<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
--------------
AMENDMENT NO. 1
[X] AMENDMENT TO ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED MARCH 31, 1997
OR
[ ] AMENDMENT TO TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 0-23132
PARCPLACE-DIGITALK, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 77-0143293
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
999 EAST ARQUES AVENUE, SUNNYVALE, CALIFORNIA 94086
(Address of principal executive offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (408) 481-9090
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK
(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
<PAGE> 2
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 the voting stock held by
non-affiliates of the Registrant, based on the closing sale price of the Common
Stock on June 26, 1997, as reported by Nasdaq was $12,331,236. Shares of Common
Stock held by each officer and director and by each person who owns 5% or more
of the outstanding Common Stock have been excluded from this computation in that
such persons may be deemed to be affiliates. This determination of affiliate
status is not a conclusive determination for other purposes. As of June 26,
1997, the registrant had outstanding 11,929,351 shares of Common Stock.
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EXPLANATORY NOTE
This Report on Form 10-K/A amends and restates in their entirety the
following Items of the Annual Report on Form 10-K of the Registrant for the
fiscal year ended March 31, 1997.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION
---- --- --------------------
<S> <C> <C>
James C. Anderson 58 Chief Executive Officer of Urlysoft Company
John B. Carrington 53 Chief Executive Officer of Artios, Inc.
Eugene L. Goda 61 President and Chief Executive Officer of the Company
Jos C. Henkens 44 General Partner, Advanced Technology Ventures
Philip C. Kantz 53 President and Chief Executive Officer, Tab Products, Inc.
</TABLE>
James C. Anderson, a founder of Digitalk, Inc. ("Digitalk"), has been
a director of the Company since September 1995. Mr. Anderson has been the Chief
Executive Officer of Urlysoft Company, a provider of Intranet development
<PAGE> 3
software, since November 1996. He was Chairman of the Board of Digitalk, a
provider of software development tools based on the Smalltalk language, from its
inception in 1983 until the merger with the Company in August 1995. Mr. Anderson
was also President and Chief Executive Officer of Digitalk from its inception
until September 1991 and January 1994, respectively. Prior to founding Digitalk,
he was a principal consultant at Computer Sciences Corporation for more than 15
years.
John B. Carrington has been a director of the Company since September
1995. He has been Chief Executive Officer and Chairman of the Board of Artios,
Inc., a provider of automation software for the packaging industry, since August
1996. He was President and a director of Digitalk from September 1991 and Chief
Executive Officer from January 1994 until the merger with the Company in August
1995. Prior to joining Digitalk, he was Chairman of the Board and Chief
Executive Officer of Cogensys Corporation, co-founded State of the Art, Inc.,
and held senior positions with the Del Mar Group, Harte-Hanks Communications,
and Honeywell.
Eugene L. Goda joined the Company as President and Chief Executive
Officer, and Chairman of the Board, on June 10, 1997. From November 1995 until
joining the Company, Mr. Goda was a consultant and private investor. From
October 1991 to October 1995, Mr. Goda served as Chief Executive Officer of
Simulation Sciences, Inc., a software company that develops and markets
simulation tools. From July 1989 to September 1991, he served as Chief Executive
Officer of Meridian Software Systems, a systems software provider. He is also a
director of Powerwave Technologies, Inc.
Jos C. Henkens has been a director of the Company since March 1988.
Mr. Henkens has been a general partner of Advanced Technology Ventures, a
venture capital investment firm, since 1983. He is also a director of
AccelGraphics, Inc., Actel Corporation, Credence Systems Corporation, and a
variety of private companies.
Philip C. Kantz has been a director of the Company since August 1996.
Mr. Kantz has been President and Chief Executive Officer and a director of Tab
Products Co. Inc., a provider of file storage and retrieval and information
management systems, since January 1997. From October 1995 through November 1996,
he served as President and Chief Operating Officer and a director of Trans Ocean
Ltd, a diversified worldwide transportation services company. From February 1994
through January 1995, Mr. Kantz served as President and Chief Executive Officer
and a director of Transcisco Industries, Inc., an industrial services company.
From 1992 to 1993 he was interim President and Chief Executive Officer of
Genetrix, Inc., a biotechnology services business. He currently serves as a
director of 3Com Corporation, Falcon Building Products, Inc., Mine Reclamation
Corporation, Search Systems Corporation, and SonicForce Corporation.
EXECUTIVE OFFICERS
Eugene L. Goda, 61, joined the Company as President and Chief
Executive Officer, and Chairman of the Board, on June 10, 1997. From November
1995 until joining the Company, Mr. Goda was a consultant and private investor.
From October 1991 to October 1995, Mr. Goda served as CEO of Simulation
Sciences, Inc., a software company that develops and markets simulation tools.
From July 1989 to September 1991, he served as CEO of Meridian Software Systems,
<PAGE> 4
a systems software provider. He is also a director of Powerwave Technologies,
Inc.
Ronald J. Clear, 44, joined the Company as Chief Financial
Officer on June 10, 1997. Since 1985, he has served as President of Clear,
Alexander & Associates, a management consulting firm specializing in
recapitalization and turnaround management. From 1983 to 1985, he was Vice
President and CFO of Waubash Computing Systems. From 1982 to 1983, he was CFO of
Russco Industrial.
James H. Smith, 41, joined the Company as Senior Vice President
of Sales on June 10, 1997. From 1995 until joining the Company, he was Executive
Vice President, Chief Operating Officer and a Director of Select Software Tools,
a developer of object-oriented application development tools. From 1994 to 1995,
he was Vice President of Sales at Softlab, a developer of process automation
tools. From 1992 to 1994, he was Vice President of Sales for the western region
at Knowledgeware, a developer of CASE tools. From 1988 to 1992, he was Vice
President of Sales and Marketing at Meridian, a developer of Ada development
tools.
Richard H. Dym, 50, is Vice President of Marketing. He joined the
Company in March 1993 as Vice President of Marketing and served as Vice
President of International Operations from April 1995 through September 1996.
From September 1996 through January 1997, he was Vice President and General
Manager of the ObjectShare Division. From 1992 until 1993, he was General
Manager of the Multimedia Division at Autodesk. From 1987 until 1992, he held a
variety of positions with Ashton-Tate Corporation, serving most recently as
Director of Graphics and Decision Support Products.
Steven G. Harris, 40, joined the Company in October 1996 as Vice
President of Technology Partnerships, and has been Vice President of Development
since January 1997. Mr. Harris was President of Polymorphic Software, Inc.
("Polymorphic"), from its inception in April 1993 until its acquisition by the
Company in October 1997. Polymorphic was a privately held corporation in the
Smalltalk tools and consulting business. From 1983 until March 1993, Mr. held
various positions with Anamet Laboratories, Inc., a systems integration firm,
serving most recently as Manager of Systems Integration and Development.
ITEM 11. EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION INFORMATION
COMPENSATION TABLES
The following table sets forth the compensation paid by the Company
during the fiscal years ended March 31, 1997, 1996 and 1995, to the Chief
Executive Officer, the four other most highly compensated executive officers of
the Company, based on fiscal 1997 salary and bonus, and one additional officer
who was among the most highly compensated but was not serving as an executive
officer at the end of fiscal 1997:
SUMMARY COMPENSATION TABLE
<PAGE> 5
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS OF
FISCAL ANNUAL COMPENSATION OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) (# OF SHARES) COMPENSATION(3)
--------------------------- ---- --------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
William P. Lyons (4) 1997 $200,000 - - $ 1,066
President and Chief Executive Officer 1996 $200,000 $ 50,000 10,000 $ 1,066
1995 $188,333 - 60,000 $ 1,066
Carolyn V. Aver (4) 1997 $168,750 - 30,000 $ 263
Vice President and Chief Financial Officer 1996 $143,750 $ 22,500 14,500 $ 253
1995 $129,167 - 12,500 $ 254
James C. Clemens (4) 1997 $135,417 - 30,000 $ 3,215
Vice President, Development Services 1996 $ 15,987 - 15,000 -
Richard H. Dym 1997 $199,049 - 25,000 $ 644
Vice President, Marketing 1996 $195,809 $ 13,000 10,100 $ 644
(formerly VP, International Operations) 1995 $132,140 - 11,500 $ 2,406
Michael W. Taylor (4) 1997 $138,689 $ 7,500 10,000 $ 41,326
Vice President, Professional Services 1996 $116,157 $ 5,750 31,150 $ 80
1995 $102,785 - - -
Martin A. Yam (4) 1997 $169,200 $ 21,875 25,000 $ 67,341
Vice President of Sales and Marketing 1996 $ 20,000 $ 12,000 55,000 $ 80
1995 $113,142 $ 40,000 - $ 13,634
</TABLE>
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(1) The amounts shown as Mr. Dym's salary include commission payments of
$47,049 in fiscal 1997, $68,934 in fiscal 1996 and $14,015 in fiscal
1995. The amounts shown as Mr. Taylor's salary include commission
payments of $15,057 in fiscal 1997 and $8,500 in fiscal 1996. The
amounts shown as Mr. Yam's salary include commission payments of
$71,892 in fiscal 1995. The amounts shown for Mr. Yam are each for
partial years of service, as described in footnote 4 below.
(2) The executive bonus plans for each fiscal year established executive
bonus awards as the product of a target percentage of base salary
times an individual performance multiplier times a Company
performance multiplier. The amount shown for Mr. Taylor in fiscal
1997 represents a one-time incentive bonus based on achievement of
specific near-term objectives. The amount shown for Mr. Yam in fiscal
1997 was pursuant to a first-year guarantee of a portion of target
bonus.
(3) Except as noted in the following sentences, the amounts shown as
other compensation represent life insurance premiums. The amount
shown for Mr. Clemens in fiscal 1997 includes reimbursement of
relocation expenses of $2,625. The amount shown for Mr. Dym in fiscal
1995 includes a travel-savings incentive of $1,772. The amount shown
for Mr. Taylor in fiscal 1997 includes severance and consulting
payments of $40,558. The amount shown for Mr. Yam in fiscal 1997
includes severance of $65,019 and in fiscal 1996 includes payout of
accrued vacation of $13,327.
(4) Mr. Lyons, Ms. Aver, Mr. Clemens and Mr. Taylor resigned from the
<PAGE> 6
Company after the end of fiscal 1997. Mr. Yam left the Company in
February 1997. He had rejoined the Company in February 1996 after
having resigned from the Company in August 1994.
The following table sets forth information regarding grants of stock
options made during the fiscal year ended March 31, 1997 to the persons named in
the Summary Compensation Table above:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
% OF TOTAL STOCK PRICE APPRECIATION
OPTIONS GRANTED EXERCISE FOR OPTION TERM(3)
OPTIONS TO EMPLOYEES IN OR BASE EXPIRATION ---------------------------
NAME GRANTED(1) LAST FISCAL YEAR PRICE(2) DATE 5% 10%
---- ---------- ---------------- -------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
William P. Lyons - - - - - -
Carolyn V. Aver 30,000 1.3% $ 4.50 9/5/06 $ 84,901 $215,155
James C. Clemens 30,000 1.3% $ 2.75 10/11/06 $ 51,884 $131,484
Richard H. Dym 25,000 1.1% $ 4.50 9/5/06 $ 47,167 $119,531
Michael W. Taylor 10,000 0.4% $ 4.50 9/5/06 $ 28,300 $ 71,718
Martin A. Yam 25,000 1.1% $ 9.00 5/9/06 $141,501 $358,592
</TABLE>
- ------------------
(1) The Board of Directors has the discretion, subject to plan limits, to
modify the terms of outstanding options and to reprice the options.
Except as noted, the listed options vest over four years, subject to
agreements providing for acceleration in the event of termination of
employment in connection with a change in control of the Company.
(2) All options were granted with an exercise price equal to the fair
market value of the Common Stock as determined by the Board of
Directors on the date of grant. The exercise price and tax
withholding obligations related to exercise may in some cases, be
paid by delivery of other shares or by offset of the shares subject
to the options.
(3) Amounts represent hypothetical gains that could be achieved for the
respective options at the end of the 10-year option term. The assumed
5% and 10% rates of stock appreciation are mandated by rules of the
Securities and Exchange Commission and do not represent the Company's
estimate or projection of the future Common Stock price. This table
does not take into account any appreciation in the price of the
Common Stock to date, which exceeds the hypothetical gains shown in
the table.
The following table sets forth, for each person named in the Summary
Compensation Table above, information regarding the exercise of stock options
during the fiscal year ended March 31, 1997 and the year-end value of
unexercised options:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
<PAGE> 7
<TABLE>
<CAPTION>
VALUE(2) OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS AT YEAR-END: OPTIONS AT YEAR-END:
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE(3) EXERCISABLE UNEXERCISABLE(3)
---- --------- ----------- --------------------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
William P. Lyons - - 429,121 61,043 $323,474 $ 0
Carolyn V. Aver 4,000 $ 36,000 51,916 50,084 $ 0 $ 0
James C. Clemens - - 3,750 41,250 $ 0 $ 0
Richard H. Dym 4,000 $ 36,000 44,266 41,584 $ 0 $ 0
Michael W. Taylor - - 12,400 - $ 0 -
Martin A. Yam - - 13,750 - $ 0 -
</TABLE>
(1) Calculated on the basis of the fair market value of the Common Stock
on the date of exercise, minus the per share exercise price,
multiplied by the number of shares underlying the option.
(2) Based on a fair market value of $1.50, which was the closing price of
the Common Stock on March 31, 1997.
(3) Shares subject to certain options may be purchased prior to vesting
but will be subject to repurchase until vested.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Company's Board of Directors (the
"Committee") consists of directors John B. Carrington and Jos C. Henkens. The
Committee is responsible for establishing policies and programs that determine
the compensation of the Company's executive officers, as well as supervising and
making recommendations to the Board on general compensation matters. The
Committee also has exclusive authority to grant stock options to executive
officers of the Company under its 1993 Stock Plan.
Compensation Philosophy and Policies
The Committee's compensation philosophy is designed to align each
executive's compensation, and therefore the executive's motivation, with that of
the stockholders through both cash and equity incentives. The Company seeks to
attract and retain executive officers of the highest quality by paying salaries
competitive in the industry and ensuring that its executives are rewarded for
their contributions to the Company.
The Committee favors a high-risk/high-reward compensation system,
which emphasizes bonus compensation as a relatively high percentage of base
salary. In addition, executives are encouraged to hold a continuing significant
equity interest in the Company. The Committee believes that broad-based employee
equity ownership provides an important incentive for employee contribution to
the Company's success.
Elements of Compensation
The components of officer compensation include cash compensation,
stock ownership through stock options and participation in a payroll-deduction
stock purchase plan, participation in a 401(k) plan (without matching employer
<PAGE> 8
contributions), supplemental life insurance, and other standard benefits. There
are essentially no other officer perquisites.
Cash compensation consists of base salary, bonuses, and sales
commissions. Base salary is determined on the basis of the level of
responsibility, expertise and experience of the employee, taking into account
competitive conditions in the industry. Cash bonuses awarded to officers and
other key employees are typically based on a target percentage of salary,
adjusted for achievement of revenue and profit goals by the Company and
individual performance evaluations. Compensation of sales executives also
includes sales commissions.
Ownership of the Company's Common Stock is a key element of executive
compensation. Officers and other employees of the Company are eligible to
participate in the 1993 Stock Plan (the "Option Plan") and the 1993 Employee
Stock Purchase Plan (the "ESPP"). The Option Plan permits the Board of Directors
or any committee delegated by the Board to grant stock options to employees on
such terms as the Board or such committee may determine. The Compensation
Committee presently has sole authority to grant stock options to executive
officers of the Company. In determining the size of the stock option grant to an
officer or other employee, the Committee takes into account equity participation
by comparable employees within the Company, external competitive circumstances,
and other relevant factors. The ESPP permits employees to acquire Common Stock
of a Company through payroll deductions and promotes broad-based equity
ownership throughout the Company.
Fiscal 1997 Executive Compensation
Executive compensation for fiscal 1997 included base salary and, for
sales personnel, sales commissions. Under the executive bonus plan in place for
the year, target bonuses were established with percentage achievement levels
based upon a combination of both Company performance, as determined by revenue
and profit before tax, and individual performance. Applying the formula in the
plan to the Company's performance resulted in no bonuses being paid for the
fiscal year. Executive officers were granted stock options during the fiscal
year, with exercise prices equivalent to the fair market value of the stock on
the date of grant.
Chief Executive Officer Compensation for Fiscal 1997
William P. Lyons, who resigned in June 1997, joined the Company as
its President, Chief Executive Officer and a Director in April 1992. Mr. Lyons'
base salary was established at that time based on a review of a number of
factors, including compensation packages awarded to chief executives of
comparable companies, competitive conditions in the industry, alignment of the
chief executive's compensation with growth in value of the Company's stock and
other relevant factors. No increase from that initial base salary was made until
October 1994, at which time Mr. Lyons' base salary was increased based on
factors substantially identical to those applied in April 1992, and no
additional increases were made after that time.
Tax Deductibility of Executive Compensation
Under Section 162(m) of the Internal Revenue Code, adopted in 1993,
<PAGE> 9
the deductibility of compensation paid to certain executive officers may be
limited if it exceeds $1 million in one year, although performance-based
compensation is excluded from the limitation. Because the targeted cash
compensation for each of the Company's officers is well below the $1 million
threshold and, subject to the amendments described in this proxy statement,
options granted under the Option Plan should meet the Section's requirements for
being performance-based, the Section is not expected to reduce the tax deduction
available to the Company. The Company's policy is to qualify to the extent
reasonable its executive officers' compensation for deductibility under
applicable tax laws.
Summary
The Compensation Committee sets policy and administers the Company's
cash and equity incentive programs for the purpose of attracting and retaining
highly skilled executives who will promote the success of the Company's
business.
COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS
John B. Carrington
Jos C. Henkens
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Neither member of the Compensation Committee is a present or former
employee or officer of the Company, although Mr. Carrington was President and
Chief Executive Officer of Digitalk prior to the merger with the Company in
August 1995. No officer of the Company served as either a member of a
compensation committee of, or as a director of, another company as to which
there was interlocking participation on the Compensation Committee of the
Company.
COMPENSATION OF NEW EXECUTIVE OFFICERS
On June 10, 1997, the Company named Eugene L. Goda to the position of
President and Chief Executive Officer, Ronald J. Clear to the position of Chief
Financial Officer, and James H. Smith to the position of Vice President of
Worldwide Sales. Their annual salaries are $200,000, $175,000, and $195,000,
respectively. Mr. Goda was also appointed Chairman of the Company's Board of
Directors. In connection with their retention, Messrs. Goda, Clear and Smith
were granted options to purchase 650,000, 195,000 and 455,000 shares,
respectively, of the Company's Common Stock at an exercise price of $1.0625 per
share, the market value of the stock on June 10, 1997. The options vest ratably
over 18 months with an initial vesting increment of six months and subsequent
increments of three months, and are subject to immediate full vesting in the
event of an acquisition, merger, or liquidation of the Company. The options each
have a term of five years, plus up to three additional years as may be necessary
to provide the optionee with three years after any termination of employment to
exercise the option. The Company has entered into employment agreements with
each of Messrs. Goda, Clear and Smith setting forth the above salaries and
option provisions, among certain other terms. The employment agreements have an
<PAGE> 10
initial term of six months and are thereafter terminable upon 90 days notice
from either party. If the Company terminates any of the agreements other than
for "cause" (as defined in the agreements), the Company must pay the
individual's salary for the balance of the initial term or, if the initial term
is completed, for 90 days, and the options will continue to vest for the full
remainder of the 18-month vesting periods.
COMPENSATION OF OUTSIDE DIRECTORS
The Company pays its outside directors a fee, for each meeting
attended, of $1,000 for each meeting of the Board of Directors and $500 for each
meeting of a committee. Under the Company's 1995 Director Stock Option Plan,
outside directors also are granted, upon election to the Board, an option to
purchase 20,000 shares of Common Stock and, assuming at least six months have
elapsed since the initial grant, are granted on June 30 of each year an option
to purchase an additional 5,000 shares of Common Stock. The initial grants vest
monthly over four years and the subsequent grants vest monthly over one year
beginning four years after the date of grant. All the options have an exercise
price equal to 100% of the fair market value of the Common Stock on the date of
grant.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
beneficial ownership of the Common Stock of the Company as of July 8, 1997 as to
each person who is known to the Company to beneficially own more than five
percent of the outstanding shares of its Common Stock. Information regarding the
beneficial ownership of management is set forth later in this Proxy Statement.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENT
NAME AND ADDRESS OWNED OWNED
---------------- ----- -----
<S> <C> <C>
Closeburn Management Ltd. (1) 1,855,700 15.6%
260 Engleburn Avenue
Peterborough, Ontario K9HIS7
Canada
</TABLE>
- ---------------------
(1) Based on information provided as of December 31, 1996, by Closeburn
Management Ltd. ("Closeburn") on a Schedule 13G. As set forth on the Schedule
13G, Closeburn is wholly owned by Michael H. Iles, who may therefore be deemed
the beneficial owner of the shares listed in the table.
<PAGE> 11
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Common Stock of the Company as of July 8, 1997 (the
"record date") as to (i) each director, (ii) each current officer named in the
Summary Compensation Table below and (iii) all directors and executive officers
as a group. The persons named in the table, to the Company's knowledge, have
sole voting and investment power with respect to the shares owned by them,
subject to community property laws.
<TABLE>
<CAPTION>
SHARES APPROXIMATE
BENEFICIALLY PERCENT
NAME OWNED OWNED(1)
---- ----- --------
<S> <C> <C>
James C. Anderson (2)............................. 294,247 2.5%
John B. Carrington (3)............................ 150,102 1.3%
Eugene L. Goda.................................... 0 *
Jos C. Henkens (4)................................ 507,711 4.3%
Philip C. Kantz (5)............................... 48,774 *
Richard H. Dym (6)................................ 53,016 *
All directors and executive officers as
a group (9 persons) (7)....................... 1,054,642 8.8%
</TABLE>
- ------------------------
* Less than 1%.
(1) Percent of the outstanding shares of Common Stock, treating as
outstanding all shares issuable on exercise of options held by the
particular beneficial owner that are included in the first column.
(2) Includes 4,166 shares subject to options exercisable as of 60 days
after the record date.
(3) Includes 13,166 shares subject to options exercisable as of 60 days
after the record date.
(4) Includes 361,598 shares held by Advanced Technology Ventures II and
130,331 shares held by Advanced Technology Ventures III, as well as
532 shares held by Mr. Henkens and 15,250 shares subject to options
exercisable as of 60 days after the record date by Mr. Henkens. Mr.
Henkens is a general partner of Advanced Technology Ventures. Mr.
Henkens disclaims beneficial ownership of the shares held by Advanced
Technology Ventures, except to the extent of his proportionate
interest therein.
(5) Includes 45,774 shares that are held by a trust for which Mr. Kantz
is executor and as to which he thereby has voting control but no
pecuniary interest.
<PAGE> 12
(6) Includes 53,016 shares subject to options exercisable as of 60 days
after the record date.
(7) Includes 90,598 shares subject to options exercisable as of 60 days
after the record date, held by the 6 directors and officers listed
above and by 3 officers not listed above.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to the Delaware General Corporation Law ("Delaware Law"),
the Company has adopted provisions in its Certificate of Incorporation that
eliminate the personal liability of its directors and officers to the Company
and its stockholders for monetary damages for breach of the directors' fiduciary
duties in certain circumstances. The Company's Bylaws require the Company to
indemnify its directors, officers, employees and other agents to the fullest
extent permitted by law. The Company has entered into indemnification agreements
with each of its current directors and executive officers that provide for
indemnification to the fullest extent permitted by Delaware Law, including in
circumstances in which indemnification and the advancement of expenses are
discretionary under Delaware Law. The Company believes that the limitation of
liability provisions in its Certificate of Incorporation and the indemnification
agreements will enhance the Company's ability to continue to attract and retain
qualified individuals to serve as directors and officers. There is no pending
litigation or proceeding involving a director, officer or employee of the
Company to which the indemnification agreements would apply. The Company has
entered into agreements with each of its executive officers providing for
acceleration of their options in the event of termination of employment in
connection with a change in control of the Company.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
PARCPLACE-DIGITALK, INC.
By: /s/ EUGENE L. GODA
-----------------------------------
Eugene L. Goda
President
and Chief Executive Officer
Dated: July 28, 1997
