<PAGE>
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:
/ / 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 Section240.14a-11(c) or
Section240.14a-12
SPLASH TECHNOLOGY HOLDINGS, INC.
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(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)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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:
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(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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
SPLASH TECHNOLOGY HOLDINGS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD WEDNESDAY, MAY 26, 1999
TO THE STOCKHOLDERS OF SPLASH TECHNOLOGY HOLDINGS, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Splash
Technology Holdings, Inc., a Delaware corporation (the "Company"), will be held
on Wednesday, May 26, 1999 at 9:00 a.m., local time, at the offices of the
Company at 555 Del Rey Avenue, Sunnyvale, California 94086 for the following
purposes:
1. To elect two Class III directors to serve for three year terms expiring
upon the Meeting of Stockholders in 2002 or until their successors are
elected;
2. To approve and ratify the adoption of an amendment to the 1996 Employee
Stock Purchase Plan (the "Purchase Plan") which (i) increases the number
of shares of Common Stock reserved for issuance thereunder from 175,000
to 350,000 and (ii) provides for an annual share increase to the Purchase
Plan consisting of the lesser of (a) 175,000 shares of Common Stock, (b)
that number of shares of Common Stock issued pursuant to the Purchase
Plan in the one-year period ending on the date of said annual increase,
or (c) a lesser amount determined by the Board.
3. To transact such other business as may properly come before the meeting
and any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on Monday, April 26,
1999 are entitled to notice of and to vote at the meeting and any adjournment
thereof.
All stockholders are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if such stockholder has returned a proxy.
THE BOARD OF DIRECTORS
Sunnyvale, California
May 3, 1999
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IMPORTANT: Whether or not you plan to attend the meeting, you are requested to
complete and promptly return the enclosed proxy in the envelope provided.
- --------------------------------------------------------------------------------
<PAGE>
SPLASH TECHNOLOGY HOLDINGS, INC.
----------------
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors of
Splash Technology Holdings, Inc. (the "Company") for use at the Annual Meeting
of Stockholders to be held on Wednesday, May 26, 1999 at 9:00 a.m., local time,
or at any adjournment thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting will
be held at the offices of the Company at 555 Del Rey Avenue, Sunnyvale,
California 94086. The telephone number of the Company's offices is (408)
328-6300.
These proxy solicitation materials and the Company's Annual Report to
Stockholders for the year ended December 31, 1998, including financial
statements, were mailed on or about May 3, 1999 to all stockholders entitled to
vote at the meeting.
RECORD DATE AND VOTING SECURITIES
Stockholders of record at the close of business on Monday, April 26, 1999
(the "Record Date") are entitled to notice of and to vote at the meeting. At the
Record Date, 13,975,542 shares of the Company's Common Stock, $0.001 par value,
were issued and outstanding.
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 meeting and voting in person.
VOTING AND SOLICITATION
Each stockholder is entitled to one vote for each share of Common Stock on
all matters presented at the Annual Meeting. Stockholders do not have the right
to cumulative voting in the election of directors.
The Company will bear the cost of soliciting proxies. In addition, the
Company may reimburse brokerage firms and other persons representing beneficial
owners of shares for their expenses in forwarding solicitation materials to such
beneficial owners. Solicitation of proxies by mail may be supplemented by
telephone, telegram, facsimile or personal solicitation by directors, officers
or regular employees of the Company. No additional compensation will be paid to
such persons for such services.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting is
a majority of the votes eligible to be cast by holders of shares of Common Stock
issued and outstanding on the Record Date. Shares that are voted "FOR,"
"AGAINST," "WITHHELD" or "ABSTAIN" are treated as being present at the meeting
for purposes of establishing a quorum and are also treated as shares entitled to
vote at the Annual Meeting (the "Votes Cast") with respect to such matter.
Although there is no definitive statutory or case law authority in Delaware
as to the proper treatment of abstentions, the Company believes that abstentions
should be counted for purposes of determining both (i) the presence or absence
of a quorum for the transaction of business and (ii) the total number of Votes
Cast with respect to a proposal (other than the election of directors). In the
absence of controlling precedent to the contrary, the Company intends to treat
abstentions in this manner. Accordingly, abstentions will have the same effect
as a vote against the proposal.
<PAGE>
The Delaware Supreme Court has held that, while broker non-votes should be
counted for purposes of determining the presence or absence of a quorum for the
transaction of business, broker non-votes should not be counted for purposes of
determining the number of Votes Cast with respect to the particular proposal on
which the broker has expressly not voted. The Company intends to treat broker
non-votes in a manner consistent with such holding. Thus, a broker non-vote will
not affect the outcome of the voting on a proposal.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company which are intended to be presented
by such stockholders at the Company's 2000 Annual Meeting must be received by
the Company no later than January 3, 2000 in order that they may be considered
for inclusion in the proxy statement and form of proxy relating to that meeting.
The attached proxy card grants the proxy holders discretionary authority to
vote on any matter raised at the meeting. If a stockholder intends to submit a
proposal at the next annual meeting of stockholders which is not eligible for
inclusion in the proxy statement relating to that meeting, the stockholder must
give notice to Splash in accordance with the requirements set forth in the
Securities Exchange Act of 1934, as amended, no later than March 19, 2000. If a
stockholder does not comply with the foregoing notice provision, the proxy
holders will be allowed to use their discretionary voting authority when and if
the proposal is raised at the next annual meeting of stockholders.
PROPOSAL ONE:
ELECTION OF DIRECTORS
NOMINEES
The number of directors authorized by the Company's Bylaws is currently
fixed by the Board at five. The Company's Amended and Restated Certificate of
Incorporation provides that the directors shall be divided into three classes,
with the classes serving for staggered, three year terms. Currently there is one
director in Class I, there are two directors in Class II and there are two
directors in Class III.
Two Class III directors are to be elected at the Annual Meeting. The Class
III directors elected at the Annual Meeting will hold office until the Annual
Meeting of Stockholders in 2002 or until their successors have been duly elected
and qualified. The term of the Class I director will expire at the Annual
Meeting of Stockholders in 2000. The term of each Class II director will expire
at the Annual Meeting of Stockholders in 2001.
Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the Company's two nominees named below, who are currently
directors of the Company. In the event that either nominee of the Company
becomes unable or declines to serve as a director at the time of the Annual
Meeting, the proxy holders will vote the proxies for any substitute nominee who
is designated by the current Board of Directors to fill the vacancy. It is not
expected that either nominee listed below will be unable or will decline to
serve as a director.
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<PAGE>
The names of the two Class III nominees for director and certain information
about them are set forth below. The names of, and certain information about, the
current Class I and Class II directors with unexpired terms are also set forth
below.
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION
- ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
NOMINEES FOR CLASS III DIRECTORS
Kevin K. Macgillivray................................ 40 President, Chief Executive Officer, Director, Splash
Technology Holdings, Inc.
Gregory M. Avis...................................... 40 General Partner, Summit Partners, L.P.
CONTINUING CLASS I DIRECTOR
Peter Y. Chung....................................... 31 Principal, Summit Partners, L.P.
CONTINUING CLASS II DIRECTORS
Charles W. Berger.................................... 44 Chief Executive Officer, AdForce, Inc.
Lawrence G. Finch.................................... 64 General Partner, Sigma Partners, L.P.
</TABLE>
Except as indicated below, each nominee or incumbent director has been
engaged in the principal occupation set forth above during the past five years.
There are no family relationships between any directors or executive officers of
the Company.
KEVIN K. MACGILLIVRAY has served as President, Chief Executive Officer and a
Director of the Company since January 1996. From April 1995 until January 1996,
Mr. Macgillivray was Vice President and General Manager of the Publishing
Division of Radius Inc., a manufacturer of computer video cards and display
products. From May 1993 to April 1995, Mr. Macgillivray held other managerial
positions within Radius Inc. and SuperMac Technology, Inc., which merged into
Radius Inc. in 1994. From May 1991 to May 1993, Mr. Macgillivray was Vice
President and General Manager of Oce Graphics USA, a computer peripherals
manufacturer.
GREGORY M. AVIS has been a director of the Company since its formation in
December 1995. Mr. Avis has served as a General Partner of Summit Partners,
L.P., a venture capital partnership, since 1987 and has served as a Managing
Partner of Summit Partners, L.P. since 1990. Mr. Avis is also a director of
Extended Systems, Inc. a designer and developer of distributed connectivity and
mobile systems solutions, Powerwave Technologies, Inc., a designer and
manufacturer of linear power amplifiers for wireless communications and several
privately held companies.
PETER Y. CHUNG has been a director of the Company since its formation in
December 1995. Mr. Chung has served as a Principal at Summit Partners, L.P., a
venture capital partnership, since December 1997. From December 1996 to December
1997, Mr. Chung served as a Vice President at Summit Partners, L.P. From August
1994 to December 1997, Mr. Chung served as a Senior Associate at Summit
Partners, L.P. From August 1989 to July 1992, Mr. Chung was employed by Goldman,
Sachs & Co., an investment banking firm.
CHARLES W. BERGER has been a director of the Company since January 1996. Mr.
Berger has been Chairman and Chief Executive Officer of AdForce, Inc. since July
1997. Mr. Berger has also been a director of Radius Inc. since March 1994 and
was Chief Executive Officer for Radius Inc. from March 1993 until July 1997.
From April 1992 until he joined Radius Inc., Mr. Berger was Senior Vice
President, Worldwide Sales, Operations and Support for Claris Corporation, a
software subsidiary of Apple Computer, Inc., a personal computer manufacturer,
that develops and markets application software. From March 1989 to April 1992,
Mr. Berger held various executive positions at Sun Microsystems, Inc. and its
subsidiaries.
3
<PAGE>
LAWRENCE G. FINCH has been a director of the Company since January 1996. Mr.
Finch has served as a General Partner of Sigma Partners, L.P., a venture capital
firm, since January 1989. Mr. Finch is also a director of International Network
Services, a networking services company.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of five (5) meetings from
January 1, 1998 through December 31, 1998 ("Fiscal 1998"). During Fiscal 1998,
no director attended fewer than seventy-five percent (75%) of the meetings of
the Board of Directors with the exception of Mr. Avis, who attended forty
percent (40%) of the meetings of the Board of Directors.
The Board of Directors established an Audit Committee and a Compensation
Committee in connection with the Company's initial public offering in October
1996. The Board of Directors has no nominating committee or any committee
performing similar functions.
The Audit Committee currently consists of Directors Chung and Finch. The
Audit Committee aids management in the establishment and supervision of the
Company's financial controls, evaluates the scope of the annual audit, reviews
audit results, consults with management and the Company's independent auditors
prior to the presentation of financial statements to stockholders and, as
appropriate, initiates inquiries into aspects of the Company's financial
affairs. The Audit Committee held 4 meetings in Fiscal 1998.
The Compensation Committee currently consists of Directors Avis and Berger.
The Compensation Committee makes recommendations to the Board concerning
salaries and incentive compensation for the Company's officers and employees and
administers the Company's 1996 Stock Option Plan and 1996 Employee Stock
Purchase Plan. The Compensation Committee held 2 meetings in Fiscal 1998.
COMPENSATION OF OUTSIDE DIRECTORS
Employee directors receive no cash remuneration for serving on the Board of
Directors, although all directors are reimbursed for all reasonable expenses
incurred by them in attending Board and Committee meetings. Effective April
1999, outside directors (as defined below) are granted an annual cash retainer
of $10,000 and an additional $1,000 for each Board Meeting attended.
Additionally, outside directors are eligible to receive stock options under the
1996 Stock Option Plan and are automatically granted fully vested options, on a
quarterly basis, to purchase 1,250 shares of Company Common Stock. An "outside
director" is a director who is (i) not an employee of the Company and (ii) not a
partner nor a member of any venture capital firm or institutional investor which
owns securities of the Company having more than five percent (5%) of the total
voting power of the Company.
VOTE REQUIRED
The two nominees receiving the highest number of affirmative votes of the
shares entitled to vote on this matter shall be elected as the Class III
directors. Votes withheld from the directors will be counted for purposes of
determining the presence or absence of a quorum but are not counted as
affirmative votes. A broker non-vote will be counted for purposes of determining
the presence or absence of a quorum but will have no other legal effect upon the
election of the director.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE NOMINEES SET
FORTH ABOVE.
4
<PAGE>
PROPOSAL TWO:
APPROVAL OF THE AMENDED 1996 EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors has determined that it is in the best interests of
the Company and its stockholders to amend the Company's 1996 Employee Stock
Purchase Plan ("Purchase Plan"). In July 1996, the Board of Directors adopted
the Purchase Plan and reserved 175,000 shares of Common Stock for issuance under
the Purchase Plan. In April 1999, the Board of Directors approved an amendment
to the Purchase Plan which, subject to stockholder approval, (1) increases the
number of shares of Common Stock reserved for issuance thereunder from 175,000
to 350,000 and (2) adds an automatic replenishment feature to the Purchase Plan
which would annually increase the number of shares issuable under the Purchase
Plan on the anniversary date of the adoption of the Purchase Plan in an amount
equal to the lesser of (i) 175,000 shares, (ii) that number of shares of Common
Stock issued pursuant to the Purchase Plan in the one-year period ending on the
date of said annual increase or (iii) a lesser amount determined by the Board
(the "Evergreen Provision"). As of April 16, 1999, 112,871 shares had been
granted pursuant to the Purchase Plan and 62,129 shares were reserved for
issuance pursuant to the Purchase Plan.
At the annual meeting, the stockholders are being asked to approve the
increase in the shares available for issuance under the Purchase Plan and the
addition of the Evergreen Provision to the Purchase Plan. The Board believes
that the amendment will enable the Company to continue its policy of widespread
employee stock ownership as a means to motivate high levels of performance and
to recognize key employee accomplishments.
SUMMARY OF THE PURCHASE PLAN
GENERAL. The purpose of the Purchase Plan is to provide employees with an
opportunity to purchase Common Stock of the Company through payroll deductions.
ADMINISTRATION. The Purchase Plan may be administered by the Board of
Directors (the "Board") or a committee appointed by the Board. All questions of
interpretation or application of the Purchase Plan are determined by the Board
or its appointed committee, and its decisions are final, conclusive and binding
upon all participants.
ELIGIBILITY. Each employee of the Company (including officers), whose
customary employment with the Company is at least twenty (20) hours per week and
more than five (5) months in any calendar year, is eligible to participate in
the Purchase Plan; provided, however, that no employee shall be granted an
option under the Purchase Plan (i) to the extent that, immediately after the
grant, such employee would own 5% of either the voting power or value of the
stock of the Company, or (ii) to the extent that his or her rights to purchase
stock under all employee stock purchase plans of the Company accrues at a rate
which exceeds $25,000 worth of stock (determined at the fair market value of the
shares at the time such option is granted) for each calendar year.
OFFERING PERIOD. The Purchase Plan is implemented by offering periods
lasting approximately six months in duration with a new offering period
commencing on May 1 and November 1 of each year. The Board shall have the power
to change the duration of the offering periods (not to exceed 24 months)
provided that any such change shall be effected only with respect to offering
periods commencing at least five (5) days following the announcement of the
change. To participate in the Purchase Plan, each eligible employee must
authorize payroll deductions pursuant to the Purchase Plan. Such payroll
deductions may not exceed 10% of a participant's compensation. Compensation is
defined as base straight time gross earnings, overtime, commissions, shift
premium, incentive compensation, bonuses, amounts deferred under a Company
approved deferred compensation plan, and other compensation. Once an employee
becomes a participant in the Purchase Plan, Common Stock will automatically be
purchased under the Purchase Plan at the end of each offering period, unless the
participant withdraws or terminates
5
<PAGE>
employment earlier, and the employee will automatically participate in each
successive offering period until such time as the employee withdraws from the
Purchase Plan or the employee's employment with the Company terminates.
PURCHASE PRICE. The purchase price per share at which shares will be sold
in an offering under the Purchase Plan is the lower of (i) 85% of the fair
market value of a share of Common Stock on the first day of an offering period
or (ii) 85% of the fair market value of a share of Common Stock on the last day
of each offering period. The fair market value of the Common Stock on a given
date is generally the closing sale price of the Common Stock as reported on the
Nasdaq National Market for such date.
PAYMENT OF PURCHASE PRICE; PAYROLL DEDUCTIONS. The purchase price of the
shares is accumulated by payroll deductions throughout the offering period. The
number of shares of Common Stock a participant may purchase in each offering
period is determined by dividing the total amount of payroll deductions withheld
from the participant's compensation during that offering period by the purchase
price; provided, however, that a participant may not purchase more than 5,000
shares for each offering period. During the offering period, a participant may
discontinue his or her participation in the Purchase Plan, and may decrease or
increase the rate of payroll deductions in an offering period within limits set
by the Administrator.
All payroll deductions made for a participant are credited to the
participant's account under the Purchase Plan, are withheld in whole percentages
only and are included with the general funds of the Company. Funds received by
the Company pursuant to exercises under the Purchase Plan are also used for
general corporate purposes. A participant may not make any additional payments
into his or her account.
WITHDRAWAL. A participant may terminate his or her participation in the
Purchase Plan at any time by giving the Company a written notice of withdrawal.
In such event, the payroll deductions credited to the participant's account will
be returned, without interest, to such participant. Payroll deductions will not
resume unless a new subscription agreement is delivered in connection with a
subsequent offering period.
TERMINATION OF EMPLOYMENT. Termination of a participant's employment for
any reason, including death, cancels his or her participation in the Purchase
Plan immediately. In such event the payroll deductions credited to the
participant's account will be returned without interest to such participant, his
or her designated beneficiaries or the executors or administrators of his or her
estate.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of any changes in
the capitalization of the Company effected without receipt of consideration by
the Company, such as a stock split, stock dividend, combination or
reclassification of the Common Stock, resulting in an increase or decrease in
the number of shares of Common Stock, proportionate adjustments will be made by
the Board in the shares subject to purchase and in the price per share under the
Purchase Plan. In the event of liquidation or dissolution of the Company, the
offering periods then in progress will terminate immediately prior to the
consummation of such event unless otherwise provided by the Board. In the event
of a sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, the offering period then
in progress will be shortened and a new exercise date will be set.
AMENDMENT AND TERMINATION. The Board may at any time and for any reason
amend or terminate the Purchase Plan, except that no such termination shall
affect options previously granted and no amendment shall make any change in an
option granted prior thereto which adversely affects the rights of any
participant. Stockholder approval for amendments to the Purchase Plan shall be
obtained in such a manner and to such a degree as required to comply with all
applicable laws or regulations. The Purchase Plan will terminate in 2006, unless
terminated earlier by the Board in accordance with the Purchase Plan.
CERTAIN FEDERAL INCOME TAX INFORMATION. The following brief summary of the
effect of federal income taxation upon the participant and the Company with
respect to the shares purchased under the Purchase
6
<PAGE>
Plan does not purport to be complete, and does not discuss the tax consequences
of a participant's death or the income tax laws of any state or foreign country
in which the participant may reside.
The Purchase Plan, and the right of participants to make purchases
thereunder, is intended to qualify under the provisions of Sections 421 and 423
of the Code. Under these provisions, no income will be taxable to a participant
until the shares purchased under the Purchase Plan are sold or otherwise
disposed of. Upon sale or other disposition of the shares, the participant will
generally be subject to tax in an amount that depends upon the holding period.
If the shares are sold or otherwise disposed of more than two years from the
first day of the applicable offering period and one year from the applicable
date of purchase, the participant will recognize ordinary income measured as the
lesser of (a) the excess of the fair market value of the shares at the time of
such sale or disposition over the purchase price, or (b) an amount equal to 15%
of the fair market value of the shares as of the first day of the applicable
offering period. Any additional gain will be treated as long-term capital gain.
If the shares are sold or otherwise disposed of before the expiration of these
holding periods, the participant will recognize ordinary income generally
measured as the excess of the fair market value of the shares on the date the
shares are purchased over the purchase price. Any additional gain or loss on
such sale or disposition will be long-term or short-term capital gain or loss,
depending on the holding period. The Company generally is not entitled to a
deduction for amounts taxed as ordinary income or capital gain to a participant
except to the extent of ordinary income recognized by participants upon a sale
or disposition of shares prior to the expiration of the holding periods
described above.
VOTE REQUIRED
The affirmative vote of a majority of the outstanding voting shares of the
Company present or represented and entitled to vote at the 1999 Annual Meeting
is required for approval of the amendment to the Purchase Plan. Should such
stockholder approval not be obtained, then the amendment will not be
implemented. No additional purchase rights will be granted on the basis of such
share increase, and the Purchase Plan will terminate once the existing share
reserve has been issued.
The amendment to the Purchase Plan is necessary in order to continue to
provide equity incentives to attract and retain the services of high quality
employees.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE APPROVAL OF
THE AMENDMENT TO THE PURCHASE PLAN.
7
<PAGE>
ADDITIONAL INFORMATION
EXECUTIVE COMPENSATION
On October 13, 1997, the Company's Board of Directors approved a change in
the Company's fiscal year end from September 30 to December 31, commencing
January 1, 1998. The following table sets forth a summary of (i) the
compensation paid by Radius Inc., the Company's predecessor business, for the
four month period ended January 31, 1996 and paid by the Company for the eight
month period ended September 30, 1996, (ii) the compensation paid by the Company
for the fiscal year ended September 30, 1997 and (iii) the compensation paid by
the Company during Fiscal 1998 (January 1, 1998 through December 31, 1998) to
the Company's Chief Executive Officer and the Company's three other most highly
compensated executive officers (collectively, the "Named Executive Officers")
for services rendered in all capacities to Radius Inc. and the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
---------------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) INCENTIVE BONUS COMPENSATION OPTIONS(2) COMPENSATION
- ------------------------------ ---- --------- --------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Kevin K. Macgillivray......... 1998 $ 257,597 $ 81,900 -- 72,000(14) $ 4,389(3)
President, Chief Executive 1997 176,540(8) 176,940 -- 40,000(9) 1,483(3)
Officer and Chairman 88,373(4)
1996 163,232 184,100 -- 48,124 691(3)
Joan P. Platt(5).............. 1998 174,017 29,700 -- 44,000(14) 3,529(3)
Vice President, Finance and 1997 140,228(10) 66,849 -- 20,000(11) 1,268(3)
Administration and Chief 18,133(4)
Financial Officer 1996 68,019 32,875 -- 96,659 476(3)
Timothy D. Kleffman(6)........ 1998 174,017 47,360 -- 44,000(14) 4,409(3)
Vice President, Engineering 1997 140,228(12) 106,172 -- 20,000(13) 1,488(3)
Operations 88,373(4)
1996 131,616 123,240 -- 48,124 696(3)
Michael Orr(7)................ 1998 123,720 105,000 -- 90,000 803(3)
Vice President, Software 72,000(14)
Engineering 1997 -- -- -- -- --
1996 -- -- -- -- --
</TABLE>
- ------------------------
(1) Includes compensation deferred by the employee under the Company's
qualified 401(k) retirement plan.
(2) Consists of options to purchase shares of the Company's Common Stock under
the Company's 1996 Stock Option Plan.
(3) Consists of the vesting of contributions made by the Company under its
qualified 401(k) retirement plan.
(4) Consists of reimbursement for underwriting fees paid by the Named Executive
Officer (including taxes payable in respect thereof) in connection with the
follow-on offering of the Company's Common Stock on August 25, 1997.
(5) The Company hired Ms. Platt on March 29, 1996. Ms. Platt will be leaving
the Company effective April 30, 1999.
8
<PAGE>
(6) Mr. Kleffman left the Company on January 4, 1999.
(7) The Company hired Mr. Orr on June 8, 1998.
(8) Does not include $64,038 earned by Mr. Macgillivray in the three month
period ended December 31, 1997.
(9) Does not include options to acquire 50,000 shares granted to Mr.
Macgillivray on December 12, 1997.
(10) Does not include $41,500 earned by Ms. Platt in the three month period
ended December 31, 1997.
(11) Does not include options to acquire 35,000 shares granted to Ms. Platt on
December 12, 1997.
(12) Does not include $46,500 earned by Mr. Kleffman in the three month period
ended December 31, 1997.
(13) Does not include options to acquire 35,000 shares granted to Mr. Kleffman
on December 12, 1997.
(14) Represents options issued in October, 1998 in a four for five exchange for
options previously granted (pursuant to an option repricing).
OPTION GRANTS AND EXERCISES
The following table sets forth certain information with respect to stock
option grants during Fiscal 1998 to the Named Executive Officers. In accordance
with the rules of the Securities and Exchange Commission, also shown below is
the potential realizable value over the term of the option (the period from the
grant date to the expiration date) based on assumed rates of stock appreciation
from the option exercise price 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 price. Actual gains, if any, on stock option
exercises will be dependent on the future performance of the Common Stock.
OPTION GRANTS IN FISCAL 1998
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT
-------------------------------------------------------- ASSUMED ANNUAL RATES
NUMBER OF PERCENT OF OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS EMPLOYEES IN EXERCISE OF EXPIRATION --------------------
NAME GRANTED FISCAL YEAR BASE PRICE DATE 5% 10%
- ------------------------------------------- ----------- ----------------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Kevin K. Macgillivray...................... 72,000(1) 3.1% 8.3125 10/28/08 376,416 953,912
Joan Platt................................. 44,000(2) 1.9% 8.3125 10/28/08 230,032 582,946
Timothy D. Kleffman........................ 44,000(3) 1.9% 8.3125 10/28/08 230,032 582,946
Michael Orr................................ 72,000(4) 3.1% 8.3125 10/28/08 376,416 953,912
</TABLE>
- ------------------------
(1) Mr. Macgillivray was granted options to acquire 90,000 shares of common
stock in calendar 1997. In 1998, these options were repriced and were
exchanged for options on 72,000 shares of common stock.
(2) Ms. Platt was granted options to acquire 55,000 shares of common stock in
calendar 1997. In 1998, these options were repriced and were exchanged for
options on 44,000 shares of common stock.
(3) Mr. Kleffman was granted options to acquire 55,000 shares of common stock in
calendar 1997. In 1998, these options were repriced and were exchanged for
options on 44,000 shares of common stock.
(4) Mr. Orr was granted options to acquire 90,000 shares of common stock on June
8, 1998. These options were repriced and were exchanged for options on
72,000 shares of common stock.
9
<PAGE>
The following table sets forth information with respect to options exercised
during Fiscal 1998 by the Named Executive Officers and the value of unexercised
options at December 31, 1998.
AGGREGATE OPTION EXERCISES IN FISCAL 1998 AND YEAR-END VALUES
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS AT
SHARES OPTIONS AT DECEMBER 31,
ACQUIRED DECEMBER 31, 1998 1998
ON VALUE ------------------------------ ---------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE
- ---------------------------------------- ------------- ----------- ----------- ----------------- ---------------
<S> <C> <C> <C> <C> <C>
Kevin K. Macgillivray................... -- -- 72,000 -- --
Joan Platt.............................. -- -- 44,000 -- --
Timothy D. Kleffman..................... -- -- 44,000 -- --
Michael Orr............................. -- -- 72,000 -- --
<CAPTION>
NAME UNEXERCISABLE
- ---------------------------------------- -----------------
<S> <C>
Kevin K. Macgillivray................... --
Joan Platt.............................. --
Timothy D. Kleffman..................... --
Michael Orr............................. --
</TABLE>
TEN YEAR OPTION REPRICINGS
The following table sets forth certain information with respect to the
Company's exchange of outstanding options with certain of its officers in
October 1998. For further information with respect to such option exchanges, see
"Compensation Committee Report on Executive Compensation."
<TABLE>
<CAPTION>
LENGTH OF
SECURITIES ORIGINAL OPTION
UNDERLYING MARKET PRICE OF EXERCISE PRICE TERM REMAINING
OPTIONS STOCK AT TIME AT TIME OF (IN YEARS) AT
NAME DATE REPRICED OF REPRICING(1) REPRICING TIME OF REPRICING
- --------------------------------------- --------- ----------- --------------- --------------- ---------------------
<S> <C> <C> <C> <C> <C>
Kevin K. Macgillivray.................. 10/28/98 40,000(2) 8.3125 21.75 8.2
10/28/98 32,000(2) 8.3125 21.00 9.2
Joan P. Platt.......................... 10/28/98 16,000(2) 8.3125 21.00 8.2
10/28/98 28,000(2) 8.3125 21.75 9.2
Timothy D. Kleffman.................... 10/28/98 16,000(2) 8.3125 21.00 8.2
10/28/98 28,000(2) 8.3125 21.75 9.2
Michael Orr............................ 10/28/98 72,000 8.3125 15.50 9.7
</TABLE>
- ------------------------
(1) The market price of the Company's stock at time of repricing is the new
exercise price of each such option.
(2) Certain executives who elected to exchange his or her stock options in the
repricing were not granted new stock options in 1998.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company currently has no employment contract in effect with its Chief
Executive Officer or any other Named Executive Officer.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During Fiscal 1998 the Compensation Committee of the Board of Directors
consisted of Messrs. Avis and Berger. Neither of these individuals were at any
time since the formation of the Company an officer or employee of the Company.
No executive officer of the Company serves as a member of the board of directors
or compensation committee of any entity that has one or more executive officers
serving as a member of the Company's Board of Directors or Compensation
Committee.
10
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following is the report to the Board of Directors describing
compensation policies and rationales applicable to the Company's executive
officers with respect to compensation paid to such executive officers for Fiscal
1998. The information contained in the following report shall not be deemed to
be "soliciting material" or to be filed with the Securities and Exchange
Commission, nor shall such information be incorporated by reference into any
future filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent that the Company
specifically incorporates it by reference into such filing.
The Compensation Committee of the Board of Directors is responsible for
reviewing and approving the Company's compensation policies and the compensation
paid to executive officers. The Committee is comprised of the members named
above, none of whom is an employee of the Company.
COMPENSATION PHILOSOPHY
The general philosophy of the Company's compensation program is to offer
executive officers competitive compensation based both on the Company's
performance and on the individual's contribution and performance. The Company's
compensation policies are intended to motivate, reward and retain highly
qualified executives for long-term strategic management and the enhancement of
stockholder value, to support a performance-oriented environment that rewards
achievement of specific internal Company goals and to attract and retain
executives whose abilities are critical to the long-term success and
competitiveness of the Company.
There are four main components in the Company's executive compensation
program:
- Base Salary
- Incentive Bonus
- Stock Incentives
- Deferred Compensation
BASE SALARY
The salaries of the executive officers, including the Chief Executive
Officer, are determined annually by the Compensation Committee with reference to
surveys of salaries paid to executives with similar responsibilities at
comparable companies, generally in the high technology industry. The peer group
for each executive officer is composed of executives whose responsibilities are
similar in scope and content. The Company seeks to set executive compensation
levels that are competitive with the average levels of peer group compensation.
INCENTIVE BONUS
Annual incentive bonuses for executive officers are intended to reflect the
Committee's belief that a significant portion of the annual compensation of each
executive officer should be contingent upon the performance of the Company, as
well as the individual contribution of each officer.
STOCK INCENTIVES
The Company utilizes stock options as long term incentives to reward and
retain executive officers. The Committee believes that this practice links
management interests with stockholder interests and motivates executive officers
to make long-term decisions that are in the best interests of the Company. The
Committee also believes that executive officers and other key employees should
own a significant
11
<PAGE>
percentage of the Company's stock. Generally, stock options vest over four years
after the grant date and optionees must be employed by the Company at the time
of vesting in order to exercise the options.
The Committee believes that stock option grants provide an incentive which
focuses the executives' attention on the Company from the perspective of an
owner with an equity stake in the business. Because options are typically
granted with an exercise price equal to the fair market value of the Common
Stock on the date of grant, the Company's stock options are tied to the future
performance of the Company's Common Stock and will provide value to the
recipient only when the price of the Company's stock increases above the
exercise price, that is, only to the extent that stockholders as a whole have
benefited.
In October 1998, the Company's Board of Directors approved an option
exchange program whereby all employees (including Named Executive Officers) were
offered the opportunity to exchange their existing options for new options at
$8.3125 per share, which was the fair market value of the Common Stock on the
date of the exchange program. The options so repriced underwent an 80%
fractional change such that each option, or portion thereof, to purchase five
(5) shares of Company Common Stock was replaced by an option to purchase four
(4) shares of Company Common Stock, with approximately 310,000 extra shares
remaining upon such fractional change being returned to the option pool. The
vesting periods for the options so exchanged remained the same. The exchanged
option became subject to certain extended blackout periods wherein each
respective option, howsoever vested, may not be exercised. The Board undertook
this action in light of the then recent reduction in the trading price of the
Company's Common Stock and in consideration of the importance to the Company of
retaining its employees by offering them appropriate equity incentives. The
Board also considered the highly competitive environment for obtaining and
retaining qualified employees and the overall benefit to the Company's
stockholders from a highly motivated group of employees.
DEFERRED COMPENSATION
In June 1998, the Company established a deferred compensation plan for its
executives. Each executive may voluntarily contribute a portion of their salary
and bonus to the plan. The Company at its discretion may make contributions to
the plan on behalf of its executives. The Company to date has made no
contributions to the plan.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Kevin K. Macgillivray has been the Company's Chief Executive Officer since
January 1996. Mr. Macgillivray received a bonus of $81,900 for Fiscal 1998
($54,400 of this bonus was placed in the Company's deferred compensation plan).
The bonus was determined in accordance with the practices described above. On
October 28,1998, Mr. Macgillivray was granted an option to purchase 72,000
shares of Common Stock at a price of $8.3125 per share, which represented the
fair market value of the Common Stock on the date of grant, in accordance with
the option exchange program described above, pursuant to which options on 90,000
shares of Common Stock initially granted to Mr. Macgillivray in 1997 were
exchanged for options on 72,000 shares of Common Stock. No new options were
granted to Mr. Macgillivray in 1998.
OTHER MATTERS
In October 1998, partially in response to the repricing of the Company's
stock options, the Company's Board of Directors froze executive salaries and
incentive plan bases for 1999 and eliminated certain executive option grants in
1998.
THE COMPENSATION COMMITTEE
Gregory M. Avis
Charles W. Berger
12
<PAGE>
PERFORMANCE GRAPH
The following line graph compares the cumulative total stockholder return
for the Company's Common Stock with the Nasdaq U.S. Index and the Hambrecht &
Quist Technology Index (the "Peer Group") for the period commencing October 9,
1996 and ending December 31, 1998. The graph assumes that $100 was invested on
the date of the Company's initial public offering, October 9, 1996, and that all
dividends are reinvested. In accordance with the guidelines of the SEC, the
stockholder return for each entity in the Peer Group has been weighted on the
basis of market capitalization as of each measurement date set forth in the
graph. Historic stock price performance should not be considered indicative of
future stock price performance.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG SPLASH, NASDAQ U.S. INDEX
AND HAMBRECHT & QUIST TECHNOLOGY INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SPLASH NASDAQ STOCK MARKET - US HAMBRECHT & QUIST TECHNOLOGY
<S> <C> <C> <C>
10/9/96 $100.00 $100.00 $100.00
12/31/96 195.45 104.28 107.18
3/31/97 27.27 98.68 102.10
6/30/97 28.41 116.49 122.84
9/30/97 355.68 136.16 148.83
12/31/97 204.55 126.85 125.38
3/31/98 152.27 148.22 151.78
6/30/98 156.26 152.99 155.33
9/30/98 129.55 136.75 138.00
12/31/98 67.62 177.06 194.73
</TABLE>
13
<PAGE>
BENEFICIAL OWNERSHIP
The following table sets forth certain information known to the Company with
respect to beneficial ownership of the Company's Common Stock as of April 6,
1999 by (i) each beneficial owner of more than 5% of the Company's Common Stock,
(ii) each director and each nominee, (iii) each Named Executive Officer and (iv)
all directors and executive officers as a group. Except as otherwise indicated,
each person has sole voting and investment power with respect to all shares
shown as beneficially owned, subject to community property laws where
applicable.
<TABLE>
<CAPTION>
PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES TOTAL(1)(2)
- ----------------------------------------------------------------------------------- ----------------- -------------
<S> <C> <C>
Summit Partners, L.P.(3)(4) ....................................................... 691,874 5.0%
499 Hamilton Avenue, Suite 200
Palo Alto, CA 94301
Gregory M. Avis(3)(4)(5)........................................................... 691,874 5.0%
Peter Y. Chung(5).................................................................. -- *
Charles W. Berger(6)............................................................... -- *
Lawrence G. Finch(7)............................................................... 39,345 *
Kevin K. Macgillivray(8)(9)........................................................ 237,622 1.7%
Joan P. Platt(9)(10)............................................................... 97,673 *
Timothy D. Kleffman(9)(11)......................................................... 96,406 *
Michael Orr(9)(12)................................................................. 72,625 *
All directors and executive officers as a group (8 persons)(3)(13)................. 1,235,545 8.7%
</TABLE>
- ------------------------
* Percentage of shares beneficially owned is less than one percent of total.
(1) Beneficial ownership is determined in accordance with the rules of
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 or warrants held by that person
that are currently exercisable or exercisable within 60 days of April 6,
1999 are deemed outstanding. Such shares, however, are not deemed
outstanding for the purposes of computing the percentage ownership of any
other person. Except as indicated in the footnotes to this table and
pursuant to applicable community property laws, each stockholder named in
the table has sole voting and investment power with respect to the shares
set forth opposite such stockholder's name.
(2) Percentage of ownership is based on 13,975,542 shares of Common Stock
outstanding on April 26, 1999.
(3) Includes 617,392, 26,339 and 48,143 shares of Common Stock held of record
by Summit Ventures IV, L.P., Summit Investors III, L.P. and Summit
Subordinated Debt Fund, L.P., respectively. Summit Partners IV, L.P. is a
General Partner of Summit Ventures IV, L.P. and Summit Partners SD, L.P. is
a General Partner of Summit Subordinated Debt Fund, L.P. Stamps, Woodsum &
Co., IV is a General Partner of Summit Ventures IV, L.P. and Stamps,
Woodsum & Co., III is a General Partner of Summit Subordinated Debt Fund,
L.P. Gregory M. Avis, a director of the Company, is a General Partner of
Stamps, Woodsum & Co., III, Stamps, Woodsum & Co., IV and Summit Investors
III, L.P. See Note (4).
(4) Includes shares described in Note (3) above. Mr. Avis, a director of the
Company, is a general partner of affiliates of Summit Partners, L.P. Mr.
Avis exercises shared investment and voting power with respect to such
shares, but disclaims beneficial ownership of such shares.
(5) Such person's address is: c/o Summit Partners, L.P., 499 Hamilton Avenue,
Suite 200, Palo Alto, CA 94301
(6) Such person's address is: c/o AdForce, Inc., 10590 North Tantau Avenue,
Cupertino, CA 95014.
14
<PAGE>
(7) Such person's address is: c/o Sigma Partners, L.P., 2884 Sand Hill Road,
Suite 121, Menlo Park, CA 94025.
(8) Includes 5,514 shares that are subject to a right of repurchase in favor of
the Company which expires ratably through February 2000. Also includes
72,000 shares issuable upon the exercise of options which vests over four
years; such options may be exercised immediately as to all shares, provided
that the unvested shares shall be subject to a right of repurchase in favor
of the Company.
(9) Such person's address is: c/o Splash Technology Holdings, Inc., 555 Del Rey
Avenue, Sunnyvale, CA 94086.
(10) Includes 24,165 shares that are subject to a right of repurchase in favor
of the Company which expires ratably through March 2000. Also includes
44,000 shares issuable upon the exercise of options which vests over four
years; such options may be exercised immediately as to all shares,
provided that the unvested shares shall be subject to a right of
repurchase in favor of the Company.
(11) Includes 4,010 shares that are subject to a right of repurchase in favor
of the Company which expires ratably through February 2000. Also includes
20,500 shares issuable upon the exercise of options which vests over four
years; such options may be exercised immediately as to all shares,
provided that the unvested shares shall be subject to a right of
repurchase in favor of the Company.
(12) Includes 72,000 shares issuable upon the exercise of an option which vests
over four years; such option may be exercised immediately as to all
shares, provided that the unvested shares shall be subject to a right of
repurchase in favor of the Company.
(13) Includes an aggregate of 33,689 shares that are subject to a right of
repurchase in favor of the Company which expires ratably through March
2000. Also includes 208,500 shares issuable upon the exercise of options
which vests over four years; such options may be exercised immediately as
to all shares, provided that the unvested shares shall be subject to a
right of repurchase in favor of the Company.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's executive officers and directors and
persons who own more than ten percent of a registered class of the Company's
equity securities to file an initial report of ownership on Form 3 and changes
in ownership on Form 4 or 5 with the Securities and Exchange Commission (the
"SEC") and the National Association of Securities Dealers, Inc. Executive
officers, directors and greater than ten percent stockholders 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, with respect to Fiscal 1998, all filing requirements applicable to its
officers, directors and ten percent stockholders were complied with.
OTHER MATTERS
The Company knows of no other matters to be submitted at the meeting. If any
other matters properly come before the meeting or any adjournment or
postponement thereof, it is the intention of the persons named in the enclosed
form of Proxy to vote the shares they represent as the Board of Directors may
recommend.
THE BOARD OF DIRECTORS
Sunnyvale, California
May 3, 1999
15
<PAGE>
1577-PS-99
<PAGE>
ANNEX A
SPLASH TECHNOLOGY, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
(AS TO BE AMENDED)
The following constitute the provisions of the 1996 Employee Stock Purchase
Plan of Splash Technology, Inc.
1. PURPOSE. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the
intention of the Company to have the Plan qualify as an "Employee Stock Purchase
Plan" under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.
2. DEFINITIONS.
(a) "BOARD" shall mean the Board of Directors of the Company, or a
committee of the Board appointed in accordance with Section 13.
(b) "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "COMMON STOCK" shall mean the Common Stock of the Company.
(d) "COMPANY" shall mean Splash Technology, Inc., and any
Designated Subsidiary of the Company.
(e) "COMPENSATION" shall mean all base straight time gross earnings
including commissions, overtime, shift premium, incentive compensation,
incentive payments, bonuses, amounts deferred under a Company approved deferred
compensation plan, and other compensation.
(f) "DESIGNATED SUBSIDIARIES" shall mean the Subsidiaries which
have been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(g) "EMPLOYEE" shall mean any individual who is an Employee of the
Company for tax purposes whose customary employment with the Company is at least
twenty (20) hours per week and more than five (5) months in any calendar year.
For purposes of the Plan, the employment relationship shall be treated as
continuing intact while the individual is on sick leave or other leave
<PAGE>
of absence approved by the Company. Where the period of leave exceeds 90
days and the individual's right to reemployment is not guaranteed either by
statute or by contract, the employment relationship shall be deemed to have
terminated on the 91st day of such leave.
(h) "ENROLLMENT DATE" shall mean the first day of each Offering
Period.
(i) "EXERCISE DATE" shall mean the last trading day of each
Purchase Period, if any, or each Offering Period.
(j) "FAIR MARKET VALUE" shall mean, as of any date, the value of
Common Stock determined as follows:
(1) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
THE WALL STREET JOURNAL or such other source as the Board deems reliable, or;
(2) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean of the closing bid and asked prices for the Common Stock on
the date of such determination, as reported in THE WALL STREET JOURNAL or such
other source as the Board deems reliable, or;
(3) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Board.
(4) For purposes of the Enrollment Date under the first
Offering Period under the Plan, the Fair Market Value shall be the initial price
to the public as set forth in the final Prospectus included within the
registration statement in Form S-1 filed with the Securities and Exchange
Commission for the initial public offering of the Company's Common Stock.
(k) "OFFERING PERIOD" shall mean the period beginning with the date
an option is granted under the Plan and ending with the date determined by the
Board. During the term of the Plan, the duration of each Offering Period shall
be determined from time to time by the Board, provided that no Offering Period
may exceed twenty-four (24) months in duration. If determined by the Board, an
Offering Period may include one or more Purchase Periods. The first Offering
Period shall begin on the effective date of the Company's initial public
offering of its Common Stock that is registered with the Securities and Exchange
Commission (the "Effective Date") and shall end on the last Trading Day on or
before April 30, 1997.
(l) "PLAN" shall mean this Employee Stock Purchase Plan.
-2-
<PAGE>
(m) "PURCHASE PRICE" shall mean an amount equal to 85% of the Fair
Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.
(n) "PURCHASE PERIOD" shall mean the period commencing on an
Enrollment Date or after an Exercise Date and which is of such duration as the
Board shall determine.
(o) "RESERVES" shall mean the number of shares of Common Stock
covered by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.
(p) "SUBSIDIARY" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
(q) "TRADING DAY" shall mean a day on which national stock
exchanges and the Nasdaq System are open for trading.
3. ELIGIBILITY.
(a) Any Employee who shall be employed by the Company on a given
Enrollment Date shall be eligible to participate in the Plan.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company or of
any Subsidiary, or (ii) to the extent that his or her rights to purchase stock
under all employee stock purchase plans of the Company and its subsidiaries
accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of
stock (determined at the fair market value of the shares at the time such option
is granted) for each calendar year in which such option is outstanding at any
time.
4. OFFERING AND PURCHASE PERIODS. The Plan shall be implemented by
consecutive, overlapping Offering Periods, each of which shall be of such
duration (not to exceed 24 months) as the Board shall determine from time to
time in its discretion, and each of which shall consist of such number of
Purchase Periods as the Board shall determine from time to time in its
discretion. The Plan shall continue until terminated in accordance with Section
19 hereof. The first Offering Period shall commence on the Effective Date and
shall end on the last Trading Day on or before April 30, 1997. Unless otherwise
specified by the Board, the Offering Periods shall be six months in duration
without any Purchase Periods with the first Offering Period commencing on the
Effective Date and ending on April 30, 1997, as aforesaid, and the second
commencing on May 1, 1997, and ending on
-3-
<PAGE>
October 31, 1997. The Board shall have the power to change the duration of
Offering Periods (including the commencement dates thereof) at any time or from
time to time, provided that (except as the shareholders may otherwise approve)
any such change shall be effected only with respect to Offering Periods
commencing at least five (5) days following the date on which the change is
announced.
5. PARTICIPATION.
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the Company's payroll office prior
to the applicable Enrollment Date.
(b) Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the last payroll in
the Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.
6. PAYROLL DEDUCTIONS.
(a) At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding ten percent (10%) of the
Compensation which he or she receives on each pay day during the Offering
Period, provided, however, that for purposes of the first Offering Period, the
maximum payroll deduction shall not exceed twenty percent (20%) of the
Compensation which a participant receives during the first Offering Period.
(b) All payroll deductions made for a participant shall be credited
to his or her account under the Plan and shall be withheld in whole percentages
only. A participant may not make any additional payments into such account.
(c) A participant may discontinue his or her participation in the
Plan as provided in Section 10 hereof, or may increase or decrease the rate of
his or her payroll deductions during the Offering Period by completing or filing
with the Company a new subscription agreement authorizing a change in payroll
deduction rate. The Board may, in its discretion, limit the number of
participation rate changes during any Offering Period. The change in rate shall
be effective with the first full payroll period following five (5) business days
after the Company's receipt of the new subscription agreement unless the Company
elects to process a given change in participation more quickly. A participant's
subscription agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 10 hereof.
(d) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a
participant's payroll deductions may be decreased to
-4-
<PAGE>
zero percent (0%) at such time during any Offering Period, or, if applicable,
any Purchase Period which is scheduled to end during the current calendar year
(collectively, the "Current Offering Period") that the aggregate of all payroll
deductions which were previously used to purchase stock under the Plan in a
prior Offering Period, or, if applicable, prior Purchase Period which ended
during that calendar year plus all payroll deductions accumulated with respect
to the Current Offering Period equal $21,250. Payroll deductions shall
recommence at the rate provided in such participant's subscription agreement at
the beginning of the first Offering Period, or, if applicable, first Purchase
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10 hereof.
(e) At the time the option is exercised, in whole or in part, or at
the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but shall not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee.
7. GRANT OF OPTION. On the Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Offering Period, or Purchase
Period, if applicable, more than 5,000 shares (subject to any adjustment
pursuant to Section 19), and provided further that such purchase shall be
subject to the limitations set forth in Sections 3(b) and 12 hereof. Exercise
of the option shall occur as provided in Section 8 hereof, unless the
participant has withdrawn pursuant to Section 10 hereof. The option shall
expire on the last day of the Offering Period.
8. EXERCISE OF OPTION.
(a) Unless a participant withdraws from the Plan as provided in
Section 10 hereof, his or her option for the purchase of shares shall be
exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Offering Period or, if applicable, Purchase Period subject to earlier withdrawal
by the participant as provided in Section 10 hereof. Any other monies left over
in a participant's account
-5-
<PAGE>
after the Exercise Date shall be returned to the participant. During a
participant's lifetime, a participant's option to purchase shares hereunder is
exercisable only by him or her.
(b) In the event, on a given Exercise Date, the number of shares
with respect to which options are to be exercised exceeds 50,000 shares (post
split) for the calendar year , the Company shall make a pro rata allocation of
the shares remaining below the 50,000 share limit in as uniform a manner as
shall be practicable and as it shall determine to be equitable. Notwithstanding
the above sentence, the 50,000 share limit shall apply separately to the first
Offering Period under the Plan.
9. DELIVERY. As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, of the shares purchased upon exercise of his
or her option.
10. WITHDRAWAL; TERMINATION OF EMPLOYMENT.
(a) A participant may withdraw all but not less than all the
payroll deductions credited to his or her account and not yet used to exercise
his or her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit B to this Plan. All of the participant's payroll
deductions credited to his or her account shall be paid to such participant
promptly after receipt of notice of withdrawal and such participant's option for
the Offering Period shall be automatically terminated, and no further payroll
deductions for the purchase of shares shall be made for such Offering Period.
If a participant withdraws from an Offering Period, payroll deductions shall not
resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.
(b) Upon a participant's ceasing to be an Employee, for any reason,
he or she shall be deemed to have elected to withdraw from the Plan and the
payroll deductions credited to such participant's account during the Offering
Period but not yet used to exercise the option shall be returned to such
participant or, in the case of his or her death, to the person or persons
entitled thereto under Section 14 hereof, and such participant's option shall be
automatically terminated. The preceding sentence notwithstanding, a participant
who receives payment in lieu of notice of termination of employment shall be
treated as continuing to be an Employee for the participant's customary number
of hours per week of employment during the period in which the participant is
subject to such payment in lieu of notice.
(c) A participant's withdrawal from an Offering Period shall not
have any effect upon his or her eligibility to participate in any similar plan
which may hereafter be adopted by the Company or in succeeding Offering Periods
which commence after the termination of the Offering Period from which the
participant withdraws.
-6-
<PAGE>
11. INTEREST. No interest shall accrue on the payroll deductions of a
participant in the Plan.
12. STOCK.
(a) The maximum number of shares of the Company's Common Stock
which shall be made available for sale under the Plan shall be 350,000 shares
(post split), PLUS AN ANNUAL INCREASE TO BE ADDED ON EACH ANNIVERSARY DATE OF
THE ADOPTION OF THE PLAN [BEGINNING IN THE YEAR ] EQUAL TO THE LESSER
OF (i) 175,000 SHARES, (ii) THAT NUMBER OF SHARES OF COMMON STOCK ISSUED
PURSUANT TO THE PURCHASE PLAN IN THE ONE YEAR PERIOD ENDING ON THE DATE OF SAID
ANNUAL INCREASE OR, (iii) A LESSER AMOUNT DETERMINED BY THE BOARD, subject to
adjustment upon changes in capitalization of the Company as provided in Section
18 hereof. If, on a given Exercise Date, the number of shares with respect to
which options are to be exercised exceeds the number of shares then available
under the Plan, the Company shall make a pro rata allocation of the shares
remaining available for purchase in as uniform a manner as shall be practicable
and as it shall determine to be equitable.
(b) The participant shall have no interest or voting right in
shares covered by his option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan shall be
registered in the name of the participant or in the name of the participant and
his or her spouse.
13. ADMINISTRATION.
(a) ADMINISTRATIVE BODY. The Plan shall be administered by the
Board or a committee of members of the Board appointed by the Board. The Board
or its committee shall have full and exclusive discretionary authority to
construe, interpret and apply the terms of the Plan, to determine eligibility
and to adjudicate all disputed claims filed under the Plan. Every finding,
decision and determination made by the Board or its committee shall, to the full
extent permitted by law, be final and binding upon all parties.
(b) RULE 16b-3 LIMITATIONS. Notwithstanding the provisions of
Subsection (a) of this Section 13, in the event that Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
any successor provision ("Rule 16b-3") provides specific requirements for the
administrators of plans of this type, the Plan shall be administered only by
such a body and in such a manner as shall comply with the applicable
requirements of Rule 16b-3. Unless permitted by Rule 16b-3, no discretion
concerning decisions regarding the Plan shall be afforded to any committee or
person that is not "disinterested" as that term is used in Rule 16b-3.
-7-
<PAGE>
14. DESIGNATION OF BENEFICIARY.
(a) A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to an
Exercise Date on which the option is exercised but prior to delivery to such
participant of such shares and cash. In addition, a participant may file a
written designation of a beneficiary who is to receive any cash from the
participant's account under the Plan in the event of such participant's death
prior to exercise of the option. If a participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for such
designation to be effective.
(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.
15. TRANSFERABILITY. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 14 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.
16. USE OF FUNDS. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
17. REPORTS. Individual accounts shall be maintained for each participant
in the Plan. Statements of account shall be given to participating Employees at
least annually, which statements shall set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.
18. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, LIQUIDATION,
MERGER OR ASSET SALE.
(a) CHANGES IN CAPITALIZATION. Subject to any required action by
the shareholders of the Company, the Reserves, as well as the price per share
and the number of shares of Common Stock covered by each option under the Plan
which has not yet been exercised, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common
-8-
<PAGE>
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration". Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an option.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Offering Periods shall terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board.
(c) MERGER OR ASSET SALE. In the event of a proposed sale of all
or substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, any Offering Periods then in progress shall be
shortened by setting a new Exercise Date (the "New Exercise Date") and any
Offering Periods then in progress shall end on the New Exercise Date. The New
Exercise Date shall be before the date of the Company's proposed sale or merger.
The Board shall notify each participant in writing, at least ten (10) business
days prior to the New Exercise Date, that the Exercise Date for the
participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.
19. AMENDMENT OR TERMINATION.
(a) The Board may at any time and for any reason terminate or amend
the Plan. Except as provided in Section 18 hereof, no such termination can
affect options previously granted, provided that an Offering Period may be
terminated by the Board on any Exercise Date if the Board determines that the
termination of the Plan is in the best interests of the Company and its
shareholders. Except as provided in Section 18 hereof, no amendment may make
any change in any option theretofore granted which adversely affects the rights
of any participant. To the extent necessary to comply with Section 423 of the
Code (or any successor rule or provision or any other applicable law or
regulation), the Company shall obtain shareholder approval in such a manner and
to such a degree as required.
(b) Without shareholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a
-9-
<PAGE>
participant in order to adjust for delays or mistakes in the Company's
processing of properly completed withholding elections, establish reasonable
waiting and adjustment periods and/or accounting and crediting procedures to
ensure that amounts applied toward the purchase of Common Stock for each
participant properly correspond with amounts withheld from the participant's
Compensation, and establish such other limitations or procedures as the Board
(or its committee) determines in its sole discretion advisable which are
consistent with the Plan.
20. NOTICES. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
21. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.
22. TERM OF PLAN. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 19 hereof.
-10-
<PAGE>
EXHIBIT A
SPLASH TECHNOLOGY, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
_____ Original Application Enrollment Date: ___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)
1. ___________________________ hereby elects to participate in the Splash
Technology, Inc. 1996 Employee Stock Purchase Plan (the "Employee Stock
Purchase Plan") and subscribes to purchase shares of the Company's Common
Stock in accordance with this Subscription Agreement and the Employee Stock
Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount of
____% of my Compensation on each payday (from 0 to 10%) during the Offering
Period in accordance with the Employee Stock Purchase Plan. (Please note
that no fractional percentages are permitted.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price
determined in accordance with the Employee Stock Purchase Plan. I
understand that if I do not withdraw from an Offering Period, any
accumulated payroll deductions will be used to automatically exercise my
option.
4. I have received a copy of the complete Employee Stock Purchase Plan. I
understand that my participation in the Employee Stock Purchase Plan is in
all respects subject to the terms of the Plan. I understand that my
ability to exercise the option under this Subscription Agreement is subject
to shareholder approval of the Employee Stock Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan should be
issued in the name(s) of (Employee or Employee and spouse only):
_______________________________.
6. I understand that if I dispose of any shares received by me pursuant to the
Plan within 2 years after the Enrollment Date (the first day of the
Offering Period during which I purchased such shares) or one year after the
Exercise Date, I will be treated for federal income tax purposes as having
received ordinary income at the time of such disposition in an amount equal
to the excess of the fair market value of the shares at the time such
shares were purchased by me
<PAGE>
over the price which I paid for the shares. I HEREBY AGREE TO NOTIFY THE
COMPANY IN WRITING WITHIN 30 DAYS AFTER THE DATE OF ANY DISPOSITION OF MY
SHARES AND I WILL MAKE ADEQUATE PROVISION FOR FEDERAL, STATE OR OTHER TAX
WITHHOLDING OBLIGATIONS, IF ANY, WHICH ARISE UPON THE DISPOSITION OF THE
COMMON STOCK. The Company may, but will not be obligated to, withhold from
my compensation the amount necessary to meet any applicable withholding
obligation including any withholding necessary to make available to the
Company any tax deductions or benefits attributable to sale or early
disposition of Common Stock by me. If I dispose of such shares at any time
after the expiration of the 2-year and 1-year holding periods, I understand
that I will be treated for federal income tax purposes as having received
income only at the time of such disposition, and that such income will be
taxed as ordinary income only to the extent of an amount equal to the
lesser of (1) the excess of the fair market value of the shares at the time
of such disposition over the purchase price which I paid for the shares, or
(2) 15% of the fair market value of the shares on the first day of the
Offering Period. The remainder of the gain, if any, recognized on such
disposition will be taxed as capital gain.
7. I hereby agree to be bound by the terms of the Employee Stock Purchase
Plan. The effectiveness of this Subscription Agreement is dependent upon
my eligibility to participate in the Employee Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the
Employee Stock Purchase Plan:
NAME: (Please print)
----------------------------------------------
(First) (Middle) (Last)
- ------------------------------- ---------------------------------------------
Relationship
---------------------------------------------
(Address)
-2-
<PAGE>
Employee's Social
Security Number:
------------------------------------
Employee's Address:
------------------------------------
------------------------------------
------------------------------------
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated:
- ------------------------------- ---------------------------------------------
Signature of Employee
-----------------------------------------
Spouse's Signature (If beneficiary other than
spouse)
-3-
<PAGE>
EXHIBIT B
SPLASH TECHNOLOGY, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the Splash
Technology, Inc. 1996 Employee Stock Purchase Plan which began on ____________,
19____ (the "Enrollment Date") hereby notifies the Company that he or she hereby
withdraws from the Offering Period. He or she hereby directs the Company to pay
to the undersigned as promptly as practicable all the payroll deductions
credited to his or her account with respect to such Offering Period. The
undersigned understands and agrees that his or her option for such Offering
Period will be automatically terminated. The undersigned understands further
that no further payroll deductions will be made for the purchase of shares in
the current Offering Period and the undersigned shall be eligible to participate
in succeeding Offering Periods only by delivering to the Company a new
Subscription Agreement.
Name and Address of Participant:
------------------------------------
------------------------------------
------------------------------------
Signature:
------------------------------------
Date:
-------------------------------
<PAGE>
SPLASH TECHNOLOGY HOLDINGS, INC.
PROXY for Annual Meeting of Stockholders
To Be Held May 26, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of SPLASH TECHNOLOGY HOLDINGS, INC., a Delaware
corporation (the "Company"), hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement, and hereby appoints Kevin K.
Macgillivray and Michael Orr, and each of them, proxies and attorneys-in-fact,
with full power to each of substitution, on behalf of the undersigned, to
represent the undersigned at the Annual Meeting of Stockholders of SPLASH
TECHNOLOGY HOLDINGS, INC. to be held at the offices of the Company at 555 Del
Rey Avenue, Sunnyvale, California 94086 on Wednesday, May 26, 1999 at 9:00 a.m.,
local time, and at any adjournment or adjournments thereof, and to vote all
shares of Common Stock that the undersigned would be entitled to vote if then
and there personally present, on all matters set forth on the reverse side
hereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE HEREIN. IF NO SPECIFICATION IS INDICATED, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED FOR EACH OF THE PERSONS AND THE
PROPOSALS ON THE REVERSE SIDE HEREOF AND FOR SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING AS THE PROXYHOLDERS DEEM ADVISABLE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
1. Election of Directors NOMINEES: Kevin K. Macgillivray
Gregory M. Avis
FOR WITHHELD
[_] [_]
[_]
---------------------------------------
For both nominees except as noted above
2. To approve and ratify the adoption of an amendment to the 1996 Employee
Stock Purchase Plan (the "Purchase Plan") which (i) increases the number of
shares of Common Stock reserved for issuance thereunder from 175,000 to
350,000 and (ii) provides for an annual share increase to the Purchase Plan
consisting of the lesser of (a) 175,000 shares of Common Stock, (b) that
number of shares of Common Stock issued pursuant to the Purchase Plan in
the one-year period ending on the date of said annual increase, or (c) a
lesser amount determined by the Board.
FOR WITHHELD ABSTAIN
[_] [_] [_]
3. To vote or otherwise represent the shares on any and all other business
which may properly come before the meeting or any adjournment or
adjournments thereof, according to their discretion and in their
discretion.
FOR WITHHELD ABSTAIN
[_] [_] [_]
MARK HERE FOR ADDRESS CHANGE AND [_]
NOTE NEW ADDRESS IN SPACE TO THE LEFT.
Please mark, sign, date and return the proxy card promptly using the enclosed
envelope.
NOTE: Please sign exactly as name appears on your stock certificate. If the
stock is registered in the names of two or more persons, each should
sign. Executors, administrators, trustees, guardians, attorneys and
corporate officers should insert their titles.
SIGNATURE: DATE:
----------------------------------- -----------------
