<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement [ ] Soliciting Material Pursuant
to Section 240.14a-11(c) or
Section 240.14a-12
[ ] Definitive Additional Materials
ASPEC TECHNOLOGY, INC.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
<PAGE> 2
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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<PAGE> 3
ASPEC LOGO
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 27, 2000
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Aspec
Technology, Inc., a Delaware corporation (the "Company"), will be held on
Thursday, April 27, 2000 at 3:00 p.m., local time, at the Company's offices at
830 East Arques Avenue, Sunnyvale, California, for the following purposes:
1. To elect five (5) directors to serve for the ensuing year and until
their successors are duly elected and qualified.
2. To approve an amendment to the Company's Certificate of Incorporation
to change the Company's name from Aspec Technology, Inc. to Ingenuus
Corporation.
3. To ratify the appointment of PricewaterhouseCoopers LLP as
independent auditors for the Company for the 2000 fiscal year.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing matters are more fully described in the Proxy Statement
accompanying this Notice.
Only stockholders of record at the close of business on March 6, 2000
are entitled to vote at the Annual Meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope for that purpose. Any stockholder attending the meeting
may vote in person even if he or she has returned a proxy.
FOR THE BOARD OF DIRECTORS
Douglas E. Klint
Secretary
Sunnyvale, California
March 21, 2000
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IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO
COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
- --------------------------------------------------------------------------------
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<PAGE> 4
ASPEC TECHNOLOGY, INC.
830 East Arques Avenue
Sunnyvale, California 94086
(408) 774-2199
PROXY STATEMENT FOR 2000
ANNUAL MEETING OF STOCKHOLDERS
The enclosed Proxy is solicited on behalf of the Board of Directors of
Aspec Technology, Inc. (the "Company") for use at the Annual Meeting of
Stockholders to be held on Thursday, April 27, 2000 at 3:00 p.m., local time, or
at any adjournment thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting will
be held at the Company's offices at 830 East Arques Avenue, Sunnyvale,
California.
These proxy solicitation materials were mailed on or about March 30,
2000 to all stockholders of record on March 6, 2000 (the "Record Date").
INFORMATION CONCERNING SOLICITATION AND VOTING
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Secretary of
the Company at the above address of the Company, written notice of revocation or
a duly executed proxy bearing a later date, or by attending the meeting and
voting in person.
RECORD DATE AND VOTING SECURITIES
Stockholders of record at the close of business on March 6, 2000 are
entitled to notice of the meeting and to vote at the meeting. At the Record
Date, 36,830,019 shares of the Company's Common Stock, $.001 par value per
share, were issued and outstanding.
VOTING AND SOLICITATION
The cost of soliciting proxies will be borne by the Company. The Company
may also reimburse brokerage firms and other persons representing beneficial
owners of shares for their expenses in forwarding solicitation materials to such
beneficial owners. Proxies may also be solicited by certain of the Company's
directors, officers and employees, without additional compensation, personally
or by telephone or telegram.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Stockholders of the Company may submit proper proposals for inclusion in
the Company's proxy statement and for consideration at the next annual meeting
of its stockholders by submitting their proposals in writing to the Secretary of
the Company in a timely manner. In order to be included in the Company's proxy
materials for the annual meeting of stockholders to be held in the year 2001,
stockholder proposals must be received by the Secretary of the Company no later
than December 27, 2000, and must otherwise comply with the requirements of Rule
14a-8 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
In addition, the Company's Bylaws establish an advance notice procedure
with regard to certain matters, including stockholder proposals not included in
the Company's proxy statement, to be brought
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<PAGE> 5
before an annual meeting of stockholders. For nominations or other business to
be properly brought before the meeting by a stockholder, such stockholder must
provide written notice delivered to the Secretary of the Company 120 days in
advance of the annual or special meeting, which notice must contain specified
information concerning the matters to be brought before such meeting and
concerning the stockholder proposing such matters. In the event that no annual
meeting was held in the previous year or the date of the annual meeting has been
changed by more than thirty (30) days from the date contemplated at the time of
the previous year's proxy statement, notice by the stockholder to be timely must
be so received a reasonable time before the Company begins to print and mail its
proxy materials. A copy of the full text of the Bylaw provisions discussed above
may be obtained by writing to the Secretary of the Company. All notices of
proposals by stockholders, whether or not included in the Company's proxy
materials, should be sent to Aspec Technology, Inc., 830 East Arques Avenue,
Sunnyvale, California 94086, Attention: Corporate Secretary.
The attached proxy card grants the proxy holders discretionary authority
to vote on any matter raised at the Annual Meeting. If a stockholder intends to
submit a proposal at the Company's 2001 Annual Meeting, which is not eligible
for inclusion in the proxy statement and form of proxy relating to that meeting,
the stockholder must do so no later than February 5, 2001. If such a stockholder
fails to comply with the foregoing notice provision, the proxy holders will be
allowed to use their discretionary voting authority when the proposal is raised
at the 2001 Annual Meeting.
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<PAGE> 6
PROPOSAL ONE:
ELECTION OF DIRECTORS
NOMINEES
A board of five (5) directors is to be elected at the Annual Meeting of
Stockholders. Unless otherwise instructed, the proxy holders will vote the
proxies received by them for the Company's five (5) nominees named below, all of
whom are presently directors of the Company. If any nominee of the Company is
unable or declines to serve as a director at the time of the Annual Meeting, the
proxies will be voted for the nominee designated by the present Board of
Directors to fill the vacancy. It is not expected that any nominees will be
unable or will decline to serve as a director. The term of office of each person
elected as a director will continue until the next Annual Meeting of
Stockholders or until the director's successor has been elected and qualified.
VOTE REQUIRED; RECOMMENDATION OF BOARD OF DIRECTORS
The five (5) candidates receiving the highest number of "FOR" votes
shall be elected to the Company's Board of Directors. An abstention will have
the same effect as a vote withheld for the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE NOMINEES
LISTED BELOW:
<TABLE>
<CAPTION>
Name of Nominee Age Principal Occupation
--------------- --- --------------------
<S> <C> <C>
Conrad J. Dell'Oca.............. 57 Chairman of the Board
Michael J. Carroll.............. 56 President and Chief Executive Officer
Ronald K. Bell.................. 56 Vice President, Micro Linear Corporation
David K. Lam.................... 56 Chairman, David Lam GROUP
Al Wilson....................... 67 Chairman and CEO, Rutilus Software, Inc.
</TABLE>
Except as set forth below, each nominee has been engaged in his or her
principal occupation described above during the past five (5) years. There are
no family relationships among any directors or executive officers of the
Company.
CONRAD J. DELL'OCA has served as the Company's Chairman of the Board
since February 1997. He also served as Chief Executive Officer and President
from February 1992 to January 1999. From May 1981 to 1991, Mr. Dell'Oca was Vice
President, Research and Development of LSI Logic Corporation, a semiconductor
manufacturer. Mr. Dell'Oca received a B.A.Sc. and M.A.Sc. in Engineering Physics
and a Ph.D. in Electrical Engineering from the University of British Columbia.
MICHAEL J. CARROLL has served as President and Chief Executive Officer
and a Director of the Company since October 1999. From December 1994 to October
1999, Mr. Carroll served as Group President of the Preco Electronics Division of
Preco, Inc., a manufacturing company. Mr. Carroll also served as President of
Sensym, Inc., a subsidiary of BTR, Ltd. from July 1992 to December 1994. Mr.
Carroll received a B.S. degree in business and industrial management from San
Jose State University in 1965.
RONALD K. BELL has been a director of the Company since March 1999. Mr.
Bell has served as Vice President, Communications Products of Micro Linear
Corporation, an analog and mixed semiconductor company, since June 1999. From
February 1998 to June 1999, Mr. Bell was Chief Executive Officer of Equator
Technologies, Inc., a multimedia processor company. From October 1997 to 1998,
Mr. Bell was
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<PAGE> 7
Vice President, Engineering and Chief Operations Officer at Equator
Technologies, Inc. From November 1995 to 1997, he was Vice President, Advanced
Architecture and Consumer Products Divisions and General Manager, Consumer
Products Division of LSI Logic. From February 1993 to November 1995, he was
Chief Technology Officer and Vice President, Computer Science Group for Unisys
Corporation. Mr. Bell received a B.S. in Electrical Engineering and a M.S. in
Computer Science from the University of Utah.
DAVID K. LAM has served as director of the Company since August 1999.
Mr. Lam has served as Chairman of the David Lam Group, a management consulting
firm for high growth technology companies, since 1988. Dr. Lam is currently a
director of Integrated Telecom Express, Inc. and Tru-Si Technologies, Inc.
AL WILSON has served as director of the Company since March 2000. Mr.
Wilson has served as Chairman of the Board and Chief Executive Officer of
Rutilus Software, Inc. since August 1998. From September 1995 to August 1998,
Mr. Wilson served as Chief Operating Officer of Mylex corporation, a data
storage systems and service company. Mr. Wilson also served as Vice President
and General Manager of Array Technology, a division of EMC Corporation, from May
1993 to September 1995.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held seven (7) meetings during
fiscal 1999.
The Audit Committee, which consisted of Messrs. Bell and Lam and former
director William Lane III, held two (2) meetings in fiscal 1999. The Audit
Committee currently consists of Messrs. Lam, Bell and Wilson. The Audit
Committee assists management in the establishment and supervision of the
Company's financial controls, evaluates the scope of the annual audit, reviews
audit results, consults with management and the Company's independent auditors
prior to the presentation of financial statements to stockholders and, as
appropriate, initiates inquiries into aspects of the Company's financial
affairs.
The Compensation Committee, which consisted of Messrs. Bell and Lam and
former director William Lane III, held three (3) meetings in fiscal 1999. The
Compensation Committee currently consists of Messrs. Lam, Bell and Wilson. The
Compensation Committee makes recommendations to the Board concerning salaries
and incentive compensation for the Company's executive officers, directors and
employees and administers the Company's 1996 Stock Plan and the Company's 1997
Employee Purchase Plan
The Option Committee consisted of Mr. Dell'Oca and Mr. Douglas E. Klint
until October 1999 and Mr. Dell'Oca and Mr. Michael J. Carroll for the remainder
of fiscal 1999. The Option Committee has the ability to grant options (not to
exceed 50,000 shares) to non-executive officers under the Company's 1996 Stock
Plan.
The Board of Directors currently has no nominating committee or
committee performing a similar function.
Each director attended at least 75% of the aggregate of (i) the total number of
meetings of the Board of Directors held during fiscal 1999 and (ii) the total
number of meetings held by all committees of the Board of Directors during
fiscal 1999 on which such director served.
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COMPENSATION OF DIRECTORS
Outside directors receive $10,000 per year for serving on the Board of
Directors, $1,000 for attendance at each Board meeting and $2,000 per year for
serving as a member of the Audit or Compensation Committees. Outside directors
are reimbursed for all reasonable expenses incurred by them in attending Board
and Committee meetings. In addition, each outside director is eligible to
participate in the Company's 1997 Director Stock Option Plan (the "Director
Plan"). Under the Director Plan, each outside director is automatically granted
a nonstatutory option to purchase 25,000 shares of Common Stock upon the date
upon which such person first becomes a outside director. In addition, each
director who has been an outside director for at least six (6) months will
automatically receive a nonstatutory option to purchase 5,000 shares of Common
Stock upon such director's annual reelection to the Board by the stockholders.
Options granted under the Director Plan have a term of ten (10) years unless
terminated sooner upon termination of the optionee's status as a director or
otherwise pursuant to the Director Plan. The exercise price of each option
granted under the Director Plan is equal to the fair market value of the Common
Stock on the date of grant. Options granted under the Director Plan are subject
to cumulative yearly vesting over a four (4) year period commencing at the date
of grant.
Ronald K. Bell received an option grant of 25,000 shares on March 22,
1999 at an exercise price of $1.06 per share. He also received a grant of 5,000
shares at an exercise price of $0.88 per share, on October 21, 1999. Both
grants were made under the 1997 Director Option Plan.
David K. Lam received an option grant of 25,000 shares, at an exercise
price of $0.69 per share, on August 23, 1999. He also received an option grant
of 5,000 shares, at an exercise price of $0.88 per share, on October 21, 1999.
Both grants were made under the 1997 Director Option Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors during 1999
consisted of Messrs. Bell, Lam and Lane. None of such individuals has been or is
an officer or an employee of the Company. No member of the Compensation
Committee or executive officer of the Company has a relationship that would
constitute an interlocking relationship with executive officers or directors of
another entity.
PROPOSAL TWO:
APPROVAL OF AMENDMENT TO THE CERTIFICATE OF INCORPORATION
CHANGING THE NAME OF THE COMPANY
On March 7, 2000, the Company's Board of Directors adopted and approved
an amendment to the Company's Certificate of Incorporation changing the
Company's name from Aspec Technology, Inc. to Ingenuus Corporation. The name of
the Company was changed to reflect the change in the Company's business. With
the sale of the Company's historical Semiconductor Intellectual Property
Business and the focus on Internet-enabled business-to-business Inter Enterprise
Collaboration content management software solutions for the emerging e-commerce
content supply chain, the Company believes it should adopt a new name to reflect
its new business. For a copy of the Amendment to the Certificate of
Incorporation, see "Appendix A - Amendment to the Certificate of Incorporation."
VOTE REQUIRED; RECOMMENDATION OF BOARD OF DIRECTORS
The approval of the amendment requires the affirmative vote of a
majority of the shares outstanding on the Record Date.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE
AMENDMENT TO THE CERTIFICATE OF INCORPORATION CHANGING THE COMPANY'S NAME FROM
ASPEC TECHNOLOGY, INC. TO INGENUUS CORPORATION.
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<PAGE> 9
PROPOSAL THREE:
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected PricewaterhouseCoopers LLP,
independent auditors, to audit the financial statements of the Company for the
2000 fiscal year. This nomination is being presented to the stockholders for
ratification at the meeting. PricewaterhouseCoopers LLP has audited the
Company's financial statements since August 1998. A representative of
PricewaterhouseCoopers LLP is expected to be present at the meeting, will have
the opportunity to make a statement, and is expected to be available to respond
to appropriate questions.
VOTE REQUIRED; RECOMMENDATION OF BOARD OF DIRECTORS
The affirmative vote of a majority of the Votes Cast on the proposal at
the Annual Meeting is required to ratify the Board's selection. If the
stockholders reject the nomination, the Board will reconsider its selection.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE 2000 FISCAL YEAR.
ADDITIONAL INFORMATION
PRINCIPAL SHARE OWNERSHIP
As of March 6, 2000, the following persons were known by the Company to
be the beneficial owners of more than 5% of the Company's Common Stock:
<TABLE>
<CAPTION>
Beneficial Ownership
----------------------
Name Number Percent
---- --------- -------
<S> <C> <C>
Summit Partners, L.P.(1)....................... 2,601,008 7.0%
499 Hamilton Avenue, Suite 200
Palo Alto, California 94301
Conrad J. Dell'Oca(2).......................... 2,725,304 7.1%
830 East Arques Avenue
Sunnyvale, California 94086
Yen Chang...................................... 2,129,070 5.7%
830 East Arques Avenue
Sunnyvale, California 94086
</TABLE>
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(1) Includes 2,601,008 shares held with shared dispositive and voting power by
Summit Venture IV, L.P. ("Summit IV"), Summit Investors III, L.P. ("Summit
Investors III"), L.P., Stamps, Woodsum & Co. IV and Messrs. E, Roe Stamps,
IV, Stephen G. Woodsum, Gregory M. Avis, Martin J. Mannion, Bruce R. Evans,
Thomas S. Roberts, Walter G. Kortschak, Joseph F. Trustey, Kevin P. Mohan
and Peter Y. Chung. Summit Partners IV, L.P. is the sole general partner of
Summit IV. L.P. Stamps, Woodsum & Co. IV is the sole general partner of
Summit Partners IV, L.P. Messrs. Stamps, Woodsum, Avis, Mannion, Evans,
Roberts, Kortschak,
(2) Includes stock options for 100,000 shares which are vested and exercisable
within 60 days of the Record Date.
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<PAGE> 10
Trustey, Mohan and Chung are individual general partner of Stamps,
Woodsum & Co. IV and Summit Investors III.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of the Company's
Common Stock as of March 6, 2000 (i) by each director of the Company, (ii) by
the Company's Chief Executive Officer and the four other executive officers of
the Company during fiscal 1999 (such officers are collectively referred to as
the "Named Executive Officers"), and (iii) by all current directors and
executive officers as a group:
<TABLE>
<CAPTION>
Beneficial Ownership
----------------------
Name Number Percent
---- --------- -------
<S> <C> <C>
Conrad J. Dell'Oca(1)......................... 2,725,304 7.1%
Michael J. Carroll............................ -- --
Ronald K. Bell(2)............................. 25,000 --
David K. Lam.................................. -- --
Al Wilson..................................... -- --
Douglas E. Klint(3)........................... 131,250 0.4%
John R. Walsh(4).............................. 413,793 1.1%
Jai P. Shin(5)................................ 1,006,063 2.7%
Yen C. Chang(6)............................... 2,129,070 5.7%
All directors and executive officers
as a group (8 persons)...................... -- --
6,430,480 17.4%
</TABLE>
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* Less than 1%
(1) Includes stock options for 100,000 shares which are vested and exercisable
within 60 days of the Record Date.
(2) Includes stock options for 25,000 shares which are vested and exercisable
within 60 days of the Record Date.
(3) Includes stock options for 131,250 shares which are vested and exercisable
within 60 days of the Record Date.
(4) Includes 8,114 shares held by Mr. Walsh's spouse. Mr. Walsh disclaims any
beneficial interest in such shares.
(5) Mr. Shin left the Company on September 1, 1999.
(6) Mr. Chang left the Company on June 30, 1999.
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<PAGE> 11
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth all compensation received for services
rendered to the Company and the Company's subsidiaries in all capacities during
the last three fiscal years by (i) the Company's Chief Executive Officer and
(ii) the Company's four other Named Executive Officers:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation(1) Compensation
------------------------------------------- ------------
Other Annual
Fiscal Compensation Awards
Name and Principal Position Year Salary Bonus(2) (3) Options(4)
--------------------------- ------ -------- -------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Conrad J. Dell'Oca................. 1999 $232,095 $ 14,971 -- 100,000
Former Chief Executive Officer 1998 209,000 120,000 -- --
and President 1997 191,617 120,000 -- --
Michael J. Carroll (5)............. 1999 21,795 -- -- 1,000,000
President and Chief Executive
Officer
Yen Chang (6)..................... 1999 185,015 12,210 47,790
Former Senior Vice President, 1998 170,469 120,000 -- --
Engineering 1997 156,281 120,000 80,676 --
Jai P. Shin (7).................... 1999 212,720 13,721 76,279 --
Former Executive Vice President 1998 191,563 120,000 -- --
1997 175,628 120,000 --
Douglas E. Klint (8)............... 1999 196,878 12,594 -- 225,000
Vice President, Secretary and 1998 62,500 -- -- --
General Counsel and Former
Interim President and Chief
Financial Officer
</TABLE>
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(1) Excludes perquisites and other personal benefits which for each Named
Executive Officer did not exceed the lesser of $50,000 or 10% of the total
annual salary and bonus for such officer.
(2) Includes bonus awards earned for performance in the fiscal year noted even
though such amounts are payable in subsequent years. Excludes bonus awards
paid in the fiscal year noted but earned in prior years.
(3) Represents incentive payments based on revenue from certain contracts.
Includes incentive payments earned in the fiscal year indicated even if
such bonuses were paid in a subsequent fiscal year.
(4) Options granted in fiscal 1999 include options previously granted in fiscal
1998 that were repriced in fiscal 1999.
(5) Mr. Carroll joined the Company in October 1999.
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<PAGE> 12
(6) Mr. Chang left the Company on June 30, 1999 and the amount reported in the
above table includes severance pay paid to Mr. Chang.
(7) Mr. Shin left the Company on September 1, 1999 and the amount reported in
the above table includes severance pay paid to Mr. Shin.
(8) Mr. Klint joined the Company in August 1998.
OPTION GRANTS IN FISCAL YEAR 1999
The following table sets forth certain information concerning grants of
stock options to each of the Named Executive Officers during the fiscal year
ended November 30, 1999.
<TABLE>
<CAPTION>
Individual Grants(1)
--------------------------------------------------
Potential Realizable
% of Total Value at Annual Rates
Options of Stock Price
Granted to Exercise Appreciation for Option
Employees or Base Term(2)
Options in Fiscal Price Per Expiration ------------------------
Name Granted Year Share Date 5% 10%
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ronald K. Bell(4) 25,000 -- $1.06 3/22/2009 -- --
5,000 -- 0.88 10/21/2009 -- --
Conrad J. Dell'Oca 100,000 2% $1.00 -- $ 63,259 $ 159,374
Michael J. Carroll 1,000,000 21% 1.00 10/25/2009 628,895 1,593,423
Yen Chang -- -- -- -- -- --
David K. Lam(4) 25,000 -- 0.69 8/23/2009 -- --
5,000 -- 0.88 10/21/2009 -- --
Jai P. Shin -- -- -- -- -- --
Douglas E. Klint (3) 70,000 1% 2.00 12/15/2008 45,109 115,562
55,000 1% 1.40 1/11/2009 34,589 87,656
100,000 2% 1.00 11/16/2009 63,259 159,374
</TABLE>
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(1) Each of these options was granted pursuant to the Company's 1996 Stock Plan
and is subject to the terms of such plan. These options were granted at an
exercise price equal to the fair market value of the Company's Common Stock
as determined by the Board of Directors of the Company on the date of grant
and, as long as the optionee maintains continuous employment with the
Company, vest over a four year period at the rate of one-fourth of the
shares on the first anniversary of the date of grant and 1/48th of the
remaining shares per month thereafter.
(2) In accordance with the rules of the Securities and Exchange Commission (the
"Commission"), shown are the hypothetical gains or "option spreads" that
would exist for the respective options. These gains are based on assumed
rates of annual compounded stock price appreciation of 5% and 10% from the
date the option was granted over the full option term. The 5% and 10%
assumed rates of appreciation are mandated by the rules of the Commission
and do not represent the Company's estimate or projection of future
increases in the price of its Common Stock.
(3) The information in the table reflects Mr. Klint's participation in the
Company's option exchange program in December 1999.
(4) Each of these options was granted pursuant to the Company's 1997 Director
Option Plan and is subject to the terms of such plan.
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<PAGE> 13
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning options
exercised by the Named Executive Officers in fiscal 1999, and exercisable and
unexercisable stock options held by each of the Named Executive Officers as of
November 30, 1999.
<TABLE>
<CAPTION>
Fiscal Year-End Option Values
------------------------------------------------------
Value of Unexercised
Number of Unexercised In-the-Money Options at
Shares Options at Fiscal Year End Fiscal Year End(1)
Acquired Value -------------------------- --------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Conrad J. Dell'Oca 0 $0 0 100,000 $0 $ 187,500
Michael J. Carroll 0 0 0 1,000,000 0 $1,875,000
Yen Chang 0 0 0 0 0 0
Jai P. Shin 0 0 0 0 0 0
Douglas E. Klint (2) 0 0 0 225,000 0 $ 329,875
</TABLE>
- --------------
(1) The value of an "in the money" of option represents the difference between
the exercise price of such option and the fair market value of the
Company's Common Stock at November 30, 1999, multiplied by the total number
of shares subject to the option.
(2) The information in the table reflects Mr. Klint's participation in the
Company's option exchange program in December 1998.
TEN YEAR OPTION REPRICINGS
The following table sets forth certain information with respect to the
Company's exchange of outstanding options with certain of its officers. For
further information with respect to such option exchanges, see "Report of the
Compensation Committee of the Board of Directors."
<TABLE>
<CAPTION>
Length of
Original
Option Term
Securities Market Price Exercise Remaining (In
Underlying of Stock at Price at Years) at
Options Time of Time of Date of
Name Date Repriced Repricing(1) Repricing Repricing
- ---- -------- ---------- ------------ --------- -------------
<S> <C> <C> <C> <C> <C>
Douglas E. Klint.............. 12/15/98 70,000 $2.00 $4.94 10
</TABLE>
- --------------
(1) The market price of stock at time of repricing is the new exercise price of
each such option.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
During 1999 the members of the Compensation Committee of the Board of
Directors were Messrs. Saper, Kortschak, Bell, Lane and Lam. Mr. Saper was a
member of the committee through July of 1999. Mr. Kortschak was a member
through June of 1999. The Compensation Committee currently consists of
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<PAGE> 14
Messrs. Bell, Lam and Wilson. All such members are outside directors. The
Compensation Committee reviews compensation levels of senior management and
recommends salaries and other compensation paid to senior management to the
Company's Board of Directors for approval.
Compensation Philosophy. The Company's executive pay programs are
designed to attract and retain executives who will contribute to the Company's
long-term success, to reward executives for achieving both short and long-term
strategic Company goals, to link executive and stockholder interests through
equity-based plans, and to provide a compensation package that recognizes
individual contributions and Company performance. A meaningful portion of each
executive's total compensation is intended to be variable and to relate to and
be contingent upon Company performance. The Company's compensation philosophy is
that cash compensation must be competitive with other technology companies of
comparable size to help motivate and retain existing staff and provide a strong
incentive to achieve specific Company goals. The Company believes that the use
of stock options as a long-term incentive links the interests of the employees
to that of the stockholders and motivates key employees to remain with the
Company to a degree that is critical to the Company's long-term success.
In December 1998, the Company's Board of Directors approved an option
exchange program for all employees of the Company whereby all such employees
that held options with exercise prices in excess of $2.00 per share were offered
the opportunity to exchange such options for new options at $2.00 per share,
which was the fair market value of the Common Stock on the date of the exchange
program. In order to participate in the option exchange program, employees were
required to restart the vesting period for their options such that the vesting
commencement date would be December 15, 1998. The Board undertook this action in
light of the then recent reduction in the trading price of the Company's Common
Stock and in consideration of the importance to the Company of retaining its
employees by offering them appropriate equity incentives. The Board also
considered the highly competitive environment for obtaining and retaining
qualified employees and the overall benefit to the Company's stockholders from a
highly motivated group of employees.
Components of Executive Compensation. The two key components of the
Company's senior management compensation program in fiscal 1999 were base salary
and long-term incentives, represented by the Company's stock option program. The
Compensation Committee utilizes an industry recognized independent annual survey
of companies to determine whether the Company's senior management compensation
is within the competitive range. Base salary is set for each senior manager
commensurate with that person's level of responsibility and within the
parameters of companies of comparable size within the semiconductor industry.
It is the policy of the Company, and the members of the Committee
believe that it is consistent with practices of comparable companies in the
industry, that incentive compensation should comprise a meaningful portion of
the annual total compensation of senior management. Messrs. Dell'Oca, Shin,
Chang, and Klint were paid bonuses in 1999 in the amount of $14,971, $13,721,
$12,210 and $12,594, respectively. All such bonuses were paid based on
achievement of management business objectives. Messrs. Shin and Chang were also
paid sales commissions in 1999 in the amount of $76,279 and $47,790,
respectively. All such sales commissions were paid based on revenue invoiced in
1999.
Stock options are generally granted when a senior manager joins the
Company and additional options may be granted from time-to-time thereafter. The
options granted to each senior manager vest over a four (4) year period. In
addition to the stock option program, senior managers are eligible to
participate in the Company's 1997 Employee Stock Purchase Plan.
Other elements of executive compensation include participation in
Company-wide medical and dental benefits and the ability to defer compensation
pursuant to a 401(k) plan, and a non-qualified deferred
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compensation program. The Company does not match annual contributions under the
401(k) plan at this time.
The Compensation Committee has considered the potential impact of
Section 162(m) of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder (the "Section"). The Section disallows a tax deduction
for any publicly-held corporation for individual compensation exceeding $1
million in any taxable year for any of the Named Executive Officers, unless such
compensation is performance-based. Since the cash compensation of each of the
Named Executive Officers is below the $1 million threshold and the Compensation
Committee believes that any options granted under the Company's 1996 Stock Plan
will meet the requirements of being performance-based, the Compensation
Committee believes that the Section will not reduce the tax deduction available
to the Company. The Company's policy is to qualify, to the extent reasonable,
its executive officers' compensation for deductibility under applicable tax
laws. However, the Compensation Committee believes that its primary
responsibility is to provide a compensation program that will attract, retain
and reward the executive talent necessary to the Company's success.
Consequently, the Compensation Committee recognizes that the loss of a tax
deduction could be necessary in some circumstances.
Compensation Committee of the Board of Directors
Ronald K. Bell
David K. Lam
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COMPARISON OF TOTAL CUMULATIVE STOCKHOLDER RETURN
The following graph sets forth the Company's total cumulative
stockholder return compared to the Nasdaq Stock Market and the Nasdaq Electronic
Components Stock Index for the period April 27, 1998 (date of the Company's
Initial Public Offering) through November 30, 1999. Total stockholder return
assumes $100 invested at the beginning of the period in the Common Stock of the
Company, the stocks represented in the Nasdaq Stock Market and the Nasdaq
Electronic Components Stock Index, respectively. Total return also assumes
reinvestment of dividends; the Company has paid no dividends on its Common
Stock.
Historical stock price performance should not be relied upon as
indicative of future stock price performance
Comparison of 19 Month Total Cumulative Returns*
-----------------------------------------------
Among Aspec Technology, the Nasdaq Stock Market Index,
and the Nasdaq Electronics Components Index
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
--------------------------------------------------
NASDAQ STOCK NASDAQ ELECTRONIC
DATE ASPEC MARKET (U.S.) COMPONENTS
---- ----- ------------- -----------------
<S> <C> <C> <C>
4/28/98 100 100 100
5/29/98 87 96 89
8/31/98 17 82 80
11/30/98 16 107 121
2/29/99 8 126 137
5/31/99 7 136 139
8/31/99 7 152 204
11/30/99 22 180 231
</TABLE>
* $100 invested on 4/28/98 in either stock or index, including reinvestment of
dividends. Fiscal year ending November 30.
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<PAGE> 17
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on its review of copies of filings under Section 16 (a) of
the Securities Exchange Act of 1934, as amended, received by it, or written
representations from certain reporting persons, the Company believes that during
fiscal 1999, Messrs. Carroll and Walsh each filed a late Initial Report on
Form 3.
OTHER MATTERS
The Company knows of no other matters to be submitted at the Annual
Meeting. If any other matters properly come before the meeting, it is the
intention of the persons named in the enclosed proxy to vote the shares they
represent as the Board of Directors of the Company may recommend.
THE BOARD OF DIRECTORS
Sunnyvale, California
March 21, 2000
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<PAGE> 18
APPENDIX A
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
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CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
ASPEC TECHNOLOGY, INC.
Aspec Technology, Inc., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), pursuant to the provisions of
the General Corporation Law of the State of Delaware (the "DGCL"), DOES HEREBY
CERTIFY as follows:
FIRST: The Certificate of Incorporation of the Corporation is hereby
amended by deleting section 1 of the Certificate of Incorporation in its present
form and substituting therefore the new section 1 as follows:
"The name of the Corporation is Ingenuus Corporation (the
"Corporation"). The original name of the Corporation was Aspec
Technology, Inc. The original Certificate of Incorporation of the
Corporation was filed with the Secretary of State of the State of
Delaware on February 10, 1997."
SECOND: The amendment to the Certificate of Incorporation of the
Corporation set forth in this Certificate of Amendment has been duly adopted in
accordance with the provisions of Section 242 of the DGCL by (a) the Board of
Directors of the Corporation having duly adopted a resolution setting forth such
amendment and declaring its advisability and submitting it to the stockholders
of the Corporation for their approval, and (b) the stockholders of the
Corporation having duly adopted such amendment by vote of the holders of a
majority of the outstanding stock entitled to vote thereon.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by Michael J. Carroll, who hereby affirms, under penalty
of perjury, that this is the act and deed of the Corporation, and that the facts
stated herein are true as of ________________, 2000.
ASPEC TECHNOLOGY, INC.
By: _____________________________________
Michael J. Carroll
President and Chief Executive Officer
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ASPEC TECHNOLOGY, INC.
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael J. Carroll and Douglas E. Klint, jointly
and severally, proxies with full power of substitution, to vote all shares of
Common Stock of Aspec Technology, Inc., a Delaware corporation, which the
undersigned is entitled to vote at the Annual Meeting of Stockholders to be held
at the Company's offices located at 830 East Arques Avenue, Sunnyvale,
California, on Thursday, April 27, 2000 at 2:00 p.m., local time, or any
adjournment thereof. The proxies are being directed to vote as specified on the
reverse side hereof or, if no specification is made, FOR the election of
directors, FOR the proposal to amend the Company's Articles of Incorporation,
FOR the appointment of PricewaterhouseCoopers LLP as independent accountants and
in accordance with their discretion on such other matters that may properly come
before the meeting.
THE DIRECTORS RECOMMEND A "FOR" VOTE ON EACH ITEM.
(Continued and to be signed on reverse side)
- ------------------------------FOLD AND DETACH HERE------------------------------
1. ELECTION OF DIRECTORS
Conrad J. Dell'Oca
Ronald K. Bell
David K. Lam
Michael J. Carroll
Al Wilson
FOR all nominees listed (except as withheld) [ ]
WITHHOLD AUTHORITY to vote for nominees listed [ ]
2. Proposal to amend the Company's Certificate of Incorporation to change the
Company's name from Aspec Technology, Inc. to Ingenuus Corporation.
3. Proposal to ratify the appointment of PricewaterhouseCoopers LLP as
independent accountants for the 2000 fiscal year.
(Instructions: To withhold authority to vote for any individual nominee, strike
that nominee's name below.)
Signature(s) ______________________________ Dated _________________, 2000
(Signature(s) must be exactly as name(s) appear on this proxy.) (If signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such, and, if signing for a corporation, please give your title. When shares
are in the name of more than one person, each should sign the proxy.)
