<PAGE> 1
SCHEDULE I
INFORMATION STATEMENT PURSUANT TO
SECTION 14(F) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 14F-1 THEREUNDER
GENERAL
This Information Statement is being mailed on or about December 23, 1999 as
part of the Solicitation/ Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9") of SOFTWORKS, Inc., a Delaware corporation (the "Company"), to
the holders of record of shares of common stock, par value $.001 per share, of
the Company (the "Shares"). You are receiving this Information Statement in
connection with the possible election of persons designated by Parent (as
defined below) to a majority of the seats on the Board of Directors of the
Company (the "Company Board").
On December 21, 1999, the Company, EMC Corporation, a Massachusetts
corporation ("Parent"), and Eagle Merger Corp., a Delaware corporation and an
indirect, wholly owned subsidiary of Parent ("Purchaser"), entered into an
Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which (i)
Parent shall cause Purchaser to commence a tender offer (the "Offer") for all
outstanding Shares at a price of $10.00 per Share, net to the seller in cash, or
such increased amount, if any, and (ii) Purchaser shall be merged with and into
the Company (the "Merger") with the Company continuing as the surviving
corporation. As a result of the Offer and the Merger, the Company will become an
indirect, wholly owned subsidiary of Parent.
The Merger Agreement provides that, promptly after the purchase of a
majority of the outstanding Shares pursuant to the Offer, Parent shall be
entitled to designate such number of directors (the "Parent Designees") to the
Company Board as will give Parent representation proportionate to its ownership
interest. The Merger Agreement requires the Company to take such action as
Parent may request to cause the Parent Designees to be elected to the Company
Board under the circumstances described therein. This Information Statement is
required by Section 14(f) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and Rule 14f-1 thereunder.
You are urged to read this Information Statement carefully. You are not,
however, required to take any action. Capitalized terms used and not otherwise
defined shall have the meaning set forth in the Schedule 14D-9.
The information contained in this Information Statement concerning Parent
and Purchaser has been furnished to the Company by Parent. The Company assumes
no responsibility for the accuracy or completeness of such information.
RIGHT TO DESIGNATE DIRECTORS; PARENT DESIGNEES
The Merger Agreement provides that, promptly upon the purchase of and
payment by Purchaser for Shares pursuant to the Offer which represent at least a
majority of the outstanding Shares (on a fully diluted basis), Parent will be
entitled to designate such number of directors, rounded down to the next whole
number, on the Company Board as shall give Parent, subject to compliance with
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder,
representation on the Company Board equal to the product of the total number of
directors on the Company Board (giving effect to the directors elected pursuant
to this sentence) multiplied by the percentage that the aggregate number of
Shares beneficially owned by Purchaser, Parent and any of their affiliates bears
to the total number of Shares then outstanding. The Company shall, upon the
request of Purchaser, use its reasonable best efforts to cause the Parent
Designees to be so elected, including, if necessary, increasing the size of the
Company Board or securing the resignations of incumbent directors.
Notwithstanding the foregoing, the Merger Agreement requires that, until the
Effective Time, the Company Board shall include at least two directors who were
members of the Company Board on the date that the Merger Agreement was executed.
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The following table sets forth certain information with respect to the
Parent Designees (including age as of the date hereof, current principal
occupation or employment and five-year employment history). The Parent Designees
are expected to be appointed as officers of the Company at the Effective Time.
Unless otherwise noted, each individual is a citizen of the United States.
Unless otherwise noted, the business address of each designee is c/o EMC
Corporation, 35 Parkwood Drive, Hopkinton, Massachusetts 01748-9103.
<TABLE>
<CAPTION>
NAME OF PRINCIPAL OCCUPATION(S)
PARENT DESIGNEE AGE DURING PAST FIVE (5) YEARS
- --------------- --- --------------------------
<S> <C> <C>
Paul T. Dacier....................... 42 Mr. Dacier is vice president, general counsel of Parent,
and a director and secretary of Purchaser. Mr. Dacier
has held the position of general counsel since March
1990, and has held the positions of vice president and
general counsel since February 1993. He has been an
officer and director of Purchaser since December, 1999.
Mr. Dacier's principal business address is 35 Parkwood
Drive, Hopkinton, Massachusetts 01748.
Colin G. Patteson.................... 50 Mr. Patteson is senior vice president, chief
administrative officer and treasurer of Parent, and a
director and treasurer of Purchaser. Mr. Patteson has
the positions of senior vice president, chief
administrative officer and treasurer of Parent since
February 1997, and as been an officer and a director of
Purchaser since December, 1999. He was vice president
and corporate controller from February 1993 to April
1995, and vice president, chief financial officer and
treasurer from April 1995 to February 1997. Mr.
Patteson's principal business address is 35 Parkwood
Drive, Hopkinton, Massachusetts 01748. Mr. Patteson is a
citizen of the United Kingdom.
David A. Donatelli................... 34 Mr. Donatelli is a director and the president of
Purchaser. Mr. Donatelli has been vice president, new
business development of Parent since April, 1999. For
the five years prior to that time, he held senior
management positions with Parent.
</TABLE>
Parent has informed the Company that each of the individuals listed above
has consented to act as a director, if so designated. If necessary, Parent may
choose additional or other Parent Designees, subject to the requirements of Rule
14f-1.
Based solely on the information set forth in the Offer to Purchase, none of
the Parent Designees (i) is currently a director of, or holds any position with,
the Company, (ii) has a familial relationship with any directors or executive
officers of the Company, or (iii) to the best knowledge of Parent, beneficially
owns any securities (or any rights to acquire such securities) of the Company.
The Company has been advised by Parent that, to the best of Parent's knowledge,
none of the Parent Designees has been involved in any transactions with the
Company or any of its directors, officers, or affiliates which are required to
be disclosed pursuant to the rules and regulations of the Securities and
Exchange Commission (the "SEC"), except as may be disclosed herein.
DIRECTORS OF THE COMPANY
The following table sets forth certain information with respect to the
current directors of the Company as of December 20, 1999. Unless otherwise
noted, each director is a citizen of the United States. Unless
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otherwise noted, the business address of each director is c/o SOFTWORKS, Inc.,
5845 Richmond Highway, Suite 400, Alexandria, Virginia 22303.
<TABLE>
<CAPTION>
DIRECTOR
OF THE
NAME OF DIRECTOR AND PRINCIPAL OCCUPATION(S) COMPANY
POSITION(S) WITH THE COMPANY AGE DURING PAST FIVE (5) YEARS SINCE
- ---------------------------- --- -------------------------- --------
<S> <C> <C> <C>
James A. Cannavino................... 55 Chairman and Chief Executive Officer of April 1998
Chairman of the Board CyberSafe, Inc., a corporation
specializing in network security, since
1997. President and Chief Executive
Officer of Perot Systems Corporation
through July 1997, and prior thereto was
a Senior Vice President at IBM,
responsible for strategy and development.
Judy G. Carter....................... 47 President and Chief Executive Officer and October 1993
President, Chief Executive a director of the Company since October
Officer and Director 1993. Prior thereto, Ms. Carter was Chief
Operating Officer from 1991. Ms. Carter
started with the Company as a system
software developer and progressed into a
number of supervisory and managerial
roles, culminating in her appointment as
Vice President of Technical Services in
1990.
Charles Feld......................... 57 President of the Feld Group, Inc., a July 1998
Director provider of temporary chief information
officer consulting services, for more
than the past five years. Since December
1997, has also served as operating Chief
Information Officer of Delta Air Lines.
Prior thereto, from June 1992 until
August 1997, served as operating Chief
Information Officer for Burlington
Northern Sante Fe, Corp.
Dr. Dennis Murray.................... 53 President of Marist College for more than December 1999
Director 20 years.
Bernard Puckett...................... 55 President and Chief Executive Officer of December 1999
Director Skytel Corporation (formerly Mobile
Telecommunication Technologies) from 1995
to 1996 and President of Skytel
Corporation from 1993 to 1994. Prior
thereto held various positions at IBM
from 1967 to 1993, including Senior Vice
President for Corporate Strategy and
Business Development, Senior Vice
President and Group Executive for
Applications Solutions, President for
Data Systems Division, Vice President
Communications-Corp., Chief Financial
Officer -- US Marketing and Service, Vice
President Marketing -- US Director
Business Plans-Corp. and Vice President
Sales for the western United States.
</TABLE>
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EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information with respect to the
current executive officers as of December 20, 1999. Each of the executive
officers is a citizen of the United States.
<TABLE>
<CAPTION>
YEAR
STARTED
WITH THE
NAME AGE TITLE COMPANY
- ---- --- ----- --------
<S> <C> <C> <C>
James A. Cannavino................... 55 Chairman of the Board 1998
Judy G. Carter....................... 47 President and Chief Executive Officer 1981
Vice President, Secretary, Chief Technology
C. R. Kinsey, III.................... 53 Officer 1977
Robert C. McLaughlin................. 53 Chief Financial Officer and Treasurer 1998
</TABLE>
BUSINESS EXPERIENCE
James A. Cannavino has been Chairman of the Board since April 1998. Mr.
Cannavino is President and Chief Executive Officer of CyberSafe, Inc., a
corporation specializing in network security. He was the President and Chief
Executive Officer of Perot Systems Corporation through July 1997, and prior to
that was a Senior Vice President at IBM, responsible for strategy and
development. He also served on the IBM Corporate Executive Committee and
Worldwide Management Council, and on the board of IBM's integrated services and
solutions company. Mr. Cannavino currently is a consultant to Computer Concepts
Corp. and serves on the boards of National Center for Missing and Exploited
Children, 7th Level, Inc. and Marist College.
Judy G. Carter has been President and Chief Executive Officer and a
director since October 1993. Prior thereto, Ms. Carter was Chief Operating
Officer from 1991. Ms. Carter started with the Company as a system software
developer and progressed into a number of supervisory and managerial roles,
culminating in her appointment as Vice President of Technical Services in 1990.
Ms. Carter is a director of Fairfax Opportunities Unlimited, a non-profit
organization.
C.R. Kinsey, III, one of the Company's co-founders, has been Vice President
since May 1998 and has been Secretary and Chief Technology Officer since 1977.
From 1977 until May 1998, Mr. Kinsey was also the Company's Treasurer. In
addition, Mr. Kinsey is a primary technical advisor to the Company's technology
division for new product research and development, product enhancements and
services and support.
Robert C. McLaughlin has been Treasurer and Chief Financial Officer since
March 1998. Prior thereto, Mr. McLaughlin was a Department Director with global
responsibilities at Perot Systems Corporation in Dallas, Texas from November
1996 through December 1997. Mr. McLaughlin also served as Senior Vice President
for a real estate investment venture in West Palm Beach, Florida from 1993 to
1996, as Vice President of First Union National Bank of Florida, N.A. in Fort
Lauderdale from 1991 to 1993 and a Vice President of Southeast Bank, N. A. in
Miami from 1987 to 1991.
EXECUTIVE COMPENSATION
Summary Compensation Table. The following Summary Compensation Table sets
forth for the last three full fiscal years information as to the total
compensation received by the chief executive officer and each other executive
officer of the Company whose total annual salary and bonus equaled or exceeded
$100,000 for services rendered for the fiscal year ended December 31, 1998 (the
"Named Executive Officers").
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SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------------------
OTHER ANNUAL ALL OTHER
COMPENSATION COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) ($)(2)
- --------------------------- ---- --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Judy G. Carter..................... 1997 $155,000(3) $165,000(4) -- $ 1,000
President and Chief 1998 $170,833
Executive Officer
C.R. Kinsey, III................... 1997 $155,000(3) $165,000(4) -- $189,000
Vice-President, Secretary 1998 $170,833 $114,611
and Chief Technology Officer
</TABLE>
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(1) No Other Annual Compensation is shown because the amounts of perquisites and
other non-cash benefits provided by us do not exceed the lesser of $50,000
or 10% of the total annual base salary and bonus disclosed in this table for
the respective officer.
(2) All Other Compensation includes royalties paid in respect of software
products developed by such officers.
(3) Includes $5,000 deferred from 1996.
(4) Includes $77,500 deferred from 1996.
Stock Option Plans. The Company's 1998 Long Term Incentive Plan (the "1998
Incentive Plan") is intended to motivate the Company's qualified employees, to
help the Company attract employees and to align the interests of those employees
with the interests of the Company's stockholders.
The 1998 Incentive Plan provides for the grant of "incentive stock options"
within the meaning of the Section 422 of the Internal Revenue Code of 1986, as
amended, "non-qualified stock options," restricted stock, performance grants and
other types of awards to the officers, key employees, consultants and
independent contractors of the Company and its affiliates.
The 1998 Incentive Plan, which is administered by the Long Term Incentive
Plan Administrative Committee of the Company Board, authorizes the issuance of a
maximum of 3,727,000 Shares, which may be either newly issued Shares, treasury
Shares, reacquired Shares, Shares purchased in the open market or any
combination thereof. If any award under the 1998 Incentive Plan terminates,
expires unexercised, or is cancelled, the Shares that would otherwise have been
issuable pursuant thereto will be available for issuance pursuant to the grant
of new awards. The Company has outstanding options to purchase 3,727,000 Shares
under the 1998 Incentive Plan. All options granted under the 1998 Incentive Plan
accelerate upon a change in control of the Company, as defined therein. Of the
3,727,000 options, James A. Cannavino has been granted 600,000 Type I options
and 600,000 Type II options, Judy Carter has been granted 150,000 Type I options
and 200,000 Type II options, C.R. Kinsey has been granted 200,000 Type I options
and 250,000 Type II options and Robert McLaughlin has been granted 20,000 Type I
options and 80,000 Type II options. Mr. Cannavino has exercised 200,000 Type I
options. "Type I" options vested one-half on the earlier of (i) the closing date
of the Company's initial public offering (August 7, 1998), or (ii) December 31,
1998 and one-half on December 31, 1998. "Type II" options vest on December 31,
2002, subject to earlier vesting based upon the Company reaching certain defined
levels of net income.
The Company's 1999 Stock Option Plan (the "1999 Plan") was adopted in order
to foster and promote the interests of the Company by attracting and retaining
directors, officers and employees of, and consultants to, the Company who
contribute to the Company's success by their ability, ingenuity and industry, to
enable such directors, officers, employees and consultants to participate in the
long-term success and growth of the Company by giving them a proprietary
interest in the Company and to provide incentive compensation opportunities
competitive with those of competing corporations.
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The 1999 Plan provides for the grant of non-qualified stock options to the
Company's officers, key employees, consultants and independent contractors.
The 1999 Plan, as amended, is administered by the Company Board or a
committee of the Company Board. The 1999 Plan authorizes the issuance of a
maximum of 2,750,000 Shares, which may be either newly issued Shares, treasury
Shares, reacquired Shares, Shares purchased in the open market or any
combination thereof. If any award under the 1999 Plan terminates, expires,
unexercised, or is cancelled, the Shares that would otherwise have been issuable
pursuant thereto will be available for issuance pursuant to the grant of new
awards. There are outstanding options to purchase 2,711,600 Shares under the
1999 Plan. Of the 1,250,000 options, Judy G. Carter has been granted 450,000
options, C.R. Kinsey has been granted 140,000 options and Robert McLaughlin has
been granted 160,000 options.
The Merger Agreement provides that as of the Effective Time (as defined in
the Merger Agreement), holders of options, other than options designated as 1999
Options (as defined in the Merger Agreement), to purchase shares of the
Company's common stock ("General Options") will be entitled to receive a cash
amount equal to the product of (i) the excess, if any, of the Offer Price over
the exercise price per Share of such General Option and (ii) the number of
Shares covered by the holder's General Options. Upon such payment, the General
Options will then be cancelled. All options designated as 1999 Options will
automatically convert into a right to receive Parent common stock (a "Parent
Option"). With respect to any such Parent Option, (i) the number of shares of
Parent common stock subject to such Parent Option will be determined by
multiplying the number of Shares subject to the 1999 Option by the Option
Exchange Ratio (defined below), rounding any fractional Share down to the
nearest whole Share, and (ii) the exercise price per share of such Parent Option
will be determined by dividing the exercise price per Share applicable to the
1999 Option by the Option Exchange Ratio, and rounding the exercise price thus
determined up to the nearest whole cent. Except as provided above, the converted
or substituted Parent Options will be subject to the same terms and conditions
(including, without limitation, expiration date, vesting and exercise
provisions) as were applicable to the 1999 Option immediately prior to the
Effective Time. The term "Option Exchange Ratio" means (i) the Merger
Consideration divided by (ii) the average of the closing prices of Parent Common
Stock on the NYSE during the twenty trading days preceding the fifth trading day
prior to the date on which the closing of the Merger occurs.
The Company will take all necessary actions so that all stock option,
incentive or other equity-based plans established by the Company or any
subsidiary of the Company (a "Company Subsidiary") shall terminate as of the
Effective Time and the provisions in any other plan, program, or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any Company Subsidiary shall be deleted and
terminated as of the Effective Time. The Company will use its reasonable best
efforts to obtain the consent of each holder of outstanding General Options and
1999 Options to the treatment of such options specified by the Merger Agreement
to the extent necessary.
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OPTION GRANTS IN FISCAL YEAR 1998
The following table sets forth details regarding the options granted to
Named Executive Officers in fiscal year 1998.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION FOR OPTION TERM (2)
-------------------------------------------------- -------------------------------------
PERCENT OF TOTAL EXERCISE PRICE
OPTIONS OPTIONS GRANTED OR BASE PRICE EXPIRATION
NAME GRANTED (#) TO EMPLOYEES(1) PER SHARE DATE 5% 10%
- ---- -------------- ---------------- -------------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
150,000 TypeI 06-30-01 $126,758 $ 296,720
200,000 TypeII 12-31-02 288,146 671,595
-------------- --------
Judy G. Carter(3) 350,000 9.7% $7.00 $414,904 $ 968,315
200,000 TypeI 06-30-01 $169,011 $ 395,626
250,000 TypeII 12-31-02 360,183 839,494
-------------- --------
C.R. Kinsey, III(3) 450,000 12.4% $7.00 $529,194 $1,235,120
</TABLE>
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(1) Options for 3,613,850 Shares were granted to employees during the fiscal
year ended December 31, 1998.
(2) Potential realizable value assumes that the Company's stock price increases
from the date the options were granted until the end of the option term at
the annual rate specified. Annual compounding results in total appreciation
of 15.2% (at 5% per year) for the Type I options with a term of 2.9 years
and total appreciation (at 5% per year) of 24.0% for the Type II options
with a term of 4.4 years; and 31.8% total appreciation (at 10% per year) for
Type I options with a term of 2.9 years and total appreciation (at 10% per
year) of 52.1% for the Type II Options with a term of 4.4 years. If the
price of the Company's common stock increased at such rates from the price
at the end of the 1998 fiscal year ($7.06 per Share) over the next three
years, the stock price with 5% appreciation would be $8.23 per Share and
with 10% appreciation would be $9.46 per Share. These assumed rates of
appreciation are specified in the Commission's rules and are not the
Company's estimate or projection of future stock price growth.
(3) The Company granted options for 125,000 Shares to Judy G. Carter and 40,000
Shares to C.R. Kinsey III in February 1999 and 50,000 Shares to Judy G.
Carter in May 1999, which amounts are not included in this table.
AGGREGATE OPTION EXERCISES IN FISCAL YEAR 1998 AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning options exercised
during the year ended December 31, 1998, by the Named Executive Officers and the
value of unexercised options held by them as of December 31, 1998:
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FISCAL YEAR END FISCAL YEAR END(1)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Judy G. Carter............................ 150,000 200,000 $1,059,375 $1,412,500
C.R. Kinsey III........................... 200,000 250,000 1,412,500 1,765,625
</TABLE>
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(1) Based upon the closing price of the common stock of $7.0625 on December 31,
1998.
COMPANY BOARD AND COMMITTEE MEETINGS
The Company Board held five meetings during 1998. Each director attended or
participated in all of the Board of Directors meetings and applicable committee
meetings during the term of his or her directorship. The Company Board has held
eight meetings during 1999. The Company Board does not have a nominating
committee. The full Company Board selects the nominees for directors.
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The Company Board has an Audit Committee whose members are James A.
Cannavino, Charles Feld and Dennis Murray. The Audit Committee is responsible
for approving the engagement of the Company's independent public accountants,
reviewing with the independent public accountants the plans and results of the
audit engagement, reviewing the scope and nature of the services provided by the
independent public accountants and reviewing the independence of the independent
public accountants. During fiscal 1998, the Audit Committee consisted of Mr.
Cannavino, Charles Feld and Robert Devine, who resigned from the Company Board
in December 1999. The Audit Committee met two times during 1998.
The Company Board has a Compensation Committee whose members are James A.
Cannavino, Charles Feld and Bernard Puckett. The Compensation Committee oversees
all aspects of the Company's executive compensation policies and practices,
subject to applicable employment agreements. During fiscal 1998, the
Compensation Committee consisted of Mr. Cannavino, Mr. Feld and Robert Devine.
The Compensation Committee did not meet during 1998 and all compensation
decisions were made by the entire Company Board.
COMPENSATION OF DIRECTORS
Employee directors receive no additional compensation for service on the
Company Board or its committees. Directors of the Company who are not employees
of the Company receive $2,000 for their attendance and participation at Company
Board or committee meetings.
CERTAIN TRANSACTIONS BETWEEN MANAGEMENT AND THE COMPANY
Employment Agreements
The Company entered into an agreement with Mr. James A. Cannavino pursuant
to which he has agreed to serve as Chairman of the Board. As compensation for
his services, Mr. Cannavino was granted options to purchase 1,200,000 Shares,
600,000 of which are Type I options and 600,000 of which are Type II options.
The agreement with Mr. Cannavino further provides for the issuance of a $500,000
full recourse loan to him for relocation or other purposes upon the effective
date of the Company's initial public offering. The money was lent to Mr.
Cannavino and the loan is due on December 1, 2000. Mr. Cannavino also receives a
monthly salary of $2,000 and is reimbursed for certain expenses.
The Company has entered into employment agreements with each of Judy G.
Carter, C.R. Kinsey, III and Robert C. McLaughlin, which started on the
effective date of the Company's initial public offering. The employment
agreements with Ms. Carter and Mr. Kinsey terminate December 31, 2002 and the
employment agreement for Mr. McLaughlin is for a three year term. The agreements
automatically renew for additional one year periods unless the Company or the
employee notifies the other party at least ninety days prior to the end of any
renewal term that it or they desire to terminate such agreement. Pursuant to the
agreements, Ms. Carter, Mr. Kinsey, Mr. McLaughlin, receive annual compensation
of $200,000, $200,000, and $120,000, respectively and an incentive bonus based
on meeting or exceeding annual or quarterly net income targets to be established
by the Company Board. The incentive payments to Ms. Carter and Mr. Kinsey were
up to $150,000 for 1998 and are up to $200,000 for each of the years 1999
through 2002. Each employment agreement also provides for certain payments
following death or disability and further provides, in the event of a change in
control of the Company, as defined therein, the right, at the employee's
election, to terminate the agreement and receive a lump sum payment of
approximately three times his or her annual salary.
In connection with the Offer, the Company has entered into a Termination
Agreement with each of Messrs. Cannavino, Kinsey and McLaughlin and Ms. Carter,
pursuant to which their employment agreements will be terminated at the
Effective Time of the Merger.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors and persons who own more than ten percent of the Shares to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission (the "Commission"). Officers, directors and persons who own more than
ten percent of the Shares are required by regulations issued by the Commission
to furnish the Company with copies of all Section 16(a) forms that they have
filed. Based solely on a review of the copies of such
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forms, the Company believes that during fiscal year 1998 its executive officers
and directors and persons who own more than ten percent of the Shares complied
with all applicable filing requirements of Section 16(a).
STOCK OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS
The following table sets forth, as of December 20, 1999, the number and
percentage of the outstanding Shares held by each person who, to the knowledge
of the Company based solely on filings with the Securities and Exchange
Commission, beneficially owns more than five percent of the outstanding Shares,
by each of the Company's directors and Named Executive Officers and by all of
the directors, Named Executive Officers of the Company as a group. As of
December 20, 1999, there were 17,373,191 Shares issued and outstanding. Except
as set forth in the footnotes to the table, the stockholders have sole voting
and investment power over such Shares.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
-----------------------
NUMBER
NAME OF SHARES PERCENTAGE
- ---- --------- ----------
<S> <C> <C>
James A. Cannavino........................................ 707,469 3.9%(1)
Judy G. Carter............................................ 520,833 2.9%(2)
C.R. Kinsey, III.......................................... 381,667 2.2%(3)
Robert C. McLaughlin...................................... 66,667 *(4)
Charles Feld.............................................. 124,000 *(5)
Dr. Dennis Murray......................................... 84,000 *(6)
Bernard Puckett........................................... 84,000 *(6)
All Directors and Officers as a Group (10 persons)........ 1,968,636 10.3%(1)(2)(3)
(4)(5)(6)(7
Computer Concepts Corp.(8)................................ 6,145,767 35.4%
</TABLE>
- ---------------
* No officer or director owns more than one percent of the Company's issued
and outstanding common stock unless otherwise indicated.
(1) Includes options currently exercisable or exercisable within 60 days to
purchase 500,000 Shares.
(2) Includes options currently exercisable or exercisable within 60 days to
purchase 520,833 Shares.
(3) Includes options currently exercisable or exercisable within 60 days to
purchase 381,667 Shares.
(4) Includes options currently exercisable or exercisable within 60 days to
purchase 66,667 Shares.
(5) Includes options currently exercisable or exercisable within 60 days to
purchase 124,000 Shares.
(6) Includes options currently exercisable or exercisable within 60 days to
purchase 84,000 Shares.
(7) The address of each officer and director listed above is c/o SOFTWORKS,
Inc., 5845 Richmond Highway, Suite 400, Alexandria, Virginia 22303.
(8) The address is 80 Orville Drive, Bohemia, New York 11716.
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