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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996 OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-20059
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VMARK SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 04-2818132
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 WASHINGTON STREET 01581-1021
WESTBORO, MASSACHUSETTS (Zip Code)
(Address of principal executive offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (508) 366-3888
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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
----- -----
The number of shares outstanding of each of the registrant's classes of
common stock as of:
DATE CLASS OUTSTANDING SHARES
June 30, 1996 Common stock, $.01 par value 8,205,122
The index to the Exhibits appears on page 14
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VMARK SOFTWARE, INC.
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1996
TABLE OF CONTENTS
PAGE NUMBERING IN
SEQUENTIAL NUMBERING SYSTEM
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PART I FINANCIAL INFORMATION
Item I Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of
June 30, 1996 and December 31, 1995 3
Condensed Consolidated Statements of Operations
for the three and six months ended June 30, 1996
and July 2, 1995 4
Condensed Consolidated Statements of Cash Flows for the
three and six months ended June 30, 1996 and July 2, 1995 5
Notes to Condensed Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial 9
Condition and Results of Operations
PART II OTHER INFORMATION
Item I. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
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Part I FINANCIAL INFORMATION
Item I. Condensed Consolidated Financial Statements
VMARK Software, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
ASSETS June 30, 1996 Dec. 31, 1995
------------- -------------
Current assets:
Cash and equivalents $13,080 $12,267
Accounts receivable - net 15,425 15,468
Income tax receivable 939 3,464
Prepaid expenses and other 3,102 2,355
Deferred income taxes 1,869 1,749
------- -------
Total current assets 34,415 35,303
------- -------
Property and equipment - net 14,931 15,253
------- -------
Long-term assets:
Intangible assets - net 6,984 8,055
Deferred income taxes 3,221 3,221
Other long-term assets 1,263 1,521
------- -------
Total long-term assets 11,468 12,797
------- -------
Total assets $60,814 $63,353
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit $ 1,462 $ --
Note payable and current portion of long-term debt 204 782
Accounts payable and accrued expenses 7,734 9,333
Accrued merger and restructuring costs 1,134 1,286
Deferred revenue 6,065 5,514
------- -------
Total current liabilities 16,599 16,915
------- -------
Long-term liabilities:
Obligations under capital leases 9,132 9,271
------- -------
Stockholders' equity 37,422 37,167
Cost of treasury stock (2,339) --
------- -------
Total stockholders' equity 35,083 37,167
------- -------
Total liabilities and stockholders' equity $60,814 $63,353
======= =======
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VMARK Software, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, 1996 July 2, 1995 June 30, 1996 July 2, 1995
------------- ------------ ------------- ------------
Revenue:
Software $ 9,238 $10,091 $18,325 $20,593
Services and other 8,720 7,636 17,369 15,010
------- ------- ------- -------
Total revenue 17,958 17,727 35,694 35,603
------- ------- ------- -------
Costs and expenses:
Costs of software 1,171 1,349 2,336 2,676
Costs of services and other 4,544 3,982 9,128 7,637
Selling & marketing 6,579 6,852 13,291 13,262
Product development 2,187 2,479 4,674 5,084
General & administrative 1,883 1,891 3,701 3,464
Merger, integration & restructuring costs 2,125 6,882 2,125 6,882
Litigation & settlement costs -- 499 -- 499
------- ------- ------- -------
Total costs and expenses 18,489 23,934 35,255 39,504
------- ------- ------- -------
Income (loss) from operations (531) (6,207) 439 (3,901)
Other income (expense) - net (102) (52) (202) 24
------- ------- ------- -------
Income (loss) before provision for income taxes (633) (6,259) 237 (3,877)
Provision (credit) for income taxes 92 (1,670) 403 (801)
------- ------- ------- -------
Net loss $ (725) $(4,589) $ (166) $(3,076)
======= ======= ======= =======
Net loss per common share $ (0.09) $ (0.58) $ (0.02) $ (0.39)
======= ======= ======= =======
Weighted average number of common and
common equivalent shares outstanding 8,058 7,970 8,094 7,943
======= ======= ======= =======
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VMARK Software, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
Six Months Ended
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June 30, July 2,
1996 1995
--------- -------
Cash flows from operating activities:
Net Loss $ (166) $(3,076)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 3,301 3,361
Amortization of restricted stock awards 7 --
Deferred income taxes (120) (1,945)
Increase (decrease)in cash from:
Current assets 1,594 (368)
Current liabilities (1,939) 2,853
------- -------
Cash provided by operating activities 2,677 825
------- -------
Cash flows from investing activities:
Expenditures for property and equipment-net (1,106) (1,564)
Expenditures for intangible assets (802) (1,748)
Decrease (increase) in cash surrender value of officers' life
insurance and deposits and other 258 (184)
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Cash used in investing activities (1,650) (3,496)
------- -------
Cash flows from financing activities:
Borrowings (repayments) under line-of-credit 1,462 (1,250)
Sale of common stock 883 606
Repurchase of common stock (2,339)
Repayments under capital lease and other obligations (134) ( 104)
------- -------
Cash used in financing activities (128) (748)
------- -------
Effect of exchange rate changes on cash (86) 92
------- -------
Increase (decrease) in cash and equivalents 813 (3,327)
Cash and equivalents, beginning of period 12,267 16,017
------- -------
Cash and equivalents, end of period $13,080 $12,690
======= =======
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission regarding interim financial reporting.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements and should be read in conjunction with the audited financial
statements included in the Company's Annual Report to Stockholders for the
year ended December 31, 1995.
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements have been prepared on the same basis as
the audited consolidated financial statements and include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the interim periods presented. The operating results for
the interim periods presented are not necessarily indicative of the results
which would be expected for the full year.
2. Loss Per Common Share
Loss per common share is computed using the weighted average number of
common and common equivalent shares outstanding during each period
presented. Common stock equivalents consist of stock options converted
using the treasury stock method and are included in the calculation only if
dilutive.
3. Income Taxes
The Company provides for income taxes at the end of each interim period
based on the estimated effective tax rate for the full fiscal year for each
tax reporting corporate entity. Cumulative adjustments to the tax provision
are recorded in the interim period in which a change in the estimated
annual effective rate is determined.
The Company has approximately $16,500,000 of available net operating loss
carryforwards. These carryforwards expire through 2009, in the case of
US-generated losses, and are available indefinitely in the case of
foreign-generated losses, however, the losses cannot be applied against
income generated in a trade or business significantly different from that
which gave rise to the carryforward. Because of US Tax regulations,
utilization of US losses in any one year will be subject to certain
limitations.
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4. Restructuring
In the quarter ended June 30, 1996, the Company recorded restructuring
costs totaling $2,125,000 This charge was associated with the downsizing of
ObjectStudio-related activities and included employee severance and
benefits, moving and facility consolidation costs, and the write-off of
costs of capitalized software.
In connection with the merger with Easel Corporation, the Company recorded
a one-time charge in the quarter ended June 30, 1995 for merger-related
costs of $6,882,000. Included in these costs were legal, investment banking
and accounting fees associated with the transaction, employee severance
expense, and costs associated with combining the operations of the
previously separate companies.
5. Preferred Share Purchase Rights
On June 6, 1996, the Company's Board of Directors declared a dividend of
one purchase right (a "Right") for every outstanding share of the Company's
common stock. The Rights were distributed on June 12, 1996 to holders of
record as of that date. Each Right entitles the holder to purchase from the
Company one one-thousandth of a share of Series A Junior Preferred Stock at
a price of $75 per one one-thousandth of a share, subject to adjustments in
certain events. The Rights will be exercisable only if a person or group
acquires 15% or more of the outstanding shares of the Company's common
stock or announces a tender offer, the consummation of which would result
in such person or group owning 30% or more of the Company's common stock.
If a person or group (other than the Company and its affiliates) acquires
15% or more of the Company's outstanding common stock, each Right (other
than Rights held by such person or group) will entitle the holder to
receive shares of Common Stock, or in certain circumstances, cash,
property, or other securities of the Company, having a market value of two
times the exercise price of the Right. Also if the Company were acquired in
a merger or other business combination, or if more than 50% of its assets
or earning power were sold, each holder of a Right would be entitled to
exercise such Right and thereby receive common stock of the acquiring
company with a market value of two times the exercise price of the Right.
Furthermore, at any time after a person or group acquires more than 15% of
the outstanding stock, but prior to the acquisition of 50% of such stock,
the Board of Directors may, at its option, exchange all or a part of the
Rights at an exchange ratio of one share of Common Stock for each Right.
The Company will be entitled to redeem the Rights at $.01 per Right,
subject to adjustment in certain events, at any time on or prior to the
tenth day after public announcement that a 15% or greater position has
been acquired by any person or group. The Rights expire on June 12, 2006.
The Company has 10,000,000 shares of $.01 par value preferred stock
authorized for issuance, of which 15,000 shares have been designated by the
Board of Directors as Series A Junior Preferred Stock.
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6. Litigation
The Company is a defendant together with certain of its officers, in two
actions filed in October 1995 in the U.S District Court for the District of
Massachusetts. Those actions have been consolidated through the filing of a
Consolidated Amended Complaint (the "Complaint"). The plaintiffs allege in
the Complaint that the Company and certain of its officers, during July
through October 1995, made certain untrue statements and failed to disclose
certain information regarding the Company's prospective financial
performance in violation of Section 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5 thereunder and that such statements and omissions
artificially inflated the market prices of the Company's stock. The
plaintiffs purport to bring the actions on behalf of certain classes of
stockholders and seek damages in unspecified amounts. The Company has
denied the allegations in its answer to the Complaint and the proceeding is
now in the early stages of discovery. Based upon its review to date,
management of the Company believes that the actions are without merit and
plans to oppose them vigorously.
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Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
VIMARK SOFTWARE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
RESULTS OF OPERATIONS
The following table sets forth certain data as a percentage of total revenue
for the three and six months ended June 30, and July 2, 1996.
Three Months Ended Six Months Ended
------------------ ----------------
Juno 30, July 2, June 30, July 2,
1996 1995 1996 1995
-------- ------- -------- -------
Revenue:
Software 51.4% 56.9% 51.3% 57.8%
Services and other 48.6 43.1 48.7 42.2
----- ----- ----- -----
Total revenue 100.0 100.0 100.0 100.0
----- ----- ----- -----
Costs and expenses:
Costs of software 6.5 7.6 6.5 7.5
Costs of services and other 25.3 22.5 25.6 21.5
Selling and marketing 36.6 38.6 37.2 37.3
Product development 12.2 14.0 13.1 14.3
General and administrative 10.5 10.7 10.4 9.7
Merger integration and restructuring costs 11.9 38.8 6.0 19.3
Litigation and settlement costs - 2.8 - 1.4
----- ----- ----- -----
Total costs and expense 103.0 135.0 98.8 111.0
----- ----- ----- -----
Income (loss) from operations (3.0)% (35.0)% 1.2% (11.0)%
===== ===== ===== -----
REVENUE
The Company's total revenue increased 1% to $17,958,000 in the second quarter of
1996 from $17,727,000 in the second quarter of 1995 and remained flat for the
first six months of 1996 as compared to the first six months of 1995. Software
revenue for the second quarter and first six months of 1996 decreased by 8% and
ll%, respectively, from the comparable periods in 1995. Software revenue as a
percentage of total revenue decreased to 51% in the second quarter and first six
months of fiscal 1996 as compared to 57% and 58% respectively in the second
quarter and first six months of 1995. The decrease in software revenue is due
primarily to a continued decline in the sale of the ESL product line as well as
a flattening in sales of the Company's UniVerse database products.
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Services and other revenue, consisting of consulting, training, and software
maintenance continued to experience growth with a 14% and 16% increase in the
quarter and six months ended June 30, 1996, respectively, as compared to the
quarter and six months ended July 2, 1995. Service and other revenue increased
to 49% of total revenue in the three and six months ended June 30, 1996,
compared to 43% and 42%, respectively, in the same fiscal periods in 1995. The
increase in services and other revenue resulted from the continued expansion of
the Company's customer maintenance base, as well as an increase in training
revenue. Additionally, during the six months ended June 30, 1996, the Company
has entered into several large consulting contracts to provide on-site
engagement services.
COSTS OF SOFTWARE
Costs of software, which consist of amortization of technology licenses and
capitalized software, product royalties, product documentation, packaging, media
and production costs, decreased 13% to $1,171,000 for the second quarter of 1996
and decreased 13% to $2,336,000 in the first six months of 1996, from $1,349,000
and $2,676,000, respectively for the same periods of the prior fiscal year. This
decrease in costs of software is due to reductions in royalties expenses caused
by the decrease in new licenses sales. Cost of software has remained at
approximately 13% of software revenue for all periods presented.
COSTS OF SERVICES AND OTHER
Costs of services and other, which consist of consulting, training, and other
customer support service costs increased 14% to $4,544,000 for the second
quarter and increased 20% to $9,128,000 for the first six months of 1996 as
compared to the same periods of the prior year. Costs of services and other as a
percentage of services and other revenue remained constant at approximately 52%
for the second quarter of 1996 compared to the second quarter of 1995 and
increased slightly to 53% in the six months ended June 30, 1996 compared to 51%
in the six months ended July 2, 1995. The profit margin associated with services
and other revenue decreased slightly for the first six months of 1996 from the
same period in 1995 due to a change in the mix of services and other revenue. A
higher percentage of the increase in services and other revenue in the first
quarter of 1996 is comprised of training and consulting revenue which typically
has a lower profit margin than revenue derived from customer maintenance
support.
SELLING AND MARKETING
Selling and marketing expenses, which consist primarily of sales organization
costs and marketing programs, decreased 4% to $6,579,000 or 37% of total revenue
in the second quarter of 1996 as compared to $6,852,000 or 39% of total revenue
in the second quarter of 1995. The percentage and dollar decreases are due
principally to a temporary decline in the sales force headcount at June 30,
1996. The cost savings resulting from the decline in headcount will be
reinvested in selling and marketing efforts associated with new products in the
last six months of the year. Selling and marketing expenses remained flat at 37%
of total revenue in the first six months of 1996 as compared to the first six
months of 1995. The decline in sales force personnel did not reduce the
year-to-date expenses when compared to the same period of the previous year due
to an increase in marketing and promotional activities in international markets
in the first quarter of 1996.
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PRODUCT DEVELOPMENT
Product development expenses, which consist primarily of salaries and related
benefits of development personnel and facility costs, decreased 12% to
$2,187,000 in the second quarter of 1996 and decreased 8% to $4,674,000 in the
first six months of 1996, as compared to the same periods of the prior year.
Product development expenses as a percentage of revenue were 12% of revenue for
the first quarter of 1996 and 13% of revenue for the first six months of 1996,
as compared to 14% of revenue for the same periods of 1995. This decrease in
spending is due primarily to cost savings associated with the restructuring
which occurred during the second quarter of 1996 and cost reductions resulting
from the merger of Easel Corporation into VMARK.
GENERAL AND ADMINISTRATIVE
General and administrative expenses include the costs of finance, human
resources, legal, information systems, and administrative departments of the
Company. General and administrative expenses remained flat in the second quarter
of 1996 and increased 7% to $3,701,000 in the first six months of 1996 as
compared to the same period of the prior year. The dollar increase in the
year-to-date expenses was due primarily to an increase in the bad debt provision
and significant investments in internal management information systems. General
and administrative expenses remained at approximately 11% of revenue for the
second quarter of 1996 and 1995 and 10% of revenue for the first six months of
each year.
NON-RECURRING ITEMS
In the quarter ended June 30, 1996, the Company recorded restructuring costs
totaling $2,125,000. This charge was associated with the downsizing of
ObjectStudio-related activities and included employee severance and benefits,
moving and facility consolidation costs, and the write-off of costs of
capitalized software. The change was recorded pursuant to a formal plan adopted
and announced in May 1996. The plan was adopted principally as a result of the
signing of a letter of intent to form a joint venture with Cincinnati,
Ohio-based Cincom whereby this joint venture will now undertake the development
and enhancement of the ObjectStudio product line. The establishment of the joint
venture is expected to be finalized during the third quarter. The Company will
contribute ObjectStudio technology and certain development personnel to the
joint venture and will share in the profits and losses of the joint venture on
an equal basis with Cincom. Royalties on sales of ObjectStudio product will be
paid to the joint venture by both parties.
INCOME TAXES
The Company recorded provisions for income taxes of $92,000 and $403,000 for the
second quarter and first six months of 1996 respectively compared to credits of
$1,670,000 and $801,000 for the same periods in 1995. The large provision in
relation to income in the first six months of 1996 is a result of the
unlikelihood of recognition of certain future tax benefits generated in the
second quarter. The Company recognized a benefit for the anticipated uses of
operating losses incurred in the first six months of 1995 at an effective tax
rate of 20.7%.
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LIQUIDITY AND CAPITAL RESOURCES
The Company has funded its operations to date primarily through sales of equity
securities and positive cash flow from operations. At June 30, 1996 the Company
had $13,080,000 in cash and cash equivalents and $19,642,000 in working capital.
The Company has a revolving line of credit with a bank under which the Company
may borrow up to the lesser of $5,000,000 or 80% of eligible domestic accounts
receivable, conditioned upon meeting certain financial covenants, including
maintaining specified levels of quarterly earnings, tangible net worth, working
capital and liquidity. The line of credit also limits the Company's ability to
pay dividends. At June 30, 1996 the Company's eligible accounts receivable
exceeded that required to access fully the revolving line of credit. The Company
also has a share repurchase line of credit with the same bank under which the
Company may borrow up to $5,000,000 to be used solely to make open market
repurchases of the Company's common stock. At June 30, 1996, there was
$1,462,000 of borrowings outstanding under the share repurchase line of credit
facility, which were used to repurchase 120,000 shares of common stock.
The Company believes that its available cash, anticipated cash generated from
operations based upon its operating plan, and amounts available under its credit
facilities will be sufficient to finance the Company's operations and meet its
foreseeable cash requirements at least for the next twelve months.
During the first quarter of 1996, the Company, together with a third-party
leasing company, initiated a leasing program available to current and potential
customers. Under the program, customers are able to purchase VMARK products
through operating and capital leases with a third party lessor. All sales under
this program are subject to the Company's normal revenue recognition policies
and are made without recourse to the Company. This leasing program continued in
the quarter ended June 30, 1996 and sales under the program in the second
quarter totaled approximately $2,100,000. During the six months ended June 30,
1996, sales under the program totaled approximately $3,900,000.
CAUTIONARY STATEMENT
When used anywhere in the Form 10-Q and in future filings by the Company with
the Securities and Exchange Commission, in the Company's press releases and in
oral statements made with the approval of an authorized executive officer of
the Company, the words or phrases "will likely result", "are expected to", "will
continue", "is anticipated", "estimated", "project", or "outlook" or similar
expressions (including confirmations by an authorized executive officer of the
Company of any such expressions made by a third party with respect to the
Company) are intended to identify "forward-looking statements," which speak only
as of the date made. Such statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical earnings and those presently anticipated or projected. Such risks and
uncertainties are set forth in Part 1 of the Company's Annual Report on Form
10-K for the year ended December 31, 1995. The Company specifically declines any
obligation to release publicly the result of any revisions which may be made to
any forward-looking statements to reflect anticipated or unanticipated events or
circumstances occurring after the date of such statements.
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PART 11 OTHER INFORMATION
ITEM I. LEGAL PROCEEDINGS
The Company is a defendant, together with certain of its officers, in two
actions initially filed in October 1995 in the U.S. District Court in the
District of Massachusetts. Those actions have been consolidated through the
filing of a Consolidated Amended Complaint (the "Complaint"). The plaintiffs
allege in the Complaint that the Company and certain of its officers, during
July through October 1995, made certain untrue statements and failed to disclose
certain information regarding the Company's prospective financial performance in
violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
thereunder and that such statements and omissions artificially inflated the
market prices of the Company's stock. The plaintiffs purport to bring the
actions on behalf of certain classes of stockholders and seek damages in
unspecified amounts. The Company has denied the allegations in its answer to the
Complaint and the proceeding is now in the early stages of discovery. Based upon
its review to date, management of the Company believes that the actions are
without merit and plans to oppose them vigorously.
ITEM 2. CHANGES IN SECURITIES
On June 12, 1996, the Board of Directors of VMARK Software, Inc. adopted a
Shareholder Rights Plan that is designed to protect the Company's shareholders
in the event of an unsolicited attempt to acquire the Company. The terms of such
plan and the Preferred Share Purchase Rights that will be issued in connection
with the implementation of such plan are described in the Companies Registration
Form on Form 8-A, dated July 17, 1996 and filed with the Securities Exchange
Commission on July 29, 1996, which description is incorporated herein by
reference.
ITEM 3. NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
An annual meeting of stockholders of the Company was held on June 6, 1996. Of
the 8,087,010 shares eligible to vote, 5,628,620 were represented at the
meeting. The following matters were approved at the meeting:
1) The re-election to the Board of Directors of Benjamin F. Robelen and
Randolph S. Naylor, each for a term of three years expiring in 1999. Each
received favorable votes of 5,458,047 shares.
2) The amendment to the Company's 1986 Stock Option Plan extending the Plan
providing an extension of the Plan for a ten year period to June 3, 2006.
This matter received favorable votes of 4,842,754 shares and negative votes
of 714,022 shares. 71,844 shares, including broker non-votes, specifically
abstained from voting.
3) The amendment to the Company's 1991 Director Stock Option Plan increasing
the annual option grant to non-employee directors from 4,000 to 5,000
shares. This matter received favorable votes of 5,107,776 shares and
negative votes of 452,619 shares. 68,225 shares, including broker
non-votes, specifically abstained from voting.
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4) The amendment to the Company's 1993 Employee Stock Purchase Plan increasing
the number of shares which may be issued from 300,000 to 500,000 shares.
This matter received favorable votes of 5,372,482 shares and negative votes
of 190,799 shares. 65,339 shares, including broker non-votes, specifically
abstained from voting.
5) The ratification of the Board of Director's selection of Deloitte & Touche
LLP as the Company's independent public accountants for 1996. This matter
received favorable votes of 5,604,592 shares and negative votes of 10,702
shares. 13,326 shares specifically abstained from voting.
ITEM 5. NONE.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Certificate of Designations, Rights, Preferences and
Privileges of Series A Junior Preferred Stock (incorporated
by reference to Exhibit 2 of the Company's Registration
Statement on Form 8-A dated July 17, 1996 which was filed
with the Securities and Exchange Commission on July 29,
1996, Commission File No 000-20059)
4.1 Rights Agreement dated as of June 12, 1996 between the
Company and State Street Bank and Trust Company, as Rights
Agent (incorporated by reference to Exhibit 1 of the
Company's Registration Statement on Form 8-A dated July 17,
1996, which was filed with the Securities and Exchange
Commission on July 29, 1996, Commission File No. 000-20059)
27 Financial Data Schedule
(b) Reports on Form 8-K:
The Company did not file a report on Form 8-K during the
quarter ended June 30, 1996.
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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.
VMARK Software, Inc.
(Registrant)
Dated: August 13, 1996 /s/ Robert M. Morrill
_____________________________________
Robert M. Morrill
President and Chief Executive Officer
and Chairman
(principal executive officer)
/s/ Charles F. Kane
Dated: August 13, 1996 ______________________________________
Charles F. Kane
Vice President of Finance and
Chief Financial Officer,
(principal accounting officer)
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