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[LOGO]
ZYCAD CORPORATION
47100 BAYSIDE PARKWAY
FREMONT, CALIFORNIA 94538
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AUGUST 30, 1995
------------------------
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Zycad
Corporation (the "Company"), a Delaware corporation, will be held on Wednesday,
August 30, 1995 at 3:30 p.m., Pacific Daylight Time, at 47100 Bayside Parkway,
Fremont, California, for the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To ratify the appointment of Deloitte & Touche as an independent
public auditors for the company for the current fiscal year.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of the business on June 23, 1995
are entitled to notice of and to vote at the meeting and at any continuation or
adjournment thereof.
All stockholders are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting, you are urged to vote,
sign, date and return the enclosed proxy as promptly as possible in the
postage-paid envelope enclosed for that purpose.
Any stockholder attending the meeting may vote in person even if he or she
has returned a proxy.
By Order of the Board of Directors
Douglas E. Klint
SECRETARY
Fremont, California
July 26, 1995
YOUR VOTE IS IMPORTANT
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN DATE THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND RETURN
IT IN THE ENCLOSED ENVELOPE.
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PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of Zycad
Corporation, a Delaware corporation ("Zycad" or the "Company"), for use at the
Annual Meeting of Stockholders to be held Wednesday, August 30, 1995 at 3:30
p.m., Pacific Daylight Time, and at any adjournment thereof. The Annual Meeting
will be held at Zycad's principal executive offices, 47100 Bayside Parkway,
Fremont, California 94538. The Company's telephone number at this address is
(510) 623-4400.
The Company intends to mail this Proxy Statement, accompanied by the Annual
Report to Stockholders for the fiscal year ended December 31, 1994, to
Stockholders on or about July 26, 1995.
RECORD DATE AND SHARE OWNERSHIP
Stockholders of record at the close of business on June 23, 1995 (the
"Record Date") are entitled to notice of and to vote at the meeting. At the
Record Date, 19,444,960 shares of the Company's Common Stock ("Common Stock"),
$.10 par value, were issued and outstanding. As of the Record Date, the
following persons or entities were known to the Company to be the beneficial
owners of more than 5% of the Company's Common Stock.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NAME AND ADDRESS SHARES (1) TOTAL
- ---------------------------------------------------------------------------------------- --------------- -----------
<S> <C> <C>
Phillips W. Smith ...................................................................... 1,221,993(2) 6.3%
4601 East Indian Bend Road
Paradise Valley, Arizona 85253
<FN>
- ------------------------
(1) Includes 2,000 shares held by Dr. Smith's spouse. Dr. Smith disclaims
beneficial ownership of these shares.
</TABLE>
REVOCABILITY OF PROXIES
Any person giving a proxy in the form accompanying this Proxy Statement has
the power to revoke it any time before it is exercised. It may be revoked by
filing with the Secretary of the Company at the Company's principle executive
office, 47100 Bayside Parkway, Fremont, California 94538, an instrument of
revocation or a duly executed proxy bearing a later date, or it may be revoked
by attending the meeting and voting in person.
VOTING AND SOLICITATION
Stockholders are entitled to one vote for each share of Common Stock held
and are not entitled to cumulate votes for the election of directors.
The Company will bear the entire cost of solicitation, including
preparation, assembly, printing and mailing of this Proxy Statement, the proxy
and any additional material furnished to stockholders. The solicitation of
proxies by mail may be supplemented by telephone, telegram or personal
solicitation by directors, officers or employees of the Company. No additional
compensation will be paid to these persons for any such services. In addition,
The Company has retained the services of Beacon Hill Partners, Inc. as a paid
solicitor to solicit proxies for a fee of $2,500 plus out-of-pocket expenses. In
addition, the Company may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
solicitation material to such beneficial owners. Except as described above, the
Company does not intend to solicit proxies other than by mail.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting is
a majority of the shares of Common Stock issued and outstanding on the Record
Date (excluding treasury stock). Shares that are voted "FOR", "AGAINST" or
"WITHHELD FROM" a matter are treated as being
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present at the meeting for purposes of establishing a quorum and are also
treated as votes eligible to cast by the Common Stock present in person or
represented by proxy at the Annual Meeting and "entitled to vote on the subject
matter" (the "Votes Cast") with respect to such matter.
While there is no definitive statutory or case law authority in Delaware as
to the proper treatment of abstentions in the election of directors, the Company
believes that abstentions should be counted for purposes of determining both the
presence or absence of a quorum for the transaction of business and the total
number of Votes Cast with respect to a particular matter. In the absence of
controlling precedent to the contrary, the Company intends to treat abstentions
in this manner. Accordingly, an abstention has the same effect as a vote against
a proposal. In a 1988 Delaware case, BERLIN V. EMERALD PARTNERS, the Delaware
Supreme Court held that, while broker non-votes should be counted for purposes
of determining the presence or absence of a quorum for the transaction of
business, broker non-votes with respect to proposals such as those set forth in
this Proxy Statement should not be considered "Votes Cast" and accordingly, will
not affect the determination as to whether the requisite majority of Votes Cast
has been obtained with respect to a particular matter.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company that are intended to be included in
the proxy statement relating to the Company's 1996 Annual Meeting of
Stockholders must be received by the Company no later than December 29, 1995 in
order that they may be considered for inclusion in the Proxy statement and form
of proxy relating to that meeting.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership on Form 3 and changes in ownership on Form 4 or 5 with the SEC. Such
officers, directors and ten-percent stockholders are also required by SEC rules
to furnish the Company with copies of all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms received by it, or
representations from certain reporting persons that no Forms 5 were required for
such persons, the Company believes that, during the last fiscal year, all
Section 16(a) filing requirements applicable to its officers, directors, and
ten-percent stockholders were complied with.
PROPOSAL ONE
ELECTION OF DIRECTORS
A board of four directors is to be elected at the Annual Meeting. Each
director to be elected will hold office until the next Annual Meeting of
Stockholders and until his successor is elected and has qualified, or his
earlier death, resignation, or removal. Each of the four nominees is currently a
director of the Company, having been so elected by the stockholders or appointed
by the Board of Directors. Unless otherwise directed on the enclosed form of
proxy, the proxy holders will vote the proxies received by them for the four
nominees named below. Each nominee has indicated a willingness to serve, but in
case any nominee is not a candidate at the meeting, for reasons not known to the
Company, the proxies named in the enclosed form of proxy may vote for a
substitute nominee in their discretion.
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NOMINEES
Set forth below is information regarding the nominees, including information
furnished by them as to their principle occupation for the last five years,
certain other directorships held by them, and their ages as of June 23, 1995:
<TABLE>
<CAPTION>
DIRECTOR
NAME SINCE AGE PRINCIPAL OCCUPATION
- -------------------------- ----------- --- -----------------------------------------------------
<S> <C> <C> <C>
Peter J. Cassidy.......... 1991 51 Executive Vice President and Chief Financial Officer
of the Company
James R. Fiebiger......... 1994 53 Industry Consultant; Chairman and Managing Director,
Thunderbird Technology, Inc.
Benjamin Huberman......... 1990 57 President of Huberman Consulting Group
Phillips W. Smith......... 1990 57 President and Chief Executive Officer of the Company
</TABLE>
Except as set forth below, each of the nominees has been engaged in his
principal occupation set forth above during the past five years. There is no
family relationship between any of the directors and executive officers of the
Company.
Mr. Cassidy was appointed a director of the Company in November 1991. He has
held the position of Executive Vice President and Chief Financial Officer of
Zycad Corporation since July 1990. From October 1987 to July 1990, he was
Executive Vice President, Operations and Chief Financial Officer for Sharebase
Corporation, a relational data base system supplier.
Dr. Fiebiger was appointed a director of the Company in February 1994. Dr.
Fiebiger has been a Consultant for the semiconductor industry since serving as
President and Chief Operating Officer of VLSI Technology, Inc., a manufacturer
of semiconductors, from February 1988 to August 1993. Previous positions include
President and CEO of Thomson-Mostek and Senior Vice President and Assistant
General Manager of Motorola's Worldwide Semiconductor Sector. Dr. Fiebiger is
also a member of the Board of Directors of Mentor Graphics Corporation and
Chairman and Managing Director, Thunderbird Technologies, Inc.
Mr. Huberman was appointed a director of the Company in September 1990. He
has served as President of the Huberman Consulting Group, a management
consulting firm, since 1990. Prior to that, he served as Vice president of
Consultants International from 1981 to 1988 and as President from 1988 to 1990.
Mr. Huberman is currently a member of the Chief of Naval Operations' Executive
Panel. From 1988 to mid-1990, he also served as the first chairman of the
Technical Advisory Panel to the U.S. Space Command.
Dr. Smith was named President, Chief Executive Officer and director of the
Company in June 1990. He had been an independent industry consultant from
October 1989 to June 1990 after leaving his post as Chairman and Chief Executive
Officer of Edgecore Technology, Inc., a computer manufacturer, after it was
acquired by Arix Corporation in September 1989. Previously, Dr. Smith had been
President and Chief Executive Officer and a director of CAE Systems, Inc.
VOTE REQUIRED
The four nominees receiving the highest number of affirmative votes of the
shares present or represented and entitled to be voted for them shall be elected
as directors. Votes withheld from any director are counted for purposes of
determining the presence or absence of a quorum for the transaction of business,
but have no other legal effect under Delaware law.
BOARD COMMITTEES AND MEETINGS
The Board of Directors has a standing Audit Committee, Nominating Committee
and Compensation Committee.
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The Audit Committee of the Board, which currently consists of directors
Benjamin Huberman and James Fiebiger, recommends engagement of the Company's
independent auditors, approves services performed by such auditors and reviews
and evaluates the Company's accounting system and its system of internal
controls. The Audit Committee met once during the year ended December 31, 1994.
The Compensation Committee, which currently consists of directors James
Fiebiger and Benjamin Huberman, administers the Company's stock plans and
approves salaries, stock options and other compensation arrangements for
executive officers of the Company. The Compensation Committee met four times
during the year ended December 31, 1994.
On February 27, 1995, the Board of Directors established a nominating
committee consisting of Directors James Fiebiger and Benjamin Huberman for the
purpose of establishing criteria and qualifications for prospective Board
Members and recommending the nomination of Board Members should a vacancy arise.
The Nominating Committee had their first meeting on February 27, 1995.
During the 1994 fiscal year, the Board of Directors held a total of five (5)
meetings. Each incumbent Board member attended at least 80% of the aggregate of
all meetings of the Board of Directors, plus all meetings of all committees of
the Board on which he served during the year ended December 31, 1994.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently consists of outside directors James
Fiebiger and Benjamin Huberman. None of these individuals was at any time during
the fiscal year ended December 31, 1994 or at any other time an officer or
employee of the Company.
During fiscal year ended December 31, 1994, the Company paid Mr. Benjamin
Huberman, a member of the Board of Directors, $80,000 in consulting fees. Mr.
Huberman has worked closely with the Company in developing and marketing
consulting services through the Company's services division. Management believes
that this arrangement is at least as favorable as could be negotiated with
outside consultants.
During fiscal year ended December 31, 1994, the Company paid Dr. James
Fiebiger, a member of the Board of Directors, consulting fees in the amount of
$29,750 of which $12,950 was paid in cash and $16,800 was paid by granting Dr.
Fiebiger stock warrants for 5,918 shares of the Company's Common stock at an
exercise price of $.0 per share, and which are exercisable in full at any time.
Dr. Fiebiger's consulting services were rendered for product development,
strategic planning and marketing consulting services for Field Programmable Gate
Array Products developed by the Company's Gatefield Division. Management
believes that this arrangement is at least as favorable as could be negotiated
with outside consultants.
No executive officer of the Company serves as a member of the board of
directors or compensation committee of any entity which has one or more
executive officers serving as a member of the Company's Board of Directors or
Compensation Committee.
DIRECTOR COMPENSATION
Members of the Board of Directors who are not employees of the Company
receive a retainer of $2,500 per quarter plus a fee of $1,000 for attendance at
each Board and Board Committee meetings and are reimbursed for their expenses in
attending meetings of the Board of Directors. On September 10, 1990, Mr.
Huberman received warrants from the Company entitling him to purchase 50,000
shares of the Company's Common Stock at an exercise price of $1.00 per share,
the then market value. The warrants granted on September 10, 1990, did not
become exercisable until six months from the issue date (sixth month anniversary
date), at which time these warrants became exercisable for 16.6% of such shares
and become exercisable cumulatively as to 2.78% of such shares of the seventh
month anniversary date and on each monthly anniversary date thereafter until the
thirty-sixth month anniversary date at which time these warrants are exercisable
in full. On August 16, 1993
4
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Mr. Huberman received warrants from the Company entitling him to purchase 30,000
shares of the Company's Common Stock at an exercise price of $2.06 per share.
These warrants are exercisable for 10,000 shares on each yearly anniversary
date. On February 4, 1994, Dr. Fiebiger received warrants from the Company
entitling him to purchase 50,000 shares of the Company's Common Stock at an
exercise price of $3.63 per share. These warrants are exercisable for 10,000
shares on each yearly anniversary date. All warrants expire six years after
their respective issue dates or 90 days after resignation from the Board of
Directors, whichever occurs first.
See "Proposal One -- Election of Directors -- Compensation Committee
Interlocks and Insider Participation" for information regarding consulting fees
paid to a director during 1994.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding ownership of
the Company's Common Stock as of June 23, 1995, by each director, by each of the
executive officers named in the summary Compensation Table, and all executive
officers and directors of the Company as a group.
SHARES OF COMMON STOCK BENEFICIALLY OWNED
<TABLE>
<CAPTION>
APPROXIMATE
PERCENT
NAME AMOUNT OWNED OWNED
- ----------------------------------------------------------------------------------- ------------ -----------
<S> <C> <C>
Phillips W. Smith.................................................................. 1,221,993 6.3%
Benjamin Huberman.................................................................. 75,000(1) *
Peter J. Cassidy................................................................... 300,000(2) 1.5%
Douglas E. Klint................................................................... 2,001(3) *
James Fiebiger..................................................................... 15,918(4) *
All directors and executive officers as a group (6 persons)........................ 1,614,913(5) 8.3%
<FN>
- ------------------------
* Less than (1) percent.
(1) Includes 60,000 shares subject to warrants held by Mr. Huberman that are
exercisable within 60 days of the Record Date.
(2) Represents 300,000 shares subject to options held by Mr. Cassidy that are
exercisable within 60 days of the Record Date.
(3) Includes 2,000 shares subject to options held by Mr. Klint that are
exercisable within 60 days of the Recorded Date.
(4) Includes 10,000 shares subject to warrants held by Dr. Fiebeger that are
exercisable within 60 days of the Recorded Date
(5) Includes 372,000 shares subject to options and warrants held by four
persons that are exercisable within 60 days of the Record Date.
</TABLE>
EXECUTIVE COMPENSATION
The following table shows, as to the Chief Executive Officer and each of the
three other executive officers, information concerning compensation paid for
services to the Company in all capacities during the fiscal year ended December
31, 1994 as well as the Company's two previous fiscal years (if such person was
the Chief Executive Officer or an executive officer, as the case may be, during
any part of such fiscal year).
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SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION OTHER COMPENSATION
ANNUAL BONUS/INCENTIVE ANNUAL SECURITIES ALL OTHER
SALARY COMPENSATION COMPENSATION UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION (1) YEAR ($) ($) ($) (#) ($)
- ---------------------------------- --------- --------- --------------- ----------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Phillips W. Smith 1994 200,000 0 64,912(3) 0 19,990(4)
President and Chief 1993 177,258 0 25,732(5) 0 11,173(6)
Executive Officer 1992 200,000 0 -- 0 12,310(6)
Peter J. Cassidy 1994 175,000 0 -- 0 7,314(6)
Executive Vice President. 1993 161,965 0 -- 0 8,098(6)
And Chief Financial Officer 1992 175,000 0 -- 0 8,750(6)
John R. Harding 1994 155,167 69,167 9,912(7) 0 15,112(8)
Executive Vice President, 1993 150,866 79,134 234,465(7)(9) 0 14,206(6)
Sales & Marketing 1992 162,005 98,000(10) 149,644(7)(11) 0 10,348(6)
Douglas E. Klint 1994 120,998 0 -- 0 6,050(6)
Vice President, General 1993 107,692 0 -- 10,000 5,385(6)
Counsel and Corporate 1992 106,835 0 3,500(12) 0 5,341(6)
Secretary
<FN>
- ------------------------
(1) The Company has four executive officers, including the Chief Executive
Officer. Mr. Harding resigned from the Company effective October 31, 1994.
(2) Messrs. Smith, Cassidy and Klint are paid bonuses based on the Company
profitability. Mr. Harding is paid incentive compensation based on the
Company revenues and profit margin.
(3) Represents $25,937 in cost of living adjustments for California housing and
$38,975 in tax gross up reimbursement payments for 1993 and 1994.
(4) Includes $10,000 contributed by the Company to a cafeteria benefit plan and
$2,310 contributed by the Company to a 401 (K) plan, , and $7,680 for term
life insurance expense reimbursement.
(5) Represents $25,732 in cost of living adjustments for California housing.
(6) Represents Company contributions to defined benefits plans.
(7) Represents relocation expenses reimbursed by the Company in connection with
Mr. Harding's relocation to California.
(8) Includes $6,661 contributed by the Company to a cafeteria benefit plan,
$2,310 contributed by the Company to a 401 (K) plan, and $6,141 for
interest forgiven on a Company loan.
(9) Approximately $65,000 of these relocation expenses represent the costs
associated with the sale of Mr. Harding's New Jersey House; $80,000
represent California housing and cost of living adjustments which expired
on 2/28/94; and $90,000 represent tax gross up reimbursement payments.
(10) Incentive compensation partially guaranteed in 1992 in connection with Mr.
Harding's promotion to Executive Vice President, Sales and Marketing, and
his relocation to California.
(11) Represents $149,644 reimbursed by the Company for relocation expenses.
(12) Represents $3,500 reimbursed by the Company for relocation expenses.
</TABLE>
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The 1984 Stock Option Plan (the "1984 Plan") was originally adopted by the
Board of Directors in March 1984 and approved by the stockholders in April 1984
and has been subsequently amended. The 1984 Plan provided for a maximum of
3,500,000 shares of Common Stock to be issued pursuant to options granted
thereunder. On February 11, 1992, The Board of Directors approved an amendment
to
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the 1984 Plan, increasing the number of shares reserved under the 1984 Plan from
3,500,000 to 4,000,000 which increase was approved by the stockholders at the
1992 Annual Meeting of Stockholders. Options granted under the 1984 Plan may be
either "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code") or options that do not
qualify for special tax treatment. The 1984 Plan also permitted the grant of
stock appreciation rights ("SAR") for all or any part of the number of shares
covered by an unexercised option under the 1984 Plan. However, no SARs were ever
granted. All employees of the Company were eligible to receive options and SARs
under the 1984 Plan. The 1984 Plan terminated in March 1994 and no further
options may be granted under this plan.
The 1984 Plan is administered by the Compensation Committee (the
"Committee"). No member of the Committee may be granted an option under the 1984
Plan. The Committee (i) designates the employees (including officers and
directors who are employees of the Company) to receive options, (ii) determines
the number and price of shares to be optioned to each optionee, and (iii)
determines such other provisions of the individual options as it may deem
necessary or desirable, subject to the limitations contained in the 1984 Plan.
The Board of Directors may amend the 1984 Plan at any time; however, certain
amendments are subject to approval by the stockholders and adversely affected
optionees.
Incentive stock options granted under the Plan must have a per-share
exercise price of not less than the fair market value per share at the date of
grant. Non-qualified stock options may be granted at such price as may be
determined by the Committee.
The exercise price of options granted under the 1984 Plan payable in cash,
but the Board of Directors may, in its discretion, allow all or any portion of
the exercise price to be paid by tendering shares of Common Stock valued at fair
market value. Options may not be transferred by the optionee except by will or
the laws of descent and distribution and may be exercised only while the
optionee is employed by the Company or a subsidiary and for three months
thereafter.
The Committee may grant options that are exercisable in full at any time or
from time to time or in installments or upon the occurrence of specified events.
No option may be exercised for more than ten years from the date of grant, and
no option granted to any person who owns stock of the Company possessing more
than 10% of the voting power of all capital stock of the Company may be
exercised for more than five years from the date of grant.
There were no individual grants of stock options pursuant to the Company's
Stock Option Plan during 1994 to any of the executive officers named in the
Summary Compensation Table above.
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The following table shows, as to the individuals named in the Summary
Compensation Table above, information concern in stock options exercised during
the fiscal year ended December 31, 1994 and options held at fiscal year end.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-ENDED OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY-END ($) AT FY-END ($)(2)
ACQUIRED ON VALUE -------------------------- --------------------------
NAME EXERCISE (#) REALIZED ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------- ----------- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Phillips W. Smith............ 0 0 0 0 0 0
Peter J. Cassidy............. 0 0 300,000 0 114,000 0
John R. Harding.............. 100,000 48,800 96,141 108,750 36,534 41,325
Douglas E. Klint............. 0 0 2,000 8,000 0 0
</TABLE>
- ------------------------
(1) Market value of underlying securities, based on the last sale price of the
Companies Common Stock on the National Association of Securities Dealers,
Inc. Automated Quotation ("NASDAQ") National Market System on the date of
exercise, minus the exercise price.
(2) Market value of underlying securities, based on the last sale price of the
Company's Common Stock on the NASDAQ National Market System at 1994 fiscal
year end ($1.38 per share), minus the exercise price.
CERTAIN TRANSACTIONS
The following table sets forth information with respect to all executive
officers of the Company who had indebtedness in excess of $60,000 outstanding
during the past fiscal year.
<TABLE>
<CAPTION>
LARGEST
PRINCIPAL PRINCIPAL
AMOUNT BALANCE AT
INTEREST OUTSTANDING DECEMBER 31,
NAME/PRINCIPAL POSITION LOANS LOAN DATE RATE MATURITY DATE DURING 1994 1994
- -------------------------- ---------- ------------------ ---------- ------------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Phillips W. Smith ........ $1,500,000 August 27, 1992 one August 27, 1995 1,500,000 1,500,000
President & CEO for $600,000 and percent for $600,000 and
September 1, 1993 over Prime September 1, 1995
for $900,000 rate for $900,000
</TABLE>
These loans were made in connection with the purchase and financing of real
property and in connection with the exercise of stock options by Dr. Smith. Both
loans are documented with full recourse Promissory Notes signed by Dr. Smith.
These loans are secured by certain real property including Dr. Smith's home in
Paradise Valley, Arizona; as well as 1,200,000 shares of Common Stock of the
Company owned by Dr. Smith of which 300,000 shares were previously purchased by
him in the open market.
8
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors is comprised of two
non-employee directors of the Board of Directors. No member of the Committee is
a former or current officer or employees of the Company.
The Compensation Committee is responsible for setting and administering the
policies governing annual compensation of executive officers, including the
annual management incentive plans and the Company's stock option plans. In
addition, The Committee reviews compensation levels of executive officers and
evaluates their performance.
It is the compensation policy of the Committee that a substantial portion of
the annual compensation opportunities of each executive officer be contingent
upon the performance of the Company. The Committee also believes that employee
equity ownership is highly motivating, provides a major incentive to employees
in building stockholder value and serves to align the interests of employees
with stockholders.
The salaries for executive officers generally are based on a review of
salaries for comparable positions among competing companies, and are adjusted
annually to take into account cost of living increases, merit increases and
adjustments deemed necessary to continue to attract and retain highly qualified
executive officers.
Under the Company's annual incentive plan, incentive compensation is paid
based on the performance of the Company as a whole. Bonuses for Messrs. Smith,
Cassidy and Klint are paid based on attainment of Company profitability goals
and incentive compensation for Mr. Harding is paid based on commissions for
attainment of Company revenue. Annual incentive compensation at targeted levels
of performance represents approximately 50% of total cash compensation for the
CEO and 25% to 45% for the executive officers. The targeted amounts of incentive
compensation are established in the Company's annual operating plan, which is
approved by the Board annually.
The Company's performance is measured for purposes of compensation decisions
under the annual incentive plan against goals established by the Committee in
consultation with management prior to the fiscal year based on the Company's
annual operating plan.
The financial goals for fiscal 1994 which related to Company revenue and net
profit before tax were not achieved and, accordingly, no bonuses were paid to
executive officers for 1994 performance. Mr. Harding was paid incentive
compensation of $69,167 related to revenue and gross profit attainment in 1994.
No stock options were granted to executive officers in 1994.
James Fiebiger
CHAIRMAN, COMPENSATION COMMITTEE
Benjamin Huberman
MEMBER, COMPENSATION COMMITTEE
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COMPANY STOCK PRICE PERFORMANCE
The following graph shows a five-year comparison of cumulative total
stockholder returns (on a dividend reinvestment basis) for the Company, NASDAQ
Stock Market (U.S.) and Hambrecht and Quist ("H&Q") Technology Index. Note that
the historic stock price performance is not necessarily indicative of future
stock price performance.
ZYCAD CORPORATION
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ZYCAD CORP. H&Q TECHNOLOGY INDEX NASDAQ STOCK MARKET-U.S. INDEX
<S> <C> <C> <C>
Dec-89 100 100 100
Dec-90 27.1 91.42 84.92
Dec-91 154.17 135.14 136.28
Dec-92 112.5 155.54 158.58
Dec-93 89.6 169.64 180.93
Dec-94 45.83 196.9 176.91
</TABLE>
Assumes $100 invested on December 31, 1989 in the Company's Common Stock, NASDAQ
Stock Market (U.S.) and Hambrecht and Quist Technology Index.
*Total return assumes reinvestment of dividends
10
<PAGE>
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors is asking stockholders to ratify the appointment of
Deloitte & Touche as the Company's independent auditors for the fiscal year
ending December 31, 1994. The affirmative vote of a majority of the Votes Cast
will be required to ratify the selection of Deloitte & Touche. If the
stockholders do not ratify the selection of Deloitte & Touche, the Board of
Directors will reconsider its selection.
Deloitte & Touche performed the audit of the Company's financial statements
in 1992 and 1993. A representative of Deloitte & Touche is expected to be
present at the meeting to answer appropriate questions and will have the
opportunity to make a statement if he or she desires to do so.
OTHER BUSINESS
The Board of Directors knows of no other business that will be presented for
consideration at the meeting. If other matters are properly brought before the
meeting, however, it is the intention of the persons named in the accompanying
proxy to vote the shares of represented thereby on such matters in accordance
with their best judgment.
By Order of the Board of Directors
Douglas E. Klint
SECRETARY
Fremont, California
July 26, 1995
11
<PAGE>
ZYCAD CORPORATION
47100 BAYSIDE PARKWAY
FREMONT, CALIFORNIA 94538
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Zycad Corporation, a Delaware corporation
(the "Company"), hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated July 26, 1995, and the Company's
1994 Annual Report to Stockholders, and hereby appoints Phillips W. Smith and
Douglas E. Klint, and each of them, proxies and attorneys-in-fact, with full
power to represent the undersigned at the 1995 Annual Meeting of Stockholders of
Zycad Corporation to be held on Wednesday, August 30, 1995 at 3:30 p.m., local
time, at the Company's Headquarters, 47100 Bayside Parkway, Fremont, California,
and at any adjournment thereof, and to vote all shares of Common Stock which the
undersigned would be entitled to vote if then and there personally present, on
the matters set forth on the reverse side. Either of such attorneys or
substitutes shall have and may exercise all of the powers of said
attorneys-in-fact hereunder.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS, AND FOR APPOINTMENT OF
DELOITTE & TOUCHE LLP AS INDEPENDENT PUBLIC ACCOUNTANTS, AND AS SAID PROXIES
DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
1. Election of Directors
Nominees: Phillips W. Smith, Benjamin Huberman, Peter J. Cassidy, James R.
Fiebiger
/ / FOR all nominees / / WITHHELD from all nominees / / ____________
For all nominees except as those listed on the line above
2. Proposal to ratify the appointment of Deloitte & Touche LLP as the
independent public accountants of the company for the 1995 fiscal year.
/ / FOR / / AGAINST / / ABSTAIN
/ / Mark here for address change and note below
And upon such other matter or matters which may properly come before the
meeting and any adjournment thereof.
This proxy should be dated, signed by the stockholder exactly as his or her
name appears herein, and returned promptly in the enclosed envelope. Persons
signing in a fiduciary capacity should so indicate. If proxies are held by joint
tenants or as community property, both should sign.
Signature: ______________ Date _______
Signature: ______________ Date _______
