UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 10-K/A
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(b) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year ended March 31, 2001
Commission File No. 0-26092
CLARE, INC.
(Exact Name of Registrant as specified in its Charter)
MASSACHUSETTS 04-2561471
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
78 CHERRY HILL DRIVE 01915
BEVERLY, MASSACHUSETTS (Zip code)
(Address of principal executive offices)
(978) 524-6700
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.01 par value
Preferred Stock Purchase Rights
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports 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/A or any
amendment to this Form 10-K/A. / /
The aggregate market value of the voting stock held by non-affiliates of the
Registrant, as of June 18, 2001, was $24,452,662. The number of shares of the
Registrant's common stock, par value $.01 per share, outstanding as of June 18,
2001 was 9,781,065.
This Amendment amends and supplements the Form 10-K filed by the
Company for the fiscal year ended March 31, 2001 by adding the following Part
III, Items 10 through 13:
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table and biographical descriptions set forth certain
information with respect to the Nominee for election as a Class III Director at
the Annual Meeting, the continuing Directors whose terms expire at the Annual
Meetings of Stockholders in 2002 and 2003 and the Executive Officers of the
Company who are not Directors, based on information furnished to the Company by
such Directors and Executive Officers. The following information is as of June
30, 2001, unless otherwise specified.
DIRECTOR
NAME AGE SINCE
Class III Nominee for Election
(TERM TO EXPIRE IN 2004)
James K. Sims 54 1996
Class I Continuing Directors
(TERM TO EXPIRE IN 2002)
Winston R. Hindle, Jr. 71 1995
Larry L. Mihalchik 54 1999
Class II Continuing Directors
(TERM TO EXPIRE IN 2003)
Andrew E. Lietz 62 2000
John G. Turner 61 1994
Executive Officers who are not Directors
Harry Andersen 54
Dennis Cocco 47
William J. Dennehy 59
Mark F. Heisig 44
NOMINEE FOR ELECTION AS A DIRECTOR
JAMES K. SIMS. Mr. Sims has been a Director since March 1996. He is the
Co-Chairman and Chief Executive Officer of Gen3 Partners of Boston,
Massachusetts, a position he has held since the Company's inception in 1999.
Previously, he was President and Chief Executive Officer of Cambridge Technology
Partners. Prior to founding Cambridge Technology Partners in 1991, Mr. Sims was
Chairman and Chief Executive Officer of Concurrent Computer Corporation. Mr.
Sims is also a Director of Security Dynamics Corporation.
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INCUMBENT DIRECTORS - TERM EXPIRING IN 2002
WINSTON R. HINDLE, JR. Mr. Hindle has been a Director since July 1995.
He was a Senior Vice President of Digital Equipment Corporation and a member of
the Executive Committee prior to his retirement in 1994 after 32 years with the
company. Mr. Hindle also serves on the Boards of Directors of Keane, Inc.,
Mestek, Inc., and Care Centric, Inc.
LARRY L. MIHALCHIK. Mr. Mihalchik was named President and Chief
Executive Officer of the Company on February 1, 2001. From January 2000 to that
date, Mr. Mihalchik was Chief Executive Officer and a member of the Board of
Directors of Internet Commerce Services Corporation (iCOMS). Previously, Mr.
Mihalchik served as President, Chief Executive Officer of Atex Media Solutions,
Inc., a developer and integrator of complex publishing systems. Prior to joining
Atex Media Solutions, Mr. Mihalchik served as Senior Vice President and Chief
Financial Officer of M/A COM, a NYSE manufacturer of electronic components.
INCUMBENT DIRECTORS - TERM EXPIRING IN 2003
ANDREW E. LIETZ. Mr. Lietz has been a Director since April 2000. Until
July 2000, he was President and Chief Executive Officer of Hadco Corporation, a
manufacturer of printed circuits and electronic interconnection devices located
in Salem, New Hampshire. Prior to joining Hadco, Mr. Lietz served in a variety
of management positions at International Business Machines Corporation. He is
Chairman of the New Hampshire Business & Industry Association, serves on the
Executive Committee of the New Hampshire Industrial Research Center, and is a
member of the University of New Hampshire's Whittemore School of Business
Advisory Board. In addition, Mr. Lietz is a member of the Board of Directors of
EnergyNorth Corporation.
JOHN G. TURNER. Mr. Turner has been a Director of the Company since
1993. Mr. Turner has been a General Partner since 1998 of Vision Capital,
Burlingame, CA, a venture capital partnership. Prior to that time, Mr. Turner
was the Managing Partner of MVP Ventures, a venture capital investment firm
based in Boston, Massachusetts, a position he held since 1988. Mr. Turner also
is a member of the Boards of Directors of Keymage, S.A.; Massana, Inc.; and
Infitel International N.V.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
HARRY ANDERSEN. Mr. Andersen joined the Company as Senior Vice
President, Chief Financial Officer, in December 1998. Previously, he worked at
Fidelity Investments in various management capacities, including Vice President,
Office of the CFO from 1996 to 1999, and Vice President, Systems Operations from
1993 to 1996. Prior to joining Fidelity, Mr. Andersen was Controller and Chief
Accounting Officer at Lotus Development Corporation and also held various
manufacturing and financial management positions at General Electric Company.
DENNIS COCCO. Mr. Cocco is the President of the Company's
Clare-Micronix subsidiary that was acquired by the Company in July 1998. Mr.
Cocco was the founder of Micronix Integrated Systems, Inc. in 1983 and served as
President and Chief Executive Officer until its acquisition by the Company.
WILLIAM J. DENNEHY. Mr. Dennehy was named Vice President, Worldwide
Sales & Corporate Marketing in February 2000. Prior to that he held the position
of VP Sales, Americas since joining the Company in June of 1999. From 1992 to
1999, Mr. Dennehy was at Harris Semiconductor (now Intersil) where he held a
variety of sales and marketing positions. His last assignment at Harris was
centered on Marketing and Business Development for Wireless LAN's. Prior to
Harris, Mr. Dennehy held various sales, marketing and engineering positions at
Sipex and RCA.
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MARK F. HEISIG. Mr. Heisig has been with Clare for four years and has
held the positions of Vice President of R&D and his current position of Vice
President, Communications Products. Prior to joining Clare, Mark spent five
years at Lucent Technologies as the Director of the High Voltage IC Business
Unit and two years at Harris Corporation as the Manager for Applications
Engineering in the Power Discrete Division. He has also worked at Allegra
Microsystems for eleven years as an Applications and Marketing Manager in the
Power Interface IC Business Unit.
THE BOARD OF DIRECTORS AND BOARD COMMITTEES
The business of the Company is managed under the direction of the
Company's Board of Directors. The Company's Amended and Restated Articles of
Organization provide that the Company's Board of Directors shall be divided into
three classes and that the members of each class of Directors will serve for
staggered three-year terms. The Board consists of two Class I Directors (Messrs.
Hindle and Mihalchik), two Class II Directors (Messrs. Lietz and Turner), and
one Class III Director (Mr. Sims), whose initial terms will expire upon the
election and qualification of Directors at the Annual Meeting of Stockholders
held following the fiscal years ending March 31, 2002, 2003, and 2004,
respectively. At each annual meeting of stockholders, Directors will be
re-elected or elected for a full term of three years to succeed those Directors
whose terms are expiring.
The Board of Directors has established an Audit Committee consisting of
Messrs. Hindle (Chairman), Lietz and Sims. The Audit Committee makes
recommendations concerning the engagement of independent public accountants,
reviews with the independent public accountants the scope and results of the
audit engagement, approves professional services provided by the independent
public accountants, reviews the independence of the independent public
accountants, considers the range of audit and non-audit fees, and reviews the
adequacy of our internal accounting controls. Our Board has adopted an Audit
Committee Charter. Each member of the Audit Committee is "independent" as that
term is defined in the rules of the Securities and Exchange Commission and the
applicable listing standards of Nasdaq. The Audit Committee held five meetings
during fiscal 2001.
The Board of Directors has established a Compensation Committee which
reviews and recommends the compensation arrangements for all Directors and
Executive Officers, approves such arrangements for other senior level employees
and administers certain compensation and incentive plans of the Company and its
subsidiaries. The Compensation Committee consists of Mr. Turner, Chairman, and
Messrs. Hindle and Lietz. During fiscal 2001, the Compensation Committee held
three meetings.
In October 2000, the Board of Directors established an Executive
Committee to oversee the operations of the Company and evaluate strategic
alternatives. Messrs. Hindle and Lietz were appointed to the Committee with Mr.
Lietz to serve as Chairman.
Officers of the Company are elected annually at the first meeting of
the Board of Directors following the annual meeting of stockholders and serve at
the discretion of the Board of Directors. There are no family relationships
between any Officers or Directors of the Company. The Company does not maintain
a nominating committee.
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During the fiscal year ended March 31, 2001, the Board of Directors
held eight meetings. All Directors attended at least 75% of the total number of
meetings of the Board of Directors and all committees of the Board on which they
served.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's Executive Officers, Directors and persons who
beneficially own more than 10% of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission and the National Association of Securities
Dealers. Officers, Directors and greater than 10% beneficial owners are required
by Securities and Exchange Commission regulations to furnish the Company with
copies of all forms they file in compliance with Section 16(a).
To the Company's knowledge, based solely on its review of the copies of
such reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended March 31, 2001, other than as
set forth herein, all Section 16(a) filing requirements applicable to its
Executive Officers, Directors and greater than 10% beneficial owners were
satisfied.
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ITEM 11. EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth for the
fiscal years ended March 31, 1999, 2000, and 2001, the cash and non-cash
compensation awarded to the (i) Chief Executive Officers serving in such
position during the last fiscal year and (ii) each of the four most highly
compensated Executive Officers (the "Named Executive Officers") of the Company
whose compensation exceeded $100,000 during the fiscal year ended March 31, 2001
and who were employed by the Company in such capacities at the end of the 2001
fiscal year.
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
---------------------------- ----------------------------------------
SECURITIES UNDERLYING ALL OTHER
FISCAL SALARY BONUS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR $ $ # $
- --------------------------- ---- ------------- -------------- -------------------- --------------------
Larry L. Mihalchik 2001 52,500 - 100,000 1,300 (1)
President and Chief Executive 2000 - - - -
Officer 1999 - - - -
Arthur R. Buckland* 2001 414,435 - - 14,477 (2)
President & Chief Executive 2000 385,008 - - 18,921 (2)
Officer 1999 384,470 - 50,000 17,203 (2)
Dennis Cocco 2001 232,396 - - 303,496 (3)
President, Clare-Micronix Division 2000 210,077 - 41,852 290,693 (3)
1999 176,230 - 240,000 161,100 (3)
Harry Andersen 2001 179,327 - 40,000 12,721 (4)
Senior Vice President & 2000 160,000 - - 11,492 (4)
Chief Financial Officer 1999 43,076 - 50,000 1,950 (4)
William J. Dennehy 2001 145,000 30,000 25,000 51,930
Vice President, Worldwide Sales 2000 102,500 - 12,000 13,072
and Marketing 1999 - - - -
Mark F. Heisig 2001 169,673 - 50,000 3,564 (6)
Vice President, Communication 2000 158,639 - 6,500 2,817 (6)
Products 1999 134,582 30,800 20,000 2,816 (6)
- -------------------------------------------------------------------------------
*Mr. Buckland resigned on January 22, 2001.
(1) Includes a car allowance of $1,300.
(2) Includes insurance premiums of $1,975, $1,400, and $1,320 paid by the
Company, matching contributions of $6,202, $9,721 and $8,083 made by the
Company on behalf of Mr. Buckland under the Company's 401(k) Savings
Plan, and a car allowance of $6,300, $7,800, and $7,800 for fiscal years
2001, 2000, and 1999, respectively.
(3) Includes $250,000, $250,000, and $125,000 in fiscal years 2001, 2000, and
1999, respectively, paid pursuant to Mr. Cocco's non-competition
agreement with the Company pursuant to which Mr. Cocco is entitled to
receive a total of $1,250,000 payable in equal installments over five
years beginning in July, 1998. Includes insurance premiums of $19,727,
$9,747, and $14,981 paid by the Company for fiscal 2001, 2000, and 1999,
respectively, matching contributions of $7,966 and $2,787 made by the
Company on behalf of Mr. Cocco under the Company's 401(k) Savings Plan
for fiscal years 2001 and 2000, respectively, and auto lease payments
made by the Company of $25,803, $28,159, and $21,119 for fiscal years
2001, 2000, and 1999, respectively.
(4) Includes matching contributions of $4,921 and $3,692 by the Company on
behalf of Mr. Andersen under the Company's 401(k) Savings Plan for fiscal
years 2001 and 2000, respectively, and a car allowance of $7,800, $7,800,
and $1,950 for fiscal years 2001, 2000, and 1999, respectively.
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(5) Includes matching contributions of $3,329 and $1,050 by the Company on
behalf of Mr. Dennehy under the Company's 401(k) Savings Plan, a car
allowance of $7,200 and $5,677, and relocation expenses of $41,401 and
$6,345 for fiscal years 2001 and 2000, respectively.
(6) Includes matching contributions of $3,564, $2,817, and $2,816 made by the
Company on behalf of Mr. Heisig under the Company's 401(k) Savings Plan
for fiscal years 2001, 2000, and 1999, respectively.
OPTION GRANTS IN FISCAL YEAR 2001. The following table sets forth
certain information concerning grants of stock options made during the fiscal
year ended March 31, 2001 to each of the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR*
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS GRANTED TO
UNDERLYING EMPLOYEES IN EXERCISE PRICE
OPTIONS GRANTED FISCAL YEAR 2001 PER SHARE EXPIRATION DATE GRANT DATE VALUE**
--------------- ---------------- -------------- --------------- ----------------
Harry Andersen 40,000 4.3% $6.00 November 14, 2010 $191,716
William J. Dennehy 25,000 2.7% $6.00 November 14, 2010 $119,823
Mark F. Heisig 50,000 5.4% $6.00 November 14, 2010 $239,645
Larry L. Mihalchik 100,000 10.7% $5.25 February 1, 2011 $419,380
- ------------------------
* Options listed in the table above are non-qualified stock options under the
Internal Revenue Code of 1986, as amended, and are exercisable in equal amounts
over five years from the date of grant. The expiration date of an option is the
tenth anniversary of the date on which the option was originally granted.
Options would be immediately exercisable upon the occurrence of a change in
control as set forth in Section 15 of the 1995 Stock Option and Incentive Plan.
** Black-Scholes method of valuation assuming a risk-free interest rate of 5.8%,
expected volatility of 96%, no expected dividend, and expected life of 6 years.
OPTION EXERCISES AND YEAR-END HOLDINGS. The following table sets forth
the aggregate number of options exercised in fiscal 2001, and the value of
options held on March 31, 2001, by the Company's Chief Executive Officer and
Named Executive Officers. The value of unexercised in-the-money options is based
on the closing price of a share of Common Stock, as reported on the Nasdaq
National Market, on March 30, 2001 of $3.3125, minus the exercise price,
multiplied by the number of shares underlying the options. An option is
"in-the-money" if the fair market value of the shares of Common Stock underlying
the option exceeds the option exercise price.
OPTION EXERCISES AND YEAR-END HOLDINGS
NUMBER VALUE NUMBER OF OPTIONS HELD VALUE OF OPTIONS HELD
ACQUIRED ON REALIZED AT FISCAL YEAR-END AT FISCAL YEAR-END
NAME EXERCISE ON EXERCISE VESTED/NON-VESTED VESTED/NON-VESTED (1)
---- ---------- ----------- ----------------- ---------------------
Harry Andersen - - 20,000 / 70,000 $0 / $0
Arthur R. Buckland 98,421 $394,963 194,000 / 30,000 $0 / $0
Dennis Cocco - - 104,371 / 177,481 $0 / $0
William J. Dennehy - - 6,000 / 49,000 $0 / $0
Mark F. Heisig - - 20,900 / 73,600 $0 / $0
Larry L. Mihalchik - - 20,000/110,000 $0 / $0
- -------------------------------------------------------------------------------
(1) Based on the fair market value at the fiscal year end less the option
exercise price.
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EMPLOYMENT AND CONSULTING AGREEMENTS
The Company has entered into the following employment agreements:
LARRY L. MIHALCHIK. Under an agreement dated February 1, 2001, Mr.
Mihalchik is serving as President and Chief Executive Officer and a Director of
the Company at an annual base salary of $325,000. Mr. Mihalchik is also eligible
to participate in the Company's management bonus plan. Under the agreement, Mr.
Mihalchik received options to purchase 100,000 shares of Common Stock which
vests in equal annual installments over the following five-year period. In the
event that Mr. Mihalchik terminates his employment for Good Reason (as defined
in his agreement, including a Change in Control) or Mr. Mihalchik's employment
is terminated by the Company without Cause (as defined in the agreement) or
because the Company elects not to extend the term of the agreement, the Company
shall pay Mr. Mihalchik for periods ranging from one to 2.99 years, depending on
the circumstances. Mr. Mihalchik has agreed not to compete with the Company or
solicit customers or employees of the Company for a period of two years
following the termination of employment with the Company. The initial term of
the agreement will expire on February 1, 2002, but will continue to be extended
for one-year periods thereafter unless terminated by either party on 60 days'
notice.
ARTHUR R. BUCKLAND. Under an agreement dated September 15, 1993, Mr.
Buckland served as President, Chief Executive Officer and a Director of the
Company at an annual salary of at least $275,000. Mr. Buckland was also eligible
to participate in the Company's management bonus plan. Under the agreement, Mr.
Buckland received options to purchase 492,107 shares of Common Stock, one-fifth
of which vested upon grant and the remainder vested in equal annual installments
over the following four-year period. Mr. Buckland terminated his employment on
January 22, 2001 and, in accordance with the employment agreement, he will
continue to be compensated for a period of twelve months from that date. Mr.
Buckland has agreed not to compete with the Company or solicit customers or
employees of the Company for a period of two years following the termination of
his employment with the Company.
OTHER EXECUTIVE OFFICERS. The Company has entered into Employment
Agreements (together, the "Management Employment Agreements") with Messrs.
Andersen, Cocco, and Miller (together, the "Contracting Parties"). The
Management Employment Agreements provide that each Contracting Party shall
receive a base salary and be entitled to participate in any bonus program
implemented by the Company. Each Contracting Party has also been granted options
to purchase shares of the Company's Common Stock, such options to vest ratably
over a five-year period. If a Contracting Party is terminated by the Company
without Cause, by the Contracting Party for Good Reason, or in the event of a
Change of Control (as all such terms are defined in the applicable Management
Employment Agreement), the Company is obligated to pay the Contracting Party for
a period of twelve months.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth, as of March 31, 2001, certain information
with respect to the shares of Common Stock "beneficially owned", as that term is
defined by Rule 13d-3 under the Exchange Act, by (a) each person who is known by
the Company to be the beneficial owner of 5% or more of the outstanding Common
Stock, (b) each director of the Company, (c) each of the "Named Executive
Officers" of the Company who are listed in the Summary Compensation Table above
and (d) all directors and executive officers of the Company as a group. Except
as otherwise indicated in the footnotes to the table, to the knowledge of the
Company, the beneficial owners listed have sole voting and investment power as
to all of the shares beneficially
8
owned by them. Ownership information was obtained from stockholder filings with
the Securities and Exchange Commission and from Nasdaq-Online.com based on
stockholder filings with the Securities and Exchange Commission.
PRINCIPAL STOCKHOLDERS
NUMBER OF
NAME AND BUSINESS ADDRESS SHARES PERCENT OF
OF BENEFICIAL OWNERS BENEFICIALLY OWNED ALL SHARES (*)
EQSF Advisors, Inc.
767 Third Avenue 1,547,950 15.9%
New York, NY 10017-2023
M.J. Whitman Advisors, Inc.
Wisconsin Investment Board 1,310,700 13.5%
121 East Wilson Street
Madison, Wisconsin 53702
Dimensional Fund Advisors Inc. 826,800 8.5%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
Allen R. Hart, et al 781,000 8.0%
2501 Marlboro Road
Cleveland Heights, OH 44118
Arthur R. Buckland 636,591 6.5%
263 Elm Street
Concord, MA 01742
Merrill Lynch & Co. Inc. 612,750 6.3%
250 Vesey Street
World Financial Center Floor 23
New York, NY 10281
on behalf of:
Merrill Lynch Asset Management Group
- -------------------------------------------------------------------------------
* As of March 31, 2001, there were 9,775,467 shares of Common Stock
outstanding.
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MANAGEMENT
NUMBER OF SHARES
BENEFICIALLY PERCENT OF
NAME OWNED ALL SHARES(1)
Class III Nominee for Election
(TERM TO EXPIRE IN 2004)
James K. Sims 57,534(2) *
Class I Continuing Directors
(TERM TO EXPIRE IN 2002)
Winston R. Hindle, Jr. 83,713(3) *
Larry L. Mihalchik 20,000(4) *
Class II Continuing Directors
(TERM TO EXPIRE IN 2003)
Andrew E. Lietz 118,152(5) 1.2%
John G. Turner 112,502(6) 1.2%
Executive Officers who are not Directors
Harry Andersen 20,000(7) *
Dennis Cocco 167,842(8) 1.7%
William J. Dennehy 13,986(9) *
Mark F. Heisig 23,800(10) *
Executive Officers and Directors as a Group 617,529 6.3%
(9 total)
- -------------------------------------------------------------------------------
* Less than one percent.
1. As of June 30, 2001, there were 9,780,417 shares of Common Stock
outstanding.
2. Includes 40,000 shares subject to options that are immediately
exercisable.
3. Includes 60,000 shares subject to options that are immediately
exercisable.
4. Includes 10,000 shares subject to options that are immediately
exercisable and 10,000 shares exercisable with 60 days of June 30,
2001.
5. Includes 110,000 shares subject to options that are immediately
exercisable.
6. Includes 40,000 shares subject to options that are immediately
exercisable. Includes 5,500 shares held directly and 67,002 shares held
by Late Stage Fund 1990 Limited Partnership ("Late Stage"), of which
MVP Capital LP is investment general partner and holder of a 0.9%
interest. Mr. Turner is a general partner of MVP and shares voting
control over Late Stage. Shares beneficially owned by Mr. Turner
include only 218 of the 67,002 shares owned by Late Stage. While Mr.
Turner may be an affiliate of Late Stage, he disclaims beneficial
ownership of the remainder of such shares.
7. Includes 20,000 shares subject to options that are immediately
exercisable.
8. Includes 112,742 shares subject to options that are immediately
exercisable and 48,000 shares exercisable within 60 days of June 30,
2001. Includes 7,100 shares purchased under the Employee Stock Purchase
Plan.
9. Includes 12,000 shares subject to options that are immediately
exercisable and 1,986 shares purchased under the Employee Stock
Purchase Plan.
10. Includes 23,800 shares subject to options that are immediately
exercisable.
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COMPENSATION OF DIRECTORS
Non-employee Directors ("Independent Directors") of the Company receive
an annual fee of $20,000 and are reimbursed for travel expenses incurred in
attending meetings of the Board of Directors and its committees. In addition,
under the Stock Option Plan, each Independent Director then serving was granted
a stock option to purchase 10,000 shares of Common Stock upon the effectiveness
of the Company's initial public offering in June 1995 and will receive an annual
stock option to purchase 10,000 shares of Common Stock. Each new Independent
Director will, upon initial election to the Board of Directors, be granted a
stock option to purchase 10,000 shares of the Company's Common Stock and will
also receive an annual stock option grant to purchase 10,000 shares of Common
Stock, beginning the year following such Director's initial election to the
Board. All options granted to Independent Directors vest in full one year after
hey are granted and the exercise price of each stock option is the fair market
value of the Common Stock on the date the option is granted. During fiscal 2001,
the Board granted Messrs. Lietz and Hindle 100,000 shares and 25,000 shares,
respectfully, of immediately vested options of the Company's stock for their
participation on the Executive Committee. Directors who are employees of the
Company are not paid any separate fees for serving as Directors.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CLARE, INC.
By: /s/ Harry Andersen
---------------------------
Harry Andersen
Senior Vice President and
Chief Financial Officer
Date: August 2, 2001
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