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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F/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, 2001
Commission file number: 0-31052
Gemplus International S.A.
(Exact name of registrant as specified in its charter)
Not Applicable
(Translation of registrant's name into English)
Grand Duchy of Luxembourg
(Jurisdiction of incorporation or organization)
Aerogolf Center
1 Hohenhof
L-2633 Senningerberg
Grand Duchy of Luxembourg
(Address of principal executive offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
None.
Securities registered or to be registered pursuant to Section 12(g) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- ------------------------------
American Depositary Shares ("ADSs"), Nasdaq National Market of the
each representing 2 Ordinary Shares, Nasdaq Stock
without par value.......................... Market Inc.
Ordinary Shares, without par value............ Premier Marche of Euronext Paris
Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act:
None
The number of outstanding shares of each class of capital or common stock as of
December 31, 2001 was:
635,282,297 Ordinary Shares, without par value
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.
[X] Yes [ ] No
Indicate by check mark which financial statement item the registrant has elected
to follow.
[ ] Item 17 [ ] Item 18
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EXPLANATORY NOTE
This Amendment No. 1 to Annual Report on Form 20-F/A (the "Amendment")
has been filed to amend the Annual Report on Form 20-F filed by Gemplus
International S.A. on July 1, 2002 (the "Annual Report"). The Amendment has been
prepared to modify (a) certain information in paragraph (i) under the heading
"Item 6. Directors, Senior Management and Employees--Board Committees" of the
20-F and (b) the Report of Independent Accountants included on page F-1 under
"Item 19. Exhibits" of the 20-F. The registrant believes that these changes are
not material to its financial condition, operations or prospects as described in
the 20-F.
Except as described above, no change has been to the 20-F and the
filing of this Amendment should not be construed to mean that any statements
contained in the 20-F are true and complete as of any date subsequent to July 1,
2002.
Item 6. Directors, Senior Management and Employees
Board of Directors
Under Luxembourg law, the board of directors is vested with the
broadest powers to perform all acts of administration and disposition in our
interests. All powers not expressly reserved by law or by the articles of
incorporation to the general meeting of shareholders fall within the competence
of the board of directors.
Our board of directors currently has thirteen members. Members of the
board are appointed by the shareholders to serve terms not to exceed three years
and may be re-appointed for consecutive terms. They may resign at any time and
their functions as members of the board may be terminated at any time by a
simple majority of the votes of the shareholders voting at a general meeting.
Under Luxembourg law, a director may be an individual or a corporation. Our
board of directors met 17 times during 2001.
On December 19, 2001, the following members resigned from our board of
directors: Dr. Bertrand Cambou, Mr. Andrew Dechet, Mr. Ronald Mackintosh and Mr.
Antonio Perez. In addition, Dr. Lassus resigned from his position as Chairman
and Mr. Halpern from his position as Vice Chairman, although both remain
directors of our company.
Following these resignations, Dr.-Ing. Hasso Freiherr von Falkenhausen
was appointed as director on December 19, 2001, and, effective as of January 10,
2002, as Chairman of the board. On December 19, 2001, Mr. David Bonderman was
appointed as director and Vice-Chairman of the board.
At our annual general shareholders meeting on April 17, 2002, our
shareholders approved a resolution to increase the number of board members to
thirteen, and elected Dr. von Falkenhaussen, Mr. David Bonderman, Mr. Thierry
Dassault, Dr. Peter Kraljic, Mr. Daniel Le Gal, Mr. Gilles Lisimaque, Mr. Ronald
W. Mackintosh and Mr. Ziad Takieddine to the board of directors. The resolutions
to increase the number of board members and to elect Mr. Bonderman were ratified
by a large majority at a further extraordinary general meeting of shareholders
on May 15, 2002.
Following the board of directors meeting held on June 21, 2002, Mr.
Dominique Vignon was appointed as Chairman of the Board with immediate effect,
succeeding Hasso von Falkenhausen who resigned as Chairman but who continues to
serve as a director of our company. Following the board of directors meeting on
June 21, 2002, Mr. Gilles Lisimaque also resigned from our board of directors.
The following table sets forth the name, age, date appointed and
occupation of each of our directors as of June 22, 2002.
Expiration
Name Age Date Appointed of Term Occupation
--------------------------------------- --- -------------------- ----------- ----------------------------------
Dominique Vignon....................... 54 June 21, 2002 April 2004 Chairman of our Board of Directors
April 2004
Hasso Freiherr von Falkenhausen........ 69 December 19, 2001 Chairman of our Board of
Directors up to June 21, 2002;
Managing Director of Polytechnos
David Bonderman........................ 59 December 19, 2001 April 2004 Vice-Chairman of our Board of
Directors; Managing Director
Texas Pacific Group
Randy L.Christofferson................. 44 November 13, 2000 April 2004 Managing Director
MIOGA Ventures,L.L.C.
Thierry Dassault....................... 45 April 17, 2002 April 2004 Chairman and Chief Executive
Officer of Dassault Mutlimedia.
Abel G. Halpern........................ 33 February 1, 2000 April 2004 Managing Director Texas Pacific
Group
Peter Kraljic.......................... 63 April 17, 2002 April 2004 Senior Director, McKinsey &
Company
Marc Lassus............................ 63 February 1, 2000 April 2004 Director of Gemplus International
SA
Daniel Le Gal.......................... 51 April 17, 2002 April 2004 Partner and Managing Director,
Finadvance
Kheng Nam Lee.......................... 53 October 12, 2000 April 2004 Chairman, Vertex Group
Ronald W. Mackintosh................... 54 April 17, 2002 April 2004 Chief Executive Officer, Gemplus
International S.A.
William S. Price, III.................. 45 February 1, 2000 April 2004 Managing Director Texas Pacific
Group
Ziad Takieddine........................ 51 April 17, 2002 April 2004 President, Middle East and Gulf
Resources
Board Committees
Our board of directors has the following committees:
(i) Audit Committee, which consists of Mr. William S. Price III
(Chairman), Mr. Randy L. Christofferson and Mr. Kheng Nam Lee.
This committee was created by the board of directors on October
12, 2000, and met 4 times during 2001. This committee reviews our
budgets and financial statements and any potential conflicts of
interests with a director or other related party (1);
(ii) Compensation and Search Committee, which consists of Dr.-Ing.
Hasso Freiherr von Falkenhausen (Chairman), Mr. David Bonderman
and Mr. Kheng Nam Lee. This committee was created by the board of
directors on October 12, 2000, and met 2 times during 2001, in
February and December. This committee makes recommendations on the
compensation of executive officers and directors and supervises
the administration of stock option plans for our employees. The
committee also evaluates and recommends candidates for new board
members and for the selection of our Chairman and Chief Executive
Officer.
------------
(1) Mr. Price is a shareholder of the general partner of Texas Pacific Group,
one of our major shareholders, and, as a result, it is not certain whether
Mr. Price may be considered an "independent director" in accordance with
Rule 4350 of the NASD Manual. See "Item 7. Major Shareholders and Related
Party Transactions--Major Shareholders." Our board of directors determined
that the appointment of Mr. Price to the Audit Committee in November 2000
is in the best interests of our company and our shareholders because Mr.
Price has extensive experience in finance and management and has served as
a director of a significant number of public and privately-held companies
in the United States and abroad. See "Item 6. Directors, Senior Management
and Employees--Director and Executive Officer Biographies" for a
description of Mr. Price's professional and academic background.
Executive Officers
Our board of directors has, with the authorization of a general meeting
of our shareholders, delegated the day-to-day management of our company,
including the power to act on behalf of our company, to the Chief Executive
Officer except for any matters that exceed (euro)30 million, subject to powers
expressly reserved by law to the board of directors or our shareholders.
During 2001 and at the beginning of 2002, some of our executive
officers resigned, some of whom have not been replaced. In July 2001, Mr.
Bertrand Cambou resigned from his position as Executive Vice President, Chief
Operating Officer. He was not replaced, although he remained a director of our
company until December 2001. In July 2001, Mr. Remy de Tonnac resigned from his
position as Executive Vice President in charge of business development. He was
replaced by Mr. Frederic Spagnou who resigned in March 2002, without being
replaced. In December 2001, Mr. Antonio Perez resigned from his position as
Chief Executive Officer and was replaced by Mr. Ronald W. Mackintosh, as interim
Chief Executive Officer. In February 2002, M. William Lloyd resigned from his
position as Chief Technology Officer and was replaced by Mr. Tony Engberg. In
February 2002, M. Phil Faraci resigned from his position as Executive Vice
President, General Manager of the telecommunications business unit. In March
2002, Mr. Steven Gomo resigned from his position as Chief Financial Officer and
was replaced by Mr. Yves Guillaumot, as interim Chief Financial Officer.
The following table sets forth the name, age and current position of
each of our executive officers as of June 22, 2002:
Name Age Position
------------------------------------ --- ---------------------------------------------------
Ronald W. Mackintosh................ 54 Chief Executive Officer
Tony Engberg........................ 52 Senior Vice President, Chief Technology Officer
Yves Guillaumot..................... 44 Executive Vice President, Chief Financial Officer
Stephen Juge........................ 48 Executive Vice President, General Counsel
Didier Lachaud...................... 42 Executive Vice President, Human Resources
Dr. Gilles Michel................... 50 Executive Vice President, General Manager Financial
and Security Services Business Unit
Jacques Seneca...................... 42 Executive Vice President, General Manager
Gemventures Services Unit
Philippe Vallee..................... 37 Executive Vice President, General Manager Telecom
Business Unit
Jacques Villieres................... 56 Executive Vice President, Corporate Manufacturing
Director and Executive Officer Biographies
Ronald W Mackintosh has served as Chief Executive Officer since
December 2001 and as Director from April 2001 to December 2001. He was
re-elected Director at the annual general meeting of shareholders held on April
17, 2002.Mr. Mackintosh was the Chief Executive Officer of Differentis, an
e-business integrator, from July 2000 through December 2001, when he resigned
from the position. Prior to joining Differentis, Mr. Mackintosh served as Chief
Executive Officer of Computer Sciences Corporation, European Business since
October 1992. From June 1990 to September 1992, Mr. Mackintosh served as Chief
Executive, CSC UK. From November 1987 to June 1990, Mr. Mackintosh served as
Chief Executive Officer at Index Group Europe. Prior to October 1987, Mr.
Mackintosh was a Partner at Nolan Norton & Co. Europe. Mr. Mackintosh serves on
the Board of Directors of Differentis. Mr. Mackintosh graduated from Arbroath
High School, Scotland.
Dominique Vignon has served as Chairman of the Board of Directors since
June 21, 2002. Mr. Vignon served as Chairman of the Board of Directors and Chief
Executive Officer of the Framatome group from 1996 to the end of 2001, where he
also developed this group's connector business. From the end of 2000 to the end
of 2001, he served as President of Framatome ANP and led the merger of the
Framatome and Siemens corresponding activities. From 1990 to 2001, Mr. Vignon
held various management positions within the Framatome group. From 1995 to 1996,
he was President of Framatome's nuclear business. From 1993 to 1995, he was
Chairman of Jeumont Industrie. From 1990 to 1993, was General Manager of Nuclear
Power International (NPI), the joint venture of Framatome and Siemens. From 1975
to 1990, he worked at Electricite de France, where he was in charge of major new
generation projects in France and abroad. Mr. Vignon is a graduate of France's
Ecole Polytechnique, and of the leading French Engineering School, the Ecole
Nationale des Ponts et Chaussees. He also holds a Bachelors degree in Economics.
Dr.-Ing. Hasso Freiherr von Falkenhausen has served as a Director since
December 2001 and as Chairman of the Board of Directors from January 10, 2002 to
June 21, 2002. Mr. von Falkenhausen is a founder and has been Managing Director
since 1998 of Polytechnos Venture-Partners GmbH, Munich, Germany. Prior to
founding Polytechnos Venture-Partners, Mr. von Falkenhausen held the position of
CEO of World Card International, a holding and management services company for
the Dr. Herbert Quandt family in Bad Homburg, Germany. In this capacity, he
served as Chairman of the Board of Directors of DataCard Corporation,
Minneapolis, MN, U.S.A., until 2000, as member of the board of directors of
Gemplus Associates SA from 1993 to 1997, and as Chairman of the supervisory
board of Gemplus SCA from 1997 to 1999. Prior to 1986, Mr. von Falkenhausen held
an executive position with Robert Bosh GmbH, Stuttgart, Germany. Until 1980, he
served as a director and senior partner of McKinsey & Co., a management
consulting company, in Dusseldorf, Germany. Mr. von Falkenhausen received a
Mechanical and Industrial Engineering degree from Berlin Technical University,
Germany, and a Masters of Industrial Engineering degree from Cornell University,
Ithaca, NY, U.S.A. He holds a Doctorate in Applied Mathematics from Darmstadt
Technical University, Germany. Mr. von Falkenhausen serves on the boards of KERO
Private Equity, Dieburg, Germany and Stylepark AG, Frankfurt, Germany, as well
as on the European and German Advisory Boards of INVESCO.
David Bonderman has served as Vice-Chairman of the Board of Directors
since December 2001. He is a principal, general partner and one of the founders
of Texas Pacific Group ("TPG"). Prior to forming Texas Pacific Group, Mr.
Bonderman was Chief Operating Officer of the Robert M. Bass Group, Inc. (now
doing business as Keystone, Inc.) in Fort Worth, Texas. Prior to joining RMBG in
1983, Mr. Bonderman was a partner in the law firm of Arnold & Porter in
Washington, DC where he specialized in corporate, securities, bankruptcy, and
antitrust litigation. From 1969 to 1970, Mr. Bonderman was a Fellow in Foreign
and Comparative Law in conjunction with Harvard University and from 1968 to
1969, he was Special Assistant to the U. S. Attorney General in the Civil Rights
Division. From 1967 to 1968, Mr. Bonderman was Assistant Professor at Tulane
University School of Law in New Orleans. Mr. Bonderman graduated Magna Cum Laude
from Harvard Law School in 1966. He was a member of the Harvard Law Review and a
Sheldon Fellow. He is a 1963 Phi Beta Kappa graduate of the University of
Washington in Seattle. Mr. Bonderman serves on the Boards of Continental
Airlines, Inc.; Bell & Howell Company; Ducati Motorcycles S.p.A.; Co-Star Realty
Information Group; Denbury Resources, Inc.; Ryanair, plc; Washington Mutual,
Inc.; Oxford Health Plans, Inc.; ON Semiconductors; Magellan Health Services,
Inc., Paradyne Networks, Inc., and Korea First Bank. He also serves on the
Boards of The Wilderness Society, the Grand Canyon Trust, and the American
Himalayan Foundation. In addition, he serves on the Board of Directors of the
University of Washington Foundation as well as the Harvard Law School Dean's
Advisory Board.
Randy L. Christofferson has served as a Director since November 2000.
Mr. Christofferson is the Managing Director of MIOGA Ventures since 1999. From
August 1999 to September 2000, Mr. Christofferson served as Chief Executive
Officer of Walker Digital. From 1995 to 1999, Mr. Christofferson served as
President of First USA Bank. From 1990 to 1995, Mr. Christofferson held several
senior management positions at the American Express Company, including President
of Amex Relationship Services, Senior Vice President of Worldwide Quality and
Reengineering and Senior Vice President of Corporate Strategy and Advanced
Technology. Prior to 1990, Mr. Christofferson was a partner of Bain & Company.
Mr. Christofferson received his M.B.A. from Harvard University and graduated
with highest honors from Michigan State University, where he earned a B.S. in
Chemical Engineering. Mr. Christofferson serves on the Boards of Directors of
IntelliRisk Management Corporation, FineStationery.com, Alliance Consulting,
Monogram Credit Services and Delaware Art Museum.
Thierry Dassault has served as a Director since April 2002. He
currently serves as the Chairman and Chief Executive Officer of Dassault
Multimedia, a venture capital company that holds investments in companies such
as Infogrames, Hi-Media, Net2one and Welcome Real-time, in which Mr. Dassault
also serves as Director. Prior to that, from 1985 to 1993, he was Producer
Partner at Claude Delon Productions company. From 1982 to 1984, he was General
Manager in an alarm systems Company, and from 1979 to 1981, he was Director of
the Equipements Civils pour l'Electronique Serge Dassault company in Brazil. Mr
Dassault serves on the supervisory board of Gemplus SA since 1998 and as
Chairman of the supervisory board of Gemplus SA since March 2001. He serves on
the boards of different companies, including Cdandco, Chapitre.com, Dassault
Multimedia, FCC and SERF (BFM), Gaumont, Groupe Industriel Marcel Dassault and
IXO. He also serves on the supervisory board of Societe du Journal des Finances.
Tony Engberg has served as our Senior Vice President, Chief Technology
Officer for Research and Development since January 2002. Mr. Engberg joined
Gemplus in October 2000. Prior to joining our company, Mr. Engberg worked for 23
years at Hewlett-Packard, where he held a number of positions, including
software engineer, R&D Laboratory Manager, Group R&D Manager, and General
Manager. Mr. Engberg holds a Bachelor of Arts and a Master in Business and
Administration from the University of Chicago, Illinois.
Yves Guillaumot has served as our Vice President, Interim Chief
Financial Officer since March 2002. Mr. Guillaumot joined our company in July
1998 as Corporate Controller. He was promoted to Vice President in March 2001.
Prior to joining Gemplus, from 1987 to 1998, Mr. Guillaumot held various
financial management positions with Digital Equipment, including as Director of
Finance for Southern Europe, Middle East and Africa from 1997 to 1998 and
Controller of the PC division from 1996 to 1997. Prior to 1996, Mr. Guillaumot
held positions with Arthur Andersen and Arthur Young. Mr. Guillaumot graduated
from the Ecole de Hautes Etudes Commerciales du Nord in France.
Abel G. Halpern has served as a Director since December 2001 and served
as Vice-Chairman of the Board of Directors from February 2000 to December 2001.
Mr. Halpern is a Partner and Managing Director with Texas Pacific Group. Based
in London since 1996, Mr. Halpern is Co-Head of TPG's European private equity
and investment activities and heads the European Technology and European Branded
Consumer Goods practices. Prior to London, Mr. Halpern was based in Mexico City,
focusing on Latin American investments. Prior to joining TPG, Mr. Halpern was a
management and strategy consultant with Bain & Company, an international
strategic consultancy firm. Mr. Halpern received a Masters of Business
Administration from Harvard University and a Bachelor of Arts degree magna cum
laude and with distinction from Yale University. Mr. Halpern's serves as
Chairman of the Board of Directors of Bally International and serves on the
Executive Committee of the Boards of Directors of Ducati Motor Holding and on
the Board of Directors of Piaggio, Landis & Gyr Communications and Yazam.com
Stephen Juge has served as our Executive Vice President, General
Counsel since November 2000. Prior to joining Gemplus, Mr. Juge served from
January to October 2000 as Senior Vice President and General Counsel of Walt
Disney Europe. From April 1996 to January 2000, Mr. Juge served as Senior Vice
President and European Legal Counsel of The Walt Disney Company (Europe) S.A.
From November 1987 to March 1996, Mr. Juge served as Vice President and General
Counsel of Disneyland Paris (Euro Disney S.C.A.). Prior to joining Disneyland
Paris, Mr. Juge was an associate at the international law firm of Coudert Freres
in Paris between 1981 and 1987. Mr. Juge attended Louisiana State University,
received a Juris Doctor degree from the Tulane University School of Law and
studied comparative law at the University of Oxford on a Marshall Foundation
Fellowship.
Kheng Nam Lee has served as a Director since October 2000. Mr. Lee is
the President of Vertex Group and of Vickers Capital. Prior to serving as
President of the Vertex Group, Mr. Lee managed several venture capital funds of
the Vertex Group since 1988. Prior to joining the Vertex Group, Mr. Lee served
as head of strategic and venture capital investments at the Singapore
Technologies Group. He holds a Bachelor of Science degree in Mechanical
Engineering (with First Class honors) from Queen's University, Canada, and a
Master of Science in Operations Research and Systems Analysis (with distinction)
from the U.S. Naval Postgraduate School. Mr. Lee serves on the Boards of
Directors of Creative Technology Ltd., GRIC Communications Inc., Activcard S.A.,
ENBA Public Limited Company and Innomedia Pte. Ltd.
Dr. Peter Kraljic has served as a Director since April 2002. He
currently serves as a senior director with McKinsey & Company, Inc., Dusseldorf,
Germany. Dr. Kraljic joined McKinsey in 1970 and has worked extensively on
strategic, organizational, operational and restructuring programs for industrial
companies in Germany, Austria, France as well as in Central and Eastern Europe.
From 1993 to 1998, he was responsible for McKinsey's activities in France as
Directeur General. Prior to joining McKinsey, Dr. Kraljic worked as researcher
in La Continentale Nucleaire, Luxembourg, as well as for the Welding Institute
Ljubljana, Slovenia. Dr. Kraljic holds a degree in metallurgy from the
University of Ljubljana, a Doctorate from the Technical University Hanover and a
Masters in Business Administration from INSEAD, Fontainebleau, France. Dr.
Kraljic serves on the supervisory board of the Wolfsburg AG association and of
the IEDC Bled Management School.
Didier Lachaud has served as our Executive Vice President, Human
Resources since September 1997. Prior to joining Gemplus, Mr. Lachaud served as
Corporate Human Resources Manager at Fives-Lille from September 1995 to August
1997. Prior to August 1997, Mr. Lachaud held several senior management positions
at Air Liquide from September 1990 and served as Personnel Manager at
Schlumberger (now SchlumbergerSema) from 1985. Mr. Lachaud holds a Degree from
the Institut d'Etudes Politiques de Paris.
Dr. Marc Lassus, one of our founders, has served as a Director since
February 2000 and as Chairman of the Board of Directors from February 2000 to
December 2001. Dr. Lassus was a member of the supervisory board of Gemplus S.A.
from 1996 to January 2002, and served as Chairman of the supervisory board of
Gemplus S.A. from April 1999 to January 2002. Prior to founding Gemplus, Dr.
Lassus served as General Manager of the Microcomputers and Memories Division at
Thomson Semiconductors from 1985 to 1988. From 1980 to 1985, Dr. Lassus served
as General Manager of Matra-Harris Semiconductors in Nantes, France. Prior to
1980, Dr. Lassus held various management positions at Motorola Semiconductors in
the US , Scotland and France, in the Integrated Circuits Division. Dr. Lassus
holds a Bachelors Degree in Physics from Lyon's Institute of Applied Sciences,
France, and a Ph.D. in Solid State Physics from Lyon's University. Dr. Lassus
serves on the Board of Directors of Ingenico, among other board positions.
Daniel Le Gal has served as a Director since April 2002. He currently
serves as a partner and Managing Director of Finadvance. One of our co-founders
in 1988, Mr. Le Gal served as our Chief Executive Officer from 1997 to 1999,
prior to which he held several management positions in Sales, Marketing and
Strategic Planning for our company. Prior to founding our company, From 1982 to
1987, Mr. Le Gal served as Marketing Manager in the Telecommunication Unit of
Thomson Semiconductors. From 1975 to 1982, he held various positions at France
Telecom. Daniel Le Gal holds an Engineering Degree from Supelec, in Paris,
France.
Gilles Lisimaque has served as a director since April 2002. One of our
co-founders, Mr. Lisimaque currently serves as a Senior Vice President in our
company in our U.S. operations. From 1985 until 1988, he held a position in
technical marketing at Thomson Semiconductors. Prior to joining Thomson, Mr.
Lisimaque held information management positions with Saint Gobain Pont a Mousson
and Rousset S.A. Mr. Lisimaque holds an engineering degree from L'Ecole des Arts
et Metiers in Lille. Mr. Lisimaque is the managing member of GemAussi LLC and is
the trustee of G&M Charitable Remaining Unitrust.
Dr. Gilles Michel has served as President and General Manager of our
Financial and Security Services Business Unit since May 2001. Prior to May 2001,
Dr. Michel served as Executive Vice President, Financial Services from November
2000 and as Senior Vice President, Strategy, Mergers and Acquisitions from
February 2000. Prior to joining Gemplus, Dr. Michel served as Vice President,
Regional Business Segment (North and South America) at Schlumberger (now
SchlumbergerSema) from September 1999 to January 2000. Prior to September 1999,
Dr. Michel held various senior management positions at Schlumberger, including
Vice President, Marketing and Vice President, Engineering and Manufacturing. Dr.
Michel holds a Degree in Physics from the Ecole Superieure de Physique et de
Chimie, Paris, France, and a Ph.D. in Computer Science from the University of
Paris VI.
William S. Price III has served as a Director since February 2000. Mr.
Price was a founding partner of TPG in 1992. Prior to forming TPG, Mr. Price was
Vice President of Strategic Planning and Business Development for General
Electric Capital Corporation. From 1985 to 1991, Mr. Price was employed by the
management consulting firm of Bain & Company, attaining partnership status and
acting as co-head of the Financial Services Practice. Prior to 1985, Mr. Price
was employed as an associate specializing in corporate securities transactions
with the law firm of Gibson, Dunn & Crutcher LLP. Mr. Price is a member of the
California Bar and graduated with honors in 1981 from the Boalt Hall School of
Law at the University of California, Berkeley. He is a 1978 Phi Beta Kappa
graduate of Stanford University. Mr. Price serves on the Boards of Directors of
Continental Airlines, Del Monte Foods, Denbury Resources, Belden & Blake, Zilog,
Verado Holdings, Advanced Telecom Group, Bally, Dovebid, Petco Animal Supplies
and Findexa.
Jacques Seneca has served as our Executive Vice President, General
Manager GemVentures Services Unit since September 1, 2001. Mr Seneca joined
Gemplus in 1989 as Project Manager. He has held several management positions as
Products Department Manager, General Manager for Sales and Manufacturing
Operations in Germany, General Manager for the Telecom Business Division, and as
Executive Vice President for Gemplus Marketing & Technology. Prior to joining
our company, he worked with ST-Microelectronics where he moved from
Manufacturing to Marketing positions and then led the business development for
discrete components in Asia. Mr Seneca holds a Bachelors degree from ENSAM and a
Business Administration degree from IAE of Aix-en-Provence in France.
Ziad Takieddine has served as a Director since April 2002. He currently
serves as the President of Middle East and Gulf Resources, an international
consulting firm he founded to provide assistance to European industrial groups
in their export operations to the Middle East and Gulf States. Prior to founding
this firm, Mr. Takieddine headed SAPSI Sa, a company established to build and
develop a ski resort, Isola 2000, in the South of France pursuant to a
concession from the French Government. Mr.Takieddine received a Bachelors in
Economics from the American University of Beirut and a Masters in Economics from
Reading University in the United Kingdom.
Philippe Vallee has served as our Executive Vice President, General
Manager of our Telecom Business Unit since February 2002. Prior to that date, he
was Vice-President of the Marketing Telecom Business Unit from May 2001 to
February 2002. He was previously based in Singapore as Executive Vice-President
of Gemplus Technologies Asia, and headed the marketing and development
activities and professional services operations of Gemplus Asia Pacific. Mr.
Vallee has 10 years of experience in the smart card industry and has served in
various marketing, product management and sales capacities in our company. Prior
to joining our company, Mr. Vallee served as product manager on the first
generation of GSM mobile phones for Matra Communications (now Lagardere Group)
in France. Mr. Vallee has a Bachelor's degree in Electronics and
Telecommunications Engineering and a Masters of Science in Marketing Management
from ESSEC.
Jacques Villieres has served as our Executive Vice President, Corporate
Manufacturing since 1999. From 1996 to 1999, Mr. Jacques Villieres served as
Gemplus Cuernavaca Plant Manager in Mexico. Prior to joining Gemplus, Mr.
Villieres was the General Manager of Microelectronics Techway from 1990 to 1996.
From 1972 to 1990, Mr. Villieres held several management positions as General
Manager at Cartier System, General Manager of a production unit at Thomson SCA,
Technical Director at Matra Harris Semiconductors and Production Manager at
Motorola. Mr. Villieres holds a Degree in Engineering and a Masters Degree in
Industrial Electronics from INSA of Toulouse in France.
Compensation of Directors and Principal Executive Officers
Aggregate compensation paid by us to our directors and executive
officers as a group, consisting of thirteen persons, for the fiscal year ended
December 31, 2001 was approximately (euro)7.4 million. This 2001 compensation
expense includes compensation paid to Antonio Perez, our former Chief Executive
Officer who resigned in December 2001, to Dr. Lassus who ceased serving as our
Chairman of the Board in December 2001 and who remains a Director of our
company, to Bertrand Cambou and Remy de Tonnac, who resigned in July 2001, and
to Steven Gomo, Phil Faraci, William Lloyd and Frederic Spagnou, all of whom
resigned in February and March 2002. Total compensation excludes amounts related
to the forgiveness of loans we made to certain of our executive officers in 2000
and 2001. For a discussion of these loans, see "Item 7. Major Shareholders and
Related Party Transactions--Related Party Transactions." A portion of the total
compensation paid in fiscal year 2001, in the amount of (euro)814,000, reflects
compensation that was paid with respect to services rendered by officers and
directors in fiscal year 2000.
The following table presents the compensation paid in 2001 to our
mandataires sociaux, which include our Chief Executive Officer and certain
directors of our company:
Name Total amount in
euros
-------------------
Antonio Perez 1,188,083
Bertrand Cambou 692,361
Kheng Nam Lee 81,250
Marc Lassus 1,147,221
Randy Christofferson 81,250
Ronald Mackintosh 50,000
--------------------
Total 3,240,166
Beginning in 2002, all of our directors will receive (euro)40,000per
year as compensation in connection with services performed in their capacity as
members of our Board and each chairman of a board committee will receive an
additional one-time payment of (euro)10,000 for their services in that capacity.
Our current Chairman of the board, Dr. Von Falkenhausen, will receive annual
compensation of (euro)300,000 to be paid on a pro rata basis beginning January
10, 2002, as well as (euro)75,000 annually to be paid on a pro rata basis for
services rendered as interim Chairman of the board from December 19, 2001
through January 9, 2002.
During 2001, our company issued to one of our employees who later
became one of our executive officers 50,000 options to subscribe our ordinary
shares, all of which were still outstanding as of March 31, 2002. None of our
other directors or executive officers received compensation in the form of stock
options in 2001. In 2000, our company issued to our directors and executive
officers a total of 23,050,000 options to subscribe our ordinary shares. As of
December 31, 2001, 25,422,500 options were outstanding, out of which 6,387,500
options were exercisable.
In addition, since its formation, Gemplus SCA, which was transformed
into Gemplus S.A., our main French subsidiary, has issued to our directors and
executive officers options to purchase Gemplus S.A. ordinary shares pursuant to
its stock option plans, of which 221,203 were outstanding as of December 31,
2001. We are currently offering to the officers and directors who hold the stock
options or the ordinary shares purchased pursuant to these options the
possibility to contribute these options or shares to our capital in exchange for
11,060,150 stock options or shares of our capital stock (after giving effect to
our fifty-to-one share split).
In 2000, we granted a total of 20,495,786 free shares and 40,991,572
stock options to Mr. Antonio Perez, our former Chief Executive Officer, and Dr.
Marc Lassus, our former Chairman of the Board. All of the stock options have
since been exercised. See "Item 7. Major Shareholders and Related Party
Transactions--Related Party Transactions." Our stock compensation benefit of
69.3 million in 2001 compared to stock compensation expense of (euro)229.7
million in 2000 under U.S. GAAP was mainly attributable to these issuances. See
"Item 5. Operating and Financial Review and Prospects--U.S. GAAP
Reconciliation."
The aggregate amount we accrued on a consolidated basis during the year
ended December 31, 2001 to provide pension, retirement and similar benefits for
our executive officers was (euro)78,000.
Stock Options
In General
On July 27, 2000, we adopted a stock option plan that provides for the
grant of stock options to any employees who are employed by our company or its
affiliates. The term of the options granted under the plan will be determined by
the notice of grant, but will not exceed ten years from the date of the grant of
the option. No options may be granted under the plan after May 31, 2003 .
The maximum number of shares of common stock that may be issued under
the stock option plan is 50,000,000. As of December 31, 2001, 44,508,691 stock
options had been granted under our stock option plan and 35,987,358 stock
options were outstanding. Our employees are also currently beneficiaries under
the stock option plans previously adopted for Gemplus S.A., our main operating
subsidiary. Our employees may contribute, from time to time, to our company the
stock options or the shares of Gemplus S.A. received upon exercise of these
options in exchange for options or shares of our company. As of December 31,
2001, 661,005 shares of Gemplus S.A. subject to options are currently
outstanding under the old plans. Certain employees of Gemplus S.A. have elected
to receive stock options of our company in exchange for their Gemplus S.A. stock
options. As of December 31, 2001, 5,558,350 options resulting from the
conversion of Gemplus S.A. stock options were outstanding. If all the Gemplus
S.A. stock options outstanding as of December 31, 2001were exercised or
exchanged for options of our company and if all the shares resulting from the
exercise of these options were contributed to our company, the beneficiaries
would be the holders of 33,050,250 of our shares.
The terms and conditions of Gemplus S.A.'s stock option plans are
mostly consistent with those of our stock option plan as described below, except
for the method of determination of the option exercise price and the vesting
period. The exercise price is determined at the time of issuance of the options
based on the latest known transactions effected by the shareholders of Gemplus
S.A. One-third of the options vest each year over a three-year term for French
beneficiaries under the Gemplus S.A. stock option plan, while twenty-five
percent of the options vest each year over a four-year term for non-French
beneficiaries, except for the Gemplus S.A. 1999 Stock Option Plan, in which
fifty percent of the options vest each year over a two-year period. Our
employees may contribute, from time to time, to our company the stock options or
the shares of Gemplus S.A. received upon exercise of these options in exchange
for options or shares of our company.
Plan Administration
The stock option plans are administered by the Stock Administration
Committee that reports plan activities to the Compensation Committee of our
board of directors on a quarterly basis. Under the option plan, the Stock
Administration Committee has the authority to determine, in its discretion, the
persons to whom options are granted; the number of shares of common stock
underlying each option; the vesting schedule and conditions under which the
options may be exercised, including any lockup periods; and any other matter
necessary or desirable for the administration of the option plan.
Vesting Period
Unless otherwise decided by the Stock Administration Committee, the
vesting period to options granted under the option plan will be four years, with
25% of the granted options vesting in each year, exercisable upon each
anniversary of the date of grant.
Option Exercise Price
The plan requires that the exercise price for the options be 100% of
the fair market value of the underlying share of common stock on the date of
grant as determined by the Compensation Committee. Because our shares are listed
on a stock exchange, the exercise price may not be less than 100% of the value
of the underlying shares on the relevant stock exchange on the date of grant,
subject to certain exceptions pursuant to local regulations.
On April 17, 2002, our board of directors voted to approve a plan
whereby our employees will be offered an option to cancel stock options
previously granted under plans adopted in 2000 and receive reissued options at a
new exercise price. The new options will be granted at least six months and one
day after the date of cancellation. The new exercise price will be the market
price of our shares on the date the new options are granted. Employees may opt
to cancel all or half of their stock options under this plan. This plan was
launched on May 23, 2002.
General Plan Provisions
Share Counting. If any outstanding option expires, terminates or is
canceled for any reason, the shares of common stock subject to the unexercised
portion of such option will become available for future grants under the option
plan.
Effect of Termination of Employment. If an option holder's employment
is terminated:
(i) for any reason other than the option holder's death or
disability, he or she may exercise options which were exercisable
at the time of the option holder's termination within three
months after such termination, and all other options will expire
at such time;
(ii) on account of the option holder's disability, he or she may
exercise options which were exercisable at the time of the option
holder's termination within twelve months after such termination,
and all other options will expire at such time;
(iii) on account of the death of the option holder, his or her
designated beneficiary may exercise options which were
exercisable at the time of the option holder's death within six
months following the option holder's death, and all other options
will expire at such time.
In no case may an option be exercised after the expiration date
provided in an option holder's option grant agreement.
Adjustments upon Changes in Capitalization. The option plan provides
for an adjustment in the number of shares of common stock available to be issued
under the plan, the number of shares subject to options and the exercise prices
of options upon changes in the capitalization of our company, including stock
subdivisions and reclassifications and stock splits or dividend payments.
No Assignment or Transfer. During an option holder's lifetime, each
option granted to an option holder is exercisable only by him or her. No option
is transferable or assignable other than by will or the laws of descent and
distribution.
Amendment. The Stock Administration Committee may at any time, with the
approval of the Compensation Committee, adapt the stock option plans to adjust
to or comply with applicable local legal, tax and accounting requirements.
However, any modification or adaptation that would impair the rights of an
option holder requires the prior consent of that option holder.
Senior Management Stock Option Plan
In addition, on November 10, 2000 our shareholders authorized our board
of directors to increase our share capital and issue up to 60,000,000 shares to
directors and executive officers of our company (including any of its
subsidiaries or affiliates) in the form of stock options or, except in the case
of directors, in the form of free shares, in each case on terms and conditions
determined by our board of directors in its sole discretion. Our board of
directors may issue these stock options and free shares from time to time over a
five-year period from the date of publication of the shareholder resolution in
accordance with Luxembourg law. As of December 31, 2001, 26,110,000 stock
options had been granted to our directors and executive officers by our board of
directors pursuant to this shareholder authorization, and 25,422,500 stock
options were outstanding. The stock options issued by our board of directors
pursuant to this shareholder resolution are not subject to the terms and
conditions of our stock option plans.
On April 17, 2002, our board of directors voted to approve a plan
whereby our senior management will be offered an option to cancel stock options
previously granted under plans adopted in 2000 and receive reissued options at a
new exercise price. The new options will be granted at least six months and one
day after the date of cancellation. The new exercise price will be the market
price of our shares on the date the new options are granted. Senior management
may opt to cancel all or half of their stock options under this plan. This plan
was launched on May 23, 2002.
Share Ownership
As of December 31, 2001, Dr. Marc Lassus and members of his family may
be deemed to have beneficial ownership of 99,825,131 shares, which constitutes
approximately 15.7% of the shares outstanding. As of December 31, 2001,
beneficial ownership of 10,308,174 shares held by Vertex Investment
International (III) Inc. representing 1.6% of the shares outstanding may be
attributed to Mr. Kheng Nam Lee, who disclaims beneficial ownership of such
shares, and beneficial ownership of 159,305,600 shares held by Texas Pacific
Group representing 25.0% of the shares outstanding may be attributed to Messrs.
Bonderman, Halpern and Price, who disclaim beneficial ownership of such shares.
In addition, beneficial ownership of 28,300,000 shares, which constitutes
approximately 4.4% of the shares outstanding, held by the Group Dassault may be
attributed to Mr. Thierry Dassault, who disclaims beneficial ownership of such
shares. None of the other officers or directors is the beneficial owner of more
than 1% of our capital stock. See also "Item 7.
Major Shareholders and Related Party Transactions--Major Shareholders."
Employees
The following table sets forth the number of employees and a breakdown
of employees by main category of activity and geographic location as of the end
of each year in the three-year period ended December 31, 2001:
December 31,
-------------------------------
1999 2000 2001
------ ------ ------
Number of employees(1)................... 5,877 7,870 6,721
Category of activity
Manufacturing....................... 3,491 4,312 3,745
Research and Development............ 660 993 819
Sales and Marketing................. 920 1,353 897
Services............................ 152 270 309
General and Administrative.......... 654 942 951
Geographic location
France.............................. 2,413 2,922 2,778
Rest of Europe...................... 1,464 2,067 1,340
Asia................................ 1,022 1,617 1,562
Americas............................ 978 1,264 1,041
---------
(1) Includes the average number of temporary employees in each period, which
amounted to approximately 512 employees in 1999, 528 employees in 2000 and
596 in 2001.
Following the announcement of our restructuring program on May 2, 2001,
the workers committee of our main operating subsidiary, Gemplus S.A., commenced
an "alert" procedure under French labor law based upon alleged concerns about
the financial situation of Gemplus S.A. An accounting firm appointed by the
workers committee issued a report about these alleged concerns. Management of
Gemplus S.A. believes that these alleged concerns were unfounded and that
management provided sufficient answers to them. The "alert" procedure was
completed with a review of the report at a Gemplus S.A. shareholders meeting on
May 28, 2002.
On February 6, 2002, we announced plans for a further restructuring of
our operations and production and procurement processes in order to improve our
financial competitiveness. These plans call for targeted savings of (euro)100
million per year and a one-time restructuring charge of (euro)65 million and
include proposed staff reductions of approximately 1,140 positions worldwide in
connection with this restructuring. This restructuring program affects all areas
within the company (Manufacturing, Selling, Marketing, Research and Development
and General and Administrative functions). The overall reduction of the
workforce is broken down as follows: (i) manufacturing organization: 550
employees, (ii) general and administrative functions: 245 employees, (iii)
selling and marketing organization: 215 employees, and (iv) research and
development organization: 130 employees. The majority of employees terminated
are located in France, Germany, the USA and the UK. As of March 31, 2002, 250
employees were terminated on a worldwide basis, with primarily the exception of
France and Germany, in which we must carry out consultations with employee
representatives before implementing workforce reductions. See "Item 5. Operating
and Financial Review and Prospects--Results of Operations--Recent Developments."
In connection with this plan, on February 14, 2002, Gemplus S.A. initiated the
process of consultation with its workers committee and union representatives
regarding a plan for the reduction of approximately 416 positions in France. The
first phase of this consultation process was completed on March 22, 2002, and
the second phase began on May 6, 2002 and was completed on June 5, 2002, in
accordance with French procedures. Following the end of the second phase, the
content of the plan will be determined precisely and communicated to the
employees. Management of Gemplus S.A. believes that this consultation process
with its employee representatives is continuing in a satisfactory and
constructive manner and expects that it will be completed by the fourth quarter
of this year.
We believe that our relations with our employees and employee
representatives are satisfactory.
Under French law, all employers of more than 20 employees in France are
required to implement a 35-hour work week. In February 1999, we entered into an
agreement to implement the 35-hour work week mandated by the French law.
Although the work week is shorter on average and we have not reduced salaries,
the agreement allows us greater flexibility than before to organize the use of
employee time. For example, employees can work more than 35 hours in some weeks,
but in exchange we are required to reduce the number of hours worked in other
weeks to ensure that they do not work more than 35 hours per week on an annual
basis. We believe this added flexibility partly compensates for the reduction in
hours and that the 35-hour week should not have a material adverse effect on our
financial condition.
Item 19 Exhibits
(a) List of Financial Statements
Report of Independent Accountants........................................ F-1
Consolidated Statements of Income
for the Years Ended December 31, 2001, 2000, and 1999 (*)............. F-2
Consolidated Balance Sheets as of December 31, 2001, 2000 and 1999 (*)... F-3
Consolidated Statements of Cash Flows
for the Years Ended December 31, 2001, 2000 and 1999 (*).............. F-4
Consolidated Statements of Changes in Shareholders' Equity
for the Years Ended December 31, 2001, 2000 and 1999 (*).............. F-5
Notes to the Consolidated Financial Statements (*)....................... F-6
------------
(*) Previously filed as an exhibit to the Company's Annual Report on Form 20-F
filed on July 1, 2002.
(b) List of Exhibits
1.1 Form of the bylaws (Statuts) of Gemplus International S.A. as amended to
date (English translation included). (*)
4.1 Second Amended and Restated Employment Agreement dated as of July 11,
2001 among Gemplus Americas, Inc., Gemplus International S.A. and Antonio
Perez. (*)
4.2 Loan Repayment Agreement between Antonio Perez and Zenzus Holdings
Limited, dated October 20, 2001, and Letter Agreement by Antonio Perez,
dated December 19, 2001. (*)
4.3 Agreement between Gemplus International S.A., Zenzus Holdings Limited and
Marc Lassus, dated December 19, 2001. (*)
8.1 Significant subsidiaries as of the end of the year covered by this
report. (*)
------------
(*) Previously filed as an exhibit to the Company's Annual Report on Form 20-F
filed on July 1, 2002.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders,
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, of cash flows and of changes in shareholders'
equity present fairly, in all material respects, the financial position of
Gemplus International S.A. and its subsidiaries at December 31, 2001, 2000 and
1999, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2001, in accordance with
International Accounting Standards. These financial statements are the
responsibility of the Company's management ; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
As discussed in Note 2 to the consolidated financial statements, the Company
changed its method of accounting for derivative financial instruments.
International Accounting Standards vary in certain respects from accounting
principles generally accepted in the United States of America. The application
of the latter would have affected the determination of consolidated net income
for each of the three years in the period ended December 31, 2001, and the
determination of shareholders' equity at December 31, 2001, 2000 and 1999 to the
extent summarized in Note 32 to the consolidated financial statements.
/s/ PricewaterhouseCoopers
PricewaterhouseCoopers
Paris, France
February 27, 2002
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant certifies that it meets all of the requirements for
filing on Form 20-F and has duly caused this Amendment to its Annual Report to
be signed on its behalf by the undersigned, thereunto duly authorized.
Date: July 24, 2002
GEMPLUS INTERNATIONAL S.A.
By: /s/ Yves Guillaumot
--------------------------
Yves Guillaumot
Chief Financial Officer