<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended: March 31, 2000
Commission File Number: 00-28785
Lante Corporation
(Exact name of registrant as specified in its charter)
Delaware 36-3322393
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
161 North Clark Street, Suite 4900, Chicago, Illinois 60601
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (312) 696-5000
----------------
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 [_]
The number of shares of the registrant's Common Stock outstanding as of
April 30, 2000, was 39,400,617.
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<PAGE>
Lante Corporation
Quarter Ended March 31, 2000
Index
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
PART I--FINANCIAL INFORMATION............................................ 3
Item 1. Financial Statements......................................... 3
Condensed Consolidated Statement of Operations for the three
months ended March 31, 1999 and 2000 (unaudited)............. 3
Condensed Consolidated Balance Sheet as of December 31, 1999
and March 31, 2000 (unaudited)............................... 4
Condensed Consolidated Statement of Cash Flows for the three
months ended March 31, 1999 and 2000 (unaudited)............. 5
Notes to Condensed Consolidated Financial Statements......... 6
Management's Discussion and Analysis of Financial Condition
Item 2. and Results of Operations.................................... 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk... 10
PART II--OTHER INFORMATION............................................... 11
Item 1. Legal Proceedings............................................ 11
Item 2. Changes in Securities and Use of Proceeds.................... 11
Item 4. Submission of Matters to a Vote of Security Holders.......... 11
Item 6. Exhibits and Reports on Form 8-K............................. 12
</TABLE>
2
<PAGE>
PART I--Financial Information
Item 1. Financial Statements
Lante Corporation
Condensed Consolidated Statement of Operations
(In thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
-------------------
March 31, March 31,
1999 2000
--------- ---------
<S> <C> <C>
Revenues................................................... $4,890 $17,126
Operating expenses:
Professional services.................................... 2,481 9,081
Selling, general and administrative...................... 2,312 10,318
Amortization of deferred compensation.................... -- 649
------ -------
Total operating expenses............................... 4,793 20,048
------ -------
Income (loss) from operations.............................. 97 (2,922)
Interest income, net....................................... 12 897
------ -------
Income (loss) before income taxes.......................... 109 (2,025)
Income tax benefit......................................... -- 616
------ -------
Net income (loss).......................................... 109 (1,409)
Dividends and accretion on mandatorily redeemable preferred
stock..................................................... -- (234)
------ -------
Net income (loss) available to common stockholders......... $ 109 $(1,643)
====== =======
Net income (loss) per common share:
Basic.................................................... $ 0.01 $ (0.05)
Diluted.................................................. $ 0.00 $ (0.05)
Pro forma basic and diluted net income (loss) per common
share..................................................... $ 0.00 $ (0.05)
Weighted average common shares outstanding:
Basic.................................................... 21,281 30,849
Diluted.................................................. 21,968 30,849
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
Lante Corporation
Condensed Consolidated Balance Sheet
(In thousands, except per share data)
<TABLE>
<CAPTION>
December 31, March 31,
ASSETS 1999 2000
------ ------------ -----------
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents........................... $13,692 $ 86,787
Short-term investments.............................. -- 12,947
Trade accounts receivable (net of allowance of $896
and $1,129 at December 31, 1999 and March 31, 2000,
respectively)...................................... 10,349 16,567
Other current assets................................ 1,094 3,436
------- --------
Total current assets.............................. 25,135 119,737
Property and equipment, net........................... 6,380 8,641
Other assets.......................................... 9,971 8,181
------- --------
Total assets...................................... $41,486 $136,559
======= ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S> <C> <C>
Current liabilities:
Accounts payable and accrued liabilities............ $ 8,868 $ 7,516
Deferred revenues................................... 2,155 4,747
Other current liabilities........................... 1,379 1,072
------- --------
Total current liabilities......................... 12,402 13,335
Other liabilities..................................... 2,121 2,042
------- --------
Total liabilities................................. 14,523 15,377
------- --------
Commitments and contingencies
Mandatorily redeemable preferred stock:
Series A convertible preferred stock, $0.01 par
value; 4,243 shares allocated and 3,536 shares
issued and outstanding as of December 31, 1999..... 25,728 --
------- --------
Stockholders' equity:
Preferred stock, $0.01 par value; 10,000 shares
authorized, no shares issued and outstanding as of
December 31, 1999 and March 31, 2000; 4,243 shares
allocated to Series A convertible preferred stock
as of December 31, 1999............................ -- --
Common stock, $0.01 par value; 50,000 authorized,
26,069 shares issued and outstanding at December
31, 1999 and 150,000 authorized, 39,397 shares
issued and outstanding at March 31, 2000........... 260 394
Additional paid-in capital.......................... 18,509 139,489
Retained deficit.................................... (9,606) (11,015)
Deferred compensation............................... (4,613) (4,328)
Note receivable--stockholder........................ (3,315) (3,358)
------- --------
Total stockholders' equity........................ 1,235 121,182
------- --------
Total liabilities and stockholders' equity........ $41,486 $136,559
======= ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
Lante Corporation
Condensed Consolidated Statement of Cash Flows
(In thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
-------------------
March 31, March 31,
1999 2000
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)........................................ $ 109 $ (1,409)
Adjustments to reconcile net income (loss) to net cash
used in
operating activities:
Depreciation and amortization........................ 57 457
Deferred income taxes................................ -- (616)
Amortization of deferred compensation and warrant
expense............................................. -- 649
Increase (decrease) in cash attributable to changes
in assets and liabilities:
Trade accounts receivable.......................... (545) (6,200)
Accounts payable and accrued liabilities........... (135) (1,738)
Deferred revenues.................................. 522 2,592
Other, net......................................... (125) 102
------ --------
Net cash used in operating activities...................... (117) (6,163)
------ --------
Cash flows from investing activities:
Capital expenditures................................. (117) (2,321)
Purchase of short-term investments................... -- (12,947)
Other................................................ -- (250)
------ --------
Net cash used in investing activities...................... (117) (15,518)
------ --------
Cash flows from financing activities:
Proceeds from initial public offering (net of
issuance costs of $8,245)........................... -- 83,755
Proceeds from issuance of common stock............... 108 11,000
Other, net........................................... -- 21
------ --------
Net cash provided by financing activities.................. 108 94,776
------ --------
Net (decrease) increase in cash and cash equivalents....... (126) 73,095
Cash and cash equivalents, beginning of period............. 3,377 13,692
------ --------
Cash and cash equivalents, end of period................... $3,251 $ 86,787
====== ========
Supplemental disclosure of cash flow information:
Cash paid for interest............................... $ 22 $ 70
Cash paid for taxes.................................. $ 20 $ 2
Supplemental disclosure of non-cash transactions:
Conversion of Series A convertible preferred stock to
common stock........................................ $ -- $25,962
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE>
Lante Corporation
Notes To Condensed Consolidated Financial Statements
(In thousands)
(Unaudited)
1. Basis of Presentation
The accompanying unaudited financial statements have been prepared by Lante
Corporation (the "Company") pursuant to the rules and regulations of the
Securities and Exchange Commission regarding interim financial reporting.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements
and should be read in conjunction with the audited financial statements and
related notes thereto included in the Company's Form 10-K as filed with the
Securities and Exchange Commission for the year ended December 31, 1999. The
accompanying unaudited financial statements reflect all adjustments
(consisting solely of normal, recurring adjustments) which are, in the opinion
of management, necessary for a fair presentation of results for the interim
periods presented. The results of operations for the three-month period ended
March 31, 2000 are not necessarily indicative of the results to be expected
for any future period or the full fiscal year.
2. Capital Stock
In January 2000, the Company completed the sale of 1,000 shares of common
stock to Dell USA, L.P., a wholly owned subsidiary of Dell Computer
Corporation, at $11.00 per share.
On February 11, 2000, the Company completed an initial public offering of
common stock which resulted in the issuance of 4,600 shares of common stock.
Proceeds to the Company, net of underwriting discounts and costs of the
offering, were approximately $83,500. Concurrent with the initial public
offering, 3,536 shares of the Company's Series A convertible preferred stock
were converted to 7,072 shares of the Company's common stock. Dividends and
accretion related to the Company's Series A convertible preferred stock
reduced income available to common shareholders up through the date of
conversion.
3. Investments
In accordance with Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt on Equity Securities," the Company
has categorized its marketable securities as "held-to-maturity." At March 31,
2000, amortized cost approximated fair value and unrealized gains and losses
were not material.
4. Net Income (Loss) Per Share
The Company computes net income (loss) per share in accordance with
Statement of Financial Accounting Standards No. 128, "Earnings Per Share."
Basic net income (loss) per share is computed using the weighted average
number of common shares outstanding during the period. Diluted net income
(loss) per share is based upon the weighted average number of shares
outstanding, including common stock equivalents, if dilutive.
The Company terminated its S-Corporation election for federal and state
purposes on June 17, 1999. Accordingly, all income that was earned in the
subsequent C-Corporation period was taxable at the statutory federal and state
tax rates. In order to present amounts in a comparable format, the statement
of operations includes pro forma earnings per share that contemplates
additional taxes that would have been recorded if the Company had been a C-
Corporation for all periods presented, based upon the tax laws in effect
during those periods.
5. Amortization of Deferred Compensation Expense
Deferred compensation expense relates to certain options that were deemed
granted in-the-money, a loan made to our chief executive officer that is being
recorded as compensation expense, the sale of restricted shares to our chief
executive officer at a price that was deemed less than our common stock's fair
value, and deferred compensation related to one of our acquisitions.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion and analysis compares the three-month period ended
March 31, 2000 to the corresponding period ended March 31, 1999 for the
Company. You should read the following discussion and analysis along with our
financial statements and the related notes included in this quarterly report.
The following discussion contains forward-looking statements that are subject
to risks, uncertainties and assumptions. Our actual results, performance and
achievements in 2000 and beyond may differ materially from those expressed in,
or implied by, these forward-looking statements. See "Cautionary Note
Regarding Forward-Looking Statements."
Overview
We are an Internet services company that develops sophisticated technology-
based solutions that are secure, reliable and scalable and integrated with
multiple back-end systems. Our strategists, user experience experts and
technologists work as a multi-disciplinary team to build these solutions. We
integrate our competencies through an iterative development process with the
client that is overseen by our delivery management specialists.
Since our inception in 1984, we have been innovators in applying emerging
technologies to businesses, evolving from personal computer networks to
database applications to distributed client-server architectures to the
Internet. We began focusing on e-markets in late 1996. Since that time, our
revenue mix has shifted from a client-server base to virtually 100% Internet
services in 1999. We expect revenues from Internet services to continue to
represent virtually all of our revenues for the foreseeable future.
Our revenues consist of fees generated for professional services. We
provide services on a fixed-fee basis, including retainer arrangements, and a
time-and-materials basis. To determine the proposed fixed fee for an
engagement, we use an estimation process that takes into account the
complexity of the engagement, the anticipated number and experience of
billable professionals needed, associated billing rates and the estimated
duration of the engagement. At the same time, we generally build into our
fixed-fee engagements the ability to renegotiate the fee if the scope of the
engagement changes. A member of our senior management team must approve each
proposal.
Revenues from a few large clients have historically constituted a
significant portion of our total revenues in a particular quarter or year,
however the concentration has declined. For example, during the three-month
period ended March 31, 1999, our five largest clients represented 79% of our
revenues. During the three-month period ended March 31, 2000, our five largest
clients represented 45% of our revenues. The following table identifies these
clients and the percentage of revenues derived from each.
<TABLE>
<CAPTION>
Three-months ended March 31, 1999
- ------------------------------------
% of
Client Revenues
------ --------
<S> <C>
ZixIt Corporation.......... 24%
Classified Ventures, Inc... 19
Microsoft Corporation...... 18
IntraLinks, Inc............ 11
HD Vest, Inc............... 7
</TABLE>
<TABLE>
<CAPTION>
Three-months ended March 31, 2000
- ------------------------------------------
% of
Client Revenues
------ --------
<S> <C>
ChemPoint.com................... 12%
Microsoft Corporation........... 10
Simon Property Group............ 9
Scudder Investor Services, Inc.. 7
Clinmark, LLC................... 7
</TABLE>
To the extent that any significant client uses less of our services or
terminates its relationship with us, our revenues could decline substantially
and our operating results could be adversely affected to the extent we are
unable to quickly redeploy our billable professionals to other client
engagements.
Costs of professional services consist of salaries, bonuses and benefits
for our billable professionals, the cost of subcontractors and other
engagement costs that are not reimbursed directly by the client. We expect
that salaries for our billable professionals will increase over time due to
the intense competition in our industry for qualified individuals. We use the
term "professional services margin" to mean revenues less costs of
professional
7
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services, stated as a percentage of revenues. Professional services margins
are affected by our ability to utilize our billable professionals, to
incorporate any wage increases of our professionals into our billing rates and
to price and execute effectively our fixed-fee engagements. Professional
services margins may be reduced in any given period to the extent that we use
subcontractors or hire new billable professionals who we may not be able to
utilize immediately on client engagements. We expect that our professional
services margins will vary from quarter to quarter.
We had 463 employees as of March 31, 2000, of whom 324 were billable
professionals. We actively recruit billable professionals and support staff
and expect our total number of employees to increase significantly.
Selling, general and administrative expenses consist primarily of salaries,
bonuses and benefits for non-project personnel, facility costs, staff
recruiting and training costs, depreciation and amortization, general
operating expenses and selling and marketing expenses. We largely develop new
business through our regional managing directors and principals. Our selling,
general and administrative expenses are expected to increase in the future as
we add additional personnel, expand our information systems, open new offices,
increase our recruiting efforts and incur additional costs related to the
growth of our business and operations as a public company.
As we strive to grow our business, we expect to spend significant funds for
marketing, recruiting and hiring additional personnel, upgrading our
infrastructure, including internal information systems, and expanding into new
geographical markets. To the extent revenues do not increase at a rate
commensurate with these costs and expenditures, our results of operations and
liquidity could be materially and adversely affected.
Results of Operations
The following table presents for the periods indicated, our selected
statement of operations data as a percentage of our revenues. We have derived
these percentages from our unaudited financial statements for all periods
presented.
<TABLE>
<CAPTION>
Three
months
ended
March 31,
----------
1999 2000
---- ----
<S> <C> <C>
Revenues..................................................... 100% 100%
Operating expenses:
Professional services...................................... 51 53
Selling, general and administrative........................ 47 60
Amortization of deferred compensation...................... -- 4
--- ---
Total operating expenses..................................... 98 117
--- ---
Income (loss) from operations................................ 2 (17)
Other income, net.......................................... -- 5
Income tax benefit......................................... -- 4
--- ---
Net income (loss).......................................... 2% (8%)
=== ===
</TABLE>
Comparison of Three Months Ended March 31, 2000 and 1999
Revenues
Revenues increased $12.2 million, or 250.2%, to $17.1 million in the three
months ended March 31, 2000, from $4.9 million in the three months ended March
31, 1999. This increase in revenues resulted from an increase in the average
size and number of client engagements and an increase in average realized
billing rates.
8
<PAGE>
Operating Expenses
Professional services
Costs of professional services increased $6.6 million, or 266.0%, to $9.1
million in the three months ended March 31, 2000, from $2.5 million in the
three months ended March 31, 1999. This increase was primarily due to an
increase in the number of billable professionals and a $1.8 million increase
in project-related expenses. Professional services margin decreased to 47.0%
in the three months ended March 31, 2000, from 49.3% in the three months ended
March 31, 1999, as a result of the hiring of billable professionals ahead of
demand in anticipation of future growth.
Selling, general and administrative
Selling, general and administrative expenses increased $8.0 million, or
346.3%, to $10.3 million in the three months ended March 31, 2000, from $2.3
million in the three months ended March 31, 1999. This increase in selling,
general and administrative expenses was primarily the result of efforts to
significantly expand our business and prepare for rapid growth. During the
first three months of 2000, we increased personnel in internal systems,
marketing, finance and recruiting, increased marketing initiatives and
enhanced internal systems and communications infrastructure necessary for
growth.
Amortization of deferred compensation expense
Amortization of deferred compensation was $0.6 million in the three months
ended March 31, 2000. Deferred compensation was recorded during 1999 related
to certain options that were deemed granted in-the-money, a loan made to our
chief executive officer that is being recorded as compensation expense, the
sale of restricted shares to our chief executive officer at a price that was
deemed less than our common stock's then fair value, and deferred compensation
related to one of our acquisitions.
Net Loss
Net loss for the three months ended March 31, 2000 was $1.4 million
compared to net income of $0.1 million in the three months ended March 31,
1999. The net loss in the three months ended March 31, 2000 is due to an
operating loss of $2.9 million, offset by net interest income of $0.9 million
generated by investing net proceeds from the initial public offering and an
income tax benefit of $0.6 million.
Liquidity and Capital Resources
During 1999, we financed our operations and investments in property and
equipment through cash generated from debt and equity financings.
Cash and cash equivalents increased to $86.8 million at March 31, 2000,
from $13.7 million at December 31, 1999. This increase is primarily the result
of net proceeds of $83.8 million from the Company's initial public offering on
February 11, 2000. In addition, the Company received proceeds of $11.0 million
from the sale of one million shares of common stock to Dell USA, L.P., a
wholly owned subsidiary of Dell Computer Corporation. These proceeds were
offset primarily by cash used for operating activities of approximately $6.2
million and for investing activities of approximately $15.5 million. Cash used
for operating activities of $6.2 million was principally made up of $1.4
million in net loss for the first three months of 2000, a $6.2 million
increase in accounts receivable primarily due to increased revenues, and a
$1.7 million decrease in accounts payable and accrued liabilities caused by
timing of payments, offset by a $2.6 million increase in deferred revenues.
We anticipate that we will expend capital to develop the infrastructure
needed to support our future growth. During the three-month period ended March
31, 2000, our capital expenditures were $2.3 million. We expect to use cash
from operations and the net proceeds from our recently completed offerings to
meet capital expenditures and working capital necessary to support our future
growth. We believe that the cash provided from operations,
9
<PAGE>
and cash on hand will be sufficient to meet our anticipated working capital
and capital expenditure requirements through December 31, 2000. However,
during this period, we may seek additional capital in the private and/or
public equity markets.
Cautionary Note Regarding Forward-Looking Statements
This quarterly report includes forward-looking statements that reflect our
current expectations and projections about our future results, performance,
prospects and opportunities. We have tried to identify these forward-looking
statements by using words including "may," "will," "expect," "anticipate,"
"believe," "intend" and "estimate" and similar expressions. These forward-
looking statements are based on information currently available to us and are
subject to a number of risks, uncertainties and other factors that could cause
our actual results, performance, prospects or opportunities in the remainder
of 2000 and beyond to differ materially from those expressed in, or implied
by, these forward-looking statements. These risks, uncertainties and other
factors include, but are not limited to: our concentrated client base; our
ability to attract, train and retain executive management, regional managing
directors and other qualified personnel; intensive competition within the
Internet professional services market; our ability to manage our rapid growth;
our ability to meet client expectations and collect fees; our ability to
accurately estimate the cost, scope or duration of our fixed-free client
engagements; our difficulty in predicting future revenues because our client
engagements are project based; the development and sustainability of a market
for systems innovation services; the rate of acceptance and the use of the
Internet as a means for commerce; and our ability to keep pace with
technological changes and future regulations affecting our business on the
Internet generally. For further information about these and other risks,
uncertainties and factors please review the disclosure included under the
caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Factors that Could Affect Our Operations" in our annual
report on Form 10-K for the year ended December 31, 1999.
You should not place undue reliance on any forward-looking statements.
Except as otherwise required by federal securities laws, we undertake no
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events, changed circumstances
or any other reason after the date of this annual report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our primary financial instruments are investments in cash and commercial
paper. We do not believe that these instruments are subject to material
potential near-term losses in future earnings from reasonably possible near-
term changes in market rates or prices. We do not have derivative financial
instruments for speculative or trading purposes.
10
<PAGE>
Part II--Other Information
Item 1. Legal Proceedings
Pantelis Georgiadis, our former chief operating officer, filed a complaint
against us on October 21, 1999 in the Circuit Court of Cook County, Illinois.
Mr. Georgiadis previously owned 2,000,000 shares of our common stock with
respect to which we exercised our contractual right to repurchase upon the
termination of his employment in September, 1999. Pursuant to this contractual
right, we tendered to Mr. Georgiadis $4,010,000, or approximately $2.00 per
share, payable in the form of cash and a promissory note. Mr. Georgiadis
contends that we breached our contractual obligations by improperly valuing
these shares in connection with the repurchase. Mr. Georgiadis' complaint
asserts that the repurchase price of his shares should have been as high as
$8.10 per share. We deny Mr. Georgiadis' allegations, believe they are without
merit and intend to defend this lawsuit vigorously.
From time to time, we may be involved in litigation incidental to the
conduct of our business. Except as described above, however, we are not
currently a party to any material legal proceedings.
Item 2. Changes in Securities and Use of Proceeds
On January 10, 2000, the Company completed the sale of 1,000,000 shares of
common stock to Dell USA. L.P. for an aggregate purchase price of $11,000,000.
Exemption from registration for this purchase of shares was claimed in
reliance on Section 4(2) of the Securities Act regarding transactions not
involving a public offering. On February 24, 2000 the Company issued 192,270
shares of common stock to Zixit Corporation upon exercise of an option the
Company granted to Zixit in November 1999. The exercise price on the option
was $7.00 per share, and the option was exercised on a cash-less basis.
Exemption from registration for this exercise was claimed in reliance on
Section 4(2) of the Securities Act regarding transactions not involving a
public offering. During the 3 months ended March 31, 2000, the Company granted
stock options to certain of its employees and advisors pursuant to the
Company's Stock Option Plan. Additionally, during these 3 months the Company
issued a total of 128,661 shares of common stock to certain employees and
advisors upon exercise of options granted under this plan. All option grants
and related purchases of the Company's common stock were made in reliance on
Rule 701 promulgated under the Securities Act.
On February 10, 2000 our registration statement on Form S-1 (File No. 333-
92373) relating to the initial public offering of our common stock was
declared effective by the SEC. With that registration statement, we registered
4,600,000 shares of our common stock. In connection with the offering, we
issued 4,600,000 shares of common stock at $20.00 per share, for an aggregate
offering amount of $92,000,000. All of these shares have been sold and the
offering has been completed. The managing underwriters of the offering were
Credit Suisse First Boston Corporation, Deutsche Bank Securities Inc., Thomas
Weisel Partners LLC and Friedman, Billings, Ramsey & Co., Inc. After payment
of underwriting discounts and expenses of $8,500,000, we received net proceeds
of $83,500,000 from the offering. We have invested the net proceeds, pending
its use for working capital and general corporate purposes, in short-term,
investment grade, interest-bearing securities.
Item 4. Submission of Matters to a Vote of Security Holders
An Annual Meeting of the Stockholders of the Company was held on February
4, 2000, prior to the completion of the Company's initial public offering.
1. The stockholders voted to adopt and approve the Amended and Restated
Certificate of Incorporation.
<TABLE>
<CAPTION>
Broker
Authority Non-
For Against Withheld Abstentions Votes
---------- ------- --------- ----------- ------
<S> <C> <C> <C> <C>
22,388,962 -- -- -- --
</TABLE>
11
<PAGE>
2. The stockholders voted to elect nine Directors to serve terms as set
forth in the Amended and Restated Certificate of Incorporation, with the
following vote:
<TABLE>
<CAPTION>
Authority Broker
Directors For Against Withheld Non-Votes
--------- ---------- ------- --------- ---------
<S> <C> <C> <C> <C>
Mark Tebbe......................... 22,388,962 -- -- --
C. Rudy Puryear.................... 22,388,962 -- -- --
John Kraft......................... 22,388,962 -- -- --
John Oltman........................ 22,388,962 -- -- --
Paul Yovovich...................... 22,388,962 -- -- --
Judith Hamilton.................... 22,388,962 -- -- --
James Cowie........................ 22,388,962 -- -- --
Paul Carbery....................... 22,388,962 -- -- --
John Landry........................ 22,388,962 -- -- --
</TABLE>
3. The stockholders voted to approve the 1998 Amended and Restated Stock
Option Plan.
<TABLE>
<CAPTION>
Authority Broker
For Against Withheld Abstentions Non-Votes
--- ------- --------- ----------- ---------
<S> <C> <C> <C> <C>
22,388,962 -- -- -- --
</TABLE>
4. The stockholders voted to approve the 2000 Lante Corporation Stock
Purchase Plan.
<TABLE>
<CAPTION>
Authority Broker
For Against Withheld Abstentions Non-Votes
--- ------- --------- ----------- ---------
<S> <C> <C> <C> <C>
22,388,962 -- -- -- --
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
a) We have filed the following exhibits with this quarterly report.
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
------- -------
<C> <S> <C>
10.15 Form of Employment Agreement
27 Financial Data Schedule
</TABLE>
b) Reports on Form 8-K.
We did not file any Current Reports on Form 8-K during the first quarter of
2000.
12
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
Lante Corporation
/s/ Brian C. Henry
By: _________________________________
Brian C. Henry
Executive Vice President, Chief
Financial
Officer (on behalf of the
registrant and as principal
financial officer)
Date: May 12, 2000
13
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
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<C> <S> <C>
10.15 Form of Employment Agreement
27 Financial Data Schedule
</TABLE>
14
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Exhibit 10.15
FORM OF EMPLOYMENT AGREEMENT
AGREEMENT made this day of , , between
("Employee") and Lante Corporation and any existing or future assigns or
subsidiaries owned or controlled, directly or indirectly by Lante and for whom
Employee works ("Lante").
In consideration of Employee's employment or continued employment by Lante,
Employee's wages or salary and other employee benefits in compensation of
Employee's services, and the other mutual covenants and agreements contained
herein, and in lieu of any prior agreement, Employee and Lante agree as follows:
1. Employment. Employee agrees to use his best efforts and abilities to
promote the interests of Lante. Lante hereby agrees to employ Employee as
further defined in this Agreement. Except as provided in this Agreement, Lante
agrees to pay Employee's salary, at the rate agreed to from time to time, and to
confer upon Employee Lante's standard health insurance, paid time off (vacation,
sick and personal time), and retirement plan benefits, all as governed by its
"Employee Handbook" and other plan documents, as amended from time to time.
2. Inventions. (a) As used herein, "Inventions" means discoveries,
improvements and ideas (whether or not shown or described in writing or reduced
to practice) and works of authorship, whether or not patentable or
copyrightable, (i) which relate directly to the business of Lante, (ii) which
relate to Lante's actual or demonstrably anticipated research or development,
(iii) which result from any work performed by Employee for Lante, (iv) for which
equipment, supplies, facility or trade secret information of Lante is used, or
(v) which is developed on any Lante time. This section does not apply to any
invention developed by Employee prior to Employee's employment by Lante,
provided that such invention is listed and described in an exhibit attached to
and made part of this Agreement.
(b) With respect to Inventions made, authored or conceived by
Employee, either solely or jointly with others, during Employee's employment,
whether or not during normal working hours and whether or not at Lante's
premises, Employee acknowledges and agrees that all such works are "works made
for hire" and, consequently, that the Company owns all copyright and other
rights thereto. Employee further agrees that it will (i) keep accurate, complete
and timely records of such Inventions, which records shall be Lante's property
and be retained on Lante's premises; (ii) promptly and fully disclose and
describe such Inventions in writing to Lante; (iii) assign, and does hereby
assign, to Lante all of Employee's rights to such Inventions and to patents,
copyrights, and applications therefore with respect to such Inventions; and (iv)
acknowledge and deliver promptly to Lante (without charge to Lante but at the
expense of Lante) such written instruments and do such other acts as may be
necessary in the opinion of Lante to obtain and preserve such property rights
and to vest the entire right and title thereto in Lante.
(c) Employee will cooperate with Lante in the execution of any
documents which effect the assignment of Inventions or rights thereto which may
be required by a Lante clients or other third party, provided that such
requirement is no broader than the requirements of Section 2(b) above.
(d) Pursuant to the provisions of the Illinois Employee Patent Act,
765 ILCS 1060/2, Employee acknowledges receipt of notice that this assignment
does not apply to an invention for which no equipment, supplies, facility, or
trade secret of the Company was used and which was developed entirely on
Employee's own time, unless (a) the invention relates (i) to the business of the
Company, or (ii) to the Company's actual or demonstrably anticipated research or
development, or (b) the invention results from any work performed by Employee
for the Company.
Page 1
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3. Confidential Information. (a) During the term of Employee's employment by
Lante and any time thereafter, except in the course of performing Employee's
employment duties for Lante, Employee will not use, disclose, reveal or report
any Confidential Information of Lante, of Lante's past or current clients, or of
other parties which have disclosed confidential or proprietary information to
Lante. As used herein, "Confidential Information" means information not
generally known that is proprietary to Lante, its clients or other parties,
including but not limited to information about any clients, prospective clients,
sales proposals, employees, processes, operations, products, services,
organization, research, development, accounting, marketing, applications,
selling, servicing, finance, business systems, computer systems, software
systems and techniques. All information disclosed to Employee, or to which
Employee obtains access, whether originated by Employee or by others, which
Employee has reasonable basis to believe to be Confidential Information, or
which is treated by Lante or its clients or other parties as being Confidential
Information, shall be presumed to be Confidential Information.
(b) Employee will cooperate with Lante in the execution of any
personal confidentiality agreement which may be required by a Lante clients or
other third party, provided that such agreement is no broader in its provisions
to the requirements of Section 3(a) above.
4. Nonsolicitation. During the Nonsolicitation Period (defined below) Employee
shall not, without Lante's written consent, directly nor indirectly, by or for
himself or as the agent of another or through others as Employee's agents (i)
solicit or accept any business from any client for whom Lante has performed any
services or issued any proposals in the two (2) year period prior to such
solicitation or acceptance, (ii) request, induce or advise any such client to
withdraw, curtail or cancel its business with Lante or (iii) solicit for
employment, employ, or engage as a consultant any person who had been an
employee of Lante at any time within the six (6) months prior to such
solicitation or engagement.
The "Nonsolicitation Period" immediately follows Employee's termination of
employment, and is based upon the position held by the Employee immediately
prior to such termination:
. For Vice Presidents, Managing Directors, Directors, and Principals the
period is two (2) years following termination of employment;
. For Managers, including Architects, the period is one (1) year following
termination of employment;
. For all other positions the period is six (6) months following
termination of employment.
5. Return of Lante Property. Upon termination of employment, Employee shall
return to Lante all copies of any Confidential Information (whether in paper,
electronic or any other form) as well as all hardware, software, books,
documentation, files, keys, keycards, company credit cards, records, lists and
any other information or property owned by Lante within Employee's possession or
control, including all copies thereof.
6. Injunctive Relief. In the event of a breach or threatened breach of
Sections 2, 3, 4 or 5 by Employee, Lante shall be entitled, without posting of a
bond, to an injunction restraining such breach, an accounting and repayment of
profits, compensation, commission, remuneration or other benefits that Employee,
directly or indirectly, may realize as a result of such violation and to
reimbursement of any attorneys' fees and costs incurred by Lante as a result of
such breach. Nothing herein shall be construed as prohibiting Lante from
pursuing any other remedy available to it for such breach.
7. Term. (a) Employment under this Agreement may be terminable by either Lante
or Employee without cause with a minimum of two (2) weeks prior notice, or may
be terminable by Lante for cause without notice. In the event of termination by
Lante without cause, two (2) weeks of severance pay may be given in lieu of
notice. For purposes of this Agreement, cause means criminal activity,
dishonesty,
Page 2
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breach of the Employee's fiduciary duties to Lante, breach of this Agreement or
failure to perform to Lante's standards.
(b) Sections 2 through 6 of this Agreement shall survive termination of
employment.
8. General Provisions. This Agreement may be assigned by Lante and shall inure
to the benefit of Lante's successors and assigns. If any term, provision,
covenant or agreement hereof is held by a court to be invalid, void or
unenforceable, the remainder of the terms hereof shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Illinois. This Agreement contains the entire contract between the
parties. All prior agreements between the parties regarding such matters or
Employee's employment are superseded hereby and terminated.
In Witness Whereof, the undersigned have executed this Agreement as of .
EMPLOYEE
- --------------------------------
LANTE CORPORATION
- --------------------------------
- --------------------------------
Printed Name
- --------------------------------
Title
Page 3
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SCHEDULE TO EXHIBIT 10.15
We entered into the Form of Employment Agreement:
--dated October 29, 1999 with Marvin Richardson
--dated June 11, 1998 with Marla Mellies
--dated November 2, 1998 with Richard Gray
--dated February 10, 2000 with John Harne
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
Form 10-Q and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 86,787
<SECURITIES> 12,947
<RECEIVABLES> 17,696
<ALLOWANCES> (1,129)
<INVENTORY> 0
<CURRENT-ASSETS> 119,737
<PP&E> 8,641
<DEPRECIATION> 0
<TOTAL-ASSETS> 136,559
<CURRENT-LIABILITIES> 13,335
<BONDS> 0
0
0
<COMMON> 394
<OTHER-SE> 120,788
<TOTAL-LIABILITY-AND-EQUITY> 136,559
<SALES> 0
<TOTAL-REVENUES> 17,126
<CGS> 0
<TOTAL-COSTS> 9,081
<OTHER-EXPENSES> 10,967
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (897)
<INCOME-PRETAX> (2,025)
<INCOME-TAX> (616)
<INCOME-CONTINUING> (1,409)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,409)
<EPS-BASIC> (0.05)
<EPS-DILUTED> (0.05)
</TABLE>
