<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /x/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
DELTAPOINT, INC.
----------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
DELTAPOINT, INC.
380 EL PUEBLO ROAD
SUITE 100
SCOTTS VALLEY, CALIFORNIA 95066
December 22, 1997
TO THE SHAREHOLDERS OF DELTAPOINT, INC.
Dear Shareholder:
You are cordially invited to attend the Special Meeting of Shareholders of
DeltaPoint, Inc. (the "Company"), which will be held at Wilson, Sonsini,
Goodrich and Rosati, 650 Page Mill Road, Palo Alto, California, on Friday,
January 16, 1998 at 10:00 a.m.
Details of the business to be conducted at the Special Meeting are given in
the attached Proxy Statement and Notice of Special Meeting of Shareholders.
It is important that your shares be represented and voted at the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. Returning the proxy does NOT deprive you of your right to attend the
Special Meeting. If you decide to attend the Special Meeting and wish to change
your proxy vote, you may do so automatically by voting in person at the meeting.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in the affairs of the Company. We look
forward to seeing you at the Special Meeting.
Sincerely,
[/S/ JEFFREY F. AIT]
Jeffrey F. Ait
CHIEF EXECUTIVE OFFICER
<PAGE>
DELTAPOINT, INC.
380 EL PUEBLO ROAD
SUITE 100
SCOTTS VALLEY, CALIFORNIA 95066
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 16, 1998
------------------------
To the Shareholders:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of DeltaPoint,
Inc., a California corporation (the "Company"), will be held on January 16, 1998
at 10:00 a.m., local time, at the offices of Wilson Sonsini Goodrich & Rosati,
Professional Corporation, 650 Page Mill Road, Palo Alto, California 94304, for
the following purposes:
1. To approve an amendment to the Company's Articles of Incorporation to
change the Company's name to "Site Technologies, Inc."
2. To approve five amendments to the Company's 1995 Stock Option Plan
("Option Plan") to (a) increase the number of shares of Common Stock
available for issuance under the Option Plan by 1,200,000 shares to a
total of 2,400,000 shares of Common Stock; (b) provide that the maximum
number of shares subject to option or stock appreciation rights that may
be granted annually to a single employee under the Option Plan be 500,000
shares of Common Stock and that, in the first year of employment, an
employee may receive an additional grant of up to a maximum of 400,000
shares of Common Stock subject to option or stock appreciation rights
(instead of the present Option Plan provision which provides that the
maximum number of shares subject to option or stock appreciation rights
that may be granted to a person participating in the Option Plan over the
term of the Option Plan is 360,000); (c) increase the number of shares of
Common Stock subject to option or stock appreciation rights that will be
granted to new members of the Company's Board of Directors from a
one-time grant of 20,000 shares of Common Stock to a one-time grant of
50,000 shares of Common Stock; (d) increase the number of shares of
Common Stock subject to option or stock appreciation rights that are
granted annually to each non-employee member of the Board of Directors
under the automatic grant portion of the Option Plan by 1,500 shares to
2,500 shares of Common Stock; and (e) allow discretionary grants of stock
options to be made to all non-employee members of the Board of Directors
of the Company.
3. To transact such other business as may properly come before the Special
Meeting and any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on December 10, 1997
are entitled to notice of and to vote at the Special Meeting.
<PAGE>
All shareholders are cordially invited to attend the Special Meeting in
person. However, to assure your representation at the Special Meeting, you are
urged to mark, sign, date and return the enclosed proxy card as promptly as
possible in the postage-prepaid envelope enclosed for that purpose. Any
shareholder attending the Special Meeting may vote in person even if he or she
has returned a proxy.
By Order of the Board of Directors
[/S/ JEFFREY F. AIT]
Jeffrey F. Ait
CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER
Scotts Valley, California
December 22, 1997
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE SPECIAL MEETING, YOU ARE REQUESTED
TO COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
<PAGE>
DELTAPOINT, INC.
---------------------
PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS
The enclosed Proxy is solicited on behalf of DeltaPoint, Inc. (the
"Company") for use at the Special Meeting of Shareholders (the "Special
Meeting") to be held on January 16, 1998 at 10:00 a.m., local time, and at any
adjournment thereof, for the purposes set forth herein and in the accompanying
Notice of Special Meeting of Shareholders. The Special Meeting will be held at
the offices of Wilson Sonsini Goodrich & Rosati, Professional Corporation, 650
Page Mill Road, Palo Alto, California 94304.
These proxy solicitation materials were mailed on or about December 22, 1997
to all shareholders entitled to vote at the Special Meeting.
INFORMATION CONCERNING VOTING AND SOLICITATION
RECORD DATE AND SHARES OUTSTANDING
Only shareholders of record at the close of business on December 10, 1997
(the "Record Date") are entitled to notice of and to vote at the Special
Meeting. As of the Record Date, 8,516,380 shares of the Company's Common Stock
were issued and outstanding. No shares of Preferred Stock were outstanding.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time prior to its use by delivering to the Secretary of the
Company a written instrument revoking the proxy or a duly executed proxy bearing
a later date or by attending the Special Meeting and voting in person.
VOTING AND SOLICITATION
Each shareholder is entitled to one vote for each share of Common Stock on
all matters to be voted on by the shareholders. The following two matters (the
"Proposals") are scheduled to be voted on at the Special Meeting: (i) the
amendment of the Company's Articles of Incorporation to change the Company's
name to "Site Technologies, Inc." ("Proposal 1") and (ii) the amendment to the
Company's 1995 Stock Option Plan ("Option Plan") to (a) increase the number of
shares of Common Stock available for issuance under the Option Plan by 1,200,000
shares to a total of 2,400,000 shares of Common Stock; (b) provide that the
maximum number of shares subject to option or stock appreciation rights that may
be granted annually to a single employee under the Option Plan in a single year
be 500,000 shares of Common Stock and that, in the first year of employment, an
employee may receive an additional grant of up to a maximum of 400,000 shares of
Common Stock subject to option or stock appreciation rights (instead of the
present Option Plan provision which provides that the maximum number of shares
subject to option or stock appreciation rights that may be granted to a person
participating in the Option Plan over the term of the Option Plan is 360,000);
(c) increase the number of shares of Common Stock subject to option or stock
appreciation rights that will be granted to new members of the Company's Board
of Directors from a one-time grant of 20,000 shares of Common Stock to a
one-time grant of 50,000 shares of Common Stock; (d) increase the number of
shares of Common Stock subject to option or stock appreciation rights that are
granted annually to each non-employee member of the Board of Directors under the
automatic grant portion of the Option Plan by 1,500 shares to 2,500 shares of
Common Stock; and (e) allow discretionary grants of stock options to be made to
all non-employee members of the Board of Directors of the Company ("Proposal
2"). Proposal 1 requires the affirmative vote of a majority of the outstanding
shares of Common Stock to approve. Proposal 2 requires the affirmative vote of a
majority of the shares of Common Stock present or represented by proxy at the
Special Meeting to approve. Votes cast by proxy will be tabulated by U.S. Stock
Transfer Corporation, the Company's transfer agent. Votes cast in person will be
tabulated by the Inspector of Elections at the Special Meeting and added to the
proxy tabulation.
Upon the execution and return of the enclosed form of proxy, the shares
represented thereby will be voted in accordance with the terms of the proxy,
unless the proxy is revoked. If no directions are indicated
<PAGE>
in such proxy, the shares represented thereby will be voted "FOR" the approval
of the Proposals. For purposes of the approval of Proposal 1, both abstentions
and broker non-votes will have the same effect as votes against the Proposals.
For purposes of approval of Proposal 2, abstentions are counted as votes cast
and, accordingly, have the same effect as votes against the proposal, whereas
broker non-votes are not counted as votes cast and therefore once a quorum is
present, will have no effect on the proposal.
The cost of soliciting proxies will be borne by the Company. In addition,
the Company may reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
material to such beneficial owners. Proxies may also be solicited by certain of
the Company's directors, officers and employees, without additional
compensation, personally or by telephone, telegram, letter or facsimile.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
A majority of the outstanding shares of Common Stock entitled to vote on the
Record Date, whether present in person or represented by proxy, shall constitute
a quorum for the transaction of business at the Special Meeting or any
adjournment thereof. The Company intends to include abstentions and broker
non-votes as present or represented for purposes of establishing a quorum for
the transaction of business.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of the Company's shareholders intended to be presented at the 1998
Annual Meeting of Shareholders must be received by the Company at its offices at
380 El Pueblo Road, Scotts Valley, California 95066, no later than January 9,
1998, and must satisfy the conditions established by the Securities and Exchange
Commission for shareholder proposals to be included in the Company's proxy
statement for that meeting.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of November 30, 1997 by (i) each
person who is known by the Company to own beneficially more than 5% of the
Company's Common Stock, (ii) each director of the Company, (iii) two of the
Company's former Chief Executive Officers and two other executive officers as of
December 31, 1996 and (iv) all directors and executive officers as a group.
Except as otherwise indicated, the Company believes that the beneficial owners
of the Common Stock listed below, based on information furnished by such owners,
have investment and voting power with respect to such shares, subject to
community property laws where applicable.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY PERCENTAGE OF SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNED BENEFICIALLY OWNED(2)
- -------------------------------------------------------------------------- ----------------- ----------------------
<S> <C> <C>
Entities affiliated with Oak Investment Partners V, L.P. (3) ............. 332,601 3.9%
One Gorham Island
Westport, CT 06880
Raymond R. Kingman, Jr. (4) .............................................. 0 *
c/o DeltaPoint, Inc.
380 El Pueblo Road
Scotts Valley, CA 95066
John J. Ambrose (5) ...................................................... 0 *
c/o DeltaPoint, Inc.
380 El Pueblo Road
Scotts Valley, CA 95066
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY PERCENTAGE OF SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNED BENEFICIALLY OWNED(2)
- -------------------------------------------------------------------------- ----------------- ----------------------
<S> <C> <C>
Jeffrey F. Ait (6) ....................................................... 244,000 2.8%
c/o DeltaPoint, Inc.
380 El Pueblo Road
Scotts Valley, CA 95066
William G. Pryor (7) ..................................................... 166,835 1.9%
c/o DeltaPoint, Inc.
380 El Pueblo Road
Scotts Valley, CA 95066
Donald B. Witmer (8) ..................................................... 203,750 2.3%
c/o DeltaPoint, Inc.
380 El Pueblo Road
Scotts Valley, CA 95066
Patrick W. Grady (9) ..................................................... 147,538 1.7%
c/o DeltaPoint, Inc.
380 El Pueblo Road
Scotts Valley, CA 95066
Joseph Marengi (10) ...................................................... 52,000 *
c/o DeltaPoint, Inc.
380 El Pueblo Road
Scotts Valley, CA 95066
Stephen Mendel (11) ...................................................... 143,713 1.7%
c/o DeltaPoint, Inc.
380 El Pueblo Road
Scotts Valley, CA 95066
Thomas Holt (12) ......................................................... 30,000 *
c/o DeltaPoint, Inc.
380 El Pueblo Road
Scotts Valley, CA 95066
All directors and executive officers as a group (5 persons) (13).......... 773,572 6.9%
</TABLE>
- ------------------------
* Less than one percent (1%).
(1) To the Company's knowledge, the persons named in the table have sole voting
and investment power with respect to all shares of Common Stock shown
beneficially owned by them, subject to community property laws where
applicable and the information contained in the footnotes to this table.
(2) Percentage ownership is based on: 8,516,380 shares of Common Stock
outstanding as of November 30, 1997 and any shares issuable pursuant to
securities convertible into or exercisable for shares of Common Stock by the
person or group in question on November 30, 1997 or within 60 days
thereafter.
(3) Consists of 325,289 shares of Common Stock held by Oak Investment Partners
V, L.P. ("Oak Investment") and 7,312 shares of Common Stock held by Oak V
Affiliates Fund, L.P. ("Oak Affiliates"). Edward F. Glassmeyer is a general
partner of Oak Investment and Oak Affiliates. Mr. Glassmeyer disclaims
beneficial ownership of the securities held by these entities, except to the
extent of his pecuniary interest therein arising from his general
partnership in Oak Investment. Oak Affiliates is an affiliate of Oak
Investment.
3
<PAGE>
(4) Mr. Kingman resigned as President and Chief Executive Officer and a director
of the Company, effective April 15, 1996.
(5) Mr. Ambrose served as the Company's Chief Executive Officer from April 22,
1996 through March 25, 1997.
(6) Includes 225,000 shares of Common Stock subject to a stock option granted in
March 1997 which is currently exercisable or exercisable within sixty (60)
days after November 30, 1997.
(7) Includes 101,894 shares of Common Stock subject to stock options currently
exercisable or exercisable within sixty (60) days after November 30, 1997,
including an option to purchase 100,000 shares of Common Stock granted on
November 10, 1995.
(8) Consists of 12,500 shares of Common Stock, an immediately exercisable
Warrant to purchase 6,250 shares of Common Stock and an option to purchase
135,000, 10,000 and 40,000 shares of Common Stock, respectively granted on
November 10, 1995, April 22, 1996 and November 4, 1996, respectively, that
is immediately exercisable.
(9) Includes an option to purchase 20,000 shares of Common Stock granted on
August 13, 1996 and 1,000 shares of Common Stock granted on June 20, 1997
that is immediately exercisable but subject to a right of repurchase upon
termination of service as a director that lapses in equal annual
installments over three years and lapses in full on a specified change in
control.
(10) Consists of 50,000 shares of Common Stock subject to a stock option granted
in July 1997 which is currently exercisable or exercisable within sixty (60)
days after November 30, 1997 but subject to a right of repurchase upon
termination of service as a director that lapses in equal annual
installments over three years and lapses in full on a specified change in
control.
(11) Includes an option to purchase 20,000 shares of Common Stock granted in
July 1997 that is immediately exercisable but subject to a right of
repurchase upon termination of service as a director that lapses in equal
annual installments over three years and lapses in full on a specified
change in control. Also includes 123,713 shares of Common Stock held by SLF
Partners II, L.P. and SLF Partners III, L.P. Mr. Mendel, a director of the
Company, is a special limited partner in each of SLF Partners II, L.P. and
SLF Partners III, L.P. Mr. Mendel disclaims beneficial ownership of the
securities held by these entities except to the extent of his pecuniary
interest therein arising from his limited partnership interest in SLF
Partners II, L.P. and SLF Partners III, L.P.
(12) Consists of 30,000 shares of Common Stock subject to a Stock Option granted
in October 1997.
(13) Consists of 144,713 shares of Common Stock, immediately exercisable
warrants to purchase 126,538 shares of Common Stock and 346,000 shares of
Common Stock subject to stock options currently exercisable or exercisable
within sixty (60) days of November 30, 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company's Board of Directors was formed on
December 1, 1995, and the current members of the Compensation Committee are
Messrs. Mendel, Marengi, Holt and Grady. None of these individuals was at any
time during 1996 or at any other time, an officer or employee of the Company. No
executive officer of the Company serves as a member of the board of directors or
compensation committee of any entity that has one or more executive officers
serving as a member of the Company's Board of Directors or Compensation
Committee.
4
<PAGE>
EXECUTIVE COMPENSATION AND RELATED INFORMATION
The following table sets forth the compensation earned by the Company's two
former Chief Executive Officers and two other executive officers who earned (or
would have earned) salary and bonus for the 1996 fiscal year in excess of
$100,000 (collectively, the "Named Officers") for services rendered in all
capacities to the Company and its subsidiaries for that fiscal year:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------------
NUMBER OF
ANNUAL COMPENSATION SECURITIES
--------------------------------------- UNDERLYING
OTHER ANNUAL OPTIONS(#) ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARDS COMPENSATION($)
- --------------------------------- --------- ---------- --------- ---------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
John J. Ambrose (1) ............. 1996 $ 78,461 $ 25,000(2) $ 4,500(3) 145,000 $ 26(4)
Chief Executive Officer and
Director
Raymond R. Kingman, Jr. (5) ..... 1996 32,000 0 900(6) 0 141,253(7)
Chairman of the Board, 1995 108,000 0 4,708(6) 100,000 66(4)
President and Chief Executive
Officer
Donald B. Witmer (8) ............ 1996 120,000 0 30,000(9) 50,000 251(4)
Chief Operating Officer, Chief 1995 19,845(9) 0 5,000(9) 135,000 0
Financial Officer, Secretary
and Director
William G. Pryor ................ 1996 104,950 0 0 0 87(4)
Vice President of Development 1995 92,500 0 0 100,000 87(4)
</TABLE>
- ------------------------
(1) Mr. Ambrose served as the Company's Chief Executive Officer from April 22,
1996 through March 25, 1997.
(2) Represents a signing bonus of $25,000.
(3) Represents a $500 per month car allowance.
(4) Represents life insurance premiums paid by the Company with respect to
insurance policies on the lives of Messrs. Ambrose, Kingman, Witmer and
Pryor.
(5) Mr. Kingman resigned as President and Chief Executive Officer and a director
of the Company, effective April 5, 1996.
(6) Represents a $300 per month car allowance.
(7) Represents a $22 life insurance premium and a severance payment of $141,231.
(8) Mr. Witmer joined the Company in November 1995 and resigned as Chief
Financial Officer in June 1997 and resigned as director of the Company in
July 1997.
(9) Represents a $2,000 per month housing allowance and a $500 per month car
allowance.
(10) Mr. Pryor resigned as Vice President of Development in October 1997.
5
<PAGE>
STOCK OPTION INFORMATION
The following table contains information concerning stock option grants made
to the Named Officers during the fiscal year ended December 31, 1996. No stock
appreciation rights were granted to these individuals during such year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING % OF TOTAL OPTIONS GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN FISCAL YEAR PRICE EXPIRATION
NAME GRANTED(#) INDIVIDUAL GRANTS(1) ($/SH)(2) DATE
- ------------------------------------------------ ------------ ----------------------------- ----------- ----------
<S> <C> <C> <C> <C>
John J. Ambrose................................. 145,000 35.3% $ 9.50 04/21/06
Raymond R. Kingman, Jr.......................... -- 0% -- --
Donald B. Witmer................................ 10,000 2.4% 9.50 04/21/06
40,000 9.7% 7.50 11/03/06
William G. Pryor................................ -- 0% -- --
</TABLE>
- ------------------------
(1) Each of the options listed in the table is immediately exercisable. The
shares purchasable thereunder are subject to repurchase by the Company at
the original exercise price paid per share upon the optionee's cessation of
service prior to vesting in such shares. The repurchase right lapses and the
optionee vests in a series of equal monthly installments over thirty-six
months of service commencing on the date of grant of the option. These
options were granted at an exercise price equal to the fair market value of
the Company's Common Stock as determined by the Board of Directors of the
Company on the date of grant. Each option has a maximum term of ten (10)
years, subject to earlier termination in the event of the optionee's
cessation of service with the Company. Upon optionee's cessation of service
with the Company, all unvested options immediately terminate.
(2) In March 1997, the Board of Directors approved a repricing of all options
granted under the Company's stock option plans that were outstanding on such
date and had an exercise price in excess of the fair market value on such
date of $2.25 per share. This option repricing resulted in the cancellation
of all the options granted in the last fiscal year to the Named Officers and
a regrant of options for the same number of shares at an exercise price of
$2.25 per share.
(3) The exercise price may be paid in cash, in shares of the Company's Common
Stock valued at fair market value on the exercise date or through a cashless
exercise procedure involving a same-day sale of the purchased shares. The
Company may also finance the option exercise by loaning the optionee
sufficient funds to pay the exercise price for the purchased shares,
together with any federal and state income tax liability incurred by the
optionee in connection with such exercise.
6
<PAGE>
The following table sets forth information concerning option holdings for
the fiscal year ended December 31, 1996 with respect to each of the Named
Officers. No stock appreciation rights were exercised during such year or were
outstanding at the end of that year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL YEAR IN-THE-MONEY OPTIONS
SHARES END(#)(1) AT FISCAL YEAR END(2)
ACQUIRED ON VALUE -------------------------- --------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John J. Ambrose................. 0 0 145,000 0 0 0
Raymond R. Kingman, Jr.......... 72,000 379,517 5,894 0 4,028 0
Donald B. Witmer................ 0 0 185,000 0 337,500 0
William G. Pryor................ 0 0 101,894 0 250,000 0
</TABLE>
- ------------------------
(1) Each of the options listed in the table is immediately exercisable. The
shares purchasable thereunder are subject to repurchase by the Company at
the original exercise price paid per share upon the optionee's cessation of
service prior to vesting in such shares. The repurchase right lapses and the
optionee vests in a series of equal monthly installments over thirty-six
months of service commencing on the date of grant of the option. These
options were granted at an exercise price equal to the fair market value of
the Company's Common Stock as determined by the Board of Directors of the
Company on the date of grant. Each option has a maximum term of ten (10)
years, subject to earlier termination in the event of the optionee's
cessation of service with the Company.
(2) Based on the closing price per share of the Company's Common Stock as listed
on the Nasdaq National Market as of December 31, 1996 of $6.00, less the per
share exercise price.
7
<PAGE>
PROPOSAL 1: TO AMEND THE COMPANY'S ARTICLES OF
INCORPORATION TO CHANGE THE COMPANY'S NAME
In October 1997, the Board of Directors of the Company (the "Board")
unanimously adopted a resolution approving an amendment of the Company's
Articles of Incorporation to change the Company's name to "Site Technologies,
Inc." Pursuant to the proposed amendment, Article I of the Company's Articles of
Incorporation would be amended and restated to read as follows:
"The name of this corporation is Site Technologies, Inc."
The Company's shareholders are being asked to approve such amendment. The
Board believes it is in the best interest of the Company to change its name to
reflect the Company's new business objective of becoming a leading provider of
scalable World Wide Web ("Web") site development and management solutions for
Web based business environments. In light of the foregoing, the Company has been
doing business as Site Technologies, Inc. since October 1997.
REQUIREMENT FOR SHAREHOLDER APPROVAL; RECOMMENDATION OF THE BOARD OF DIRECTORS
At the Special Meeting, the Shareholders are being asked to approve the
amendment to the Company's Articles of Incorporation to change the Company's
name to "Site Technologies, Inc." The approval of the holders of a majority of
the shares of Common Stock entitled to vote at the special meeting will be
required to approve the adoption of the amendment. Both abstentions and broker
non-votes will have the same effect as votes against this proposal. Upon
majority approval, the amendment of the Company's Articles of Incorporation is
expected to become effective on or about January 1, 1998, upon the filing of the
amendment with the Secretary of State of California.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
APPROVAL OF PROPOSAL 1
PROPOSAL 2: APPROVAL OF AMENDMENTS TO THE 1995 STOCK PLAN
(AS AMENDED DECEMBER, 1997)
The shareholders are being asked to vote on a proposal to approve five
amendments to the DeltaPoint, Inc. 1995 Stock Option Plan (the "Option Plan").
The first amendment increases the number of shares of Common Stock available for
issuance under the Option Plan by 1,200,000 shares to a total of 2,400,000
shares of Common Stock. The second amendment will provide a limit on the maximum
number of shares of Common Stock that may be granted annually as an option or
stock appreciation right ("SAR") to a single employee under the Option Plan of
500,000 shares of Common Stock and that in the first year of employment an
employee may also be granted an option of SAR for an additional 400,000 shares
of Common Stock (the "Share Limit"). Presently, the Option Plan provides that no
individual participating in the Option Plan may receive options or SARs for more
than 360,000 shares over the term of the Option Plan (the "Term Share Limit").
If the amendments are approved, the Share Limit will replace the Term Share
Limit. The third amendment will increase the number of shares of Common Stock
subject to option or stock appreciation rights that will be granted to new
members of the Company's Board of Directors from a one-time grant of 20,000
shares of Common Stock to a one-time grant of 50,000 shares of Common Stock. The
fourth amendment will increase the number of shares of Common Stock subject to
option or stock appreciation rights that are granted annually to each
non-employee member of the Board of Directors under the automatic grant portion
of the Option Plan by 1,500 shares to 2,500 shares of Common Stock. The fifth
amendment will allow discretionary grants of stock options to be made to all
non-employee members of the Board of Directors of the Company. The Board adopted
the amendments on December 5, 1997, subject to shareholder approval at the
Special Meeting.
The Board of Directors believes that the increase in the number of shares
reserved under the Option Plan and the increase in the Share Limit are necessary
in order to enhance the Company's ability to attract
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<PAGE>
the best available talent for key positions in the Company. Allowing for
discretionary grants to non-employee directors updates the Option Plan for
recent changes made in the securities laws and provides the Company with greater
flexibility with respect to director compensation. The increase in the option
grants to non-employee directors is intended to adjust these grants for the
increase in the Company's capitalization. The original automatic initial stock
option grants constituted approximately 1% of the Company's outstanding Common
Stock at the time of adoption. The increase in the automatic initial stock
option grants will restore the grants to approximately 0.60% of the Company's
outstanding capitalization.
SUMMARY OF THE 1995 OPTION PLAN (AS AMENDED)
GENERAL. The Company established the Option Plan to provide a means whereby
employees, officers, directors, consultants and independent advisers of the
Company or parent or subsidiary corporations may be given an opportunity to
purchase shares of Common Stock. The Option Plan was adopted by the Board of
Directors (the "Board") on November 8, 1995 and approved by the shareholders in
December 1995. The Board believes that option grants under the Option Plan play
an important role in the Company's efforts to attract, employ, and retain
employees, directors and consultants of outstanding ability.
The principal terms and provisions of the Option Plan, as amended,
(including the proposed amendments above) are summarized below. The summary,
however, is not intended to be a complete description of all the terms of the
Option Plan. A copy of the Option Plan will be furnished by the Company to any
shareholder upon written request to the Chief Executive Officer at the executive
offices in Scotts Valley, California.
STRUCTURE. The Option Plan is divided into two separate components: (i) the
Discretionary Option Grant Program under which employees, non-employee directors
and consultants may, at the discretion of the Compensation Committee, be granted
options to purchase shares of Common Stock, and (ii) the Automatic Option Grant
Program under which option grants will automatically be made at periodic
intervals to eligible non-employee directors to purchase shares of Common Stock.
ADMINISTRATION. The Compensation Committee of the Board, which is comprised
of two (2) or more Board members ("Committee"), administers the Option Plan.
Committee members serve for such period of time as the Board may determine. No
Board member may serve on the Committee if he or she has received an option
grant or stock award under the Option Plan or under any other stock plan of the
Company or its parent or subsidiary corporations within the twelve (12) month
period preceding his or her appointment to the Committee, other than grants
under the Automatic Option Grant Program. The Option Plan may also be
administered with respect to optionees who are not executive officers subject to
the short-swing profit rules of federal securities laws by the Board or a
secondary committee comprised of one or more Board members.
The Committee (or Board or secondary committee to the extent acting as plan
administrator) has full authority (subject to the express provisions of the
Option Plan) to determine the eligible individuals who are to receive grants
under the Option Plan, the number of shares to be covered by each granted
option, the date or dates on which the option is to become exercisable, the
maximum term for which the Option is to remain outstanding, whether the granted
option will be an incentive stock option ("Incentive Option") which satisfies
the requirements of Section 422 of the Internal Revenue Code ("Code") or a
non-statutory option not intended to meet such requirements and the remaining
provisions of the option grant.
ELIGIBILITY. Employees (including officers), consultants and independent
contractors who render services to the Company or its subsidiary corporations
(whether now existing or subsequently established) are eligible to receive
option grants under the Discretionary Option Grant Program. A non-employee
member of the Board or the board of any parent or subsidiary corporation is also
eligible for option grants under the Discretionary Option Grant Program.
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<PAGE>
SECURITIES SUBJECT TO OPTION PLAN. The maximum number of shares of Common
Stock which may be issued over the term of the Option Plan shall not exceed
2,400,000 shares. Such authorized share reserve is comprised of (i) the
1,200,000 shares authorized by the Board under the Option Plan, and subsequently
approved by the shareholders, plus (ii) an additional increase of 1,200,000
shares which is the subject of this Proposal 2.
Section 162(m) of the Code places limits on the deductibility for federal
income tax purposes of compensation paid to certain executive officers of the
Company. In order to preserve the Company's ability to deduct the compensation
income associated with options and stock appreciation rights granted to such
persons, the Option Plan provides that no eligible person may be granted options
and separately exercisable SARs to purchase more than 500,000 shares annually of
Common Stock under the Option Plan. In addition, notwithstanding this limit, in
connection with an eligible person's initial employment with the Company, he or
she may be granted options or separately exercisable SARs to purchase up to an
additional 400,000 shares of Common Stock.
Should an option expire or terminate for any reason prior to exercise in
full, the shares subject to the portion of the option not so exercised will be
available for subsequent option grants under the Option Plan.
DISCRETIONARY OPTION GRANT PROGRAM
PRICE AND EXERCISABILITY. The option exercise price per share in the case
of an Incentive Option may not be less than one hundred percent (100%) of the
fair market value of the Common Stock on the grant date and, in the case of a
non-statutory option, eighty-five percent (85%) of the fair market value of the
Common Stock on the grant date. The exercise price of an Incentive Option
granted to a 10% shareholder may not be less than 110% of the fair market value
of the Common Stock on the date of the option grant. Options granted under the
Discretionary Option Grant Program become exercisable at such time or times and
during such period as the Committee may determine and set forth in the
instrument evidencing the option grant.
The means of payment for shares issued upon exercise of an option is
specified in each option agreement. The Plan permits payment to be made by cash,
check, promissory note (upon such terms and conditions as established by the
Committee), other shares of Common Stock of the Company (with some
restrictions), or a "cashless" exercise.
No optionee is to have any shareholder rights with respect to the option
shares until the optionee has exercised the option, paid the exercise price and
become a holder of record of the shares. Options are not assignable or
transferable other than by a qualified domestic relations order or by will or
the laws of descent and distribution, and during the optionee's lifetime, the
option may be exercised only by the optionee.
TERMINATION OF SERVICE. If an optionee's employment or consulting
relationship terminates for any reason (other than death), then all options held
by the optionee under the Plan expire on the earlier of (i) the date set forth
in his or her option agreement or (ii) the expiration date of such option. To
the extent the option is vested and exercisable at the time of such termination,
the optionee may exercise all or part of his or her option at any time before
termination. Each such option will normally, during such limited period, be
exercisable only to the extent of the number of shares of Common Stock in which
the optionee is vested at the time of cessation of service. The Committee has
complete discretion to extend the period of time that outstanding options may be
exercised or to accelerate the exercisability of such options in whole or in
part. Such discretion may be exercised at any time while the options remain
outstanding, whether before or after the optionee's actual cessation of service.
The shares of Common Stock acquired upon the exercise of one or more options
may be subject to repurchase by the Company at the original exercise price paid
per share upon the optionee's cessation of service prior to vesting of such
shares. The Committee has complete discretion in establishing the vesting
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<PAGE>
schedule to be in effect for any such unvested shares and may cancel the
Company's outstanding repurchase rights with respect to those shares at any
time, thereby accelerating the vesting of the shares subject to the canceled
rights.
If an optionee's service terminates as a result of death, then the
optionee's estate or the person who acquires the right to exercise the option by
bequest or inheritance may exercise all or part of the option at any time before
such expiration to the extent that the option was vested and exercisable at the
time of such termination.
If an optionee's service terminates for misconduct, then all options held by
the optionee shall terminate immediately.
INCENTIVE OPTIONS. Incentive Options may only be granted to individuals who
are employees of the Company or its parent or subsidiary corporations. During
any calendar year, the aggregate fair market value (determined as of the grant
date(s)) of the Common Stock for which one or more options granted to any
employee under the Option Plan (or any other option plan of the Company or its
parent or subsidiary corporations) may for the first time become exercisable as
Incentive Options shall not exceed one hundred thousand dollars ($100,000).
LIMITED STOCK APPRECIATION RIGHTS. One or more officers of the Company
subject to the short-swing profit restrictions of the federal securities laws
may, at the discretion of the Committee, be granted limited stock appreciation
rights in connection with their option grants under the Option Plan. Any option
with such a limited stock appreciation right in effect for at least six (6)
months may be unconditionally surrendered, to the extent exercisable for one or
more vested option shares, upon the successful completion of a hostile tender
offer for more than 50% of the Company's outstanding voting stock. In return,
the officer will be entitled to a cash distribution from the Company in an
amount per canceled option share equal to the excess of (i) the highest price
per share of Common Stock paid in the tender offer over (ii) the option exercise
price.
TANDEM STOCK APPRECIATION RIGHTS. The Committee is authorized to issue
tandem stock appreciation rights in connection with option grants under the
Discretionary Option Grant Program. Tandem stock appreciation rights provide the
holders with the right to surrender their options for an appreciation
distribution from the Company equal in amount to the excess of (a) the fair
market value of the vested shares of Common Stock subject to the surrendered
option on the surrender date over (b) the aggregate exercise price payable for
such shares. Such appreciation distribution may, at the discretion of the
Committee, be made in cash or in shares of Common Stock.
AUTOMATIC OPTION GRANT PROGRAM
Under the Automatic Option Grant Program, non-employee Board members will
receive option grants at specified intervals over their period of Board service.
These special grants may be summarized as follows:
- Each individual who is a non-employee Board member on the date of the
Company's initial public offering and each individual who first becomes a
non-employee Board member after the date of such initial public offering,
whether through election by the shareholders or appointment by the Board,
will automatically be granted, at the time of the offering or at the time
of such initial election or appointment, a nonstatutory stock option to
purchase 50,000 shares of Common Stock. In no event may a non-employee
Board member receive more than one initial 50,000 share option grant.
- On the date of each Annual Shareholders Meeting beginning with the 1997
Annual Meeting, each individual who continues to serve as a director,
whether or not such individual is standing for re-election, will receive
an additional grant of a nonstatutory stock option under the Option Plan
to
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<PAGE>
purchase 2,500 shares of Common Stock, provided such individual has been a
member of the Board for at least six months.
TERMS AND CONDITIONS. Each option grant under the Automatic Option Grant
Program will be subject to the following terms and conditions:
1. The option price per share will be equal to the fair market value per
share of Common Stock on the automatic grant date and each option is to have a
maximum term of ten years from the grant date.
2. Each automatic option grant will be immediately exercisable for all of
the option shares; the shares purchasable under the option shall be subject to
repurchase at the original exercise price in the event the optionee's Board
service should cease prior to full vesting. With respect to each grant, the
repurchase right shall lapse and the optionee vest in a series of three (3)
equal and successive annual installments over the optionee's period of continued
service as a Board member, with the first such installment to vest upon the
optionee's completion of one (1) year of Board service, measured from the option
grant date.
3. The option will remain exercisable for a 12-month period following the
optionee's termination of service as a Board member for any reason and may be
exercised following the Board member's death by the personal representatives of
the optionee's estate or the person to whom the grant is transferred by the
optionee's will or the laws of inheritance. In no event, however, may the option
be exercised after the expiration date of the option term. During the applicable
exercise period, the option may not be exercised for more than the number of
shares (if any) for which it is vested and exercisable at the time of the
optionee's cessation of Board service.
4. The option shares will become fully vested in the event of a Corporate
Transaction (as defined below) or a Change in Control (as defined below). The
option shares will become fully vested in the event of the optionee's cessation
of Board service by reason of death or permanent disability.
5. Upon the occurrence of a hostile tender offer, the optionee shall have a
thirty (30) day period in which to surrender to the Company each automatic
option which has been in effect for at least six (6) months and the optionee
will in return be entitled to a cash distribution from the Company in an amount
per canceled option share (whether or not the optionee is otherwise vested in
those shares) equal to the excess of (i) the highest reported price per share of
Common Stock paid in the tender offer over (ii) the option exercise price
payable per share.
6. Option grants under the Automatic Option Grant Program will be made in
strict compliance with the express provisions of that program. The remaining
terms and conditions of the option will in general conform to the terms
described below for option grants under the Discretionary Option Grant Program
and will be incorporated into the option agreement evidencing the automatic
grant.
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<PAGE>
GENERAL PROVISIONS
ACCELERATION OF OPTIONS/TERMINATION OF REPURCHASE RIGHTS. Upon the
occurrence of either of the following transactions (a "Corporate Transaction"):
(i) the sale, transfer or other disposition of all or substantially all
of the Company's assets in complete liquidation or dissolution of the
Company, or
(ii) a merger or consolidation in which securities possessing more than
fifty percent (50%) of the total combined voting power of the Company's
outstanding securities are transferred to a person or persons different from
the persons holding those immediately prior to such transaction,
each outstanding option under the Option Plan will, immediately prior to the
effective date of the Corporate Transaction, become fully exercisable for all of
the shares at the time subject to such option. However, an outstanding option
shall not accelerate if and to the extent: (a) such option is, in connection
with the Corporate Transaction, either to be assumed by the successor
corporation (or parent) or to be replaced with a comparable option to purchase
shares of the capital stock of the successor corporation (or parent), (b) such
option is to be replaced with a cash incentive program of the successor
corporation which preserves the spread existing on the unvested option shares at
the time of the Corporate Transaction and provides for subsequent payout in
accordance with the same vesting schedule applicable to such option or (c) the
acceleration of such option is subject to other limitations imposed by the
Committee at the time of the option grant. Immediately following the
consummation of the Corporate Transaction, all outstanding options will
terminate and cease to be exercisable, except to the extent assumed by the
successor corporation.
Also upon a Corporate Transaction, the Company's outstanding repurchase
rights applicable to options granted under the Discretionary Option Grant
Program will terminate automatically unless assigned to the successor
corporation.
Any options which are assumed or replaced in the Corporate Transaction and
do not otherwise accelerate at that time shall automatically accelerate (and any
of the Company's outstanding repurchase rights which do not otherwise terminate
at the time of the Corporate Transaction shall automatically terminate and the
shares of Common Stock subject to those terminated rights shall immediately vest
in full) in the event the optionee's service should subsequently terminate by
reason of an involuntary termination within twelve (12) months following the
effective date of such Corporate Transaction. Any options so accelerated shall
remain exercisable for fully-vested shares until the earlier of (i) the
expiration of the option term or (ii) the expiration of the one (1)-year period
measured from the effective date of the involuntary termination.
Upon the occurrence of the following transactions ("Change in Control"):
(i) any person or related group of persons (other than the Company or a
person that directly or indirectly controls, is controlled by, or is under
common control with, the Company) acquires beneficial ownership of more than
fifty percent (50%) of the Company's outstanding voting stock without the
Board's recommendation, or
(ii) there is a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the Board
members ceases by reason of a proxy contest, to be comprised of individuals
who (a) have been Board members continuously since the beginning of such
period or (b) have been elected or nominated for selection as Board members
by a majority of the Board in (a) who were still in office at the time such
election or nomination was approved by the Board,
the Committee has the discretion to accelerate outstanding options and terminate
the Company's outstanding repurchase rights. The Committee also has the
discretion to accelerate outstanding options
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<PAGE>
and terminate the Company's outstanding repurchase rights upon the subsequent
termination of the optionee's service within a specified period following the
Change in Control.
The acceleration of options in the event of a Corporate Transaction or
Change in Control may be seen as an anti-takeover provision and may have the
effect of discouraging a merger proposal, a takeover attempt or other efforts to
gain control of the Company.
VALUATION. For purposes of establishing the option price and for all other
valuation purposes under the Option Plan, the fair market value of a share of
Common Stock on any relevant date will be the closing price per share of Common
Stock on that date, as such price is reported on Nasdaq.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event any change is made
to the Common Stock issuable under the Option Plan by reason of any stock split,
stock dividend, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Company's receipt
of consideration, appropriate adjustments will be made to (i) the maximum number
and class of securities issuable under the Option Plan, (ii) the maximum number
and class of securities for which any one person may be granted options and
separately exercisable stock appreciation rights per calendar year, (iii) the
number and class of securities for which automatic option grants are to be
subsequently made per director under the Automatic Option Grant Program and (iv)
the number and class of securities and the exercise price per share in effect
under each outstanding option in order to prevent the dilution or enlargement of
benefits thereunder.
Each outstanding option which is assumed in connection with a Corporate
Transaction will be appropriately adjusted to apply and pertain to the number
and class of securities which would otherwise have been issued, in consummation
of such Corporate Transaction, to the option holder had the option been
exercised immediately prior to the Corporate Transaction. Appropriate
adjustments will also be made to the option price payable per share and to the
class and number of securities available for future issuance under the Option
Plan on both an aggregate and a per-participant basis.
AMENDMENT AND TERMINATION OF PLAN. The Board may amend or modify the Option
Plan in any and all respects whatsoever. However, the Board may not, without the
approval of the Company's shareholders, (i) materially increase the maximum
number of shares issuable under the Option Plan (except in connection with
certain changes in capitalization), (ii) materially modify the eligibility
requirements for option grants, or (iii) otherwise materially increase the
benefits accruing to participants under the Option Plan.
Unless sooner terminated by the Board, the Option Plan will in all events
terminate in 2005. Any options outstanding at the time of such termination will
remain in force in accordance with the provisions of the instruments evidencing
such grants.
NEW PLAN BENEFITS AND OPTION GRANT TABLE
Because the Option Plan is discretionary, benefits to be received by
individual optionees are not determinable. The table below shows, as to each of
the executive officers named in the Summary Compensation Table and the various
indicated groups, (i) the number of shares of Common Stock for
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<PAGE>
which options have been granted under the Option Plan for the one (1)-year
period ending December 31, 1996 and (ii) the weighted average exercise price per
share.
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE EXERCISE
NUMBER OF PRICE OF
NAME AND POSITION OPTION SHARES GRANTED OPTIONS
- -------------------------------------------------------------------------------- ------------- -------------------
<S> <C> <C>
Raymond R. Kingman, Jr.(1) ..................................................... 0 0
President and Chief Executive Officer
John J. Ambrose(2) ............................................................. 145,000 $ 2.25
Chief Executive Officer
William G. Pryor (3) ........................................................... 0 0
Vice President of Development
Donald B. Witmer (4) ........................................................... 50,000 2.25
Chief Operating Officer and Chief Financial Officer
All current executive officers as a group 4 persons............................. 420,000 2.25
All current directors (other than executive officers) as a group 2 persons...... 30,000 7.50
All employees, including current officers who are not executive officers, as a 410,344 2.25
group 47 persons..............................................................
</TABLE>
- ------------------------
(1) Mr. Kingman terminated from employment with the Company, effective April 5,
1996.
(2) Mr. Ambrose terminated employment with the Company, effective March 25,
1997.
(3) Mr. Pryor terminated employment with the Company, effective October 9, 1997.
(4) Mr. Witmer terminated employment with the Company, effective June 16, 1997.
FEDERAL INCOME TAX CONSEQUENCES
Options granted under the Option Plan may be either incentive stock options
that satisfy the requirements of Section 422 of the Code or non-statutory
options that are not intended to meet such requirements. The federal income tax
treatment for the two types of options differs as follows:
INCENTIVE STOCK OPTIONS. No taxable income is recognized by the optionee at
the time of the option grant, and no taxable income is generally recognized at
the time the option is exercised. However, the spread on an Incentive Stock
Option (the excess of the fair market value of the purchased shares at the time
of exercise over the exercise price paid for those shares) is normally included
in the optionee's alternative minimum taxable income at the time of exercise and
may be subject to the alternative minimum tax. In addition, the optionee will
recognize taxable income in the year in which the purchased shares are sold or
otherwise made the subject of disposition.
For federal tax purposes, dispositions are divided into two categories: (i)
qualifying and (ii) disqualifying. The optionee will make a qualifying
disposition of the purchased shares if the sale or other disposition of such
shares is made after the optionee has held the shares for more than two (2)
years after the grant date of the option and more than one (1) year after the
exercise date. If the optionee fails to satisfy either of these two holding
periods prior to the sale or other disposition of the purchased shares, then a
disqualifying disposition will result.
Upon a qualifying disposition of the shares, the optionee will recognize
either long-term capital gain or loss. If there is a disqualifying disposition
of the shares, then the excess of (i) the lesser of the sales price or the fair
market value of those shares on the date the option was exercised over (ii) the
exercise price paid for the shares will be taxable as ordinary income. Any
additional gain recognized upon the disposition
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<PAGE>
will be a capital gain. Any loss on a disqualifying disposition will be a
capital loss. Presently there is no withholding requirement for an Incentive
Stock Option.
If the optionee makes a disqualifying disposition of the purchased shares,
then the Company will be entitled to an income tax deduction for the taxable
year in which such disposition occurs equal to the amount of ordinary income the
optionee recognizes. In no other instance will the Company be allowed a
deduction with respect to the optionee's disposition of the purchased shares.
The Company anticipates that any compensation deemed paid by the Company upon
one or more disqualifying dispositions of incentive stock option shares by the
Company's executive officers will remain deductible by the Company and will not
have to be taken into account for purposes of the $1 million deduction
limitation which covers certain executive officers of the Company.
NON-STATUTORY STOCK OPTIONS. No taxable income is recognized by an optionee
upon the grant of a non-statutory option. The optionee will in general recognize
ordinary income in the year in which the option is exercised equal to the excess
of the fair market value of the purchased shares on the exercise date over the
exercise price paid for the shares, and if the optionee is an employee the
optionee will be required to satisfy the tax withholding requirements applicable
to such income.
Special provisions of the Internal Revenue Code apply to the acquisition of
Common Stock under a non-statutory option if the purchased shares are subject to
repurchase by the Company. These special provisions may be summarized as
follows:
(i) If the shares acquired upon exercise of the non-statutory option are
subject to repurchase by the Company at the original exercise price in the
event of the optionee's termination of service prior to vesting in such
shares, the optionee will not recognize any taxable income at the time of
exercise but will have to report as ordinary income, as and when the
Company's repurchase right lapses, an amount equal to the excess of (a) the
fair market value of the shares on the date such repurchase right lapses
with respect to such shares over (b) the exercise price paid for the shares.
(ii) The optionee may, however, elect under Section 83(b) of the
Internal Revenue Code to include as ordinary income in the year of exercise
of the non-statutory option an amount equal to the excess of (a) the fair
market value of the purchased shares on the exercise date (determined as if
the shares were not subject to the Company's repurchase right) over (b) the
exercise price paid for such shares. If the Section 83(b) election is made,
the optionee will not recognize any additional income as and when the
repurchase right lapses.
The Company will be entitled to a business expense deduction equal to the
amount of ordinary income recognized by the optionee with respect to the
exercised non-statutory option. The deduction will in general be allowed for the
taxable year of the Company in which such ordinary income is recognized by the
optionee. The Company anticipates that the compensation deemed paid by the
Company upon the exercise of non-statutory options with exercise prices equal to
the fair market value of the option shares on the grant date will remain
deductible by the Company and will not have to be taken into account for
purposes of the $1 million deduction limitation which covers certain executive
officers of the Company.
STOCK APPRECIATION RIGHTS. No income will be recognized by a recipient in
connection with the grant of an SAR. When the SAR is exercised, the recipient
generally will be required to include as taxable ordinary income in the year of
exercise an amount equal to the sum of the amount of cash received and the fair
market value of any Common Stock received on the exercise. In the case of a
recipient who is also an employee, any income recognized on exercise of a SAR
will constitute wages for which withholding will be required. The Company will
be entitled to a tax deduction in the same amount. If the optionee receives
Common Stock upon the exercise of a SAR, any gain or loss on the subsequent sale
of such stock will be treated in the same manner as discussed above under
"Nonstatutory Stock Options."
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION
UPON OPTIONEES, HOLDERS OF STOCK APPRECIATION RIGHTS, AND THE COMPANY WITH
16
<PAGE>
RESPECT TO THE GRANT AND EXERCISE OF OPTIONS AND STOCK APPRECIATION RIGHTS UNDER
THE PLAN. IT DOES NOT PURPORT TO BE COMPLETE, AND DOES NOT DISCUSS THE TAX
CONSEQUENCES OF THE EMPLOYEE'S OR CONSULTANT'S DEATH OR THE PROVISIONS OF THE
INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE
EMPLOYEE OR CONSULTANT MAY RESIDE.
REQUIREMENT FOR SHAREHOLDER APPROVAL; RECOMMENDATION OF THE BOARD OF DIRECTORS
At the Special Meeting, the shareholders are being asked to approve the
amendments to the Option Plan. The affirmative vote of the holders of a majority
of the shares present or represented by proxy at the Special Meeting will be
required to approve the amendments to the Option Plan. Abstentions are counted
as votes cast and, accordingly, have the same effect as votes against the
proposal, whereas broker non-votes are not counted as votes cast and therefore
once a quorum is present, will have no effect on the proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
APPROVAL OF PROPOSAL 2
TRANSACTION OF OTHER BUSINESS
The Board of Directors of the Company knows of no other matters which may be
brought before the Special Meeting. If any other matters properly come before
the Special Meeting, or any adjournment thereof, it is the intention of the
persons named in the accompanying form of Proxy to vote the Proxy on such
matters in accordance with their best judgment.
THE BOARD OF DIRECTORS
Scotts Valley, California
December 22, 1997
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<PAGE>
DELTAPOINT, INC.
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 16, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of DELTAPOINT, INC., a California corporation
(the "Company"), hereby acknowledges receipt of the Notice of Special Meeting
of Shareholders and Proxy Statement, each dated December 22, 1997, and hereby
appoints Jeffrey F. Ait and Patrick Grady as proxy attorneys-in-fact, with
full power to each of substitution, on behalf of the undersigned, to represent
the undersigned at the Special Meeting of Shareholders of DELTAPOINT, INC. to
be held at the offices of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, 650 Page Mill Road, Palo Alto, California 94304 on Friday,
January 16, 1998 at 10:00 a.m., local time, and at any adjournment or
adjournments thereof, and to vote all shares of Common Stock that the
undersigned would be entitled to vote if then and there personally present, on
all matters set forth on the reverse side hereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE HEREIN. IF NO SPECIFICATION IS INDICATED, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS ON THE
REVERSE SIDE HEREOF AND FOR SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING AS THE PROXY HOLDERS DEEM ADVISABLE.
1. To approve an amendment to the Company's Articles of Incorporation to
change the Company's name to "Site Technologies, Inc."
/ / FOR / / WITHHELD
2. To approve five amendments to the Company's 1995 Stock Option Plan
("Option Plan") to (a) increase the number of shares of Common Stock available
for issuance under the Option Plan by 1,200,000 shares to a total of 2,400,000
shares of Common Stock; (b) provide that the maximum number of shares subject
to option or stock appreciation rights that may be granted annually to a
single employee under the Option Plan be 500,000 shares of Common Stock and
that, in the first year of employment, an employee may receive an additional
grant of up to a maximum of 400,000 shares of Common Stock subject to option
or stock appreciation rights (instead of the present Option Plan provision
which provides that the maximum number of shares subject to option or stock
appreciation rights that may be granted to a person
SEE REVERSE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
<PAGE>
participating in the Option Plan over the term of the Option Plan is 360,000);
(c) increase the number of shares of Common Stock subject to option or stock
appreciation rights that will be granted to new members of the Company's Board
of Directors from a one-time grant of 20,000 shares of Common Stock to a
one-time grant of 50,000 shares of Common Stock; (d) increase the number of
shares of Common Stock subject to option or stock appreciation rights that are
granted annually to each non-employee member of the Board of Directors under the
automatic grant portion of the Option Plan by 1,500 shares to 2,500 shares of
Common Stock; and (e) allow discretionary grants of stock options to be made to
all non-employee members of the Board of Directors of the Company.
/ / FOR / / WITHHELD
3. To transact such other business as may properly come before the Special
Meeting and any adjournment thereof.
/ / FOR / / WITHHELD
<TABLE>
<S> <C>
MARK HERE FOR
ADDRESS CHANGE
AND NOTE NEW
ADDRESS IN SPACE
TO THE LEFT
<CAPTION>
/ /
<CAPTION>
</TABLE>
Please mark, sign, date and
return the proxy card promptly
using the enclosed envelope.
NOTE: Please sign exactly as
name appears on your
stock certificate. If the
stock is registered in
the names of two or more
persons, each should
sign. Executors,
administrators, trustees,
guardians, attorneys and
corporate officers should
insert their titles.
Signature: ________________ Date: __
Signature: ________________ Date: __
