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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K/A
AMENDMENT NO. 2
AMENDMENT TO APPLICATION OR REPORT
FILED PURSUANT TO SECTION 12, 13, OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
TRUETIME, INC.
(Exact name of registrant as specified in its charter)
Commission File Number 000-28473
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The undersigned registrant hereby amends Part III, Item 11 of its Annual Report
on Form 10-K for the year ended September 30, 2000 as set forth below to correct
mathematical errors in the calculation of the percent of total options granted
to employees and the potential realizable value of stock options granted to the
executive officers in fiscal 2000.
PART III
ITEM 11. EXECUTIVE COMPENSATION.
DIRECTOR COMPENSATION
Non-employee directors and board advisors are compensated for their
services at a rate of $12,000 per year (plus expenses). Pursuant to the 1999
Non-Employee Director Stock Plan, as amended, each of our non-employee directors
received an initial grant of options to purchase 10,000 shares of common stock
at an exercise price equal to the initial public offering price ($5.00 per
share) in connection with the initial public offering. Also, pursuant to that
plan, each non-employee director and board advisor serving on the board of
directors following each annual meeting of stockholders will receive a grant of
options to acquire 3,000 shares of common stock at the market price on the date
of the grant. All non-employee directors are reimbursed for ordinary and
necessary expenses incurred in attending board or committee meetings.
EXECUTIVE COMPENSATION
A summary of the compensation earned by the current President and Chief
Executive Officer of TrueTime, and the two other executive officers and one
former executive officer of TrueTime who received salary and bonus in the fiscal
years ended September 30, 2000 and 1999, that exceeded $100,000, these persons
being collectively referred to as "named executive officers." The following
compensation data includes bonuses awarded in fiscal 2000 for performance in
fiscal 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
-------------------- SHARES UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS OTHER COMPENSATION
--------------------------- ---- -------- -------- ------------------- ------------------
<S> <C> <C> <C> <C> <C>
Elizabeth A. Withers........... 2000 $157,939 $ -- 105,000 $ 5,035(2)
President and Chief 1999 98,077(1) 71,546 -- 4,617(2)
Executive Officer
Haresh C. Patnaik.............. 2000 154,482 -- 90,000 4,979(2)
Senior Vice President and 1999 135,193 71,546 -- 4,980(2)
Chief Technical Officer
Donald H. Mitchell............. 2000 147,705 -- 90,000 3,938(2)
Vice President and Director 1999 83,429 207,272(3) -- 6,473(2)
of Sales and Marketing
Michael P. Von der Porten...... 2000 426,206(4) -- 90,000(5) 34,522(2)(6)
Former Vice President and 1999 102,268 71,546 -- 4,764(2)
Chief Financial Officer
</TABLE>
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(1) Ms. Withers' compensation for fiscal 1999 related to her position as Vice
President of Operations until September 15, 1999.
(2) Represents contributions by TrueTime to a 401(k) savings plan and premiums
paid on group-term life insurance.
(3) Includes commissions from sales and bonuses.
(4) Mr. Von der Porten resigned from his position with the Company effective
June 6, 2000. Salary amount includes compensation of $125,699 (including any
pay out of accrued vacation) for the period through June 6, 2000 and
separation pay of $300,507.
(5) Michael Von der Porten resigned from his position with the Company effective
June 6, 2000. The options granted to Mr. Von der Porten terminated on
September 5, 2000.
(6) Includes consulting fees of $28,470 paid after his resignation as of June 6,
2000.
STOCK OPTIONS
Information regarding stock options granted to the executive officers in
fiscal 2000 follows. All of these were granted in connection with our initial
public offering in December 1999.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE
SHARES OF PERCENT OF TOTAL APPRECIATION FOR
COMMON STOCK OPTIONS EXERCISE OPTION TERM(1)
UNDERLYING GRANTED TO PRICE PER ---------------------------
NAME OPTIONS EMPLOYEES SHARE EXPIRATION 5% 10%
---- ------------ ---------------- --------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Elizabeth A. Withers........ 105,000 11.2% $5.00 12/15/09 $330,170 $836,715
Haresh C. Patnaik........... 90,000 9.6% 5.00 12/15/09 283,003 717,184
Donald H. Mitchell.......... 90,000 9.6% 5.00 12/15/09 283,003 717,184
Michael P.
VonderPorten(2)........... -- -- -- -- -- --
</TABLE>
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(1) The potential realizable value of the options is based on an assumed
appreciation in the price of the common stock at a compounded annual rate of
5% or 10% from the date the option was granted until the date the option
expires. The 5% and 10% appreciation rates are set forth in the Securities
and Exchange Commission's regulations. We do not represent that the common
stock will appreciate at these assumed rates or at all.
(2) Michael Von der Porten resigned from his position with the Company effective
June 6, 2000. Accordingly, pursuant to the terms of the TrueTime, Inc. 1999
Key Employee Stock Option Plan and the option agreement granted to Mr. Von
der Porten, the options for 90,000 shares held by him terminated on
September 5, 2000.
Information regarding the value of unexercised options held by the
executive officers as of September 30, 2000, follows. None of the executive
officers exercised any options in fiscal 2000. None of the options were
exercisable during fiscal 2000.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS AT IN-THE MONEY OPTIONS AT
NAME SEPTEMBER 30, 2000(# OF SHARES) SEPTEMBER 30, 2000($)
---- --------------------------------- -----------------------
<S> <C> <C>
Elizabeth A. Withers......................... 105,000 $(1)
Haresh C. Patnaik............................ 90,000 (1)
Donald H. Mitchell........................... 90,000 (1)
</TABLE>
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(1) None of these options were in the money on September 30, 2000, based on
$4.063 per share, the closing price of the common stock on September 30,
2000, as reported by The Nasdaq Stock Market, Inc.
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EMPLOYMENT AGREEMENTS
Ms. Withers and Messrs. Patnaik and Mitchell have entered into employment
agreements with the Company. Ms. Withers' base annual salary is $160,000, Mr.
Patnaik's base annual salary is $155,000 and Mr. Mitchell's base annual salary
is $150,000. These salaries may be adjusted by our board of directors. Each of
these employees is also entitled to participate in our 401(k) Plan and any bonus
plan the Company adopts and to receive certain employee benefits and vacation.
Each of Ms. Withers' and Messrs. Patnaik's and Mitchell's employment
agreements provides that he or she will receive the severance benefits described
below upon termination of his or her employment unless the termination:
- results from the death, disability or retirement of such employee,
- is by TrueTime for Cause (as defined in the employment agreement) or
- is by such employee other than for Good Reason (as defined in the
employment agreement).
Under these employment agreements, "Cause" is defined to mean the
employee's willful and continued failure to perform his or her duties after a
demand for such performance or the employee's willfully engaging in gross
misconduct materially and demonstrably injurious to TrueTime. Under these
employment agreements, "Good Reason" is defined to mean a demotion, a reduction
in base salary, a relocation of the employee's base location of employment, the
discontinuation of any employee benefit without comparable substitution, the
failure of any successor of TrueTime to assume the employment agreement or a
purported termination not in compliance with the employment agreement.
The severance benefits to which Ms. Withers or Messrs. Patnaik or Mitchell
would be entitled include
- his or her salary through the date of termination,
- his or her base salary and pro-rated bonus for the fiscal year of
termination multiplied by one and one-half,
- any relocation and indemnity payments to which he or she is entitled and
any costs and legal fees incurred in connection with any dispute over the
employment agreement, and
- a gross-up for any applicable "excess parachute payment" tax imposed on
the employee by the Internal Revenue Code of 1986.
Each employment agreement has a two-year term and is automatically
renewable unless the Company timely elects not to renew. In these employment
agreements, each of Ms. Withers and Messrs. Patnaik and Mitchell agree that he
or she will not disclose or misappropriate any of our confidential information.
These employment agreements also contain customary non-competition provisions
for a California-based enterprise and California employees, which are limited by
state law.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The compensation committee comprises Messrs. Kobayashi, Abbe, Still and
Towbin. Mr. Still is a partner in the law firm of Fulbright & Jaworski L.L.P.,
which provides legal services to the Company. Fulbright & Jaworski L.L.P. also
provides legal services to OYO Corporation and to OYO USA and its affiliates.
Mr. Towbin is Co-Chairman of C.E. Unterberg, Towbin, one of the underwriters in
TrueTime's initial public offering in December 1999, in connection with which
C.E. Unterberg, Towbin received an aggregate of approximately $409,500 in
underwriting discounts and warrants valued at approximately $455,043 covering
an aggregate of up to 200,000 shares of common stock exercisable at $5.50 per
share.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized
TRUETIME, INC.
Date: January 19 , 2001 By /s/ ELIZABETH A. WITHERS
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Elizabeth A. Withers
President and Chief Executive Officer
