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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
Amendment No. 1 to:
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JUNE 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
TRANSITION PERIOD FROM ________ TO ________.
COMMISSION FILE NUMBER 0-18708
MICROGRAFX, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-1952080
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8144 WALNUT HILL LANE, SUITE 1050, DALLAS, TX 75231
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (469) 232-1000
Securities Registered Pursuant to Section 12(b) of the Act: NONE
Securities Registered Pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class)
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 ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
The aggregate market value of voting stock held by nonaffiliates of the
registrant at September 30, 2000, was approximately $19,856,823.
On October 27, 2000, there were 11,497,981 shares outstanding of the
registrant's Common Stock.
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<PAGE>
The item numbers and responses thereto are in accordance with the requirements
of Form 10-K. All capitalized terms used and not otherwise defined herein shall
have the meaning specified in the Company's Annual Report on Form 10-K.
The Company hereby amends and restates in its entirety each of the following
items of the Company's Annual Report on Form 10-K.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The directors of the Company as of June 30, 2000 were as follows:
<TABLE>
<CAPTION>
SERVED AS
NOMINEE AGE DIRECTOR SINCE PRESENT OFFICE(S) HELD IN MICROGRAFX
<S> <C> <C> <C>
Russell E. Hogg 71 1997 Chairman of the Board of Directors
Sunnygables, 2 Salsbury Place
South Nyack, NY 10960
Douglas M. Richard 41 1998 Chief Executive Officer,
505 Millennium Drive President and Director
Richardson, TX 75081
Seymour Merrin 65 1990 Director
560 Los Nidos Drive
Santa Fe, NM 87501
Robert Kamerschen 61 1993 Director
204 Parade Hill Road
New Canaan, CT 06840
Avery More 46 1999 Director
6523 Waggoner Drive
Dallas, TX 75230
</TABLE>
See Item 1 of the Company's Form 10-K filed on October 13, 2000 for information
concerning executive officers.
Russell E. Hogg is the Chairman and Chief Executive Officer of Hogg
International Associates, a global financial service company whose clients draw
upon global expertise in the areas of finance, strategic marketing and "back
room" operations, located in Nyack, NY. Mr. Hogg joined the Board of Directors
and was elected to the position of Chairman of the Board in May, 1997. In the
past, he served as a consultant to the National Academy of Sciences
sub-committee which evaluated and documented the shortcomings within the
Internal Revenue Service telecommunications and processing modernization project
and as a board member for several major corporations. Mr. Hogg is the Chairman
of the Institute for International Sports, sponsor in 1993 of the inaugural
World Scholar-Athlete Games. From 1980 to 1989, Mr. Hogg was the Chief Executive
Officer for MasterCard.
2
<PAGE>
Douglas M. Richard served as the Chief Executive Officer of the Company since
February 1997 and served as a director since 1998. In April 1996 Micrografx
acquired Visual Software, Inc., a company Mr. Richard founded. In addition to
founding Visual Software, Mr. Richard founded ITAL computers in 1985.
Seymour Merrin has been a director of the Company since February 1990. Since
1988, he has served as president of Merrin Information Services, Inc., an
information service that provides information and consulting to retail computer
software businesses.
Robert Kamerschen has been a director of the Company since April 1993. In
September 1999, Mr. Kamerschen was appointed Chairman and Chief Executive
Officer of DIMAC Marketing Corporation, a direct marketing service. He
previously served as the Chairman of the Board and Chief Executive Officer of
ADVO, Inc., a company principally involved in direct mail advertising, for a
highly successful ten year leadership tenure ending in June 1999. He is also a
director of IMS Health, Inc., R. H. Donnelley, Inc., Tandy Corporation,
CoolSavings.com.Inc., and TravelCLICK.com.
Avery More was elected to the board on February 12, 1999. He has a 20-year
history in the information technology industry. He currently is the managing
director of Eureka Ventures, a venture capital and merchant banking company
specializing in information technology companies. He also serves as the Chairman
and Chief Executive Officer of PC Service Source, a NASDAQ-traded company, which
is 24 percent owned by Eureka Ventures. Prior to launching Eureka Ventures, More
was President and Chief Executive Officer of CompuCom Systems, Inc.
("CompuCom"). Before joining CompuCom, More served on the board of directors and
as executive vice president of Computer Craft, Inc.
As of June 30, 2000, (i) there were no family relationships between any of the
officers and directors of the Company and (ii) there were no agreements whereby
any shareholder or group of shareholders was entitled to representation on the
Board of Directors of the Company. On September 5, 2000 the Company issued
1,120,000 shares of its Series A Convertible Preferred Stock ("Series A
Preferred Stock") in a private transaction. Pursuant to the terms of the Series
A Preferred Stock, the holders of such shares as a group have the right to elect
two members of the Board of Directors. All members of the Board of Directors
elected by the holders of the Common Stock will stand for election at the
Company's Annual Meeting of Shareholders to hold office until the next annual
election of directors by shareholders or until their respective successors shall
have been duly elected and shall have qualified. The holders of the Series A
Preferred Stock have not elected any director to the Board of Directors as of
October 30, 2000.
On August 30, 2000 Mr. Richard resigned from the Board of Directors and James L.
Hopkins was elected as his replacement, and was further elected Chairman of the
Board of Directors. On September 5, 2000 Messrs. Merrin, Kamerschen, and More
resigned their positions on the Board of Directors and its committees. On
October 16, 2000, James L. Hopkins was appointed to the additional positions of
President and Chief Executive Officer of the Company. On October 30, 2000,
George W. Macintyre and P. Michael Sullivan agreed to serve as directors
effective November 1, 2000.
The Bylaws of the Company provide that the Board of Directors shall be composed
of not less than five but not more than nine directors. The Board of Directors
is actively searching for a suitable candidate to join the Company's Board to
meet this requirement.
3
<PAGE>
The following is a brief account of the business experience, during the past
five years, of each of James L. Hopkins, George W. Macintyre, and P. Michael
Sullivan.
<TABLE>
<CAPTION>
NOMINEE AGE PRESENT OFFICE(S) HELD IN MICROGRAFX
<S> <C> <C>
James L. Hopkins 53 President, Chief Executive Officer and
8144 Walnut Hill Lane Chairman of the Board of Directors
Suite 1050
Dallas, TX 75231
George W. Macintyre 55 Director
100 Congress Ave
Suite 600 Austin, TX 78701
P. Michael Sullivan 47 Director
5009 Sail Creek Drive
Plano, Texas 75093
</TABLE>
James L. Hopkins has been elected as the Chief Executive Officer of the Company
beginning October 16, 2000 and was elected a director and Chairman of the Board
of Directors of the Company on August 30, 2000. From September 1999 to October
2000, Mr. Hopkins served as Managing Director of the Austin office of Hoak,
Breedlove, Wesneski, LLC, a private investment banking firm headquartered in
Dallas, Texas. From May 1999 to September, 1999 he served as Senior Vice
President of Finance and Strategic Planning and as a director of 3dfx
Interactive, Inc. From January 1995 through May 1999 Mr. Hopkins served as a
director and as Chief Financial Officer and Vice President of Strategic
Marketing of STB Systems, Inc.
George W. Macintyre is the President and Chief Executive Officer of Adhesive
Software Inc., an Austin, Texas-based software company focused on the
development of solutions for deploying and managing complex Web sites. He has
held this position since August 2000. From March, 1998 to July, 2000 he was
Senior Vice President of Corporate Strategy with Inprise/Borland, a provider of
Internet access infrastructure and application development tools. From February,
1997 to December, 1998, he was Executive Vice President at MCSB Technology
Corporation, a server performance enhancement software company. From February
1994 to January 1997 he was Vice President of Marketing and Business Development
at Open Connectivity Systems, Inc., a connectivity software company.
Since September, 1997 P. Michael Sullivan has been an independent businessman
and financial and management consultant. From January 1997 to September 1997 he
was Senior Vice President and Chief Financial Officer of ErgoBilt, Inc., a
developer, manufacturer and marketer of customized ergonomic products for
businesses and home offices. From September 1996 to January 1997, Mr. Sullivan
was a financial consultant to ErgoBilt, Inc. From 1978 to September 1996 Mr.
Sullivan was Vice President, Chief Financial Officer, Secretary and Treasurer
for USDATA Corporation, a software, systems and consulting company for
information systems that supervise, monitor and control manufacturing and other
automated processes. Mr. Sullivan is a certified public accountant in the State
of Texas.
4
<PAGE>
The Board of Directors has a standing Audit Committee currently chaired by
Russell E. Hogg. During the fiscal year ending June 30, 2000, the Audit
Committee was composed of Messrs. Avery More, as Chairman, and Robert Kamerschen
and Russell E. Hogg. The Audit Committee is responsible for consulting with the
independent public accountants for the Company with regard to the adequacy of
internal controls and the plan of audit, as well as reviewing the audit report
and management letter and matters concerning financial reporting, accounting and
audit procedures and policies generally. The Audit Committee held six meetings
during the fiscal year ending June 30, 2000. No member of the Audit Committee
attended fewer than 100% of the meetings. For the ensuing year, the Committee
will be comprised of Messrs. Hogg, Macintyre, and Sullivan, with Mr. Hogg having
been elected as Chairman of the Committee.
The Board of Directors has a standing Executive Compensation and Stock Option
Committee currently chaired by Russell E. Hogg. During the fiscal year ended
June 30, 2000, the Stock Option Committee was composed of Messrs. Avery More ,
Russell Hogg, and Robert Kamerschen, as Chairman. The Committee is responsible
for reviewing and determining matters of executive compensation and
administering the Company's Incentive and Nonstatutory Stock Option Plan (the
"Stock Option Plan"). The Committee held four meetings during the fiscal year
ended June 30, 2000. No member of the Committee attended fewer than 100% of the
meetings. For the ensuing year, the Committee will be comprised of Messrs. Hogg,
Macintyre and Sullivan.
The Board of Directors has a standing Nominating Committee, chaired by Mr. Hogg.
During the fiscal year ended June 30, 2000, the Nominating Committee was
composed of Messrs. Hogg and Kamerschen. The Nominating Committee is
responsible for selection for nomination of candidates to serve on the Company's
Board of Directors. In recommending candidates to the Board, the Nominating
Committee seeks persons of proven judgment and experience. The Nominating
Committee held no meetings during the year ended June 30, 2000. For the ensuing
year, the Nominating Committee will be composed of Messrs. Macintyre (Chairman)
and Hogg.
The Board of Directors held seven meetings during the fiscal year ended June 30,
2000. Various matters were approved during the last fiscal year by unanimous
written consent of the Board of Directors. During the fiscal year ended June 30,
2000, no director attended fewer than 100% of the aggregate of (i) the total
number of meetings of the Board of Directors and (ii) the total number of
meetings held by all committees of the Board of Directors on which each director
served.
During the fiscal year ended June 30, 2000, each director who is not an employee
of the Company received an annual retainer of $20,000 and a fee of $10,000 for
attending all board and committee meetings held during the year. In addition,
each committee chairperson received an annual fee of $3,000. All directors are
reimbursed for travel and other expenses incurred in attending such meetings. In
connection with his election as Chairman of the Board in May, 1997, the Company
agreed to pay Mr. Hogg the following additional compensation for serving as
Chairman: (i) during each year of service in such capacity, a consulting fee of
$1,500 per each day of work on Company business, with a maximum cap of $50,000
for the year; (ii) a grant of non-statutory stock options covering 30,000 shares
with an exercise price of $6.00 per share, granted as of Mr. Hogg's election in
June 1997, pursuant to the Company's Option Plan, vesting ratably over a period
of four years from the date of grant and (iii) additional non-statutory stock
option grants, each covering 5,000 shares, in each of the years 1998 and 1999,
and for the year 2000 vesting over a period of four (4) years from the date of
grant.
All non-employee directors are eligible to participate in the Company's 1995
Director Option Plan (the "1995 Director Plan"). The 1995 Director Plan provides
that on each October 1, after the completion of one year of service, each
eligible director will be entitled to receive an option for 10,000 shares of
Common Stock at an exercise price equal to the fair market value of the Common
Stock on the date of grant. Each option granted under the 1995 Director Plan
becomes exercisable at the rate of 25% per year commencing on the first
anniversary of the date of grant. During the fiscal year ended June 30, 2000,
Mr. Hogg was the only eligible director to receive a grant of options covering
10,000 shares of Common Stock with an exercise price of $1.91 per share,
representing the closing price of the Company's stock as of October 2, 2000,
pursuant to the terms of the 1995 Director Plan.
5
<PAGE>
The shareholders at the 1997 Annual Meeting approved a proposal to grant
non-employee directors the ability to substitute non-statutory options for cash
fees that reduced the cash cost to the Company associated with compensation of
its non-employee directors. The proposal provided that such options (unlike the
annual grants) would not expire upon termination of a non-employee director's
board service, but would continue in effect for a term of five years from the
date of grant. The plan requires that each non-employee director must make a
semi-annual irrevocable election prior to April 1 and October 1 (the "Option
Election Dates") of each year to participate in this feature for the six month
period following each Option Election Date. Options granted in lieu of cash fees
are granted at the rate of $2.00 in option value (using present value of the
grant at date of grant under the Black-Scholes option pricing model) for each
$1.00 of cash director's fees which would otherwise be paid, and have an
exercise price equal to the fair market value of the Company's Common Stock on
the Option Election Date of each semi-annual period in question, exercisable in
increments of 25% per year for a term of five years. During fiscal year 2000,
under the stock-in-lieu of compensation provisions, Mr. More received options to
purchase 10,030 shares with an exercise price of $5.50. The amendment also
provided for immediate vesting of all unexercisable options granted under the
1995 Director Plan upon the occurrence of certain events resulting in a change
in control of the Company.
SECTION 16(A) COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission (the "SEC"). Officers, directors and greater than ten-percent
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file. Based solely on its review of the copies
of such forms received by it, or written representations from certain reporting
persons that no Forms 5 were required for those persons, the Company believes
that, during the fiscal year ended June 30, 2000, all filing requirements
applicable to its officers, directors, and greater than ten-percent beneficial
owners were complied with.
6
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning the compensation
of the Company's Chief Executive Officer and each of the four other most highly
compensation executive officers (and one former executive officer for whom
disclosure would have been required but for the fact that he was not serving as
such at the end of the most recently completed fiscal year), during fiscal years
ended June 30, 2000, 1999 and 1998.
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
------------------------ ---------------
Awards
---------------
Year Options/
Name Ending Salary Bonus SARs All Other
Principal Position June 30 ($)(1) ($) (#)(2) Comp. (3)
------------------------- --------- ------------ ----------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Douglas M. Richard 2000 $270,508 $13,125 175,000 $ 4,372
Chief Executive 1999 250,000 78,338 43,300 4,142
Officer(4) 1998 217,398 11,131 80,000 3,211
------------------------- --------- ------------ ----------- --------------- ------------
Kenneth Carraher
President of 2000 $205,539 $20,813 85,000 $ 5,434
Enterprise Process 1999 129,231 49,244 8,000 4,025
Management Solutions 1998 107,962 30,162 68,469 3,437
------------------------- --------- ------------ ----------- --------------- ------------
John M. Carradine 2000 $178,385 $ 7,031 67,700 $ 4,080
Chief Financial Officer 1999 -- -- -- --
and Corporate Secretary 1998 -- -- -- --
------------------------- --------- ------------ ----------- --------------- ------------
Frank Childers
Former Executive Vice 2000 $ 99,171 $43,750 -- $ 3,573
President of Global 1999 151,390 61,593 80,600 1,566
Sales and Marketing 1998 -- -- -- --
------------------------- --------- ------------ ----------- --------------- ------------
</TABLE>
(1) Includes amounts of base salary deferred at the election of the executive
pursuant to the Company's 401(k) Savings Plan, a defined contribution plan.
(2) The Stock Option Plan authorizes the issuance of SARs but no SARs were
issued by the Company as of June 30, 2000.
(3) All other compensation includes company contributions in fiscal 2000 in the
following amounts to match amounts deferred pursuant to the Company's
401(k) Savings Plan: Mr. Richard $4,372, Mr. Carraher $5,434, Mr. Carradine
$4,080 and Mr. Childers $3,573.
(4) Mr. Richard was Chief Executive Officer and President of Micrografx, Inc.
at June 30, 2000. At the date of this filing, Mr. Richard is no longer
acting in that capacity and has assumed the role of Chief Executive Officer
of Image2Web, a wholly-owned subsidiary of Micrografx, Inc.
7
<PAGE>
GRANTS OF OPTIONS
The following table sets forth details regarding stock options granted to the
named executive officers listed in the Summary Compensation Table during the
fiscal year 2000. In addition, there are shown the "option spreads" that would
exist for the respective options granted based upon assumed rates of annual
compound stock appreciation of 5% and 10% from the date the options were granted
over the full option term. The Company granted no SARs in fiscal year 2000.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
% OF TOTAL
OPTIONS/
OPTIONS/ SARS POTENTIAL REALIZABLE VALUE
SARS GRANTED TO EXERCISE OR AT ASSUMED ANNUAL RATES OF
GRANTED (1) EMPLOYEES IN BASE PRICE EXPIRATION STOCK PRICE APPRECIATION
NAME (#) FISCAL YEAR ($/SH) DATE FOR OPTION TERM (2)
----------------------------
5% ($) 10% ($)
--------------------- ------------- -------------- -------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Doug Richard 175,000 11.95% $ 4.63 3/8/10 $509,012 $ 1,289,935
Ken Carraher 85,000 5.81% $ 4.63 3/8/10 $247,234 $ 626,540
John Carradine 67,700 4.62% $ 4.63 3/8/10 $196,915 $ 499,021
Frank Childers -- -- -- -- -- --
</TABLE>
All of the options granted to executives were granted under the Company's 1995
Incentive and Nonstatutory Stock Option Plan.
(1) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent upon the future
performance of the Company's Common Stock, overall market conditions and
the executive's continued employment with the Company. The amounts
represented in this table may not necessarily be achieved.
(2) Options vest generally in increments of 25% annually. The options have a
term of ten years, unless they are exercised or expire upon certain
circumstances set forth in the Stock Option Plan, including retirement,
termination in the event of a change in control, death or disability.
8
<PAGE>
EXERCISES OF OPTIONS
The following table sets forth information with respect to the named
executive officers concerning the exercise of options during fiscal year 2000
and unexercised options held as of June 30, 2000. No SARs were exercised by the
named executive officers during fiscal 2000.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
FISCAL YEAR END OPTION/SAR VALUES
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
NUMBER OF SHARES FY-END (#) FY-END ($)
ACQUIRED ON EXERCISE EXERCISABLE/ EXERCISABLE/
NAME (#) VALUE REALIZED($) UNEXERCISABLE UNEXERCISABLE(1)
---------------------- ---------------------- --------------------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
Doug Richard -- -- 107,159/254,141 --/--
Kenneth Carraher -- -- 50,469/111,000 --/--
John Carradine -- -- 12,752/105,956 --/--
Frank Childers -- -- --/ -- --/--
</TABLE>
(1) Values are stated based upon the closing price of $2.31 per share of the
Company's common stock on the NASDAQ/NMS on June 30, 2000, the last trading
day of fiscal 2000.
9
<PAGE>
EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL PROVISIONS
The Company has entered into agreements providing for contractual benefits and
compensation with John Carradine, Ken Carraher, Douglas Richard, which
agreements provide for severance to such individuals equal to six (6) months
base salary in the event of their severance from the Company without cause in
the case of Mr. Carradine and Mr. Carraher, and (12) months base salary in the
event of his severance in the case of Mr. Richard. These Agreements expire two
years after the date of a Change in Control, and require the Company to pay such
officers, if their employment is terminated by (i) the Company without cause or
(ii) such officer, as a result of a reduction in his respective base salary,
potential earnings under a performance based bonus plan, any material employee
benefit, or in the nature or scope of his respective duties, a sum equal to (i)
one and one-half times Mr. Richard's highest base annual salary with the Company
and (ii) one times Mr. Carradine's and Mr. Carraher's highest base annual salary
with the Company. Additionally, in the event such officer's employment with the
Company is terminated under the circumstances described above following a Change
in Control, they would also be entitled to the continuation of medical, dental,
disability and life insurance benefits for a period of twelve (12) months and
the acceleration and/or immediate vesting of all stock options and restricted
stock awards then outstanding.
COMPENSATION OF DIRECTORS
For information on compensation paid to directors of the Company during Fiscal
Year 2000, see Item 10 "Directors and Executive Officers of the Registrant."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is or has been an officer or employee of
the Company or any of its subsidiaries or had any relationship requiring
disclosure pursuant to Item 404 of SEC Regulation S-K. No member of the
Compensation Committee served on the compensation committee, or as a director,
of another corporation, one of whose directors or executive officers served on
the Compensation Committee of or whose executive officers served on the
Company's Board of Directors.
10
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table and notes thereto set forth certain information with respect
to beneficial ownership of the Company's Common Stock as of September 30, 2000
by (i) each person known by the Company to own beneficially more than 5% of the
presently outstanding Common Stock, (ii) each director and nominee for director
of the Company, (iii) each of the Company's current and former executive
officers named in the Summary Compensation Table and (iv) the present directors
and executive officers of the Company as a group:
<TABLE>
<CAPTION>
COMMON STOCK PERCENT OF
BENEFICIALLY OUTSTANDING
NAME OWNED COMMON STOCK(1)
------------------------------------------------- ------------------ ------------------
<S> <C> <C>
The Lake Fund
Roemer Visscherplein 19
2106 AG Heemstede 2,092,400 18.20%
The Netherlands
Douglas M. Richard 186,382(2) 1.57%
Russell E. Hogg 41,250(3) *
Kenneth Carraher 148,672(4) 1.25%
John Carradine 25,504(5) *
All executive officers and directors as a group 401,808(6) 3.38%
</TABLE>
* Represents less than 1% of the outstanding Common Stock.
(1) Except as otherwise indicated, the persons named in the table have sole
voting and investment power with respect to the shares of Common Stock
shown as beneficially owned by them. Beneficial ownership as reported in
the above table has been determined in accordance with Rule 13d-3 of the
Exchange Act. The percentages are based upon 11,497,981 shares outstanding
as of September 30, 2000, except for certain parties who hold presently
exercisable options to purchase shares. The percentages for those parties
who hold options that are presently exercisable or exercisable within 60
days of June 30, 2000, are based upon the sum of 11,497,981 shares plus the
number of shares subject to options that are presently exercisable or
exercisable within 60 days of September 30, 2000, held by each of them
respectively, as indicated in the following notes.
(2) Consists of 61,732 held and 124,650 shares subject to stock options that
are presently exercisable or that are exercisable within the next 60 days.
Does not include 3,290 shares held by Mr. Richard's spouse, concerning
which she has sole voting and investment power.
(3) Consists of 41,250 shares subject to stock options that are presently
exercisable or that are exercisable within the next 60 days.
(4) Consists of 86,203 shares held directly by Mr. Carraher and 62,469 shares
subject to stock options that are presently exercisable or that are
exercisable within the next 60 days.
(5) Consists of 25,504 shares subject to stock options that are presently
exercisable or that are exercisable within the next 60 days.
(6) Includes 253,873 shares subject to stock options that are presently
exercisable or that are exercisable within the next 60 days.
11
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company entered into a severance agreement with R. Edwin Pearce, former
General Counsel and Secretary, whereby he resigned his position with the Company
effective September 30, 1999. Under the terms of the severance agreement, Mr.
Pearce was paid the sum of $83,464, representing his base salary and bonuses
through March 31, 2000. The vesting schedule of outstanding stock options
covering 62,247 shares owned by Mr. Pearce were accelerated. The agreement
further provided an extension of the expiration dates so that these options
would expire unless exercised by October 1, 2000. As a further consideration of
the severance agreement, Mr. Pearce agreed to not compete with or solicit
customers of the Company for a period of two (2) years, nor to hire employees of
the Company for a one (1) year period.
12
<PAGE>
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, on October 30, 2000.
MICROGRAFX, INC.
By: /S/ JAMES L. HOPKINS
--------------------
James L. Hopkins
Chief Executive Officer and President
(Principal Executive Officer)
By: /S/ JOHN M. CARRADINE
---------------------
John M. Carradine
Chief Financial Officer and Corporate Secretary
(Principal Financial Officer)
By: /S/ RONALD K. HERBERT
---------------------
Ronald K. Herbert
Controller
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the registrant
and in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ JAMES L. HOPKINS Chairman of the Board of Directors October 30, 2000
---------------------------------
James L. Hopkins
/s/ RUSSELL HOGG Director October 30, 2000
---------------------------------
Russell Hogg
</TABLE>
13
<PAGE>
