<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant X
-----
Filed by a Party other than the Registrant
-----
Check the appropriate box:
Preliminary Proxy Statement Confidential. For Use of the
- - ----- ----- Commission Only (as permitted
by Rule 14a-6(e)(2))
X Definitive Proxy Statement
- - -----
Definitive Additional Materials
- - -----
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
- - -----
Viewlogic Systems, Inc.
- - ----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- - ----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
- - -----
Fee computed on table below per Exchange Act Rules 14a-6(i)(I) and 0-11.
- - -----
(1) Title of each class of securities to which transaction applies:
- - -----------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- - -----------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
- - -----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - -----------------------------------------------------------------------------
(5) Total fee paid:
- - -----------------------------------------------------------------------------
Fee paid previously with preliminary materials:
-----
- - -----------------------------------------------------------------------------
Check box if any part of the fee is offset as provided by
----- Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the form
or schedule and the date of its filing.
(1) Amount previously paid:
- - -----------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- - -----------------------------------------------------------------------------
(3) Filing Party:
- - -----------------------------------------------------------------------------
(4) Date Filed:
- - -----------------------------------------------------------------------------
1
<PAGE>
VIEWLOGIC SYSTEMS, INC.
293 BOSTON POST ROAD WEST
MARLBORO, MASSACHUSETTS 01752
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 13, 1997
To the Stockholders:
The 1997 Annual Meeting of Stockholders of Viewlogic Systems,
Inc. (the "Company") will be held at Hale and Dorr LLP, 60 State
Street, 26th floor, Boston, Massachusetts 02109, on Tuesday, May
13, 1997 at 10:00 a.m., local time, to consider and act upon the
following matters:
1. To elect two Class I Directors for the ensuing three years.
2. To ratify the selection by the Board of Directors of Deloitte
& Touche as the Company's independent auditors for 1997.
3. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Stockholders of record at the close of business on March 19,
1997 are entitled to notice of, and to vote at, the meeting. The
stock transfer books of the Company will remain open for the
purchase and sale of the Company's Common Stock.
All stockholders are cordially invited to attend the meeting.
By order of the Board of Directors
PETER T. JOHNSON, Secretary
Marlboro, Massachusetts
April 7, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND PROMPTLY MAIL
IT IN THE ENCLOSED ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF
YOUR SHARES AT THE MEETING. NO POSTAGE NEED BE AFFIXED IF THE
PROXY CARD IS MAILED IN THE UNITED STATES.
2
<PAGE>
VIEWLOGIC SYSTEMS, INC.
293 BOSTON POST ROAD WEST
MARLBORO, MASSACHUSETTS 01752
PROXY STATEMENT FOR THE 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 13, 1997
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Viewlogic
Systems, Inc. (the "Company" or "Viewlogic") for use at the
1997 Annual Meeting of Stockholders to be held at Hale and Dorr
LLP, 60 State Street, 26th floor, Boston, Massachusetts 02109 on
Tuesday, May 13, 1997 (the "Annual Meeting") and at any
adjournment or adjournments of that meeting. All proxies will be
voted in accordance with the instructions contained therein, and
if no choice is specified, the proxies will be voted in favor of
the matters set forth in the accompanying Notice of Meeting. Any
proxy may be revoked by a stockholder at any time before it is
exercised by delivery of written revocation to the Secretary of
the Company.
The Company's Annual Report to Stockholders for the year ended
December 31, 1996 is being mailed to stockholders with the
mailing of this Notice and Proxy Statement on or about April 7,
1997.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM-10K FOR THE YEAR
ENDED DECEMBER 31, 1996 AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, EXCEPT FOR EXHIBITS, WILL BE FURNISHED WITHOUT CHARGE
TO ANY STOCKHOLDER UPON WRITTEN REQUEST TO THE CHIEF FINANCIAL
OFFICER OF THE COMPANY, VIEWLOGIC SYSTEMS, INC., 293 BOSTON POST
ROAD WEST, MARLBORO, MASSACHUSETTS 01752.
VOTING SECURITIES AND VOTES REQUIRED
On March 19, 1997, the record date for the determination of
stockholders entitled to notice of and to vote at the meeting,
there were outstanding and entitled to vote 16,552,560 shares of
Common Stock of the Company, $.01 par value per share ("Common
Stock"). Each share is entitled to one vote.
The presence at the Annual Meeting, in person or by proxy, of
the holders of a majority of the shares of Common Stock
outstanding on March 19, 1997 will constitute a quorum for the
transaction of business at the Annual Meeting. Shares of Common
Stock represented in person or by proxy at the Annual Meeting
(including shares which abstain or do not vote with respect to
one or more of the matters presented at the Annual Meeting) will
be tabulated by the inspectors of election appointed for the
meeting and will determine whether or not a quorum is present.
The affirmative vote of the holders of a plurality of the votes
cast at the meeting is required for the election of directors.
The affirmative vote of the holders of a majority of the shares
of Common Stock voting on the matter is required for the approval
of each of the other matters to be voted upon.
Shares held in "street name" by brokers or nominees who
indicate on their proxies that they do not have discretionary
authority to vote such shares as to a particular matter, will not
be considered as present and entitled to vote with respect to a
particular matter and will have no effect on the voting on such
matter. Shares which abstain from voting as to a particular
matter will be considered as present and entitled to vote with
respect to a particular matter but will not be counted as shares
voting on such matter.
3
<PAGE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of
January 31, 1997, with respect to the beneficial ownership of the
Company's Common Stock by (i) each director and nominee for
director, (ii) each executive officer named in the Summary
Compensation Table under the heading "Compensation of Executive
Officers" below, (iii) any person known to the Company to be the
beneficial owner of more than five percent of its Common Stock,
and (iv) all directors and executive officers of the Company as a
group.
The number of shares of Common Stock beneficially owned by each
director or executive officer is determined under rules of the
Securities and Exchange Commission, and the information is not
necessarily indicative of beneficial ownership for any other
purpose. Under such rules, beneficial ownership includes any
shares as to which the individual has sole or shared voting power
or investment power and also any shares which the individual has
the right to acquire within 60 days after January 31, 1997
through the exercise of any stock option or other right. Unless
otherwise indicated, each person has sole investment and voting
power (or shares such power with his or her spouse) with respect
to the shares set forth in the following table. The inclusion
herein of any shares deemed beneficially owned does not
constitute an admission of beneficial ownership of those shares.
4
<PAGE>
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK PERCENTAGE OF
BENEFICIALLY COMMON STOCK
NAME OWNED OUTSTANDING
---- ------------ -------------
<S> <C> <C>
Alain J. Hanover^ 423,177(1) 2.58%
Gregory T. George^ 30,092(2) *
William J. Herman^ 205,144(3) 1.25%
Gordon B. Hoffman^ 25,366(4) *
Larry E. Reeder^ 36,821(5) *
Gregory A. White^ 20,900(6) *
Allyn C. Woodward, Jr.^ 20,000(7) *
Harold E. Julsen 29,000(8) *
Lawrence M. Rubin 138,542(9) *
Richard G. Lucier 52,294(10) *
David L. Babson & Co., Inc. 1,718,100(11) 10.47%
One Memorial Drive
Cambridge, MA 02142
State of Wisconsin 1,608,000(12) 9.80%
Investment Board
P.O. Box 7842
Madison, WI 53707
Pioneering Management Corporation 1,108,000(13) 6.75%
60 State Street
Boston, MA 02109
All directors and executive 1,108,444(14) 6.76%
officers as a group (15 persons)
- - --------------
<FN>
* Represents holdings of less than one percent.
^ Director of the Company.
(1) Includes 307,734 shares of Common Stock which Mr. Hanover has the
right to acquire within 60 days after January 31, 1997 upon exercise
of outstanding options. Includes an aggregate of 34,900 shares of
Common Stock held by Mr. Hanover's wife and in trust for his children
and as to which Mr. Hanover disclaims beneficial ownership.
(2) Includes 30,000 shares of Common Stock which Mr. George has the right
to acquire within 60 days after January 31, 1997 upon exercise of
outstanding options. Excludes an aggregate of 758,901 shares held by
the Technology Funding Entities, 2000 Alameda De Las Puelgas, San
Mateo, California 94403. Mr. George, a general partner or executive
officer of each of the Technology Funding Entities, may be deemed to
be a beneficial owner of the shares held by the Technology Funding
Entities.
(3) Includes 96,250 shares of Common Stock which Mr. Herman has the right
to acquire within 60 days after January 31, 1997 upon exercise of
outstanding options. Includes an aggregate of 14,914 shares of Common
Stock held by Mr. Herman's spouse and in trust for his children as to
which Mr. Herman disclaims beneficial ownership.
(4) Includes 25,000 shares of Common Stock which Mr. Hoffman has the
right to acquire within 60 days after January 31, 1997 upon exercise
of outstanding options.
(5) Includes 30,000 shares of Common Stock which Mr. Reeder has the right
to acquire within 60 days after January 31, 1997 upon exercise of
outstanding options.
(6) Represents 20,900 shares of Common Stock owned by the Massachusetts
Pension Reserves Investment Management Board, of which Mr. White is
the Executive Director. Mr. White disclaims beneficial ownership of
such shares.
(7) Represents 20,000 shares of Common Stock which Mr. Woodward has the
right to acquire within 60 days after January 31, 1997 upon exercise
of outstanding options.
5
<PAGE>
(8) Includes 25,000 shares of Common Stock which Mr. Julsen has the right
to acquire within 60 days after January 31, 1997 upon exercise of
outstanding options.
(9) Includes 110,000 shares of Common Stock which Mr. Rubin has the right
to acquire within 60 days after January 31, 1997 upon exercise of
outstanding options. Includes 3,000 shares of Common Stock held in
trust for Mr. Rubin's children as to which Mr. Rubin disclaims
beneficial ownership.
(10) Includes 51,625 shares of Common Stock which Mr. Lucier has the right
to acquire within 60 days after January 31, 1997 upon exercise of
outstanding options.
(11) Based on the most recent Schedule 13G for David L. Babson & Co., Inc.
dated February, 1997. Includes 947,600 shares with respect to which
voting power is shared.
(12) Based on the most recent Schedule 13G for State of Wisconsin
Investment Board dated January, 1997.
(13) Based on the most recent Schedule 13G for Pioneering Management
Corporation dated January, 1997. Includes 1,058,000 shares with
respect to which dispositive power is shared.
(14) Includes an aggregate of 809,082 shares of Common Stock which
executive officers and directors have the right to acquire within 60
days after January 31, 1997 upon exercise of outstanding options.
</TABLE>
ELECTION OF DIRECTORS
The Company has a classified Board of Directors consisting of
three Class I Directors, two Class II Directors and two Class III
Directors. The Class I, Class II and Class III Directors serve
until the annual meetings of stockholders to be held in 1997,
1999 and 1998, respectively, and until their respective
successors are elected and qualified. At each annual meeting of
stockholders, directors are elected for a full term of three
years to succeed those whose terms are expiring. Mr. Hanover, a
Class I Director, will not stand for reelection. To comply with
the Company's By-laws regarding the classification of Directors,
Mr. Woodward was reclassified from a Class III Director to a
Class I Director. Upon the expiration of Mr. Hanover's current
term of office, which ends on the date of the Annual Meeting, the
Board of Directors will consist of two Class I Directors, two
Class II Directors and two Class III Directors.
The persons named in the enclosed proxy will vote to elect as
directors William J. Herman and Allyn C. Woodward, Jr., the Class
I nominees named below, unless the proxy is marked otherwise. If
a shareholder returns a proxy without contrary instructions, the
persons named as proxies will vote to elect as directors the two
Class I director nominees named below, each of whom is currently
a member of the Board of Directors of the Company.
Each Class I Director will be elected to hold office until the
2000 Annual Meeting of Stockholders and until his successor is
duly elected and qualified. Both nominees have indicated their
willingness to serve, if elected; however, if either nominee
should be unable to serve, the shares of Common Stock represented
by proxies may be voted for a substitute nominee designated by
the Board of Directors.
There are no family relationships between or among any officers
or directors of the Company.
Set forth below are the name and age of each member of the
Board of Directors (including those who are nominees for election
as Class I directors), and the positions and offices held by him,
his principal occupation and business experience during the past
five years, the names of other publicly held companies of which
he serves as a director and the year of the commencement of his
term as a director of the Company.
NOMINEES FOR DIRECTOR WITH TERMS EXPIRING IN 2000 (CLASS I DIRECTORS)
WILLIAM J. HERMAN, age 37, became a director in 1992
Mr. Herman has served as President and Chief Executive Officer
of the Company since January 1997, as President and Chief
Operating Officer of the Company from January 1996 to January
1997 and as Executive
6
<PAGE>
Vice President and Chief Operating
Officer of the Company from March 1995 to January 1996.
Previously, he served as Senior Vice President of Engineering
of the Company from May 1991 to November 1992 and as Vice
President of Engineering of the Company from 1988 to 1991.
From February 1994 to March 1995, Mr. Herman was President of
Silerity, Inc., a computer aided engineering software company.
Mr. Herman served as President of Scopus Technology, Inc., a
computer software company, from November 1992 to February
1994.
ALLYN C. WOODWARD, Jr., age 56, became a director in 1996
Mr. Woodward has served as President, a member of the
Executive Committee and the Board of Directors of Adams,
Harkness & Hill, Inc., an independent institutional research,
brokerage and investment banking firm, since June 1995. From
April 1990 to April 1995, Mr. Woodward initially served as
Executive Vice President, Manager and co-founder of Silicon
Valley Bank and more recently served as Senior Executive Vice
President and Chief Operating Officer. Mr. Woodward serves as
a director of Cayenne Software, Inc.
DIRECTORS WHOSE TERMS EXPIRE IN 1998 (CLASS III DIRECTORS)
GREGORY T. GEORGE, age 48, became a director in 1989
Mr. George has served as Vice President of Technology Funding,
Inc. and General Partner of Technology Funding Ltd., the
general partners of the Technology Funding Entities, private
equity funds, since 1986. He also serves as a director of
Wasatch Education Systems Corporation.
GORDON B. HOFFMAN, age 53, became a director in 1992
Mr. Hoffman has served as Group Vice President, Software of
the Company since February 1997. He served as a Director and
President and Chief Executive Officer of Eagle Design
Automation, Inc., a software development company, from
September 1994 until February 1997. He was a partner of
Technologies and Transitions Corporation, a consulting company
from 1991 to 1994. From 1987 to 1991 he served as the Director
of Systems Engineering Programs of Mentor Graphics
Corporation.
DIRECTORS WHOSE TERMS EXPIRE IN 1999 (CLASS II DIRECTORS)
LARRY E. REEDER, age 59, became a director in 1988
Mr. Reeder is a private investor. He served as General Partner
of private equity funds of DLJ Capital Corporation from 1980
to August 1994. He served as President and Chief Executive
Officer of Kendall Square Research Corporation, a computer
manufacturer, from August to September 1994.
GREGORY A. WHITE, age 37, became a director in 1996
Mr. White has served as the Executive Director of the
Massachusetts Pension Reserves Investment Management Board
since 1994. From 1992 to 1994 he served as a member of the
Board of Trustees of the Massachusetts Pension Reserves
Investment Management Board. From 1990 to 1993, Mr. White was
a Principal and Vice President of UNC Partners, Inc., a
venture capital fund.
BOARD AND COMMITTEE MEETINGS
The Company has a standing Audit Committee of the Board of
Directors, which provides the opportunity for direct contact
between the Company's independent accountants and the Board. The
Audit Committee met three times during 1996 to review the
effectiveness of the auditors during the annual audit and the
adequacy of
7
<PAGE>
financial statement disclosures, to discuss the
Company's internal control policies and procedures and to
consider and recommend the selection of the Company's independent
accountants. The members of the Audit Committee are Messrs.
Hoffman, Reeder and White.
The Company also has a standing Compensation Committee of the
Board of Directors, which provides recommendations to the Board
regarding compensation strategy and programs of the Company and
administers the Company's stock option and stock purchase plans,
including the granting of stock options. The Compensation
Committee is also responsible for establishing and modifying the
compensation of all corporate officers of the Company,
recommending adoption of and amendment to all stock option and
other employee benefit plans and arrangements, and the engagement
of, terms of any employment agreements and arrangements with, and
termination of, all corporate officers of the Company. The
Compensation Committee met seven times during 1996. The members
of the Compensation Committee for 1996 were Stanley F. Alfeld,
who resigned as a Director in March 1997, and Messrs. George and
Woodward.
For 1996, the Company also had a standing Nominating Committee
which recommended to the Board nominees for director. The
Nominating Committee held no meetings in 1996. The members of the
Nominating Committee for 1996 were Messrs. Hanover, Alfeld and
Reeder.
The Board of Directors held nine meetings during 1996. Each
director attended at least 75% of the total number of meetings of
the Board of Directors and all committees of the Board on which
he served.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's directors and executive officers, and persons who
own more than 10% of the Company's Common Stock to file with the
Securities and Exchange Commission initial reports of ownership
of the Company's Common Stock and other equity securities on a
Form 3 and reports of changes in such ownership on a Form 4 or
Form 5. Officers, directors and 10% Stockholders are required by
SEC regulations to furnish the Company with copies of all Section
16(a) forms they file.
To the Company's knowledge, based on a review of the Company's
records and written representations by the persons required to
file such reports, the filing requirements of Section 16(a) were
satisfied with respect to the Company's most recent fiscal year,
except that a Form 4 reporting the grant of a stock option to Mr.
Woodward was filed seven days late, a Form 4 reporting the
transfer of shares from Mr. Hanover and Mr. Hanover's wife to
their children was filed seven days late, and a Form 5 reporting
the grant of a stock option to Shiv Tasker was filed 33 days
late.
CERTAIN TRANSACTIONS
Mr. Hoffman, a director of the Company, was the President, a
director and a principal shareholder of Eagle Design Automation,
Inc. ("Eagle") from September 1994 until February 1997. In
January 1995, the Company purchased a 20% equity interest in
Eagle for $500,000. In connection with that purchase, the Company
entered into an agreement with Eagle whereby the Company licensed
certain products from Eagle and Eagle had the right to require
the Company to make advance royalty payments of up to $2,000,000.
In December 1994, Transitions Three, Limited Partnership
purchased a 20% equity interest in Eagle for $500,000. Stanley F.
Alfeld, a director of the Company until March 1997, is the
President and Chief Executive Officer of TTI Partners, the
General Partner of Transitions Three, Limited Partnership. Also,
the Company and Transitions Three, Limited
8
<PAGE>
Partnership guaranteed
up to $1,000,000 of debt of Eagle. In February, 1997 the Company
exercised its option to purchase all of the capital stock of
Eagle. The Company paid a total of $5,788,000 to the
shareholders of Eagle for the shares of Eagle capital stock not
owned by the Company, of which $1,393,000 was paid to Mr. Hoffman
and $1,878,000 was paid to Transitions Three, Limited
Partnership. The Company is also required to pay to the prior
shareholders of Eagle additional payments based on the sale by
the Company of Eagle's products over the three year period
beginning after certain sales targets have been met. Such
payments will be distributed amongst the prior shareholders of
Eagle based on their prior share ownership. No payments are
required after that three year period. There are no minimum or
maximum payments based on the sale of Eagle's products; however,
if current sales projections are met, such additional payments
could total approximately $5,500,000.
COMPENSATION OF DIRECTORS
Outside directors are entitled to participate in the Company's
1996 Outside Directors' Stock Option Plan (the "1996 Director
Plan") which provides for automatic grants of non-qualified stock
options to members of the Company's Board of Directors who are
not employees of the Company. The 1996 Director Plan provides
that (i) each then eligible director be granted an option to
purchase 10,000 shares of Common Stock on the date of the
Company's annual meeting of stockholders each year from 1996
through 2000, and (ii) each person who becomes an eligible
director after December 14, 1995 be granted an option to purchase
10,000 shares of Common Stock at the close of business on the
date of his or her initial election to the Board of Directors.
Each director who is not an officer or employee of the Company
receives: (a) $10,000 each year, (b) $1,000 for each Board
meeting attended in person and $500 for each Committee meeting
attended in person and (c) expense reimbursement for attending
Board and Committee meetings. Directors who are officers or
employees of the Company do not receive any additional
compensation for their services as a director.
Mr. White does not participate in the 1996 Director Plan nor
does he receive cash compensation for his services as a Director,
other than expense reimbursement for attending Board and
Committee meetings, due to the policies of the Massachusetts
Pension Reserves Investment Management Board.
9
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE. The following table sets forth
certain information with respect to the annual and long-term
compensation of the Company's Chief Executive Officer and each of
the four most highly compensated executive officers of the
Company for the year ended December 31, 1996 and the two
preceding years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------- ---------
OTHER
ANNUAL SECURITIES
COMPEN- UNDERLYING
SALARY BONUS SATION OPTIONS
NAME AND POSITION YEAR ($) ($) ($)(2) (#)
- - ----------------- ---- ------ ----- ------- ----------
<S> <C> <C> <C> <C> <C>
Alain J. Hanover (1) 1996 225,000 96,384 13,592 75,000
Chairman of the Board 1995 214,000 69,980 13,761 100,000
1994 204,000 56,335 13,065 100,000
William J. Herman 1996 200,000 85,675 10,312 75,000
President and Chief 1995 127,000 44,550 83,033 125,000
Executive Officer 1994 0 0 0 0
Harold E. Julsen 1996 180,000 79,357 13,300 0
Senior V.P. of World- 1995 31,385 8,000 11,338 100,000
Wide Sales 1994 0 0 0 0
Richard G. Lucier 1996 165,000 64,220 10,217 140,000
Group Vice President, 1995 138,000 47,250 9,938 40,000
Systems 1994 100,000 29,685 7,967 20,000
Lawrence M. Rubin 1996 170,000 65,909 5,342 40,000
Group Vice President, 1995 150,000 54,750 3,616 40,000
Advanced Development 1994 143,000 67,131 29,318 20,000
- - ----------
<FN>
(1) Mr. Hanover resigned as Chief Executive Officer in January 1997. He will
resign as Chairman of the Board when his term as a Director expires in
May 1997.
(2) Includes amounts representing the Company's contributions under the
Company's tax-qualified and deferred 401(k) savings plan; the taxable
portion of group life insurance paid by the Company; automobile
allowances provided by the Company; in the case of Mr. Rubin in 1994,
$25,000 paid in lieu of vacation; in the case of Mr. Herman in 1995,
reimbursement of relocation expenses of $75,185; and, in the case of
Mr. Julsen in 1995 and 1996, reimbursement of relocation expenses of
$10,000 and $1,380, respectively.
</TABLE>
10
<PAGE>
OPTION GRANT TABLE. The following table sets forth certain
information regarding options granted during the year ended
December 31, 1996 by the Company to the executive officers named
in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------
% OF
TOTAL POTENTIAL REALIZABLE
OPTIONS VALUE AT ASSUMED
NUMBER OF GRANTED TO ANNUAL RATES OF STOCK
SECURITIES EMPLOYEES EXERCISE PRICE APPRECIATION
UNDERLYING IN FISCAL OR BASE EXPIR- FOR OPTION TERM($)(2)
OPTIONS YEAR PRICE ATION ---------------------
GRANTED(1) 1996 ($/SH) DATE 5% 10%
---------- -------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Alain J. Hanover 75,000 5.3% 10.50 1/25/2003 320,250 747,000
William J. Herman 75,000 5.3% 10.50 1/25/2003 320,250 747,000
Harold E. Julsen 0 0 0 0 0 0
Richard G. Lucier 100,000 7.1% 8.70 10/17/2003 356,000 830,000
40,000 2.8% 10.50 1/25/2003 170,800 398,400
Lawrence M. Rubin 40,000 2.8% 10.50 1/25/2003 170,000 398,400
- - ------------
<FN>
(1) Options vest at the rate of 25% per year beginning on the first
anniversary of the grant date, except that Mr. Hanover's option
becomes fully vested on December 30, 1999 and no shares are vested
prior thereto.
(2) Amounts represent hypothetical gains that could be achieved for options
if exercised at the end of the option term. These gains are based on
assumed rates of stock price appreciation of 5% and 10% compounded
annually from the date options are granted.
</TABLE>
YEAR-END OPTIONS. The following table sets forth certain information
regarding stock options exercised during the year ended December 31, 1996
and stock options held as of December 31, 1996 by the executive officers
named in the Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN LAST YEAR AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT
OPTIONS AT FISCAL
FISCAL YEAR- YEAR-END
END(#) ($)(2)
SHARES VALUE ------------- -------------
ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) ($)(1) UNEXERCISABLE UNEXERCISABLE
- - ---- -------------- ------- ------------- -------------
<S> <C> <C> <C> <C>
Alain J. Hanover 15,000 172,945 307,734/275,000 293,873/128,125
William J. Herman 46,250/168,750 761,172/294,141
Harold E. Julsen 25,000/75,000 31,250/93,750
Richard G. Lucier 31,625/187,625 469/297,500
Lawrence M. Rubin 77,500/112,500 0/35,000
- - -----------
<FN>
(1) Represents the difference between the exercise price and the closing
sales price of the Common Stock on the date of exercise.
(2) Value is based on the closing sales price of the Company's Common Stock
on December 31, 1996, the last trading day of the Company's 1996 fiscal
year ($11.38), less the applicable option exercise price.
</TABLE>
11
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
OVERVIEW OF VIEWLOGIC'S EXECUTIVE COMPENSATION PROGRAM.
The Company's compensation program for executive officers is
administered by the Compensation Committee of the Board of
Directors, which was composed of the three non-employee directors
listed below in this report during 1996. The Committee is
responsible for establishing and administering the policies which
govern both cash compensation and equity ownership. None of these
directors has any interlocking or other relationship with the
Company which would call into question his independence as a
Committee member.
The Company's executive compensation program reflects input
from the Company's Vice President of Human Resources, the
President and the Chief Executive Officer. The Compensation
Committee reviews their proposals concerning executive
compensation and makes a final determination concerning the scope
and nature of compensation arrangements. The actions of the
Compensation Committee are reported to the Company's entire Board
of Directors.
ELEMENTS OF EXECUTIVE COMPENSATION.
Compensation paid to executive officers is composed of salary,
cash bonuses for the achievement of corporate and personal
objectives, and long-term incentive opportunities in the form of
stock options; as well as various benefit programs, such as
medical insurance and 401(k) savings plan, available to employees
generally.
OBJECTIVES OF COMPENSATION.
In general terms, the executive compensation program is
intended to achieve the following goals:
To motivate executives to achieve strategic business
objectives and reward them for that achievement.
To align the interests of executives with the long-term
interests of stockholders through assurance that bonus and
stock option programs reward revenue, profitability, and
enhancement in shareholder value.
To provide compensation opportunities which are competitive
with those offered by other leading companies in the
industry, allowing the Company to attract and retain
executives at a level required to maintain a competitive
position in the Company's marketplace.
To increase profitability of the Company and, accordingly,
increase stockholder value.
In balancing the foregoing considerations, the Committee has
consistently sought to emphasize those components which would
align the interests of management with those of the stockholders.
It therefore maintains base compensation at a level which is
consistent with prevailing salary levels for comparable
companies, while providing a significant bonus package to
supplement base salaries if corporate goals are met.
BASE SALARY.
The Committee's goal is to assure a base salary sufficient to
attract and retain key executives and to balance that goal with
bonus and long-term incentives which assure that a significant
portion of annual compensation is dependent upon the financial
performance of the Company. In furtherance of that goal and based
on a review of competitive salary information, the Committee set
executive officer base salaries for 1996 to be comparable with
corresponding positions at other companies and to reflect changes
in individual circumstances and increased responsibilities of
certain senior executives.
12
<PAGE>
BONUS.
The Company's 1996 bonus plan provided for bonuses to be paid
to each eligible executive officer as a percentage of their base
salary and on the basis of the achievement of certain individual
and corporate financial goals. A portion of the bonus could be
earned through annual goals identified for each individual
executive, which were formulated by the Company's CEO, President
and the Committee (or, in the case of the CEO and President, the
Committee) to further specific strategic goals of the Company,
including maintaining expense levels at or below budgetary
limits. The balance of the bonus could be earned through
achievement of quarterly and annual revenue, bookings and income
goals. The bonuses actually earned by each individual reflected
the achievement of their personal goals, and was offset by the
bonus payments foregone because of the Company's failure to
achieve corporate revenue, income and booking goals set for the
third quarter of 1996 and the year as a whole.
LONG-TERM INCENTIVES.
The Company provides long-term incentives for its executive
officers through the periodic grant of stock options. The Company
believes that these option grants reflect competitive
compensation practices. Stock options are also, in the judgment
of the Compensation Committee, an important incentive for
executives to remain with the Company and to align the interests
of management with those of stockholders. Stock options for
executive officers are granted without any discount in exercise
price, which is fixed at market value, and generally with a
vesting schedule of four years.
The Committee generally considers the grant of options to
executive officers on an annual basis, in order to permit the
regular evaluation of management equity participation and to
monitor the corresponding impact on equity dilution to
stockholders.
BENEFITS.
The Company's executive officers are entitled to receive
medical and life insurance benefits and to participate in the
Company's 401(k) Savings Plan on the same basis as other full-
time employees of the Company. The Company's Employee Stock
Purchase Plan, which is available to virtually all employees,
including executive officers, allows participants to purchase
shares at a discount of 15% from the fair market value at the
beginning or end of the applicable purchase period.
The amount of perquisites, as determined in accordance with the
rules of the Securities and Exchange Commission relating to
executive compensation, did not exceed 10% of salary for 1996.
SUMMARY OF COMPENSATION OF CHIEF EXECUTIVE OFFICER.
In 1996, the Company's Chief Executive Officer, Alain J.
Hanover, received salary and bonus compensation of $321,384,
including base salary of $225,000 and bonus compensation of
$96,384. Bonus compensation was 54% of Mr. Hanover's maximum
bonus target of $180,000 (80% of base salary). Mr. Hanover's
bonus compensation for 1996 reflected the achievement of certain
personal goals established for Mr. Hanover, and was offset by the
bonus payments foregone because of the Company's failure to
achieve corporate revenue, income and booking goals set for the
third quarter of 1996 and the year as a whole.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M).
Section 162(m) of the Internal Revenue Code, enacted in 1994,
generally disallows a tax deduction to public companies for
compensation over $1 million paid to the corporation's Chief
Executive Officer and four other
13
<PAGE>
most highly compensated
executive officers. Qualifying performance-based compensation
will not be subject to the deduction limit if certain
requirements are met. The Company intends to structure stock
option grants to its executive officers to comply with the
statute to mitigate any disallowance of deductions and, in any
event, does not expect Section 162(m) to apply to the
compensation paid by the Company to its executive officers.
COMPENSATION COMMITTEE
Stanley F. Alfeld
Gregory T. George
Allyn C. Woodward, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee for 1996 were Stanley
F. Alfeld, Gregory T. George and Allyn C. Woodward, Jr.. No
member of the Compensation Committee was at any time during 1996,
or formerly, an officer or employee of the Company or any
subsidiary of the Company, nor has any member of the Compensation
Committee had any relationship with the Company requiring
disclosure under Item 404 of Regulation S-K under the Securities
Exchange Act of 1934 (as amended, the "Exchange Act"), except
as otherwise set forth herein. With respect to certain
relationships between the Company and Mr. Alfeld, see "Certain
Transactions".
Since January 1995, an executive officer of the Company has
served on the Board of Directors and the Compensation Committee
of Eagle Design Automation, Inc.. Currently, Shiv Tasker, the
Company's Senior Vice President of Corporate Marketing serves in
that capacity. Gordon Hoffman, a director of the Company, was the
President, a director and a principal shareholder of Eagle from
September 1994 until February 1997. No other executive officer of
the Company has served as a director or member of the
compensation committee (or other committee serving an equivalent
function) of any other entity, one of whose executive officers
served as a director of, or member of the Compensation Committee
of, the Company. With respect to certain relationships between
the Company and Mr. Hoffman, see "Certain Transactions".
14
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The comparative stock performance graph below compares the
cumulative stockholder return on the Common Stock of the Company
for the period from December 31, 1991 through the year ended
December 31, 1996 with the cumulative total return on (i) the
CRSP Total Return Index for the Nasdaq National Market (U.S.
Companies) (the "Nasdaq Composite Index") and (ii) a peer group
consisting of seven electronic design automation companies for
the same period (the "EDA Peer Group") (assuming the investment
of $100 in the Company's Common Stock, the Nasdaq Composite Index
and the EDA Peer Group on December 31, 1991 and reinvestment of
all dividends). Measurement points are on the last trading day of
the Company's fiscal years ended December 31, 1991, 1992, 1993,
1994, 1995 and 1996. The EDA Peer Group consists of Cadence
Design Systems, Inc., Mentor Graphics Corporation, Zycad
Corporation, Avant Corporation, IKOS Systems, Inc., Quickturn
Design Systems, Inc. and Synopsys, Inc. Synopsys, Inc. became a
public company in 1992, Quickturn Design Systems, Inc. became a
public company in 1993 and Avant Corporation became a public
company in 1995. Based on changes in the industry, the Company
believes that the companies listed above constitute a more
representative peer group than the companies used in prior years.
Line graph depicting the following information:
COMPARISON OF CUMULATIVE STOCK PERFORMANCE
THE NASDAQ COMPOSITE INDEX AND EDA PEER GROUP
VS VIEWLOGIC SYSTEMS, INC.
DECEMBER 1991 - DECEMBER 1996
<TABLE>
<CAPTION>
12/31/91 12/31/92 12/31/93 12/30/94 12/29/95 12/31/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Viewlogic Systems, 100 93.590 116.667 94.872 51.282 58.333
Inc.
Nasdaq Composite 100 116.378 133.595 130.586 184.675 227.158
Index
EDA Peer Group 100 86.826 84.954 102.246 184.648 218.077
</TABLE>
Source: CRSP University of Chicago
15
<PAGE>
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Subject to ratification by the stockholders, the Board of
Directors, on the recommendation of its Audit Committee, has
selected the firm of Deloitte & Touche as the Company's
independent public accountants for the current year. Deloitte &
Touche has served as the Company's independent public accountants
since 1985.
Representatives of Deloitte & Touche are expected to be present
at the Annual Meeting. They will have the opportunity to make a
statement if they desire to do so and will also be available to
respond to appropriate questions from stockholders.
If the stockholders do not ratify the selection of Deloitte &
Touche as the Company's independent public accountants, the
selection of such accountants will be reconsidered by the Audit
Committee and the Board of Directors.
OTHER MATTERS
The Board of Directors does not know of any other matters which
may come before the meeting. However, if any other matters are
properly presented to the meeting, it is the intention of the
persons named in the accompanying proxy to vote, or otherwise
act, in accordance with their judgment on such matters.
All costs of solicitation of proxies will be borne by the
Company. In addition to solicitations by mail, the Company's
directors, officers and regular employees, without additional
remuneration, may solicit proxies by telephone, telegraph and
personal interviews. The Company may, if it deems it appropriate,
use the services of a professional proxy solicitor. Brokers,
custodians and fiduciaries will be requested to forward proxy
soliciting material to the owners of stock held in their names,
and the Company will reimburse them for their reasonable out-of-
pocket expenses incurred in connection with the distribution of
proxy materials.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS FOR THE 1998
ANNUAL MEETING
Proposals of stockholders intended to be presented at the 1998
Annual Meeting of Stockholders must be received by the Company at
its principal office in Marlboro, Massachusetts not later than
December 9, 1997 for inclusion in the proxy statement for that
meeting.
By Order of the Board of Directors,
Peter T. Johnson, SECRETARY
April 7, 1997
THE BOARD OF DIRECTORS ENCOURAGES STOCKHOLDERS TO ATTEND THE
MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE
ACCOMPANYING ENVELOPE. A PROMPT RESPONSE WILL GREATLY FACILITATE
ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE
APPRECIATED. STOCKHOLDERS WHO ATTEND THIS MEETING MAY VOTE THEIR
STOCK PERSONALLY EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
16
<PAGE>
X PLEASE MARK VOTES AS IN THIS EXAMPLE
- - ---
- - ------------------------
VIEWLOGIC SYSTEMS, INC.
- - ------------------------
RECORD DATE SHARES:
<TABLE>
<CAPTION>
With- For All
For hold Except
<C><S> <C> <C> <C>
1. To elect the following two Class I Directors:
WILLIAM J. HERMAN
ALLYN C. WOODWARD, JR.
--- --- ---
To withhold your vote from any particular nominee, mark the "For All
Except" box and strike a line though that nominee's name. Your shares
will be voted for the remaining nominee.
<CAPTION>
For Against Abstain
<C><S> <C> <C> <C>
2. To ratify the selection of Deloitte & Touche as
the Company's independent accountants for 1997.
--- --- ---
3. To transact such other business as may properly
come before the meeting or at any adjournment
thereof. --- --- ---
</TABLE>
Mark box at right if an address change has been noted
on the reverse side of this card. ---
Please be sure to sign and date this Proxy. Date
---------------
- - --------------------------- ---------------------------
Stockholder sign here Co-owner sign here
DETACH CARD DETACH CARD
VIEWLOGIC SYSTEMS, INC.
Dear Stockholder,
Please take note of the important information enclosed with this
Proxy Ballot. There are a number of issues related to the
management and operation of your Corporation that require your
immediate attention and approval. These are discussed in detail
in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise
your right to vote your shares.
Please mark the boxes on this proxy card to indicate how your
shares will be voted. Then sign the card, detach it and return
your proxy vote in the enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of
Stockholders to be held on May 13, 1997.
Thank you in advance for your prompt consideration of these
matters.
Sincerely,
Viewlogic Systems, Inc.
17
<PAGE>
VIEWLOGIC SYSTEMS, INC.
PROXY FOR 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 13, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned, revoking all prior proxies, hereby appoint(s)
as proxies Ronald R. Benanto and Peter T. Johnson, and each of
them, with full power of substitution, as proxies to represent
and to vote as designated herein, all shares of stock of
Viewlogic Systems, Inc. (the "Company") which the undersigned
would be entitled to vote if present at the 1997 Annual Meeting
of the Stockholders of the Company to be held at Hale & Dorr
LLP, 60 State Street, 26th Floor, Boston, Massachusetts 02109,
on Tuesday, May 13, 1997 at 10:00 a.m., local time, and at any
adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1,2
AND 3. ATTENDANCE OF THE UNDERSIGNED AT THE MEETING OR AT ANY
ADJOURNMENT THEREOF WILL NOT BE DEEMED TO REVOKE THIS PROXY
UNLESS THE UNDERSIGNED SHALL REVOKE THIS PROXY IN WRITING.
---------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
---------------------------------------------------------
NOTE: Please sign exactly as name(s) appear(s) hereon.
Joint owners should each sign. When signing as an
attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please
sign in full corporate name by President or other
authorized officer. For partnership, please sign in
partnership name by authorized person.
----------------------------------------------------------
HAS YOUR ADDRESS CHANGED?
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