<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
<TABLE>
<CAPTION>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement*
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
PUMA TECHNOLOGY, INC.
- --------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/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:
----------------------------------------------------------
(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:(1)
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / 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:
----------------------------------------------------------
</TABLE>
* The Registrant expects to release definitive proxy statements to
securityholders on or about November 20, 1999.
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE>
PRELIMINARY PROXY MATERIALS
PUMA TECHNOLOGY, INC.
2550 NORTH FIRST STREET, SUITE 500
SAN JOSE, CALIFORNIA 95131
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 8, 1999
To the Stockholders of Puma Technology, Inc.:
You are invited to attend the Annual Meeting of Stockholders of Puma
Technology, Inc. (the "Company") which will be held on Wednesday, December 8,
1999, at 9:00 a.m. local time, at the Santa Clara Marriott, 2700 Mission College
Boulevard, Santa Clara, California, for the following purposes:
1. To elect five (5) members of the Board of Directors to hold office until
the 2000 Annual Meeting of Stockholders and until their respective
successors are elected and qualified.
2. To approve an amendment to the Puma Technology, Inc. Amended and
Restated 1993 Stock Option Plan to increase the number of shares of
Common Stock reserved for issuance thereunder by 500,000 shares.
3. To approve an amendment to the Company's Certificate of Incorporation to
increase the number of authorized shares of Common Stock from 40,000,000
to 60,000,000 shares.
4. To vote upon a proposal to ratify the appointment of
PricewaterhouseCoopers LLP as the Company's independent public
accountants for the fiscal year ending July 31, 2000.
5. To transact such other business as may properly come before the meeting.
Stockholders of record at the close of business on October 27, 1999 are
entitled to notice of, and to vote at, this meeting and any adjournments
thereof. For ten (10) days prior to the meeting, a complete list of the
stockholders entitled to vote at the meeting will be available for examination
by any stockholder for any purpose relating to the meeting during ordinary
business hours at the principal office of the Company.
By Order of the Board of Directors
/s/ Stephen A. Nicol
STEPHEN A. NICOL
SECRETARY
San Jose, California
November , 1999
STOCKHOLDERS ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND
RETURN IT IN THE ENCLOSED POSTAGE PREPAID ENVELOPE. PROXIES ARE REVOCABLE, AND
ANY STOCKHOLDER MAY WITHDRAW HIS OR HER PROXY AND VOTE IN PERSON AT THE MEETING.
<PAGE>
PUMA TECHNOLOGY, INC.
2550 NORTH FIRST STREET, SUITE 500
SAN JOSE, CALIFORNIA 95131
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 8, 1999
The accompanying proxy is solicited by the Board of Directors of Puma
Technology, Inc., a Delaware corporation (the "Company"), for use at the 1999
Annual Meeting of Stockholders to be held December 8, 1999, or any adjournment
thereof, for the purposes set forth in the accompanying Notice of Annual
Meeting. The date of this Proxy Statement is November , 1999, the approximate
date on which this Proxy Statement and the accompanying form of proxy were first
sent or given to stockholders.
GENERAL INFORMATION
ANNUAL REPORT. An annual report for the fiscal year ended July 31, 1999 is
enclosed with this Proxy Statement.
VOTING SECURITIES. Only stockholders of record as of the close of business
on October 27, 1999 will be entitled to vote at the meeting and any adjournment
thereof. As of that date, there were 13,388,711 shares of Common Stock of the
Company, par value $0.001 per share ("Common Stock"), issued and outstanding.
Stockholders may vote in person or by proxy. Each holder of shares of Common
Stock is entitled to one vote for each share of stock held on the proposals
presented in this Proxy Statement. The Company's Bylaws provide that a majority
of all of the shares of the stock entitled to vote, whether present in person or
represented by proxy, shall constitute a quorum for the transaction of business
at the meeting.
SOLICITATION OF PROXIES. The cost of soliciting proxies will be borne by
the Company. In addition to soliciting stockholders by mail and through its
regular employees, the Company may request banks and brokers, and other
custodians, nominees and fiduciaries, to solicit their customers who have stock
of the Company registered in the names of such persons and will reimburse them
for their reasonable, out-of-pocket costs. The Company may use the services of
its officers, directors, and others to solicit proxies, personally or by
telephone, without additional compensation.
VOTING OF PROXIES. All valid proxies received prior to the meeting will be
voted. All shares represented by a proxy will be voted, and where a stockholder
specifies by means of the proxy a choice with respect to any matter to be acted
upon, the shares will be voted in accordance with the specification so made. If
no choice is indicated on the proxy, the shares will be voted in favor of the
proposal. A stockholder giving a proxy has the power to revoke his or her proxy,
at any time prior to the time it is voted, by delivery to the Secretary of the
Company of a written instrument revoking the proxy or a duly executed proxy with
a later date, or by attending the meeting and voting in person.
<PAGE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of August 31, 1999,
with respect to the beneficial ownership of the Company's Common Stock by
(i) each director and director nominee of the Company, (ii) the Chief Executive
Officer and the two (2) other most highly compensated executive officers of the
Company whose salary and bonus for the fiscal year ended July 31, 1999 exceeded
$100,000, (iii) all directors and executive officers of the Company as a group
and (iv) each person known by the Company to own more than five percent (5%) of
the Company's Common Stock.
<TABLE>
<CAPTION>
SHARES OWNED
-----------------------------
NUMBER OF PERCENTAGE OF
NAME AND ADDRESS OF BENEFICIAL OWNERS(1) SHARES CLASS
- ---------------------------------------- --------- -------------
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS
Bradley A. Rowe............................................. 1,388,500(2) 10.3%
Stephen A. Nicol............................................ 722,500(3) 5.3%
Michael M. Clair............................................ 349,500(4) 2.6%
M. Bruce Nakao.............................................. 340,291(5) 2.5%
Tyrone F. Pike.............................................. 298,513(6) 2.2%
All current directors and executive officers as a group (6
persons).................................................. 3,199,904(7) 23.0%
</TABLE>
- ------------------------
* Represents less than 1%.
(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 will become exercisable within sixty (60) days
after August 31, 1999 are deemed outstanding, while such shares are not
deemed outstanding for purposes of computing percentage ownership of any
other person. Options granted under the Company's Amended and Restated 1993
Stock Option Plan (the "Option Plan") are fully exercisable from the date of
grant, subject to the Company's right to repurchase any unvested shares at
the original exercise price upon termination of employment. Unless otherwise
indicated in the footnotes below, the persons and entities named in the
table have sole voting and investment power with respect to all shares
beneficially owned, subject to community property laws where applicable.
Unless otherwise indicated, the address of each of the individuals listed in
the table is: c/o Puma Technology, Inc., 2550 North First Street, Suite 500,
San Jose, California 95131.
(2) Represents (i) 160,000 shares subject to options which are exercisable
within sixty (60) days of August 31, 1999, (ii) 100,000 shares registered in
the name of the Bradley Alan & Tanya Elaine Rowe Charitable Remainder
Unitrust, of which Mr. Rowe is a trustee and (iii) 1,128,500 shares
registered in the name of the Bradley Alan Rowe and Tanya Elaine Rowe Trust
UA 8 31 93 BAROWE & TEROWE Revocable Living Trust, of which Mr. Rowe is a
trustee.
(3) Includes 160,000 shares subject to options which are exercisable within
sixty (60) days of August 31, 1999.
(4) Includes (i) 7,500 shares subject to options which are exercisable within
sixty (60) days of August 31, 1999, (ii) 30,000 shares held by the
MacLean-Clair Family Limited Partnership, of which Mr. Clair is a general
partner, (iii) 16,000 shares registered in the names of children of
Mr. Clair and (iv) 171,000 shares registered in the name of Audrey MacLean
and Michael M. Clair, as Trustees, or their successors, of the Audrey
MacLean and Michael Clair Trust Agreement UAD 12/1/90. The 30,000 shares
held by the MacLean-Clair Family Limited Partnership can be voted and
disposed of by Mr. Clair and Audrey MacLean acting together.
2
<PAGE>
(5) Represents (i) 93,000 shares subject to options which are exercisable within
sixty (60) days of August 31, 1999, (ii) 95,071 shares registered in the
name of the M. Bruce Nakao FBO 1994 Trust UAD 4/28/94, of which Mr. Nakao is
a trustee, (iii) 120,489 shares registered in the name of M. Bruce Nakao and
Marilynn Occhipinti as tenants in common and (iv) 31,731 shares held by B&Z
Investments, L.P. ("B&Z"), of which Mr. Nakao is a general partner. The
31,731 shares held by B&Z can be voted and disposed of by Mr. Nakao acting
alone. Mr. Nakao disclaims beneficial ownership of the stock held by B&Z
except to the extent of his pecuniary interest therein.
(6) Includes (i) 15,000 shares subject to options which are exercisable within
sixty (60) days of August 31, 1999, of which 10,313 shares are subject to a
repurchase right in favor of the Company which lapses over time, (ii) 2,000
shares registered in the name of the Logan Marler Pike Trust, of which
Mr. Pike is a trustee, and (iii) 2,000 shares registered in the name of the
Elizabeth Watson Pike Trust, of which Mr. Pike is a trustee.
Excludes 114,274 shares registered in the name of the Tyrone & Bettina Pike
1999 Joint Issue Trust (the "Joint Issue Trust"). Mr. Pike does not have
voting or investment power with respect to the shares held by the Joint
Issue Trust and disclaims beneficial ownership of these shares, except to
the extent of his proportionate interest in them. The 114,274 shares held by
the Joint Issue Trust and 241,013 of the shares listed in the table were
acquired in connection with the Company's acquisition of ProxiNet, Inc. in
October 1999.
(7) Includes 535,500 shares subject to options which are exercisable within
sixty (60) days of August 31, 1999, of which 10,313 shares are subject to a
repurchase right in favor of the Company which lapses over time.
3
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Five (5) directors, constituting the Company's full Board of Directors, are
to be elected at the Annual Meeting. If elected, the nominees will serve as
directors until the Company's Annual Meeting of Stockholders in 2000, and until
their successors are elected and qualified.
Management's nominees for election to the Board of Directors, and certain
information with respect to their age and background, are set forth below.
Management knows of no reason why any nominee should be unable or unwilling to
serve. However, if any nominee(s) should for any reason be unable or unwilling
to serve, the proxies will be voted for such substitute nominees as management
may designate.
If a quorum is present and voting, the nominees for directors receiving the
highest number of votes will be elected as directors. Abstentions and shares
held by brokers that are present, but not voted because the brokers were
prohibited from exercising discretionary authority, i.e. "broker non-votes",
will be counted as present for purposes of determining if a quorum is present.
<TABLE>
<CAPTION>
NAME POSITION WITH THE COMPANY AGE DIRECTOR SINCE
- ---- ------------------------------------------- -------- --------------
<S> <C> <C> <C>
Bradley A. Rowe...................... President, Chief Executive Officer and
Director 39 1993
Stephen A. Nicol..................... Senior Vice President, Sales and Director 39 1993
Michael M. Clair..................... Chairman of the Board 52 1994
Tyrone F. Pike....................... Director 45 1996
M. Bruce Nakao....................... Director Nominee 55 1999
</TABLE>
MR. ROWE co-founded the Company in August 1993 and has served as President
since October 1993 and Chief Executive Officer since March 1995. He has also
served as a Director of the Company since August 1993. Prior to founding the
Company, from January 1991 to July 1993, he held various management positions at
SystemSoft Corporation, a PC system software supplier, including Vice President
of Worldwide Sales and General Manager of Desktop Computing. In June 1988,
Mr. Rowe co-founded Extar Technologies, a manufacturer's representative of PC
products, where he held a number of management positions, including Vice
President of Sales and President until December 1990. From November 1983 to
June 1988, Mr. Rowe served in various sales positions at Western Digital
Corporation, a storage management company, including Director of Western Area
Sales. He holds a B.S. degree in engineering and management science from
Princeton University. Mr. Rowe currently serves as a director of two privately
held corporations: 7th Street Teleworks, Inc. and ClikIn.com, Inc.
MR. NICOL co-founded the Company in August 1993 and has served as Senior
Vice President of Sales since its establishment. He has also served as a
Director since August 1993. Prior to founding the Company, he served in several
capacities at SystemSoft Corporation, including Director of Sales for Japan and
Asia Pacific from July 1992 to July 1993 and as Sales Manager for the Eastern
United States from November 1991 to July 1992. Mr. Nicol co-founded Extar
Technologies in June 1988 where he served until November 1991 as Vice President
of Sales. Previously, Mr. Nicol served as OEM Manager for Western Digital and
Computer Sales Representative for Hewlett-Packard. He holds an A.B. degree in
political science from Princeton University.
MR. CLAIR became a Director of the Company in November 1994 and has served
as Chairman of the Board since March 1995. Mr. Clair was a founder of SynOptics
Communications, a computer networking company, and from January 1987 to
November 1992, served as Vice President Sales and
4
<PAGE>
Marketing and then as Senior Vice President of Sales and Customer Service of
SynOptics. Mr. Clair has more than twenty-five (25) years of experience in data
processing, data and voice communications and local area networking. He spent
the early part of his career with Tymshare, a computer time-sharing company, and
ROLM, a manufacturer of digital PBX equipment, in a variety of sales and
marketing positions. He holds a B.S. degree in business and an M.B.A. degree
from the University of Buffalo. Mr. Clair currently serves as a director of
several private companies in Silicon Valley.
MR. PIKE became a Director of the Company in October 1996. Since
March 1993, Mr. Pike has served as a Director of Citrix Systems, a publicly-held
supplier of multi-user application server products. In August 1996, Mr. Pike
founded Switchsoft Systems, a supplier of virtual network management software
and virtual private network services and has served as Chairman of the Board and
Chief Executive Officer since its inception. From January 1994 to August 1996,
Mr. Pike served in various positions at UB Networks, a computer networking
company, including Senior Vice President and Chief Technical Officer. Prior to
joining UB Networks, Mr. Pike served as a partner of Pike Associates from
September 1992 to January 1994. From March 1992 to September 1992, Mr. Pike
served as President and Chief Executive Officer of Global Village
Communications, a networking communications company. From May 1991 to
June 1992, he served as manager, Strategic Planning & Business Development of
Intel Corporation. From April 1983 to May 1991, Mr. Pike served as Founder,
Chairman of the Board and President of LANSystems, a computer networking
company, of which he served as a Director until February 1994. Mr. Pike holds an
A.B. degree in architecture from Princeton University.
MR. NAKAO became a Director of the Company in May 1999. Mr. Nakao currently
holds the position of Chief Financial Officer at an Internet search company, Ask
Jeeves, Inc. Prior to joining the Company's Board, from June 1996 to May 1999,
Mr. Nakao was the Chief Financial Officer of the Company. Prior to that, from
May 1986 to June 1996, Mr. Nakao served in several capacities at Adobe Systems
Incorporated, a software company, most recently as its Senior Vice President,
Finance and Administration, Chief Financial Officer and Treasurer. He holds a
B.A. degree in business and economics from the University of Washington and an
M.B.A. degree from Stanford University.
BOARD MEETINGS AND COMMITTEES
During the fiscal year ended July 31, 1999, the Board of Directors held four
(4) meetings. No incumbent director attended fewer than one hundred percent
(100%) of such meetings of the Board of Directors and the Committees on which he
serves.
The Company has an Audit Committee and a Compensation Committee.
The Audit Committee's function is to review with the Company's independent
accountants and management the annual financial statements and independent
accountants' opinion, the scope and results of the examination of the Company's
financial statements by the independent accountants, approve all professional
services and related fees performed by the independent accountants, recommend
the retention of the independent accountants to the Board of Directors, subject
to ratification by the stockholders, and periodically review the Company's
accounting policies and internal accounting and financial controls. The members
of the Audit Committee are Messrs. Clair and Nakao. During the fiscal year ended
July 31, 1999, the Audit Committee held one (1) meeting.
The Compensation Committee's function is to review and establish salary
levels for executive officers, including the Chief Executive Officer, and
certain other management employees and to grant stock options. The members of
the Compensation Committee are Messrs. Clair and Nakao. During the fiscal year
ended July 31, 1999, the Compensation Committee held one (1) meeting. For
additional information concerning the Compensation Committee, see "REPORT OF THE
COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION."
5
<PAGE>
VOTE REQUIRED AND BOARD OF DIRECTORS RECOMMENDATION
If a quorum representing a majority of all outstanding shares of Common
Stock is present and voting, either in person or by proxy, the five
(5) nominees for director receiving the highest number of votes will be elected.
Abstentions and broker non-votes will each be counted as present for purposes of
determining the presence of a quorum. Abstentions and broker non-votes, on the
other hand, will have no effect on the outcome of the vote. THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES NAMED ABOVE.
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth information concerning the compensation of
the Chief Executive Officer of the Company and the two (2) other most highly
compensated executive officers of the Company as of July 31, 1999 whose total
salary and bonus for the fiscal year ended July 31, 1999 exceeded $100,000, for
services in all capacities to the Company, during the fiscal years ended
July 31, 1999, 1998 and 1997:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
AWARDS
ANNUAL COMPENSATION ----------------------
------------------------ SECURITIES
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY ($) UNDERLYING OPTIONS(#)
- --------------------------- ----------- ---------- ----------------------
<S> <C> <C> <C>
Bradley A. Rowe 1999 218,750 160,000(1)
President and Chief Executive Officer 1998 131,250 60,000(2)
1997 96,250 160,000(3)
Stephen A. Nicol 1999 212,917 160,000(1)
Senior Vice President, Sales 1998 131,250 60,000(2)
1997 102,083 160,000(3)
FORMER EXECUTIVE OFFICER: 1999 143,192 93,000(1)
M. Bruce Nakao(5) 1998 119,208 60,000(2)
Director 1997 94,375 236,122(4)
</TABLE>
- ------------------------
(1) Represents: (i) for Mr. Rowe, 160,000 shares for options previously granted
in fiscal years 1997 and 1996 which were canceled and replaced pursuant to
the October 29, 1998 repricing; (ii) for Mr. Nicol, 160,000 shares for
options previously granted in fiscal years 1997 and 1996 which were canceled
and replaced pursuant to the October 29, 1998 repricing; and (iii) for
Mr. Nakao, 93,000 shares for options granted during fiscal year 1999. See
"OPTION GRANTS IN LAST FISCAL YEAR" and "REPORT OF THE COMPENSATION
COMMITTEE ON REPRICING OF OPTIONS."
(2) Represents 60,000 shares for options previously granted in fiscal year 1997
which were canceled and replaced pursuant to the October 3, 1997 repricing.
All shares listed in fiscal year 1998 (i) for Messrs. Rowe and Nicol, have
been canceled and replaced pursuant to the October 29, 1998 repricing and
(ii) for Mr. Nakao, have been canceled and replaced pursuant to the
October 29, 1998 repricing, of which 35,000 shares have been exercised by
Mr. Nakao and 25,000 shares have canceled by the Company in fiscal year
1999.
(3) Represents 60,000 shares for options previously granted in fiscal year 1997
which were canceled and replaced pursuant to the October 3, 1997 repricing
and 100,000 shares for options previously granted in fiscal year 1996 which
were canceled and replaced pursuant to the October 29, 1998
6
<PAGE>
repricing. All shares listed in fiscal year 1997 have been canceled and
replaced pursuant to the October 3, 1997 and October 29, 1998 repricings.
(4) Represents (i) 176,122 shares for options previously granted in fiscal year
1996 which were canceled and replaced pursuant to the October 29, 1998
repricing, of which 108,413 shares have been exercised by Mr. Nakao and
67,709 shares have been canceled by the Company in fiscal year 1999, and
(ii) 60,000 shares for options previously granted in fiscal year 1997 which
were canceled and replaced pursuant to the October 3, 1997 and October 29,
1998 repricings, of which 35,000 shares have been exercised by Mr. Nakao and
25,000 shares have been canceled by the Company in fiscal year 1999.
(5) Mr. Nakao served as the Company's Senior Vice President and Chief Financial
Officer until May 1999.
STOCK OPTIONS GRANTED IN FISCAL YEAR 1999
The following table provides the specified information concerning grants of
options to purchase the Company's Common Stock made during the fiscal year ended
July 31, 1999 to the persons named in the Summary Compensation Table:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK
NUMBER OF OPTIONS PRICE APPRECIATION
SECURITIES GRANTED TO FOR OPTION
UNDERLYING EMPLOYEES IN TERM(3)
OPTIONS FISCAL EXERCISE PRICE EXPIRATION ---------------------
NAME GRANTED(#)(1) YEAR ($/SH)(2) DATE 5% ($) 10% ($)
- ---- ------------- ------------ -------------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Bradley A. Rowe................. 100,000(4) 10.4 2.40625 07/22/01 151,328 383,494
60,000(5) 6.3 2.40625 03/03/02 90,797 230,097
Stephen A. Nicol................ 100,000(4) 10.4 2.1875 07/22/06 137,571 348,631
60,000(5) 6.3 2.1875 03/03/07 82,542 209,179
FORMER OFFICER: 176,122(4) 18.4 2.1875 06/23/06 242,292 614,016
M. Bruce Nakao................ 93,000 9.7 5.50 05/24/09 321,680 815,199
60,000(5) 6.3 2.1875 03/03/07 82,542 209,179
</TABLE>
- ------------------------
(1) The Board of Directors has discretion, subject to plan limits, to modify the
terms of options and to reprice the options. Each option is fully
exercisable from the time of grant, subject to the Company's right to
repurchase any unvested shares at the original exercise price in the event
of the optionee's termination. Shares generally vest at the rate of 1/4
after twelve (12) months from the date of grant and 1/48 of the total number
of shares each month thereafter.
(2) The exercise price per share of options granted represented the fair market
value of the underlying shares of Common Stock on the dates the respective
options were granted as determined by the Company's Board of Directors. In
October 1998, as a result of a broad decline in the fair market value of the
Company's Common Stock, the Compensation Committee determined that it was in
the best interests of the Company to offer to all current option holders,
including executive officers whom the Committee considered separately, the
opportunity to exchange outstanding options with an exercise price above the
then current price for options with an exercise price equal to the then
current fair market value. For details concerning the repricings of options,
see "REPORT OF THE COMPENSATION COMMITTEE ON REPRICING OF OPTIONS."
7
<PAGE>
(3) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. The assumed
five percent (5%) and ten percent (10%) rates of stock price appreciation
are mandated by rules of the Securities and Exchange Commission and do not
represent the Company's estimate or projection of the future Common Stock
price. This table does not take into account any appreciation in the price
of the Common Stock to date.
(4) Represents options that were repriced on October 29, 1998, replacing options
that were granted in fiscal year 1996.
(5) Represents options that were repriced on October 29, 1998, replacing options
that were granted in fiscal year 1997 and repriced on October 3, 1997.
OPTION EXERCISES AND FISCAL 1999 YEAR-END VALUES
The following table provides the specified information concerning exercises
of options to purchase the Company's Common Stock in the fiscal year ended
July 31, 1999, and unexercised options held as of July 31, 1999, by the persons
named in the Summary Compensation Table:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT JULY 31, 1999(#) AT JULY 31, 1999($)(1)
ON VALUE ------------------------------ ------------------------------
NAME EXERCISE REALIZED($)(2) EXERCISABLE(3) UNEXERCISABLE EXERCISABLE(4) UNEXERCISABLE
- ---- -------- -------------- -------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bradley A. Rowe.............. -- -- 160,000 -- 475,000 --
Stephen A. Nicol............. -- -- 160,000 -- 510,000 --
FORMER OFFICER:
M. Bruce Nakao............... 143,413 367,496 93,000 -- -- --
</TABLE>
- ------------------------
(1) Calculated on the basis of the fair market value of the underlying
securities at July 31, 1999 of $5.375 per share, as reported by the Nasdaq
National Market, minus the aggregate exercise price.
(2) "Value Realized" represents the fair market value of the underlying
securities on the exercise date minus the aggregate exercise price of such
options.
(3) All options are fully exercisable, subject to the Company's right to
repurchase any unvested shares at the original exercise price in the event
of the optionee's termination. Shares generally vest at the rate of 1/4
after twelve (12) months from the date of grant and 1/48 of the total number
of shares each month thereafter.
(4) Does not include options that had an exercise price greater than the per
share closing price of $5.375 on July 31, 1999 as reported by the Nasdaq
National Market on July 31, 1999.
8
<PAGE>
REPRICING OF OPTIONS
The following table provides the specified information concerning all
repricings of options to purchase the Company's Common Stock held by any
executive officer of the Company from December 5, 1996, the first day of trading
following the date of the Company's initial public offering, through the fiscal
year ended July 31, 1999:
TEN-YEAR OPTION REPRICINGS(1)
<TABLE>
<CAPTION>
NUMBER OF LENGTH OF ORIGINAL
SECURITIES OPTION TERM
UNDERLYING MARKET PRICE OF EXERCISE PRICE REMAINING AT DATE
OPTIONS STOCK AT TIME AT TIME OF NEW OF REPRICING OR
NAME AND REPRICED OR OF REPRICING OR REPRICING OR EXERCISE AMENDMENT
PRINCIPAL POSITION DATE AMENDED(#) AMENDMENT($) AMENDMENT ($) PRICE ($) (MONTHS)
- ------------------ ---- ----------- --------------- -------------- --------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Bradley A. Rowe........ 10/29/98 100,000(1) 2.1875 6.05 2.40625 33
President and Chief 10/29/98 60,000(1) 2.1875 7.15 2.40625 41
Executive Officer 10/03/97 56,910(2) 6.50 11.825 7.15 113
10/03/97 3,090(2) 6.50 11.825 7.15 53
Stephen A. Nicol....... 10/29/98 160,000(1) 2.1875 5.50 2.1875 93
Senior Vice 10/29/98 60,000(1) 2.1875 6.50 2.1875 101
President, Sales 10/03/97 60,000(2) 6.50 10.75 6.50 113
FORMER OFFICER:
M. Bruce Nakao......... 10/29/98 176,122(1) 2.1875 3.25 2.1875 92
Former Senior Vice 10/29/98 60,000(1) 2.1875 6.50 2.1875 101
President and Chief 10/03/97 60,000(2) 6.50 10.75 6.50 113
Financial Officer
</TABLE>
- ------------------------
(1) Options that were repriced in October 1998 continue to vest in accordance
with their original vesting schedule. See also "REPORT OF COMPENSATION
COMMITTEE ON REPRICING OF OPTIONS."
(2) Options that were repriced in October 1997 continue to vest in accordance
with their original vesting schedule.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company did not have a Compensation Committee until September 1996,
prior to which time all decisions concerning executive compensation were made by
the entire Board of Directors, of which Messrs. Rowe and Nicol are members.
Messrs. Rowe and Nicol abstained from all deliberations concerning their own
compensation during this period. The Compensation Committee currently consists
of Mr. Clair and Mr. Nakao.
DIRECTOR COMPENSATION
Directors do not receive any cash compensation for their services as members
of the Board of Directors or members of committees of the Board of Directors,
although they are reimbursed for their out-of-pocket expenses incurred in
attending Board and committee meetings. Directors who are employees are eligible
to receive stock option grants under the Option Plan.
9
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors and persons who beneficially own more than ten
percent (10%) of the Company's Common Stock to file initial reports of ownership
and reports of changes in ownership with the Securities and Exchange Commission
("SEC"). Such persons are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms filed by such person.
Based solely on the Company's review of such forms furnished to the Company
and written representations from certain reporting persons, the Company believes
that it has complied with all filing requirements applicable to the Company's
executive officers, directors and greater than ten percent (10%) stockholders.
CHANGES TO BENEFIT PLANS
Amended and Restated 1993 Stock Option Plan. The Board of Directors has
adopted, subject to stockholder approval, an amendment to the Amended and
Restated 1993 Stock Option Plan to increase the maximum number of shares that
may be issued thereunder by 500,000 shares. See "PROPOSAL NO. 2--AMENDMENT TO
THE PUMA TECHNOLOGY, INC. AMENDED AND RESTATED 1993 STOCK OPTION PLAN." As of
November 1, 1999, no grant of options had been made to any person conditioned
upon stockholder approval of the increase in the share reserve of the Amended
and Restated 1993 Stock Option Plan.
10
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE ON REPRICING OF OPTIONS
In October 1998, the Committee considered the options held by the Company's
executive officers and employees and the fact that a broad decline in the price
of the Company's stock had resulted in a substantial number of stock options
granted pursuant to the Option Plan having prices well above the recent
historical trading prices for the stock. Management had informed the Committee
of its concern that key employee turnover was likely to increase in part because
the Company's total compensation package for long-term employees, which included
substantial options with exercise prices well above the current trading price,
was less attractive than compensation offered by other companies in the same
geographic locations. This is because options granted to new hires at other
companies would likely be granted at current trading prices, providing more
opportunity for appreciation than the Company's options.
The Committee believed that the Company's success in the future would depend
in large part on its ability to retain a number of its highly skilled technical,
managerial, sales and marketing personnel, and the loss of key employees could
have a significant impact on the Company's business. The Committee also believed
that unless an adjustment was made in option prices, existing employees holding
options would perceive a substantial inequity in comparison to new employees
granted stock options with exercise prices set at the current, lower fair market
value of the Company's stock, and that employee morale would suffer as a
consequence. The Committee concluded that it was important and cost-effective to
provide equity incentives to employees and executive officers of the Company to
improve the Company's performance and the value of the Company for its
stockholders. The Committee considered granting new options selectively to
current key employees at fair market value, but recognized that the size of the
option grants required to offset the decline in market price would result in
significant additional dilution to stockholders. The Committee recognized that
an exchange of existing options with exercise prices higher than fair market
value for options at fair market value would provide additional incentives to
employees because of the increased potential for appreciation. The Committee
also recognized that issuance of the new options could be subject to a
restriction on exercise for a given period, thereby providing optionees
participating in the exchange with an additional incentive to remain employed by
the Company. The Committee recognized that to require optionees to forfeit
accumulated vesting would appear more onerous than a restriction on exercise for
a specified period. Considering these factors, the Committee determined that it
was in the best interests of the Company and its stockholders to grant
replacement stock options under the Option Plan for those options with exercise
prices above recent trading prices.
Accordingly, in October 1998, the Committee decided to approve an offer to
all employees of the Company, including executive officers, which the Committee
considered separately, to exchange outstanding options for replacement options
with an exercise price based on the closing price of the Company's Common Stock
on October 29, 1998, which was $2.1875. Pursuant to the repricing, a total of
2,359,516 shares, with exercise prices ranging from $2.50 to $9.75, were
voluntarily exchanged for the same number of options, all with an exercise price
of $2.1875 per share, except that Mr. Rowe's shares were repriced with an
exercise price of $2.40625 per share. Options exchanged by the Company's
executive officers were as follows:
<TABLE>
<S> <C>
Bradley A. Rowe............................................. 160,000
Stephen A. Nicol............................................ 160,000
M. Bruce Nakao.............................................. 236,122
</TABLE>
Under the October 1998 repricing program, repriced options will continue to
have the same vesting schedule as the surrendered options, but will be subject
to a three month restriction on exercise.
COMPENSATION COMMITTEE
Michael M. Clair
M. Bruce Nakao
11
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Prior to September 1996, the Company did not have a Compensation Committee,
during which time all decisions concerning executive compensation were made by
the entire Board, of which Messrs. Rowe and Nicol are members. Messrs. Rowe and
Nicol abstained from all deliberations concerning their own compensation during
this period. The initial Compensation Committee (the "Committee") was formed in
September 1996. The current Committee consists of Messrs. Clair and Nakao. Each
of these individuals is a non-employee member of the Company's Board of
Directors.
Since September 1996, the Committee has been responsible for setting and
administering the policies governing annual compensation of the executive
officers of the Company. For all executive officers, the Committee reviews the
performance and compensation levels for executive officers, sets salary levels
and recommends option grants under the Option Plan.
OVERVIEW
The goals of the Company's executive officer compensation policies are to
attract, retain and reward executive officers who contribute to the Company's
success, to align executive officer compensation with the Company's performance
and to motivate executive officers to achieve the Company's business objectives.
The Company uses salary and option grants to attain these goals. The Committee
reviews compensation surveys and other data to enable the Committee to compare
the Company's compensation package with that of similarly-sized high technology
companies in the Company's geographic areas.
During the fiscal year ended July 31, 1999, the Company implemented a 401(k)
matching plan for all employees. Since September 1997, the Company has had in
effect a profit sharing plan for non-officer employees and, during the fiscal
year ended July 31, 1999, the Company implemented a management bonus program for
all officers, vice presidents, directors and managers, excluding persons
eligible for commission-based compensation. Eligibility for management bonuses
is based on attainment of specified Company financial objectives.
SALARY
Base salaries of executive officers, other than for Mr. Rowe, the Company's
President and Chief Executive Officer, are reviewed annually by the Committee,
and adjustments are made based on individual executive officer performance,
scope of responsibilities and levels paid by similarly-sized high technology
companies in the applicable geographic area.
STOCK OPTIONS
The Company strongly believes that equity ownership by executive officers
provides incentives to build stockholder value and align the interests of
executive officers with the stockholders. The size of an initial option grant to
an executive officer has generally been determined with reference to similarly-
sized high technology companies in the relevant geographic area for similar
positions, the responsibilities and future contributions of the executive
officer, as well as recruitment and retention considerations.
12
<PAGE>
CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee annually reviews the performance and compensation of
Mr. Rowe. Mr. Rowe has served as the Company's President since October 1993 and
Chief Executive Officer since March 1995. The compensation of Mr. Rowe is based
upon the same criteria as the other executive officers of the Company. While the
Chief Executive Officer makes recommendations about the compensation levels,
goals and performance of the other executive officers, he does not participate
in discussions regarding his own compensation or performance. Mr. Rowe
participated in the same voluntary salary reduction program in exchange for an
award of options described above.
COMPENSATION COMMITTEE
Michael M. Clair
M. Bruce Nakao
13
<PAGE>
COMPARISON OF STOCKHOLDER RETURN
Set forth below is a line graph comparing the annual percentage change in
the cumulative total return on the Company's Common Stock, with the cumulative
total return of the Nasdaq Stock Market Index (U.S. Companies) ("Nasdaq U.S.")
and the Hambrecht & Quist Computer Software Index ("H&Q Computer Software"), for
the period commencing on December 5, 1996, the first day of trading following
the date of the Company's initial public offering, and ending on July 30, 1999.
COMPARISON OF CUMULATIVE TOTAL RETURN FROM DECEMBER 5, 1996 THROUGH
JULY 30, 1999(1):
PUMA TECHNOLOGY, INC., NASDAQ STOCK MARKET INDEX (U.S. COMPANIES)
AND HAMBRECHT & QUIST COMPUTER SOFTWARE INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PUMA H&Q COMPUTER
<S> <C> <C> <C>
Technology, Inc. Nasdaq U.S. Software
12/05/96 $100.00 $100.00 $100.00
1/31/97 $125.81 $110.39 $99.98
7/30/97 $69.09 $127.50 $116.15
1/31/98 $52.59 $129.55 $120.93
7/31/98 $45.89 $149.79 $148.27
1/29/99 $32.23 $200.47 $161.26
7/30/99 $44.34 $211.08 $168.72
</TABLE>
<TABLE>
<CAPTION>
12/05/96 1/31/97 7/30/97 1/31/98 7/31/98 1/29/99 7/30/99
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Puma Technology, Inc.................. $100.00 $125.81 $ 69.09 $ 52.59 $ 45.89 $ 32.23 $ 44.34
Nasdaq U.S............................ $100.00 $110.39 $127.50 $129.55 $149.79 $200.47 $211.08
H&Q Computer Software................. $100.00 $ 99.98 $116.15 $120.93 $148.27 $161.26 $168.72
</TABLE>
- ------------------------
(1) Assumes that $100.00 was invested on December 5, 1996 in the Company's
Common Stock and each index, and that all dividends were reinvested. No
dividends have been declared on the Company's Common Stock. Stockholder
returns over the indicated period should not be considered indicative of
future stockholder returns.
14
<PAGE>
PROPOSAL NO. 2
AMENDMENT TO THE PUMA TECHNOLOGY, INC.
AMENDED AND RESTATED 1993 STOCK OPTION PLAN
GENERAL
At the Annual Meeting, the stockholders will be asked to approve an
amendment to the Company's Amended and Restated 1993 Stock Option Plan (the
"Option Plan") to increase by 500,000 the maximum number of shares of Common
Stock that may be issued under the Option Plan. The Company's stockholders have
previously approved the reservation of 4,500,000 shares of the Company's Common
Stock for issuance to employees (including officers), directors and consultants
under the Option Plan. As of November 1, 1999, options to purchase an aggregate
of 2,249,771 shares of Common Stock were outstanding under the Option Plan, at a
weighted average exercise price of $3.8673 per share, and 1,692,588 shares had
been issued upon the exercise of previously granted options, leaving only
557,641 shares available for future option grants. To enable the Company to
continue to provide long-term equity incentives, the Board of Directors has
amended the Option Plan, subject to approval by the stockholders, to increase
the maximum number of shares that may be issued under the Option Plan by
500,000, to an aggregate of 5,000,000 shares. The Board of Directors believes
that the Company's stock option program is an important factor in attracting and
retaining the high caliber employees, directors and consultants essential to the
success of the Company and in aligning their long-term interests with those of
the stockholders. Because competition for highly qualified individuals in the
Company's industry is intense, management believes that to successfully attract
the best candidates, the Company must continue to offer a competitive stock
option program. The Board of Directors further believes that stock options serve
an important role in motivating their holders to contribute to the Company's
continued growth and profitability. The proposed amendment is intended to ensure
that the Company will continue to have available a reasonable number of shares
under the Option Plan to meet these needs.
SUMMARY OF THE OPTION PLAN, AS AMENDED
The following summary of the Option Plan, as amended, is qualified in its
entirety by the specific language of the Option Plan, a copy of which is
available to any stockholder upon request.
GENERAL. The purpose of the Option Plan is to advance the interests of the
Company and its stockholders by providing an incentive to attract, retain and
reward the Company's employees, directors and consultants and by motivating such
persons to contribute to the Company's growth and profitability. It provides for
the grant of incentive stock options within the meaning of section 422 of the
Internal Revenue Code of 1986, as amended (the "Code") and nonstatutory stock
options.
SHARES SUBJECT TO PLAN. The stockholders have previously authorized an
aggregate of 4,500,000 shares of the Company's Common Stock for issuance upon
the exercise of options granted under the Option Plan. As amended, the Option
Plan would provide that the maximum aggregate number of authorized but unissued
or reacquired shares of Common Stock that may be issued under the plan is
5,000,000. Appropriate adjustments will be made to the shares subject to the
Option Plan and to outstanding options upon any stock dividend, stock split,
reverse stock split, recapitalization, combination, reclassification, or similar
change in the capital structure of the Company. To the extent that any
outstanding option under the Option Plan expires or terminates prior to exercise
in full, or if shares issued upon exercise of an option are subject to a Company
repurchase right which is subsequently exercised by the Company, the shares of
Common Stock for which such option is not exercised or the shares repurchased
are returned to the Option Plan and become available for future grant.
15
<PAGE>
ADMINISTRATION. The Option Plan is administered by the Board of Directors
or a duly appointed committee of the Board (hereinafter referred to as the
"Board"). Subject to the provisions of the Option Plan, the Board determines the
persons to whom options are to be granted, the number of shares to be covered by
each option, whether an option is to be an incentive stock option or a
nonstatutory stock option, the timing and terms of exercisability and vesting of
each option, the exercise price of and the type of consideration to be paid to
the Company upon the exercise of each option, the duration of each option, and
all other terms and conditions of the options. The Board will interpret the
Option Plan and options granted thereunder, and all determinations of the Board
will be final and binding on all persons having an interest in the Option Plan
or any option. The Board may amend, modify, extend, cancel, renew, or grant a
new option in substitution for, any option, waive any restrictions or conditions
applicable to any option, and accelerate, continue, extend or defer the
exercisability or vesting of any option, including with respect to the period
following an optionee's termination of service with the Company. The Option Plan
provides, subject to certain limitations, for indemnification by the Company of
any director, officer or employee against all reasonable expenses, including
attorneys' fees, incurred in connection with any legal action arising from such
person's action or failure to act in administering the plan.
ELIGIBILITY. Options may be granted under the Option Plan to employees
(including officers), directors and consultants of the Company or of any present
or future parent or subsidiary corporations of the Company. In addition, options
may be granted to prospective service providers in connection with written
employment offers, provided that no shares may be purchased prior to such
person's commencement of service. As of November 1, 1999, the Company had
approximately 119 employees, including 4 executive officers and 5 directors
eligible under the Option Plan. While any person eligible under the Option Plan
may be granted nonstatutory stock options, only employees may be granted
incentive stock options.
TERMS AND CONDITIONS OF OPTIONS. Each option granted under the Option Plan
is evidenced by a written agreement between the Company and the optionee
specifying the number of shares subject to the option and the other terms and
conditions of the option, consistent with the requirements of the plan. The
exercise price of each incentive stock option granted under the Option Plan may
not be less than the fair market value of a share of the Company's Common Stock
on the date of grant, while the exercise price of a nonstatutory stock option
may not be less than 85% of such fair market value. However, any incentive stock
option granted to a person who at the time of grant owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or any parent or subsidiary corporation of the Company (a "Ten Percent
Stockholder") must have an exercise price equal to at least 110% of the fair
market value of a share of Common Stock on the date of grant. As of November 1,
1999, the closing price of the Company's Common Stock, as reported on the Nasdaq
National Market, was $36.06 per share. The Option Plan provides that the
exercise price may be paid in cash, by check, or in cash equivalent, by tender
of shares of the Company's Common Stock owned by the optionee having a fair
market value not less than the exercise price, by the assignment of the proceeds
of a sale or loan with respect to some or all of the shares of Common Stock
being acquired upon the exercise of the option, by means of a promissory note,
by such other lawful consideration as approved by the Board, or by any
combination of these. The Board may nevertheless restrict the forms of payment
permitted in connection with any option grant. No option may be exercised until
the optionee has made adequate provision for federal, state, local and foreign
taxes, if any, relating to the exercise of the option. Options granted under the
Option Plan become exercisable and vested at such times and subject to such
conditions as specified by the Board. Generally, options granted under the
Option Plan are exercisable on and after the date of grant, subject to the right
of the Company to reacquire at the optionee's exercise price any unvested shares
held by the optionee upon termination of employment or service with the Company
or if the optionee attempts to transfer any unvested shares. Shares subject to
options generally vest in installments subject to the optionee's continued
employment or service. The maximum term of an incentive stock option
16
<PAGE>
granted under the Option Plan is ten years, provided that an incentive stock
option granted to a Ten Percent Stockholder must have a term not exceeding five
years. Options are nontransferable by the optionee other than by will or by the
laws of descent and distribution, and are exercisable during the optionee's
lifetime only by the optionee. Generally, options remain exercisable for three
months following an optionee's termination of service, unless such termination
results from the optionee's death or disability, in which case the option will
remain exercisable for twelve months following the optionee's termination of
service, provided that in any event the option must be exercised no later than
its expiration date.
TRANSFER OF CONTROL. The Option Plan provides that in the event of (i) a
sale or exchange by the stockholders in a single or series of related
transactions of more than 50% of the Company's voting stock, (ii) a merger or
consolidation in which the Company is a party, (iii) the sale, exchange or
transfer of all or substantially all of the assets of the Company, or (iv) a
liquidation or dissolution of the Company wherein, upon any such event, the
stockholders of the Company immediately before such event do not retain
immediately after such event direct or indirect beneficial ownership of more
than 50% of the total combined voting power of the voting stock of the Company,
its successor, or the corporation to which the assets of the Company were
transferred (a "Transfer of Control"), the surviving, continuing, successor or
purchasing corporation or parent corporation thereof may either assume the
Company's rights and obligations under the outstanding options or substitute
substantially equivalent options for such corporation's stock. To the extent
that the outstanding options are not assumed, replaced or exercised prior to the
Transfer of Control, they will terminate.
TERMINATION OR AMENDMENT. The Option Plan currently provides that unless
sooner terminated, no Incentive Stock Option may be granted under the Option
Plan after December 3, 2007. However, if the stockholders approve the proposed
increase in the number of shares issuable under the Option Plan, such term will
be extended for another 10 years. This term limitation does not apply to
nonstatutory stock options, which may be granted until the Plan is terminated.
The Board may terminate or amend the Option Plan at any time. However, without
stockholder approval, the Board may not amend the Option Plan to increase the
total number of shares of Common Stock issuable thereunder or change the class
of persons eligible to receive options. No termination or amendment may
adversely affect an outstanding option without the consent of the optionee,
unless the amendment is required to preserve the option's status as an incentive
stock option or comply with any applicable law or regulation.
SUMMARY OF UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary is intended only as a general guide as to the United
States federal income tax consequences under current law of participation in the
Option Plan and does not attempt to describe all possible federal or other tax
consequences of such participation or tax consequences based on particular
circumstances.
INCENTIVE STOCK OPTIONS. An optionee recognizes no taxable income for
regular income tax purposes as the result of the grant or exercise of an
incentive stock option qualifying under section 422 of the Code. Optionees who
do not dispose of their shares for two years following the date the option was
granted nor within one year following the exercise of the option will normally
recognize a long-term capital gain or loss equal to the difference, if any,
between the sale price and the purchase price of the shares. If an optionee
satisfies such holding periods upon a sale of the shares, the Company will not
be entitled to any deduction for federal income tax purposes. If an optionee
disposes of shares within two years after the date of grant or within one year
from the date of exercise (a "disqualifying disposition"), the difference
between the fair market value of the shares on the determination date (see
discussion under "Nonstatutory Stock Options" below) and the option exercise
price (not to exceed the gain realized on the sale if the disposition is a
transaction with respect to
17
<PAGE>
which a loss, if sustained, would be recognized) will be taxed as ordinary
income at the time of disposition. Any gain in excess of that amount will be a
capital gain. If a loss is recognized, there will be no ordinary income, and
such loss will be a capital loss. A capital gain or loss will be long-term if
the optionee's holding period is more than 1 year. Any ordinary income
recognized by the optionee upon the disqualifying disposition of the shares
generally should be deductible by the Company for federal income tax purposes,
except to the extent such deduction is limited by applicable provisions of the
Code or the regulations thereunder. The difference between the option exercise
price and the fair market value of the shares on the determination date of an
incentive stock option (see discussion under "Nonstatutory Stock Options" below)
is an adjustment in computing the optionee's alternative minimum taxable income
and may be subject to an alternative minimum tax which is paid if such tax
exceeds the regular tax for the year. Special rules may apply with respect to
certain subsequent sales of the shares in a disqualifying disposition, certain
basis adjustments for purposes of computing the alternative minimum taxable
income on a subsequent sale of the shares and certain tax credits which may
arise with respect to optionees subject to the alternative minimum tax.
NONSTATUTORY STOCK OPTIONS. Options not designated or qualifying as
incentive stock options will be nonstatutory stock options. Nonstatutory stock
options have no special tax status. An optionee generally recognizes no taxable
income as the result of the grant of such an option. Upon exercise of a
nonstatutory stock option, the optionee normally recognizes ordinary income in
the amount of the difference between the option exercise price and the fair
market value of the shares on the determination date (as defined below). If the
optionee is an employee, such ordinary income generally is subject to
withholding of income and employment taxes. The "determination date" is the date
on which the option is exercised unless the shares are subject to a substantial
risk of forfeiture and are not transferable, in which case the determination
date is the earlier of (i) the date on which the shares are transferable or
(ii) the date on which the shares are not subject to a substantial risk of
forfeiture. If the determination date is after the exercise date, the optionee
may elect, pursuant to section 83(b) of the Code, to have the exercise date be
the determination date by filing an election with the Internal Revenue Service
not later than 30 days after the date the option is exercised. Upon the sale of
stock acquired by the exercise of a nonstatutory stock option, any gain or loss,
based on the difference between the sale price and the fair market value on the
determination date, will be taxed as capital gain or loss. A capital gain or
loss will be long-term if the optionee's holding period is more than 1 year. No
tax deduction is available to the Company with respect to the grant of a
nonstatutory stock option or the sale of the stock acquired pursuant to such
grant. The Company generally should be entitled to a deduction equal to the
amount of ordinary income recognized by the optionee as a result of the exercise
of a nonstatutory stock option, except to the extent such deduction is limited
by applicable provisions of the Code or the regulations thereunder.
VOTE REQUIRED AND BOARD OF DIRECTIONS RECOMMENDATION
The affirmative vote of a majority of the votes cast at the Annual Meeting
of Stockholders, at which a quorum representing a majority of all outstanding
shares of Common Stock of the Company is present and voting, either in person or
by proxy, is required for approval of this proposal. Abstentions and broker
non-votes will each be counted as present for purposes of determining the
presence of a quorum, but will not be counted as having been voted on the
proposal. The Board of Directors believes that the proposed amendment to the
Option Plan increasing by 500,000 the maximum aggregate number of shares of
Common Stock issuable under the plan is in the best interests of the Company and
the stockholders for the reasons stated above. THEREFORE, THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND THE OPTION PLAN TO
INCREASE THE MAXIMUM AGGREGATE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UNDER
THE PLAN BY 500,000.
18
<PAGE>
PROPOSAL NO. 3
AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK
BACKGROUND
Under Delaware law, the Company may only issue shares of Common Stock to the
extent such shares have been authorized for issuance under the Company's
Certificate of Incorporation (the "Certificate"). The Certificate currently
authorizes the issuance by the Company of up to 40,000,000 shares of Common
Stock, $.001 par value. However, as of November 1, 1999, 15,289,448 shares of
the Company's Common Stock were issued and outstanding, including
1,900,737 shares of Common Stock issued to the stockholders of ProxiNet, Inc.
("ProxiNet") in connection with the Company's acquisition of ProxiNet in
October 1999 (the "ProxiNet Acquisition"), and a total of 6,139,217 shares of
Common Stock were reserved for issuance under the Company's equity compensation
plans, including 639,617 shares of Common Stock reserved for issuance to holders
of options to acquire the Common Stock of ProxiNet in connection with the
ProxiNet Acquisition, leaving 18,571,335 shares of Common Stock unissued and
unreserved. If the Company's stockholders approve Proposal 2, regarding an
increase in the maximum number of shares issuable under the Option Plan, only
18,071,335 shares of Common Stock will remain unissued and unreserved. In order
to ensure sufficient shares of Common Stock will be available for issuance by
the Company, the Board of Directors on November 22, 1999 approved, subject to
stockholder approval, amending the Certificate to increase the number of shares
of such Common Stock authorized for issuance from 40,000,000 to 60,000,000.
PURPOSE AND EFFECT OF THE AMENDMENT
The principal purpose of the proposed amendment to the Certificate is to
authorize additional shares of Common Stock which will be available in the event
the Board of Directors determines that it is necessary or appropriate to permit
future stock dividends or stock splits, to raise additional capital through the
sale of equity securities, to acquire another company or its assets, to
establish strategic relationships with corporate partners, provide equity
incentives to employees and officers or other corporate purposes. The Board of
Directors has no current intention to split the outstanding Common Stock by
declaring a stock dividend, and the declaration and payment of such a stock
dividend by the Board would be contingent upon several factors, including the
market price of the Company's stock, the Company's expectations about future
performance and the Company's beliefs about general market trends. The
availability of additional shares of Common Stock is particularly important in
the event that the Board of Directors needs to undertake any of the foregoing
actions on an expedited basis and thus to avoid the time and expense of seeking
stockholder approval in connection with the contemplated issuance of Common
Stock. The Board of Directors has no present agreement, arrangement or intention
to issue any of the shares for which approval is sought. If the amendment is
approved by the stockholders, the Board of Directors does not intend to solicit
further stockholder approval prior to the issuance of any additional shares of
Common Stock, except as may be required by applicable law.
The increase in authorized Common Stock will not have any immediate effect
on the rights of existing stockholders. However, the Board will have the
authority to issue authorized Common Stock without requiring future stockholder
approval of such issuances, except as may be required by applicable law. To the
extent that additional authorized shares are issued in the future, they may
decrease the existing stockholders' percentage equity ownership and, depending
on the price at which they are issued, could be dilutive to the existing
stockholders. The holders of Common Stock have no preemptive rights and the
Board of Directors has no plans to grant such rights with respect to any such
shares.
19
<PAGE>
The increase in the authorized number of shares of Common Stock and the
subsequent issuance of such shares could have the effect of delaying or
preventing a change in control of the Company without further action by the
stockholders. Shares of authorized and unissued Common Stock could, within the
limits imposed by applicable law, be issued in one or more transactions which
would make a change in control of the Company more difficult, and therefore less
likely. Any such issuance of additional stock could have the effect of diluting
the earnings per share and book value per share of outstanding shares of Common
Stock and such additional shares could be used to dilute the stock ownership or
voting rights of a person seeking to obtain control of the Company.
The Board of Directors is not currently aware of any attempt to take over or
acquire the Company. While it may be deemed to have potential anti-takeover
effects, the proposed amendment to increase the authorized Common Stock is not
prompted by any specific effort or takeover threat currently perceived by
management.
If the proposed amendment is approved by the stockholders, Article 4,
Section FOURTH(A) of the Certificate will be amended to read as follows:
The total number of shares of all classes of stock which the
Corporation shall have authority to issue is Sixty-Two Million
(62,000,000) consisting of Sixty Million (60,000,000) shares of
Common Stock, par value one-tenth of one cent ($.001) per share
(the "Common Stock") and Two Million (2,000,000) shares of
Preferred Stock, par value one-tenth of one cent ($.001) per share
(the "Preferred Stock").
The additional shares of Common Stock to be authorized pursuant to the
proposed amendment will have a par value of $.001 per share and be of the same
class of Common Stock as is currently authorized under the Certificate. The
Company does not have any current intentions, plans, arrangements, commitments
or understandings to issue any shares of its capital stock except in connection
with its existing stock option and purchase plans and as stock dividends to
holders of outstanding stock.
The affirmative vote of a majority of the shares of outstanding Common Stock
is required for approval of this proposal. Abstentions and broker non-votes will
be counted as present for purposes of determining if a quorum is present.
Abstentions and broker non-votes will have the same effect as a negative vote on
this proposal. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
STOCKHOLDERS VOTE FOR APPROVAL OF THE AMENDMENT TO THE CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM
40,000,000 TO 60,000,000 SHARES.
20
<PAGE>
PROPOSAL NO. 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has selected PricewaterhouseCoopers
LLP as independent accountants to audit the financial statements of the Company
for the fiscal year ending July 31, 2000. PricewaterhouseCoopers LLP has acted
as the Company's independent accountants since the Company's inception. A
representative of PricewaterhouseCoopers LLP is expected to be present at the
Annual Meeting with the opportunity to make a statement if the representative
desires to do so, and is expected to be available to respond to appropriate
questions.
The affirmative vote of a majority of the votes cast at the Annual Meeting
of Stockholders, at which a quorum representing a majority of all outstanding
shares of Common Stock of the Company is present and voting, either in person or
by proxy, is required for approval of this proposal. Abstentions and broker
non-votes will each be counted as present for purposes of determining the
presence of a quorum, but will not be counted as having been voted on the
proposal. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT
ACCOUNTANTS FOR THE FISCAL YEAR ENDING JULY 31, 2000.
STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING
The Company has an advance notice provision under its bylaws for stockholder
business to be presented at meetings of stockholders. Such provision states that
in order for stockholder business to be properly brought before a meeting by a
stockholder, such stockholder must have given timely notice thereof in writing
to the Secretary of the Company. To be timely, a stockholder proposal must be
received at the Company's principal executive offices not less than 120 calendar
days in advance of the one year anniversary of the date the Company's proxy
statement was released to stockholders in connection with the previous year's
annual meeting of stockholders; except that (i) if no annual meeting was held in
the previous year, (ii) if the date of the annual meeting has been changed by
more than thirty calendar days from the date contemplated at the time of the
previous year's proxy statement or (iii) in the event of a special meeting, then
notice must be received not later than the close of business on the tenth day
following the day on which notice of the date of the meeting was mailed or
public disclosure of the meeting date was made.
Proposals of stockholders intended to be presented at the 2000 Annual
Meeting of the Stockholders of the Company must be received by the Company at
its offices at 2550 North First Street, Suite 500, San Jose, California 95131 no
later than July , 2000 and satisfy the conditions established by the
Securities and Exchange Commission for stockholder proposals to be included in
the Company's proxy statement for that meeting.
TRANSACTION OF OTHER BUSINESS
At the date of this Proxy Statement, the only business which the Board of
Directors intends to present or knows that others will present at the meeting is
as set forth above. If any other matter or matters are properly brought before
the meeting, or any adjournment thereof, it is the intention of the persons
named in the accompanying form of proxy to vote the proxy on such matters in
accordance with their best judgment.
By Order of the Board of Directors
/s/ Stephen A. Nicol
STEPHEN A. NICOL
SECRETARY
November , 1999
21
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PRELIMINARY PROXY MATERIALS
PUMA TECHNOLOGY, INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 8, 1999
The undersigned hereby appoints Bradley A. Rowe and Kelly J. Hicks, and
each of them, with full power of substitution to represent the undersigned
and to vote all of the shares of stock in Puma Technology, Inc., a Delaware
corporation (the "Company"), which the undersigned is entitled to vote at the
Annual Meeting of Stockholders of the Company to be held at the Santa Clara
Marriott, 2700 Mission College Boulevard, Santa Clara, California, on
December 8, 1999 at 9:00 a.m. local time, and at any adjournment or
postponement thereof (1) as hereinafter specified upon the proposals listed
on the reverse side and as more particularly described in the Proxy Statement
of the Company dated November __, 1999 (the "Proxy Statement"), receipt of
which is hereby acknowledged, and (2) in their discretion upon such other
matters as may properly come before the meeting.
THE SHARES REPRESENTED HEREBY SHALL BE VOTED AS SPECIFIED. IF NO SPECIFICATION
IS MADE, SUCH SHARES SHALL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
<PAGE>
PUMA TECHNOLOGY, INC.
PLEASE MARK VOTE IN OVAL IN THE
FOLLOWING MANNER USING DARK INK ONLY.
Whether or not you plan to attend the meeting in person, you are urged to
sign and promptly mail this proxy in the return envelope so that your stock
may be represented at the meeting.
A vote FOR the following proposals is recommended by the Board of Directors:
1. To elect the following five (5) members of the Board of Directors to hold
office until the 2000 Annual Meeting of Stockholders and until their
respective successors are elected and qualified: Bradley A. Rowe,
Stephen A. Nicol, Michael M. Clair, Tyrone F. Pike, M. Bruce Nakao
For Withhold For All
All All Except
/ / / / / /
____________________________________________
Except Nominee(s) Written Above
2. To approve an amendment to the Puma Technology, Inc. Amended and Restated
1993 Stock Option Plan to increase the number of shares of Common Stock
reserved for issuance thereunder by 500,000 shares.
For Against Abstain
/ / / / / /
3. To approve an amendment to the Company's Certificate of Incorporation to
increase the number of authorized shares of Common Stock from 40,000,000
to 60,000,000.
For Against Abstain
/ / / / / /
4. To ratify the appointment of PricewaterhouseCoopers LLP as the Company's
independent public accountants for the fiscal year ending July 31, 2000;
For Against Abstain
/ / / / / /
MARK HERE FOR ADDRESS
CHANGE AND NOTE AT LEFT / /
MARK HERE IF YOU PLAN TO ATTEND THE MEETING / /
Dated_____________________
Signature(s): _______________________________________________________________
SIGN EXACTLY AS YOUR NAME(S) APPEARS ON YOUR STOCK CERTIFICATE. IF SHARES OF
STOCK STAND OF RECORD IN THE NAMES OF TWO OR MORE PERSONS OR IN THE NAME OF
HUSBAND AND WIFE, WHETHER AS JOINT TENANTS OR OTHERWISE, BOTH OR ALL OF SUCH
PERSONS SHOULD SIGN THE ABOVE PROXY. IF SHARES OF STOCK ARE HELD OF RECORD
BY A CORPORATION, THE PROXY SHOULD BE EXECUTED BY THE PRESIDENT OR VICE
PRESIDENT AND THE SECRETARY OR ASSISTANT SECRETARY, AND THE CORPORATE SEAL
SHOULD BE AFFIXED THERETO. EXECUTORS OR ADMINISTRATORS OR OTHER FIDUCIARIES
WHO EXECUTE THE ABOVE PROXY FOR A DECEASED STOCKHOLDER SHOULD GIVE THEIR FULL
TITLE. PLEASE DATE THE PROXY.
- FOLD AND DETACH HERE -
CONTROL NUMBER
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