<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
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|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 000-20923
INNOVEDA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 93-1137888
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
293 Boston Post Road West 01752
Marlboro, Massachusetts (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
Registrant's telephone number, including area code: (508) 408-0881
------------------
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.01
par value.
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 this Form 10-K. |X|
The aggregate market value of the voting stock held by non-affiliates of
the Registrant, based upon the closing sale price of the Common Stock on
February 25, 2000 as reported on the Nasdaq National Market, was approximately
$118,360,055. Shares of Common Stock held by each named executive officer and
director and by each entity that owns 5% or more of the outstanding Common Stock
have been excluded in that such persons may be deemed affiliates. This
determination of affiliate status is not necessarily a conclusive determination
for other purposes.
As of February 25, 2000, the Registrant had outstanding 15,913,957 shares
of Common Stock.
<PAGE>
EXPLANATORY NOTE
Part III of the Annual Report on Form 10-K of Summit Design, Inc. (now
Innoveda, Inc., the "Company") for the fiscal year ended December 31, 1999, as
filed with the Securities and Exchange Commission (the "Commission") on March 2,
2000, is hereby amended and restated in its entirety as follows:
PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY
The information required by the Item with respect to executive officers
of the Company as of February 25, 2000 is set forth under the heading "Executive
Officers of the Company" in Part I of this Form 10-K and is incorporated herein
by reference. Mr. Botts resigned as Chief Executive Officer of the Company
effective March 2000. Mr. Davenport resigned as President and Chief Operating
Officer effective February 2000. Mr. Fletcher resigned as Treasurer and Director
of Investor Relations effective March 2000. Mr. Whiteley-Ross resigned as Chief
Accounting Officer and Controller effective March 2000. The executive officers
and directors of the Company as of April 30 2000 are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
William J. Herman......... 40 President, Chief Executive Officer and Chairman of the Board
Paula J. Cassidy.......... 31 Vice President, Human Resources
Peter T. Johnson.......... 52 Vice President, Business Development, Chief Legal Officer and Secretary
Gary L. Kiaski............ 45 Vice President, Worldwide Sales
Richard G. Lucier......... 40 Executive Vice President and Chief Operating Officer
Guy Moshe................. 42 Senior Vice President and General Manager of Innoveda Israel
Kevin P. O'Brien.......... 43 Vice President, Finance and Chief Financial Officer
William V. Botts(1)....... 64 Director
Lorne J. Cooper........... 42 Director
Keith B. Geeslin(2)....... 47 Director
Steven P. Erwin(1)(2)..... 56 Director
</TABLE>
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(1) Member of Audit Committee
(2) Member of Compensation Committee
WILLIAM J. HERMAN has served as the Company's President and Chief
Executive Officer and Director since March 2000. From October 1998 to March
2000, Mr. Herman served as Chairman of the Board, President and Chief Executive
Officer of Viewlogic Systems, Inc., an electronic design automation company.
From December 1997 to September 1998, Mr. Herman served as President of the
Viewlogic Systems Group of Synopsys, Inc., an electronic design automation
company. From March 1995 to November 1997, Mr. Herman served in various senior
management capacities, most recently as President and Chief Executive Officer,
at the former Viewlogic Systems, Inc., a larger electronic design automation
company which Mr. Herman co-founded in 1984. From February 1994 to February
1995, Mr. Herman served as President of Silerity, Inc., a computer-aided
engineering software company.
PAULA J. CASSIDY has served as the Company's Vice President, Human
Resources since March 2000. Ms. Cassidy served as the Vice President, Human
Resources of Viewlogic from October 1998 to March 2000. From December 1997 to
September 1998, Ms. Cassidy served as Vice President of Human Resources of the
Viewlogic Systems Group of Synopsys. From 1989 to November 1997, Ms. Cassidy
served in various capacities, most recently as Manager, Human Resources, at the
former Viewlogic Systems, Inc.
<PAGE>
PETER T. JOHNSON has served as the Company's Vice President, Business
Development, Chief Legal Officer and Secretary since March 2000. Mr. Johnson
served as the Vice President, Business Development and Chief Legal Officer of
Viewlogic from October 1998 to March 2000 and as Secretary from May 1999 to
March 2000. From May 1998 to October 1998, Mr. Johnson served as Vice President,
Chief Legal Officer and Secretary of Avid Technology, Inc., a digital media
software developer. From December 1997 to April 1998, Mr. Johnson served as Vice
President and General Counsel of the Viewlogic Systems Group of Synopsys. From
June 1995 to November 1997, Mr. Johnson served as Vice President, General
Counsel and Secretary of the former Viewlogic Systems, Inc. From 1993 to
February 1995, Mr. Johnson served as General Counsel and Secretary of Phoenix
Technologies Ltd., a software development firm.
GARY L. KIASKI has served as the Company's Vice President, Worldwide
Sales since March 2000. Mr. Kiaski served as the Vice President, Worldwide Sales
of Viewlogic from October 1998 to March 2000. From December 1997 to September
1998, Mr. Kiaski served as Vice President of Worldwide Sales of the Viewlogic
Systems Group of Synopsys. From 1988 to November 1997, Mr. Kiaski served in
various capacities, most recently as Vice President, Western Region Sales, at
the former Viewlogic Systems, Inc.
RICHARD G. LUCIER has served as the Company's Executive Vice President
and Chief Operating Officer since March 2000. Mr. Lucier served as the Executive
Vice President and Chief Operating Officer of Viewlogic from October 1998 to
March 2000 and served as a director of Viewlogic from October 1998 to December
1999. From December 1997 to September 1998, Mr. Lucier served as Senior Vice
President of Engineering and Marketing of the Viewlogic Systems Group of
Synopsys. From 1986 to November 1997, Mr. Lucier served in various capacities,
most recently as Group Vice President of the Systems Group, at the former
Viewlogic Systems, Inc.
GUY MOSHE has served as the Company's Senior Vice President and General
Manager of Innoveda Israel since March 2000. Mr. Moshe served as Chief
Technology Officer and President of Summit Design (EDA), Ltd. from February 1999
to March 2000 and as Vice President, General Manager and Chief Operating Officer
of the Design Solutions Division of the Company from September 1997 to March
2000. From May 1996 to September 1997 Mr. Moshe served as General Manager of
Summit Design (EDA) Ltd. Mr. Moshe served as the Vice President of Product
Marketing of the Company from 1994 to May 1996.
KEVIN P. O'BRIEN has served as the Company's Vice President, Finance
and Chief Financial Officer since March 2000. Mr. O'Brien served as the Vice
President, Finance and Chief Financial Officer of Viewlogic from October 1998 to
March 2000 and as Secretary from October 1998 to May 1999. From April 1998 to
September 1998, Mr. O'Brien served as Vice President of Finance of the Viewlogic
Systems Group of Synopsys. From September 1997 to March 1998, Mr. O'Brien served
as an independent management consultant. From October 1995 to August 1997, Mr.
O'Brien served as Chief Financial Officer at SmarTel Communications, Inc., a
telecommunications company. From 1989 to June 1995 Mr. O'Brien served in various
capacities, most recently as Vice President, Finance and Chief Financial
Officer, at Easel Corporation, a client server software developer. Mr. O'Brien
is a certified public accountant.
WILLIAM V. BOTTS has served as a director of the Company since May
1997. Mr. Botts served as Interim Chief Executive Officer and Chairman of the
Board from July 1999 to March 2000. From August 1997 to July 1999, Mr. Botts was
the Interim Chief Executive Officer of California Lifestyles, Inc., a footwear
company. From March 1996 to March 1997, Mr. Botts served as Chief Executive
Officer of Hard Candy, Inc., a cosmetics company. From 1993 to March 1996, Mr.
Botts was the owner and President of WV Associates, a consulting firm for
business combinations, acquisitions, business turnarounds and strategic
planning.
LORNE J. COOPER has served as a director of the Company since March
2000. Mr. Cooper was a director of Viewlogic from December 1999 to March 2000.
Since November 1994, Mr. Cooper has served as the President of Sente, Inc., a
software company that develops and markets tools for electronic design
automation.
KEITH B. GEESLIN has served as a director of the Company since March
2000. Mr. Geeslin was a director of Viewlogic from October 1998 to March 2000.
Since July 1984, Mr. Geeslin has served in various capacities, most recently as
a general partner, of The Sprout Group, a venture capital firm. In addition, Mr.
Geeslin is a general or limited partner in a series of investment funds
associated with The Sprout Group, a division of DLJ Capital Corporation, which
is a subsidiary of Donaldson, Lufkin & Jenrette. Mr. Geeslin is also a director
of GlobeSpan, Inc., Paradyne Corp., Rhythms NetConnections Inc., SDL, Inc., and
several privately held companies.
- 2 -
<PAGE>
STEVEN P. ERWIN has served as a director of the Company since May 1997.
Mr. Erwin has served as Executive Vice President and Chief Financial Officer of
Foundation Health Systems, Inc., a managed health care company, since March
1998. From 1994 to July 1997, Mr. Erwin was Executive Vice President and Chief
Financial Officer of U.S. Bancorp, Portland, Oregon.
Each officer serves at the discretion of the Board of Directors and
holds office until his successor is elected and qualified or until his
earlier termination or removal. The Board of Directors is divided into three
classes, each of whose members serve for a staggered three-year term. Mr.
Herman serves in the class whose term expires in 2000. Messrs. Cooper and
Erwin serve in the class whose term expires in 2001 and Messrs. Botts and
Geeslin serve in the class whose term expires in 2002. At each annual meeting
of stockholders, a class of directors will be elected for a three-year term
to succeed the directors of the same class whose terms are then expiring.
There are no family relationships among any of our directors or executive
officers.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the Commission initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, directors and
greater-than-ten-percent stockholders are required by Commission 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 copies of such
reports furnished to the Company, during fiscal 1999 all of the Company's
officers, directors and greater-than-ten-percent beneficial owners complied with
Section 16(a) filing requirements.
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<PAGE>
ITEM 11: EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
annual compensation to (i) the Company's Chief Executive Officer as of December
31, 1999, (ii) the Company's former Chief Executive Officer who was not serving
in such capacity as of December 31, 1999, and (iii) the Company's other four
most highly compensated executive officers who were serving as executive
officers of the Company as of December 31, 1999 (the "Named Executive
Officers"):
SUMMARY COMPENSATION TABLE
--------------------------
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM AWARDS
------------------- ----------------
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND PRINCIPAL POSITION(1) YEAR SALARY($)(2) BONUS($)(3) COMPENSATION($) UNDERLYING OPTIONS COMPENSATION($)
- ------------------------------ ---- ------------ ----------- --------------- ------------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
William V. Botts (4).......... 1999 112,500 60,000 20,000(5) 30,000 -
Chairman of the Board and 1998 - - 25,000(5) 10,000 -
Chief Executive Officer 1997 - - 15,865(5) 10,000 -
Larry J. Gerhard(6)........... 1999 200,000 - 12,000(7) - 200,000(8)
Former President and Chief 1998 400,000 - 12,000(7) 75,000 4,333(9)
Executive Officer 1997 341,667 160,000 5,000(7) 75,000 3,575(10)
Richard Davenport(11)......... 1999 230,500 - 9,000(7) - -
President and 1998 141,000 - 9,000(7) - -
Chief-Operating Officer 1997 37,510 - 2,250(7) - -
C. Albert Koob(12)............ 1999 160,000 144,500(13) 7,214(7) - -
Vice President, Finance, 1998 160,000 30,000 7,214(7) 10,000 2,425(14)
Chief Financial Officer 1997 143,333 64,00 3,750(7) 248,000 2,350(14)
and Secretary
Guy Moshe..................... 1999 180,000 - 12,804(7) 256,681 -
Chief Technology Officer 1998 170,000 30,000 12,804(7) 1,755 -
And President of Summit 1997 113,392 69,810(15) 10,515(7) 34,152 -
Design (EDA), Ltd.
Eric Benhayoun................ 1999 153,860 39,174(16) - 75,000 -
Vice President, General 1998 154,890 57,109(16) - - -
Manager-European Operations 1997 120,252 26,945(16) - 32,500 -
</TABLE>
- ---------------------
(1) Unless otherwise noted, lists the principal position with the Company
as of December 31, 1999.
(2) Amounts shown include cash and noncash compensation earned and received
by executive officers as well as amounts earned but deferred at the
election of those officers.
(3) Consists of annual incentive bonuses.
(4) Mr. Botts served as an executive officer of the Company from July 1999
to March 2000.
(5) Consists of director's fee.
(6) Mr. Gerhard served as an executive officer of the Company from January
1993 to June 1999.
(7) Consists of car allowance.
(8) Consists of severance payments.
(9) Consists of the Company's matching contribution to Mr. Gerhard's 401(k)
plan in the amount of $2,500 and medical insurance premiums in the
amount of $1,833.
(10) Consists of the Company's matching contribution to Mr. Gerhard's 401(k)
plan in the amount of $2,375 and medical insurance premiums in the
amount of $1,200.
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<PAGE>
(11) Mr. Davenport served as an executive officer of the Company from
September 1997 to February 2000.
(12) Mr. Koob served as an executive officer of the Company from October
1995 to January 2000.
(13) Consists of a $100,000 retention bonus and a $44,500 annual incentive
bonus.
(14) Consists of the Company's matching contribution to Mr. Koob's 401(k)
plan.
(15) Consists of $64,000 of annual incentive bonus and $5,810 of
commissions.
(16) Consists of commissions.
STOCK OPTION GRANTS
The following table sets forth the stock option grants made by the
Company to each of the Named Executive Officers during the year ended December
31, 1999:
OPTION GRANTS IN YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS POTENTIAL REALIZABLE VALUE AT
UNDERLYING GRANTED TO EXERCISE ASSUMED ANNUAL RATES OF
OPTIONS EMPLOYEES PRICE EXPIRATION STOCK PRICE APPRECIATION FOR
GRANTED(1) IN 1999(2) ($/SHARE)(3) DATE OPTION TERM(4)
---------- ---------- ----------- ---------- ------------------------------
5%($) 10%($)
----- ------
<S> <C> <C> <C> <C> <C> <C>
William V. Botts.. 10,000 0.5 2.50 5/26/09 15,722 39,844
20,000 1.1 2.56 7/26/09 32,199 81,600
Larry J. Gerhard.. - - - - - -
Richard Davenport. - - - - - -
C. Albert Koob.... - - - - - -
Guy Moshe......... 100,000 5.3 3.44 2/25/09 216,340 548,247
2,892 0.2 3.00 4/16/09 5,456 13,827
150,000 8.0 3.00 9/16/09 283,003 717,184
3,789 0.2 2.38 10/15/99 5,671 14,371
Eric Benhayoun.... 75,000 4.0 3.44 10/25/09 162,255 411,186
</TABLE>
- -----------
(1) Options granted in 1999 generally vest over four years, with 25% of the
option shares becoming fully vested one year from the grant date and
1/48th vesting in each successive month, with full vesting occurring on
the fourth anniversary date. Under the terms of the Company's 1994
Stock Plan, the administrator retains discretion, subject to plan
limits, to modify the terms of outstanding options and to reprice
outstanding options. The options have a term of 10 years, subject to
earlier termination in certain situations related to termination of
employment.
(2) Based on a total of 1,879,360 options granted to all employees and
consultants during 1999.
(3) Equal to the per share market value of the underlying shares of Common
Stock on the date of grant.
(4) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These
gains are based on assumed rates of stock appreciation of 5% and 10%
compounded annually from the date the respective options were granted
to their expiration date. Actual gains, if any, on stock option
exercises will depend on the future performance of the Common Stock and
the date on which the options are exercised. No gain to the optionees
is possible without an appreciation in stock price, which will benefit
all stockholders commensurately.
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<PAGE>
AGGREGATED OPTION EXERCISES AND VALUATION
The following table sets forth, on an aggregated basis, the exercise of
stock options during the year ended December 31, 1999 by each of the Named
Executive Officers and the year-end value of unexercised options held by such
officers:
AGGREGATED OPTION EXERCISES AND OPTION VALUES IN YEAR ENDED
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISABLE IN-THE-MONEY OPTIONS AT
OPTIONS AT YEAR END YEAR END ($)(1)
------------------- ---------------
SHARES
ACQUIRED VALUE
NAME ON EXERCISE REALIZED($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William V. Botts...... 0 0 40,000 10,000 18,800 10,000
Larry J. Gerhard...... 0 0 0 0 0 0
Richard Davenport..... 0 0 0 0 0 0
C. Albert Koob........ 15,000 26,250 47,749 20,251 26,250 0
Guy Moshe............. 0 0 81,075 225,752 8,190 78,500
Eric Benhayoun........ 0 0 38,436 80,564 1,125 23,500
</TABLE>
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(1) Represents the difference between the aggregate fair market value of
the underlying shares of Common Stock on the date of exercise and the
aggregate exercise price.
(2) Based on the aggregate fair market value of the underlying shares of
Common Stock on December 31, 1999 ($3.50 per share), less the aggregate
option exercise price.
DIRECTOR COMPENSATION
In 1999, all non-employee directors received $20,000 per year and
$1,000 per meeting (excluding committee meetings) as compensation for their
services as members of the Board of Directors. Members were also reimbursed for
all travel and related expenses incurred in connection with attending Board and
committee meetings. In addition, non-employee directors were eligible to receive
option grants under the Company's 1996 Director Option Plan, under which 150,000
shares of Common Stock have been reserved for issuance. The Director Plan
provides for an automatic grant of an option to purchase 10,000 shares of Common
Stock on the date on which a person first becomes a non-employee director.
Thereafter, he or she will automatically be granted an additional option to
purchase 10,000 shares on the date of the annual meeting of each subsequent
year, provided he or she is then a non-employee director and provided further,
that on such date he or she has served on the Board for at least six months. The
first option granted to a director pursuant to the Director Plan vests twelve
months after the date of grant, except for Mr. Erwin's which vests one business
day prior to the Company's first annual meeting after the grant date. All
subsequent options vest and become exercisable on the earlier of (i) 12 months
after the date of the grant or (ii) one business day prior to the date of the
Company's first annual meeting after the grant date. Vesting of the options is
subject to the optionee continuing to serve as a director on the vesting date.
Amihai Ben-David, William V. Botts, Steven P. Erwin and Barbara M. Karmel were
each granted 10,000 options in May 1999 at an exercise price of $2.50 per share.
As of the date of such grants each such individual was a non-employee director
of the Company who had served on the Board for at least six months.
Beginning in March 2000, all non-employee directors will receive
compensation for their services as directors of the Company as follows: (i) an
annual cash retainer of $7,500; (ii) $1,000 for each day of each meeting of the
Board or any committee thereof. In addition, and in lieu of further grants of
stock options under the Company's 1996 Director Option Plan, Messrs. Botts,
Cooper, Erwin and Geeslin were each granted a stock option in April 2000 to
purchase 50,000 shares of Common Stock at an exercise price of $4.85 per share.
Each new non-employee director will be granted a stock option to purchase 50,000
shares of Common Stock upon first being elected to the Board of Directors. All
of these options vest in equal monthly installments over the 48 month period
succeeding the date of grant. If a director is involuntarily removed from the
Board following a change in control of the Company, the unvested portion of
these options immediately becomes fully vested. Directors continue to be
reimbursed for all reasonable travel expenses related to attending Board and
committee meetings.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors has a Compensation Committee which is
responsible for (i) recruiting and approving the compensation and benefits for
the Company's officers and directors, (ii) administering the Company's stock
option plans and (iii) making recommendations to the Board of Directors
regarding such matters. Currently, the Compensation Committee consists of
Messrs. Geeslin and Erwin. Amihai Ben-David served on the Compensation Committee
throughout the year ended December 31, 1999. During that year, Mr. Botts also
served
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<PAGE>
on the Compensation Committee until he began serving as the Company's Interim
Chief Executive Officer in July 1999.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as to the beneficial
ownership of the Company's Common Stock by (i) each person or entity known to
the Company to beneficially own more than 5% of the outstanding shares of the
Company's Common Stock, (ii) each director of the Company, (iii) each of the
Named Executive Officers and (iv) all directors and executive officers of the
Company, as a group.
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER NUMBER OF SHARES
- ------------------------ BENEFICIALLY OWNED(1) PERCENT OF TOTAL(2)
--------------------- -------------------
<S> <C> <C>
Keith B. Geeslin(3)................................... 9,509,920 29.6%
The Sprout Group
300 Sand Hill Road
Building 4, Suite 270
Menlo Park, CA 94025
The Sprout Group(4)................................... 9,509,920 29.6%
300 Sand Hill Road
Building 4, Suite 270
Menlo Park, CA 94025
Synopsys, Inc(5)...................................... 2,694,514 8.4%
700 East Middlefield Road
Mountain View, CA 93404
William J. Herman..................................... 860,046 2.7%
Richard G. Lucier..................................... 679,280 2.1%
Richard Davenport..................................... 376,082 1.2%
Gary L. Kiaski(6)..................................... 180,839 *
Kevin P. O'Brien...................................... 180,839 *
Peter T. Johnson...................................... 142,648 *
Guy Moshe(7).......................................... 81,075 *
William Botts(8)...................................... 62,500 *
Eric Benhayoun(9)..................................... 52,445 *
C. Albert Koob(10).................................... 48,852 *
Paula J. Cassidy...................................... 45,210 *
Steven P. Erwin(11)................................... 25,000 *
Lorne J. Cooper....................................... 0 0.0%
Larry J. Gerhard(12).................................. 0 0.0%
All directors and executive officers as a group
(11 persons)(13).................................... 11,767,357 36.3%
</TABLE>
- ---------------------
* Less than 1%.
(1) Unless otherwise noted, reflects beneficial ownership as of December
31, 1999. Includes shares of the capital stock of Viewlogic Systems,
Inc., beneficially owned as of December 31, 1999 based upon a
conversion ratio of 0.67928 shares of the Company's Common Stock for
each share of Viewlogic's capital stock. The inclusion herein of any
shares of Common Stock deemed beneficially owned does not constitute an
admission of beneficial ownership of those shares. Unless otherwise
indicated, each person listed above has sole voting and investment
power with respect to the shares listed. For purposes of this table,
each person is deemed to beneficially own any shares subject to stock
options, warrants or other securities convertible into Common Stock,
held by such person which are currently exercisable (or convertible) or
exercisable (or convertible) within 60 days after December 31, 1999.
(2) Number of shares deemed outstanding includes 32,095,470 shares issued
and outstanding as of December 31, 1999 (including 16,280,983 shares
representing the outstanding shares of capital stock of Viewlogic
Systems, Inc. on an as converted basis, based upon a conversion ratio
of 0.67928 shares of the Company's
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<PAGE>
Common Stock for each share of Viewlogic's Capital Stock) plus any
shares subject to stock options, warrants or other securities
convertible into Common Stock, held by the referenced beneficial
owner(s).
(3) Consists of 9,509,920 shares beneficially owned by The Sprout Group, as
more fully described in note (4) below. Mr. Geeslin is a general
partner of The Sprout Group. Mr. Geeslin disclaims beneficial ownership
of all shares owned by The Sprout Group.
(4) Consists of 771,715 shares owned by DLJ ESC II, L.P., 6,440,804 shares
owned by Sprout Capital VIII, L.P., 1,755,195 shares owned by Sprout
Growth II, L.P., 29,273 shares owned by Sprout CEO Fund, L.P., 185,918
shares owned by DLJ Capital Corp., and 386,448 shares owned by Sprout
Venture Capital, L.P.
(5) On March 31, 2000, Synopsys, Inc. filed a Schedule 13G with the
Securities and Exchange Commission reporting beneficial ownership of
2,694,514 shares of the Company's Common Stock. Such information is
reported herein in reliance upon such filing.
(6) Consists of 180,839 shares issuable upon the exercise of stock options
held by Mr. Kiaski which are exercisable within the 60 day period
following December 31, 1999.
(7) Includes 81,075 shares issuable upon the exercise of stock options held
by Mr. Moshe which are exercisable within the 60 day period following
December 31, 1999.
(8) Includes 40,000 shares issuable upon the exercise of stock options held
by Mr. Botts which are exercisable within the 60 day period following
December 31, 1999.
(9) Includes 49,936 shares issuable upon the exercise of stock options held
by Mr. Benhayoun which are exercisable within the 60 day period
following December 31, 1999.
(10) Consists of 48,852 shares issuable upon the exercise of stock options
held by Mr. Koob which are exercisable within the 60 day period
following December 31, 1999.
(11) Includes 20,000 shares issuable upon the exercise of stock options held
by Mr. Erwin which are exercisable within the 60 day period following
December 31, 1999.
(12) As of November 1999.
(13) Includes 321,914 shares issuable upon the exercise held by such
officers and directors which are exercisable within the 60 day period
following December 31, 1999.
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<PAGE>
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Effective January 22, 1999, the Company entered into a severance
agreement with Joseph A, Masarich, former Senior Vice President-Worldwide
Marketing and Sales of the Company, in connection with the termination of his
employment. Pursuant to the agreement, in February 1999 Mr. Masarich began to
receive payments of $13,333.33 per month. The payments continued until January
2000.
The Company entered into a four-year employment agreement with Mr.
Moshe on February 25, 1999, pursuant to which he receives an annual base
salary of 721,800 New Israeli Schekels or approximately $178,222 U.S.
Dollars, based on the exchange rate on February 25, 1999, an annual bonus of
up to 25% of his base salary, and all standard benefits accorded other
executives of the Company. In the event Mr. Moshe is terminated other than
for cause, he is entitled to severance equal to his then monthly base salary
plus benefits for a period of fifteen months. In addition, the unvested
portion of the stock option covering 100,000 shares of common stock granted
to Mr. Moshe on February 25, 1999 would then become fully exercisable.
The Company entered into an employment agreement with Mr. Davenport
on February 25, 1999 and amended on October 24, 1999, pursuant to which he
received an annual base salary of $225,000, an annual bonus of up to 25% of
his base salary, and all standard benefits accorded other executives of the
Company. In addition, Mr. Davenport was entitled to an allowance for car
expenses of $750 per month. Mr. Davenport also received a retention bonus in
the amount of $150,000 on January 1, 2000. Mr. Davenport resigned from his
position as President and Chief Operating Officer effective as of February
29, 2000. Upon his resignation from the Company, Mr. Davenport became
entitled to payments of $18,750 per month plus benefits for twelve months.
The Company entered into a four-year employment agreement with Mr.
Benhayoun on February 25, 1999 pursuant to which he receives an annual base
salary of 935,000 French Francs or approximately $157,407 U.S. Dollars, based
on the exchange rate on February 25, 1999, commissions based on sales revenue
generated, and all standard benefits accorded other executives of the
Company. In the event Mr. Benhayoun is terminated other than for cause, he is
entitled to severance equal to his then monthly base salary plus benefits for
a period of twelve months. In addition, the unvested portion of the stock
option covering 75,000 shares of common stock granted to Mr. Benhayoun on
February 25, 1999 shall become fully exercisable upon termination of Mr.
Benhayoun without cause or upon a sale of more than 75% of the assets of the
Company or if more than 50% of the outstanding shares of the Company have
been acquired by another company.
The Company entered into an employment agreement with Mr. Gerhard on
February 29, 1999 and amended April 30, 1999, pursuant to which he received
an annual base salary of $400,000 and all standard benefits accorded other
executives of the Company as well as certain additional medical benefits. In
addition, Mr. Gerhard was entitled to an allowance for car expenses of $1,000
per month. Mr. Gerhard resigned from his position as Chief Executive Officer
effective June 30, 1999. Upon termination of his employment, Mr. Gerhard
became entitled to payments of $33,333.33 per month plus benefits for
twenty-four months.
The Company entered into an employment agreement with Mr. Koob on
July 30, 1999, pursuant to which he received an annual base salary of
$160,000 and all standard benefits accorded other executives of the Company.
In addition, Mr. Koob was entitled to an allowance for car expenses of $750
per month. Mr. Koob also received a retention bonus in the amount of $100,000
on January 2, 2000. Mr. Koob resigned from his position as Vice President,
Finance, Chief Financial officer and Secretary of the Company effective
January 31, 2000. Upon termination of his employment, Mr. Koob became
entitled to payments of $13,333.33 per month plus benefits for twelve months.
-9-
<PAGE>
On March 23, 2000, pursuant to that certain Agreement and Plan of
Reorganization dated as of September 16, 2000 (the "Reorganization Agreement")
by and among the Company, Hood Acquisition Corp., a Delaware corporation and a
wholly owned subsidiary of the Company ("Merger Sub"), and Viewlogic Systems,
Inc., a Delaware corporation ("Viewlogic"), Merger Sub merged with and into
Viewlogic with Viewlogic surviving as a wholly owned subsidiary of the Company
(the "Merger"). In connection with the Merger, the shares of capital stock of
Viewlogic issued and outstanding immediately prior to the effective time of the
Merger (the "Effective Time") were automatically converted into the right to
receive (i) shares of the Company's Common Stock based upon an exchange ratio of
0.67928 of a share of Common Stock for each share of Viewlogic's capital stock
(the "Exchange Ratio"), plus (ii) cash in lieu of any fractional shares of
Common Stock, based on the then-fair market value of the Common Stock. Pursuant
to the Reorganization Agreement, at the Effective Time the outstanding shares of
Viewlogic's capital stock held by the following executive officers of the
Company were automatically converted into shares of the Company's Common Stock
as set forth in the table below:
<TABLE>
<CAPTION>
- ---------------------------------------- -------------------------------------- --------------------------------------
Number of Shares of the Company's
Number of Shares of Viewlogic's Common Stock into which Such Shares
Capital Stock Held Immediately Prior of Viewlogic's Capital Stock were
Executive Officer to the Effective Time Converted at the Effective Time
- ---------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
William J. Herman 1,266,115 860,046
- ---------------------------------------- -------------------------------------- --------------------------------------
Paula J. Cassidy 66,556 45,210
- ---------------------------------------- -------------------------------------- --------------------------------------
Peter T. Johnson 210,000 142,648
- ---------------------------------------- -------------------------------------- --------------------------------------
Richard G. Lucier 1,000,000 679,280
- ---------------------------------------- -------------------------------------- --------------------------------------
Kevin P. O'Brien 266,223 180,839
- ---------------------------------------- -------------------------------------- --------------------------------------
</TABLE>
-10-
<PAGE>
All of these shares are restricted stock, subject to a repurchase right of
the Company if the executive officer ceases to be an employee, officer or
director of, or a consultant to, the Company. This repurchase right vests
over time. Twenty-five percent of all of these shares vested from the
repurchase right in October 1999. The remaining 75% vest in equal monthly
increments over the succeeding 36 months. If the executive officer ceases to
be an employee, officer or director of, or a consultant to, the Company as a
result of the Company's actions without cause, 50% of the shares become
vested shares. If, within, 24 months after a change of control of the
Company, the executive officer ceases to be an employee, officer or director
of, or a consultant to, the Company as a result of termination without cause
by the Company or for good reason by the executive, 100% of the shares vest
The Merger did not constitute a change of control for purposes of the vesting
of the restricted stock.
In addition, at the Effective Time all options to purchase Viewlogic's
capital stock then outstanding under Viewlogic's stock plans were assumed by the
Company with appropriate adjustments, based upon the Exchange Ratio, to both the
exercise price thereof and the number of shares for which such options are
exercisable. Consequently, at the Effective Time, the outstanding option held by
Gary L. Kiaski to purchase up to 266,223 shares of Viewlogic's capital stock at
a per share purchase price of $0.33 was converted into an option to purchase up
to 180,839 shares of the Company's Common Stock at a per share purchase price of
$0.49 on the same terms and conditions set forth in Mr. Kiaski's stock option
agreement with Viewlogic. Twenty-five percent of the shares subject to this
stock option vested in October 1999. The remaining 75% vest in equal monthly
increments over the succeeding 36 months. In the event Mr. Kiaski's employment
is terminated prior to October 2, 2002, the vesting of this stock option will
accelerate (i) as to the first 133,112 shares, if he is terminated without
cause, and (ii) in full, if he is terminated without cause or resigns his
employment for good reason in connection with, or within 24 months subsequent
to, a change of control. The Merger did not constitute a change of control for
purposes of this stock option.
In connection with the Merger, the Company also assumed the employment
agreements of Mr. Herman and Mr. Lucier. Under the terms of Mr. Herman's
employment agreement, Mr. Herman's employment will continue until October 2,
2001 unless Mr. Herman resigns or the Company terminates his employment. Mr.
Herman receives a base salary of $255,000 annually and standard benefits
afforded other employees of the Company. If the Company terminates Mr. Herman's
employment without cause, he will continue to receive his benefits and base
salary for a period of nine months. This agreement includes post-termination
restrictions for a period of one year which restrict Mr. Herman from competing
with the Company and which prohibit him from soliciting the Company's employees
and customers during that period. Mr Herman's compensation is subject to
adjustment after the first year of employment but his base salary may not be
decreased.
Mr. Lucier's employment agreement provides that Mr. Lucier's employment
will continue until October 2, 2001 unless Mr. Lucier resigns or the Company
terminates his employment. Mr. Lucier receives a base salary of $235,000
annually and standard benefits afforded other employees of the Company. If the
Company terminates Mr. Lucier's employment without cause, he will continue to
receive his benefits and base salary for a period of nine months. This agreement
includes post-termination restrictions for a period of one year which restrict
Mr. Lucier from competing with Viewlogic and which prohibit him from soliciting
the Company's employees and customers during that period. Mr Lucier's
compensation is subject to adjustment after the first year of employment but his
base salary may not be decreased.
-11-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
INNOVEDA, INC.
/s/ William J. Herman
William J. Herman
President, Chief Executive Officer
and Chairman of the Board
Dated: May 1, 2000
