SOLOPOINT INC, DEFS14A, 1999-10-12

SOLOPOINT INC
DEFS14A, 1999-10-12
COMMUNICATIONS EQUIPMENT, NEC

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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 Section 240.14a-11(c) or Section 240.14a-12

SOLOPOINT, 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.

[_]$125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.

[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
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SOLOPOINT, INC.

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To be held on October 26, 1999

TO THE SHAREHOLDERS:

NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of SoloPoint,
Inc., a California corporation (the "Company"), will be held on Tuesday,
October 26, 1999 at 11:00 a.m., local time, at the Company's offices located
at 130-B Knowles Drive, Los Gatos, California 95032 for the following
purposes:

1. To increase the number of shares of Common Stock reserved for issuance
under the Company's 1993 Incentive Stock Plan from 949,250 to 1,549,250
shares;

2. To approve the amendment to the Company's Articles of Incorporation, and
to authorize the officers of the Company to take all necessary action,
to effect a one time, one-for-three reverse stock split of the Company's
outstanding Common Stock, if and when the Company's management
determines that such a reverse stock split is needed to ensure the
Company's compliance with the listing requirements of the Nasdaq
SmallCap Market;

3. To change the Company's name to "SoloPoint.com, Inc."; and

4. To transact such other business as may properly come before the meeting
or any adjournment thereof.

These items of business are more fully described in the Proxy Statement
accompanying this notice.

Only shareholders of record at the close of business on September 24, 1999
are entitled to notice of and to vote at the meeting.

All shareholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to sign
and return the enclosed Proxy as promptly as possible in the postage-prepaid
envelope enclosed for that purpose. Any shareholder attending the meeting may
vote in person even if the shareholder has returned a proxy.

By order of the Board of Directors

/s/ Michael J. O'Donnell

Michael J. O'Donnell
Secretary

Los Gatos, California
September 30, 1999

IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE
AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.

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SOLOPOINT, INC.

PROXY STATEMENT FOR
SPECIAL MEETING OF SHAREHOLDERS

INFORMATION CONCERNING SOLICITATION AND VOTING

General

The enclosed Proxy is solicited on behalf of Board of Directors of
SoloPoint, Inc., a California corporation (the "Company"), for use at the
Special Meeting of Shareholders (the "Special Meeting") to be held on Tuesday,
October 26, 1999, at 11:00 a.m., local time, or at any adjournment thereof,
for the purposes set forth in this Proxy Statement and in the accompanying
Notice of Special Meeting of Shareholders. The Special Meeting will be held at
the Company's principal executive offices located at 130-B Knowles Dr., Los
Gatos, California 95032. The Company's telephone number at that address is
(408) 364-8850.

These proxy solicitation materials were mailed on or about October 11, 1999
to all shareholders entitled to vote at the Special Meeting. The Company's
Board of Directors has unanimously approved the matters being submitted for
shareholder approval at the Special Meeting.

Record Date; Outstanding Shares

Shareholders of record at the close of business on September 24, 1999 (the
"Record Date") are entitled to notice of and to vote at the Special Meeting.
As of the Record Date, 4,981,284 shares of Common Stock were issued and
outstanding held of record by approximately 107 shareholders.

Revocability of Proxies

Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a
later date or by attending the Special Meeting and voting in person.

Voting and Solicitation

Except as provided below with respect to cumulative voting, each share of
Common Stock is entitled to one vote with respect to the matters set forth
herein. Every shareholder voting in the election of directors may cumulate
such shareholder's votes and give one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of votes to which
the shareholder's shares are entitled, or distribute the shareholder's votes
on the same principle among as many candidates as the shareholder thinks fit,
provided that votes cannot be cast for more than the number of directors to be
elected. However, no shareholder shall be entitled to cumulate votes unless
the candidate's name has been placed in nomination prior to the voting, and
the shareholder, or any other shareholder, has given notice at the Special
Meeting prior to the voting of the intention to cumulate such shareholder's
votes.

The cost of soliciting proxies will be borne by the Company. Proxies may be
solicited by certain of the Company's officers, directors and regular
employees, without compensation, personally or by telephone or telecopy.

Deadline for Receipt of Shareholder Proposals

Proposals which are intended to be presented by shareholders at the
Company's next annual meeting of shareholders, which is proposed to be held in
June 2000, must be received by the Company no later than December 31, 1999 in
order that they may be included in the proxy statement and form of proxy
relating to that meeting.
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PROPOSAL NO. 1

AMENDMENT OF 1993 INCENTIVE STOCK PLAN

General

The Company's 1993 Incentive Stock Plan (the "Incentive Plan"), was
originally adopted by the Board of Directors and approved by the shareholders
in 1993. The Incentive Plan provides for grants of incentive stock options,
nonstatutory stock options, and stock purchase rights to employees (including
employees who are officers) of the Company and its subsidiaries. The Incentive
Plan also provides for grants of nonstatutory stock options and stock purchase
rights to consultants. In September 1999, the Board of Directors approved an
amendment to the Incentive Plan increasing to a total of 1,549,250 the shares
of Common Stock reserved for issuance under the Incentive Plan. There are
currently 949,250 shares of Common Stock reserved for issuance under the
Incentive Plan. As of September 30, 1999, options to purchase 747,260 shares
were outstanding under the Incentive Plan and 171,693 shares remained
available for future grant. The Incentive Plan may be administered by the
Board of Directors or by a committee appointed by the Board. The Incentive
Plan is currently administered by the Board of Directors.

The shareholders are now being requested to consider and approve an
amendment to the Incentive Plan to increase the number of shares of Common
Stock reserved for issuance thereunder to a new total of 1,549,250 shares. The
primary purpose for the increase in shares is to attract and retain employees
as the Company continues the strategic implementation of its Internet
initiatives.

Summary of the Incentive Plan

The essential features of the Incentive Plan are summarized below. This
summary does not purport to be complete and is subject to, and qualified by
reference to, all provisions of the Incentive Plan, a copy of which is
available from the Company upon request.

General. The purpose of the Incentive Plan is to attract and retain the best
available personnel, to provide additional incentive to the employees and
consultants of the Company and to promote the success of the Company's
business. Options and stock purchase rights may be granted under the Incentive
Plan. Options granted under the Incentive Plan may be either "incentive stock
options," as defined in Section 422 of the Code, or nonstatutory stock
options.

Administration. The Incentive Plan may generally be administered by the
Board or a committee appointed by the Board. The administrators of the
Incentive Plan are referred to herein as the "Administrator."

Eligibility; Limitations. Nonstatutory stock options and stock purchase
rights may be granted under the Incentive Plan to employees, consultants and
directors of the Company. Incentive stock options may be granted only to
employees. The Administrator, in its discretion, selects the employees,
consultants and directors to whom options and stock purchase rights may be
granted, the time or times at which such options and stock purchase rights
shall be granted, and the number of shares subject to each such grant.

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 purchase rights granted to such
persons, the Incentive Plan provides that no employee may be granted, in any
fiscal year of the Company, options and stock purchase rights to purchase more
than 75,000 shares of Common Stock. Notwithstanding this limit, however, in
connection with an employee's initial employment, he or she may be granted
options or stock purchase rights to purchase up to an additional 75,000 shares
of Common Stock.

Terms and Conditions of Options. Each option is evidenced by a stock option
agreement between the Company and the optionee, and is subject to the
following additional terms and conditions:

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(a) Exercise Price. The Administrator determines the exercise price of
options at the time the options are granted. The exercise price of an
incentive stock option may not be less than 100% of the fair market value
of the Common Stock on the date such option is granted; provided, however,
the exercise price of an incentive stock option granted to a 10%
shareholder may not be less than 110% of the fair market value of the
Common Stock on the date such option is granted. The exercise price of a
nonstatutory stock option shall be determined by the Administrator. The
fair market value of the Common Stock is generally determined with
reference to the mean of the bid and asked prices of the Common Stock for
the date of grant as reported by the Wall Street Journal or the Nasdaq
National Market System.

(b) Exercise of Option; Form of Consideration. The Administrator
specifies in the option agreement when options become exercisable. The
means of payment for shares issued upon exercise of an option is specified
in each option agreement. The Incentive Plan permits payment to be made by
cash, check, promissory note, other shares of Common Stock of the Company
(with some restrictions), cashless exercise, any combination thereof,
reduction of any liability to optionee, or any other legal form of
consideration.

(c) Term of Option. The term of option may be no more than ten (10) years
from the date of grant; provided that in the case of an incentive stock
option granted to a 10% shareholder, the term of the option may be no more
than five (5) years from the date of grant. No option may be exercised
after the expiration of its term.

(d) Termination of Employment. If an optionee's employment or consulting
relationship terminates for any reason (other than death or disability),
then all options held by the optionee under the Incentive Plan expire on
the earlier of (i) the date set forth in his or her notice of grant (which
date in the case of an incentive stock option may not be more than three
(3) months after the date of such termination, and in the case of a
nonstatutory stock option, may not be more than six (6) months after the
date of such termination), or (ii) the expiration date of such option. To
the extent the option is exercisable at the time of the optionee's
termination, the optionee may exercise all or part of his or her option at
any time before it terminates.

(e) Disability. If an optionee's employment or consulting relationship
terminates as a result of disability, then all options held by such
optionee under the Incentive Plan expire (i) 6 months from the date of such
termination (or such longer period of time not exceeding 12 months as
determined by the Administrator), but only to the extent that the optionee
is entitled to exercise it on the date of termination (and in no event
later than the expiration of the term of the option as set forth in the
notice of grant). The optionee (or the optionee's estate or a person who
has acquired 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 exercisable at the time of such
termination.

(f) Death. In the event of an optionee's death: (i) during the optionee's
employment or consulting relationship with the Company where the optionee
has been in continuous status as an employee or consultant of the Company
since the date of the grant of the option, the option may be exercised, at
any time within 6 months of the date of death (but no later than the
expiration date of such option) by the optionee's estate or a person who
has acquired the right to exercise the option by bequest or inheritance,
but only to the extent that the optionee's right to exercise the option
would have accrued if he or she had remained an employee or consultant of
the Company 6 months after the date of death; or (ii) within 30 days (or
such other period of time not exceeding 3 months as determined by the
Administrator) after the optionee's employment or consulting relationship
with the Company terminates, the option may be exercised at anytime within
6 months (or such other period of time as determined by the Administrator)
following the date of death (but in no event later than the expiration date
of the option) by the optionee's estate or a person who has acquired the
right to exercise the option by bequest or inheritance, but only to the
extent of the optionee's right to exercise the option at the date of
termination.

(g) Nontransferability of Options. Options granted under the Incentive
Plan are not transferable other than by will or the laws of descent and
distribution, and may be exercisable during the optionee's lifetime only by
the optionee.

(h) Other Provisions. The stock option agreement may contain other terms,
provisions and conditions not inconsistent with the Incentive Plan as may
be determined by the Administrator.

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Stock Purchase Rights. A stock purchase right gives the purchaser a period
of no longer than 6 months from the date of grant to purchase Common Stock.
The purchase price of Common Stock purchased pursuant to a stock purchase
right is determined in the same manner as for nonstatutory stock options. A
stock purchase right is accepted by the execution of a restricted stock
purchase agreement between the Company and the purchaser, accompanied by the
payment of the purchase price for the shares. Unless the Administrator
determines otherwise, the restricted stock purchase agreement shall give the
Company a repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's employment or consulting relationship with the
Company for any reason (including death and disability). The purchase price
for any shares repurchased by the Company shall be the original price paid by
the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option lapses at a rate determined by
the Administrator. A stock purchase right is nontransferable other than by
will or the laws of descent and distribution, and may be exercisable during
the optionee's lifetime only by the optionee.

Adjustments Upon Changes in Capitalization. In the event that the stock of
the Company changes by reason of any stock split, reverse stock split, stock
dividend, combination, reclassification or other similar change in the capital
structure of the Company effected without the receipt of consideration,
appropriate adjustments shall be made in the number and class of shares of
stock subject to the Incentive Plan, the number and class of shares of stock
subject to any option or stock purchase right outstanding under the Incentive
Plan, and the exercise price of any such outstanding option or stock purchase
right.

In the event of a liquidation or dissolution, any unexercised options or
stock purchase rights will terminate. The Administrator may allow the
optionees to exercise their options as to all the stock covered by such
options fifteen (15) days prior to the consummation of the liquidation or
dissolution.

In connection with any merger, consolidation, acquisition of assets or like
occurrence involving the Company, each outstanding option or stock purchase
right shall be assumed or an equivalent option or right may be substituted by
the successor corporation. If the successor corporation refuses to assume an
option or stock purchase rights, or to substitute substantially equivalent
options or rights, then the optionee shall fully vest in and have the right to
exercise the option or stock purchase right as to all of the stock subject to
such option or stock purchase right, including shares as to which it would not
otherwise be vested or exercisable.

Amendment and Termination of the Incentive Plan. The Board may amend, alter,
suspend or terminate the Incentive Plan, or any part thereof, at any time and
for any reason. However, the Company shall obtain shareholder approval for any
amendment to the Incentive Plan to the extent necessary to comply with Section
162(m) of the Code and Section 422 of the Code, or any other applicable rule
or statute. No such action by the Board or shareholders may alter or impair
any option or stock purchase right previously granted under the Incentive Plan
without the consent of the optionee.

Federal Income Tax Consequences

Incentive Stock Options. An optionee who is granted an incentive stock
option does not recognize taxable income at the time the option is granted or
upon its exercise, although the exercise may subject the optionee to the
alternative minimum tax. Upon a disposition of the shares more than two years
after grant of the option and one year after exercise of the option, any gain
or loss is treated as long-term capital gain or loss. If these holding periods
are not satisfied, the optionee recognizes ordinary income at the time of
disposition equal to the difference between the exercise price and the lower
of (i) the fair market value of the shares at the date of the option exercise
or (ii) the sale price of the shares. Any gain or loss recognized on such a
premature disposition of the shares in excess of the amount treated as
ordinary income is treated as long-term or short-term capital gain or loss,
depending on the holding period. A different rule for measuring ordinary
income upon such a premature disposition may apply if the optionee is also an
officer, director, or 10% shareholder of the Company. The Company is entitled
to a deduction in the same amount as the ordinary income recognized by the
optionee.

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Nonstatutory Stock Options. An optionee does not recognize any taxable
income at the time he or she is granted a nonstatutory stock option. Upon
exercise, the optionee recognizes taxable income generally measured by the
excess of the then fair market value of the shares over the exercise price.
Any taxable income recognized in connection with an option exercise by an
employee of the Company is subject to tax withholding by the Company. The
Company is entitled to a deduction in the same amount as the ordinary income
recognized by the optionee. Upon a disposition of such shares by the optionee,
any difference between the sale price and the optionee's exercise price, to
the extent not recognized as taxable income as provided above, is treated as
long-term or short-term capital gain or loss, depending on the holding period.

Stock Purchase Rights. Stock purchase rights will generally be taxed in the
same manner as nonstatutory stock options. However, restricted stock is
generally purchased upon the exercise of a stock purchase right. At the time
of purchase, restricted stock is subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code. As a result, the purchaser will
not recognize ordinary income at the time of purchase. Instead, the purchaser
will recognize ordinary income on the dates when a stock ceases to be subject
to a substantial risk of forfeiture. The stock will generally cease to be
subject to a substantial risk of forfeiture when it is no longer subject to
the Company's right to repurchase the stock upon the purchaser's termination
of employment with the Company. At such times, the purchaser will recognize
ordinary income measured as the difference between the purchase price and the
fair market value of the stock on the date the stock is no longer subject to a
substantial risk of forfeiture.

The purchaser may accelerate to the date of purchase his or her recognition
of ordinary income, if any, and the beginning of any capital gain holding
period by timely filing an election pursuant to Section 83(b) of the Code. In
such event, the ordinary income recognized, if any, is measured as the
difference between the purchase price and the fair market value of the stock
on the date of purchase, and the capital gain holding period commences on such
date. The ordinary income recognized by a purchaser who is an employee will be
subject to tax withholding by the Company. Different rules may apply if the
purchaser is also an officer, director, or 10% shareholder of the Company.

The foregoing is only a summary of the effect of federal income taxation
upon optionees, holders of stock purchase rights, and the Company with respect
to the grant and exercise of options and stock purchase rights under the
Incentive 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.

Required Vote

The affirmative vote of the holders of a majority of the Common Stock
present or represented at the Special Meeting is required to approve Proposal
No. 1.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE "FOR" PROPOSAL NO. 1

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PROPOSAL NO. 2

REVERSE STOCK SPLIT

General

The Board of Directors of the Company has approved a proposal (the "Reverse
Stock Split Proposal") to amend the Company's Articles of Incorporation, and
to authorize the Company's officers to take all necessary action, to effect a
one-time, one-for-three reverse stock split of the Company's outstanding
Common Stock, no par value per share (the "Common Stock") if and when the
Company's management determines that such a reverse stock split is needed to
ensure the Company's compliance with the listing requirements of the Nasdaq
SmallCap Market, subject to the approval by the shareholders of the Company.
The Reverse Stock Split Proposal provides for the combination and
reclassification of the presently issued and outstanding shares of Common
Stock, into a smaller number of shares of identical Common Stock, on the basis
of one share of Common Stock for each three shares of Common Stock previously
issued and outstanding (the "Reverse Stock Split"). Except as may result from
the payment of cash for fractional shares as described below, each shareholder
will hold the same percentage of Common Stock outstanding immediately
following the Reverse Stock Split as each shareholder did immediately prior to
the Reverse Stock Split. If approved by the shareholders of the Company as
provided herein and if and when deemed necessary by the Company's management,
the Reverse Stock Split will be effected by filing a Certificate of Amendment
of the Company's Amended and Restated Articles of Incorporation in
substantially the form attached to this Proxy Statement as Appendix A (the
"Reverse Stock Split Amendment") with the California Secretary of State, and
will become effective on the date (the "Effective Date") that the Reverse
Stock Split Amendment is accepted by the California Secretary of State. The
following discussion is qualified in its entirety by the full text of the
Reverse Stock Split Amendment, which is hereby incorporated by reference
herein.

On the Effective Date, each share of Common Stock issued and outstanding
will automatically be reclassified and converted into one-third of a share of
Common Stock. Fractional shares of Common Stock will not be issued as a result
of the Reverse Stock Split. Shareholders entitled to receive a fractional
share of Common Stock as a consequence of the Reverse Stock Split will,
instead, receive from the Company a cash payment in U.S. dollars equal to such
fraction multiplied by three times the arithmetic mean average closing bid
price per share of the Common Stock on the Nasdaq SmallCap Market for the five
trading days immediately preceding the Effective Date.

The Company expects that, if the Reverse Stock Split Proposal is approved by
the shareholders at the Special Meeting, the Reverse Stock Split Amendment
will only be followed at such time as the Company's management determines that
the reverse stock split is necessary to ensure the Company's compliance with
the listing requirements of the Nasdaq SmallCap Market. Accordingly,
notwithstanding approval of the Reverse Stock Split Proposal by the
shareholders of the Company, management may elect not to file, or to delay the
filing of, the Reverse Stock Split Amendment.

Reasons for the Reverse Stock Split

The primary purpose of the Reverse Stock Split is to combine the outstanding
shares of Common Stock so that the Common Stock outstanding after giving
effect to the Reverse Stock Split trades at a significantly higher price per
share than the Common Stock outstanding before giving effect to the Reverse
Stock Split.

During the 1999 calendar year, the closing bid price for the Common Stock on
the Nasdaq SmallCap Market ranged from $.63 to $2.69 per share. The closing
bid price for the Common Stock on September 28, 1999 was $.63 per share. The
Company believes that such a low quoted market price per share may discourage
potential new investors, increase market price volatility and decrease the
liquidity of the Common Stock. Most importantly, pursuant to Nasdaq SmallCap
Market listing requirements the minimum bid price for the Company's Common
Stock must be at least $1.00 per share for continued inclusion of the Common
Stock on the Nasdaq SmallCap Market. The Company believes, but cannot assure,
that the Reverse Stock Split will enable the

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Common Stock to trade above the $1.00 minimum bid price established by the
listing requirements of the Nasdaq SmallCap Market.

The Company believes that maintaining the listing of the Common Stock on the
Nasdaq SmallCap Market is in the best interests of the Company and its
shareholders. Inclusion in the Nasdaq SmallCap Market increases liquidity and
may potentially minimize the spread between the "bid" and "asked" prices
quoted by market makers. Further, the continued Nasdaq SmallCap Market listing
may enhance the Company's access to capital and increase the Company's
flexibility in responding to anticipated capital requirements. The Company
believes that prospective investors will view an investment in the Company
more favorably if its shares qualify for listing on the Nasdaq SmallCap
Market.

For the above reasons, the Company believes that having the ability to
effect the Reverse Stock Split as necessary to ensure compliance with the
listing requirements of the Nasdaq SmallCap Market is in the best interests of
the Company and its shareholders. However, there can be no assurances that the
Reverse Stock Split, if effected, will have the desired consequences. The
Company anticipates that, following the consummation of the Reverse Stock
Split, the Common Stock will trade at a price per share that is significantly
higher than the current market price of the Common Stock. However, there can
be no assurance that, following the Reverse Stock Split, the Common Stock will
trade at three times the market price of the Common Stock prior to the Reverse
Stock Split.

Effect of the Reverse Stock Split Proposal

Subject to shareholder approval, the Reverse Stock Split Proposal will be
effected by filing the Reverse Stock Split Amendment to the Company's
Certificate of Incorporation, and will be effective immediately upon such
filing. The actual timing of such filing will be determined by the Company's
management based upon their evaluation as to when and if such action is
necessary to ensure the Company's compliance with the listing requirements of
the Nasdaq SmallCap Market, and when such action will be most advantageous to
the Company and its shareholders. The Company reserves the right to forego or
postpone filing the Reverse Stock Split Amendment, if such action is
determined not to be in the best interests of the Company and its
shareholders.

Each shareholder that owns fewer than three Common Stock will have such
shareholder's fractional share of Common Stock converted into the right to
receive cash as set forth below in "Exchange of Stock Certificates and Payment
for Fractional Shares." The interest of such shareholder in the Company will
thereby be terminated, and such shareholder will have no right to share in the
assets or future growth of the Company. Each shareholder that owns three or
more shares of Common Stock will continue to own shares of Common Stock and
will continue to share in the assets and future growth of the Company as a
shareholder. Such interest will be represented by one-third as many shares as
such shareholder owned before the Reverse Stock Split, subject to the
adjustment for fractional shares in which case such shareholder shall receive
cash in lieu of such fractional share. The number of shares of Common Stock
that may be purchased upon the exercise of outstanding options, warrants, and
other securities convertible into, or exercisable or exchangeable for, shares
of Common Stock (collectively, "Convertible Securities") and the per share
exercise or conversion prices thereof, will be adjusted appropriately as of
the Effective Date, so that the aggregate number of shares of Common Stock
issuable in respect of Convertible Securities immediately following the
Effective Date will be one-third of the number issuable in respect thereof
immediately prior to the Effective Date, the per share exercise price
immediately following the Effective Date will be 300% of the per share
exercise or conversion price immediately prior to the Effective Date, and the
aggregate exercise or conversion prices thereunder shall remain unchanged.

The Reverse Stock Split will also result in some shareholders owning "odd
lots" of less than 100 shares of Common Stock received as a result of the
Reverse Stock Split. Brokerage commissions and other costs of transactions in
odd lots may be higher, particularly on a per-share basis, than the cost of
transactions in even multiples of 100 shares.

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The Company is authorized to issue 35,000,000 shares of Common Stock, of
which 4,981,284 shares were issued and outstanding at the close of business on
the Record Date. The Company is also authorized to issue 5,000,000 shares of
Preferred Stock, no par value (the "Preferred Stock"), of which none were
issued and outstanding at the close of business on the Record Date.

If the Reverse Stock Split were carried out the shares of Common Stock
outstanding on the Record Date would be reduced from 4,981,284 to
approximately 1,660,428. In such event, the Company estimates that it would
have approximately the same number of shareholders. Except for the receipt of
cash in lieu of fractional interests, the completion of the Reverse Stock
Split would not affect any shareholder's proportionate equity interest in the
company.

The Common Stock is currently listed on the Nasdaq SmallCap Market, under
the trading symbol "SLPTC". This is an interim trading symbol due to Nasdaq's
granting of continued listing of the Company's Common Stock on the Nasdaq
SmallCap Market with an exception. Once this exception is removed the Company
will return trading under its regular symbol "SLPT."

Exchange of Stock Certificates and Payment for Fractional Shares

The combination and reclassification of shares of Common Stock pursuant to
the Reverse Stock Split will occur automatically on the Effective Date without
any action on the part of shareholders of the Company and without regard to
the date certificates representing shares of Common Stock prior to the Reverse
Stock Split are physically surrendered for new certificates. If the number of
shares of Common Stock to which a holder is entitled as a result of the
Reverse Stock Split would otherwise include a fraction, the Company will pay
to the shareholder, in lieu of issuing fractional shares of the Company, cash
in an amount equal to the same fraction multiplied by four times the average
closing price of the Common Stock on the Nasdaq SmallCap Market for the five
days immediately preceding the Effective Date. A change in the closing price
of the Common Stock will affect the amount received by shareholders in lieu of
fractional shares.

As soon as practicable after the Effective Date, transmittal forms will be
mailed to each holder of record of certificates for shares of Common Stock to
be used in forwarding such certificates for surrender and exchange for
certificates representing the number of shares of Common Stock such
shareholder is entitled to receive as a consequence of the Reverse Stock
Split. The transmittal forms will be accompanied by instructions specifying
other details of the exchange. Upon receipt of such transmittal form, each
shareholder should surrender the certificates representing shares of Common
Stock prior to the Reverse Stock Split, in accordance with the applicable
instructions. Each holder who surrenders certificates will receive new
certificates representing the whole number of shares of Common Stock that he
holds as a result of the Reverse Stock Split and any cash payable in lieu of a
fractional share. SHAREHOLDERS SHOULD NOT SEND THEIR STOCK CERTIFICATES UNTIL
THEY RECEIVE A TRANSMITTAL FORM.

After the Effective Date, each certificate representing shares of Common
Stock outstanding prior to the Effective Date (an "old certificate") will,
until surrendered and exchanged as described above, be deemed, for all
corporate purposes, to evidence ownership of the whole number of shares of
Common Stock, and the right to receive from the Company the amount of cash for
any fractional shares, into which the shares of Common Stock evidenced by such
certificate have been converted by the Reverse Stock Split, except that the
holder of such unexchanged certificates will not be entitled to receive any
dividends or other distributions payable by the Company after the Effective
Date, until the old certificates have been surrendered. Such dividends and
distributions, if any, will be accumulated, and at the time of surrender of
the old certificates, all such unpaid dividends or distributions will be paid
without interest.

Certain Federal Income Tax Considerations

The following discussion describes certain material federal income tax
considerations relating to the Reverse Stock Split. This discussion is based
upon the Internal Revenue Code of 1986 (the "Code"), existing and

8
<PAGE>

proposed regulations thereunder, legislative history, judicial decisions, and
current administrative rulings and practices, all as amended and in effect on
the date hereof. Any of these authorities could be repealed, overruled, or
modified at any time. Any such change could be retroactive and, accordingly,
could cause the tax consequences to vary substantially from the consequences
described herein. No ruling from the Internal Revenue Service (the "IRS") with
respect to the matters discussed herein has been requested, and there is no
assurance that the IRS would agree with the conclusions set forth in this
discussion. All shareholders should consult with their own tax advisors.

This discussion may not address certain federal income tax consequences that
may be relevant to particular shareholders in light of their personal
circumstances (such as persons subject to the alternative minimum tax) or to
certain types of shareholders (such as dealers in securities, insurance
companies, foreign individuals and entities, financial institutions, and tax-
exempt entities) who may be subject to special treatment under the federal
income tax laws. This discussion also does not address any tax consequences
under state, local, or foreign laws.

SHAREHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISERS AS TO THE PARTICULAR
TAX CONSEQUENCES TO THEM OF THE REVERSE STOCK SPLIT, INCLUDING THE
APPLICABILITY OF ANY STATE, LOCAL, OR FOREIGN TAX LAWS, CHANGES IN APPLICABLE
TAX LAWS, AND ANY PENDING OR PROPOSED LEGISLATION.

The Company should not recognize any gain, or loss as a result of the
Reverse Stock Split. No gain or loss should be recognized by a shareholder who
receives only Common Stock upon the Reverse Stock Split. A shareholder who
receives cash in lieu of a fractional share of Common Stock that otherwise
would be held as a capital asset generally should recognize capital gain or
loss on an amount equal to the difference between the cash received and the
shareholder's basis in such fractional share of Common Stock. For this
purpose, a shareholder's basis in such fractional share of Common Stock will
be determined as if the shareholder actually received such fractional share.
Except as provided with respect to fractional shares, the aggregate tax basis
of the shares of Common Stock held by a shareholder following the Reverse
Stock Split will equal the shareholder's aggregate basis in the Common Stock
held immediately prior to the Reverse Stock Split and generally will be
allocated among the shares of Common Stock held following the Reverse Stock
Split on a pro-rata basis. Shareholders who have used the specific
identification method to identify their basis in shares of Common Stock
combined in the Reverse Stock Split should consult their own tax advisors to
determine their basis in the post-Reverse Stock Split shares of Common Stock
received in exchange therefor.

Required Vote

The affirmative vote of the holders of a majority of the Common Stock
present or represented at the Special Meeting is required to approve Proposal
No. 2.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE "FOR" PROPOSAL NO. 2

9
<PAGE>

PROPOSAL NO. 3

APPROVAL OF CORPORATE NAME CHANGE

The Board of Directors of the Company has approved a proposal to amend the
Company's Articles of Incorporation to change the name of the Company to
"SoloPoint.com, Inc.", subject to the approval by the shareholders of the
Company. The Board believes that because the name "SoloPoint.com, Inc."
focuses attention on the Company's increasingly important Internet
initiatives, approval of the corporate name change is in the best interests of
the Company and the shareholders. If approved by the shareholders of the
Company as provided herein, the corporate name change will be effected by
filing a Certificate of Amendment of the Company's Amended and Restated
Articles of Incorporation in substantially the form attached to this Proxy
Statement as Appendix B (the "Corporate Name Change Amendment"), and will
become effective on the date that the Corporate Name Change Amendment is
accepted by the California Secretary of State. If the Reverse Stock Split
Amendment is first filed with and accepted by the California Secretary of
State, the change of corporate name will be accomplished thereby.

Required Vote

The affirmative vote of the holders of a majority of the Common Stock
present or represented at the Special Meeting is required to approve Proposal
No. 3.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE "FOR" PROPOSAL NO. 3

10
<PAGE>

BENEFICIAL SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS

The following table sets forth certain information known to the Company with
respect to beneficial ownership of the Company's Common Stock as of September
30, 1999 by (i) each shareholder known by the Company to be the beneficial
owner of more than 5% of the Company's Common Stock, (ii) each director,
(iii) the Company's Chief Executive Officer and each of the other executive
officers of the Company other than the Chief Executive Officer whose total
salary and bonus for fiscal year 1998 exceeded $100,000 (together, the "Named
Officers") and (iv) all executive officers and directors as a group.

<TABLE>
<CAPTION>
Five Percent
Shareholders,
Directors and Percent
Executive Beneficially
Officers(1) Number Owned(2)
--------------- --------- ------------
<S> <C> <C>
VENTURESTAR, INC........ 2,305,422 46.3%
1787 North First Street
Suite 650
San Jose, CA 95122
Hui-Chuan Liu........... 276,650 5.6%
8th Floor, 9,
Lane 311, Alley 48
Hoping East Road
Taipei, Taiwan R.O.C.
Edward M. Esber, Jr. 105,634 2.1%
(4)....................
c/o SoloPoint, Inc.
130-B Knowles Dr.
Los Gatos, CA 95032
Arthur G. Chang (5)..... 80,943 1.6%
c/o SoloPoint, Inc.
130-B Knowles Dr.
Los Gatos, CA 95032
Donald Nanneman (6)..... 13,818 *
c/o SoloPoint, Inc.
130-B Knowles Dr.
Los Gatos, CA 95032
Ronald J. Tchorzewski 9,869 *
(7)....................
c/o SoloPoint, Inc.
130-B Knowles Dr.
Los Gatos, CA 95032
Patrick Grady (8)....... 3,376 *
Borealis Technology
Corp.
4070 Silver Sage Drive
Carson City, NV 89701
Murali Narayanan (9).... 17,145 *
Skytel
200 South Lamar Street,
7th Floor
Jackson, MS 39201
All directors and
officers as a group (6
persons) (10).......... 230,785 4.5%
</TABLE>
- --------
* Less than 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 as beneficially owned by them, subject to community property laws
where applicable and the information contained in the footnotes to this
table. All numbers in this table take into account the Company's 1998 one-
for-four reverse stock split.

11
<PAGE>

(2) Applicable percent ownership is based on 4,981,284 shares of Common Stock
outstanding as of September 30, 1999.
(3) Includes 512,316 shares held by InveStar Burgeon Venture Capital, Inc.
768,474 shares held by InveStar Dayspring Venture Capital, Inc. 768,474
shares held by InveStar Excelsus Venture Capital (Int'l), Inc. LDC, and
256,158 shares held by Forefront Venture Partners, L.P.
(4) Includes 32,188 shares subject to options exercisable within 60 days of
September 30, 1999. An additional 50,000 of Mr. Esber's shares are subject
to repurchase options granted to the Company under two separate
agreements. The first agreement grants the Company an option to repurchase
35,000 of Mr. Esber's shares within 90 days following the termination of
Mr. Esber's employment with the Company. Under the agreement, one-fourth
(8,750) of the shares were released from the repurchase option on November
26, 1996, and one-forty-eighth (approximately 729) of the shares were
released from the repurchase option on October 26, 1996 and one-forty-
eighth of the shares will be released on the twenty-sixth day of each
month thereafter until all of the shares were released. As of September
30, 1999, 50,000 shares originally subject to repurchase by the Company
had been released from the repurchase option. In the event of a Change of
Control of the Company (as defined in the agreement), an additional number
of shares equal to one-half of the number of shares that have not been
released from the Company's repurchase option as of the closing of such
Change in Control shall become immediately exercisable on the consummation
of such Change in Control. The second agreement grants the Company an
option to repurchase the remaining 15,000 shares within 90 days following
the termination of Mr. Esber's employment with the Company. Under the
agreement, one-forty-eighth (313) of the shares were released on June 1,
1996, and an additional one-forty-eighth of the shares are to be released
on the first day of each month thereafter until all of the shares have
been released. The second agreement contains identical Change of Control
provisions as the agreement governing the aforementioned 35,000 shares. As
of September 30, 1999, approximately 12,520 of the shares originally
subject to repurchase by the Company had been released from the repurchase
option.
(5) Includes 49,868 shares subject to options exercisable within 60 days from
September 30, 1999. The remaining 28,750 of Mr. Chang's shares are subject
to repurchase options granted to the Company under two separate
agreements. The first agreement grants the Company an option to repurchase
18,750 of Mr. Chang's shares within 90 days following the termination of
Mr. Chang's employment with the Company. Under the agreement, one-fourth
(approximately 4,688) of the shares were released from the repurchase
option on January 1, 1997. One-forty-eighth (approximately 599) of the
shares were released from the repurchase option on February 1, 1997 and
one-forty-eighth of the shares will be released on the first day of each
month thereafter until all of the shares have been released. As of
September 30, 1999, approximately 17,189 of the shares originally subject
to repurchase by the Company had been released from the repurchase option.
In the event of a Change of Control of the Company (as defined in the
agreement), an additional number of shares equal to one-half of the number
of shares that have not been released from the Company's repurchase option
as of the closing of such Change in Control shall become immediately
exercisable on the consummation of such Change in Control. The second
agreement grants the Company an option to repurchase the remaining 10,000
shares within 90 days following the termination of Mr. Chang's employment
with the Company. Under the agreement, one-forty-eighth (approximately
208) of the shares were released on June 1, 1996, and an additional one-
forty-eighth of the shares will be released on the first day of each month
thereafter until all shares have been released. As of September 30, 1999
approximately 8,320 of the shares originally subject to repurchase by the
Company had been released from the repurchase option. The second agreement
contains identical Change of Control provisions as the agreement governing
the aforementioned 18,750 shares.
(6) Includes 13,818 shares subject to options exercisable within 60 days from
September 30, 1999.
(7) Includes 9,869 shares subject to options exercisable within 60 days from
September 30, 1999.
(8) Includes 3,376 shares subject to options exercisable within 60 days from
September 30, 1999. Mr. Grady, a director of the Company, is H.J. Meyers &
Co., Inc.'s nominee to the Board of Directors pursuant to agreement with
the Company. See "Certain Relationships and Related Transactions."
(9) Includes 3,313 shares subject to options exercisable within 60 days from
September 30, 1999.
(10) Includes 112,432 shares subject to options exercisable within 60 days
from September 30, 1999.

12
<PAGE>

EXECUTIVE COMPENSATION

Executive Officers

The executive officers of the Company and certain information about them as
of December 31, 1998 are listed below:

<TABLE>
<CAPTION>
Name Age Company Positions
---- --- -----------------
<S> <C> <C>
Edward M. Esber, Jr. (1).............. 46 Chairman of the Board of Directors
Arthur G. Chang (2)................... 40 President and Chief Executive Officer
Ronald J. Tchorzewski................. 48 Chief Financial Officer
Donald Nanneman....................... 44 Vice President of Marketing
</TABLE>
- --------
(1) Mr. Esber resigned as President and Chief Executive Officer effective
February 4, 1998 and became Chairman of the Board of the Company as of
such date.
(2) Mr. Chang resigned as Chief Operating Officer effective February 4, 1998
in order to assume the position of President and Chief Executive Officer
of the Company.

Arthur G. Chang has served as a Director of the Company since July 1998. Mr.
Chang joined the Company as Chief Operating Officer and Vice President of
Research and Development in February 1996. Effective February 1998, Mr. Chang
serves as the Company's President and Chief Executive Officer. From November
1993 to April 1995, Mr. Chang was Chairman, President, Chief Executive Officer
and Director of CommVision Corporation, a wide area remote access company.
From February 1988 to April 1993, Mr. Chang was co-founder and Senior Vice
President of Product Development and Product Marketing for Parallan Computer,
Inc. (now Meridian Data, Inc.), a company that made fault-tolerant
superservers for PC networks. Mr. Chang holds a bachelors degree in electrical
engineering from Northwestern University and a master's degree in electrical
and computer science from the University of California at Berkeley.

Edward M. Esber, Jr. became the Chairman of the Board of the Company in
February 1998. Mr. Esber served as the Company's President, Chief Executive
Officer, and Director from October 1995 until February 1998 and served as the
Company's Chief Financial Officer from May 1996 until July 1997. From May 1994
to June 1995, Mr. Esber was Chairman, Chief Executive Officer and President of
Creative Insights, Inc., a computer toys company. From May 1993 to June 1994,
Mr. Esber was President and Chief Operating Officer of Creative Labs, Inc.,
the US subsidiary of Creative Technology Ltd. From 1985 to 1990, Mr. Esber was
Chairman, President, Chief Executive Officer and Director of Ashton-Tate, a
database software company and maker of dBase. Mr. Esber as served as a
director of Quantum Corp. since 1988, Borealis Technology Corporation since
1996 and Integrated Circuit Systems Technology since 1997. Mr. Esber holds a
bachelor's degree in computer engineering from Case Western Reserve
University, a master's degree in electrical engineering from Syracuse
University and a M.B.A. in general management from Harvard Business School.

Ronald J. Tchorzewski joined the Company in October 1996 as Vice President
of Finance as was elected Chief Financial Officer in July 1997. From July 1996
to October 1996, Mr. Tchorzewski was an independent consultant. From September
1993 to July 1996, Mr. Tchorzewski served as Chief Financial Officer of
ULTRADATA Corporation. From July 1987 to September 1993, Mr. Tchorzewski held
various positions with Cadence Design Systems, Inc., most recently as Vice
President and Corporate Controller. Mr. Tchorzewski holds a bachelor's degree
in accounting from Seton Hall University and a master's degree in finance from
Seton Hall University.

Donald Nanneman joined the Company in January 1997 as Vice President of
Marketing. From March 1992 to December 1996, Mr. Nanneman was Group Marketing
Manager of Octel Communications. Prior to joining Octel, Mr. Nanneman was Vice
President of Sales and Marketing for MediaWorks, a workgroup software
publisher. Prior to Media Works, Mr. Nanneman held marketing management
positions with Apple Computer, Britton Lee and other technology companies.

13
<PAGE>

Compensation Tables

Summary Compensation Table. The following table sets forth the compensation
paid by the Company to the Chief Executive Officer and each of the other
executive officers of the Company whose total salary and bonus for fiscal year
1998 exceeded $100,000 (collectively the "Named Officers"). All stock numbers
in the table reflect the Company's 1998 one-for-three reverse stock split.

<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation
---------------- ------------
Securities
Underlying All Other
Name of Principal Position Fiscal Year Salary Bonus Options # Compensation(2)
- -------------------------- ----------- -------- ------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Edward M. Esber, Jr.,.... 1996 $180,000 $45,000(1) -- $4,496
Chief Executive Officer, 1997 180,000 72,000(1) 18,750(6) 5,299
President and Director 1998 68,288 41,250(4) 7,014
Arthur G. Chang,......... 1996 104,583 -- -- 4,197
Chief Operating Officer 1997 156,000 18,000(5) 18,750(6) 4,764
1998 166,000 65,125(7) 6,225
Ronald J. Tchorzewski.... 1996 27,083 -- 6,250(9) --
Chief Financial Offi-
cer(8) 1997 130,000 -- 21,875(10) 5,254
1998 130,000 -- 6,225
Donald Nanneman.......... 1997 130,000 -- 22,500(12) 5,299
Vice President of Mar-
keting(11) 1998 140,000 -- 4,092
</TABLE>
- --------
(1) Represents bonus earned by the Named Officer based upon his performance in
the year noted but credited in the subsequent year against the Named
Officer's indebtedness to the Company. See "Certain Relationships and
Related Transactions."
(2) Consists of life and health insurance premiums paid by the Company.
(3) Pursuant to the Company's 1993 Incentive Stock Plan, an option to purchase
18,750 shares of Common Stock at a price of $3.50 per share was granted to
Mr. Esber in December 1997. Such option vests on a monthly basis over a
four-year period commencing July 1, 1997. As of December 31, 1998, such
option was vested with respect to 7,031 shares of Common Stock.
(4) Pursuant to the Company's 1993 Incentive Stock Plan, options were granted
to Mr. Esber as follows: (a) 11,250 shares at a price of $3.50 per share
on January 5, 1998, vesting on a monthly basis over a four-year period
commencing June 1, 1997; and (b) 30,000 shares at a price of $1.25 per
share on June 16, 1998, vesting on a monthly basis over a four-year period
commencing on March 1, 1998. As of December 31, 1998 such options were
vested with as to (a) 4,219 shares and (b) 5,625 shares, respectively.
(5) Represents bonus earned by the Named Officer based upon his performance in
the year noted but paid in the subsequent year.
(6) Pursuant to the Company's 1993 Incentive Stock Plan, an option to purchase
18,750 shares of Common Stock at a price of $3.50 per share was granted to
Mr. Chang in December 1997. Such option vests on a monthly basis over a
four-year period commencing July 1, 1997. As of December 31, 1998, such
option was vested with respect to 7,031 shares of Common Stock.
(7) Pursuant to the Company's 1993 Incentive Stock Plan, options were granted
to Mr. Chang as follows: (a) 1,375 shares at a price of $3.50 per share on
January 5, 1998, vesting on a monthly basis over a four-year period
commencing June 1, 1997; (b) 38,750 shares at a price of $1.25 per share
on June 16, 1998, vesting on a monthly basis over a four-year period
commencing on March 1, 1998; and (c) 25,000 shares at a price of $0.2188
per share on October 22, 1998, vesting over a four-year period commencing
October 22, 1998. As of December 31, 1998 such options were vested with as
to (a) 516 shares, (b) 7,266 shares and (c) 521 shares, respectively.
(8) Mr. Tchorzewski joined the Company in October 1996.
(9) Pursuant to the Company's 1993 Incentive Stock Plan, an option to purchase
6,250 shares of Common Stock at a price of $12.00 per share was granted to
Mr. Tchorzewski in October 1996. Such option was canceled and regranted at
a price of $9.50 in January 1997 and was again canceled and regranted at a

14
<PAGE>

price of $3.50 on December 31, 1997, pursuant to the Company's stock
option exchange program under the Company's 1993 Incentive Stock Plan (see
description below). Such option vests on a monthly basis over a four-year
period commencing January 29, 1997. As of December 31, 1998, such option
was vested with respect to 3,125 shares of Common Stock.
(10) Consists of options to purchase 5,625 shares of Common Stock as original
grants pursuant to the Company's 1993 Incentive Stock Plan and options to
purchase 16,250 shares of Common Stock as regrants of canceled stock
options pursuant to the Company's stock option exchange program. An
option to purchase 1,875 shares of Common Stock was originally granted to
Mr. Tchorzewski at a price of $8.50 per share in July 1997 and was
subsequently canceled and regranted at a price of $3.50 per share in
December 1997. Such option vests at the rate of 1/4th of the shares on
the first anniversary of the original grant date and vests on a monthly
basis over the subsequent three years. An option to purchase 5,625 shares
of Common Stock was granted to Mr. Tchorzewski at a price of $3.50 per
share in December 1997. Such option vests on a monthly basis over a four-
year period commencing July 1, 1997. As of December 31, 1998, both such
options were vested with respect to an aggregate 2,812 shares of Common
Stock.
(11) Mr. Nanneman joined the Company in January 1997.
(12) Consists of options to purchase 13,750 shares of Common Stock as original
grants pursuant to the Company's 1993 Incentive Stock Plan and options to
purchase 8,750 shares of Common Stock as regrants of canceled stock
options pursuant to the Company's stock option exchange program. An
option to purchase 8,750 shares of Common Stock was originally granted to
Mr. Nanneman at a price of $7.00 per share in January 1997 and was
subsequently canceled and regranted at a price of $3.50 per share in
December 1997. Such option vests at the rate of 1/4th of the shares on
the first anniversary of the original grant date and vests on a monthly
basis over the subsequent three years. An option to purchase 5,000 shares
of Common Stock was granted to Mr. Nanneman at a price of $3.50 per share
in December 1997. Such option vests on a monthly basis over a four-year
period commencing July 1, 1997. As of December 31, 1998, both such
options were vested with respect to an aggregate 6,250 shares of Common
Stock.

Employment Contracts. In October 1995, The Company entered into an
employment agreement with Edward M. Esber, Jr., former President and Chief
Executive Officer and current Chairman of the Board of the Company. Pursuant
to such agreement, Mr. Esber received an annual base salary of $180,000 plus a
performance bonus of up to $72,000 for fiscal 1997. Mr. Esber's bonus for 1997
was credited in the 1998 against the Mr. Esber's indebtedness to the Company.
Pursuant to Mr. Esber's employment agreement, if Mr. Esber's employment is
involuntarily terminated without cause prior to November 1, 1999, Mr. Esber
will continue to receive his base salary and benefits for a period of six
months from the date of termination. See "Certain Relationships and Related
Transactions."

In February 1996, the Company entered into an employment agreement with
Arthur G. Chang, the former Chief Operating Officer and current President and
Chief Executive Officer of the Company. Pursuant to such agreement, Mr. Chang
received an annual salary of $85,000. In 1996, Mr. Chang's annual salary was
increased (i) to $132,000, (ii) to $156,000 for 1997, and (iii) to $168,000
for 1998. See "Certain Relationships and Related Transactions."

In October 1996, the Company entered into an employment agreement with
Ronald J. Tchorzewski, the Chief Financial Officer of the Company. Pursuant to
such agreement, Mr. Tchorzewski receives an annual salary of $130,000.

In January 1997, the Company entered into an employment agreement with
Donald Nanneman, the Vice President of Marketing of the Company. Pursuant to
such agreement, Mr. Nanneman receives an annual salary of $130,000. Mr.
Nanneman's salary has since been increased to $142,000.

The Company currently has no other compensatory plan or arrangement with any
of the Named Officers where the amounts to be paid exceed $100,000 and which
are activated upon resignation, termination or retirement of any such
executive officer upon a change in control of the Company.

15
<PAGE>

Stock Option Information

Option Grants in Last Fiscal Year. The following table sets forth certain
information concerning grants of stock options to each of the Named Officers
during the fiscal year ended December 31, 1998.

Option Grants in Last Fiscal Year

<TABLE>
<CAPTION>
% of Total
Number of Options
Securities Granted to
Underlying Employees Exercise
Options in Fiscal Price Expiration
Name Granted(1) Year Per Share Date
---- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Edward M. Esber, Jr., ............ 41,250(2) 26.1% $1.25 1/5/08
President, Chief Executive to $3.50 to 6/16/08
Officer and Director
Arthur G. Chang, ................. 65,125(3) 41.2% $ 0.2188 1/5/08
Chief Operating Officer to $3.50 to 10/22/08
Donald Nanneman................... 7,000(4) 4.4% $1.25 6/16/08
Vice President of Marketing
</TABLE>
- --------
(1) The options referenced in the foregoing table are intended to be incentive
stock options to the extent permitted by applicable law. The Company's
1993 Amended Incentive Stock Plan (the "Incentive Plan") also provides for
the grant of non-qualified stock options. Incentive stock options may be
granted under the Incentive Plan at an exercise price no less than fair
market value on the date of grant. For so long as the Company's Common
Stock is listed on the Nasdaq National Market, the fair market value is
the closing sale price for the Common Stock. Non-qualified options may be
granted at an exercise price of no less than 85% of fair market value on
the date of grant. Options generally become exercisable as to 25% of the
shares subject to the option one year after the date of grant, and as to
the remainder in equal monthly installments over the succeeding 36 months.
Options generally terminate on the earlier of thirty days after
termination of the optionee's employment by or services to the Company, or
ten years after grant.
(2) An option to purchase 11,250 shares of Common Stock was granted to Mr.
Esber at a price of $3.50 per share in January 1998. Such option vests on
a monthly basis over a four-year period commencing June 1, 1997. An option
to purchase 6,250 shares of Common Stock was granted to Mr. Esber at a
price of $1.25 per share in June 1998. Such option vests on a monthly
basis over a four-year period commencing March 1, 1998. As of December 31,
1998, both such options were vested with respect to an aggregate 9,844
shares of Common Stock.
(3) An option to purchase 1,375 shares of Common Stock was granted to Mr.
Chang at a price of $3.50 per share in January 1998. Such option vests on
a monthly basis over a four-year period commencing June 1, 1997. An option
to purchase 38,750 shares of Common Stock was granted to Mr. Chang at a
price of $1.25 per share in June 1998. Such option vests on a monthly
basis over a four-year period commencing March 1, 1998. An option to
purchase 25,000 shares of Common Stock was granted to Mr. Chang in October
1998. Such option vests on a monthly basis over a four-year period
commencing October 22, 1998. As of December 31, 1998, all such options
were vested with respect to an aggregate 8,303 shares of Common Stock.
(4) Mr. Nanneman's option was granted in June 1998. Such option vests on a
monthly basis over a four-year period commencing March 1, 1998. As of
December 31, 1998, such option was vested with respect to 1,312 shares of
Common Stock.

16
<PAGE>

Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End
Values. The following table sets forth certain information concerning the
number of options exercised by the Named Officers during the fiscal year ended
December 31, 1998, and the number of shares covered by both exercisable and
unexercisable stock options held by the Named Officers as of December 31,
1998. Also reported are values for "in-the-money" options that represent the
positive spread between the respective exercise prices of outstanding options
and the fair market value of the Company's Common Stock as of December 31,
1998 ($3.50 per share).

Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values

<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options
Shares December 31, 1998 at December 31, 1998
Acquired Value ------------------------- -------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Edward M. Esber, Jr..... 0 $ 0 16,875 43,125 $36,914 $94,336
Arthur G. Chang......... 0 0 15,334 68,541 17,034 122,419
Ronald J. Tchorzewski... 0 0 5,937 7,813 0 0
Donald Nanneman......... 0 0 7,563 13,187 2,872 12,440
</TABLE>

Board of Directors Report on Option Repricing.

Because of significant declines in the market value of the Company's Common
Stock in 1997, most of the Company's outstanding options were exercisable at
prices which substantially exceeded the market value of the Common Stock. In
view of such declines in market value and in keeping with the Company's
philosophy of utilizing equity incentive to motivate and retain qualified
employees, the Board of Directors has felt it was important to regain the
incentive intended to be provided by options to purchase shares of the
Company's Common Stock and as such has approved stock option exchange
programs.

In January 1997, the Board of Directors approved a stock option exchange
program (the "Exchange Program"), pursuant to which Ronald J. Tchorzewski, the
Company's Chief Financial Officer and certain other employees holding
incentive stock options and nonstatutory options under the Company's 1993
Incentive Stock Option Plan (the "Incentive Plan") were given the opportunity,
within thirty (30) days of notice of such Exchange Program, to exchange such
options for new options including a new vesting schedule of such new options
as described below.

Under the Exchange Program, holders of stock options on January 29, 1997
which were granted under the Incentive Plan and which had an exercise price
greater than $2.375 per share (the "Old Options") were offered the opportunity
to request that the Company issue new options ("New Options") having an
exercise price equal to $2.375, the fair market value of a share of the
Company's Common Stock on that date (the "Base Exercise Price"). The New
Options vest as follows: each New Option vests at a rate of one-forty-eighth (
1/48) of the total number of shares subject to such New Option per month from
January 29, 1997; provided, however, that each New Option will not be
exercisable for any shares until one year from the original vesting start date
("Vesting Start Date") of the respective Old Option. At any time on or after
one year from such Vesting Start Date, all vested shares subject to such New
Option shall be exercisable.

The New Options modify only the exercise price of the Existing Options to
which each relate and were issued under and are governed by the Incentive Plan
under which such options were originally granted. Other than the different
exercise price and the commencement of a new vesting schedule, the option
agreements relating to the New Options are substantially identical to the
option agreements for the Old Options they replaced.

In December 1997, the Board of Directors approved a second stock option
exchange program (the "Second Exchange Program"), pursuant to which Ronald J.
Tchorzewski, the Company's Chief Financial Officer, Donald

17
<PAGE>

Nanneman, the Company's Vice President of Marketing and certain other
employees holding incentive stock options and nonstatutory options under the
Incentive Plan were given the opportunity, within thirty (30) days of notice
of such Second Exchange Program, to exchange such options for new options. The
vesting schedule for the such new options was unchanged.

Under the Second Exchange Program, holders of stock options on December 31,
1997 which were granted under the Incentive Plan and which had an exercise
price greater than $0.875 per share (the "Second Old Options") were offered
the opportunity to request that the Company issue new options ("Second New
Options") having an exercise price equal to $0.875, the fair market value of a
share of the Company's Common Stock on that date (the "Second Base Exercise
Price"). Each Second New Option is exercisable according to the same vesting
schedule as the corresponding Second Old Option.

The Second New Options modify only the exercise price of the Second Existing
Options to which each relate and were issued under and are governed by the
Incentive Plan under which such options were originally granted. Other than
the different exercise price, the option agreements relating to the Second New
Options are substantially identical to the option agreements for the Second
Old Options they replaced.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In February 1996, Edward M. Esber, Jr., the then Chief Executive Officer,
President, Chief Financial Officer and Director of the Company, and the
Company, entered into a Restricted Stock Purchase Agreement pursuant to which
Mr. Esber bought 140,000 shares of the Company's Common Stock, at a price of
$0.50 per share. These shares are subject to repurchase by the Company, at the
original $0.50 purchase price per share, upon Mr. Esber's cessation of service
prior to vesting in those shares. In conjunction with the share purchase, the
Company loaned $70,000 to Mr. Esber pursuant to a promissory note secured by
the 140,000 shares of restricted Common Stock purchased by Mr. Esber. Mr.
Esber serves pursuant to an employment agreement under which he is entitled to
severance payments. See "Beneficial Security Ownership of Management & Certain
Beneficial Owners" and "Executive Compensation."

In February 1996, Arthur G. Chang, the then Chief Operating Officer of the
Company, and the Company, entered into a Restricted Stock Purchase Agreement
pursuant to which Mr. Chang bought 75,000 shares of the Company's Common
Stock, at a price of $0.50 per share, pursuant to the Incentive Plan. These
shares are subject to repurchase by the Company, at the original $0.50
purchase price per share, upon Mr. Chang's cessation of service prior to
vesting in those shares. In conjunction with the share purchase, the Company
loaned $37,500 to Mr. Chang pursuant to a promissory note secured by the
75,000 shares of restricted Common Stock purchased by Mr. Chang. In addition,
Mr. Chang serves pursuant to an employment arrangement at a current annual
salary of $85,000.

In April 1996, the Board of Directors approved a sale of 60,000 shares of
the Company's Common Stock at a price of $0.50 per share to Mr. Esber pursuant
to a Restricted Stock Purchase Agreement. In May 1996, Mr. Esber executed the
Restricted Stock Purchase Agreement pursuant to which the shares are subject
to repurchase by the Company, at the original $0.50 purchase price per share,
upon Mr. Esber's cessation of service prior to vesting in those shares. In
conjunction with the share purchase, the Company loaned $30,000 to Mr. Esber
pursuant to a promissory note secured by the 60,000 shares of restricted
Common Stock purchased by Mr. Esber.

In April 1996, the Board of Directors approved the sale of 40,000 shares of
the Company's Common Stock at a price of $0.50 per share to Mr. Chang pursuant
to a Restricted Stock Purchase Agreement. In May 1996, Mr. Chang executed the
Restricted Stock Purchase Agreement pursuant to which the shares are subject
to repurchase by the Company, at the original $0.50 purchase price per share,
upon Mr. Chang's cessation of service prior to vesting in those shares. In
conjunction with the share purchase, the Company loaned $20,000 to Mr. Chang
pursuant to a promissory note secured by the 40,000 shares of restricted
Common Stock purchased by Mr. Chang.

18
<PAGE>

In August 1996, as part of its underwriting agreement with H.J. Meyers &
Co., Inc. (the underwriters for the Company's Initial Public Offering), the
Company agreed (for a period of 24 months from the closing of the Initial
Public Offering in August 1996) to grant to H.J. Meyers & Co., Inc. the right
to nominate one member of the Board of Directors. In January 1998, as part of
its underwriting agreement with H.J. Meyers & Co., Inc., with respect to the
Company's secondary public offering, the Company agreed to extend H.J. Meyers
& Co., Inc.'s right to nominate one member of the Board of Directors for a
period of 36 months from the closing of the secondary public offering in
January 1998, provided such nominee is acceptable to the Company.

In March 1997, pursuant to his employment agreement, Mr. Esber elected to
forgive $45,000 of indebtedness to the Company incurred to purchase stock, in
lieu of a $30,000 cash bonus for his performance in 1996. In April 1997, Mr.
Esber elected to have the Company forgive $27,000 of his indebtedness to the
Company incurred to purchase stock, as a one time discretionary bonus, in lieu
of a proposed $18,000 increase in base salary.

In August 1999, as part of its private placement agreement with InveStar
(the lead venture fund for the Company's recent private placement), the
Company agreed to grant InveStar the right to nominate one member of the Board
of Directors and the right to have one observer present at each meeting of the
Company's Board of Directors.

In August 1999, as part of its private placement, the Company sold 18,443
shares and 13,832 shares to Directors Esber and Narayanan, respectively. In
connection with the private placement Mr. Esber and Mr. Narayanan were issued
warrants to purchase 8,254 shares of Common Stock and 6,190 shares of Common
Stock, respectively, at a price of $3.00 per share. The warrants are
exercisable during the 18-month period commencing September 13, 1999.

In September 1999, pursuant to his Restricted Stock Purchase Agreements
dated February 1996 and May 1996, the Company elected to forgive $57,500 of
Mr. Chang's indebtedness plus accrued interest of $11,072 incurred to purchase
stock.

Unless otherwise indicated, transactions with affiliates have been made on
terms no less favorable to the Company than those available from unaffiliated
parties. In the future, the Company will continue to seek the most favorable
terms available from both affiliates and nonaffiliates.

RECENT SALES OF UNREGISTERED SECURITIES

In February 1996, a total of 642,855 shares of Series A-7 Preferred Stock
were issued to accredited investors at a price of $5.00 per share for a total
value of $3,214,275. Consideration for the shares consisted of cash
($1,200,500), cancellation of convertible promissory notes ($1,463,770), and
exchange of shares of Series A-6 Preferred Stock. In connection with the
financing, the Company also issued warrants exercisable for a total of
2,442,700 shares of Series A-7 Preferred Stock. The Company relied upon
Section 4(2) as the exemption from the registration requirements of the
Securities Act of 1933, as amended. No underwriters were used and no
commission was paid. See "Certain Relationships and Related Transactions."

In June 1996, pursuant to a bridge loan financing, the Company issued
convertible promissory notes totaling $1,500,000 to Ameritech and 4C Ventures
which automatically converted into shares of Common Stock upon the Company's
IPO. The Company also issued warrants exercisable for a total of 30,000 shares
of common stock at $5.00 per share. The Company relied upon Section 4(2) as
the exemption from the registration requirements of the Securities Act of
1933, as amended. No underwriters were issued and no commission was paid. See
"Certain Relationships and Related Transactions."

In August 1999, the Company sold 2,904,829 shares of its Common Stock at a
price per share of $1.0844 per share to a group of investors (including
certain directors) lead by a venture capital organization. In connection with
the issuance of the shares the Company agreed to issue warrants to purchase
1,300,000 shares of Common Stock at a price of $3.00 per share. The warrants
are exercisable during the 18-month period commencing September 13, 1999. See
"Certain Relationships and Related Transactions."

19
<PAGE>

LEGAL PROCEEDINGS

The Company is not a party to any legal proceeding.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Section 16(a) of the Exchange Act, requires the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file reports of ownership on Form 3 and
changes in ownership on Form 4 or Form 5 with the SEC. Such officers,
directors and 10% shareholders are also required by SEC rules to furnish the
Company with copies of all Section 16(a) forms they file.

Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that, during the fiscal year ended December 31, 1998, all Section 16(a) filing
requirements applicable to its officers, directors and 10% shareholders were
complied with.

OTHER MATTERS

The Company knows of no other matters to be submitted to the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy card to vote the shares they represent as
the Board of Directors may recommend.

It is important that your shares be represented at the meeting, regardless
of the number of shares which you hold. You are, therefore, urged to execute
and return, at your earliest convenience, the accompanying proxy card in the
envelope which has been enclosed.

20
<PAGE>

APPENDIX A

CERTIFICATE OF AMENDMENT

ARTICLES OF INCORPORATION

OF SOLOPOINT, INC.

Arthur G. Chang and Michael J. O'Donnell certify that:

1. They are the President and Secretary, respectively, of SoloPoint,
Inc., a California corporation (the "Corporation").

2. Article I of the Articles of Incorporation now reads:

"The name of this corporation is SoloPoint, Inc."

3. Article I of the Corporation's Articles of Incorporation is hereby
amended in its entirety to read as follows:

"The name of this corporation is SoloPoint.com, Inc. (the
"Corporation")."

4. The second paragraph of Article III of the Corporation's Amended and
Restated Articles of Incorporation now reads:

The outstanding shares of Common Stock shall be and hereby are
combined and reclassified as follows: each share of Common Stock
shall be reclassified as and converted into one-third of a share of
Common Stock; provided, however, that fractional shares of Common
Stock will not be issued in connection with such combination and
reclassification, and each holder of a fractional share of Common
Stock shall receive in lieu thereof a cash payment from the
Corporation determined by multiplying such fractional share of
Common Stock by three times the arithmetic mean average closing
price per share of Common Stock on the Nasdaq SmallCap Market for
the five trading days immediately preceding the effective date of
such reclassification and conversion, as determined by the Board of
Directors, such payment to be made upon such other terms and
conditions as the officers of the Corporation, in their judgment,
determine to be advisable and in the best interests of the
Corporation.

5. The foregoing amendments of the Amended and Restated Articles of
Incorporation of the Corporation have been duly approved by the Board of
Directors of the Corporation, as well as by the required vote of
shareholders of the Corporation in accordance with Sections 902 and 903 of
the Corporations Code and this Corporation's Amended and Restated Articles
of Incorporation.

[The remainder of this page is intentionally left blank]
<PAGE>

The undersigned further declare under penalty of perjury that the matters
set forth in the foregoing certificate are true of their own knowledge.

Executed at Palo Alto, California on September 30, 1999

/s/ Arthur G. Chang
-------------------------------------
Arthur G. Chang, President

/s/ Michael O'Donnell
-------------------------------------
Michael O'Donnell, Secretary

A-2
<PAGE>

APPENDIX B

CERTIFICATE OF AMENDMENT

ARTICLES OF INCORPORATION

OF SOLOPOINT, INC.

Arthur G. Chang and Michael J. O'Donnell certify that:

1. They are the President and Secretary, respectively, of SoloPoint,
Inc., a California corporation (the "Corporation").

2. Article I of the Articles of Incorporation now reads:

"The name of this corporation is SoloPoint, Inc."

3. Article I of the Corporation's Articles of Incorporation is hereby
amended in its entirety to read as follows:

"The name of this corporation is SoloPoint.com, Inc. (the
"Corporation")."

4. The foregoing amendment has been duly approved by the required vote of
shareholders in accordance with Sections 902 and 903 of the Corporations
Code and this corporation's Amended and Restated Articles of Incorporation.

[The remainder of this page is intentionally left blank]
<PAGE>

The undersigned further declare under penalty of perjury that the matters
set forth in the foregoing certificate are true of their own knowledge.

Executed at Palo Alto, California on September 30, 1999

/s/ Arthur G. Chang
_____________________________________
Arthur G. Chang, President

/s/ Michael O'Donnell
_____________________________________
Michael O'Donnell, Secretary

B-2
<PAGE>

This Proxy is solicited on behalf of the Board of Directors

SOLOPOINT, INC.
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD October 26, 1999

The undersigned shareholder of SOLOPOINT, INC., a California
corporation, hereby acknowledges receipt of the Notice of Special Meeting of
Shareholders and Proxy Statement, each dated September 30, 1999 and hereby
appoints Arthur G. Chang, and Ronald J. Tchorzewski, and each of them, proxies
and attorneys-in-fact, with full power to each of substitution, on behalf and
in the name of the undersigned, to represent the undersigned at the Special
Meeting of Shareholders of SOLOPOINT, INC. to be held on Tuesday, October
26, 1999 at 11:00 a.m. local time, at 130-B Knowles, Los Gatos, California and
at any adjournment or adjournments thereof, and to vote all shares of Common
Stock which the undersigned would be entitled to vote if then and there
personally present, on the matters set forth below:

1. PROPOSAL TO APPROVE THE AMENDMENT TO THE COMPANY'S 1993
INCENTIVE STOCK PLAN (THE "INCENTIVE PLAN") TO INCREASE THE
NUMBER OF SHARES RESERVED FOR ISSUANCE UNDER THE INCENTIVE PLAN
FROM 949,250 TO 1,549,250 SHARES:

[_] FOR [_] AGAINST [_] ABSTAIN

2. TO APPROVE A PROPOSED AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION, AND TO AUTHORIZE THE OFFICERS OF THE COMPANY TO
TAKE ALL NECESSARY ACTION, TO EFFECT A ONE TIME, ONE-FOR-THREE
REVERSE STOCK SPLIT OF THE COMPANY'S OUTSTANDING COMMON STOCK IF
AND WHEN THE COMPANY'S MANAGEMENT DETERMINES THAT SUCH A REVERSE
STOCK SPLIT IS NEEDED TO ENSURE THE COMPANY'S COMPLIANCE WITH
THE LISTING REQUIREMENTS OF THE NASDAQ SMALLCAP MARKET:

[_] FOR [_] AGAINST [_] ABSTAIN

3. TO CHANGE THE COMPANY'S NAME TO "SOLOPOINT.COM, INC.";

[_] FOR [_] AGAINST [_] ABSTAIN

and, in their discretion, upon such other matter or matters which may properly
come before the meeting or any adjournment or adjournments thereof.

THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR THE AMENDMENT OF THE 1993 INCENTIVE STOCK PLAN, FOR THE
ADVANCE APPROVAL OF THE REVERSE STOCK SPLIT, FOR THE COMPANY NAME CHANGE AND AS
SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.

Dated:_______________, 1999 _______________________________
Signature of Shareholder

_______________________________
(please print name)

(This Proxy should be marked, dated and signed by the shareholder(s) exactly as
his or her name appears on the stock certificate(s), and returned promptly in
the enclosed envelope. A corporation is requested to sign its name by its
authorized officer, with the office held designated. Persons signing in a
fiduciary capacity should so indicate. If shares are held by joint tenants or
as community property, both should sign.)