SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
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the Securities Exchange Act of 1934 (Amendment No. )
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|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Catapult Communications Corporation
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
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<PAGE>
CATAPULT COMMUNICATIONS CORPORATION
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held February 7, 2001
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 Wednesday, February 7, 2001 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, 2001.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on December 11, 2000
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 8, 2001
--------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------
<PAGE>
CATAPULT COMMUNICATIONS CORPORATION
----------------
PROXY STATEMENT
FOR 2001 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 Wednesday, February 7, 2001
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
8, 2001 to all stockholders entitled to vote at the meeting.
Record Date and Voting Securities
Stockholders of record at the close of business on December 11, 2000 are
entitled to notice of and to vote at the meeting. At the record date, 12,887,616
shares of the Company's authorized Common Stock were issued and outstanding and
held of record by 51 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.
1
<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 2002 Annual Meeting of Stockholders must
be received by the Company no later than November 24, 2001 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 2002
Annual Meeting of Stockholders is September 10, 2001. 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.
The names of the nominees and certain information about them as of
December 11, 2000 are set forth below:
<TABLE>
<CAPTION>
Name of Nominee Age Positions With the Company Director Since
--------------- --- -------------------------- --------------
<S> <C> <C> <C>
Richard A. Karp.................... 56 Chief Executive Officer and 1985
Chairman of the Board
Nancy H. Karp...................... 55 Secretary and Director 1985
John M. Scandalios (1)(2).......... 70 Director 1987
Charles L. Waggoner (1)(2)......... 61 Director 1991
</TABLE>
----------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
Dr. Richard A. Karp founded the Company in 1985 and has served as Chief
Executive Officer and Chairman of the Board of the Company since inception and
as President from inception to May 2000. 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.
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
2
<PAGE>
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. Through 2000, Mr. Waggoner served as President of the FlowPoint Division
of Efficient Networks, Inc. From 1993 through 1999, Mr. Waggoner served as
President of FlowPoint Corp. 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 six meetings, and
acted by unanimous written consent twice, during the fiscal year ended September
30, 2000. 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's
responsibilities are to provide oversight and monitoring of Company Management
and the independent auditors and their activities with respect to the Company's
financial reporting process, to provide the Company's Board of Directors with
the results of its monitoring and recommendations derived therefrom, to nominate
to the Board of Directors independent auditors to audit the Company's financial
statements and oversee the activities and independence of the auditors, and to
provide to the Board of Directors such additional information and materials as
it may deem necessary to make the Board of Directors aware of significant
financial matters which require the Board of Director's attention.
The Compensation Committee met two times during the fiscal year. 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 2000.
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.
3
<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, 2001, 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
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, 1999 and 2000:
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term
------------------------------------------------------ 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 ................... 2000 336,669 85,780 -- -- 8,484
Chief Executive Officer 1999 360,000 2,400 -- 40,000 6,000
and Chairman of the 1998 360,000 251,200 -- -- --
Board of Directors
Barry R. Hoglund .................. 2000 190,000 111,015 -- -- 11,598
Vice President of Sales 1999 162,917 145,525 -- 30,000 5,967
1998 140,000 173,308 -- -- --
Glenn Stewart ..................... 2000 170,000 77,335 -- -- 13,555
Vice President of 1999 140,833 77,251 -- 25,000 5,910
Engineering 1998 136,667 59,308 -- -- --
Guy R. Simpson .................... 2000 140,000 42,890 -- -- 3,900
Vice President of 1999 120,833 54,414 -- 37,000 4,800
Applications 1998 112,500 58,475 -- -- --
Development
Terry Eastham (3) ................. 2000 136,000 60,006 -- 9,000 5,524
Vice President of 1999 11,093 -- -- -- --
Marketing 1998 -- -- -- -- --
</TABLE>
----------
(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 fiscal 2000 of approximately
$7,434 for Dr. Karp, $9,598 for Mr. Hoglund, $11,555 for Mr. Stewart,
$3,900 for Mr. Simpson and $3,084 for Mr. Eastham and (b) employer
matching contributions to each employee's 401-K plan in fiscal 2000 of
$1,050 for Dr. Karp, $2,000 for Mr. Hoglund, $2,000 for Mr. Stewart and
$2,440 for Mr. Eastham.
(3) Mr. Eastham's compensation figures from fiscal 1999 reflect his hire date
of September 11, 1999.
4
<PAGE>
Option Grants
The following table shows, as to the Named Executive Officers, information
concerning stock options granted during the fiscal year ended September 30,
2000.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants (1)
-------------------------------------------------------------- Potential Realizable Value at
Number of % of Total Assumed Annual Rates of
Securities Options Exercise Stock Price Appreciation
Underlying Granted to Or Base for Option Term (4)
Options Employees in Price Expiration -----------------------------
Name Granted (#)(1) Fiscal Year (2) ($/sh) Date(s) (3) 5% ($) 10% ($)
----------------------- -------------- --------------- -------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Karp ....... -- -- -- -- -- --
Barry R. Hoglund ...... -- -- -- -- -- --
Glenn Stewart ......... -- -- -- -- -- --
Guy Simpson ........... -- -- -- -- -- --
Terry Eastham ......... 9,000 3.33% 12.75 2/11/2010 72,165.66 182,881.95
</TABLE>
----------
(1) These options grants are 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 270,037 shares subject to options granted in
fiscal 2000.
(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.
Option Exercises and Values
The following table sets forth certain information regarding option
exercises and the value of options held by the Named Executive Officers.
Fiscal Year-End Option Exercises and Values
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options In-the-Money Options at
Shares at September 30, 2000 (#) September 30, 2000($) (2)
Acquired on Value --------------------------- -----------------------------
Name Exercise (#) Realized ($)(1) Exercisable Unexercisable Exercisable Unexercisable
---------------------------- ------------ --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Karp ............ -- -- 13,852 26,148 15,583.50 29,416.50
Barry R. Hoglund ........... 54,000 472,725 18,889 32,111 159,233.43 239,041.50
Glenn Stewart .............. -- -- 31,157 16,343 410,051.48 18,385.88
Guy R. Simpson ............. 22,500 271,281 123,844 15,656 2,068,278.33 32,275.50
Terry Eastham .............. -- -- 8,811 30,189 16,594.32 71,830.69
</TABLE>
----------
(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, 2000 of $18.625, minus the exercise price.
5
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
Overview and Philosophy
The Compensation Committee (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 and Benefits
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.
The Company provides benefits to the named executive officers that are
generally available to all Company employees.
Stock Options
During fiscal 2000 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.
6
<PAGE>
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".
Chief Executive Officer's Compensation
Dr. Karp's compensation for fiscal 2000 was established by the
Compensation Committee based upon a survey of comparable Chief Executive
Officers' salaries in the Bay Area as well as Dr. Karp's recommendation. Prior
to March 1, 2000, Dr. Karp's compensation consisted of base salary of $360,000.
In order to introduce an element of variable performance-based compensation,
effective March 1, 2000, his compensation was amended to $320,000 per annum in
base salary together with an on-target bonus of $100,000 for the fiscal year
ending September 30, 2000.
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
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Directors has:
o reviewed and discussed the Company's audited financial
statements for fiscal 2000 with the Company's management;
o discussed with PricewaterhouseCoopers LLP, the Company's
independent auditors, the materials required to be discussed
by Statement of Auditing Standard 61, or SAS 61; and
o reviewed the written disclosures and the letter from
PricewaterhouseCoopers LLP required by Independent Standards
Board No. 1 and has discussed with PricewaterhouseCoopers LLP
its independence.
Based on the foregoing review and discussion, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Company's 2000 Annual Report on Form 10-K. The Charter for the
Audit Committee is attached hereto as Appendix A.
Audit Committee
John M. Scandalios
Charles L. Waggoner
7
<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, 2000. 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 fiscal year which ends on
September 30. Under the assumptions stated above, over the period from February
11, 1999 to September 30, 2000 the total return on an investment in the Company
would have been 43%, as compared to 46% for the Nasdaq Stock Market index and 3%
for the Nasdaq Telecommunications index shown below.
COMPARISON OF 19 MONTH CUMULATIVE TOTAL RETURNS*
PERFORMANCE GRAPH FOR
CATAPULT COMMUNICATIONS CORPORATION
Provided by Research Data Group. Produced on December 6, 2000, including data
through September 30, 2000.
[The following table was depicted as a line graph in the printed material.]
Cumulative Total Return
-------------------------------------
2/11/1999 9/99 9/00
CATAPULT COMMUNICATIONS CORPORATION 100.00 119.23 143.27
NASDAQ STOCK MARKET (U.S.) 100.00 109.79 145.73
NASDAQ TELECOMMUNICATIONS 100.00 105.39 102.95
* $100 INVESTED ON 2/11/99 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING SEPTEMBER 30.
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.
8
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information with respect to
beneficial ownership of Common Stock of the Company as of November 30, 2000 (see
Note 4 below) 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.
<TABLE>
<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) ....................................... 6,736,754 52.19%
Nancy H. Karp (3) ......................................... 2,661,875 17.70
Franklin Resources, Inc. (4) .............................. 744,100 5.77
Barry R. Hoglund .......................................... 339,725 2.63
Glenn Stewart ............................................. 257,186 1.99
Guy R. Simpson ............................................ 144,248 1.11
Terry Eastham ............................................. 11,485 *
John M. Scandalios ........................................ 45,000 *
Charles L. Waggoner ....................................... 45,000 *
All directors and executive officers as a group (8 persons) 7,579,398 57.68%
</TABLE>
----------
* 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, 2000, as
follows: Dr. Karp, 19,879 shares; Mr. Hoglund, 20,522 shares; Mr. Stewart,
37,067 shares; Mr. Simpson, 128,648 shares; Mr. Eastham, 10,185 shares;
Mr. Scandalios, 17,190 Shares; Mr. Waggoner, 19,533 Shares; and all
directors and executive officers as a group (7 persons), 253,024 shares.
(2) Based on 12,887,616 shares of Common Stock outstanding on November 30,
2000.
(3) Includes, in the case of Dr. Karp, 2,661,875 shares beneficially owned by
Ms. Karp with respect to which Dr. Karp has sole voting power pursuant to
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. 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. The
address for Dr. and Ms. Karp is c/o Catapult Communications Corporation,
160 South Whisman Road, Mountain View, California 94041.
(4) The address for Franklin Resources, Inc. is 777 Mariners Island Boulevard
San Mateo, CA 94404. Includes shares of Common Stock beneficially owned by
Franklin Resources as of September 30, 2000.
CERTAIN TRANSACTIONS
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.
9
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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 2000, all filing
requirements applicable to its executive officers and directors were complied
with, except that Terry Eastham, the Company's Vice President of Marketing,
filed a Form 3 on November 9, 2000 which should have been filed by October 13,
1999 and David Mayfield, the Company's President and Chief Operating Officer,
filed a Form 3 on November 9, 2000 which should have been filed by May 6, 2000.
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 8, 2001
10
<PAGE>
APPENDIX A
CHARTER FOR THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS OF
CATAPULT COMMUNICATIONS CORPORATION
PURPOSE:
The purpose of the Audit Committee of the Board of Directors of Catapult
Communications Corporation (the "Company") shall be to provide oversight and
monitoring of Company Management and the independent auditors and their
activities with respect to the Company's financial reporting process, to provide
the Company's Board of Directors with the results of its monitoring and
recommendations derived therefrom, to nominate to the Board of Directors
independent auditors to audit the Company's financial statements and oversee the
activities and independence of the auditors, and to provide to the Board of
Directors such additional information and materials as it may deem necessary to
make the Board of Directors aware of significant financial matters which require
the Board of Director's attention.
The Audit Committee will undertake those specific duties and responsibilities
listed below and such other duties as the Board of Directors from time to time
prescribe.
MEMBERSHIP:
The Committee will be appointed by, and will serve at the discretion of, the
Board of Directors. Prior to June 14, 2001, at least a majority of the members
will be independent directors. On or before June 14, 2001, the Committee will
consist of at three members of the Board of Directors who will meet the
following criteria:
1. Each member will be an independent director, in accordance with the
Nasdaq National Market Audit Committee requirements;
2. Each member will be able to read and understand fundamental
financial statements, in accordance with the Nasdaq National Audit
Committee requirements; and
3. At least one member will have past employment experience in finance
or accounting, requisite professional certification in accounting,
or other comparable experience or background, including a current or
past position as a chief executive or financial officer or other
senior officer with financial oversight responsibilities.
RESPONSIBILITIES:
The responsibilities of the Audit Committee shall include:
1. Recommending the selection and, where appropriate, replacement of
the independent auditors to the Board of Directors;
2. Reviewing fee arrangements with the independent auditors;
3. Reviewing the independent auditors' proposed audit scope, approach
and independence.
4. Reviewing the performance of the independent auditors, who shall be
accountable to the Board of Directors and the Audit Committee;
5. Ensuring the receipt from the independent auditors of a formal
written statement delineating all relationships between the auditor
and the Company, consistent with Independent Standard Board Standard
No. 1 and engaging in a dialogue with the auditors with respect to
any disclosed relationship or services that may impact the
objectivity and independence of the auditors;
6. Ensuring that the Company's independent auditors review before
filing with the SEC the Company's interim financial statements
included in quarterly reports on Form 10-Q, using professional
standards and procedures for conducting such reviews;
A-1
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7. Discussing with the Company's independent auditors the matters
required to be discussed by Statement on Accounting Standard No. 61,
as may be modified or supplemented;
8. Reviewing with management, before release, the audited financial
statements and Management's Discussion and Analysis in the company's
annual report on Form 10-K;
9. Providing a report in the Company's proxy statement in accordance
with the requirements of Item 306 of Regulation S-K and item 7(e)(3)
of Schedule 14A;
10. Reviewing the Audit Committee's own structure, processes and
membership requirements; and
11. Performing such other duties as requested by the Board of Directors.
MEETINGS:
The Audit Committee will meet at least quarterly. The Audit Committee may
establish its own schedule, which it will provide to the Board of Directors in
advance.
The Audit Committee will meet separately with the independent auditors as well
as members of the Company's management as it deems appropriate in order review
the financial controls of the Company.
MINUTES:
The Audit Committee will maintain written minutes of its meetings, which minutes
will be filed with the minutes of the meetings of the Board of Directors.
REPORTS:
Apart from the report prepared pursuant to Item 306 of Regulation S-K and Item
7(e)(3) of Schedule 14A, the Audit committee will summarize its examinations and
recommendations to the Board as may be appropriate, consistent with the
Committee's charter.
A-2
<PAGE>
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R CATAPULT COMMUNICATIONS CORPORATION
O 2001 ANNUAL MEETING OF STOCKHOLDERS
X FEBRUARY 7, 2001
Y
The undersigned stockholder of Catapult Communications Corporation, a
Nevada corporation, hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders and Proxy Statement, each dated January 8, 2001, and hereby
appoints Richard A. Karp and Nancy H. Karp, and each of them, proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the 2001 Annual Meeting
of Stockholders of Catapult Communications Corporation, to be held on Wednesday,
February 7, 2001, at 3:00 p.m., Pacific Daylight Savings Time, at the
corporation's principal executive offices located at 160 South Whisman Road,
Mountain View, California 94041 and at any continuations(s) or adjournment(s)
thereof, and to vote all shares of Common Stock that the undersigned would be
entitled to vote if then and there personally present, on the matters set forth
on the reverse side and, in their discretion, upon such other matter or matters
that may properly come before the meeting and any adjournment(s) thereof.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED (1) FOR THE ELECTION OF DIRECTORS, (2) FOR THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS AND (3) AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS
AS MAY PROPERLY COME BEFORE THE MEETING.
________________________________________________________________________________
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS BOX ON THE REVERSE SIDE
(Continued and to be signed on reverse side)
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CATAPULT [LOGO]
COMMUNICATIONS
ANNUAL MEETING OF STOCKHOLDERS
Wednesday, February 7, 2001
3:00 p.m.
Catapult Communications Corporation
160 South Whisman Road
Mountain View, California 94041
<PAGE>
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS FOR all nominees listed WITHHOLD 2. Proposal to approve and ratify the appointment of
(except as indicated) for all nominees PricewaterhouseCoopers LLP, as the independent
public accountants of the Company for the fiscal
|_| |_| year ending September 30, 2001.
FOR AGAINST ABSTAIN
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, |_| |_| |_|
STRIKE A LINE THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW:
3. The proxies are authorized to vote in their
discretion upon such other business as may
Richard A. Karp, Nancy H. Karp, John M. Scandalios and Charles L. Waggoner properly come before the meeting.
FOR AGAINST ABSTAIN
|_| |_| |_|
I PLAN TO ATTEND |_|
THE MEETING
COMMENTS/ADDRESS CHANGE |_|
Please mark this if you have written
comments/address on the reverse side
Signature ___________________________________ Signature _________________________________ Date _______________________________
(This Proxy should be marked, dated, signed by the stockholder(s) exactly as his or her name appears hereon, and returned promptly
in the enclosed envelope. Persons signing in a fiduciary capacity should so indicate. If shares are held by joint tenants or as
community property, both should sign.)
</TABLE>
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