<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(mark one)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934.
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 0-23852
PROJECT SOFTWARE & DEVELOPMENT, INC.
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2448516
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
100 CROSBY DRIVE, BEDFORD, MASSACHUSETTS 01730
(Address of principal executive offices, including zip code)
(781) 280-2000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.01 PAR VALUE
----------------------------
(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 the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to the Form 10-K. [ ]
<PAGE> 2
As of December 16, 1999, the aggregate market value of the voting stock held by
non-affiliates of the Registrant was approximately $496,684,432 based on the
last sale price of such stock on such date.
Number of shares outstanding of the Registrant's common stock as of the latest
practicable date: 21,487,326 shares of common stock, $.01 par value per share,
as of December 16, 1999.
Total number of pages: 12
<PAGE> 3
Part III of the Registrant's Annual Report on Form 10-K is hereby amended
by deleting the text thereof in its entirety and substituting the following:
PART III
ITEM 10. DIRECTORS AND OFFICERS OF THE REGISTRANT.
The directors and executive officers of the Company as of September 30,
1999 are as follows. Messrs. Drapeau and Fishman are Class III Directors, whose
terms expire in 2002. Messrs. Birch and Daniels are Class I Directors, whose
terms expire in 2000. Messrs. Sayre and Stanzler are Class II Directors, whose
terms expire in 2001. Mr. Stanzler consented to be named as a nominee of Robert
L. Daniels and Susan H. Daniels for election as director of the Company at its
Special Meeting in Lieu of Annual Meeting held on May 28, 1998 and was elected
as a director at that meeting.
NAME AGE POSITION
- ---- --- --------
Norman E. Drapeau, Jr. 39 President and Chief Executive
Officer and Director B Class
III
Robert L. Daniels 57 Executive Chairman of the
Board B Class I
Paul D. Birch 41 Executive Vice President B
Finance and Administration,
Chief Financial Officer and
Treasurer and Director - Class I
William J. Sawyer 52 Executive Vice President B
Operations
Ted D. Williams 51 Executive Vice President B
Worldwide Sales
John W. Young 46 Executive Vice President B
Research and Development
Richard P. Fishman 52 Director B Class III
Stephen B. Sayre 47 Director B Class II
Alan L. Stanzler 56 Director B Class II
<PAGE> 4
NORMAN E. DRAPEAU, JR. joined the Company in 1982 as an applications
analyst. Since that time, he has held various positions with the Company,
including, from 1984 to 1987, that of Manager of Customer Support and from 1989
through 1991, that of Director, Product Marketing. In 1991, Mr. Drapeau was
appointed Vice President, Corporate Marketing, in 1992 was appointed Vice
President - Americas and in July 1996 was appointed Executive Vice President -
Worldwide Sales and Marketing, serving in that capacity until January 1998. In
January 1998, Mr. Drapeau was appointed Executive Vice President and Chief
Operating Officer and was also elected a director of the Company. In May 1998,
Mr. Drapeau was elected President and Chief Executive Officer.
ROBERT L. DANIELS founded the Company in 1968 and has been a director since
that time. Mr. Daniels served as Chairman of the Board and Chief Executive
Officer from 1968 to 1996 and as President from 1968 to 1995. In May 1998, Mr.
Daniels was elected executive Chairman of the Board.
PAUL D. BIRCH joined the Company in 1991 as Vice President, Finance, was
appointed Vice President, Finance and Administration in 1992 and Executive Vice
President Finance and Administration in 1996. Since 1992 he has been the Chief
Financial Officer of the Company, and since 1993 has held the additional office
of Treasurer. In May 1998, Mr. Birch was elected a director of the Company.
WILLIAM J. SAWYER joined the Company in 1978 as an application consultant
and served in sales and services positions from 1978 to 1984. Mr. Sawyer was a
Vice President of the Company from 1984 to 1990 and Executive Vice President
from 1990 until November 1997. In November 1997, Mr. Sawyer left the Company and
joined Peritus Software Services, Inc., a software application company, as Vice
President, Operations. Mr. Sawyer rejoined the Company in October 1998 as
Executive Vice President of Operations.
TED D. WILLIAMS originally joined the Company in 1984 and served as
Director, MAXIMO until 1988. From 1988 to 1993, Mr. Williams was President and
Chief Operating Officer of Comac Systems Corporation, a software application
company. In 1993, Mr. Williams rejoined the Company as Director, Eastern
Regional Sales. He was appointed Vice President C North American Sales in 1996
and Vice President C Worldwide Sales in January 1998. In October, 1998, Mr.
Williams was appointed Executive Vice President C Worldwide Sales.
JOHN W. YOUNG originally joined the Company in 1985 and served until 1988
as MAXIMO Product Manager. From 1988 to 1992, Mr. Young was Vice President of
Sales of Comac Systems Corporation, a software application company. In 1992 he
rejoined the Company as Director of MAXIMO Product Design, was appointed Vice
President - Research and Development of the Company in 1995 and was appointed
Executive Vice President - Research and Development of the Company in 1998.
RICHARD P. FISHMAN was elected as a director in March 1999. Mr. Fishman is
currently Senior Vice President at MacAndrews & Forbes Group, Inc., where he is
responsible for venture capital investing. From 1995 through 1998, Mr. Fishman
served as Managing Director of GeoPartners Research, Inc., a strategy and
management consulting firm, where he headed the
<PAGE> 5
firm's venture capital activities. From 1995 to 1997, Mr. Fishman was also Of
Counsel at the law firm of Akin, Gump, Strauss, Hauer & Feld L.L.P. Mr. Fishman
served as President and Chief Executive Officer of Thinking Machines Corporation
from 1993 to 1994 and was a partner at the law firm of Milbank, Tweed, Hadley &
McCloy from 1987 until 1993.
STEPHEN B. SAYRE was elected as a director in September 1998. Mr. Sayre is
currently the Senior Vice President of Marketing at Lotus Development
Corporation, a subsidiary of IBM Corporation which develops software
applications. Prior to joining Lotus in 1994, Mr. Sayre was President of Boston
Treasury Systems and has held other senior executive level positions with
Cullinet Software and Easel Corporation.
ALAN L. STANZLER was elected as a director in May 1998. Mr. Stanzler served
as a director of the Company from 1992 to 1994, and as Clerk of the Company from
1990 to 1996. Mr. Stanzler is a member of the law firm of Maselan Jones &
Stanzler, P.C. From 1995 to 1998, Mr. Stanzler was a member of the law firm of
Davis, Malm & D=Agostine, P.C. and from 1978 to 1995 he was a partner in the law
firm of Finnegan & Stanzler, P.C.
All directors hold office until the expiration of their respective terms as
described above and until their respective successors are duly elected and
qualified. Executive officers of the Company are appointed by and serve at the
discretion of the Board of Directors.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% 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-10% stockholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely upon review of Forms 3 and 4 and amendments thereto furnished
to the Company during fiscal 1999 and Forms 5 and amendments thereto furnished
to the Company with respect to fiscal 1999, or written representations that Form
5 was not required, the Company believes that all Section 16(a) filing
requirements applicable to its officers, directors and greater-than-10%
stockholders were fulfilled in a timely manner, with the exception of one late
Form 4 by Mr. Daniels (relating to certain sales of shares and a non-taxable
disposition to a limited partnership) and one late Form 3 by Mr. Williams. After
investigating these matters, the Company has concluded that any omissions were
inadvertent, and that none of the transactions gave rise to liability under
Section 16(b) of the Exchange Act for recapture of short-swing profits.
ITEM 11. EXECUTIVE COMPENSATION.
Summary Compensation Table. The following table sets forth certain
information concerning the compensation earned by the Company's Chief Executive
Officer and the four other most highly
<PAGE> 6
paid executive officers of the Company (collectively, the "named executive
officers") for services rendered in all capacities to the Company during fiscal
1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------
Awards
------------
Securities All Other
Fiscal Other Annual Underlying Compensation
Name and Principal Position Year Salary($) Bonus($) Compensation Options(#)(1) ($)(2)
- --------------------------- ---- --------- -------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Norman E. Drapeau, Jr. 1999 $295,000 $375,414(3) -- 200,000 $ 2,500
President and 1998 224,375 -- 30,241(4) 60,000 2,375
Chief Executive 1997 152,500 -- 95,885(4) 49,998 2,250
Officer
Robert L. Daniels 1999 $295,000 $375,414(3) -- -- --
Executive Chairman of the 1998 110,625 -- -- -- --
Board and Former Chief 1997 64,773 -- -- -- $29,167(5)
Executive Officer and President
Paul D. Birch 1999 $207,750 $144,416(3) -- 40,000 $2,500
Executive Vice-President 1998 188,250 -- -- 40,000 2,375
Chief Financial Officer, 1997 166,500 13,655(6) -- 40,000 2,250
and Treasurer
John W. Young 1999 $185,000 $88,166(3) -- 90,000 $2,500
Executive Vice-President 1998 160,000 -- -- 40,000 2,375
Research and Development 1997 135,000 7,686(6) -- 19,998 2,250
William J. Sawyer 1999 $172,591 $88,166(3) $30,000(7) 90,000 $2,500
Executive Vice President 1998 18,750(8) -- 6,154(9) -- --
of Operations 1997 147,500 8,086(6) -- -- 2,250
</TABLE>
- -------------------------
(1) Represents shares of Common Stock issuable upon exercise of stock options
granted under the Company's 1994 Stock Option Plan.
(2) The amounts reported represent contributions made by the Company pursuant
to the Company's 401(k) Plan and Trust for fiscal 1999 and for the fiscal
years ended September 30, 1998 and 1997 ("fiscal 1998 and "fiscal 1997,"
respectively).
(3) Represents bonuses paid under the Company's 1999 Executive Bonus Plan.
(4) Represents commissions paid under Mr. Drapeau's individual incentive
compensation plan as Executive Vice President Worldwide Sales designed to
reward him for achievement of quarterly and annual revenue and contribution
targets.
(5) Represents fees related to an executive consulting agreement.
(6) Represents bonuses paid under the Company's 1997 Executive Bonus Plan.
(7) Represents a bonus paid when Mr. Sawyer was rehired.
(8) Mr. Sawyer left the Company in November 1997 and returned in October 1998.
(9) Represents payment for unused vacation time in connection with Mr. Sawyer's
departure from the Company.
<PAGE> 7
Option Grants in Last Fiscal Year. The following table sets forth certain
information regarding stock options granted during fiscal 1999 by the Company to
the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Number of Percent of Total Annual Rate of Stock
Securities Options Granted Price Appreciation for
Underlying to Employees Exercise Option Term(4)
Options in Fiscal Price Expiration -------------------------
Name Granted (#)(1) Year(%)(2) ($/Sh)(3) Date 5%($) 10%($)
---- -------------- ----------------- --------- ---------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Norman E. Drapeau, Jr. ..... 200,000(5) 18.9% $9.0625 10/28/08 $1,140,000 $2,896,000
Robert L. Daniels........... --- --- --- --- --- ---
Paul D. Birch .............. 40,000(5) 3.8% $9.0625 10/28/08 $ 228,000 $ 579,200
Jack W. Young............... 90,000(5) 8.5% $9.0625 10/28/08 $ 513,000 $1,303,200
William J. Sawyer........... 90,000(5) 8.5% $9.8125 11/04/08 $ 557,100 $1,407,600
</TABLE>
- -----------------------
(1) Represents shares of Common Stock issuable upon exercise of incentive stock
options granted under the Company's 1994 Stock Option Plan.
(2) The Company granted to employees options for the purchase of an aggregate
of 1,061,000 shares of Common Stock in fiscal 1999 pursuant to the 1994
Stock Option Plan.
(3) All options were granted at exercise prices not less than the fair market
value of the Common Stock on the date of grant.
(4) Potential realizable value means the value of the shares of Common Stock
underlying the option, at the specified assumed annual rates of stock price
appreciation, compounded over the option term (10 years). Actual gains, if
any, realized on stock option exercises are dependent on the future
performance of the Common Stock and overall stock market conditions. There
can be no assurance that the values reflected in this table will be
realized.
(5) All such options expire ten years after the date of grant, and first become
exercisable as to 25% of the shares covered on the first anniversary of the
date of grant and as to a further 25% annually thereafter, subject to
acceleration in certain circumstances.
<PAGE> 8
Option Exercises and Fiscal Year-End Values. The following table sets forth
certain information concerning stock options exercised during fiscal 1999 and
stock options held as of September 30, 1999 by each of the named executive
officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Shares Options at in-the-In-The-Money Options
Acquired Value Fiscal Year-End at Fiscal Year End($)(2)
On Realized -------------------------------- -----------------------------------
Name Exercise(#) ($)(1) Exercisable(#) Unexercisable(#) Exercisable($) Unexercisable($)
---- ----------- -------- -------------- --------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Norman E. Drapeau, Jr. .. -- -- 101,998 257,500 $1,831,569 $4,361,906
Robert L. Daniels........ -- -- -- -- -- --
Paul D. Birch............ 65,000 $1,240,362 90,000 80,000 $1,511,250 $1,283,750
John W. Young............ 6,000 $ 117,990 42,998 125,000 $ 700,405 $2,087,187
William J. Sawyer........ -- -- 0 90,000 0 $1,475,135
</TABLE>
- ------------------------
(1) Value is based on the last sale price of the Common Stock on the exercise
date, as reported by the Nasdaq Stock Market, or the price at which shares
acquired upon exercise of the option were actually sold (in the event of a
concurrent exercise and sale), less the applicable option exercise price.
(2) Value is based on the last sale price of the Common Stock on September 30,
1999, as reported by the Nasdaq Stock Market ($26.75 per share), less the
applicable option exercise price. These values have not been and may never
be realized. Actual gains, if any, on exercise will depend on the value of
the Common Stock on the date of the sale of the shares.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Alan L. Stanzler and Stephen B. Sayre served on the Compensation Committee
during fiscal 1999. Neither Mr. Stanzler nor Mr. Sayre, nor any executive
officer of the Company, has any relationship requiring disclosure by the Company
pursuant to item 402(j) of Regulation S-K promulgated by the SEC.
DIRECTORS' COMPENSATION
Members of the Board of Directors who are not employees of the Company or
one of the Company's subsidiaries ("Outside Directors") receive fees of $1,000
for each meeting of the Board of Directors and $750 for each meeting of a
Committee of the Board which they attend, provided that no fee is paid with
respect to a committee meeting if the committee meeting is held on the same date
as a Board meeting. Outside Directors receive $500 for participating in a
telephonic Board or committee meeting. Outside Directors are reimbursed for
out-of-pocket expenses incurred in the performance of their duties as directors
of the Company. Directors who are employees of the Company are not paid any
separate fees for serving as directors.
<PAGE> 9
Pursuant to the Company's 1999 Equity Incentive Plan (the "1999 Plan"),
each Outside Director, upon first joining the Board, is automatically granted an
option to purchase 9,000 shares of Common Stock at an exercise price equal to
the fair market value of the Common Stock (determined in accordance with the
terms of the 1999 Plan) on the date of the grant. In addition, each Outside
Director who continues to serve as a director following any annual meeting of
stockholders of the Company or special meeting in lieu thereof is automatically
granted, immediately following such meeting of stockholders, an option to
purchase 9,000 shares of Common Stock at an exercise price equal to the fair
market value of the Common Stock (determined in accordance with the terms of the
1999 Plan) on the date of grant. Notwithstanding the preceding sentence, in the
event an Outside Director joins the Board after the second Tuesday in February
in a given year such Outside Director will receive an option for a number of
shares equal to 9,000 multiplied by N/12 where "N" is the number of months
remaining between the date of election of such Outside Director and the next
second Tuesday in February.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of December 16, 1999 by
(i) each person known by the Company to own beneficially more than five percent
of the Common Stock as of such date, (ii) each director of the Company, (iii)
each named executive officer and (iv) all executive officers and directors of
the Company as a group:
<TABLE>
<CAPTION>
Shares Beneficially
Owned(1)
------------------------------
Name Number Percent
---- ------ -------
<S> <C> <C>
Robert L. Daniels (2)(3)
100 Crosby Drive
Bedford, MA 01730....................................... 5,086,720 23.7%
Kopp Investment Advisors, Inc. (4)
6600 France Avenue South
Edina, MN 55435......................................... 1,763,858 8.2%
Susan H. Daniels (2)(3)(5)
100 Crosby Dr.
Bedford, MA 01730....................................... 1,419,258 6.6%
Fidelity Management & Research Corporation (6)
1 Federal Street
Boston, MA 02109........................................ 1,141,800 5.3%
Norman E. Drapeau, Jr. (7)................................ 166,998 *
Paul D. Birch (8)......................................... 143,466 *
John W. Young(7).......................................... 62,898 *
Ted D. Williams(7)........................................ 14,856 *
William J. Sawyer(9)...................................... 15,628 *
</TABLE>
<PAGE> 10
<TABLE>
<CAPTION>
Shares Beneficially
Owned(1)
------------------------------
Name Number Percent
---- ------ -------
<S> <C> <C>
Alan L. Stanzler(10)...................................... 50,000 *
Stephen B. Sayre(7)....................................... 18,000 *
Richard P. Fishman(11).................................... 20,600 *
All directors and executive officers as a group
(9 persons) (2)(3)(7)(8)(9)(10)(11)..................... 5,579,166 25.4%
</TABLE>
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* Less than one percent.
(1) The persons named in this table have sole voting and investment power with
respect to the shares listed, except as otherwise indicated. The inclusion
herein of shares listed as beneficially owned does not constitute an
admission of beneficial ownership.
(2) Excludes 204,580 shares held in three trusts for the benefit of Mr.
Daniels' children and 1,700 shares held by Mr. Daniels as custodian for the
benefit of a minor child. Each of Robert L. Daniels and Susan H. Daniels
disclaims beneficial ownership of these shares.
(3) Includes shares held by Robert L. Daniels as Trustee of the 1996 Daniels
Voting Trust (the "Voting Trust"). Of the 2,516,516 shares subject to the
Voting Trust, 1,258,258 are owned beneficially by Mr. Daniels and 1,258,258
are owned beneficially by Susan H. Daniels. Mr. Daniels, as Trustee, has
sole voting power with respect to the shares subject to the Voting Trust.
Mr. Daniels also owns 2,570,204 shares free of the Voting Trust, and Susan
Daniels also owns 161,000 shares free of the Voting Trust. The Voting Trust
will terminate upon the written agreement of the parties or August 19,
2001, whichever comes first. Each of Mr. Daniels and Susan Daniels
disclaims beneficial ownership of the shares beneficially owned by the
other. Robert and Susan Daniels are divorced.
(4) This information is as of September 30, 1999, and is based upon a report on
Schedule 13F filed by Kopp Investment Advisors, Inc. with the Securities
and Exchange Commission on October 29, 1999.
(5) Excludes 10,500 shares held by Susan H. Daniels as Trustee of the Susan
Daniels Family Charitable Foundation. Susan H. Daniels disclaims ownership
of these shares.
(6) This information is as of September 30, 1999 and is based upon a report on
Schedule 13F filed by Fidelity Management & Research Corporation with the
Securities and Exchange Commission.
(7) Represents shares issuable pursuant to outstanding stock options
exercisable within 60 days of the date of this table.
(8) Includes 110,000 shares issuable pursuant to outstanding stock options
exercisable within 60 days of the date of this table.
(9) Includes 12,500 shares issuable pursuant to outstanding stock options
exercisable within 60 days of the date of this table.
<PAGE> 11
(10) Includes 26,000 shares issuable pursuant to outstanding stock options
exercisable within 60 days of the date of this table. Also includes 10,000
shares underlying Stock Appreciation Rights granted to Mr. Stanzler by Mr.
Daniels, exercisable for five years from December 8, 1997.
(11) Includes 15,000 shares issuable pursuant to outstanding stock options
exercisable within 60 days of the date of this table.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
<PAGE> 12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Dated: January 27, 2000
PROJECT SOFTWARE & DEVELOPMENT, INC.
/s/ Norman E. Drapeau, Jr.
By:_______________________________________
Norman E. Drapeau, Jr.
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
amendment has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ Norman E. Drapeau, Jr. President and Chief Executive Officer January 27, 2000
___________________________ and Director (Principal Executive
Norman E. Drapeau, Jr. Officer)
/s/ Paul D. Birch Executive Vice President, Chief January 27, 2000
___________________________ Financial Officer and Treasurer and
Paul D. Birch Director (Principal Financial and
Accounting Officer)
___________________________ Director January 27, 2000
Robert L. Daniels
/s/ Alan L. Stanzler
___________________________ Director January 27, 2000
Alan L. Stanzler
___________________________ Director January 27, 2000
Stephen B. Sayre
/s/ Richard P. Fishman
___________________________ Director January 27, 2000
Richard P. Fishman
</TABLE>
