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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): JANUARY 20, 2000
ARDENT SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State of incorporation or organization)
0-20059 04-2818132
(Commission File Number) (I.R.S. Employer Identification No.)
50 WASHINGTON STREET, WESTBORO, MA 01581-1021
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (508) 366-3888
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ITEM 5. OTHER EVENTS.
1999 EXECUTIVE OFFICER AND DIRECTOR COMPENSATION
SUMMARY COMPENSATION TABLE
The following summary compensation table sets forth compensation received by
- - the Company's Chief Executive Officer during 1999,
- - the four other most highly compensated executive officers in 1999 who were
serving as such on December 31, 1999
The table details compensation received for services rendered to the Company
during the fiscal years ended December 31, 1999, 1998 and 1997.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION SHARES UNDER
------------------- OPTIONS ALL
NAME AND PRINCIPAL POSITION SALARY(1) BONUS AWARDED OTHER
ON DECEMBER 31, 1999 YEAR ($) ($) (#) COMPENSATION(1)(2)
- --------------------------- ---- ------- ------- ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Peter Gyenes(3)......................... 1999 350,000 525,000 -- 81,074
Chief Executive Officer, President 1998 300,000 225,000 400,000 81,890
and Chairman of the Board 1997 233,077 150,000 75,000 81,613
Charles F. Kane......................... 1999 200,000 110,000 -- 43,183
Vice President, Finance and 1998 165,000 150,000 55,000 43,002
Chief Financial Officer 1997 162,939 50,000 -- 41,804
Cornelius P. McMullan................... 1999 200,000 110,000 -- --
Vice President, International 1998 180,000 120,000 50,000 --
Operations 1997 170,827 50,000 100,000 --
James D. Foy............................ 1999 200,000 110,000 -- 81,267
Vice President, Engineering 1998 165,000 150,000 55,000 81,875
1997 165,000 50,000 52,351 81,405
Peter L. Fiore.......................... 1999 200,000 110,000 -- 42,957
Vice President, Data Warehousing 1998 165,000 125,000 55,000 42,775
1997 155,000 45,000 24,000 41,576
</TABLE>
(1) Salary includes amounts deferred by the named executive officer, and All
Other Compensation includes the Company's contribution, under the deferred
compensation and profit-sharing plan established pursuant to Section 401(k)
of the Internal Revenue Code. The plan covers substantially all domestic
employees of the Company and allows each participant to contribute up to
15% of his or her base wage up to an amount not to exceed an annual
statutory maximum ($10,000 in 1999). The Company matches contributions in
an amount equal to 50% of the contributions of each participant up to 6% of
such participant's annual compensation.
(2) All Other Compensation includes, for each of the executive officers except
Mr. McMullan, the value, projected on an actuarial basis, of the benefit to
the executive of the premium paid by the Company during the year on an
insurance policy on the life of the executive purchased in connection with
a split-dollar agreement. Each policy is a whole-life policy to be paid in
ten equal annual premiums, which the Company has agreed to pay so long as
the executive continues to be employed by the Company and, in some
circumstances, including the occurrence of change-in-control events,
thereafter. The Company has limited rights to borrow against each policy
and the right to receive an amount equal to all premiums paid by it not
later than upon the death of the respective executive. The executives have
the right to borrow limited amounts under the policies and to receive the
respective death benefits net of premium amounts paid by the Company. The
benefits in 1999 were: Mr. Gyenes, $76,274; Mr. Kane, $38,383; Mr. Foy,
$76,467; and Mr. Fiore, $38,157.
(3) Mr. Gyenes became President and Chief Executive Officer on April 1, 1997.
SEVERANCE ARRANGEMENTS ON CHANGE-IN-CONTROL
The Company has a policy providing that each of its executive officers will,
upon termination of their employment within one year following a
change-in-control of the Company, be entitled to severance compensation equal to
one year's salary (two years' in the case of the Chief Executive Officer and
founders) and any applicable planned discretionary bonus. This does not include
voluntary termination or termination for cause.
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OPTION EXERCISE AND YEAR-END VALUE TABLE
The following option exercise and year-end value table sets forth information
regarding the exercise of stock options by the named executive officers during
the fiscal year ended December 31, 1999 and the number and unrealized value or
spread (the difference between the exercise price and the market value) of
unexercised options held by such officers on December 31, 1999. All of such
options were then exercisable, but some of the underlying shares were subject to
vesting over a five year period, subject to acceleration upon certain change of
control events. The table does not include shares purchased under the employee
stock purchase plan, which is described in the related section below.
<TABLE>
<CAPTION>
SHARES UNDER UNEXERCISED VALUE OF UNEXERCISED IN THE MONEY
SHARES OPTIONS AT FISCAL YEAR END(#) OPTIONS AT FISCAL YEAR END($)
ACQUIRED ON VALUE ---------------------------- -------------------------------------
NAME EXERCISE REALIZED VESTED UNVESTED TOTAL VESTED UNVESTED TOTAL
---- ----------- ---------- ------- -------- ------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Peter Gyenes.............. 81,529 $1,488,845 202,221 316,250 518,471 $5,772,912 $8,782,969 $14,555,881
Charles F. Kane........... 25,000 431,661 72,917 57,083 130,000 2,236,781 1,494,313 3,731,094
Cornelius P. McMullan..... -- -- 75,000 75,000 150,000 2,306,249 2,118,751 4,425,000
James D. Foy.............. -- -- 92,329 73,200 165,529 2,841,364 1,990,222 4,831,585
Peter L. Fiore............ 18,933 323,530 69,048 67,853 136,901 1,961,136 1,784,615 3,745,751
</TABLE>
DIRECTOR COMPENSATION
Each director who is not also an employee of the company is paid a quarterly fee
of $4,000. Such directors are also paid $1,000 for each Board meeting and $500
for each committee meeting attended. Directors also are reimbursed for traveling
costs and other out-of-pocket expenses incurred in connection with meeting
attendance. Under the Company's 1991 Director Stock Option Plan, each
non-employee director is automatically entitled to receive upon first joining
the Board an option for the purchase of 15,000 shares of the Company's common
stock and on January 31 of each year thereafter an option for the purchase of
10,000 shares, in each case exercisable, subject to a three year vesting period,
with acceleration upon certain change-in-control events, at a price per share
equal to fair market value at the date of grant.
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BOARD COMPENSATION COMMITTEE REPORT
The overall policy for compensating executive officers has been based upon the
following three principles:
1. Aggregate compensation should be sufficiently competitive within the
software industry to retain and, when necessary, attract executives capable
of leading the Company.
2. The executive officers of the Company, other than the Chief Executive
Officer, should function and succeed as a team and, therefore, there should
not be significant differences in compensation among those officers.
3. A significant portion of aggregate compensation opportunity should depend
upon the achievement of Company goals.
The main components of the Company's executive compensation program are salary,
bonuses and stock options. Executives are also eligible to participate in
various benefit programs provided to all full time employees, including 401(k)
and employee stock purchase plans. In addition, there is a split-dollar life
insurance program for executive officers.
Salary and Bonuses. The committee's objective has been to fix levels of salary
plus bonus opportunity for executive officers at the average levels for
comparable companies within the software industry. Based upon review of various
surveys of compensation within the industry, the committee believes that this
objective has generally been achieved. Because one of the Company's overall
principles for compensating executive officers, other than the Chief Executive
Officer, has been that there should not be significant differences in
compensation among those officers, the Committee's comparison of the Company's
compensation levels with those of other companies has been done on an aggregate
rather than position by position basis.
Executive salaries have been fixed based upon subjective consideration of
several factors, principally including salary levels of comparable companies in
the industry. Each of the executives has been paid a similar salary, except for
the Chief Executive Officer (see discussion below).
At the beginning of each year, the committee establishes a bonus opportunity for
key employees, other than sales and sales support personnel who receive
commissions and bonuses based upon sales. The 1999 bonus plan for executive
officers provided for bonuses based upon the Company's achievement of certain
earnings per share as well as the contribution of the executives, in the
judgement of the Committee, to the Company's performance during the year.
Stock Options. The committee believes that equity ownership by executive
officers, as well as by other employees, provides an important long-term
incentive for retention and team-oriented performance. Executive officers, as
well as other employees of the Company, have historically been given, at the
time of initial hiring, an equity ownership opportunity in the form of stock
options. Such equity has generally been subject to vesting over several years.
From time to time executive officers and other employees have been given
additional stock options, most recently in 1998. No stock options were granted
to executive officers in 1999.
Chief Executive Officer's Compensation. Mr. Gyenes' base salary during 1999
represented an increase of approximately 17% over his rate of salary as CEO in
1998. The increase was based upon his performance as CEO during 1998 and was
determined to be appropriate based upon levels of CEO salaries for comparable
companies in the software industry. His bonus for 1999 was determined in
accordance with the 1999 bonus plan for executive officers and on his role in
initiating and negotiating the agreement of merger with Informix Corporation.
Compensation Not Qualifying for Tax Deductibility. Section 162(m) of the
Internal Revenue Code provides in general that compensation to some individual
executive officers during any year in excess of $1 million is not deductible by
a public company. The committee believes that, given the general range of
salaries and bonuses for executive officers of the Company and the nature of the
options generally held by them (some options do not result in income which is
includable in the amounts which are non-deductible), the $1 million threshold of
Section 162(m) will not be reached by any executive officer of the Company in
the foreseeable future. Accordingly, the committee has not considered what its
policy regarding compensation not qualifying for federal tax deductibility might
be at such time, if ever, as that threshold is within range of any executive
officer.
Compensation Committee
Robert G. Claussen
Martin T. Hart
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COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURN
The following performance graph assumes an investment of $100 on December 31,
1994 and compares the change to December 31, 1995, 1996, 1997, 1998 and 1999 in
the market price of the Company's common stock with a broad market index (S&P
500) and an industry index (S&P Computer Software & Services). The Company paid
no dividends during the periods shown. The performance of the indexes is shown
on a total return (dividend reinvestment) basis. The graph lines merely connect
the prices on the dates indicated and do not reflect fluctuations between these
dates.
<TABLE>
<CAPTION>
MEASUREMENT PERIOD ARDENT S&P SOFTWARE &
(FISCAL YEAR COVERED) SOFTWARE, INC. S&P 500 SERVICES
- --------------------- ------------- ------- --------------
<S> <C> <C> <C>
12/31/94 100 100 100
12/31/95 53 138 141
12/31/96 42 169 218
12/31/97 45 226 304
12/31/98 130 290 551
12/31/99 220 351 1,020
</TABLE>
The Compensation Committee Report and the Comparison of Cumulative Total
Stockholder Return above shall not be deemed to be "soliciting material" or
incorporated by reference into any of the Company's filings with the SEC.
ITEM 7. FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION.
Not applicable.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ARDENT SOFTWARE, INC.
Date: January 20, 2000 By: /s/ Peter Gyenes
----------------------------------
Peter Gyenes
Chief Executive Officer, President
and Chairman of the Board
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