<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
AVANT! CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGO]
AVANT! CORPORATION
46871 BAYSIDE PARKWAY
FREMONT, CALIFORNIA 94538
April 13, 1999
TO THE STOCKHOLDERS OF AVANT! CORPORATION
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Avant! Corporation (the "Company"), which will be held at the Company's
principal executive offices at 46871 Bayside Parkway, Fremont, California 94538,
on Friday, May 14, 1999, at 9:00 a.m.
Details of the business to be conducted at the Annual Meeting are given in
the attached Proxy Statement and Notice of Annual Meeting of Stockholders.
It is important that your shares be represented and voted at the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. Returning the proxy does NOT deprive you of your right to attend the
Annual Meeting. If you decide to attend the Annual Meeting and wish to change
your proxy vote, you may do so automatically by voting in person at the meeting.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in the affairs of the Company. We look
forward to seeing you at the Annual Meeting.
Sincerely,
[/S/ GERALD C. HSU]
Gerald C. Hsu
PRESIDENT, CHIEF EXECUTIVE OFFICER AND
CHAIRMAN OF THE BOARD OF DIRECTORS
<PAGE>
AVANT! CORPORATION
46871 BAYSIDE PARKWAY
FREMONT, CALIFORNIA 94538
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 14, 1999
The Annual Meeting of Stockholders (the "Annual Meeting") of Avant!
Corporation (the "Company") will be held at the Company's principal executive
offices at 46871 Bayside Parkway, Fremont, California 94538, on Friday, May 14,
1999, at 9:00 a.m. for the following purposes:
1. To elect five members of the Board of Directors of the Company.
2. To ratify the appointment of KPMG LLP as the Company's independent
public accountants for the year ending December 31, 1999; and
3. To transact such other business as may properly come before the meeting
or any adjournments or postponements thereof.
The foregoing items of business are more fully described in the attached
Proxy Statement.
Only stockholders of record at the close of business on April 1, 1999 are
entitled to notice of, and to vote at, the Annual Meeting and at any
adjournments or postponements thereof. A list of such stockholders will be
available for inspection at the Company's headquarters located at 46871 Bayside
Parkway, Fremont, California, during ordinary business hours for the ten-day
period prior to the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
Charles St. Clair
SECRETARY
Fremont, California
April 13, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE ANNUAL MEETING. IF
YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO CHANGE YOUR PROXY VOTE, YOU
MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE MEETING.
<PAGE>
AVANT! CORPORATION
46871 BAYSIDE PARKWAY
FREMONT, CALIFORNIA 94538
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 14, 1999
These proxy materials are furnished in connection with the solicitation of
proxies by the Board of Directors of Avant! Corporation, a Delaware corporation
(the "Company"), for the Annual Meeting of Stockholders (the "Annual Meeting")
to be held at the Company's principal executive offices at 46871 Bayside
Parkway, Fremont, California 94538, on Friday, May 14, 1999, at 9:00 a.m., and
at any adjournment or postponement of the Annual Meeting. These proxy materials
were first mailed to stockholders on or about April 13, 1999.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Annual Meeting
are summarized in the accompanying Notice of Annual Meeting of Stockholders.
Each proposal is described in more detail in this Proxy Statement.
VOTING RIGHTS AND SOLICITATION OF PROXIES
The Company's Common Stock is the only type of security entitled to vote at
the Annual Meeting. On April 1, 1999, the record date for determination of
stockholders entitled to vote at the Annual Meeting, there were 33,271,364
shares of Common Stock outstanding. Each stockholder of record on April 1, 1999
is entitled to one vote for each share of Common Stock held by such stockholder
on April 1, 1999. Shares of Common Stock may not be voted cumulatively. All
votes will be tabulated by the inspector of election appointed for the meeting,
who will separately tabulate affirmative and negative votes, abstentions and
broker non-votes.
QUORUM REQUIRED
The Company's bylaws provide that the holders of a majority of the Company's
Common Stock issued and outstanding and entitled to vote at the Annual Meeting,
present in person or represented by proxy, shall constitute a quorum for the
transaction of business at the Annual Meeting. Abstentions and broker non-votes
will be counted as present for the purpose of determining the presence of a
quorum.
VOTES REQUIRED
PROPOSAL 1. Directors are elected by a plurality of the affirmative votes
cast by those shares present in person or represented by proxy and entitled to
vote at the Annual Meeting. A properly executed proxy marked "WITHHOLD
AUTHORITY" with respect to the election of one or more directors will not be
voted with respect to the director or directors indicated, although it will be
counted for purposes of determining whether there is a quorum. The five nominees
for director receiving the highest number of affirmative votes will be elected.
Abstentions and broker non-votes are not counted toward a nominee's total.
Stockholders may not cumulate votes in the election of directors.
PROPOSAL 2. Ratification of the appointment of KPMG LLP as the Company's
independent public accountants for the year ending December 31, 1999 requires
the affirmative vote of a majority of those shares present in person, or
represented by proxy, and voted either affirmatively or negatively at the
1
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Annual Meeting. Abstentions and broker non-votes will not be counted as having
been voted on the proposal.
PROXIES
Whether or not you are able to attend the Company's Annual Meeting, you are
urged to complete and return the enclosed proxy, which is solicited by the
Company's Board of Directors and which will be voted as you direct on your proxy
when properly completed. In the event no directions are specified, such proxies
will be voted FOR the Nominees of the Board of Directors (as set forth in
Proposal No. 1) and FOR Proposal No. 2 and in the discretion of the proxy
holders as to other matters that may properly come before the Annual Meeting.
You may also revoke or change your proxy at any time before the Annual Meeting.
To do this, you must send a written notice of revocation or another signed proxy
with a later date to the Secretary of the Company at the Company's principal
executive offices and such notice of revocation or proxy must be received by the
Secretary of the Company before the beginning of the Annual Meeting. You may
also automatically revoke your proxy by attending the Annual Meeting and voting
in person. All shares represented by a valid proxy received prior to the Annual
Meeting will be voted.
SOLICITATION OF PROXIES
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing, and mailing of this Proxy Statement, the proxy,
and any additional soliciting material furnished to stockholders. Copies of
solicitation material will be furnished to brokerage houses, fiduciaries and
custodians holding shares in their names that are beneficially owned by others
so that they may forward this solicitation material to such beneficial owners.
In addition, the Company may reimburse such persons for their costs of
forwarding the solicitation material to such beneficial owners. The original
solicitation of proxies by mail may be supplemented by solicitation by
telephone, telegram or other means by directors, officers, employees or agents
of the Company. No additional compensation will be paid to these individuals for
any such services. The Company does not presently intend to solicit proxies
other than by mail.
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<PAGE>
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The directors who are being nominated for election to the Board of Directors
(the "Nominees"), their ages as of February 28, 1999, their positions and
offices held with the Company and certain biographical information are set forth
below. The proxy holders intend to vote all proxies received by them in the
accompanying form FOR the Nominees listed below unless otherwise instructed. In
the event any Nominee is unable or declines to serve as a director at the time
of the Annual Meeting, the proxies will be voted for any nominee who may be
designated by the present Board of Directors to fill the vacancy. As of the date
of this Proxy Statement, the Board of Directors is not aware of any Nominee who
is unable or will decline to serve as a director. The five nominees receiving
the highest number of affirmative votes of the shares entitled to vote at the
Annual Meeting will be elected directors of the Company to serve until the next
Annual Meeting or until their successors have been duly elected and qualified.
<TABLE>
<CAPTION>
NOMINEES AGE POSITIONS AND OFFICES HELD WITH THE COMPANY
- -------------------------------- --- ----------------------------------------------------------------
<S> <C> <C>
Gerald C. Hsu................... 52 President, Chief Executive Officer and Chairman of the Board of
Directors
Charles L. St. Clair (1)(2)..... 68 Director and Secretary
Eric A. Brill................... 48 Director
Moriyuki Chimura................ 50 Director and Executive Staff, Customers
Dan Taylor...................... 60 Director
</TABLE>
- ------------------------
(1) Member of Audit Committee
(2) Member of Compensation Committee
MR. HSU joined the Company in March 1994 as President, Chief Executive
Officer and a director, and has been Chairman of the Board of Directors since
November 1995. From July 1991 to March 1994, Mr. Hsu was employed by Cadence
Design Systems, Inc., an electronic design automation company, where his last
position was President and General Manager of the IC Design Group. Mr. Hsu holds
an M.S. in Oceanic Engineering from the Massachusetts Institute of Technology,
an M.S. in Mechanics and Hydraulics from the University of Iowa and a B.S. in
Applied Mathematics from the National Chung-Hsing University. In April 1997, the
Santa Clara District Attorney filed a criminal complaint alleging felony level
offenses against, among others, Mr. Hsu, the Company and certain other of the
Company's employees for allegedly violating various California Penal Code
sections relating to the theft of trade secrets. In December 1998, the April
1997 criminal complaint was dismissed and Mr. Hsu was indicted following a grand
jury investigation for the same violations alleged in the April 1997 criminal
complaint, and also for violations of certain state securities laws. Mr. Hsu has
pleaded not guilty and is awaiting further proceedings.
MR. ST. CLAIR served the Company as Director of Administration at its RTP
Facility in Durham, North Carolina, from June 1996 to April 1997 and has been
employed by the Company as a consultant since April 1997. He has been a director
of the Company since September 1997, and has served as Secretary of the Company
since September 1998. From February 1995 to March 1996, Mr. St. Clair was
employed by Interkiln Corporation of America as Director, Southern Africa
Operations. From January 1993 to January 1995, he was employed by Deloitte &
Touche as an Industrial Advisor to the Botswana Development Corporation Ltd. Mr.
St. Clair holds a B.S. in Economics and Management from Arizona State University
and a B.F.T., Latin America from the American Graduate School for International
Management. Mr. St. Clair is a member of the Audit Committee and the
Compensation Committee.
3
<PAGE>
MR. BRILL has been a director of the Company since November 1996. Mr. Brill
was Avant!'s Secretary from November 1996 to September 1998. Mr. Brill is a
corporate and securities attorney whose practice focuses principally on
technology companies and private investment partnerships. He has maintained his
own practice since 1993, and previously practiced with the San Francisco law
firm of Farella, Braun & Martel. Mr. Brill holds a B.S. in History from
Cleveland State University and a J.D. from the Harvard Law School.
MR. CHIMURA has served as Executive Staff, Customers since November 1998.
Prior to that he was General Manager of Galax!, Inc., a subsidiary of the
Company ("Galax!"), since April 1998 and has served as a director of the Company
since March 17, 1998. Prior to joining Galax!, Mr. Chimura served as President
of Panasonic Semiconductor Development Company, a division of Matsushita
Semiconductor Corporation of America and a developer of microcontroller systems
and ASIC products, since April 1997. From April 1992 to March 1997, Mr. Chimura
served as General Manager of the Semiconductor Group of Matsushita Electronics
Corporation. Mr. Chimura holds an M.S. in Electrical Engineering from Gifu
University.
MR. TAYLOR has been a director of the Company since January 1999. Mr.
Taylor, a retired Federal employee, served as a natural and cultural resource
manager for the U.S. National Park Service from 1968 to 1995. Mr. Taylor
lectured in Geography at the University of Hawaii prior to joining Avant! as a
director. Mr. Taylor holds an M.A. degree in Geography from San Francisco State
University. Mr. Taylor became a member of the Audit and Compensation Committees
on April 1, 1999.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During the year ended December 31, 1998, the Board of Directors held
thirteen meetings and acted by written consent on six occasions. For the year,
each of the current directors during the term of their tenure attended or
participated in at least 75% of the aggregate of (i) the total number of
meetings of the Board of Directors and (ii) the total number of meetings held by
all Committees of the Board of Directors on which each such director served. The
Board of Directors has two standing committees: the Audit Committee and the
Compensation Committee.
During the year ended December 31, 1998, the Audit Committee of the Board of
Directors met one time. The Audit Committee reviews, acts on and reports to the
Board of Directors with respect to various auditing and accounting matters,
including the selection of the Company's auditors, the scope of the annual
audits, fees to be paid to the Company's auditors, the performance of the
Company's auditors and the accounting practices of the Company. Currently, the
members of the Audit Committee are Mr. St. Clair and Mr. Taylor.
During the year ended December 31, 1998, the Compensation Committee of the
Board of Directors met nine times. The Compensation Committee is authorized to
administer the 1995 Stock Option/Stock Issuance Plan, review the performance and
set the compensation of the Chief Executive Officer of the Company, approve the
compensation of the executive officers of the Company and review the
compensation programs for other key employees, including salary and cash bonus
levels, as set by the Chief Executive Officer. The members of the Compensation
Committee during 1998 were Mr. St. Clair and Mr. James Andrews. Currently, the
members of the Compensation Committee are Messrs. St. Clair and Taylor.
DIRECTOR COMPENSATION
Except for grants of stock options, directors of the Company generally do
not receive compensation for services provided as a director. The Company also
does not pay compensation for committee participation or special assignments of
the Board of Directors. Mr. St. Clair receives compensation for his services in
the amount of $6,000 per year, and Mr. Taylor will receive $55,000 in 1999 for
his services. As described in greater detail in "Certain Relationships and
Related Transactions," Mr. Brill receives compensation in connection with legal
services rendered to the Company.
4
<PAGE>
Non-employee Board members are eligible for option grants pursuant to the
provisions of the Automatic Option Grant Program under the Company's 1995 Stock
Option/Stock Issuance Plan. Under the Automatic Option Grant Program, each
individual who first becomes a non-employee Board member after the date of the
Company's initial public offering will be granted an option to purchase 20,000
shares on the date such individual joins the Board, provided such individual has
not been in the prior employ of the Company. In addition, at each Annual
Stockholders Meeting subsequent to the 1996 Annual Stockholders Meeting, each
individual who continues to serve and has served as a non-employee Board member
for at least six months prior to such Annual Meeting will receive an additional
option grant to purchase 5,000 shares of Common Stock, whether or not such
individual has been in the prior employ of the Company.
Non-employee Board members and directors who are also employees of the
Company are eligible to receive options and be issued shares of Common Stock
directly under the 1995 Stock Option/Stock Issuance Plan. Employee-directors are
also eligible to participate in the Company's Employee Stock Purchase Plan.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED HEREIN.
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Company is asking the stockholders to ratify the appointment of KPMG LLP
as the Company's independent public accountants for the year ending December 31,
1999. The affirmative vote of the holders of a majority of shares present or
represented by proxy and voting at the Annual Meeting will be required to ratify
the appointment of KPMG LLP.
In the event the stockholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the appointment is ratified,
the Board of Directors, in its discretion, may direct the appointment of a
different independent accounting firm at any time during the year if the Board
of Directors feels that such a change would be in the Company's and its
stockholders' best interests.
Representatives of KPMG LLP are expected to be present at the Annual
Meeting, will have the opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
SELECTION OF KPMG LLP TO SERVE AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS
FOR THE YEAR ENDING DECEMBER 31, 1999.
5
<PAGE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of February 28, 1999, certain information
with respect to shares beneficially owned by (i) each person who is known by the
Company to be the beneficial owner of more than five percent of the Company's
outstanding shares of Common Stock, (ii) each of the Company's directors, and
the executive officers named in the Summary Compensation Table and (iii) all
current directors and executive officers as a group. Beneficial ownership has
been determined in accordance with Rule 13d-3 under the Exchange Act. Under this
rule, certain shares may be deemed to be beneficially owned by more than one
person (if, for example, persons share the power to vote or the power to dispose
of the shares). In addition, shares are deemed to be beneficially owned by a
person if the person has the right to acquire shares (for example, upon exercise
of an option or warrant) within 60 days of the date as of which the information
is provided; in computing the percentage ownership of any person, the amount of
shares is deemed to include the amount of shares beneficially owned by such
person (and only such person) by reason of such acquisition rights. As a result,
the percentage of outstanding shares of any person as shown in the following
table does not necessarily reflect the person's actual voting power at any
particular date.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED (1)
--------------------------------------------
BENEFICIAL OWNER NUMBER OF SHARES PERCENTAGE OF CLASS (2)
- -------------------------------------------------------------- ----------------- -------------------------
<S> <C> <C>
T. Rowe Price Associates, Inc. (3)............................ 3,167,900 9.53%
J.&W. Seligman & Co. Incorporated (4)......................... 2,628,457 7.90
Gerald C. Hsu (5)............................................. 1,288,987 3.81
Eric A. Brill (6)............................................. 10,000 *
Moriyuki Chimura (7).......................................... 20,000 *
Dan Taylor.................................................... 0 0
Charles St. Clair (8)......................................... 18,505 *
Roy Jewell (9)................................................ 259,640 *
David Stanley (10)............................................ 7,595 *
Linda Chinn (11).............................................. 0 0
All directors and executive officers as a group
(9 persons) (12)............................................ 1,863,405 5.49
</TABLE>
- ------------------------
* Less than 1% of the outstanding shares of Common Stock.
(1) Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the persons named in the table have
sole voting and investment power with respect to all shares of Common
Stock.
(2) Based on 33,256,116 shares of Common Stock outstanding as of February 28,
1999.
(3) Based on information provided by T. Rowe Price Associates, Inc., as of
February 22, 1999, T. Rowe Price Associates, Inc. held sole dispositive
power for all of such shares and held sole voting power for 167,200 of such
shares. T. Rowe Price Associates, Inc.'s address is 100 East Pratt Street,
Baltimore, Maryland 21202.
(4) Based on Schedule 13G/A filed with the Securities and Exchange Commission
on February 9, 1999, and other information obtained by the Company, J.&W.
Seligman & Co. Incorporated held sole voting power as to no such shares,
shared voting power as to 2,300,700 such shares, sole dispositive power as
to no such shares and shared dispositive power as to 2,628,457 such shares.
J.&W. Seligman & Co. Incorporated's address is 100 Park Avenue, Eighth
Floor, New York, New York 10006.
(5) Includes options exercisable into 579,686 shares of Common Stock under the
Option Plan as of April 30, 1999.
6
<PAGE>
(6) Includes options exercisable into 10,000 shares of Common Stock under the
Option Plan as of April 30, 1999.
(7) Includes options exercisable into 20,000 shares of Common Stock under the
Option Plan as of April 30, 1999.
(8) Includes options exercisable into 16,590 shares of Common Stock under the
Option Plan as of April 30, 1999.
(9) Includes options exercisable into 10,833 shares of Common Stock under the
Option Plan as of April 30, 1999.
(10) Includes options exercisable into 7,083 shares of Common Stock under the
Option Plan as of April 30, 1999.
(11) Ms. Chinn is no longer employed by the Company.
(12) Includes options exercisable into 707,923 shares of Common Stock under the
Option Plan as of April 30, 1999.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Before joining the Board of Directors of the Company in November 1996, Mr.
Brill was an attorney with the law firm of Farella Braun & Martel, LLP. Farella
Braun & Martel has represented, and continues to represent, the Company in
certain litigation matters. In addition, Farella Braun & Martel is one of the
law firms that represent Gerald C. Hsu, individually, in the litigation matter
against Cadence Design Systems, Inc. In 1998, Mr. Brill received approximately
$227,641 in connection with legal services rendered by Mr. Brill to the Company.
In addition, Mr. Brill received a portion of the $505,342 paid to Farella Braun
& Martel by the Company in 1998.
In 1998, the Company paid directly the legal fees of Gerald C. Hsu in
connection with various litigation matters involving the Company, including the
litigation matter against Cadence Design Systems, Inc., in the amount of
$257,875.
In 1997 and 1996, the Company consolidated its Japanese and Korean sales
channels by forming two joint ventures, MainGate Electronics, KK ("MainGate")
and DavanTech Co., Ltd. ("DavanTech"), respectively. The joint ventures were
formed for the purpose of consolidating distribution in Japan and Korea. The
Company owns 35% and 39.6% of MainGate and DavanTech, respectively, and accounts
for the joint ventures using the equity method. Gerald C. Hsu, the Company's
President and Chief Executive Officer, owns approximately 40% and 2.6% of
MainGate and DavanTech, respectively. Other than possible appreciation of his
investments in MainGate and DavanTech, Mr. Hsu has not derived, directly or
indirectly, any remuneration as a result of the agreements between the Company
and MainGate and DavanTech, respectively. The distributorship agreements that
the Company entered into with MainGate and DavanTech are comparable, from a
financial point of view, with the agreements the Company had with its previous
distributors in the region and contain no better terms, from a financial point
of view, than the Company could have negotiated with other potential
distributors.
In December 1997, the Company's Compensation Committee awarded Mr. Hsu a
bonus, payable by the Company's cancellation of the principal amount and accrued
interest outstanding on an $800,000 loan that had been made by the Company to
Mr. Hsu in July 1997. See "Report on Executive Compensation-- CEO Compensation."
The largest aggregate amount that Mr. Hsu was indebted to the Company at any one
point during 1998 was $1,637,585. As of March 31, 1999, Gerald C. Hsu was not
indebted to the Company.
From April 1998 to July 1998, the Company made various personal loans to Roy
Jewell, a Named Officer. The largest aggregate amount that Mr. Jewell was
indebted to the Company at any one point
7
<PAGE>
during 1998 was $1,710,000. No interest is charged on these loaned amounts. As
of March 31, 1999, Mr. Jewell owed the Company $1,000,000.
EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL ARRANGEMENTS
The Company has entered into an employment agreement with Mr. Hsu. Under the
terms of the agreement, the Company will pay Mr. Hsu an annual salary of no less
than $600,000. The Company may terminate Mr. Hsu's employment at any time and
for any reason upon 30 days, advance notice. In the event of an involuntary
termination, Mr. Hsu is entitled to a cash payment equal to three times the
amount of his annual base salary in effect on the date of the termination. In
addition, in the event of an involuntary termination any outstanding options
held by Mr. Hsu will automatically vest in full and any repurchase rights of the
Company in connection with any Common Stock previously issued to Mr. Hsu will
terminate.
"Involuntary termination," as defined in Mr. Hsu's employment agreement,
means a termination of employment by reason of (i) Mr. Hsu's involuntary
dismissal for reasons other than "misconduct" (as defined below), (ii) Mr. Hsu's
voluntary resignation within six months after a "change in control" or "a
corporate transaction" (as defined in the Company's 1995 Stock Option/Stock
Issuance Plan), or (iii) Mr. Hsu's voluntary resignation within six months after
a change in his position or title with the Company which materially reduces his
level of responsibility, a reduction by more than fifteen percent in Mr. Hsu's
level of compensation, or a relocation of Mr. Hsu's place of employment by more
than fifty miles.
The Company has entered into severance arrangements with Messrs. Roy Jewell
and David Stanley. In the event of an involuntary termination occurring within
six months of a change in control, these officers are entitled to a cash payment
equal to two times their annual base salary. "Involuntary termination," as
defined in these employment agreements, means (i) any refusal by the officer to
relocate his or her principal place of employment to a place that is more than
twenty-five miles from such executive's current principal place of employment,
(ii) any adverse change in the officer's compensation, (iii) any material
adverse change in the officer's position or job responsibilities, or (iv) any
activity by the Company that constitutes constructive termination under
applicable law.
In addition, the Board of Directors or the Compensation Committee has the
authority under the 1995 Stock Option/Stock Issuance Plan (the "Option Plan") to
accelerate the vesting of shares of Common Stock subject to outstanding options
held by the Chief Executive Officer and the Company's other executive officers
under that Plan, in the event their employment were to be terminated (whether
involuntarily or through a forced resignation) following a hostile take-over of
the Company effected through a successful tender offer for more than 50% of the
Company's outstanding Common Stock or through a change in the majority of the
Board as a result of one or more contested elections for Board membership.
Upon the occurrence of either of the following transactions (a "Corporate
Transaction"):
(i) the sale, transfer or other disposition of all or substantially all of
the Company's assets in complete liquidation or dissolution of the Company, or
(ii) a merger or consolidation in which securities possessing more than 50%
of the total combined voting power of the Company's outstanding securities are
transferred to a person or persons different from the persons holding those
securities immediately prior to such transaction,
each outstanding option under the Option Plan will, immediately prior to the
effective date of the Corporate Transaction, become fully exercisable for all of
the shares at the time subject to such option. However, an outstanding option
will not accelerate if and to the extent: (i) such option is, in connection with
the Corporate Transaction, either to be assumed by the successor corporation (or
parent) or to be replaced with a comparable option to purchase shares of the
capital stock of the successor corporation (or parent); (ii) such option is to
be replaced with a cash incentive program of the successor corporation which
8
<PAGE>
preserves the spread existing on the unvested option shares at the time of the
Corporate Transaction and provides for subsequent payout in accordance with the
same vesting schedule applicable to such option; or (iii) the acceleration of
such option is subject to other limitations imposed by the Board of Directors or
Committee at the time of the option grant. Immediately following the
consummation of the Corporate Transaction, all outstanding options will
terminate and cease to be exercisable, except to the extent assumed by the
successor corporation.
Also upon a Corporate Transaction, the Company's outstanding repurchase
rights applicable to options granted under the Discretionary Option Grant
Program will terminate automatically unless assigned to the successor
corporation.
Any options which are assumed or replaced in the Corporate Transaction and
do not otherwise accelerate at that time will automatically accelerate (and any
of the Company's outstanding repurchase rights which do not otherwise terminate
at the time of the Corporate Transaction will automatically terminate and the
shares of Common Stock subject to those terminated rights will immediately vest
in full) in the event the optionee's service should subsequently terminate by
reason of an involuntary termination within 18 months following the effective
date of such Corporate Transaction. Any options so accelerated will remain
exercisable for fully-vested shares until the earlier of (i) the expiration of
the option term or (ii) the expiration of the one-year period measured from the
effective date of the involuntary termination.
Upon the occurrence of the following transactions ("Change in Control"):
(i) any person or related group of persons (other than the Company or a
person that directly or indirectly controls, is controlled by, or is under
common control with, the Company) acquires beneficial ownership of more than 50%
of the Company's outstanding voting stock without the Board's recommendation, or
(ii) there is a change in the composition of the Board over a period of 36
consecutive months or less such that a majority of the Board members ceases, by
reason of a proxy contest, to be comprised of individuals who (a) have been
Board members continuously since the beginning of such period or (b) have been
elected or nominated for election as Board members by a majority of the Board in
(a) who were still in office at the time such election or nomination was
approved by the Board,
the Board of Directors or Committee has the discretion to accelerate outstanding
options and terminate the Company's outstanding repurchase rights. The Board of
Directors or Committee also has the discretion to terminate the Company's
outstanding repurchase rights upon the subsequent termination of the optionee's
service within a specified period following the Change in Control.
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee has the authority to establish the level of base
salary payable to the Chief Executive Officer ("CEO"), to administer the Option
Plan with respect to executive officers, and to supervise the administration of
the Purchase Plan. In addition, the Committee has the responsibility for
approving the individual bonus program to be in effect for the CEO. The CEO has
the exclusive authority to establish the level of base salary payable to all
other employees of the Company, including all executive officers, subject to the
approval of the Committee. In addition, the CEO has the responsibility for
approving the bonus programs to be in effect for all other executive officers
and other key employees each fiscal year, subject to the approval of the
Committee.
For 1998, the process utilized by the CEO in determining executive officer
compensation levels took into account both qualitative and quantitative factors.
Among the factors considered by the CEO were informal surveys conducted by
Company personnel among local companies. However, the CEO made the final
compensation decisions concerning such officers. In preparing the performance
graph for this Proxy Statement, the Company has selected the Nasdaq Stock Market
U.S. Total Return Index and the Nasdaq Computer & Data Processing Stocks Total
Return Index for the Nasdaq Stock Market. The companies
9
<PAGE>
included in the Company's informal survey are not necessarily those included in
the Indices, because they may have been determined not to be competitive with
the Company for executive talent or because compensation information was not
available to the Company.
GENERAL COMPENSATION POLICY. The CEO's fundamental policy is to offer the
Company's executive officers competitive compensation opportunities based upon
overall Company performance, their individual contribution to the financial
success of the Company and their personal performance. It is the CEO's objective
to have a substantial portion of each officer's compensation contingent upon the
Company's performance, as well as upon his or her own level of performance.
Accordingly, each executive officer's compensation package consists of: (i) base
salary, (ii) cash bonus awards and (iii) long-term stock-based incentive awards.
BASE SALARY. The base salary for each executive officer is set on the basis
of personal performance and the salary level in effect for comparable positions
at companies that compete for executive talent on the basis of informal surveys
conducted by the Company.
ANNUAL CASH BONUSES. Each executive officer has an established bonus target
each fiscal year. The annual pool of bonuses for executive officers is
determined on the basis of the Company's achievement of the financial
performance targets established at the start of the fiscal year, a range for the
executive's contribution and a measure of customer satisfaction. For 1998, the
Company exceeded its performance targets. Actual bonuses paid reflect an
individual's accomplishment of both corporate and functional objectives, with
greater weight being given to achievement of corporate rather than functional
objectives.
LONG-TERM INCENTIVE COMPENSATION. During 1998, the Committee, in its
discretion, made option grants to Gerald C. Hsu, Roy Jewell and Linda Chinn
under the Option Plan. Generally, a significant grant is made in the year that
an officer commences employment and no grant is made in the second year.
Generally, the size of each grant is set at a level that the Committee deems
appropriate to create a meaningful opportunity for stock ownership based upon
the individual's position with the Company, the individual's potential for
future responsibility and promotion, the individual's performance in the recent
period and the number of unvested options held by the individual at the time of
the new grant. The relative weight given to each of these factors will vary from
individual to individual.
Each grant allows the officer to acquire shares of the Company's Common
Stock at a fixed price per share (the market price on the grant date) over a
specified period of time. The option vests in periodic installments over a
four-year period, contingent upon the executive officer's continued employment
with the Company, and the vesting schedule is adjusted to reflect existing
grants to ensure a meaningful incentive in each year following the year of
grant. Accordingly, the option will provide a return to the executive officer
only if he remains in the Company's employ, and then only if the market price of
the Company's Common Stock appreciates over the option term.
CEO COMPENSATION. Unless otherwise defined, the capitalized terms used in
this "CEO Compensation" section have the meanings assigned to them in the Option
Plan.
1998 SALARY. The 1998 annual base salary for Mr. Hsu, the Company's
President and CEO, was established by the Committee in January 1998 at $600,000.
The Committee's decision was made primarily on the basis of Mr. Hsu's personal
performance of his duties.
SEPTEMBER 1998 OPTION. On September 1, 1998, the Committee granted to the
CEO an option (the "September 1998 Option") to purchase up to 250,000 shares of
the Common Stock of the Company, in recognition of the CEO's performance and to
provide an incentive for his continued strong performance. The exercise price of
the September 1998 Option is $13.00 per share, the closing price for the
Company's Common Stock on The Nasdaq National Market on the grant date. This
Option is intended to be an Incentive Option to the maximum extent permissible
under the tax laws. It is subject to vesting on a four-year schedule according
to the standard Notice of Grant in use under the Option Plan. The Option has a
10
<PAGE>
maximum term of ten years from the grant date, subject to earlier termination
following Mr. Hsu's cessation of service with the Company.
1998 CASH BONUS. In January 1999, the Committee awarded the CEO a cash
bonus of $1.2 million for his services in 1998.
TAX LIMITATION. As a result of federal tax legislation enacted in 1993, a
publicly held company such as the Company will not be allowed a federal income
tax deduction for compensation paid to certain executive officers to the extent
that compensation exceeds $1 million per officer in any year. The stockholders
approved the Option Plan, which includes a provision that limits the maximum
number of shares of Common Stock for which any one participant may be granted
stock options. Accordingly, any compensation deemed paid to an executive officer
when he exercises an outstanding option granted by the Compensation Committee
under the Option Plan with an exercise price equal to the fair market value of
the option shares on the grant date will not be subject to the $1 million
limitation provided that the Compensation Committee meets certain requirements.
The Board of Directors currently does not have a Compensation Committee meeting
the requirements of Section 162(m). The cash compensation to be paid to the
Company's Chief Executive Officer for the 1998 fiscal year exceeds the $1
million limit and the Committee has decided not to limit the dollar amount of
cash compensation payable to the Company's Chief Executive Officer or other
executive officers to $1 million.
OPTION REPRICINGS. The Board of Directors views the Option Plan as a key
element of employee compensation which enables the Company to attract highly
qualified new employees and to retain existing employees. In addition, the
Option Plan makes it possible to maintain cash compensation at lower, more
reasonable levels. However, stock options are effective in attracting and
retaining employees and enhance employee morale only if they offer a reasonable
prospect of gain, and the absence of gain has an adverse impact upon employee
morale and the Company's ability to motivate and retain valued employees.
Therefore, because the market price for the Company's Common Stock had, for an
extended period of time prior to the repricing, been lower than the exercise
price of many of its outstanding options, the Board of Directors deemed it
appropriate to reprice outstanding stock options.
The following table sets forth information concerning stock options repriced
in 1998 with respect to each of the Company's current executive officers.
11
<PAGE>
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
SECURITIES ORIGINAL
UNDERLYING MARKET PRICE OPTION TERM
NUMBER OF OF STOCK AT EXERCISE PRICE REMAINING AT
OPTIONS TIME OF AT TIME OF DATE OF
REPRICED OR REPRICING OR REPRICING OR NEW EXERCISE REPRICING OR
NAME DATE AMENDED (#) AMENDMENT AMENDMENT PRICE AMENDMENT
- ------------------------ --------- --------------- -------------- --------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Gerald C. Hsu........... -- -- -- -- -- --
Peter S. Teshima........ -- -- -- -- -- --
Roy Jewell.............. -- -- -- -- -- --
Linda Chinn (1)......... 3/2/98 30,000 $ 13.9735 $ 16.8750 $ 13.9735 118 months
David Stanley........... -- -- -- -- -- --
Stephen Wuu............. 3/2/98 625 $ 13.9735 $ 25.5000 $ 13.9735 109 months
3/2/98 4,750 $ 13.9735 $ 35.0000 $ 13.9735 107 months
3/2/98 9,375 $ 13.9735 $ 25.5000 $ 13.9735 109 months
3/2/98 15,250 $ 13.9735 $ 35.0000 $ 13.9735 107 months
3/2/98 17,514 $ 13.9735 $ 21.7500 $ 13.9735 101 months
3/2/98 28,000 $ 13.9735 $ 15.5000 $ 13.9735 118 months
3/2/98 2,486 $ 13.9735 $ 21.7500 $ 13.9735 101 months
Chi-Ping Hsu............ 3/2/98 14,038 $ 13.9735 $ 21.7500 $ 13.9735 101 months
3/2/98 8,902 $ 13.9735 $ 15.5000 $ 13.9735 118 months
3/2/98 5,962 $ 13.9735 $ 21.7500 $ 13.9735 101 months
3/2/98 7,098 $ 13.9735 $ 15.5000 $ 13.9735 118 months
</TABLE>
- ------------------------
(1) Because Ms. Chinn is no longer employed by the Company, her option to
purchase 30,000 shares of Common Stock has been cancelled.
BOARD OF DIRECTORS
Gerald C. Hsu
Eric A. Brill
Moriyuki Chimura
Charles L. St. Clair
Dan Taylor
12
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1998, Messrs. Charles St. Clair, and for a short period, James
Andrews, who resigned for personal reasons, served on the Compensation
Committee. Mr. St. Clair was an officer of the Company but was not an employee
during 1998. Currently, Messrs. St. Clair and Taylor are members of the
Compensation Committee. No executive officer of the Company serves as a member
of the board of directors or compensation committee of any entity that has one
or more executive officers serving as a member of the Company's Board of
Directors or Compensation Committee.
STOCK PERFORMANCE GRAPH
The graph set forth below compares the cumulative total stockholder return
on the Company's Common Stock between June 7, 1995 (the date the Company's
Common Stock commenced public trading) and December 31, 1998 with the cumulative
total return of (i) The Nasdaq Stock Market Total Return Index (U.S. Companies)
(the "Nasdaq Stock Market-U.S. Index") and (ii) The Nasdaq Computer & Data
Processing Stocks Total Return Index for The Nasdaq Stock Market ("Nasdaq CDP
Index"), over the same period. This graph assumes the investment of $100 on June
7, 1995 in the Company's Common Stock, or on May 31, 1995 in The Nasdaq Stock
Market-U.S. Index or the Nasdaq CDP Index, and assumes the reinvestment of
dividends, if any.
The comparisons shown in the graph below are based upon historical data, and
the Company cautions that the stock price performance shown in the graph below
is not indicative of, nor intended to forecast, the potential future performance
of the Company's Common Stock. Information used in the graph was obtained from
The Nasdaq Stock Market, a source believed to be reliable, but the Company is
not responsible for any errors or omissions in such information.
COMPARISON OF 43 MONTH CUMULATIVE TOTAL RETURN AMONG AVANT! CORPORATION,
THE NASDAQ STOCK MARKET (U.S.) INDEX AND THE NASDAQ COMPUTER AND DATA PROCESSING
INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DOLLARS 6/95 9/95 12/95 3/96 6/96 9/96 12/96
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AVANT! CORPORATION 100 128 156 73 91 88 113 120
NASDAQ STOCK MARKET (U.S.) 100 108 121 123 128 139 144 151
NASDAQ COMPUTER & DATA PROCESSING 100 111 121 127 133 148 151 157
3/97 6/97 9/97 12/97 3/98 6/98 9/98 12/98
102 122 110 63 79 93 48 60
143 169 197 185 216 222 201 260
145 186 204 192 254 282 266 344
</TABLE>
13
<PAGE>
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate this Proxy
Statement or future filings made by the Company under those statutes, the
Compensation Committee Report and Stock Performance Graph are not deemed filed
with the Securities and Exchange Commission and shall not be deemed incorporated
by reference into any of those prior filings or into any future filings made by
the Company under those statutes.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
The following Summary Compensation Table sets forth the compensation earned
by the Company's Chief Executive Officer and the three other most highly
compensated executive officers who were serving as such during 1998
(collectively, the "Named Officers"), each of whose salary and bonus for 1998
exceeded $100,000 for services rendered in all capacities to the Company and its
subsidiaries for that fiscal year. Salary and bonus figures include amounts
deferred under the 401(k) plan as well as amounts earned in the stated year but
not yet paid or paid in the subsequent year. The Company did not grant any stock
appreciation rights or make any long-term incentive payments during the years
covered by the table.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
-------------
NUMBER OF
ANNUAL COMPENSATION SECURITITES
------------------------ OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($) OPTIONS (#) COMPENSATION ($)
- --------------------------- --------- ---------- ------------ ---------------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Gerald C. Hsu.............. 1998 $ 600,000 $ 1,200,000 -- 250,000 $ 5,000(1)
President, Chief 1997 350,000 800,000 -- 800,000 --
Executive Officer and 1996 250,000 350,000 -- 175,000 --
Chairman
Roy Jewell (2)............. 1998 198,375 60,000 $ 189,000(3) 40,000 --
Linda Chinn (4)............ 1998 180,000 35,000 -- 30,000 --
David Stanley(5)........... 1998 200,000 40,000 -- -- 2,083(1)
General Counsel 1997 33,333 40,000 -- -- --
</TABLE>
- ------------------------
(1) Represents matching contributions by the Company to the 401(k) Plan.
(2) Mr. Jewell's 1998 compensation began January 16, 1998.
(3) Represents compensation in the form of forgiveness of amounts owed to the
Company.
(4) Ms. Chinn is no longer employed by the Company.
(5) Mr. Stanley's 1997 compensation began November 1, 1997.
14
<PAGE>
The following table contains information concerning the stock option grants
made to each of the Named Officers in 1998. No stock appreciation rights were
granted to these individuals during such year. Option Grants in Last Fiscal Year
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
------------------------------------------------------------------
NUMBER OF AT ASSUMED ANNUAL RATES OF
SECURITIES % OF TOTAL STOCK PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED EXERCISE FOR OPTION TERM (4)
OPTIONS TO EMPLOYEES IN PRICE ($/SH) --------------------------
NAME GRANTED (#) 1998(2) (3) EXPIRATION DATE 5%($) 10%($)
- -------------------------- ----------- --------------- ------------- --------------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Gerald C. Hsu (1)......... 250,000 6.79 $ 13.0000 September 1, 2008 $ 2,043,907 $ 5,179,663
Roy Jewell (1)............ 40,000 1.09 13.0313 March 4, 2008 327,813 830,741
Linda Chinn(1)(5)......... 30,000 0.82 13.9735 March 2, 2008 263,636 668,105
David Stanley............. -- -- -- -- -- --
</TABLE>
- ------------------------
(1) 25% of the option shares vest after the first 12 months of service to the
Company measured from the Vesting Commencement Date, and the remaining 75%
of the option shares vest in a series of successive equal monthly
installments upon the optionee's completion of each of the following thirty-
six months of service to the Company.
(2) Based on 3,679,580 total stock options granted in 1998. 2,004,797 of these
options were granted as replacement options for the repricing. Eliminating
the repriced grants from the total results in the following % of total
options granted for Messrs. Hsu and Jewell and Ms. Chinn respectively;
14.93%, 2.39% and 1.79%.
(3) The exercise price for the options may be paid in cash, in shares of Common
Stock valued at fair market value on the exercise date or through a cashless
exercise procedure involving a same-day sale of the purchased shares. The
Company may also finance the option exercise by loaning the optionee
sufficient funds to pay the exercise price for the purchased shares,
together with any federal and state income tax liability incurred by the
optionee in connection with such exercise. The plan administrator has the
discretionary authority to reprice the options through the cancellation of
those options and the grant of replacement options with an exercise price
based on the fair market value of the option shares on the regrant date. The
options have a maximum term of 10 years measured from the option grant date,
subject to earlier termination in the event of the optionee's cessation of
service with the Company. Under each of the options, the option shares will
vest upon an acquisition of the Company by merger or asset sale, unless the
Company's repurchase right with respect to the unvested option shares is
transferred to the acquiring entity. See "General Provisions" under the
heading "Description of the Option Plan" for a discussion of the vesting of
options in connection with such a transaction.
(4) The potential realizable value of the options reported above was calculated
by assuming that the market price of the Common Stock of the Company
appreciates 5% and 10% from the date of grant of the options until the
expiration of the options. These assumed annual rates of appreciation were
used in compliance with the rules of the Securities and Exchange Commission
and are not intended to forecast future price appreciation of the Common
Stock of the Company. The actual value realized from the options could be
substantially higher or lower than the values reported above, depending upon
the future appreciation or depreciation of the Common Stock during the
option period and the timing of exercise of the options. Unless the
executive officer remains employed until he vests in the option shares and
the market price of the Common Stock appreciates over the option term, no
value will be realized from the option grants made to the executive
officers.
(5) Because Ms. Chinn is no longer employed by the Company, her option to
purchase 30,000 shares of Common Stock has been cancelled.
15
<PAGE>
The following table sets forth information concerning option exercises in
1998 and option holdings as of the end of 1998 with respect to each of the Named
Officers. No stock appreciation rights were outstanding at the end of that year.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE REALIZED NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES (MARKET PRICE AT UNDERLYING UNEXERCISED IN-THE- MONEY OPTIONS AT
ACQUIRED ON EXERCISE LESS OPTIONS AT FY-END (#) FY-END ($) (1) (2)
EXERCISE EXERCISE PRICE) -------------------------- --------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------- ----------- ------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gerald C. Hsu (3)...... 35,714 447,996 424,479 822,396 0 0
Roy Jewell............. 0 -- 0 40,000 0 118,748
Linda Chinn(4)......... 0 -- 0 30,000 0 61,875
David Stanley.......... 0 -- 5,416 14,584 2,708 7,292
</TABLE>
- ------------------------
(1) The amounts reported above under the column "Value Realized" merely reflect
the amount by which the fair market value of the Common Stock of the Company
on the date the option was exercised exceeded the exercise price of the
option. The option holder does not realize any cash until the shares of
Common Stock issued upon exercise of the options are sold.
(2) Based on the closing price of the Common Stock of the Company at December
31, 1998, as reported on the Nasdaq National Market, of $16.00 per share,
less the exercise price payable for such shares.
(3) Shares of Common Stock acquired on exercise are subject to repurchase by the
Company at the original exercise price paid per share upon the optionee's
cessation of service to the Company prior to vesting in such shares.
(4) Because Ms. Chinn is no longer employed by the Company, her option to
purchase 30,000 shares of Common Stock has been cancelled.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The members of the Board of Directors, the executive officers of the Company
and persons who hold more than 10% of the Company's outstanding Common Stock are
subject to the reporting requirements of Section 16(a) of the Securities
Exchange Act of 1934, which require them to file reports with respect to their
ownership of the Company's Common Stock and their transactions in such Common
Stock. Based upon (i) the copies of Section 16(a) reports which the Company
received from such persons for their 1998 fiscal year transactions in the Common
Stock and their Common Stock holdings and (ii) the written representations
received from one or more of such persons that no annual Form 5 reports were
required to be filed by them for the 1998 fiscal year, the Company believes that
all reporting requirements under Section 16(a) for such fiscal year were met in
a timely manner by its executive officers, Board members and greater than
ten-percent shareholders, except that Gerald Hsu reported two transactions late,
Linda Chinn filed her Form 3 late and Moriyuki Chimura filed his Form 3 late.
FORM 10-K
The Company will mail without charge, upon written request, a copy of the
Company's Form 10-K report for 1998, including the financial statements,
schedules and list of exhibits. Requests should be sent to Avant! Corporation,
46871 Bayside Parkway, Fremont, California 94538, Attn: Charles St. Clair,
Secretary.
16
<PAGE>
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Stockholder proposals that are intended to be presented at the 2000 Annual
Meeting that are eligible for inclusion in the Company's proxy statement and
related proxy materials for that meeting under the applicable rules of the
Securities and Exchange Commission must be received by the Company not later
than December 10, 1999 in order to be included. Such stockholder proposals
should be addressed to Avant! Corporation, 46871 Bayside Parkway, Fremont,
California 94538, Attn: Charles St. Clair, Secretary.
OTHER MATTERS
The Board knows of no other matters to be presented for stockholder action
at the Annual Meeting. However, if other matters do properly come before the
Annual Meeting or any adjournments or postponements thereof, the Board intends
that the persons named in the proxies will vote upon such matters in accordance
with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS,
Charles St. Clair
SECRETARY
Fremont, California
April 13, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE ANNUAL MEETING. IF
YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO CHANGE YOUR PROXY VOTE, YOU
MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE MEETING.
THANK YOU FOR YOUR ATTENTION TO THIS MATTER. YOUR PROMPT RESPONSE WILL GREATLY
FACILITATE ARRANGEMENTS FOR THE ANNUAL MEETING.
17
<PAGE>
PROXY PROXY
AVANT! CORPORATION
ANNUAL MEETING OF STOCKHOLDERS, MAY 14, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
AVANT! CORPORATION
The undersigned revokes all previous proxies, acknowledges receipt of
the Notice of the Annual Meeting of Stockholders to be held on May 14, 1999
and the Proxy Statement and appoints Gerald C. Hsu and David L. Stanley, and
each of them, the proxy of the undersigned, with full power of substitution,
to vote all shares of Common Stock of Avant! Corporation (the "Company")
which the undersigned is entitled to vote, either on his or her own behalf or
on behalf of any entity or entities, at the Annual Meeting of Stockholders to
be held at the Company's principal executive offices at 46871 Bayside
Parkway, Fremont, California on Friday, May 14, 1999, at 9:00 a.m. local time
and at any adjournment or postponement thereof (the "Annual Meeting"), with
the same force and effect as the undersigned might or could do if personally
present thereat. The shares represented by this Proxy shall be voted in the
manner set forth on the reverse side.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
AVANT! CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES LISTED
BELOW AND A VOTE FOR THE OTHER PROPOSALS. THIS PROXY, WHEN PROPERLY EXECUTED,
WILL BE VOTED AS SPECIFIED BELOW. THIS PROXY WILL BE VOTED FOR THE ELECTION
OF THE NOMINEES LISTED BELOW AND FOR THE OTHER PROPOSALS IF NO SPECIFICATION
IS MADE.
1. To elect the following directors to serve for a term ending upon the 2000
Annual Meeting of Stockholders or until their successors are elected and
qualified:
NOMINEES: Gerald C. Hsu, Charles L. St. Clair, Eric A. Brill, Moriyuki Chimura
and Dan Taylor.
For Withhold For All
All All Except
/ / / / / /
______________________________________________________________________________
FOR ALL NOMINEES, EXCEPT FOR ANY NOMINEE(S) WHOSE NAME IS WRITTEN IN THE SPACE
PROVIDED ABOVE.
2. To ratify the appointment of KPMG LLP as the Company's independent
auditors for the fiscal year ending December 31, 1999.
For Against Abstain
/ / / / / /
3. To transact such other business as may properly come before the Annual
Meeting and at any adjournment or postponement thereof.
For Against Abstain
/ / / / / /
Mark Here for Address Change / /
And Note it below.
________________________________
________________________________
________________________________
Please sign your name.
Dated: ____________________________________, 1999
Signature(s):
_________________________________________________
_________________________________________________
Please sign exactly as your name(s) appear on your stock certificate.
^ FOLD AND DETACH HERE ^
YOUR VOTE IS IMPORTANT!
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT
IN THE ENCLOSED ENVELOPE.
