Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
AMENDMENT TO ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 1996 Commission file number 0-21342
Wind River Systems, Inc.
(Exact name of registrant as specified in its charter)
Delaware 94-2873391
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
1010 Atlantic Avenue, Alameda, California 94501
(Address of principal executive offices)
(510) 748-4100
(Registrant's telephone number)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.00067 per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in any amendment to this Form 10-K/A. [ ]
The approximate aggregate market value of the voting stock held by non-
affiliates of the registrant as of April 30, 1996 was $232,924,000.
Number of shares of common stock outstanding as of April 30, 1996: 13,878,876
WIND RIVER SYSTEMS, INC.
INDEX
Item 10. Directors and Executive Officers of the Registrant 2
Item 11. Executive Compensation 4
Item 12. Security Ownership of Certain Beneficial Owners and Management 9
Item 13. Certain Relationships and Related Transactions 10
SIGNATURE 11
ITEM 10 - Directors and Executive Officers of the Registrant
Set forth below is information regarding directors and executive officers
of the Company.
Name Age Position with the Company
- ----------------------- --- --------------------------------------------------
Jerry L. Fiddler 44 Chairman of the Board
Ronald A. Abelmann 58 President and Chief Executive Officer and Director
David N. Wilner 42 Chief Technical Officer and Director
Robert L. Wheaton 49 Senior Vice President of Sales
David G. Fraser 32 Vice President of Engineering
Richard W. Kraber 55 Vice President of Finance, Chief Financial Officer
and Secretary
David Larrimore 44 Vice President of Marketing
Stephen Li 43 Vice President of Business Development
Graham Shenton 56 Managing Director of European Operations
William B. Elmore (1) 43 Director
David B. Pratt (1) 56 Director
(1) Member of the Audit Committee and Compensation Committee
Mr. Fiddler co-founded the Company in February 1983, and currently serves as
Chairman of the Board. From February 1983 to March 1994, he also served as
Chief Executive Officer of the Company. Prior to founding the Company, he was a
computer scientist in the Real-Time Systems Group at Lawrence Berkeley
Laboratory. Mr. Fiddler holds a B.A. in music and photography and an M.S. in
computer science from the University of Illinois.
Mr. Abelmann joined the Company in March 1994 as Chief Executive Officer,
President and Director. From 1987 to 1993, he served as the founding Chief
Executive Officer of Vantage Analysis Systems, a developer of VHDL-based
simulation software for design automation. Prior to then, he served as Group
Vice President and General Manager for the Instrument Division of Varian
Associates. Mr. Abelmann holds B.S. and M.S. degrees in applied physics from
the University of California at Los Angeles, and an M.B.A. from Stanford
University.
Mr. Wilner co-founded the Company in February 1983 and currently serves as
Chief Technical Officer and a Director. Prior to founding the Company, he was a
senior staff scientist in the Real-Time Systems Group at Lawrence Berkeley
Laboratory. Mr. Wilner holds a B.S. in computer science from the University of
California at Berkeley.
Mr. Wheaton joined the Company in March 1992 and currently serves as Senior
Vice President of Sales. From 1989 to 1991, he served as the Vice President,
Marketing of ShareBase Corporation, a relational database hardware and software
company. From 1988 to 1989, he served as the Western Regional Manager of
Powersoft Corporation, a computer software company. Mr. Wheaton holds a B.S. in
automotive engineering from Western Michigan University.
Mr. Fraser joined the Company in September 1991 and currently serves as Vice
President of Engineering. From 1988 to 1991, he served as a product marketing
manager at Unisys/Convergent. From 1985 to 1988, he was a software engineer at
Hewlett-Packard in England. Mr. Fraser holds a B.S. in computing science from
Glasgow University, Scotland.
Mr. Kraber joined the company in August 1995 and currently serves as Vice
President of Finance and Chief Financial Officer. From 1991 to 1995, he served
as Chief Operating Officer and Chief Financial Officer of Peerless Lighting, an
industrial lighting products company. Prior to then, he was Chief Financial
Officer for GardenAmerica and a consultant and engagement manager for McKinsey &
Company. Mr. Kraber has a B.S. in mathematics from Stanford University and an
M.B.A. from Harvard University.
Mr. Larrimore joined the company in May 1995 and currently serves as Vice
President of Marketing. From 1991 to 1995, he was Vice President of Marketing
for Destiny Technology, a computer
Page 2
software company. Prior to then, he held a consulting position with McKinsey &
Company and a management position with Dow Chemical. Mr. Larrimore holds a B.S.
in chemical engineering from the Georgia Institute of Technology and an M.B.A
from Stanford.
Mr. Li joined the company in February 1994 and currently serves as Vice
President of Business Development. From 1993 to 1994, he was Vice President of
Marketing for DSET Corporation, a computer software company. From 1991 to 1993,
he was Vice President of Technical Services for Integrated Systems, Inc., a
computer software company. Prior to then, he served as General Manager and
Chief Financial Officer of Software Components Group. Mr. Li holds a B.S. in
Computer Science from Massachusetts Institute of Technology.
Mr. Shenton joined the Company in July 1994 and currently serves as
Managing Director of European Operations. From 1990 until the date he joined
the Company, he was Managing Director of Vantage Analysis Systems Europe, Ltd.,
a developer of VHDL-based simulation software for design automation. From 1986
to 1989, he was Managing Director of IMP Europe, Ltd., a semiconductor design
and application firm. Mr. Shenton holds a B.E. degree from Sydney University,
Australia and an M.E. degree from the University of New South Wales, Australia.
Mr. Elmore became a director of the Company in August 1990. He is
currently a general partner of Foundation Capital, a venture capital investment
firm. From 1987 to 1995, he was a general partner of Inman & Bowman and Inman &
Bowman Entrepreneurs, venture capital investment firms. Mr. Elmore holds a B.S.
and an M.S. in electrical engineering from Purdue University and an M.B.A. from
Stanford University. Mr. Elmore currently serves on the board of directors of
ParcPlace--Digitalk, Inc.
Mr. Pratt became a director of the Company in April 1995. He has been
an officer of Adobe Systems Incorporated, a developer of software for printing
and publishing, since 1988. He is currently a Senior Vice President and Chief
Operating Officer at Adobe. From 1987 to 1988, he was Executive Vice President
and Chief Operating Officer of Logitech Corporation. From 1986 to 1987, he was
Senior Vice President and Chief Operating Officer of Quantum Corporation. Mr.
Pratt holds a B.S.E.E. degree from the Massachusetts Institute of Technology and
an M.B.A. from the University of Chicago. Mr. Pratt currently serves on the
board of directors of Radius, Inc.
Page 3
ITEM 11 - Executive Compensation
On May 24, 1996, a three-for-two stock split was effected by means of
payment of a stock dividend with respect to all of the Company's Common Stock
outstanding on May 10, 1996. All share numbers and prices in this section have
been adjusted to give effect to the stock dividend.
Compensation of Directors
Each Non-Employee Director receives a per meeting fee of $1,200. In
accordance with Company policy, Directors may be reimbursed for certain expenses
in connection with attendance at Board and committee meetings. Directors who
are also executive officers of the Company are not separately compensated for
their service as directors.
All Non-Employee Directors participate in the Company's 1995 Non-Employee
Directors' Stock Option Plan (the "Directors' Plan"). The Directors' Plan
provides for the automatic grant of options to purchase Common Stock of the
Company to directors of the Company who are not employees of, or consultants to,
the Company or any affiliate of the Company ("Non-Employee Directors"). Under
the Directors' Plan, each person who was a Non-Employee Director on April 27,
1995, and each person after such date who is elected for the first time as a
Non-Employee Director will automatically be granted an option to purchase 15,000
shares of Common Stock upon the date of his or her election to the Board,
whichever is applicable. Additionally, on April 1 of each year, commencing with
April 1, 1996, each person who is then a Non-Employee director automatically
will be granted an option to purchase 3,000 shares of Common Stock. The
aggregate number of shares of Common Stock authorized for issuance pursuant to
the exercise of options granted under the Directors' Plan is 150,000.
During the last fiscal year, the Company granted options covering 30,000
shares to each of Messrs. Elmore and Pratt at an exercise price of $8.25 per
share. The fair market value of such Common Stock on the date of such grant was
$8.25 per share (based on the closing sales price reported on the Nasdaq
National Market for the date of grant). As of May 22, 1996, no options had been
exercised under the Directors' Plan.
Page 4
Summary Compensation Table
The following table shows for the fiscal year ended January 31, 1996,
compensation awarded or paid to, or earned by the Company's Chief Executive
Officer and its other four most highly compensated executive officers who earned
over $100,000, (the "Named Executive Officers"):
Long-Term
Compensation
Awards
Fiscal Annual Compensation -----------------
------ ------------------- All Shares Underlying
Name and Principal Position Year Salary Bonus(1) Other(2) Options (#)(3)
- ------------------------------ ---- ------ ------- ------- -----------------
Ronald A. Abelmann (4) 1996 $201,667 $100,000 -- 90,000
President, Chief Executive 1995 171,975 75,000 -- 543,750
Officer and Director 1994 -- -- -- --
Jerry L. Fiddler 1996 140,833 64,228 -- 31,500
Chairman of the Board 1995 135,000 32,326 $ 3,000 --
1994 125,000 -- 3,000 --
David N. Wilner 1996 140,833 64,398 -- 31,500
Chief Technical Officer and 1995 135,000 31,401 3,000 --
Director 1994 135,000 -- 3,000 --
Robert L. Wheaton 1996 135,000 83,115 -- 36,000
Senior Vice President of Sales 1995 135,000 66,249 -- --
1994 110,000 87,594 -- 75,000
Graham Shenton (5) 1996 130,000 80,000 -- 27,000
Managing Director of European 1995 61,600 25,945 -- 105,000
Operations 1994 -- -- -- --
(1) Includes bonuses earned in respective fiscal year and paid the following
fiscal year pursuant to the Company's fiscal management incentive
arrangements and sales commission.
(2) Includes perquisites consisting of cost of tax and financial planning by
third parties.
(3) All options are issued at prices ranging from 85% to 110% of fair market
value.
(4) Mr. Abelmann joined the Company in March 1994.
(5) Mr. Shenton joined the Company in July 1994.
Page 5
Stock Option Grants and Exercises
The following tables show for the fiscal year ended January 31, 1996, certain
information regarding options granted to, exercised by, and held at year end by
the Named Executive Officers:
Option Grants in last fiscal year
---------------------------------
Potential Realizable Value at Assumed
Number of Annual Rates of
Shares % of Total Stock Price Appreciation
Underlying Options Granted Per Share for Option Term (3)
Options to Employees in Exercise Expiration ---------------------------------------
Name Granted(1) Fiscal Year (2) Price Date 0% 5% 10%
- ---- --------- ---------------- ----- ---- ------- -------- ---------
Ronald A. 37,500 4.3% $ 7.01 6/26/05 $ 46,000 $241,000 $ 539,000
Abelmann 52,500 6.0 16.08 1/31/06 149,000 774,000 1,732,000
Jerry L. 22,500 2.6 9.07 6/26/00 - 33,000 95,000
Fiddler 9,000 1.0 20.81 1/31/01 - 30,000 87,000
David N. 22,500 2.6 9.07 6/26/00 - 33,000 95,000
Wilner 9,000 1.0 20.81 1/31/01 - 30,000 87,000
Robert L. 22,500 2.6 7.01 6/26/05 28,000 145,000 324,000
Wheaton 13,500 1.6 16.08 1/31/06 38,000 199,000 445,000
Graham 18,000 2.1 7.01 6/26/05 22,000 116,000 259,000
Shenton 9,000 1.0 16.08 1/31/06 26,000 133,000 297,000
(1) Options granted become exercisable at a rate of 1/4 of the shares subject
to option at the end of the first year and 1/48 of the shares subject to
the option at the end of each month thereafter. All options may be
repriced by the Company's board of directors.
(2) Based on 868,500 options shares granted in fiscal year 1996.
(3) The potential realizable value is based on the term of the option at its
time of grant. It is calculated by assuming that the stock price on the
date of grant appreciates at the indicated annual rate, compounded annually
for the entire term of the option and that the option is exercised and sold
on the last day of its term for the appreciated stock price. No gain to
the optionee is possible unless the stock price increases over the option
term, which will benefit all stockholders. There can be no assurance that
the values shown in this table will be achieved.
Page 6
Aggregated Option Exercises in Fiscal Year 1996,
And Value of Options at End of Fiscal Year 1996
-----------------------------------------------
Number of
Securities
Underlying
Unexercised Value of Unexercised
Options at End In-the-Money Options at
Number of of Fiscal 1996 End
Shares Acquired on Value Exercisable/ of Fiscal 1996 (2)
Name Exercise(#) Realized ($)(1) Unexercisable Exercisable/Unexercisable
- ---- ---------- --------------- ------------- -------------------------
Ronald A. Abelmann 228,109/405,641 $4,247,000/$7,552,000
Jerry L. Fiddler -- -- 0/31,500 $0/$417,000
David N. Wilner -- -- 0/31,500 $0/$417,000
Robert L. Wheaton 13,500 $146,895 89,081/77,420 $1,541,000/$1,340,000
Graham Shenton -- -- 41,559/81,441 $786,000/$1,540,000
(1) Value realized is based on the fair market value of the Company's Common
Stock on the date of exercise minus the exercise price and does not
necessarily indicate that the optionee sold such stock.
(2) Fair market value of the Company's Common Stock at January 31, 1996 minus
the exercise price of the options.
Page 7
Employment Agreement
In March 1994, Ronald A. Abelmann joined the Company as President and Chief
Executive Officer. Mr. Abelmann's current base salary is $230,000 per year with
a bonus of up to 50% of such base salary determined upon the achievement of
worldwide goals related to revenue and net income.
As part of his compensation package, Mr. Abelmann was granted an option to
purchase 543,750 shares of the Company's Common Stock under the 1987 Plan at
fair market value at that time. In addition, 75,000 shares of the Company's
Common Stock were purchased with cash and a full recourse promissory note (the
"Note"), also under the 1987 Plan. None of such shares is subject to any
repurchase option by the Company. The Note in the amount of $182,812.50 bears
interest at 5.36% per annum with interest payable annually in arrears and the
outstanding principal due and payable on March 4, 1998. The full amount of the
Note is secured by a pledge of shares of Common Stock of the Company. On May
24, 1996, a three-for-two stock split was effected by means of payment of a
stock dividend with respect to all of the Company's Common Stock outstanding on
May 10, 1996. All share numbers and prices in this section have been adjusted
to give effect to the stock dividend.
Severance Plan
In November 1995, the Compensation Committee of the Board of Directors
adopted a Change in Control Incentive and Severance Benefit Plan (the "Severance
Plan") to provide an incentive to officers of the Company with the title of Vice
President or above in the event of certain "change of control" transactions, and
severance benefits in the event of certain terminations of employment within
twelve (12) months of the change of control.
Upon the occurrence of a change of control, all executive officers, except
the Chief Executive Officer, will receive acceleration of vesting for all shares
subject to stock options which would otherwise have vested within one year of
the date of the change of control. The Chief Executive Officer will receive two
years' worth of accelerated vesting credit, except to the extent that the option
acceleration would create adverse tax consequences for the Chief Executive
Officer and the Company under the golden parachute provisions of sections 280G
and 49999 of the Code.
If an executive officer other than the Chief Executive Officer is
terminated without "Cause" or voluntarily terminates with "Good Reason" (in each
case as defined in the Severance Plan) within twelve (12) months of a change in
control, the executive will receive continued pay for 12 months (including an
estimated bonus amount), continued health insurance for the same period, and
accelerated vesting for stock options which would otherwise vest within one year
of the date of termination. In addition, any shares which would have received
acceleration vesting on account of the change in control but did not because of
the limitation to avoid the golden parachute tax provisions shall receive
accelerated vesting at this time. If the total severance payments would cause
an executive to become liable for golden parachute excise tax payments, then the
Company shall pay that executive's excise tax liability and all other taxes
associated with the company's payment of the excise tax in order to leave the
executive in the same after-tax position as if no excise tax had been imposed.
Page 8
ITEM 12 - Security Ownership Of Certain Beneficial Owners And Management
The following table and footnotes set forth certain information regarding
the ownership of the Company's Common Stock as of April 30, 1996, by: (i) each
director and nominee for director as of April 30, 1996; (ii) each of the
Executive Officers named in the Summary Compensation Table employed by the
Company in that capacity on January 31, 1996; (iii) all executive officers and
directors of the Company as a group; and (iv) all those known by the Company to
be beneficial owners of more than five percent of its Common Stock:
Beneficial Ownership (1)
------------------------
Beneficial Owners Number of Shares Percent of Total
- ----------------- ---------------- ----------------
Jerry L. Fiddler(2) 2,741,070 19.74%
1010 Atlantic Avenue
Alameda, CA 94501
David N. Wilner(3) 1,969,125 14.18
1010 Atlantic Avenue
Alameda, CA 94501
Ronald A. Abelmann(4) 288,063 2.04
William B. Elmore(5) 155,664 1.12
Robert L. Wheaton(6) 104,991 0.75
Graham Shenton(7) 80,457 0.58
David Pratt(8) 5,250 0.04
All officers and directors as a group 5,525,640 38.15
(11 persons) (9)
(1) This table is based upon information supplied by officers, directors and
principal stockholders. Unless otherwise indicated in the footnotes to this
table and subject to community property laws where applicable, each of the
stockholders named in this table has sole voting and investment power with
respect to the shares indicated as beneficially owned. Applicable
percentages are based on 13,878,876 shares outstanding on April 30, 1996,
adjusted as required by rules promulgated by the SEC.
(2) Includes 2,735,445 shares held by The Fiddler and Alden Family Trust, of
which Mr. Fiddler is a trustee. Also includes 5,625 shares subject to
stock options exercisable within 60 days of April 30, 1996.
(3) Includes 172,500 shares held in trust for Mr. Wilner's minor child. Also
includes 5,625 shares subject to stock options exercisable within 60 days
of April 30, 1996.
(4) Includes 257,043 shares subject to stock options exercisable within 60 days
of April 30, 1996.
(5) Includes 3,750 shares subject to stock options exercisable within 60 days
of April 30, 1996.
(6) Includes 104,991 shares subject to stock options exercisable within 60 days
of April 30, 1996.
(7) Includes 56,996 shares subject to stock options exercisable within 60 days
of April 30, 1996.
(8) Includes 3,750 shares subject to stock options exercisable within 60 days
of April 30, 1996.
(9) Includes 605,307 shares subject to stock options held by officers and
directors exercisable within 60 days of April 30, 1996.
Page 9
ITEM 13 - Certain Relationships and Related Transactions
The Company has entered into indemnity agreements with certain officers and
directors which provide, among other things, that the Company will indemnify
such officer and director, under the circumstances and to the extent provided
for therein, for expenses, damages, judgments, fines and settlements he may be
required to pay in actions or proceedings which he is or may be made a party by
reason of his position as a director, officer or other agent of the Company, and
otherwise to the full extent permitted under Delaware law and the Company's By-
laws.
In March 1994, Mr. Abelmann purchased 75,000 shares of the Company's Common
Stock, with cash and a full recourse promissory note (the "Note"). None of such
shares is subject to any repurchase option by the Company. The Note in the
amount of $182,812.50 bears interest at 5.36% per annum with interest payable
annually in arrears and the outstanding principal due and payable on March 4,
1998. The full amount of the Note is secured by a pledge of shares of Common
Stock of the Company.
Page 10
SIGNATURE
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.
WIND RIVER SYSTEMS, INC.
Date: May 30, 1996 \s\RICHARD W. KRABER
-----------------------------
Richard W. Kraber
Vice President of Finance
Chief Financial Officer
Page 11