UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 1996 Commission File Number: 0-25674
CBT GROUP PUBLIC LIMITED COMPANY
(Exact name of registrant as specified in its charter)
REPUBLIC OF IRELAND NONE
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1005 HAMILTON COURT
MENLO PARK, CA 94025
(Address of principal executive offices)
Registrant's telephone number, including area code: (415) 614-5900
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
Ordinary Shares IR37.5p
(Title of class)
Indicate by check mark whether 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 of time that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. X Yes 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 the registrant's Form 10-K or any
amendment to the registrant's Form 10-K. [_]
The aggregate market value of the voting shares held by non-affiliates of
registrant was $796,656,952.50 as of March 15, 1997 (excludes 386,420 shares
which may be deemed to be held by directors, officers and affiliates of
registrant as of March 15, 1997).
The number of registrant's equivalent American Depositary Shares outstanding as
of March 15, 1997 was 18,595,722.
PART III
[Part III of Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 is hereby amended in its entirety to read as follows]
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
The following table sets forth certain information, as of March 31, 1997, for
the current non-employee directors of the Company:
NAME AGE POSITIONS WITH THE COMPANY
---- --- --------------------------
John M. Fortune 43 Director
Patrick J. McDonagh 45 Director
John M. Grillos 55 Director
Mr. Fortune has been a director of the Company since March 1990 and served as
Vice President, Finance and Corporate Development and Chief Financial Officer of
the Company from January 1995 until November 1995. From April 1993 to January
1995, Mr. Fortune acted as a consultant to the Company for certain special
financial and strategic projects. Prior to that period, Mr. Fortune was an
Executive Director of the Company. Before joining the Company, Mr. Fortune was a
Director of Corporate Finance with the Investment Bank of Ireland Limited.
Mr. McDonagh was a founding member of and has been a director of the Company
since September 1989. He has not taken an active role in the Company's
management since 1991 and is currently a private investor.
Mr. Grillos has been a director of the Company since February 1994. Mr. Grillos
has been a Partner of ITech Partners, L.P., a venture capital partnership
focused on very early stage information technology companies, since 1997. Prior
to such time, and from August 1988, Mr. Grillos was a Managing Director of
Robertson, Stephens & Company LLC, an investment banking firm, in its venture
capital group. Mr. Grillos is also a member of the Board of Directors of Summit
Design, Inc.
There are no family relationships among any of the directors or executive
officers of the Company.
For information regarding the Company's employee directors and current executive
officers see Part I of the Registrant's Form 10-K under the caption "Executive
Officers."
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), requires the Company's officers (as defined in the rules under Section
16) and directors, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file certain reports with the
Securities and Exchange Commission (the "Commission") and the National
Association of Stock Dealers, Inc. regarding ownership of, and transactions in,
the Company's securities. Such officers, directors and ten percent holders are
also required by the Commission's rules to furnish to the Company copies of all
Section 16(a) forms that they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that during the fiscal year ended December 31, 1996 (the "Last Fiscal Year") all
Section 16(a) filing requirements applicable to its executive officers,
directors and ten percent holders were complied with, except that, after
leaving the Company, Mr. Richard P. Ream, a former officer of the Company,
filed one Form 4 late with respect to one transaction.
ITEM 11. EXECUTIVE COMPENSATION
IMPORTANT NOTE ABOUT SHARE NUMBERS AND DOLLAR VALUES
Effective May 15, 1996, the Company effected a two-for-one split of its
American Depositary Shares ("ADSs"), such that each ADS is now represented by
one-half of one Ordinary Share of the Company. The share numbers in this
section give effect to such ADS split unless otherwise noted. All references
to "dollars" or "$" are to U.S. dollars unless otherwise noted.
SUMMARY COMPENSATION TABLE
The following table discloses, for the Last Fiscal Year, compensation earned
by each individual serving as the Company's Chief Executive Officer and each
of the four other most highly compensated executive officers (collectively,
the "Named Executive Officers"), and compensation earned by the Named Executive
Officers for the fiscal years ended December 31, 1995 and 1994:
Long-Term
Annual Compensation Compensation
-----------------------------------------------------------------
Options to
Other Annual Purchase ADS All Other
Name and Principal Position Year Salary (1) Bonus Compensation(2) Equivalents Compensation (3)
- --------------------------------------------------------------------------------------------------------------------------------
William G. McCabe(4) 1996 $120,000 $380,000 $ -- 200,000 $31,800
Chairman of the Board 1995 120,000 410,000 -- 250,000 32,080
1994 120,000 232,500 -- 93,332 39,000
James J. Buckley(4) 1996 125,618 50,000 -- 485,000 --
President, Chief Executive
Officer and Director
John M. Todd 1996 66,792 217,658 -- 19,000 6,817
European Sales Director 1995 66,172 137,586 -- 30,000 6,630
1994 67,412 71,298 -- 38,332 6,250
Morten G. Weaver 1996 69,835 194,196 -- 37,500 --
Vice President, Pacific Rim Sales 1995 66,000 252,907 -- 30,000 --
1994 65,000 148,109 -- 38,332 --
Gregory M. Priest(5) 1996 125,000 89,250 -- 5,000 --
Vice President, Finance, 1995 5,208 -- -- 160,000 --
Chief Financial Officer and
Director
William A. Beamish 1996 80,000 85,000 -- 25,000 6,360
Vice President, Product 1995 70,000 91,000 34,449 30,000 6,980
Strategy and Development 1994 70,000 72,345 -- 26,666 6,380
- ----------------------------
(1) Salary includes amount deferred pursuant to the Company's 401(k) plan.
(2) Includes $24,000 paid to Mr. Beamish for rental reimbursement in 1995.
(3) Represents $39,000 paid to Mr. McCabe; $6,250 paid to Mr. Todd; and $6,380
paid to Mr. Beamish in 1994;$32,080 paid to Mr. McCabe; $6,630 paid to
Mr. Todd; and $6,980 paid to Mr. Beamish in 1995; and $31,800 paid to Mr.
McCabe; $6,817 paid to Mr. Todd; and $6,360 paid to Mr. Beamish in 1996
pursuant to a defined contribution plan.
(4) Mr. McCabe was the Chairman of the Board, Chief Executive Officer and
President until September 1996, when he stepped down as President. In
September 1996, Mr. Buckley joined the Company as President and Chief
Operating Officer. In December 1996, Mr. Buckley became the Chief Executive
Officer of the Company. Consequently, Mr. Buckley's compensation
information is from September 1996 through December 31, 1996.
(5) Mr. Priest joined the Company as Vice President, Finance and Chief Financial
Officer in December 1995.
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information with respect to options granted
during the Last Fiscal Year to the Named Executive Officers:
Individual Grants Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
for Option Term (1)
------------------------------------------------------------------------------------------------------
Number of Percent of Total
Equivalent ADSs Options Granted Exercise
for Which Options to Employees in Price Per Expiration
Name Were Granted (2)(3) Last Fiscal Year Equivalent ADS(4) Date 5% 10%
---- ------------------------------------------------------------------------------------------------------
William G. McCabe(5) 200,000 13.1% $22.625 1/16/06 $ 2,845,748 $ 7,211,685
James J. Buckley 485,000 31.7 39.25 7/25/06 11,971,795 30,338,880
John M. Todd 14,000 0.9 22.625 1/16/06 199,202 504,818
5,000 0.3 34.00 4/12/06 106,912 270,936
Morten G. Weaver 25,000 1.6 22.625 1/16/06 355,719 901,461
12,500(6) 0.8 34.00 4/12/06 267,280 677,341
Gregory M. Priest 5,000 0.3 34.00 4/12/06 106,912 270,936
William A. Beamish 20,000 1.3 22.625 1/16/06 284,575 721,168
5,000 0.3 34.00 4/12/06 106,912 270,936
- ----------------------------------
(1) Potential realizable value assumes that the share price (based on the fair
market value of the ADSs) increases from the date of grant until the end of
the option term (10 years) at the annual rate specified (5% and 10%). If
the price of the ADSs were to increase at such rates from the price at
December 31, 1996, the last trading day of the Last Fiscal Year ($54.25 per
ADS) over the next ten years, the resulting ADS price at 5% and 10%
appreciation would be approximately $88.38 and $140.71, respectively. The
assumed annual rates of appreciation are specified in Commission rules and
do not represent the Company's estimate or projection of future share
price. The Company does not necessarily agree that this method can properly
determine the value of an option.
(2) All options in this table were granted under the Company's 1994 Share
Option Plan (the "1994 Plan") or 1990 Share Option Scheme (the "1990
Plan"). The options expire ten years from the date of grant, subject to
earlier termination in the event of the optionee's cessation of service
with the Company. The 1994 Plan and the 1990 Plan are currently
administered by the Stock Option Committee of the Board of Directors, which
has broad discretion and authority to amend outstanding options and to
reprice options, whether through an exchange of options or an amendment
thereto.
(3) Unless otherwise indicated, options generally vest over four years such
that 12/48ths of the shares subject to the option vest one year from the
respective date of grant and as to 1/48th each month thereafter.
(4) Options were granted at an exercise price equal to the fair market value of
the Company's ADSs, as determined by reference to the closing price of the
ADSs as reported on the Nasdaq National Market on the last trading day
prior to the date of grant.
(5) The shares subject to this option became fully vested on January 16, 1996.
(6) 5,000 shares subject to this option vest on April 12, 1997 and the balance
of the shares vest as to 1/20th each month thereafter.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table provides information with respect to option exercises in the
Last Fiscal Year by the Named Executive Officers and the value of such officers'
unexercised options at December 31, 1996:
Number of Equivalent ADSs
Subject to Unexercised Value of Unexercised
Options at In-the-Money Options at
Fiscal Year-End Fiscal Year End (3)
--------------------------------------------------------------------
Equivalent Value
ADSs Acquired Realized
Name on Exercise(1) (2) Exercisable Unexercisable Exercisable Unexercisable
---- ---------------------------------------------------------------------------------------------------
William G. McCabe -- $ -- 849,998 -- $39,401,126 $ --
James J. Buckley -- -- -- 485,000 -- 7,275,000
John M. Todd 97,000 4,465,950 68,873 43,583 3,547,131 1,741,480
Morten G. Weaver 95,414 5,465,569 15,000 61,082 693,750 2,209,553
Gregory M. Priest 39,430 1,349,501 3,902 121,668 123,635 3,797,876
William A. Beamish 95,000 5,250,511 138,892 25,000 7,243,291 733,750
(1) Employees of the Company, including the Named Executive Officers, have a
choice of acquiring either Ordinary Shares or ADSs representing such
Ordinary Shares upon exercise of options.
(2) Market value of underlying shares based on the closing price of the ADSs on
the Nasdaq National Market on the date of exercise, minus the exercise
price.
(3) Market value of shares underlying in-the-money share options based on the
closing price of $54.25 per ADS on the Nasdaq National Market on December
31, 1996 (the last trading day of the Last Fiscal Year), minus the exercise
price.
COMPENSATION OF DIRECTORS
No director receives any cash compensation for his services as a member of the
Board of Directors, although each director is reimbursed for his expenses in
attending Board and related Committee meetings. Directors who serve on
committees of the Board of Directors receive no additional compensation.
EMPLOYMENT CONTRACTS AND ARRANGEMENTS
On January 2, 1996, the Company entered into an Employment Agreement with
Gregory M. Priest, pursuant to which agreement the Company agreed to employ Mr.
Priest as Vice President, Finance and Chief Financial Officer of the Company.
Mr. Priest also was nominated to serve as a director of the Company. Under the
terms of the Agreement, Mr. Priest receives an annual minimum base salary of
$125,000 and is entitled to an annual bonus of not less than $30,000 based upon
the satisfaction of certain performance goals for the Company. The Agreement
does not contain any specified minimum term of employment and both paries have
acknowledged that Mr. Priest's employment with the Company is at-will. In the
event the Company terminates Mr. Priest for any reason other than Cause (as
defined in the Agreement) or the Company otherwise breaches any material term of
the Agreement, the Company agrees to employ Mr. Priest as a consultant or part-
time employee until the value of vested options previously granted to Mr. Priest
(as represented by the difference between the aggregate fair market value and
aggregate exercise price thereof) equals a specified percentage of Mr. Priest's
compensation at the time of such termination or breach.
On July 24, 1996, the Company executed an employment offer letter with
James J. Buckley pursuant to which Mr. Buckley became the President and Chief
Operating Officer of the Company, effective as of September 3, 1996. In
accordance with the terms of the offer letter, Mr. Buckley receives an annual
base salary of $385,000 and a targeted bonus of approximately $150,000, subject
to the achievement of certain performance objectives. In connection with the
offer letter, Mr. Buckley received an aggregate of 485,000 options at an
exercise price equal to the fair market value thereof at such date. The options
vest over four years, with the initial 25% vesting after one year and the
remainder on a monthly basis thereafter.
COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the Last Fiscal Year, the Compensation Committee of the Board of
Directors consisted of directors McCabe, Fortune, McDonagh and Grillos, and the
Stock Option Committee consisted of directors McDonagh and Grillos. Messrs.
McDonagh and Grillos, who have served as members of each of the Compensation
Committee and the Stock Option Committee since they were established in February
1995, were not officers or employees of the Company during the Last Fiscal Year.
Mr. McCabe has served on the Compensation Committee since February 1995 and is
the Chairman of the Board of the Company. Mr. McCabe also served as President of
the Company until September 1996 and Chief Executive Officer until December
1996. Mr. Fortune served as the Vice President, Finance and Chief Financial
Officer of the Company until November 1995.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's ADSs as of March 15, 1997 by (a) each director, (b)
each of the Named Executive Officers; (c) each person who is known by the
Company to be the beneficial owner of more than five percent (5%) of the
Company's ADSs; and (d) all current directors and executive officers as a group.
The number and percentage of ADSs beneficially owned is determined under the
rules of the Commission, and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under such rules, beneficial
ownership includes any shares as to which the individual has sole or shared
voting power or investment power and also any shares that the individual has the
right to acquire within sixty (60) days of March 15, 1997 through the exercise
of share options or other rights. Unless otherwise indicated, each person has
sole voting and investment power (or shares such powers with his spouse) with
respect to the shares shown as beneficially owned.
A total of 18,595,722 of the Company's ADSs were issued and outstanding as of
March 15, 1997.
Approximate
Equivalent ADSs Percentage
Name of Person or Identity of Group Beneficially Owned Owned
- ----------------------------------- ------------------ -----------
Putnam Investments, Inc.(1) 2,412,256 13.0%
One Post Office Square
Boston, MA 02109
Standard Life Assurance Co. plc(2) 1,170,000 6.3
32/33 College Green
Dublin 2, Ireland
William G. McCabe (3) 699,998 3.6
Morten G. Weaver (4) 225,218 1.2
William A. Beamish (5) 86,194 *
John M. Todd (6) 34,185 *
Gregory M. Priest (7) 14,708 *
John M. Grillos 2,408 *
John P. Hayes (8) 1,926 *
John M. Fortune 1,484 *
James J. Buckley -- --
Patrick J. McDonagh -- --
All current directors and executive officers as a group 1,329,948 6.8
(14 persons)(9)
- -----------------------------
*Less than 1%.
1) All of such shares are represented by ADSs. Based on information contained in
the Schedule 13G/A filed with the Commission for the fiscal year ended
December 31, 1996 by Putnam Investment Management, Inc. ("PIM"), Putnam
Advisory Company, Inc. ("PAC") and Putnam New Opportunities Fund ("Fund"),
investment managers (together with their parent corporations, Putnam
Investments, Inc. ("PI") and Marsh & McClennan Companies, Inc. ("MMC")). MMC
does not have sole voting power, shared voting power, sole dispositive power
or shared dispositive power with respect to any of the shares. PI does not
have sole voting power, shared voting power or sole dispositive power with
respect to any of the shares and has shared dispositive power with respect to
all of the shares. PIM does not have sole voting power, shared voting power
or sole dispositive power with respect to any of the shares and has shared
dispositive power with respect to 2,351,456 shares. PAC does not have sole
voting power, shared voting power or sole dispositive power with respect to
any of the shares and has shared dispositive power with respect to 60,800
shares. Fund does not have sole voting power, shared voting power or sole
dispositive power with respect to any of the shares and has shared
dispositive power with respect to 1,052,900 shares. The shares were acquired
for investment purposes by such investment managers for certain of their
advisory clients.
2) These shares are registered in the name of Ulster Bank Dublin Nominees
Limited.
3) Represents 699,998 equivalent ADSs issuable upon the exercise of options held
by Mr. McCabe, which options are exercisable within sixty (60) days of March
15, 1997.
4) Includes 35,582 equivalent ADSs issuable upon the exercise of options held by
Mr. Weaver, which options are exercisable within sixty (60) days of March 15,
1997.
5) Includes 76,496 equivalent ADSs issuable upon the exercise of options held by
Mr. Beamish, which options are exercisable within sixty (60) days of March
15, 1997.
6) Represents 34,185 equivalent ADSs issuable upon the exercise of options held
by Mr. Todd, which options are exercisable within sixty (60) days of March
15, 1997.
7) Represents 14,708 equivalent ADSs issuable upon the exercise of options
held by Mr. Priest, which options are exercisable within sixty (60) days of
March 15, 1997.
8) Represents 1,926 equivalent ADSs issuable upon the exercise of options held
by Mr. Hayes, which options are exercisable within sixty (60) days of March
15, 1997.
9) Includes 943,528 equivalent ADSs issuable upon the exercise of options held
by current officers and directors of the Company as a group, which options
are exercisable within sixty (60) days of March 15, 1997.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Ownership of CBT Technology
Approximately 9% of the CBT Technology ("CBT T") outstanding share capital,
representing a special non-voting class, is owned by Stargazer Productions
("Stargazer"), an unlimited company which is wholly-owned by officers and key
employees of the Company. CBT T has in the past and may in the future declare
and pay dividends to Stargazer, and Stargazer may pay dividends to its
shareholders out of such amounts. Any such dividends would be treated as
compensation expense by the Company and would be included in the Company's
operating expenses under U.S. generally accepted accounting principles.
Loan to Mr. Priest
In February 1996, Gregory M. Priest, the Company's Vice President, Finance,
Chief Financial Officer and a director of the Company, received an interest-free
loan from the Company in the amount of $125,000 with principal payable in four
annual installments, commencing in February 1997. In February 1997, Mr. Priest
repaid to the Company $31,250 of the principal amount due under the loan. As of
the date hereof, $93,750 remains outstanding under the loan. The largest
aggregate amount outstanding under the loan during fiscal year 1996 was
$125,000.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the
Company has duly caused this Form 10-K/A to Registrant's Annual Report to be
signed on its behalf by the undersigned, thereunto duly authorized on the 14th
day of April, 1997.
CBT GROUP PUBLIC LIMITED COMPANY
/s/ James J. Buckley
-----------------------------------
James J. Buckley,
President and Chief Executive Officer
Pursuant to the requirements of the Exchange Act, this Form 10-K/A has been
signed below by the following persons on behalf of the Company and in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
* Chairman of the Board April 14, 1997
- ----------------------------
William G. McCabe
* President, Chief Executive April 14, 1997
- --------------------------- Officer and Director (Principal
James J. Buckley Executive Officer)
* Vice President, Finance, Chief April 14, 1997
- --------------------------- Financial Officer and Director
Gregory M. Priest (Principal Financial Officer)
* Group Financial Controller and April 14, 1997
- --------------------------- Director (Principal Accounting
John P. Hayes Officer)
Director
- ---------------------------
John M. Grillos
Director
- ---------------------------
Patrick J. McDonagh
* Director April 14, 1997
- ---------------------------
John M. Fortune
* /s/ Gregory M. Priest
- ---------------------------
Gregory M. Priest
Attorney-in-Fact