]
The aggregate market value of the registrant's Common Stock, held by
non-affiliates of the registrant, based on the closing sale price of the Common
Stock on September 18, 2000 as reported on NASDAQ, was approximately $38.0
million. Shares of Common Stock held by each officer and director and by each
person who owns 5% or more of the outstanding common stock have been excluded in
that such persons may be deemed affiliates. This determination of affiliate
status is not necessarily a conclusive determination for other purposes.
As of September 18, 2000, there were 18,116,600 shares of the registrant's
Common Stock outstanding.
Documents Incorporated by Reference:
NONE
<PAGE>
MOBIUS MANAGEMENT SYSTEMS, INC.
FORM 10-K/A
INDEX
Page
----
PART III
Item 10. Directors and Executive Officers of the Registrant..................2
Item 11. Executive Compensation..............................................6
Item 12. Security Ownership of Certain Beneficial Owners and Management.....11
Item 13. Certain Relationships and Related Transactions.....................13
Signature
1
<PAGE>
Mobius Management Systems, Inc.
Amendment No. 1 on Form 10-K/A to the Annual Report on Form 10-K for the Year
Ended June 30, 2000
In compliance with General Instruction G (3) to Form 10-K, the
following Items were omitted from the Form 10-K filed by Mobius Management
Systems, Inc. on September 28, 2000, and such Form 10-K is hereby amended to
include Part III as hereinafter set forth, not later than 120 days after the end
of the fiscal year.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
INFORMATION CONCERNING DIRECTORS
There are currently seven members of the Board of Directors. The Board
is divided into three classes with terms expiring, respectively, at the 2000,
2001 and 2002 annual meeting of stockholders. All Mobius directors are elected
for three-year terms, except Robert H. Levitan who was elected for a two year
term. Personal information on each of our directors is given below.
The Board oversees the management of the Company on your behalf. It
reviews Mobius' long-term strategic plans and exercises direct decision-making
authority in key areas. The Board chooses the Chief Executive Officer, sets the
scope of his authority to manage Mobius' business day to day, and evaluates his
performance.
Six of Mobius' seven directors are not Mobius employees. Only
non-employee directors serve on Mobius' Audit and Compensation committees.
The Board met four times during fiscal 2000. Each director attended all
of the meetings of the Board except Peter J. Barris who attended two of the
meetings of the Board. In addition, since Robert H. Levitan became a Director of
the Company after the last Board meeting in fiscal 2000, Mr. Levitan did not
attend any of the meetings of the Board.
2
<PAGE>
DIRECTORS
Set forth below are the names, ages, positions and certain other
information concerning the current Directors of Mobius.
Mitchell Gross...................... Co-Founder of Mobius. President since
Age 50 1981 and Chairman of the Board and Chief
Director since 1981 Executive Officer since 1996. Mr. Gross
was an officer in the U.S. Navy, serving
on nuclear submarines, from 1971-1976.
Holds a B.S. in mechanical engineering
from Columbia University School of
Engineering and Applied Science and a
M.B.A. in finance from The Wharton School
at the University of Pennsylvania.
Gary G. Greenfield.................. President and Chief Executive Officer of
Age 45 MERANT plc (software development company)
Director since 1998 since 1998. Holds a M.S. in information
systems from George Washington University
and a M.B.A from Harvard Business School.
Serves as a director of MERANT plc,
Hyperion Solutions, Inc. and Managed
Object Solutions.
Edward F. Glassmeyer................ Co-Founder of Oak Investment Partners
Age 59 (venture capital firm) and its General
Director Since 1997 Partner since 1978. Holds a B.A. from
Princeton University and a M.B.A. from
the Tuck School at Dartmouth College.
Serves as a Director of TheStreet.com.
Kenneth P. Kopelman................. Partner of Kramer Levin Naftalis &
Age 49 Frankel LLP(1) (law firm). Attended
Director since 1997 Cornell University (A.B.) and the London
School of Economics and received his J.D.
from Columbia University School of Law.
Serves as a Director of Liz Claiborne,
Inc.
Joseph J. Albracht.................. Co-founder of Mobius. Executive Vice
Age 51 President and Secretary from 1981 to
Director since 1981 1999, Chief Operating Officer from 1996
to 1999 and Treasurer from 1981 to 1996.
Holds a B.S. in operations research and a
M.B.A. from Pennsylvania State
University.
Peter J. Barris..................... General Partner, New Enterprise
Age 48 Associates (venture capital firm) since
Director since 1997 1993. Holds a B.S. in electrical
engineering from Northwestern University
and a M.B.A. from the Tuck School at
Dartmouth College. Serves as a director
of Career Builder, Inc. and PCOrder.com.
Robert H. Levitan................... Co-founder and Chief Executive Officer of
Age 39 Flooz.com. Co-founder of iVillage.com.
Director since 2000 Holds a B.A. in history and public policy
studies from Duke University. Serves as a
director of New York Cares.
-----------------
(1) Kramer Levin has served as legal counsel to Mobius since its founding
in 1981.
3
<PAGE>
DIRECTOR COMPENSATION
Mobius employees receive no extra pay for serving as directors. Prior
to January 1, 2000, non-employee directors were not paid any compensation for
their service or for attendance at meetings. The Company reimbursed its
directors for their out-of-pocket expenses incurred in the performance of their
duties as directors of the Company. On January 18, 2000, the Board adopted a
resolution in which non-employee directors are each paid $10,000 annual retainer
fee for serving on the Board, payable quarterly in advance, and are paid meeting
fees of $1,250 for each Board meeting attended and $500 for each telephonic
Board meeting attended, each payable promptly after each meeting. With the
exception of Gary G. Greenfield, each non-employee director will be paid the
above fees retroactively as of January 1, 2000. Mr. Greenfield has been paid the
above fees retroactively as of January 1, 1999 and he was paid a meeting fee for
attending a telephonic meeting on December 4, 1998. In addition, Kramer Levin is
paid Mr. Kopelman's standard rates for time Mr. Kopelman devotes to preparation
for and attendance at Board meetings.
The Mobius Non-Employee Directors' 1998 Stock Option Plan provides for
the grant to Mobius directors of non-qualified stock options to purchase Mobius
shares. These include an initial grant of 10,000 options, made upon a
non-employee director's first election to the Board, as well as an annual grant
of 10,000 options, made at each annual meeting to those directors having at
least nine months of Board service on the grant date. All such options have an
exercise price equal to the fair market value of the underlying Mobius shares on
the date of grant.
INFORMATION CONCERNING EXECUTIVE OFFICERS
Set forth below are the names, ages, positions and certain other
information concerning the current Executive Officers of Mobius. Personal
information on Mitchell Gross is given above. Executive officers are elected by
the Board and serve until the next meeting of the Board following the annual
meeting of stockholders and until their successors have been duly executed and
qualified.
Name Position
---- --------
Mitchell Gross Chairman of the Board, Chief Executive Officer and
President.
Sandra A. Becker Senior Vice President, Marketing since 1998. Prior
to joining Mobius, Ms. Becker was employed by
Ceridian Employer Services as Vice President of
Marketing and held several marketing and strategy
leadership positions for U.S. West Communications.
Holds a B.S. from College of St. Catherine and a
M.B.A. from the University of Minnesota.
David J. Gordon Interim Chief Financial Officer since June 2000.
Joined Mobius in 1987 and served as Director of
Finance from 1999-2000, Controller from 1987-1999.
Holds a B.A. in Accounting from Queens College
N.Y.
4
<PAGE>
Karry Kleeman Vice President, World Sales since 1999.
Joined Mobius in 1990 and served as Vice
President, Sales (North and South America) from
1997-1999, National Sales Manager from 1995 to
1997 and Regional Manager from 1992 to 1995. Holds
a B.A. in marketing from Elmhurst College.
Robert Lawrence Vice President, Product Engineering since 1992.
Joined Mobius in 1985. Holds a B.S. in physics
from the University of Massachusetts.
Mario Pelleschi Vice President, Sales (Europe, Middle East and
Africa) since 1998. Prior to joining Mobius, Mr.
Pelleschi was employed by Computer Associates from
1981 to 1997, initially as a Branch Manager, and
as Managing Director of the following
subsidiaries: Switzerland, 1981 to 1985; Brazil,
1985 to 1987; Germany 1987 to 1995; and France,
1995 to 1997. Holds a Swiss Federal Degree in
Electronic Engineering.
Joseph Tinnerello Vice President, Business Development
since January, 1998. Joined Mobius in 1990 and
served as Vice President, Sales from 1995 to 1997.
Following a personal leave of absence, left Mobius
from October 1997 through January 1998. From 1988
to 1989, Mr. Tinnerello served as a Regional
Manager with Legent Software.
Hiromasa Yazaki Vice President, Sales (North Asia) since 1999.
Prior to joining Mobius, Mr. Yazaki was employed
by Kodak Japan Ltd. in 1997 and 1998 as a General
Manger/Consumer Imaging Marketing and employed by
Informix K.K. in 1996 as Director of Sales. Holds
a B.A. from Dokkyo University.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers, and persons who own
more than 10% of the Company's common stock, to file reports of ownership on
Form 3 and changes in ownership on Form 4 or 5 with the SEC. Such directors,
executive officers and 10% stockholders are also required by SEC rules to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely upon its review of copies of such forms received by it, or on written
representations from certain reporting persons that no other filings were
required for such persons, the Company believes that, during the year ended June
30, 2000, all Section 16(a) filing requirements applicable to its directors,
executive officers and 10% stockholders were complied with except as follows:
David J. Gordon inadvertently filed late the initial Form 3 to disclose his
holdings of the Company's Common Stock at the time he was appointed Interim
Chief Financial Officer.
5
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the compensation earned, by Mobius'
Chief Executive Officer and the four other highest-paid executive officers for
the past three fiscal years. The individuals included in the table will be
collectively referred to as the "Named Officers."
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Name and Principal Position Annual Compensation(1)
All Other
Annual All Other
Year Salary Bonus Compensation (2) Compensation
---- ------ ----- ---------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Mitchell Gross 2000 $200,000 $75,252 $0 $84,948(3)
Chairman of the Board, 1999 200,000 0 0 61,632(3)
Chief Executive Officer and 1998 200,000 150,335 0 46,050(3)
President
Karry Kleeman 2000 125,000 6,126 310,501 0
Vice President, World Sales 1999 125,000 60,267 325,972 0
1998 127,888 80,130 272,400 0
Sandra A. Becker 2000 190,000 142,658 0 72,943(5)
Senior Vice President, Marketing 1999 107,301(4) 71,250 0 30,000(5)
1998 -- -- -- --
Joseph Tinnerello(6) 2000 150,000 252 214,500 0
Vice President, Business Development 1999 150,000 0 198,000 0
1998 139,417 0 250,750(7) 0
Robert Lawrence 2000 193,737 43,875 0 0
Vice President, Project Engineering 1999 170,000 48,423 0 271,175(8)
1998 163,332 47,087 0 0
</TABLE>
--------------------------
(1) In accordance with the rules of the SEC, other compensation in the form
of perquisites and other personal benefits has been omitted in those
instances where the aggregate amount of such perquisites and other
personal benefits constituted less than the lesser of $50,000 or 10% of
the total annual salary and bonuses for the named executive officer for
such year.
(2) Consists of sales commissions and non-recoverable draws.
(3) Includes premiums on insurance, car premiums and tax preparation fees
added to compensation. Also includes the grossed up amount to cover
taxes.
(4) Ms. Becker was employed by Mobius for approximately 7 months of fiscal
1999.
(5) Includes relocation expenses.
(6) Mr. Tinnerello was not employed by Mobius from October 1, 1997 to
January 15, 1998.
(7) Includes $160,000 advance against future commissions. See "Certain
Relationships and Related Transactions - Relationship with Mr.
Tinnerello" on page 13.
(8) Disqualifying disposition of shares obtained through the exercise of
incentive stock options.
BOARD COMMITTEES
The Board appoints committees to help carry out its duties. Each
committee reviews the results of its meetings with the full Board. The Board
established its committees in February 1998 in connection with Mobius' initial
public offering.
6
<PAGE>
The Audit Committee is responsible for accounting and internal control
matters. Subject to stockholder and Board approval, the Committee chooses the
independent public accountants to audit Mobius' financial statements and reviews
the scope, results and costs of the audit with such accountants. The Committee
also reviews the financial statements and accounting and control practices of
Mobius. The Audit Committee consists of Messrs. Barris and Glassmeyer. The Audit
Committee met one time last year.
The Compensation Committee oversees compensation for Mobius'
executives, including salary, bonus and incentive awards. The Committee is also
responsible for administering Mobius' 1996 Stock Incentive Plan, Mobius' 1998
Employee Stock Purchase Plan and Mobius' 1998 Executive Incentive Plan. The
Compensation Committee consists of Messrs. Barris and Glassmeyer. The
Compensation Committee met two times last year.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Overview
The Compensation Committee, which during fiscal 2000 consisted of
Messrs. Barris and Glassmeyer:
(1) reviews and approves the compensation of Mr. Gross;
(2) approves the general policies applicable to salaries and bonuses
for the other executive officers and reviews and acts on bonuses
for those officers; and
(3) makes recommendations to the full Board and senior management
with respect to the adoption and administration of Mobius'
compensation programs.
Our executive compensation program is designed to attract, retain,
motivate and reward the management talent our company needs to achieve its
business goals and maintain its leadership in the increasingly competitive
environment of enterprise software products.
The three major components of our compensation program are salary,
annual bonus and stock options.
The salary and bonus components of Mobius' executive compensation are
designed to facilitate the fulfillment of the following objectives:
(1) keeping competent management;
(2) rewarding management for the achievement of short and long term
accomplishments;
(3) aligning the interests of management with the interests of
Mobius' stockholders; and
7
<PAGE>
(4) relating executive compensation to the achievement of our goals
and financial performance.
Salary
We base salary on an executive's knowledge, skills and level of
responsibility as well as the economic and business conditions affecting Mobius.
Other factors we consider are:
(1) competitive positioning (comparing Mobius' salary structure with
salaries paid by other companies);
(2) Mobius' own business performance; and
(3) general economic factors.
Annual Bonus
We give our executives annual bonuses to provide an incentive and
reward for short-term financial success and long-term Company growth. Annual
bonuses link compensation in significant part to Mobius' financial performance
and is determined solely by the Compensation Committee.
Stock Options
We use stock options as a long-term, non-cash incentive and to align
the long-term interests of executives and stockholders. Stock options are
awarded based upon the market price of the Common Stock on the date of grant and
are linked to future performance of our stock because they do not become
valuable to the holder unless the price of our stock increases above the price
on the date of grant. The number of stock options granted to an executive as a
form of non-cash compensation is determined by the following factors:
(1) number of stock options previously granted to an executive;
(2) the executive's remaining options exercisable; and
(3) the value of those remaining stock options, as compared to the
anticipated value that an executive will add to Mobius in the
future.
Employee Stock Purchase Plan
The Employee Stock Purchase Plan commenced in fiscal 1999 and provides
employees who wish to acquire our common stock with the opportunity to purchase
Mobius shares with a convenient way of doing so by accumulated payroll
deductions. We believe that employee participation in ownership of Mobius on
this basis will be to the mutual benefit of the employees and Mobius.
8
<PAGE>
Executive Incentive Plan
The Executive Incentive Plan ("Incentive Plan") was established in
fiscal 1998 and participation in the Incentive Plan is limited to those
executives and key employees who, in the judgment of the Compensation Committee,
are in a position to have a significant impact on the performance of Mobius.
Awards under the Incentive Plan are based upon the extent to which performance
goals established by the Compensation Committee for a designated performance
period are satisfied. The Incentive Plan also provides for grants of
discretionary bonuses. As of October 27, 2000, there were no awards made under
the Incentive Plan.
Compensation of the Chief Executive Officer
Mr. Gross is one of the founders of Mobius. He beneficially owns
approximately 5,561,500 shares of Common Stock constituting approximately 30.7%
of the total amount outstanding. Accordingly, his interest is very much aligned
with the interest of all stockholders and Mobius has not considered it sensible
to relate Mr. Gross's compensation to Mobius' performance through long-term
stock incentives such as restricted stock or stock options. Mr. Gross's
compensation package consists primarily of salary and bonus. The levels of his
salary and bonus are established in Mr. Gross's employment agreement. The
members of the Compensation Committee granted Mr. Gross a bonus attributable to
his success in achieving certain goals during fiscal 2000.
Peter J. Barris
Edward F. Glassmeyer
Stock Options
The following table contains information concerning the grant of stock
options under the Company's 1996 Stock Incentive Plan to the Named Officers
during the 2000 fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Individual Grants
-------------------------------------------------------------------------------------------------------------------
Name Number of Securities % of Underlying Options Exercise Price Expiration
Underlying Options Granted to Employees in ($/Share) Date
Granted(#)(1) Fiscal Year
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sandra A. Becker 20,000 3.6 % $4.00 10/12/09
-------------------------------------------------------------------------------------------------------------------
</TABLE>
------------------------
(1) Options were granted on October 12, 1999 and have a maximum term of 10
years measured from the grant date, subject to earlier termination in
the event of the optionee's cessation of service with the Company.
4,000 of the stock options became exercisable on the first anniversary
of the grant date and 1,000 of the remaining stock options will become
exercisable every three months thereafter.
9
<PAGE>
Option Exercises and Holdings
The table below sets forth information with respect to the Named
Officers concerning their exercise of options during the 2000 fiscal year and
the unexercised options held by them as of the end of such year.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
Shares Number of Securities Value of Unexercised in-the-
------ -------------------- ----------------------------
Value Underlying Unexercised Money Options at Fiscal
Acquired on Realized Options at Fiscal Year-End Year-End ($)(1)
Name Exercise ($)(1)
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mitchell Gross 0 $-- 0 0 $-- $--
Karry Kleeman 0 -- 252,727 87,273 394,247 168,963
Sandra A. Becker 0 -- 23,999 76,001 -- 11,260
Joseph Tinnerello 0 -- 220,000 60,000 -- --
Robert Lawrence 30,000 150,000 96,000 108,000 318,048 357,804
</TABLE>
------------------
(1) Based on the closing sale price on the Nasdaq National Market of the
Common Stock on June 30, 2000 of $4.5630.
STOCK PERFORMANCE GRAPH
The following graph depicts a comparison of the cumulative total return
(assuming the reinvestment of dividends) for a $100 investment on April 28, 1998
(the date we completed our initial public offering) in each of the Common Stock
of Mobius (at a closing price of $18.25 per share), Goldman Sachs Technology
Software Index (a published industry index), and the Nasdaq Composite (a broad
market index). The Company paid no dividends during the period shown. The graph
lines merely connect measurement dates and do not reflect fluctuations between
those dates.
<TABLE>
<CAPTION>
April 28, 1998 June 30, 1998 June 30,1999 June 30,2000
-------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Mobius $ 100 $ 82.19 $ 45.21 $ 24.99
Goldman Sachs 100 107.33 152.85 259.17
Technology Software Index
Nasdaq Composite 100 103.44 146.64 216.52
</TABLE>
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<PAGE>
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows how much Mobius Common Stock each Named
Officer, each non-employee director, and certain stockholders known by the
Company to be the beneficial owner of more than 5% of the outstanding Common
Stock, owned as of September 15, 2000.
<TABLE>
<CAPTION>
Name and Address of Named Executive
Officers, Certain Stockholders and
Directors / Nominees Shares Owned(1) Percent of Class
-------------------- -------------- ----------------
<S> <C> <C> <C>
Mitchell Gross(2)
c/o Mobius Management Systems, Inc.
120 Old Post Road 5,561,500 30.7%
Rye, New York 10580 ..........................................................
Joseph J. Albracht
c/o Mobius Management Systems, Inc.
120 Old Post Road 3,933,500 21.7%
Rye, New York 10580...........................................................
Oak Investment Partners VI, Limited Partnership(3)
One Gorham Island 1,065,500 5.9%
WestPort, CT 06680...........................................................
Karry Kleeman(4)
c/o Mobius Management Systems, Inc.
600 West Fulton Street 270,727 1.5%
Chicago, IL 60661 ............................................................
Robert Lawrence (5)
c/o Mobius Management Systems, Inc.
120 Old Post Road 252,000 1.4%
Rye, New York 10580...........................................................
Joseph Tinnerello(6)
c/o Mobius Management Systems, Inc.
600 West Fulton Street 230,600 1.3%
Chicago, IL 60661.............................................................
Peter J. Barris(7)
c/o New Enterprise Associates
11951 Freedom Drive 52,398 *
Reston, VA 20190..............................................................
Edward F. Glassmeyer(8)
c/o Oak Investments
1 Gorham Island 1,109,006 6.1%
Westport, CT 06880............................................................
Gary G. Greenfield (9)
c/o MERANT plc
9420 Key West Avenue 20,481 *
Rockville, MD 20850...........................................................
11
<PAGE>
Name and Address of Named Executive
Officers, Certain Stockholders and
Directors / Nominees Shares Owned(1) Percent of Class
-------------------- -------------- ----------------
<S> <C> <C> <C>
Kenneth P. Kopelman(10)
c/o Kramer, Levin, Naftalis & Frankel
919 Third Avenue 23,850 *
New York, NY 10022............................................................
Robert H. Levitan(11)
c/o Flooz.com, Inc.
1071 Avenue of the Americas; 10th Floor 10,000 *
New York, NY 10018...........................................................
Sandra A. Becker(12)
c/o Mobius Management Systems, Inc.
120 Old Post Road 39,429 *
Rye, New York 10580...........................................................
All Executive Officers and Directors
as a group (14 persons) ...................................................... 11,648,431 61.4%
</TABLE>
-------------------
* Less than 1%
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission ("SEC"), and generally includes
voting power and/or investment power with respect to securities. Shares
of Common Stock subject to options currently exercisable or exercisable
within 60 days ("Currently Exercisable Options") are deemed outstanding
for computing the percentage beneficially owned by the person holding
such options but are not deemed outstanding for computing the
percentage beneficially owned by any other person.
(2) Includes 3,732,259 shares of Common Stock held by HARMIT, LP, of which
Mitchell Gross and Harriet Gross, the spouse of Mr. Gross, are general
partners.
(3) Includes 47,056 shares of Common Stock held by its affiliate Oak VII
Affiliates Fund, Limited Partnership.
(4) Includes 269,727 shares issuable pursuant to Currently Exercisable
Options.
(5) Includes 132,000 shares issuable pursuant to Currently Exercisable
Options.
(6) Includes 220,000 shares issuable pursuant to Currently Exercisable
Options.
(7) Includes 6,381 shares held in the Barris Family Trust. Includes 272
shares held by NEA General Partners, L.P. Mr. Barris disclaims
beneficial ownership of these shares except to the extent of his
pecuniary interest therein arising from his affiliation with such
entity. Also includes 20,000 shares issuable pursuant to Currently
Exercisable Options.
(8) Includes 998,900 shares of Common Stock and 19,544 shares issuable
pursuant to Currently Exercisable Options held by Oak Investment
Partners VI, Limited Partnership and 46,600 shares of Common Stock and
456 shares issuable pursuant to Currently Exercisable Options held by
Oak VI Affiliates Fund, Limited Partnership. Mr. Glassmeyer disclaims
beneficial ownership of these shares except to the extent of his
pecuniary interest therein arising from his affiliation with such
entities. Also includes 5,244 shares (of which 1,865 shares are
beneficially owned by EFG Trust and 3,379 shares are beneficially owned
by EFG Trust II) received by Mr. Glassmeyer from an in kind
distribution by Oak Investment Partners VI, L.P. pro rata to its
partners in accordance with their beneficial ownership without any
additional consideration.
(9) Includes 20,000 shares issuable pursuant to Currently Exercisable
Options.
(10) Includes 1,500 shares of Common Stock held in trust by Mr. Kopelman's
wife, as trustee, for Mr. Kopelman's three minor children and 2,350
shares of Common Stock held jointly by Mr. Kopelman and his wife. Mr.
Kopelman disclaims beneficial ownership to such shares. Also includes
20,000 shares issuable pursuant to Currently Exercisable Options.
(11) Includes 10,000 shares issuable pursuant to Currently Exercisable
Options.
(12) Includes 31,999 shares issuable pursuant to Currently Exercisable
Options. Also includes 6,930 shares issuable pursuant to the 1998
Employee Stock Purchase Plan.
12
<PAGE>
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Relationship With Kramer Levin Naftalis & Frankel LLP
Since 1981 we have engaged, and we plan to continue to engage, the
Kramer Levin law firm to provide us with legal counsel. Mr. Kopelman, a member
of our Board, is a partner of Kramer Levin Naftalis & Frankel LLP. We believe
that fees charged by Kramer Levin are at rates and on terms no less favorable to
us than could have been obtained from unaffiliated third parties.
Relationship With Mr. Tinnerello
Following a personal leave, on September 30, 1997, we entered into a
severance agreement with Mr. Joseph Tinnerello, presently Mobius' Vice
President, Business Development, pursuant to which Mr. Tinnerello left our
employment on October 1, 1997 and agreed to certain non-competition and
non-solicitation restrictions in consideration for (1) the acceleration of
80,000 options to purchase shares of our common stock previously granted to him
and (2) the grant of 100,000 new options to purchase shares of our common stock
at an exercise price equal to the fair market value of the shares at the time of
the grant. Due to his termination and the terms of Mobius' 1996 Employee Stock
Incentive Plan, Mr. Tinnerello forfeited 640,000 options to purchase shares of
common stock that were previously granted to him in November, 1996. On December
26, 1997, Mr. Tinnerello agreed to return to Mobius effective January 15, 1998.
On December 28, 1997, we agreed to advance $160,000 to Mr. Tinnerello against
future commissions. As of September 15, 2000, the full amount of such advance
remains outstanding. Such monies (net of applicable taxes) were used by Mr.
Tinnerello to exercise options to purchase 80,000 shares of common stock. On
January 15, 1998, we granted Mr. Tinnerello options to purchase 180,000 shares
of common stock in accordance with and on terms similar to, our standard hiring
practices.
Agreements With Employees
In February, 1998, we entered into employment agreements with each of
Messrs. Gross and Albracht providing for the employment of Mr. Gross as our
Chairman of the Board, Chief Executive Officer and President and Mr. Albracht as
our Executive Vice President and Chief Operating Officer. Each employment
agreement provides for a three-year term ending on April 27, 2001, the third
anniversary of our initial public offering. Each provides for an annual base
salary of not less than $200,000 as well as an annual bonus based upon our
performance in an amount determined solely by the Compensation Committee of the
Board. Each agreement also prohibits the executive from using the confidential
information of Mobius for a period of three years following the termination of
his employment (two years if he is terminated other than for cause (as defined
therein)) and contains a non-competition covenant pursuant to which the
executive is prohibited from competing with Mobius during his employment with
Mobius and for two years thereafter (one year if he is terminated other than for
cause). The agreements further provide that in the event that employment is
terminated by Mobius without cause (as defined therein) or by the executive for
good reason (as defined therein), the executive is entitled to receive (1) his
accrued but unpaid base salary and bonus through April 27, 2001; (2)
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coverages substantially identical to those provided immediately prior to the
termination for twelve months following April 27, 2001; and (3) an aggregate
amount, payable in equal semi-monthly installments over a one-year period
following April 27, 2001, equal to the aggregate of what his base salary would
have been for said period plus his maximum bonus for such period, but not less
than his highest annual bonus during the preceding five years. In the event of
death or disability of the executive, we will continue to make base salary
payments to the executive or his estate for twelve months following such death
or disability.
In October 1999, Mr. Albracht ended his employment with the Company.
Compensation Committee Interlocks And Insider Participation
The current members of our Board's Compensation Committee are Messrs.
Barris and Glassmeyer. There are no compensation committee interlocks which are
required to be disclosed by applicable SEC rules. No member of our Compensation
Committee serves as a member of the board of directors or compensation committee
of any other entity that has one or more executive officers serving as a member
of our Board of Directors or Compensation Committee.
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this Form 10-K/A
Amendment No. 1 on Form 10-K to be signed on its behalf by the undersigned,
thereunto duly authorized.
MOBIUS MANAGEMENT SYSTEMS, INC.
By: /s/ Mitchell Gross
--------------------------------
Name: Mitchell Gross
Title: Chairman of the Board, Chief
Executive Officer & President
Date: October 30, 2000
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