<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
INFINITY FINANCIAL TECHNOLOGY, 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> 2
Infinity
------------------------
Notice of Annual Meeting of Stockholders
To Be Held May 21, 1997
------------------------
To the Stockholders of Infinity Financial Technology, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Infinity
Financial Technology, Inc., a Delaware corporation (the "Company"), will be held
at the Radisson Inn, Empress Room II, 1085 East El Camino Real, Sunnyvale, CA
94087, at 10:30 a.m., local time, on Wednesday, May 21, 1997, for the following
purposes:
1. ELECTION OF DIRECTORS. To elect six directors of the Company to
serve until the 1998 Annual Meeting of Stockholders or until their
successors are elected and qualified.
2. RATIFICATION AND APPROVAL OF THE APPOINTMENT OF INDEPENDENT
AUDITORS. To ratify and approve the appointment of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending December 31,
1997.
3. OTHER BUSINESS. To transact such other business as may properly
come before the Annual Meeting of Stockholders and any adjournment or
postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement which is attached hereto and made a part hereof.
The Board of Directors has fixed the close of business on March 31, 1997 as
the record date for determining the stockholders entitled to notice of and to
vote at the 1997 Annual Meeting of Stockholders and any adjournment or
postponement thereof.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING OF STOCKHOLDERS IN
PERSON, YOU ARE URGED TO MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS
PROMPTLY AS POSSIBLE IN THE POSTAGE-PREPAID ENVELOPE PROVIDED TO ENSURE YOUR
REPRESENTATION AND THE PRESENCE OF A QUORUM AT THE ANNUAL MEETING. IF YOU SEND
IN YOUR PROXY CARD AND THEN DECIDE TO ATTEND THE ANNUAL MEETING TO VOTE YOUR
SHARES IN PERSON, YOU MAY STILL DO SO. YOUR PROXY IS REVOCABLE IN ACCORDANCE
WITH THE PROCEDURES SET FORTH IN THE PROXY STATEMENT.
By Order of the Board of Directors,
Roger A. Lang, Jr.
Chief Executive Officer
Mountain View, California
April 18, 1997
<PAGE> 3
MAILED TO STOCKHOLDERS ON OR ABOUT APRIL 18, 1997
INFINITY FINANCIAL TECHNOLOGY, INC.
640 CLYDE COURT
MOUNTAIN VIEW, CALIFORNIA 94043-2239
(415) 940-6100
------------------------
PROXY STATEMENT
------------------------
GENERAL INFORMATION
This Proxy Statement is furnished to the stockholders of Infinity Financial
Technology, Inc., a Delaware corporation (the "Company"), in connection with the
solicitation by the Board of Directors of the Company (the "Board" or "Board of
Directors") of proxies in the accompanying form for use in voting at the 1997
Annual Meeting of Stockholders of the Company (the "Annual Meeting") to be held
at 10:30 a.m., local time, on Wednesday, May 21, 1997, at the Radisson Inn,
Empress Room II, 1085 East El Camino Real, Sunnyvale, CA 94087, and any
adjournment or postponement thereof. The shares represented by the proxies
received, properly marked, dated, executed and not revoked will be voted at the
Annual Meeting.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is exercised by delivering to the Company (to
the attention of Terry H. Carlitz, the Company's Chief Financial Officer and
Vice President, Finance) a written notice of revocation or a duly executed proxy
bearing a later date, or by attending the Annual Meeting and voting in person.
SOLICITATION AND VOTING PROCEDURES
The solicitation of proxies will be conducted by mail and the Company will
bear all attendant costs. These costs will include the expense of preparing and
mailing proxy materials for the Annual Meeting and reimbursements paid to
brokerage firms and others for their expenses incurred in forwarding
solicitation material regarding the Annual Meeting to beneficial owners of the
Company's Common Stock. The Company may conduct further solicitation personally,
by telephone or by facsimile through its officers, directors and regular
employees, none of whom will receive additional compensation for assisting with
such solicitation.
The close of business on March 31, 1997 has been fixed as the record date
(the "Record Date") for determining the holders of shares of Common Stock of the
Company entitled to notice of and to vote at the Annual Meeting. As of the close
of business on the Record Date, the Company had 18,253,670 shares of Common
Stock outstanding and entitled to vote at the Annual Meeting. The presence at
the Annual Meeting of a majority of these shares of Common Stock of the Company,
either in person or by proxy, will constitute a quorum for the transaction of
business at the Annual Meeting. Each outstanding share of Common Stock on the
Record Date is entitled to one (1) vote on all matters. With respect to the
election of directors, a stockholder may cumulate his or her votes, meaning that
such stockholder can multiply the number of shares owned by the number of board
positions to be filled, and allocate such votes for all or as many director-
nominees as he or she may designate provided any such stockholder has given
notice at the Annual Meeting of his or her intention to cumulate votes prior to
the voting and then cumulative voting will apply only to those candidates whose
names have been placed in nomination prior to the voting. If any stockholder has
given such notice, all stockholders may cumulate their votes for candidates in
nomination.
An automated system administered by the Company's transfer agent will
tabulate votes cast by proxy at the Annual Meeting and an officer of the Company
will tabulate votes cast in person at the Annual Meeting. Abstentions and broker
non-votes are each included in the determination of the number of shares present
and voting, and each is tabulated separately. In determining whether a proposal
has been approved or a nominee has been elected as a director, abstentions are
counted as votes against a proposal or nominee and broker non-votes are not
counted as votes for or against a proposal or nominee.
<PAGE> 4
PROPOSAL NO. 1
ELECTION OF DIRECTORS
As set by the Board of Directors pursuant to the Bylaws of the Company, the
authorized number of directors is set at six. Six directors will be elected at
the Annual Meeting to serve until the 1998 Annual Meeting of Stockholders or
until their successors are elected or appointed and qualified or until the
director's earlier resignation or removal. Effective as of the Annual Meeting,
Charles H. Marston will resign as Chairman of the Board and will not seek
re-election. At such time, Roger A. Lang, Jr. will become Chairman of the Board.
Michael A. Laven has been nominated to fill the vacancy on the Board. In the
event that any nominee of the Company is unable or declines to serve as a
director at the time of the Annual Meeting, the proxies will be voted for any
nominee who shall be designated by the present Board of Directors to fill the
vacancy. In the event that additional persons are nominated for election as
directors, the proxy holders intend to vote all proxies received by them in such
a manner in accordance with cumulative voting as will assure the election of as
many of the nominees listed below as possible, and, in such event, the specific
nominees to be voted for will be determined by the proxy holders. The Board has
no reason to believe that the persons named below will be unable or unwilling to
serve as a nominee or as a director, if elected. Each of the six nominees for
director who receives the greatest number of votes will be elected.
Set forth below are the names, ages and certain biographical information
relating to the director nominees.
<TABLE>
<CAPTION>
NAME OF NOMINEE AGE POSITION WITH COMPANY DIRECTOR SINCE
- ------------------------------------- --- --------------------------------- --------------
<S> <C> <C> <C>
Roger A. Lang, Jr.................... 37 Chief Executive Officer 1989
Michael A. Laven..................... 48 President and Chief Operating --
Officer
Till M. Guldimann.................... 47 Executive Vice President and 1995
Director
Douglas M. Leone(1)(2)............... 39 Director 1994
John C. Lewis(2)..................... 61 Director 1995
James A. Dorrian(1).................. 44 Director 1996
</TABLE>
- ---------------
(1) Member of Audit Committee
(2) Member of Compensation Committee
Mr. Lang has been Chief Executive Officer and a Director of the Company
since he co-founded the Company in June 1989. From May 1996 to March 1997, he
served as President of the Company. Prior to founding the Company, Mr. Lang was
Vice President, Global Client Services at C-ATS Software Inc., a provider of
software products for the financial services industry, from September 1986 until
June 1989. Mr. Lang holds a B.A. and an M.A. from Stanford University.
Mr. Laven was named President and Chief Operating Officer in March 1997,
having previously served as Vice President, Worldwide Field Operations. Prior to
joining the Company in May 1996, he was employed by Scopus Technology, Inc., a
customer information management software company, where he served as Vice
President, International since June 1995. From April 1994 to May 1995, he was
Chief Executive Officer of CoroNet Systems, a network management company. From
May 1990 to March 1994, Mr. Laven held various positions at Ask Computer, a
relational database management systems and applications company, most recently
serving as Executive Vice President, Worldwide Operations. Mr. Laven holds a
B.A. from Wesleyan College, an M.A. from the School of International Training
and an M.Ed from Harvard University.
Mr. Guldimann has been Executive Vice President and a Director of the
Company since he joined the Company in September 1995. From June 1974 to June
1995, Mr. Guldimann was employed by J.P. Morgan, where he served as head of
Global Research from March 1990 to June 1995 and as Chairman of J.P. Morgan's
2
<PAGE> 5
Market Risk Committee from February 1991 to October 1992. Mr. Guldimann holds an
M.S. from the Swiss Federal Institute of Technology and an M.B.A. from Harvard
University.
Mr. Leone has served as a Director of the Company since January 1994. Prior
to joining Sequoia Capital, a venture capital investment firm in 1988, he spent
seven years in the electronics industry and held sales and management positions
at Sun Microsystems, Hewlett-Packard and Prime Computer. Mr. Leone is also a
director of Arbor Software and International Network Services, Inc., and is the
Chairman of Shomiti Systems. He holds a B.S. from Cornell University, an M.S.
from Columbia University and an M.S. from Massachusetts Institute of Technology.
Mr. Lewis has served as a Director of the Company since January 1995. He
has been Chairman of the Board of Amdahl Corporation since May 1987. He also
served as Amdahl's Chief Executive Officer from May 1983 to May 1992. He
presently serves on the Board of Directors of Vitesse Semiconductor Corporation,
Cypress Semiconductor Corporation and Pinnacle Systems, is a member of the Board
of Trustees of Santa Clara University and is a director of the California
Chamber of Commerce. He holds a B.S. from California State University at Fresno.
Mr. Dorrian has served as a Director of the Company since July 1996. In
April 1991, he co-founded Arbor Software and has served as its President and
Chief Executive Officer and is currently serving as a director. Prior to
co-founding Arbor Software, Mr. Dorrian was the President of Solutions
Technology, Inc., a software consulting firm specializing in financial software
systems development. Previously, Mr. Dorrian was Western States Director for
Thorn EMI Computer Software, a developer of executive information systems
software. Mr. Dorrian holds a B.A. from Indiana University.
THE BOARD RECOMMENDS A VOTE FOR
THE ELECTION OF THE NOMINEES NAMED ABOVE.
RELATIONSHIPS AMONG DIRECTORS OR EXECUTIVE OFFICERS
There are no family relationships among any of the directors or executive
officers of the Company.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended December 31, 1996, the Board met six times.
The Board has two committees: the Audit Committee and the Compensation
Committee. During the fiscal year ended December 31, 1996, no director attended
fewer than 75% of all the meetings of the Board and its committees on which he
served after becoming a member of the Board.
The Board does not have a nominating committee or a committee performing
the functions of a nominating committee. Although there are no formal procedures
for stockholders to recommend nominations, the Board will consider stockholder
recommendations. Such recommendations should be addressed to Terry H. Carlitz,
the Company's Chief Financial Officer and Vice President, Finance, at the
Company's principal executive office.
The Audit Committee, which held one meeting during the fiscal year ended
December 31, 1996, consists of Messrs. Dorrian and Leone. The Audit Committee
reviews and supervises the Company's financial controls, including selecting the
Company's auditors, reviewing the books and accounts of the Company, meeting
with the officers of the Company regarding the Company's financial controls,
acting upon recommendations of auditors and taking such further action as the
Audit Committee deems necessary to complete an audit of the books and accounts
of the Company, as well as other matters which may come before it or as directed
by the Board.
The Compensation Committee, which held one meeting during the fiscal year
ended December 31, 1996, consists of Messrs. Lewis and Leone. The Compensation
Committee reviews and approves the compensation and benefits for the Company's
executive officers, administers the Company's stock option and employee stock
purchase plans and performs such other duties as from time to time may be
determined by the Board.
3
<PAGE> 6
COMPENSATION OF DIRECTORS
The Company's outside directors are reimbursed for expenses incurred in
connection with attending Board and committee meetings but are not compensated
for their services as Board members. The Company may also grant to directors
options to purchase Common Stock of the Company pursuant to the terms of the
Company's 1993 and 1996 Stock Incentive Plans. In July, 1996, upon his election
to the Board, Mr. Dorrian received an immediately exercisable non-qualified
stock option for 40,000 shares of the Company's Common Stock at an exercise
price of $10.50 per share. No other outside director received a grant of options
during fiscal 1996.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of February 28, 1997, for
(i) each person who is known by the Company to beneficially own more than 5% of
the Company's Common Stock, (ii) each of the Company's directors and nominees,
(iii) each of the officers appearing in the Summary Compensation Table below and
(iv) all directors and executive officers as a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(1)
---------------------
DIRECTORS, EXECUTIVE OFFICERS AND 5% STOCKHOLDERS NUMBER PERCENT(2)
----------------------------------------------------------------- --------- -------
<S> <C> <C>
Roger A. Lang, Jr.(3)............................................ 4,898,000 26.6%
Till M. Guldimann(4)............................................. 879,166 4.8%
Charles H. Marston............................................... 900,000 4.9%
Douglas M. Leone................................................. 50,000 *
John C. Lewis.................................................... 140,000 *
James A. Dorrian(5).............................................. 17,024 *
Terry H. Carlitz................................................. 200,000 1.1%
Sequoia Capital Growth Fund(6)................................... 2,616,334 14.3%
Robin Vasan(7)................................................... 1,200,000 6.5%
Michael A. Laven................................................. -- *
All Executive officers and Directors as a group (10
persons)(8).................................................... 7,576,773 41.2%
</TABLE>
- ---------------
* Less than one percent.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of Common Stock subject to options held by that person that are
currently exercisable or exercisable within 60 days of February 28, 1997 are
deemed outstanding. Such shares, however, are not deemed outstanding for the
purpose of computing the percentage ownership of each other person. To the
Company's knowledge, except as set forth in the footnotes to this table and
subject to applicable community property laws, each person named in the
table has sole voting and investment power with respect to the shares set
forth opposite such person's name.
(2) Percentage beneficially owned is based on 18,232,333 shares of Common Stock
outstanding as of February 28, 1997.
(3) Includes (a) 57,142 shares held by Roger Allen Lang, Jr. and Cynthia Hunter
Lang, Trustees 1996 Generation Skipping Trust fbo Roger Lloyd Lang and (b)
57,142 shares held by Roger Allen Lang, Jr. and Cynthia Hunter Lang,
Trustees 1996 Generation Skipping Trust fbo Christopher Allen Lang.
(4) Includes 79,166 shares subject to options exercisable within 60 days of
February 28, 1997.
(5) Includes 7,500 shares subject to options exercisable within 60 days of
February 28, 1997.
(6) The address of Sequoia Capital Growth Fund is c/o Sequoia Capital, 3000 Sand
Hill Road, Bldg. 4, Suite 280, Menlo Park, California 94025.
(7) Based upon a Schedule 13G dated February 7, 1997 and filed with the
Securities and Exchange Commission on February 12, 1997. Mr. Vasan's address
is c/o RMS 149 Commonwealth Drive, Menlo Park, California 94025.
(8) Includes 164,147 shares subject to options exercisable within 60 days of
February 28, 1997.
4
<PAGE> 7
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Ernst & Young LLP has served as the Company's independent auditors since
1990 and has been appointed by the Board to continue as the Company's
independent auditors for the Company's fiscal year ending December 31, 1997. In
the event that ratification of this selection of auditors is not approved by a
majority of the shares of Common Stock voting at the Annual Meeting in person or
by proxy, management will review its future selection of auditors. A
representative of Ernst & Young LLP is expected to be present at the Annual
Meeting. The representative will have an opportunity to make a statement and to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF
THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 1997.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning compensation
of (i) each person that served as the Company's Chief Executive Officer during
the last fiscal year of the Company, (ii) the four other most highly compensated
executive officers of the Company, and (iii) up to two former executive officers
of the Company who would have been one of the Company's four most highly
compensated executive officers had such officer been serving as such at the end
of the Company's last fiscal year (collectively, the "Named Executive
Officers"):
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES ALL OTHER
------------------------------------- UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR(1) SALARY($) BONUS($)(2) OPTIONS(#) ($)(3)
- --------------------------------- ------- --------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Roger A. Lang, Jr.,.............. 1996 150,000 60,000 -- 264
Chief Executive Officer(4)
Michael A. Laven,................ 1996 93,847(5) 138,750(6) 240,000 464
President and Chief Operating
Officer(7)
Till M. Guldimann,............... 1996 200,000 60,000 -- 696
Executive Vice President,
Director
Charles H. Marston,.............. 1996 150,000 60,000 -- 696
Chairman of the Board(4)
Terry H. Carlitz,................ 1996 150,000 60,000 -- 408
Chief Financial Officer and
Vice President, Finance
</TABLE>
- ---------------
(1) The Company became a reporting company under the Securities Exchange Act in
1996.
(2) Includes bonus amounts earned in stated year and paid in following year.
(3) Represents premiums paid on term life insurance.
(4) Mr. Lang served as President of the Company from May 1996 to March 1997. Mr.
Marston will resign as a director and Chairman of the Board effective as of
the Annual Meeting. At such time, Mr. Lang will become the Chairman of the
Board.
(5) Mr. Laven joined the Company in May 1996. His annual base salary for 1996
was $150,000.
(6) Consists of guaranteed and incentive bonus as contemplated by the terms of
an employment agreement entered into by the Company and Mr. Laven (see
"Employment Agreements").
(7) Mr. Laven served as Vice President, World Wide Field Operations until March
10, 1997. Mr. Laven became President and Chief Operating Officer in March
1997.
5
<PAGE> 8
EMPLOYMENT AGREEMENTS
The Company has entered into an employment agreement dated September 1,
1995 with Till M. Guldimann, its Executive Vice President. The agreement
provides that Mr. Guldimann shall receive a yearly salary of $200,000 and
reimbursement for certain expenses. Mr. Guldimann is also entitled to
participate in any pension, bonus, retirement, insurance, medical reimbursement
or other employee benefit plans adopted by the Company. Under an option
agreement executed in connection with his employment agreement, Mr. Guldimann
was granted incentive stock options to purchase 200,000 shares of the Company's
Common Stock at an exercise price of $1.50 per share. Mr. Guldimann was also
granted immediately exercisable, non-qualified options to purchase 500,000
shares of the Company's Common Stock at an exercise price of $1.50 per share. In
addition, on the same date, Mr. Guldimann purchased 200,000 shares of Common
Stock of the Company pursuant to a Restricted Stock Purchase Agreement.
The employment agreement continues until Mr. Guldimann's employment is
terminated (i) by the Board of Directors for cause at any time upon ten days
written notice, or without cause upon six months written notice; (ii) by death;
(iii) by Mr. Guldimann for good reason upon 20 days written notice, or at will
upon three months written notice; or (iv) due to disability. Upon termination of
employment without cause by the Company, or for good reason by the employee, the
Company will hire Mr. Guldimann as a consultant for a period of six months
following termination. During the consultancy period, Mr. Guldimann is required
to be available at least ten hours per month in return for which he will be
entitled to receive a monthly salary, bonus and benefits equal to the amount
that he received immediately prior to his termination of employment. During this
period his options will continue to vest.
In May 1996, Michael A. Laven, the Company's President and Chief Operating
Officer, was initially hired as the Company's Vice President, World Wide Field
Operations and in that capacity entered into a letter agreement with the
Company. The letter agreement provides for an annual salary of $150,000 plus a
guaranteed bonus of $30,000 per annum. Mr. Laven is also eligible for an
executive incentive bonus of up to $120,000 provided certain targets are met by
the Company. Mr. Laven is also eligible to participate in all of the Company's
benefit plans and was granted in May 1996 incentive stock options to purchase
100,000 shares of the Company's Common Stock at an exercise price of $4.00 per
share, and non-qualified stock options to purchase 140,000 shares of the
Company's Common Stock at an exercise price of $4.00 per share. Mr. Laven's
employment is at will and may be terminated by either party with or without
cause.
6
<PAGE> 9
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides certain information with respect to stock
options granted to the Named Executive Officers during the fiscal year ended
December 31, 1996. In addition, as required by the Securities and Exchange
Commission rules, the table sets forth the potential realizable value over the
term of the option (the period from the grant to the expiration date) based on
assumed rates of stock appreciation of 5% and 10%, compounded annually. These
amounts are based on certain assumed rates of appreciation and do not represent
the Company's estimate of future stock values. Actual gains, if any, on stock
option exercises will be dependent on the future performance of the Company's
Common Stock.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------------ VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATE OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE PRICE FOR OPTION TERM(5)
OPTIONS EMPLOYEES IN PER SHARE EXPIRATION ---------------------
NAME GRANTED(#)(1) FISCAL YEAR(2) ($/SH)(3) DATE(4) 5%($) 10%($)
- ------------------------- ------------- -------------- -------------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Roger A. Lang, Jr........ -- -- -- -- -- --
Michael A. Laven......... 240,000 15.47% 4.00 5/15/06 603,739 1,529,993
Till M. Guldimann........ -- -- -- -- -- --
Charles H. Marston....... -- -- -- -- -- --
Terry H. Carlitz......... 40,000 2.58% 6.00 6/10/06 150,935 382,498
</TABLE>
- ---------------
(1) Options granted under the Company's 1993 Stock Incentive Plan.
(2) Based on a total of 1,551,250 options granted to employees of the Company in
1996, including the Named Executive Officers.
(3) In determining the fair market value of the Company's Common Stock prior to
October 25, 1996, the date of the Company's initial public offering, the
Board of Directors considered various factors, including the Company's
financial condition and business prospects, its operating results, the
absence of a market for its Common Stock and the risks normally associated
with high technology companies. Subsequent to October 25, 1996, all options
are granted at an exercise price equal to the fair market value of a share
of the Company's Common Stock as listed on the NASDAQ National Market on the
date the options are granted. The exercise price may be paid in cash, check,
promissory note, shares of the Company's Common Stock, through a cashless
exercise procedure involving same-day sale of the purchased shares or any
combination of such methods.
(4) Options may terminate before their expiration dates if the optionee's status
as an employee or consultant is terminated or upon the optionee's death or
disability.
(5) The potential realizable value is calculated based on the term of the option
at its time of grant (ten years). It is calculated by assuming that the
stock price on the date of grant appreciates at the indicated annual rate,
compounded annually for the entire term of the option, and that the option
is exercised and sold on the last day of its term for the appreciated stock
price. There can be no assurance that the amounts reflected in this table
will be achieved.
7
<PAGE> 10
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information with respect to stock
options exercised by the Named Executive Officers during fiscal year 1996,
including the aggregate value of gains on the date of exercise. In addition, the
table sets forth the number of shares covered by stock options as of December
31, 1996, and the value of "in-the-money" stock options, which represent the
positive spread between the exercise price of a stock option and the market
price of the shares subject to such option on December 31, 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 1996(#) DECEMBER 31, 1996($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Roger A. Lang, Jr........... -- -- -- -- -- --
Michael A. Laven............ -- -- -- 240,000 -- 3,180,000
Till M. Guldimann........... -- -- 62,500 137,500 984,375 2,165,625
Charles H. Marston.......... -- -- -- -- -- --
Terry H. Carlitz............ -- -- -- 40,000 -- 450,000
</TABLE>
- ---------------
(1) Calculated by determining the difference between the fair market value of
the securities underlying the option at December 31, 1996 ($17.25 per share)
and the exercise price of the Named Executive Officers' respective options.
8
<PAGE> 11
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
This section is not "soliciting material," is not deemed "filed" with the
Commission and is not incorporated by reference in any filing of the Company
under the Securities Act of 1993, as amended, or the Securities Exchange Act of
1934, as amended, whether made before or after the date hereof and irrespective
of any general language to the contrary.
The Compensation Committee of the Board was formed in 1996 and consists of
outside directors John C. Lewis and Douglas M. Leone. Decisions concerning the
compensation and the granting of stock options to the Company's Named Executive
Officers are made by the Compensation Committee and reviewed by the full Board
(excluding any interested directors).
EXECUTIVE OFFICER COMPENSATION PROGRAMS
The objectives of the executive officer compensation program are to
attract, retain, motivate and reward key personnel who possess very high caliber
leadership and management skills, through competitive base salary, annual cash
bonus incentives, long-term incentive compensation in the form of stock options,
and various other general employee benefit programs.
The executive compensation policies of the Compensation Committee are
intended to combine competitive levels of compensation and rewards for above
average performance and to align relative compensation with the achievements of
key business objectives, optimal customer satisfaction, and maximization of
stockholder value. The Compensation Committee believes that stock ownership by
management is essential in aligning management and stockholder interests,
thereby enhancing stockholder value.
Base Salaries. Salaries for the Company's executive officers are
determined primarily on the basis of the executive officer's responsibilities,
general salary practices of peer companies and the officer's individual
contributions, qualifications and experience. The base salaries are reviewed
annually and may be adjusted by the Compensation Committee in accordance with
certain criteria which includes individual performance, the functions performed
by the executive officer, the scope of the executive officer's on-going duties,
general changes in the compensation of the peer group in which the Company
competes for executive talent, and the Company's financial performance
generally. The weight given each such factor by the Compensation Committee may
vary from individual to individual. The Company attempts to align the base
salaries of its executive officers with the base salaries of executive officers
of other comparable companies included within the peer group.
Incentive Bonuses. The Company adopted an executive incentive bonus plan
in 1996. The Compensation Committee believes that an annual incentive bonus plan
motivates the Company's executive officers and management to achieve annual
performance goals because a cash bonus provides a more immediate reward than
does the potential appreciation in the value of stock options. Annual incentive
bonuses are aligned to be near the middle of the range for incentive bonuses
within the peer group of comparable companies. The bonus amounts are based upon
comparisons with the peer group, predictability of business results, the
achievement of the Company's planned operating performance, and the officer's
level of responsibility and contributions to the Company's success. Bonuses
earned in 1996 reflect the Company's achievements in operating performance from
the prior year -- an increase in revenues of 68%, an increase in income from
operations of 50% and an increase in net income per share of 47%.
Stock Option Grants. Stock options are granted to executive officers and
other employees under the 1993 and 1996 Stock Incentive Plans. Because of the
direct relationship between the value of a stock option and the stock price, the
Compensation Committee believes that options motivate executive officers to
manage the Company in a manner that is consistent with stockholder interest.
Stock option grants are intended to focus the attention of the recipient on the
Company's long-term performance which the Company believes results in improved
stockholder value, and to retain the services of the executive officers in a
competitive job market by providing very significant long-term earning
potential. To this end, stock options generally vest and become fully
exercisable over a four-year period. The principal factors considered in
granting stock options to executive officers of the Company are prior
performance, level of responsibility, previously granted options, other
compensation, and the executive officer's ability to influence the Company's
long-term growth and profitability.
9
<PAGE> 12
Other Compensation Plans. The Company has adopted certain general employee
benefit plans including the 1996 Employee Stock Purchase Plan in which executive
officers are permitted to participate on parity with other employees. The
Company also provides a 401(k) deferred compensation plan.
Deductibility of Compensation. Section 162(m) of the Internal Revenue Code
("IRC") disallows a deduction by the Company for certain compensation exceeding
$1.0 million in a given year paid to any Named Executive Officer, excluding,
among other things, certain performance based compensation. Because the
compensation levels for the Named Executive Officers have not approached the
limitation, the Compensation Committee has not had to use any available
exemptions from the deduction limit. The Compensation Committee remains aware of
the existence of the IRC Section 162(m) limitations, and the available
exemptions, and will address the issue of deductibility when and if
circumstances warrant the use of such exemption.
CHIEF EXECUTIVE OFFICER COMPENSATION
The compensation of the Chief Executive Officer is reviewed annually on the
same basis as discussed above for all executive officers. Mr. Lang's base salary
for the fiscal year ended December 31, 1996 was $150,000. Mr. Lang's base salary
was established in part by comparison to base salaries of chief executive
officers at other companies of similar size. Mr. Lang's base salary and total
compensation was below the median of the base salary range for chief executive
officers of comparative companies. Mr. Lang received an incentive bonus of
$60,000 under the 1996 executive incentive bonus plan approved by the
Compensation Committee. Mr. Lang received no stock options during fiscal year
1996. This below market total compensation positioning is not indicative of Mr.
Lang's performance and only signifies a mutual agreement between the Committee
and the Chief Executive Officer to conserve the Company's cash and to tightly
control stockholder dilution. Industry and competitive practices as well as
internal compression issues will likely compel a closer-to-market positioning in
the future.
MEMBERS OF THE
COMPENSATION COMMITTEE
Douglas M. Leone
John C. Lewis
10
<PAGE> 13
CERTAIN TRANSACTIONS
The following is a description of certain transactions and relationships
entered into or existing during the fiscal year ended December 31, 1996 between
the Company and certain affiliated parties. The Company believes that the terms
of such transactions were no less favorable to the Company than could have been
obtained from an unaffiliated party.
In April 1995, the Company granted Ms. Carlitz, the Company's Chief
Financial Officer and Vice President, Finance, immediately exercisable,
incentive stock options for 200,000 shares of the Company's Common Stock at an
exercise price of $0.35 per share. Ms. Carlitz paid for the shares with $17,500
in cash and a promissory note in the original principal amount of $52,500
payable to the Company. The shares are subject to repurchase by the Company upon
termination of Ms. Carlitz's employment on the terms and conditions set forth in
the option agreement. The promissory note bears interest at 5.88% per annum and
is payable in full by April 17, 2000. The unpaid balance of the promissory note
at January 1, 1996 and February 28, 1997 was $52,500 and $35,000, respectively.
The option agreement was amended in May 1996 to provide for acceleration of Ms.
Carlitz's options upon the occurrence by a change in control and certain other
stockholder approved transactions. In June 1996, the Company granted Ms. Carlitz
incentive stock options for 40,000 shares of the Company's Common Stock at an
exercise price of $6.00 per share.
In September 1995, the Company entered into an employment agreement with
Mr. Guldimann, its Executive Vice President. Under an option agreement executed
in connection with his employment agreement, Mr. Guldimann was granted incentive
stock options to purchase 200,000 shares of the Company's Common Stock at an
exercise price of $1.50 per share. Mr. Guldimann was also granted immediately
exercisable, non-qualified options to purchase 500,000 shares of the Company's
Common Stock at an exercise price of $1.50 per share. Mr. Guldimann exercised
his options for 500,000 shares in September 1995 by delivering a promissory note
in the original principal amount of $750,000 to the Company. The unpaid balance
of the promissory note at January 1, 1996 and February 28, 1997 was $750,000 and
$531,250, respectively. In November 1996, the Promissory Note was amended from
monthly payments to annual payments due and payable as follows: (i) $156,250 on
September 1, 1997; (ii) $187,500 on September 1, 1998; and (iii) $187,500 on
September 1, 1999. The promissory note bears interest at 6.04% per annum.
In addition, in September 1995, Mr. Guldimann purchased 200,000 shares of
the Company's Common Stock pursuant to a Restricted Stock Purchase Agreement. In
payment of such shares, Mr. Guldimann delivered to the Company $100,000 in cash
and a promissory note in the original principal amount of $200,000 bearing
interest at 6.04% per annum. Such promissory note was paid in full on March 1,
1997. The vesting of Mr. Guldimann's options was amended in December 1995 such
that 25% of such options vest one year from the grant date, and the remainder of
the options vest ratably at the end of each month thereafter. The option
agreement was again amended in May 1996 to provide for acceleration of Mr.
Guldimann's options upon the occurrence of a change in control and certain other
stockholder approved transactions.
In May 1996, Mr. Laven, the Company's current President and Chief Operating
Officer, was initially hired as the Company's Vice President, World Wide Field
Operations and in that capacity entered into a letter agreement with the
Company. The letter agreement provides for an annual salary of $150,000 plus a
guaranteed bonus of $30,000 per annum. Mr. Laven is also eligible for an
executive incentive bonus of up to $120,000, provided certain targets are met by
the Company. Mr. Laven is also eligible to participate in all of the Company's
benefit plans and was granted in May 1996 incentive stock options to purchase
100,000 shares of the Company's Common Stock at an exercise price of $4.00 per
share, and nonqualified stock options to purchase 140,000 shares of the
Company's Common Stock at an exercise price of $4.00 per share. Mr. Laven's
employment is at will and may be terminated by either party with or without
cause. The option agreements provide for acceleration of Mr. Laven's options
upon the occurrence of a change in control and certain other stockholder
approved transactions.
11
<PAGE> 14
STOCK PERFORMANCE GRAPH
The following graph compares the percentage change in the cumulative total
stockholder return on the Company's Common Stock from October 25, 1996, the date
of the Company's initial public offering, through the end of the Company's
fiscal year ended December 31, 1996, with the percentage change in the
cumulative total return for the NASDAQ Stock Market -- U.S. Index and the
Hambrecht & Quist Computer Software Index. The comparison assumes an investment
of $100 on October 25, 1996 in the Company's Common Stock and in each of the
foregoing indices and assumes reinvestment of dividends. The stock performance
shown on the graph below is not necessarily indicative of future price
performance.
COMPARISON OF 2 MONTH CUMULATIVE TOTAL RETURN*
AMONG INFINITY FINANCIAL TECHNOLOGY, INC., THE NASDAQ STOCK MARKET -- US INDEX
AND THE HAMBRECHT & QUIST COMPUTER SOFTWARE INDEX
<TABLE>
<CAPTION>
'INFINITY HAMBRECHT & QUIST
MEASUREMENT PERIOD FINANCIAL NASDAQ STOCK COMPUTER SOFTWARE
(FISCAL YEAR COVERED) TECHNOLOGY, INC.' MARKET - US INDEX INDEX
<S> <C> <C> <C>
10/25/96 100 100 100
12/31/96 102 106 102
</TABLE>
- ---------------
* $100 invested on 10/25/96 in stock or index -- including reinvestment of
dividends. Fiscal year ending December 31.
12
<PAGE> 15
STOCKHOLDER PROPOSALS
To be considered for presentation to the annual meeting of the Company's
stockholders to be held in 1998, a stockholder proposal must be received by
Terry H. Carlitz, Chief Financial Officer and Vice President, Finance, Infinity
Financial Technology, Inc., 640 Clyde Court, Mountain View, California
94043-2239, no later than December 19, 1997.
OTHER MATTERS
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons who own more than 10% of the Company's Common
Stock (collectively, "Reporting Persons") to file reports of ownership and
changes in ownership of the Company's Common Stock. Reporting Persons are
required by Securities and Exchange Commission regulations to furnish the
Company with copies of all Section 16(a) reports they file. Based solely on its
review of the copies of such reports received or written representations from
certain Reporting Persons, the Company believes that during the fiscal year
ended December 31, 1996, all Reporting Persons complied with all applicable
filing requirements.
OTHER MATTERS
The Board of Directors knows of no other business which will be presented
at the Annual Meeting. If any other business is properly brought before the
Annual Meeting, it is intended that proxies in the enclosed form will be voted
in respect thereof in accordance with the judgments of the persons voting the
proxies.
It is important that the proxies be returned promptly and that your shares
be represented. Stockholders are urged to mark, date, execute and promptly
return the accompanying proxy card in the enclosed envelope.
By Order of the Board of Directors,
Roger A. Lang, Jr.
Chief Executive Officer
April 18, 1997
Mountain View, California
13
<PAGE> 16
1574-PS-97
<PAGE> 17
P DETACH HERE INF F
R INFINITY FINANCIAL TECHNOLOGY, INC.
640 Clyde Court
O Mountain View, California 94043-2239
X THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING ON MAY 21, 1997
Y
Roger A. Lang and Terry H. Carlitz, or either of them, each with the
power of substitution, are hereby authorized to represent and vote the shares of
the undersigned, with all the powers which the undersigned would possess if
personally present, at the Annual Meeting of Stockholders of Infinity Financial
Technology, Inc. (the "Company"), to be held at 10:30 a.m., local time, on
Wednesday, May 21, 1997 at the Radisson Inn, 1085 East El Camino Real,
Sunnyvale, California 94087, and any adjournment or postponement thereof.
Election of six directors (or if any nominee is not available for
election, such substitute as the Board of Directors or the proxy holders may
designate).
NOMINEES: James A. Dorrian, Till M. Guldimann, Roger A. Lang, Michael A. Laven,
Douglas M. Leone and John C. Lewis.
-------------
SEE REVERSE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
<PAGE> 18
DETACH HERE INF F
____
Please mark |
[ X ] votes as in |
this example.
The Board of Directors recommends a vote FOR the election of Directors and FOR
proposal 2.
1. Election of Directors (see reverse):
FOR WITHHELD
[ ] [ ]
MARK HERE
FOR ADDRESS
CHANGE AND
[ ]_____________________________________________________ NOTE BELOW [ ]
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. To ratify and approve the appointment of Ernst
& Young LLP as the Company's independent auditors
for the fiscal year ending December 31, 1997: [ ] [ ] [ ]
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER. IF NO SUCH DIRECTIONS ARE INDICATED, THE PROXIES WILL HAVE
AUTHORITY TO VOTE FOR THE ELECTION OF ALL DIRECTORS, AND FOR ITEM 2.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
REPLY ENVELOPE.
Please sign exactly as your name appears herein. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
- ---------------------- -------- ----------------------- --------
Signature Date Signature Date
