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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-26170
Eagle Point Software Corporation
(Exact name of registrant as specified in its charter)
Delaware 42-1204819
(State or other jurisdiction (I.R.S. employer identification number)
of incorporation or organization)
4131 Westmark Drive, Dubuque, Iowa 52002-2627, (319) 556-8392
(Address of principal executive offices, including zip code)
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 $.01 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 definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ].
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of September 13, 1999 was $12,793,928. This calculation does not
reflect a determination that persons are affiliates for any other purposes.
Number of shares of common stock outstanding as of September 13, 1999:
4,846,476.
EXPLANATORY NOTE
This amendment on Form 10-K/A to the Annual Report on Form 10-K for its fiscal
year ended June 30, 1999 of Eagle Point Software Corporation (the "Company"),
amends and restates in its entirety Part III.
The Company hereby amends and restates Part III of its Annual Report on Form
10-K for its fiscal year ended June 30, 1999 as follows:
PART III
Item 10. Directors and Executive Officers of the Registrant
Directors and Executive Officers of the Registrant
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Certain information concerning the directors and executive officers of the
Company is set forth below:
Name Age Position
---- --- --------
Rodney L. Blum 44 Chairman of the Board, President and
Chief Executive Officer
Dennis J. George 36 Vice President, Chief Financial Officer,
Treasurer and Secretary; Director
John F. Biver 44 Vice President - Civil Division; Director
Edward T. Graham 36 Vice President - Building Design and Services
Division
Brent A. Straka 31 Vice President - Marketing and Business
Development Division
Randy K. Ambrosy 30 Vice President -International and Landscaping
Divisions
William P. Le May 45 Chief Technology Officer
James P. Hickey 42 Director
Thomas O. Miller 48 Director
Rodney L. Blum has served as Chairman of the Board, President and Chief
Executive Officer of the Company since January 1990. From May 1988 until he
joined the Company in 1990, Mr. Blum was Director of Sales and Marketing of
D.D.S., a provider of turn-key computer systems to the auto, large truck and
implement dealer markets. From 1980 until May 1988 he served in various
marketing and management positions at CyCare Systems, Incorporated, a provider
of computerized information processing systems to the healthcare industry. Mr.
Blum is a director of American Trust and Savings Bank and is a member of the
Board of Trustees for the Herbert Hoover Presidential Library.
Dennis J. George has served as Vice President, Chief Financial Officer,
Treasurer, Secretary and a director of the Company since April 1989. During
1988 he was the Financial Budget Analyst for the Ertl Company, a manufacturer of
agricultural model toys. During 1987 he served as Finance Manager for D.D.S., a
provider of turn-key computer systems to the auto, large truck and implement
dealer markets.
John F. Biver co-founded the Company in 1983 and has served as Vice
President - Civil Division since January 1990. Mr. Biver has served as a
director of the Company since its inception. Prior to founding the Company, Mr.
Biver was a registered Professional Engineer with the civil engineering firm of
Wright, Kilby, Sejkoara and Associates.
Edward T. Graham has been employed by the Company in various sales
capacities since January 1990. Mr. Graham currently serves as Vice President -
Building Design and Services Division. From May 1989 until he joined the
Company, Mr. Graham was a principal of Prism Marketing, a provider of
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marketing systems and services.
Brent A. Straka has been employed by the Company since November 1990 in
various sales, marketing-related, and management positions. Since July, 1996
Mr. Straka has served as Vice President - Marketing and Business Development.
From June 1989 until he joined the Company, Mr. Straka held various marketing
positions with Land's End, Inc., a mail-order provider of apparel and specialty
products.
Randy K. Ambrosy has been employed by the Company since September 1991 in
various sales and management positions. Since April, 1998 Mr. Ambrosy has
served as Vice President - International and Landscaping Divisions. From June
1990, until he joined the Company, Mr. Ambrosy was a sales engineer at Sencore
Electronics a manufacturer of electronic test equipment.
William P. Le May has been employed by the Company since October 1992 in
various research and development and management positions. Since December, 1995
Mr. Le May has served as Chief Technology Officer. From March, 1984 until he
joined the Company, Mr. Le May was a product manager at Accugraph Corporation, a
developer of software applications for the civil engineering market.
James P. Hickey has been a Director of the Company since August 30, 1995
and is a member of the Audit Committee and the Compensation Committee of the
Board of Directors of the Company. Since 1989, Mr. Hickey has been a Principal
of William Blair & Company, an investment banking firm.
Thomas O. Miller has been a Director of the Company since August 30, 1995
and is a member of the Audit Committee and the Compensation Committee of the
Board of Directors of the Company. Since March of 1997, Mr. Miller has been
Senior Vice President of Intermec Technologies Corporation ("Intermec"), a
manufacturer of hand-held data systems. In March of 1997 Intermec acquired
Norand Corporation ("Norand"), also a manufacturer of hand-held data systems.
From September 1995 until March 1997 he served as Senior Vice President of
Norand, from 1993 until September 1995 he served as Vice President-Mobile
Systems of Norand and from 1990 until 1992 he served as Vice President-Marketing
of Norand.
COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than 10 percent of a registered class of the Company's equity
securities ("Reporting Persons") to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Reporting Persons are
required by Securities and Exchange Commission regulations to furnish the
Company with copies of all Section 16(a) forms they file. Based solely on a
review of the Form 3, 4, and 5 filings received from such Reporting Persons
since the beginning of fiscal year 1999, the Company is not aware of any failure
to file on a timely basis any Form 3, 4, or 5 during fiscal year 1999 except as
set forth in this paragraph. Mr. Randy K. Ambrosy filed one late report on Form
5 disclosing one exempt acquisition in 1998. Mr. John F. Biver filed one late
report on Form 5 disclosing one exempt acquisition in each of 1997 and 1998.
Mr. Rodney L. Blum filed one late report on Form 5 disclosing one exempt
acquisition in each of 1997 and 1998. Mr. Dennis J. George filed one late
report on Form 5 disclosing one exempt acquisition in each of 1997 and 1998.
Mr. Edward T. Graham filed one late report on Form 5 disclosing one non-exempt
acquisition in 1996, three exempt acquisitions in each of 1996 and 1997 and one
exempt acquisition in 1998. Mr. James P. Hickey filed one late report on Form 5
disclosing two exempt acquisitions in 1995 and one exempt acquisition in each of
1996, 1997 and 1998. Mr. Willliam P. LeMay filed one late report on Form 5
disclosing four
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exempt acquisitions in each of 1996 and 1997 and one exempt acquisition in 1998.
Mr. Thomas O. Miller filed one late report on Form 5 disclosing one non-exempt
acquisition in 1998, two exempt acquisitions in 1995 and one exempt acquisition
in each of 1996, 1997 and 1998. Mr. Brent A. Straka filed one late report on
Form 5 disclosing one exempt acquisition in each of 1996 and 1998 and three
exempt acquisitions in 1997.
CLASSIFICATION OF DIRECTORS
The Board of Directors consists of five persons and is divided into three
staggered classes, each class serving a three-year term. The current Class I
Directors consist of Mr. Miller and Mr. George who will continue in office until
the 2001 Annual Meeting of Stockholders. The current Class II Directors consist
of Mr. Hickey and Mr. Biver who will continue in office until the 1999 Annual
Meeting of Stockholders which will be held on December 16, 1999 at the Company's
headquarters in Dubuque, Iowa. Stockholders of record at the close of business
on November 15, 1999 will be entitled to notice of, and to vote at, the 1999
Annual Meeting of Stockholders. The current Class III Directors consist of Mr.
Blum who will continue in office until the 2000 Annual Meeting of Stockholders.
Item 11. Executive Compensation
The following table (the "Compensation Table") sets forth the aggregate
compensation for the past three fiscal years of the individual who served as
Chief Executive Officer during Fiscal 1999 and the other most highly compensated
executive officers for Fiscal 1999 (collectively, the "Named Executive
Officers").
Summary Compensation Table
--------------------------
Long-Term
Compensation
Annual Compensation Awards
------------------- ------
Securities
Fiscal Underlying All other
Name and Principal Position Year Salary ($) Bonus ($) Options (#) Compensation(1)
--------------------------- ---- ---------- --------- ----------- ---------------
Rodney L. Blum 1999 $185,000 $34,447 10,000 -
Chairman, President and Chief 1998 140,000 16,920 35,000 -
Executive Officer 1997 140,000 1,579 - -
John F. Biver 1999 129,500 897 7,500 -
Vice President - Civil Division 1998 107,000 1,330 25,000 -
1997 107,000 1,004 - -
Dennis J. George 1999 116,550 22,007 7,500 718
Vice President, Chief Financial 1998 99,000 11,039 25,000 574
Officer, Treasurer and Secretary 1997 99,000 1,020 - 513
Edward T. Graham 1999 70,000 43,055 - 565
Vice President - Building Design and 1998 50,000 11,327 50,000 -
Services Division 1997 50,000 23,833 8,475 -
(1) These amounts represent Company matching contributions to the Eagle Point
Software Corporation 401(k) plan and trust.
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DIRECTOR COMPENSATION
Directors who are employees of the Company receive no compensation for serving
as directors. Those directors who are not employees of the Company ("Outside
Directors") receive a $500 fee for each meeting of the Board of Directors
attended, whether attendance is in person or telephonic, and they are reimbursed
for out-of-pocket expenses incurred in connection with attending meetings. In
addition, each Outside Director participates in the Stock Option Plan. Upon
election to the Board, any new Outside Director will receive an option to
purchase 2,000 shares of Common Stock with a per share exercise price equal to
the average of the high and low sales prices of a share of Common Stock as
reported on The Nasdaq Stock Market on the day such stock option is granted. In
addition, on the date of each annual meeting of stockholders of the Company,
each person who is an Outside Director immediately after such meeting will
receive an option to purchase 4,000 shares of Common Stock with a per share
exercise price equal to the average of the high and low sales prices of a share
of Common Stock as reported on The Nasdaq Stock Market on the day such option is
granted. Each stock option granted to Outside Directors under the Stock Option
Plan is immediately exercisable.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements ("Executive Employment
Agreements") with each of Rodney L. Blum, John F. Biver and Dennis J. George to
serve as its President and Chief Executive Officer, Vice President-Civil
Division and Vice President, Chief Financial Officer, Secretary and Treasurer,
respectively. Mr. Blum, Mr. Biver and Mr. George (each an "Executive Employee")
received annual salaries of $185,000, $129,500 and $116,550, respectively, in
Fiscal 1999, and each are entitled to participate in the Company's bonus program
for executive officers. Each Executive Employee's salary is subject to change
as determined by the Compensation Committee of the Board of Directors. None of
the Executive Employment Agreements contain a specified expiration date,
although the Company may terminate each such agreement at any time upon thirty
days' written notice to the Executive Employee, and each Executive Employee may
terminate his respective agreement at any time upon thirty days' written notice
to the Company.
If an Executive Employment Agreement is terminated by virtue of an Executive
Employee's disability, such Executive Employee will be entitled to receive a
lump sum payment equal to one and one-half times the cumulative compensation
payable to him for the twelve months immediately proceeding the effective date
of termination. If an Executive Employment Agreement is terminated by virtue of
an Executive Employee's death, such Executive Employee will be entitled to
receive a lump sum payment equal to two times the cumulative compensation
payable to him for the twelve month period immediately preceding his death. If
an Executive Employment Agreement is terminated for any other reason, other than
for any act of theft, embezzlement, or other documented proof of material
dishonesty, such Executive Employee will be entitled to receive a lump sum
payment equal to two times the cumulative compensation payable to him for the
twelve month period immediately preceding such termination.
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OPTION GRANTS
The following table sets forth information with respect to individual grants of
options that were made during Fiscal 1999 to each of the Named Executive
Officers and the potential realizable value of these options assuming five
percent and ten percent rates(1) of compound appreciation in the market value of
the Common Stock over the term of the option grants. The Company has never
granted stock appreciation rights.
Option Grants in Last Fiscal Year
---------------------------------
Individual Grants (2)
---------------------
Percent of
Total Potential Realizable Value at
Number of Options Assumed Annual Rates of Stock
Securities Granted to Price Appreciation for Option Term
Underlying Employees Exercise ----------------------------------
Options in Fiscal Price Expiration
Name Granted (#) Year ($/Sh) Date 5% ($)(1) 10%($)(1)
---- ------------ ---- ------ ---- --------- ---------
Rodney L. Blum 10,000 6.8% $8.0938 8/3/08 $50,901(3) $128,994(3)
John F. Biver 7,500 5.1% $8.0938 8/3/08 $38,176(3) $ 96,745(3)
Dennis J. George 7,500 5.1% $8.0938 8/3/08 $38,176(3) $ 96,745(3)
______________________
(1) Amounts reflect assumed rates of appreciation set forth in the Securities
and Exchange Commission's executive compensation disclosure rules. Actual
gains, if any, on stock option exercises depend on future performance of the
Company's Common Stock and overall stock market conditions. No assurance
can be given that the amounts reflected in these columns will be achieved.
(2) Upon a sale of substantially all of the business and assets of the Company,
each outstanding option will become exercisable in full.
(3) The future hypothetical value of one share of Common Stock based on a fair
market value of $8.0938 on August 3, 1998, and assumed rates of appreciation
of five percent and ten percent through August 3, 2008, would be $13.184 and
$20.993, respectively.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
---------------------------------
Number of Unexercised Value of Unexercised
Options at In-The-Money Options
Fiscal Year-End (#) at Fiscal Year-End ($)(1)
--------------------------- ---------------------------
Shares
Acquired on Value
Name Exercise (#) Realized ($)(1) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ --------------- ----------- ------------- ----------- -------------
Rodney L. Blum 11,433 $73,421 117 33,450 $ 356 $71,449
John F. Biver - - 8,250 24,250 $25,137 $51,035
Dennis J. George 8,099 $52,011 151 24,250 $ 460 $51,035
Edward T. Graham 10,004 $47,887 8,396 40,075 $15,367 $97,557
______________________
(1) Value is calculated by subtracting the exercise price from the fair market
value of the shares underlying the option on the exercise date (in the case
of options exercised) or at June 30, 1999 ( in the case of unexercised "in-
the-money" options) and multiplying the result by the number of shares for
which the option was exercised or is in-the -money, as the case may be.
Fair market value at June 30, 1999 was calculated based upon the average of
the high and low sales prices of a share as reported by The Nasdaq Stock
Market for that date ($6.50). There is no assurance that if and when any
such in-the-money option is exercised, the option will have this value.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of October 1, 1999 concerning the
beneficial ownership of Common Stock for each Director, the Named Executive
Officers, all Directors and Executive Officers as a group, and each holder of 5%
or more of the Company's Common Stock. Unless otherwise noted, the listed
persons have sole voting and investment power with respect to the shares held in
their names, subject to community property laws if applicable. The table does
not include options which are not exercisable within 60 days.
Name of Number % of total
Beneficial Holder of Shares(1) Outstanding Shares
- ----------------- ------------- -------------------
John F. Biver (8) 1,248,066 (2) 25.71%
Rodney L. Blum (8) 953,704 (3) 19.68
Dennis J. George (8) 381,631 (4) 7.87
J. Carlo Cannell
d/b/a Cannell Capital Management (9) 352,400 7.27
Dimensional Fund Advisors (10) 338,500 6.98
James P. Hickey 14,000 (5) --
Thomas O. Miller 13,500 (5) --
Edward T. Graham (8) 9,896 (6) --
All Directors and Executive
Officers as a group (9 persons) 2,647,609 (7) 54.07
(1) Based on the number of shares outstanding at, or acquirable within, 60 days
of October 1, 1999.
(2) Includes 8,250 shares which may be acquired under options which are
currently exercisable or which will be exercisable within 60 days of October
1, 1999.
(3) Includes 117 shares which may be acquired under options which are currently
exercisable or which will be
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exercisable within 60 days of October 1, 1999.
(4) Includes 151 shares which may be acquired under options which are currently
exercisable or which will be exercisable within 60 days of October 1, 1999.
(5) Includes 12,000 shares which may be acquired under options which are
currently exercisable or which will be exercisable within 60 days of
October 1, 1999.
(6) Includes 9,896 shares which may be acquired under options which are
currently exercisable or which will be exercisable within 60 days of
October 1, 1999.
(7) Includes 50,301 shares which executive officers and directors have the
right to acquire under options which are currently exercisable or which
will be exercisable within 60 days of October 1, 1999.
(8) The address of such beneficial holder is c/o Eagle Point Software
Corporation, 4131 Westmark Drive, Dubuque, Iowa 52002-2627.
(9) Based upon the most recent report on Schedule 13G as filed with the
Securities and Exchange Commission, J. Carlo Cannell D/B/A Cannell Capital
Management is deemed to have beneficial ownership of 352,400 shares of
Eagle Point Software stock as of December 31, 1999, all of which shares are
owned by advisory clients of J. Carlo Cannell D/B/A Cannell Capital
Management or partnerships of which J. Carlo Cannell D/B/A Cannell Capital
is a general partner, no one of which, to the knowledge of J. Carlo Cannell
D/B/A Cannell Capital Management, owns more than 5% of the class. J. Carlo
Cannell D/B/A Cannell Capital Management's address is 600 California
Street, Floor 14, San Fransisco, CA 94108.
(10) Based upon the most recent report on Schedule 13G as filed with the
Securities and Exchange Commission, Dimensional Fund Advisors Inc., a
registered investment advisor, is deemed to have beneficial ownership of
338,500 shares of Eagle Point Software stock as of December 31, 1999, all
of which shares are owned by advisory clients of Dimensional Fund Advisors
Inc., no one of which, to the knowledge of Dimensional Fund Advisors Inc.,
owns more than 5% of the class. Dimensional Fund Advisors Inc. disclaims
beneficial ownership of all such shares. The Dimensional Fund Advisors
Inc. address is 1299 Ocean Avenue, 11th floor, Santa Monica, CA 90401
Item 13. Certain Relationships and Related Transactions
James P. Hickey, an Outside Director of the Company since August 1995, is a
Principal of William Blair & Company, L.L.C., an investment banking firm
("William Blair"). William Blair was one of the managing underwriters of the
Company's initial public offering of Common Stock in June 1995. The Company
currently maintains a no-fee money market account with William Blair.
SIGNATURES
Pursuant to the requirements of Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, this Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
Date: October 28, 1999 EAGLE POINT SOFTWARE CORPORATION
/s/ Rodney L. Blum
-------------------------
Rodney L. Blum
Chairman of the Board, President
and Chief Executive Officer
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