SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive Proxy Statement Commission Only (as permitted by
[ ] Definitive Additional Materials Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
----------------------------------------------------------
CATAPULT COMMUNICATIONS CORPORATION
----------------------------------------------------------
(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 transactions applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
CATAPULT COMMUNICATIONS CORPORATION
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held February 11, 2000
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of CATAPULT
COMMUNICATIONS CORPORATION, a Nevada corporation (the "Company"), will be held
on Friday, February 11, 2000 at 3:00 PM, local time, at the Company's principal
executive offices located at 160 South Whisman Road, Mountain View, California
94041 for the following purposes:
1. To elect four directors to serve until the next Annual Meeting of
Stockholders and until their successors are elected.
2. To ratify the appointment of PricewaterhouseCoopers LLP as independent
public accountants of the Company for the fiscal year ending September
30, 2000.
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Theforegoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on December 14, 1999
are entitled to notice of and to vote at the meeting.
To assure 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 he or she has returned a proxy.
BY ORDER OF THE BOARD OF DIRECTORS
Nancy H. Karp
Secretary
Mountain View, California
January 12, 2000
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND
RETURN IT IN THE ENCLOSED ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES.
- --------------------------------------------------------------------------------
-1-
<PAGE>
CATAPULT COMMUNICATIONS CORPORATION
----------------
PROXY STATEMENT
FOR 2000 ANNUAL MEETING OF STOCKHOLDERS
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed Proxy is solicited on behalf of the Board of Directors of
CATAPULT COMMUNICATIONS CORPORATION, a Nevada corporation (the "Company"), for
use at the Annual Meeting of Stockholders to be held Friday, February 11, 2000
at 3:00 PM, 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 Company's principal executive offices
located at 160 South Whisman Road, Mountain View, California 94041. The
telephone number at that location is (650) 960-1025.
These proxy solicitation materials were first mailed on or about January 12,
2000 to all stockholders entitled to vote at the meeting.
Record Date and Voting Securities
Stockholders of record at the close of business on December 14, 1999 are
entitled to notice of and to vote at the meeting. At the record date, 12,729,997
shares of the Company's authorized Common Stock were issued and outstanding and
held of record by 52 stockholders. No shares of the Company's authorized
Preferred Stock were outstanding.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time 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 Annual 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.
This solicitation of proxies is made by the Company, and all related costs
will be borne by the Company. In addition, the Company may reimburse brokerage
firms and other persons representing beneficial owners of shares for their
expenses in forwarding solicitation materials to such beneficial owners. Proxies
may also be solicited by certain of the Company's directors, officers and
regular employees, without additional compensation, personally or by telephone
or facsimile.
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" or "WITHHELD" with respect to a matter will be treated as being
present at the meeting for purposes of establishing a quorum. The Company
believes that under Nevada law abstentions (i.e. votes of "WITHHELD") and broker
non-votes (i.e. the votes of shares held of record by brokers as to which the
underlying beneficial owners have given no voting instructions and such brokers
have no discretionary voting authority) should be counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
Thus, abstentions and broker non-votes will make a quorum more readily
obtainable, but they will not otherwise affect the outcome of voting on a
proposal.
-2-
<PAGE>
Deadline for Receipt of Stockholder Proposals
Proposals of stockholders of the Company that are intended to be presented
by such stockholders at the Company's 2001 Annual Meeting of Stockholders must
be received by the Company no later than November 28, 2000 in order that they
may be considered at that meeting.
The date by which stockholder proposals must be received by the Company for
inclusion in the Company's proxy statement and form of proxy for its 2001 Annual
Meeting of Stockholders is September 14, 2000. Such stockholder proposals should
be submitted to Catapult Communications Corporation, 160 South Whisman Road,
Mountain View, California 94041, Attention: Secretary.
PROPOSAL ONE
ELECTION OF DIRECTORS
Nominees
A board of four directors is to be elected at the Annual Meeting of
Stockholders. Unless otherwise instructed, the proxy holders will vote the
proxies received by them for the Company's four nominees named below, all of
whom are presently directors of the Company. In the event that any nominee of
the Company is unable or declines to serve as a director at the time of the
Annual Meeting of Stockholders, the proxies will be voted for any nominee who
shall be designated by the present Board of Directors to fill the vacancy. The
Company is not aware of any nominee who will be unable or will decline to serve
as a director. The term of office for each person elected as a director will
continue until the next Annual Meeting of Stockholders or until a successor has
been elected and qualified.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE NOMINEES
LISTED BELOW.
<TABLE>
The names of the nominees and certain information about them as of December
14, 1999 are set forth below:
<CAPTION>
Name of Nominee Age Positions With the Company Director Since
- --------------- --- -------------------------- --------------
<S> <C> <C> <C>
Richard A. Karp.................................... 55 President, Chief Executive Officer and 1985
Chairman of the Board
Nancy H. Karp...................................... 54 Secretary and Director 1997
John M. Scandalios(1)(2)........................... 69 Director 1987
Charles L. Waggoner(1)(2).......................... 60 Director 1994
<FN>
- ----------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
</FN>
</TABLE>
Dr. Richard A. Karp founded the Company in 1985 and has served as President,
Chief Executive Officer and Chairman of the Board of the Company since
inception. Prior to founding Catapult in 1985, Dr. Karp was Vice President of
Software Development for Tri-Data, Inc., a supplier of protocol conversion
equipment, from 1982 to 1985. Previously, he was a founder and Vice President of
Software of Sequoia Systems, a fault-tolerant computer systems manufacturer. Dr.
Karp has also served as an independent software consultant, and he spent five
years as a systems programmer and project leader at Burroughs Corporation. Dr.
Karp holds a Ph.D. in computer science from Stanford University, a M.S. in
mathematics from the University of Wisconsin and a B.S. in science from the
California Institute of Technology.
Ms. Nancy H. Karp has served as director and Secretary of the Company since
its inception and served as the Company's Treasurer from inception to September
1997. In addition, from time to time during that period, she provided a variety
of services to the Company. Beginning in June 1998, she also entered into a
three-year consulting agreement with the Company. See "Certain Transactions."
Ms. Karp holds an M.B.A. from Claremont Graduate School, an M.A. in public
health from the University of California at Berkeley and a B.S. from Texas
Technical University.
-3-
<PAGE>
Mr. John M. Scandalios has served as a director of the Company since
November 1987. From 1994 through April 1999, Mr. Scandalios served as Vice
President of Sales at Flowpoint Corporation (Flowpoint), a computer networking
company. From 1993 to 1994, he served as Vice President of Sales of Combinet
Inc., a computer networking company. From 1990 to 1993, Mr. Scandalios was
President of LIR Corporation, a network software company. From 1987 to 1990, he
served as Vice-President of Sales of ARIX Corporation, a UNIX-based computer
manufacturing company. Mr. Scandalios is also a director of Ancot Corporation, a
SCSI and fiber channel test equipment company. Mr. Scandalios holds an M.B.A.
and a B.A. from the University of Chicago.
Mr. Charles L. Waggoner has served as a director of Catapult since January
1991. Since 1993, Mr. Waggoner has served as President of Flowpoint. From 1992
to 1993, Mr. Waggoner was Vice President of Development of LIR. From 1990 to
1992, he was an independent consultant at Waggoner Associates. From 1986 to
1990, Mr. Waggoner served as Vice President of Operations of GRiD Systems, Inc.,
a portable laptop computer company. Mr. Waggoner holds a B.S. in electrical
engineering from South Dakota State University.
Dr. Karp and Ms. Karp were married until June of 1998. There are no other
family relationships between directors and executive officers of the Company
Board Meetings and Committees
The Board of Directors of the Company held a total of four meetings, and
acted by unanimous written consent once, during the fiscal year ended September
30, 1999. Each director attended all of the meetings of the Board of Directors
and committees thereof, if any, upon which such director served. The Board of
Directors has an Audit Committee and a Compensation Committee. The Board of
Directors has no nominating committee or any committee performing such
functions.
The Board of Directors has an Audit Committee and a Compensation Committee,
each consisting of Messrs. Waggoner and Scandalios. The Audit Committee met two
times during the fiscal year. The Audit Committee was formed in June 1998 and
makes recommendations to the Company's Board of Directors regarding the
selection of independent auditors, reviews the results and scope of the annual
audit and reviews and evaluates the Company's internal control functions.
The Compensation Committee met two times during the fiscal year. The
Compensation Committee was constituted in February 1999 following completion of
the Company's initial public offering. The Compensation Committee makes
recommendations to the Board of Directors concerning salaries and incentive
compensation for the Company's executive officers and administers the Company's
Stock Plans.
Compensation of Directors
The Company's non-employee directors do not currently receive any cash
compensation for service on the Company's Board of Directors or any committee
thereof, but directors may be reimbursed for certain expenses incurred in
connection with attendance at Board and committee meetings. Although
non-employee directors are eligible for option grants under the Company's 1998
Stock Plan (the "1998 Plan"), no options were granted to them under such plan
during fiscal 1999.
Vote Required
If a quorum is present and voting, the four nominees receiving the highest
number of votes will be elected to the Board of Directors. Votes withheld from
any nominee will be counted for purposes of determining the presence or absence
of a quorum for transaction of business at the meeting, but will have no other
legal effect upon the election of directors under Nevada law.
-4-
<PAGE>
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected PricewaterhouseCoopers LLP, independent
public accountants, to audit the consolidated financial statements of the
Company for the fiscal year ending September 30, 2000, and recommends that
stockholders vote for ratification of such appointment. In the event of a
negative vote on ratification, the Board of Directors will reconsider its
selection.
PricewaterhouseCoopers LLP has audited the Company's financial statements
annually since 1997. Representatives of PricewaterhouseCoopers LLP will be
available at the meeting to respond to any appropriate questions, and such
representatives will have an opportunity to make a statement at the meeting if
they desire to do so.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT PUBLIC ACCOUNTANTS.
EXECUTIVE COMPENSATION
<TABLE>
The following table sets forth the compensation of the Chief Executive
Officer and each of the four other most highly compensated executive officers of
the Company (the CEO and such other officers collectively the "Named Executive
Officers") during the fiscal years ended September 30, 1998 and September 30,
1999:
<CAPTION>
Summary Compensation Table
Long-Term
Annual Compensation Compensation
--------------------------------------------------- Awards
Name and Fiscal Other Annual ----------- All Other
Principal Position Year Salary($) Bonus($) Compensation(1)($) Options(#) Compensation(2)($)
- ------------------------------- ----- -------------- ---------- -------------------- --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Karp............... 1999 360,000 2,400 -- 40,000 6,000
President, Chief 1998 360,000 251,200 -- -- --
Executive Officer and
Chairman of the Board of
Directors
Barry R. Hoglund.............. 1999 162,917 145,525 -- 30,000 5,967
Vice President of Sales 1998 140,000 173,308 -- -- --
Glenn Stewart................. 1999 140,833 77,251 -- 25,000 5,910
Vice President of 1998 136,667 59,308 -- -- --
Engineering
Guy R. Simpson................ 1999 120,833 54,414 -- 37,000 4,800
Vice President of 1998 112,500 58,475 -- -- --
Applications Development
Barbara J. Fairhurst.......... 1999 105,833 43,944 -- 18,000 6,083
Vice President of 1998 98,000 31,406 -- -- --
Operations
<FN>
- ----------
(1) Includes perquisites only where the aggregate amount thereof equals or
exceeds the lesser of $50,000 or 10% of the salary plus bonus for the
executive officer.
(2) Includes (a) health insurance premiums in 1999 of approximately $4,800 for
Dr. Karp, Mr. Hoglund, Mr. Simpson and Ms. Fairhurst and approximately
$4,500 for Mr. Stewart, respectively and (b) employer matching
contributions to each employee's 401-K plan of $1,200 for Dr. Karp, $1,167
for Mr. Hoglund, $1,410 for Mr. Stewart and $1,283 for Ms. Fairhurst.
</FN>
</TABLE>
-5-
<PAGE>
Option Grants
<TABLE>
The following table shows, as to the Named Executive Officers, information
concerning stock options granted during the fiscal year ended September 30,
1999.
<CAPTION>
Option Grants in Last Fiscal Year
Individual Grants(1)
------------------------------------------------------------- Potential Realizable Value at
Number of % of Total Assumed Annual Rates of
Securities Options Exercise Stock Price Appreciation
Underlying Granted to Or Base for Option Term(4)
Options Employees in Price Expiration ---------------------------------------
Name Granted(#)(1) Fiscal Year(2) ($/sh) Date(s)(3) 5% ($) 10% ($)
- ------------------------ ------------- -------------- --------- ---------- ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Karp......... 40,000 18.67% 17.50 7/1/2009 309,914.67 908,120.33
Barry R. Hoglund........ 30,000 14.00 17.50 7/1/2009 232,436.00 681,090.24
Glenn Stewart........... 25,000 11.67 17.50 7/1/2009 193,696.67 567,575.20
Guy R. Simpson.......... 15,000 10.27 6.00 10/28/2008 288,718.00 513,045.12
22,000 7.00 17.50 7/1/2009 170,453.07 499,466.18
Barbara J. Fairhurst.... 18,000 8.40 17.50 7/1/2009 139,461.60 408,654.15
<FN>
- ----------
(1) These options grants are a combination of incentive stock options and
nonqualified stock options granted pursuant to the 1998 Plan and have terms
of 10 years, subject to earlier termination in certain events related to
termination of employment. These options vest as to 1/8th of the underlying
shares six months after the date of grant, and as to 1/48th of the shares
each month thereafter.
(2) Based on an aggregate of 273,014 shares subject to options granted in
fiscal 1999.
(3) Options may terminate before their expiration dates if the optionee's
status as an employee or consultant is terminated or upon the optionee's
death or disability.
(4) The potential realizable value is calculated based on the term of the
option (10 years) and assumes that the deemed value at the date of grant
appreciates at the indicated annual rate, compounded annually for the
entire term of the option, and that the option is exercised and sold on the
last day of its term for the appreciated stock price. The 5% and 10%
assumed annual rates of compounded stock price appreciation are mandated by
rules of the Securities and Exchange Commission (the "SEC") and do not
represent the Company's estimate or projection of the Company's future
Common Stock prices.
</FN>
</TABLE>
Option Exercises and Values
<TABLE>
The following table sets forth certain information regarding option
exercises and the value of options held by the Named Executive Officers.
<CAPTION>
Fiscal Year-End Option Exercises and Values
Number of Unexercised Value of Unexercised
Options In-the-Money Options at
Shares at September 30, 1999(#) September 30, 1999($)(2)
Acquired on Value ----------------------------- -----------------------------
Name Exercise(#) Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
- --------------------------- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Karp............ -- -- -- 40,000 -- --
Barry R. Hoglund........... -- -- 75,000 30,000 1,067,499.75 --
Glenn Stewart.............. -- -- 15,625 25,000 229,166.72 --
Guy R. Simpson............. 26,800 456,278.49 128,437 33,563 1,943,016.85 --
Barbara J. Fairhurst....... 2,900 34,631.25 27,100 18,000 407,584 --
-6-
<PAGE>
<FN>
- ----------
(1) Market value of underlying securities on date of exercise, minus the
exercise or base price.
(2) Value of in-the-money options is based on market value of the Company's
Common Stock on September 30, 1999 of $15.50, minus the exercise price.
</FN>
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE
Overview and Philosophy
The Compensation Committee (the "Committee") of the Board of Directors was
constituted in February 1999 following completion of the Company's initial
public offering. The Committee reviews and approves executive officer
compensation including recommendations for stock option grants, for approval by
the Board of Directors. Executive compensation includes the following elements:
base salaries, annual bonuses, stock options and various benefit plans.
The Committee is composed of two independent, outside directors. It is the
Committee's objective that executive compensation be tied directly to the
achievement of the Company's performance objectives. Specifically, the Company's
executive compensation program is designed to reward executive performance that
results in enhanced corporate and stockholder values.
Published industry pay survey data is reviewed and relied upon in the
Committee's assessment of appropriate compensation levels, including the Radford
Management Survey and data from companies in the computer industry of comparable
size, performance and growth rates.
The Committee recognizes that the industry sector in which the Company
operates is highly competitive, with the result that there is substantial demand
for qualified, experienced executive personnel. The Committee considers it
crucial that the Company be assured of attracting and rewarding its top caliber
executives who are essential to the attainment of the Company's ambitious
long-term strategic goals.
For these reasons, the Committee believes the Company's executive
compensation arrangements must remain competitive with those offered by other
companies of similar size, scope, performance levels and complexity of
operations.
Annual Cash Compensation
The Committee believes that the annual cash compensation paid to
executives should be commensurate with both the executive's and the Company's
performance. For this reason, the Company's executive cash compensation consists
of base compensation (salary) and variable incentive compensation (annual
bonus).
Base salaries for executive officers are established considering a number
of factors, including the Company's profitability; the executive's individual
performance and measurable contribution to the Company's success; and pay levels
of similar positions with comparable companies in the industry. The Committee
supports the Company's compensation philosophy of moderation for elements such
as base salary and benefits. Base salary decisions are made as part of the
Company's formal annual review process.
An executive's annual performance award generally depends on the overall
financial performance of the Company and the executive's individual performance.
No bonus payments are made until minimum revenue and profit targets are
achieved. These targets are reviewed at least annually to meet the changing
nature of the Company's business. The incentive portion is set at a higher
percentage for more senior officers, with the result that such officers have a
higher percentage of their potential total cash compensation at risk.
-7-
<PAGE>
Stock Options
During fiscal 1999 the Compensation Committee approved all stock option
grants made to executive officers under the Company's 1998 Plan. The 1998 Plan
is designed to attract, retain and motivate the Company's officers and other
participants by providing them with a meaningful stake in the Company's
long-term success.
In making its determinations, the Compensation Committee takes into
consideration: (i) grants made to individuals in similar positions in comparable
high technology companies, (ii) participants' contributions to the Company's
performance, both short- and long-term, (iii) prior stock option grants,
especially as they relate to the number of options vested and unvested, and (iv)
the impact that total option grants made to all participants have on dilution of
current stockholder ownership and the Company's earnings.
Stock option grants made to the Named Executive Officers are set forth in
the table of option grants during the last fiscal year set forth above. See
"Executive Compensation--Option Grants".
Benefits
The Company provides benefits to the named executive officers that are
generally available to all Company employees. The amount of executive level
benefits and perquisites, as determined in accordance with the rules of the
Securities and Exchange Commission relating to executive compensation, did not
exceed 5% of total salary and bonus for fiscal year 1999 for any executive
officer.
Chief Executive Officer's Compensation
Dr. Karp's compensation for fiscal 1999 was established prior to the
Company becoming a publicly traded company, and was based upon Dr. Karp's
recommendation. Dr. Karp's base salary for fiscal 1999 was $360,000, the same as
for fiscal 1998. Dr. Karp also agreed he would receive no bonus for fiscal 1999
other than a nominal bonus of $2,400. During fiscal 1999 Dr. Karp was granted an
option to purchase 40,000 shares of the Company's Common Stock.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee is composed of John M. Scandalios and Charles
L. Waggoner who are nonemployee directors with no interlocking relationships as
defined by the Securities and Exchange Commission.
Compensation Committee
John M. Scandalios
Charles L. Waggoner
-8-
<PAGE>
COMPANY'S STOCK PERFORMANCE
Set forth below is a line graph comparing the annual percentage change in
the cumulative return to the stockholders of the Company's Common Stock with the
cumulative return of the Nasdaq composite index and a peer group index for the
period commencing on the first day the Company's Common Stock was traded on the
Nasdaq Stock Market, February 11, 1999, and ending on September 30, 1999. The
information contained in the performance graph shall not be deemed to be
"soliciting material" or to be "filed" with the SEC, nor shall such information
be incorporated by reference into any future filing under the Securities Act of
1933 or the Securities Exchange Act of 1934, except to the extent that the
Company specifically incorporates it by reference into such filing.
The graph assumes that $100 was invested on February 11, 1999 in the
Company's Common Stock and in each index (based on prices from the close of
trading on February 11, 1999), and that all dividends were reinvested. No cash
dividends have been declared or paid on the Company's Common Stock. Stockholder
returns over the indicated period should not be considered indicative of future
stockholder returns. The Company operates on a 52 week fiscal year which ended
on Thursday, September 30, 1999. Under the assumptions stated above, over the
period from February 11, 1999 to September 30, 1999 the total return on an
investment in the Company would have been 19%, as compared to 14% for the Nasdaq
Stock Market index and 7% for the Nasdaq Telecommunications index shown below.
COMPARISON OF CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR
CATAPULT COMMUNICATIONS CORPORATION
Provided by Research Data Group. Produced on January 4, 2000, including data
through September 30, 1999.
- --------------------------------------------------------------------------------
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
Catapult
Measurement Period Communications Nasdaq
(Fiscal Year Covered) Corporation Nasdaq Stock Market Telecommunications
- --------------------- -------------- ------------------- ------------------
09/30/99 119 114 107
02/11/99 100 100 100
Notes:
A. The lines represent index levels derived from compounded daily returns that
include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the interval does not end on a trading day, the preceding trading day is
used.
D. The index level for all series was set to $100 on February 11, 1999.
-9-
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
<TABLE>
The following table sets forth certain information with respect to
beneficial ownership of Common Stock of the Company as of November 30, 1999 as
to (i) each person who is known by the Company to own beneficially more than 5%
of the outstanding shares of Common Stock, (ii) each director and each nominee
for director of the Company, (iii) each of the executive officers named in the
Summary Compensation Table above, and (iv) all directors and executive officers
as a group. Except as otherwise indicated, the Company believes that the
beneficial owners of the Common Stock listed below have sole investment and
voting power with respect to such shares, subject to community property laws.
<CAPTION>
Common Stock Approximate
Five Percent Stockholders, Directors Beneficially Percentage
And Certain Executive Officers Owned(1) Owned(2)
- --------------------------------------------------------------------------- ------------- -----------
<S> <C> <C>
Richard A. Karp(3)......................................................... 7,001,875 54.98%
Nancy H. Karp(3)........................................................... 2,816,875 22.13
Barry R. Hoglund........................................................... 393,750 3.07
Glenn Stewart.............................................................. 266,875 2.09
Guy R. Simpson............................................................. 129,687 1.01
Barbara J. Fairhurst....................................................... 47,250 *
John M. Scandalios......................................................... 37,965 *
Charles L. Waggoner........................................................ 37,965 *
All directors and executive officers as a group (8 persons)................ 7,915,367 60.81%
<FN>
- ----------
* Less than 1%.
(1) Includes stock subject to stock options held by directors and executive
officers that are exercisable within 60 days of November 30, 1999, as
follows: Dr. Karp, 5,000 shares; Mr. Hoglund, 78,750 shares; Mr. Stewart,
21,875 shares; Mr. Simpson, 129,687 shares; Ms. Fairhurst, 29,350 shares;
Mr. Scandalios, 10,155 shares; Mr. Waggoner, 12,498 shares, and all
directors and executive officers as a group (7 persons), 285,437 shares.
(2) Based on 12,729,570 shares of Common Stock outstanding on November 30,
1999.
(3) Includes, in the case of Dr. Karp, 2,816,875 shares beneficially owned by
Ms. Karp with respect to which Dr. Karp has sole voting power pursuant to a
voting trust agreement. Ms. Karp has retained dispositive power over such
shares. See "Certain Transactions." The address for Dr. and Ms. Karp is c/o
Catapult Communications Corporation, 160 South Whisman Road, Mountain View,
California 94041.
</FN>
</TABLE>
CERTAIN TRANSACTIONS
In connection with a divorce proceeding, in June 1998 Dr. Richard A. Karp
and Nancy H. Karp entered into a Voting Trust Agreement. Under the Agreement,
Ms. Karp placed all shares of the Company's Common Stock that she owned into a
voting trust of which Dr. Karp is the trustee. She also agreed to place shares
that she acquires in the future into the trust. The agreement gives Dr. Karp the
power to vote the shares while they are in the trust. Ms. Karp has the ability
to sell the shares which are the subject of the voting trust, which would
terminate the voting trust as to any shares sold. Unless sooner terminated by
Dr. Karp's resignation as trustee, his death or permanent disability, or a sale
or merger of the Company, the voting trust will expire in June 2013.
In June 1998 the Company and Ms. Karp entered into a Consulting and
Non-Competition Agreement under which Ms. Karp is retained as a consultant to
the Company for three years to assist in the areas of human resources,
facilities expansion and relocation, marketing and general business at a rate of
not less than $4,500 per month regardless of the nature and amount of services
rendered. She has agreed during this period in exchange for a lump sum payment
of $18,000 not to engage in certain activities which would be competitive with
the Company. She continues to serve without pay as a director and Secretary of
the Company.
-10-
<PAGE>
In connection with the Company's initial public offering in February of
1999, the Company paid the expenses of Dr. and Ms. Karp as selling stockholders,
excluding underwriting discounts and commissions.
On December 24, 1998 the Company repurchased 50,000 shares of Common Stock
from Barry R. Hoglund at a price of $6.00 per share.
The Company has entered into indemnification agreements with its executive
officers and directors containing provisions that may require the Company, among
other things, to indemnify its executive officers and directors against certain
liabilities that may arise by reason of their status or service as executive
officers or directors (other than liabilities arising from willful misconduct of
a culpable nature) and to advance their expenses incurred as a result of any
proceeding against them as to which they could be indemnified. The Company also
intends to execute such agreements with its future directors and executive
officers.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (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 reports of ownership and changes in ownership with the SEC and the New
York Stock Exchange. Executive officers, directors and greater than ten percent
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file. Based solely on its review of the copies
of such forms received by it, or written representations from certain reporting
persons, the Company believes that, during fiscal year 1999, all filing
requirements applicable to its executive officers and directors were complied
with, except that Mark Allan Neal, Acting Corporate Controller and Chief
Accounting Officer, filed a Form 3 stating the initiation of his contracting
agreement with the Company as an interim executive officer nine days after the
deadline for timely filing of a Form 3.
OTHER MATTERS
The Company knows of no other matters to be submitted at the meeting. If any
other matters properly come before the meeting, 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.
For the Board of Directors
Nancy H. Karp
Secretary
Dated: January 12, 1999
-11-
<PAGE>
APPENDIX A
PROXY CATAPULT COMMUNICATIONS CORPORATION PROXY
160 South Whisman Road, Mountain View, California 94041
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned hereby appoints Richard A. Karp and Nancy H. Karp as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to repesent and to vote, as designated below, all the shares of Common
Stock of Catapult Communications Corporation held of record by the undersigned
on December 14, 1999, at the Annual Meeting of Stockholders to be held on
February 11, 2000 or any adjournment thereof.
(Continued, and to be signed on the other side)
<PAGE>
<TABLE>
<CAPTION>
Please mark
[X] your votes
as this
<S> <C> <C> <C> <C> <C>
WITHHOLD
FOR FOR ALL
FOR AGAINST ABSTAIN
1. ELECTION OF DIRECTORS: [ ] [ ] 2. Proposal to approve the appointment [ ] [ ] [ ]
of Pricewaterhouse Coopers LLP as the
Richard A. Karp, Nancy H. Karp, independent public accountants of the
John M. Scandalios, Charles L. Waggoner Corporation.
INSTRUCTION: If you wish to withhold authority to vote for 3. In their discretion the proxies are
any individual nominee, write that nominee's name in the authorized to vote upon such other
space provided below. business as may properly come before
the annual meeting.
- ------------------------------------------------------------
This proxy when properly executed will be voted
in the manner directed herein by the undersigned
stockholder. If no direction is made, this proxy
will be voted FOR Proposals 1, 2 and 3.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
Signature(s) ___________________________________________________________________ Dated __________________________________, 2000
Please sign below exactly as name appears on stock certificate(s). When shares are held by joint tenants, both should sign. When
signing as attorney, as executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign
in full corporate name by President or other authorized officer. If a partnership please sign in partnership name by authorized
person.
</TABLE>
