<PAGE> 1
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
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Pyramid Technology Corporation
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Pyramid Technology Corporation
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
- - --------------------------------------------------------------------------------
/ / 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:
- - --------------------------------------------------------------------------------
- - ---------------
1Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
PYRAMID TECHNOLOGY CORPORATION
3860 N. FIRST STREET
SAN JOSE, CALIFORNIA 95134
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JANUARY 26, 1995
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Pyramid
Technology Corporation (the "Corporation") will be held at the Westin Hotel,
5101 Great America Parkway, Santa Clara, California on Thursday, January 26,
1995, at 9:00 a.m., local time, for the following purposes:
1. To elect directors of the Corporation to serve the ensuing year and
until their successors are elected.
2. To approve the amendment of the Amended 1987 Employee Stock
Purchase Plan to increase the number of shares reserved for issuance
thereunder by 700,000.
3. To ratify the appointment of Ernst & Young LLP as the independent
auditors for the Corporation for the fiscal year ending September 30, 1995.
4. To transact such other business as may properly come before the
meeting or any adjournments 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 November 28, 1994,
are entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person, even though he or she has returned a proxy.
Sincerely,
KENT L. ROBERTSON,
Secretary
San Jose, California
December 7, 1994
YOUR VOTE IS IMPORTANT
In order to assure your representation at the meeting, you are requested to
complete, sign and date the enclosed proxy as promptly as possible and return it
in the enclosed envelope.
<PAGE> 3
PYRAMID TECHNOLOGY CORPORATION
------------------------
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of PYRAMID TECHNOLOGY CORPORATION
(the "Corporation") for use at the Annual Meeting of Stockholders of the
Corporation (the "Annual Meeting") to be held on Thursday, January 26, 1995, at
9:00 a.m., local time, or at any adjournment(s) or postponement(s) 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 Westin Hotel, 5101 Great
America Parkway, Santa Clara, California 95054. The Corporation's principal
executive offices are located at 3860 N. First Street, San Jose, California
95134, and its telephone number at that location is (408) 428-9000.
These proxy solicitation materials were mailed on or about December 7,
1994, to all stockholders entitled to vote at the Annual Meeting.
ANNUAL REPORT
An annual report for the fiscal year ended September 30, 1994, is enclosed
with this Proxy Statement.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on November 28, 1994
(the "Record Date"), are entitled to notice of and to vote at the Annual
Meeting. At the Record Date, 15,583,965 shares of the Corporation's Common
Stock, $.01 par value, were issued and outstanding. The Corporation's Bylaws
provide that a majority of all the shares entitled to vote, whether present in
person or represented by proxy, shall constitute a quorum for the transaction of
business at the meeting.
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
Corporation at the Corporation's principal executive offices 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
Every stockholder voting in the election of directors may cumulate such
stockholder's votes and give one candidate a number of votes equal to the number
of directors to be elected multiplied by the number of shares held by such
stockholder, or distribute such stockholder's votes on the same principle among
as many candidates as the stockholder may select, provided that votes cannot be
cast for more candidates than the number of directors to be elected (8).
However, no stockholder may cumulate votes unless, pursuant to the Bylaws of the
Corporation, the candidate's name has been placed in nomination prior to the
voting and the stockholder, or any other stockholder, has given notice of the
intention to cumulate the stockholder's votes. On all other matters, each share
of Common Stock has one vote. Abstentions will be counted towards the tabulation
of votes cast on proposals presented to stockholders and will have the same
effect as negative votes, whereas broker non-votes are not counted for any
purpose in determining whether a matter has been approved.
The cost of soliciting proxies will be borne by the Corporation. The
Corporation has retained the services of Corporate Investor Communications, Inc.
("C.I.C.") to assist in the solicitation of proxies. The Corporation will pay
C.I.C. a fee of approximately $4,500 for its services and will reimburse it for
certain out-of-pocket expenses. In addition, the Corporation may reimburse
brokerage firms and other persons representing beneficial owners of shares for
their expenses in forwarding solicitation material to such beneficial owners.
<PAGE> 4
Proxies may also be solicited by certain of the Corporation's directors,
officers and regular employees, without additional compensation, personally or
by telephone, telegram, facsimile, or letter.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
Proposals of stockholders which are intended to be presented by such
stockholders at the Corporation's 1995 Annual Meeting must be received by the
Corporation no later than August 9, 1995, in order that they may be included in
the proxy statement and form of proxy relating to that meeting.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
In fiscal 1994, the Board of Directors amended the Corporation's Bylaws to
provide that the authorized number of directors shall be eight. A board of eight
directors is to be elected at the Annual Meeting.
Unless otherwise instructed, the proxy holders will vote the proxies
received by them for management's eight nominees named below, all of whom are
presently directors of the Corporation. In the event that any management nominee
is unable, or declines, to serve as a director at the time of the Annual
Meeting, the proxies will be voted for any nominee designated by the present
Board of Directors to fill the vacancy. The Corporation is not aware of any
nominee who will be unable, or will decline, to serve as a director. In the
event that additional persons are nominated for election as directors, the proxy
holders intend to vote all proxies received by them as will assure the election
of as many of the nominees listed below as possible, and, in such event, the
specific nominees to be voted for will be determined by the proxy holders. The
term of office of each person elected as a director will continue until the next
annual meeting of stockholders or until his successor has been elected and
qualified.
The names of the nominees and certain information about them are set forth
below:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- - --------------------------------------------- ---- ------------------------------ --------
<S> <C> <C> <C>
Richard H. Lussier........................... 57 Chief Executive Officer and 1986
Chairman of the Board of the
Corporation
John S. Chen................................. 39 President and Chief Operating 1993
Officer of the Corporation
Dr. Rudolf Bodo.............................. 63 Vice President and General 1994
Manager, Midrange Systems
Unit, Siemens Nixdorf
Informationssysteme AG
Paul J. Chiapparone.......................... 55 Senior Vice President, 1994
Electronic Data Systems
Corporation
Donald E. Guinn.............................. 62 Chairman Emeritus, Pacific 1988
Telesis Group
Jack L. Hancock.............................. 64 Retired executive, Pacific 1994
Bell
Clarence W. Spangle.......................... 69 Self-employed consultant 1990
George D. Wells.............................. 59 President and Chief Executive 1988
Officer, Exar Corporation
</TABLE>
Except as set forth below, each nominee has been engaged in his principal
occupation shown above during the past five years. There is no family
relationship between any director or executive officer of the Corporation.
Mr. Chen has been President of the Corporation since June 1993 and has been
Chief Operating Officer of the Corporation since October 1992. Previously, he
was the Corporation's Executive Vice President from
2
<PAGE> 5
August 1991 to September 1992. Prior to that, Mr. Chen held various management
and executive positions with Unisys Corporation for twelve years, the last
position being Vice President and General Manager of its Unix Systems Group, and
prior to that Vice President and General Manager of its RISC Technology Platform
Division.
Dr. Bodo has been Vice President and General Manager, Midrange Systems
Unit, Siemens Nixdorf Informationssysteme AG ("SNI") since April 1993. From
October 1990 to March 1993, he was Vice President of the Systems Planning
Department of SNI. From 1988 to 1990, he was Vice President of Systems Planning
of the Information Systems Division of Siemens AG.
Mr. Chiapparone is also a director of Electronic Data Systems Corporation.
Mr. Guinn is also a director of Bank of America, NT&SA, BankAmerica
Corporation, Brunswick Corporation, The Dial Corp, Pacific Bell, Pacific Telesis
Group, and Pacific Mutual Life Insurance Co.
Mr. Hancock was Executive Vice President of Pacific Bell from January 1989
to December 1993. He is also a director of 3Com Corporation, Whitaker
Corporation, and Union Bank.
Mr. Spangle is also a director of Apertus Technology Inc., and Keytronics
Inc.
Mr. Wells has served as President and Chief Executive Officer, and as a
director of Exar Corporation since June 1992. From April 1985 until June 1992,
Mr. Wells was President, Chief Operating Officer and a director of LSI Logic
Corporation. Mr. Wells is also a director of Micronics, Inc., and QLogic
Corporation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF EACH OF
THE NAMED NOMINEES.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Corporation held a total of thirteen (13)
meetings during fiscal 1994. The Board of Directors has an Audit Committee, a
Compensation Committee, and a Nominating Committee.
The Audit Committee, which consisted of Donald E. Guinn, Clarence W.
Spangle and George D. Wells, held a total of three (3) meetings during fiscal
1994. In fiscal 1994, the Audit Committee recommended engagement of the
Corporation's independent auditors, reviewed the scope of the annual audit,
considered comments made by the independent auditors with respect to accounting
procedures and internal controls and the action or response by management, and
reviewed selected accounting procedures and controls of the Corporation.
The Compensation Committee, which also consisted of directors Guinn,
Spangle and Wells, held four (4) meetings during fiscal 1994. In fiscal 1994,
this Committee reviewed and approved the Corporation's executive compensation
policy and distributions to officers and key employees of the Corporation. If
delegated by the Board, the Committee also makes recommendations to the Board
with respect to, and administers, the Corporation's Amended 1982 Incentive Stock
Option Plan, Executive Officers Nonstatutory Stock Option Plan and 1987 Employee
Stock Purchase Plan.
The Nominating Committee, which consisted of Messrs. Guinn, Spangle and
Wells, held two (2) meetings during fiscal 1994. The Committee recommends
candidates for election to the Board and selects director nominees for election.
It also recommends changes in the size and composition of the Board. The
Committee will consider nominees recommended by stockholders. Stockholders who
wish to submit names of prospective nominees for consideration by the Committee
should do so in writing to the Secretary of the Corporation in accordance with
the Bylaws of the Corporation.
During fiscal 1994, no director attended fewer than 75% of all such
meetings of the Board of Directors and the committees upon which such director
served.
3
<PAGE> 6
DIRECTOR COMPENSATION
Non-employee members of the Board of Directors are eligible to receive an
annual retainer of $10,000, and fees of $1,000 per Board meeting attended and
$750 per Committee meeting attended.
In addition, non-employee directors participate in the Amended and Restated
Directors' Option Plan (the "Director Plan.") Under the Director Plan, each new
non-employee director is granted an initial option to purchase (i) 12,000 shares
of Common Stock if he or she first becomes a new director by June 30, or (ii)
6,000 shares if he or she first becomes a director on or after July 1. Also,
incumbent non-employee directors are entitled to receive automatic grants of
options to purchase 6,000 shares of Common Stock on January 31 of each year. The
exercise price of these options may not be less than the fair market value of
the Common Stock on the date of such grants. Such options are exercisable
cumulatively, to the extent of 1/4 of the option stock six months after the date
of grant and, thereafter, as to 1/24 of the option stock for each full month
that expires while the optionee remains a director. In fiscal 1994, non-employee
directors as a group received stock options under the Director Plan totaling
42,000 shares.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of October 31, 1994,
with respect to the beneficial ownership of the Common Stock of the Corporation
by: (a) each stockholder known by the Corporation to be the beneficial owner of
more than five percent of the Corporation's Common Stock; (b) each director and
nominee of the Corporation; (c) each Executive Officer named in the Summary
Compensation Table below; and (d) all directors and executive officers as a
group.
<TABLE>
<CAPTION>
BENEFICIAL APPROXIMATE
OWNERSHIP OF PERCENT OF
NAME OF BENEFICIAL OWNER COMMON STOCK(1) CLASS
- - ---------------------------------------------------------------- --------------- -----------
<S> <C> <C>
Siemens Nixdorf Information Systems Inc./....................... 2,717,743 17.44%
Siemens Nixdorf Informationssysteme AG
Otto-Hahn-Ring 6
81739 Munich, Germany
Richard H. Lussier(2)........................................... 203,290 1.30%
John S. Chen(3)................................................. 137,589 *
Dr. Rudolf Bodo................................................. -0- N/A
Paul J. Chiapparone(4).......................................... 4,500 *
Donald E. Guinn(5).............................................. 46,333 *
Jack L. Hancock(6).............................................. 4,500 *
Clarence W. Spangle(7).......................................... 22,500 *
George D. Wells(8).............................................. 16,000 *
Mitchell Mandich(9)............................................. 38,308 *
Edward W. Scott, Jr.(10)........................................ 45,927 *
Allan D. Smirni(11)............................................. 38,457 *
All directors and executive officers as a group (13
persons)(12).................................................. 582,759 3.74%
</TABLE>
- - ---------------
* Less than 1 percent.
(1) Each holder named in the table has sole voting and investment power with
respect to all shares of Common Stock beneficially owned subject to
community property laws where applicable and the information contained in
the footnotes to this table.
(2) Represents 182,977 and 20,313 shares subject to options granted to Mr.
Lussier under the Amended 1982 Incentive Stock Option Plan and the
Executive Officers Nonstatutory Stock Option Plan, respectively, which were
exercisable as of October 31, 1994, or within 60 days thereafter.
(3) Represents 137,589 shares subject to options granted to Mr. Chen under the
Amended 1982 Incentive Stock Option Plan which were exercisable as of
October 31, 1994, or within 60 days thereafter.
4
<PAGE> 7
(4) Represents 4,500 shares subject to options granted to Mr. Chiapparone under
the Directors Option Plan which were exercisable as of October 31, 1994, or
within 60 days thereafter.
(5) Represents 5,000 shares beneficially owned by Donald E. Guinn and Darhl M.
Guinn, Trustees of the Guinn 1985 Family Trust dated 12/19/85, and 20,000
and 21,333 shares subject to options granted to Mr. Guinn under the Amended
1982 Incentive Stock Option Plan and the Directors Option Plan,
respectively, which were exercisable as of October 31, 1994, or within 60
days thereafter.
(6) Represents 4,500 shares subject to options granted to Mr. Hancock under the
Directors Option Plan which were exercisable as of October 31, 1994, or
within 60 days thereafter.
(7) Represents 22,500 shares subject to options granted to Mr. Spangle under
the Directors Option Plan which were exercisable as of October 31, 1994, or
within 60 days thereafter.
(8) Represents 16,000 shares subject to options granted to Mr. Wells under the
Directors Option Plan which were exercisable as of October 31, 1994, or
within 60 days thereafter.
(9) Includes 38,157 shares subject to options granted to Mr. Mandich under the
Amended 1982 Incentive Stock Option Plan which were exercisable as of
October 31, 1994, or within 60 days thereafter.
(10) Includes 42,823 shares subject to options granted to Mr. Scott under the
Amended 1982 Incentive Stock Option Plan which were exercisable as of
October 31, 1994, or within 60 days thereafter.
(11) Includes 36,691 shares subject to options granted to Mr. Smirni under the
Amended 1982 Incentive Stock Option Plan which were exercisable as of
October 31, 1994, or within 60 days thereafter.
(12) Includes 482,539, 20,313, and 68,833 shares subject to options granted
under the Corporation's Amended 1982 Incentive Stock Option Plan, Executive
Officers Nonstatutory Stock Option Plan and Directors' Option Plan,
respectively, exercisable on October 31, 1994, or within 60 days
thereafter.
PROPOSAL NO. 2
AMENDMENT OF 1987 EMPLOYEE STOCK PURCHASE PLAN
INCREASE IN SHARES AUTHORIZED FOR ISSUANCE UNDER THE PURCHASE PLAN
In October 1994 the Board unanimously approved an amendment to the 1987
Employee Stock Purchase Plan (the "Purchase Plan") to increase the number of
shares of common stock reserved for issuance thereunder by 700,000 shares, from
1,150,000 to 1,850,000 shares, subject to approval by the stockholders at the
Annual Meeting. At September 30, 1994, without giving effect to the amendment
subject to stockholder approval at the Annual Meeting, only 31,626 shares
remained available under the Purchase Plan.
The Board believes that in order to provide additional incentives to
participants in the Purchase Plan, it is necessary to continue to provide for
the sale of Common Stock to such employees. The Board further believes that the
remaining shares in the Purchase Plan are insufficient for such purpose. (See
"CHANGES TO BENEFIT PLANS" and "1987 EMPLOYEE STOCK PURCHASE PLAN.")
VOTE REQUIRED
Approval of this proposal requires the affirmative vote of the holders of a
majority of the shares of Common Stock of the Corporation represented by proxy
or in person and entitled to vote on the proposal at the Annual Meeting. An
abstention will have the same effect as a vote against the proposal, and, under
Delaware law, a broker non-vote will not be deemed to be represented by proxy or
in person and entitled to vote on the proposal at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE AMENDMENT TO
THE PURCHASE PLAN TO INCREASE THE SHARES AUTHORIZED FOR ISSUANCE THEREUNDER BY
700,000 SHARES.
5
<PAGE> 8
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Ernst & Young LLP, independent
auditors, to audit the consolidated financial statements of the Corporation for
the fiscal year ending September 30, 1995, and recommends that stockholders vote
for ratification of such appointment. In the event of a negative vote on such
ratification, the Board of Directors will reconsider its selection.
Ernst & Young LLP has audited the Corporation's financial statements
annually since fiscal 1982. Representatives of Ernst & Young LLP are expected to
be present at this Annual Meeting and will be given the opportunity to make a
statement if they desire to do so, and are expected to be available to respond
to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION
OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
EXECUTIVE COMPENSATION AND OTHER MATTERS
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded, earned or paid for
services rendered in all capacities to the Corporation during fiscal years 1994,
1993 and 1992 to the Corporation's Chief Executive Officer and each of its four
other most highly compensated executive officers who were serving as executive
officers at the end of fiscal 1994. This information includes the dollar values
of base salaries, bonus awards, the number of stock options granted, and certain
other compensation, if any, whether paid or deferred. The Corporation does not
grant SARs and, other than options, has no other long-term compensation
programs.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
-------------------------- UNDERLYING ALL OTHER
SALARY BONUS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)
- - ------------------------------------------- ---- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Richard H. Lussier......................... 1994 $363,463 $ -0- 156,000 $ 12,115(1)
Chief Executive Officer and
Chairman of the Board 1993 332,116 165,900 25,000 7,306
1992 320,413 -0- 60,000 7,219
John S. Chen............................... 1994 290,779 -0- 81,000 64,427(2)
President and Chief Operating Officer 1993 246,623 99,540 95,000 5,570
1992 208,068 56,175 35,000 5,321
Edward W. Scott, Jr........................ 1994 224,214 -0- -0- 73,352(3)
Executive Vice President 1993 209,997 66,360 15,000 149,701
1992 215,884 -0- 15,000 143,093
Mitchell Mandich........................... 1994 210,338 60,315(4) 12,500 6,836(5)
Senior Vice President 1993 170,958(6) 15,000 75,000 3,425
1992 N/A
Allan D. Smirni............................ 1994 169,345 -0- 7,500 9,725(7)
Vice President, General Counsel 1993 155,172 31,007 5,000 5,933
1992 148,386 -0- 13,000 6,261
</TABLE>
- - ---------------
(1) Represents $4,673 for a 401(k) Plan matching contribution, and $7,442 for
life insurance premiums.
(2) Represents $56,800 to compensate Mr. Chen for interest due on a loan in the
amount of $100,000, which loan was repaid in full by Mr. Chen, plus
compensation for taxes associated with such interest; $5,562 for a 401(k)
Plan matching contribution, and $2,065 for life insurance premiums.
6
<PAGE> 9
(3) Represents forgiveness of principal and interest in the amount of $68,967
under a 9.0% promissory note in the original amount of $300,000 made to Mr.
Scott in 1990, and $4,385 for life insurance premiums. (See "Certain
Transactions")
(4) Represents commission bonus.
(5) Represents $4,411 for a 401(k) Plan matching contribution, and $2,425 for
life insurance premiums.
(6) Includes salary for a partial year (employment date 1-18-93).
(7) Represents $5,433 for a 401(k) Plan matching contribution, and $4,292 for
life insurance premiums.
STOCK OPTION GRANTS AND EXERCISES
The following table sets forth further information regarding individual
grants of options during fiscal 1994 to each of the executive officers named in
the Summary Compensation Table above. All such grants were made pursuant to the
Corporation's Amended 1982 Incentive Stock Option Plan. In accordance with the
rules of the SEC, the table sets forth the hypothetical gains or "option
spreads" that would exist for the options at the end of their respective
ten-year terms based on assumed annualized rates of compound stock price
appreciation of 5% and 10% from the dates the options were granted to the end of
the respective option terms. Actual gains, if any, on option exercises are
dependent on the future performance of the Corporation's Common Stock and
overall market conditions. There can be no assurance that the potential
realizable values shown in this table will be achieved.
OPTION GRANTS IN FISCAL 1994
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- - ------------------------------------------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED
SECURITIES PERCENTAGE OF ANNUAL RATES OF STOCK
UNDERLYING TOTAL OPTIONS PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE FOR OPTION TERM(3)
GRANTED EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME (#)(1) FISCAL 1994(2) ($/SH) DATE 5% ($) 10% ($)
- - ----------------------------- ------------- -------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Richard H. Lussier........... 80,000 7.16 $14.75 01/25/04 $742,096 $1,880,616
76,000 6.80 8.88 09/22/04 424,189 1,074,979
John S. Chen................. 15,000 1.34 14.75 01/25/04 139,143 352,616
66,000 5.91 8.88 09/22/04 368,375 933,535
Edward W. Scott, Jr.......... -0- N/A N/A N/A N/A N/A
Mitchell Mandich............. 12,500 1.12 14.75 01/25/04 115,952 293,846
Allan D. Smirni.............. 7,500 0.67 14.75 01/25/04 69,571 176,308
</TABLE>
- - ---------------
(1) Stock options are granted with an exercise price equal to the fair market
value of the Corporation's Common Stock on the date of grant. Options
generally become exercisable 25% after the first year and monthly thereafter
at the rate of 1/48 of the total grant, and are fully exercisable after 4
years. Options lapse after ten years or, if earlier, 3 months after
termination of employment.
(2) Based on 1,117,500 shares granted during fiscal 1994.
(3) Potential realizable values are net of exercise price, but before taxes
associated with exercise. These amounts represent certain assumed rates of
appreciation only, based on the SEC rules. Actual realizable values, if any,
on stock option exercises are dependent on the future performance of the
Common Stock, overall market conditions and the option holders' continued
employment through the vesting period.
7
<PAGE> 10
The following table sets forth certain information concerning the exercise
of stock options during fiscal 1994 by each of the executive officers named in
the Summary Compensation Table above and the number and value at September 30,
1994, of unexercised options held by said individuals.
AGGREGATED OPTION EXERCISES IN FISCAL 1994
AND SEPTEMBER 30, 1994 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED(1)
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
VALUE OPTIONS AT 9/30/94 AT 9/30/94 ($)
SHARES ACQUIRED REALIZED -------------------------- --------------------------
ON EXERCISE (#) ($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
--------------- -------------- -------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C>
Richard H. Lussier..... -0- N/A 193,900 144,080 $ 10,157 $ 781
John S. Chen........... -0- N/A 125,327 145,673 14,219 1,094
Edward W. Scott, Jr.... -0- N/A 41,371 1,729 6,094 469
Mitchell Mandich....... -0- N/A 31,238 42,262 -0- -0-
Allan D. Smirni........ -0- N/A 35,456 7,649 2,031 156
</TABLE>
- - ---------------
(1) Based on a fair market value of $8.50 per share as of September 30, 1994,
the closing price of the Corporation's Common Stock on that date as reported
by the NASDAQ National Market System.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
The Corporation has no long-term incentive plans for executive officers
other than stock options.
PENSION TABLE
The Corporation maintains no pension plan for executive officers.
EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
The Corporation has employment agreements for the following executive
officers of the Corporation: Richard H. Lussier, John S. Chen, Mitchell Mandich,
Kent L. Robertson, Edward W. Scott, Jr., Allan D. Smirni, and William M.
Wishart. The agreements cover the conditions under which termination severance
and benefits will be paid by the Corporation. If termination is for cause, is
due to death or disability, or is voluntary and not related to a change in
control, no severance or benefits will be paid under the agreements. If a change
in control of the Corporation occurs as defined in the agreements, then
severance and benefits will be paid as follows: (i) for involuntary termination
within 12 months after the change of control, severance equal to 200% of annual
base salary and the average of annual cash bonuses paid for three years, and 24
months of continued benefits; (ii) for voluntary termination within 6 months
after the change of control, severance is equal to 100% of annual base salary
and the average of annual cash bonuses paid for three years, and 12 months of
continued benefits. In the event of involuntary termination not related to a
change of control, severance is equal to 100% of annual base salary and the
average of annual cash bonuses paid for three years, and 12 months of continued
benefits will be paid. The agreements terminate upon the earlier of (i) the date
that all obligations of the executive officer and the Corporation are satisfied,
(ii) June 30, 1996, or (iii) twenty-four months after a change in control.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers and directors, and persons who beneficially own more than
ten percent of the Corporation's securities, to file reports of ownership and
changes in ownership with the SEC and the NASD. Officers, directors and greater
than ten percent stockholders are required by SEC regulation to furnish the
Corporation with copies of all Section 16(a) forms they file.
8
<PAGE> 11
The Corporation has reviewed or prepared all Forms 3, 4 and 5 filed with
respect to fiscal 1994, and based thereon and on written representations from
certain reporting persons, it has determined that there has been no failure to
timely file any reports required by Section 16(a) of the Securities Exchange Act
of 1934 for fiscal 1994.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In fiscal 1994, Messrs. Guinn, Spangle and Wells served as members of the
Compensation Committee. No member of the Compensation Committee is or was
formerly an officer or an employee of the Corporation or its subsidiaries.
No interlocking relationship exists between the Corporation's Board of
Directors or Compensation Committee and the board of directors or compensation
committee of any other company, nor has any such interlocking relationship
existed in the past.
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE POLICY
The Compensation Committee of the Board of Directors (the "Committee") was
responsible for setting executive compensation policy and determining the
compensation paid to executive officers of the Corporation. The Committee was
comprised of Messrs. Guinn, Spangle and Wells, all of whom are non-employee
Directors of the Corporation.
The Corporation's executive compensation programs are designed to enable it
to attract, retain and reward qualified executives while maintaining a strong
and direct link between executive pay, the Corporation's financial performance
and stockholder returns. The Committee believes that officers and other
employees should have a significant stake in the Corporation's stock price
performance under programs which link executive compensation to stockholder
return. This is accomplished through the executive compensation program. There
are three main components of the executive compensation program: base salaries,
annual bonuses, and stock-based long-term incentives.
BASE SALARIES
The Committee believes that it is in the best interests of stockholders to
manage and fix compensation costs at industry rates to enable the Corporation to
secure qualified and talented executive officers under the rapidly changing
market conditions in the high technology industry. Accordingly, base salaries
for the Corporation's executive officers have been targeted at average rates
paid by competitors to enable the Corporation to retain highly skilled
executives and to attract others as necessary.
Base salaries are reviewed annually with the assistance of an independent
compensation consultant firm and are adjusted based on individual performance,
average increases in high technology companies and general industry, and the
going rate for similar positions in similar sized companies in the same
geographic area. In this group of companies, the Corporation targets its base
salaries at the median level.
The independent compensation consultant firm provides the Corporation with
assistance in research and survey analysis of total executive compensation for
competitors and for companies with similar size and products. The compensation
of the President and Chief Executive Officer is also directly related to the
results of operations and the balance sheet and cash flows for the fiscal year
of the Corporation.
Richard H. Lussier, the Chief Executive Officer and Chairman of the Board,
received a salary increase of 8.57% based on an analysis of the foregoing
factors. This salary increase was effective at the beginning of fiscal year
1995. For all executive officer positions, actual base salary levels are
currently at the targeted average levels of the competition.
9
<PAGE> 12
ANNUAL BONUSES
The Corporation maintains a Management Incentive Plan (MIP) which provides
executive officers and other key management employees the opportunity to earn
annual cash bonuses. The MIP is intended to motivate and reward officers for the
attainment of the Corporation's annual pretax income and revenue goals, as
determined by the Committee. The total bonus compensation for the Corporation's
executive officers has also been targeted at average rates paid by competitors.
For all executive officer positions, actual total bonus compensation levels are
currently at the targeted average level of the competition.
The MIP formula begins to result in bonus payments as a percentage of each
individual's target MIP award, when actual performance reaches a predetermined
percentage of the preset goal. The payout percent increases in a linear fashion
until 100% of the preset goals is achieved, whereupon 100% of a target MIP award
would be paid. Above 100% of preset goal performance, the MIP payout percentage
differs for the pretax and revenue goals. When actual pretax income exceeds the
preset pretax income target, the actual MIP award paid is 100% of target plus an
accelerated percentage for each 1% that actual pretax income exceeds the target.
This design results in a highly leveraged total annual compensation program at
the Corporation. It will result in above average total annual compensation in
years of above-average performance, and conversely, it will result in
below-average total annual compensation in years of below-average performance.
The Committee believes that this pay-for-performance result is beneficial to
stockholders' interests.
The Corporation's fiscal 1994 performance did not exceed the minimum
percentage of the goals established by the Committee. As a result, under the
application of the MIP formula, no MIP bonus awards were paid.
LONG-TERM INCENTIVES
The Committee utilizes stock options as the sole form of long-term
incentives. Stock options are normally granted to executives on an annual basis
each January under the Amended 1982 Incentive Stock Option Plan. The Committee
believes that this program serves to link management and stockholder interests
and motivate executives to make long-term decisions and investments that will
serve to increase the long-term total return to stockholders. Executive officers
received stock option grants during fiscal 1994 (see "Option Grants in Fiscal
1994.") The Corporation does not have a policy that requires or encourages the
Committee to qualify stock options awarded to executive officers for
deductibility under Section 162(m) of the Internal Revenue Code of 1986, as
amended. However, the Committee does consider the net cost to the Corporation in
making all compensation decisions.
Grants of stock options for all participants are not made on the basis of
any formal guideline, but rather on the basis of an assessment of individual
performance, the relative position of the optionee, and relative contribution of
the optionee. The allocation of shares granted is governed by the overall
constraint of managing the available pool of shares preapproved by stockholders
for options. While the grants are intended to be consistent with average
competitive practice, the ultimate value received by option holders is directly
linked to increases in the Corporation's stock price and the number of shares
granted to a participant.
COMPENSATION COMMITTEE
Donald E. Guinn
Clarence W. Spangle
George D. Wells
10
<PAGE> 13
STOCK PERFORMANCE GRAPH
The following line graph compares the cumulative total stockholder return
on the Corporation's Common Stock to the Corporation's stockholders during the
five-year period ended September 30, 1994, with the cumulative total return on
the Standard & Poor's 500 Composite Index and the Standard & Poor's High
Technology Composite Index (assuming $100 invested in the Corporation's Common
Stock and in each of the other indexes on September 30, 1989). The performance
shown in the graph is not necessarily indicative of future performance.
<TABLE>
<CAPTION>
YEAR ENDING
--------------------------------------------
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Pyramid Technology Corporation.............. $100 $107 $107 $ 59 $147 $ 58
S & P 500................................... 100 91 119 132 149 155
S & P High Tech Composite................... 100 86 105 107 130 151
</TABLE>
[CRC CHART]
11
<PAGE> 14
CERTAIN TRANSACTIONS
In September 1991, the Corporation loaned John S. Chen, President and Chief
Operating Officer, the sum of $100,000. The loan was repaid in full by Mr. Chen
in September 1994. The loan (i) had a term of three years, (ii) bore interest at
the rate of 8.50%, (iii) provided for the payment of interest and principal at
maturity, (iv) was unsecured, and (v) could be prepaid any time without penalty.
In December 1990, the Corporation loaned Edward W. Scott, Jr., Executive
Vice President, the sum of $300,000. The loan has been forgiven in full through
an agreement with the Corporation providing for loan forgiveness of the
principal and interest based on continued employment by Mr. Scott through
January 1, 1994, which was achieved. The loan (i) had a term of three years,
(ii) bore interest at the rate of 9.00%, (iii) provided for the payment of
interest and principal at maturity, (iv) was unsecured, and (v) could be prepaid
at any time without penalty.
In 1985, the Corporation entered into a Convertible Subordinated and
Preferred Stock Purchase Agreement (the "Nixdorf Stock Agreement") with Nixdorf
Computer AG ("Nixdorf "). Under the Nixdorf Stock Agreement, Nixdorf purchased
approximately 5% of the Corporation's Common Stock. The Nixdorf Stock Agreement
also gives Nixdorf the right to purchase its pro rata share of certain equity
financings of the Corporation as long as Nixdorf holds a minimum 5% stock
interest.
The Corporation and Nixdorf also entered into an OEM Agreement in 1985 (the
"Nixdorf OEM Agreement"), pursuant to which the Corporation agreed to sell or
license its current and certain future products to Nixdorf for resale or
sublicense under Nixdorf 's own label. In March 1990, the Corporation and
Nixdorf agreed to extend the term of the Nixdorf OEM Agreement through March
1996. In addition, the Corporation and Nixdorf in 1990 entered into a Software
License Agreement, under which the Corporation agreed to license its computer
operating system software and directly related software programs.
Also in March 1990, Nixdorf exercised its right to purchase approximately
140,000 shares of the Corporation's common stock as part of the Corporation's
secondary public offering of its common stock, to maintain Nixdorf 's pro rata
equity ownership at approximately 6% of the Corporation's outstanding shares.
In 1990, Nixdorf was acquired by Siemens AG, which renamed Nixdorf as
Siemens Nixdorf Informationssysteme AG ( "Siemens Nixdorf "). The Common Stock
of the Corporation and the rights under the Nixdorf Stock Agreement, the Nixdorf
OEM Agreement and Software License Agreement were assigned and transferred to
Siemens Nixdorf. In 1992, the Corporation and Siemens Nixdorf also entered into
a Master Agreement, pursuant to which the Corporation agreed to sell computer
systems, components, spare parts, and services to Siemens Nixdorf and its local
country affiliates for resale under its own label.
In August 1994, the Corporation entered into a Common Stock and Warrant
Purchase Agreement ( the "Siemens Stock Agreement")with Siemens Nixdorf
Information Systems, Inc. ("Siemens"), an affiliate of Siemens Nixdorf. Pursuant
to the Siemens Stock Agreement, the Corporation sold Siemens 2,000,000 shares of
its Common Stock for an aggregate price of $17,250,000 and issued a warrant to
sell up to an additional 1,330,000 shares at $10.00 per share, which warrant
expires on September 30, 1995. Under the Siemens Stock Agreement, Siemens
designated one of its officers, Dr. Rudolf Bodo, to be elected as a director to
the Corporation's Board of Directors.
The Corporation and Siemens Nixdorf also expanded its cooperative
agreements for high-end UNIX-based open systems by entering into a new Software
and Hardware License Agreement (the "Siemens Nixdorf License Agreement") and by
amending the Nixdorf OEM Agreement. Under these agreements, Siemens Nixdorf
agreed to license the Corporation's enhancement of the UNIX operating system for
massively parallel processing ("MPP") and received the right to purchase the
related MPP hardware product.
In fiscal 1994, the Corporation's sales to Siemens Nixdorf totaled
approximately $11,300,000.
12
<PAGE> 15
CHANGES TO BENEFIT PLANS
The Corporation has proposed an amendment to increase the share reserve
under the 1987 Employee Stock Purchase Plan (the "Purchase Plan"). The following
table sets forth as to each of the individuals named in the table under
"Executive Compensation" above and as to all executive officers as a group, and
as to all other employees who participated in the Purchase Plan: (i) the number
of shares of the Corporation's Common Stock purchased under the Purchase Plan
during the period from October 1, 1993 to September 30, 1994; and (ii) the
market value of such shares on the date of purchase, minus the purchase price
under the Purchase Plan:
<TABLE>
<CAPTION>
NUMBER OF
NAME AND POSITION SHARES PURCHASED DOLLAR VALUE(1)
- - -------------------------------------------------------------- ---------------- ---------------
<S> <C> <C>
Richard H. Lussier, Chief Executive Officer and Chairman
of the Board................................................ -0- $ -0-
John S. Chen, President and Chief Operating Officer........... -0- -0-
Edward W. Scott, Jr., Executive Vice President................ 3,104 3,808
Mitchell Mandich, Senior Vice President....................... 151 193
Allan D. Smirni, Vice President and General Counsel........... 1,172 1,438
All executive officers as a group (7 persons)................. 4,427 5,439
All other employees as a group................................ 295,647 361,991
</TABLE>
- - ---------------
(1) Reflects the market value on the date of purchase, minus the purchase price
under the Purchase Plan and may not represent amounts actually realized by
the participants.
1987 EMPLOYEE STOCK PURCHASE PLAN
GENERAL
The Purchase Plan was adopted by the Board in September 1987 with 150,000
shares of Common Stock reserved for issuance thereunder, and was approved by the
stockholders of the Corporation in January 1988. During the period from October
1988 through January 1993, the Board approved and the stockholders ratified
various amendments to the Plan to increase the shares authorized for issuance
thereunder to a total of 1,150,000 shares.
All employees of the Corporation, including executive officers, have the
right to participate in the voluntary Purchase Plan.
DESCRIPTION OF THE PURCHASE PLAN
The Purchase Plan may be administered by the Board of Directors or a
committee appointed by the Board. Members of the Board or its committee who are
eligible employees are permitted to participate in the Purchase Plan. Any
directors eligible to participate in the Purchase Plan may not vote on any
matter affecting the administration of the Purchase Plan or the grant of any
option pursuant thereto, and may not be members of any committee established to
administer the Purchase Plan. The Purchase Plan is currently administered by the
Board.
Any person who is employed by the Corporation (or by any of its
majority-owned subsidiaries designated by the Board) for at least 20 hours per
week and more than five months in a calendar year is eligible to participate in
the Purchase Plan, provided that such employee is employed on the commencement
date of an offering period.
The Purchase Plan is implemented by consecutive twenty-four month offering
periods (each an "Offering Period") with a new Offering Period commencing on or
about October 1 and April 1 of each year. Each Offering Period is composed of
four six-month exercise periods, with all accrued payroll deductions of each
participant applied to the purchase of shares in accordance with the terms of
the Purchase Plan at the end of each six-month exercise period.
13
<PAGE> 16
The purchase price per share at which shares are sold under the Purchase
Plan is the lower of 85% of the fair market value of a share of Common Stock on
the date of commencement of the applicable Offering Period or 85% of the fair
market value of a share of Common Stock on the applicable exercise date within
such Offering Period. The applicable "exercise date" is the last day of the
respective six-month exercise period within the Offering Period.
The purchase price of the shares is accumulated by payroll deductions
during the Offering Period. The deductions may not exceed 10% of a participant's
eligible compensation. At the beginning of each Offering Period, by executing a
subscription agreement to participate in the Purchase Plan, each employee is in
effect granted an option to purchase shares of Common Stock on each exercise
date during the Offering Period.
The Board may amend or terminate the Purchase Plan, except that such
termination shall not affect options previously granted. No amendment may make
any change in an option granted prior thereto which adversely affects the rights
of any participant. In addition, to the extent necessary and desirable to comply
with Rule 16b-3 under the Exchange Act or with Section 423 of the Code (or any
other applicable law or regulation, including the requirements of the NASD or an
established stock exchange), the Corporation shall obtain stockholder approval
of any Purchase Plan amendment in such a manner and to such a degree as
required.
FEDERAL TAX INFORMATION
The Purchase Plan, and the right of participants to make purchases
thereunder, is intended to qualify under the provisions of Sections 421 and 423
of the Code. Under these provisions, no income will be taxable to a participant
until the shares purchased under the Purchase Plan are sold or otherwise
disposed of. Upon sale or other disposition of the shares, the participant will
generally be subject to tax and the amount of the tax will depend upon the
holding period. If the shares are sold or otherwise disposed of more than two
years from the first day of the offering period and one year from the date the
shares are purchased, the participant will recognize ordinary income measured as
the lesser of (a) the excess of the fair market value of the shares at the time
of such sale or disposition over the purchase price, or (b) an amount equal to
15% of the fair market value of the shares as of the first day of the offering
period. Any additional gain will be treated as long-term capital gain. If the
shares are sold or otherwise disposed of before the expiration of these holding
periods, the participant will recognize ordinary income generally measured as
the excess of the fair market value of the shares on the date the shares are
purchased over the purchase price. Any additional gain or loss on such sale or
disposition will be long-term or short-term capital gain or loss, depending on
the holding period. The Corporation is not entitled to a deduction for amounts
taxed as ordinary income or capital gain to a participant except to the extent
that it is entitled to a deduction for ordinary income recognized by
participants upon a sale or disposition of shares prior to the expiration of the
holding period(s) described above.
The foregoing is only a summary of the effect of federal income taxation
upon the participant and the Corporation with respect to the shares purchased
under the Purchase Plan. Reference should be made to the applicable provisions
of the Code. In addition, the summary does not discuss the tax consequences of a
participant's death or the income tax laws of any state or foreign country in
which the participant may reside.
14
<PAGE> 17
OTHER BUSINESS
The Board knows of no business that will be presented for consideration at
the Annual Meeting other than as stated herein and in the Notice of Annual
Meeting. If, however, other matters are properly brought before the Annual
Meeting, it is the intention of the persons named in the accompanying form of
proxy to vote the shares represented thereby on such matters in accordance with
their best judgment.
By Order of the Board of Directors
Kent L. Robertson, Secretary
December 7, 1994
15
<PAGE> 18
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PYRAMID TECHNOLOGY CORPORATION
1994 ANNUAL MEETING OF STOCKHOLDERS
JANUARY 26, 1995
The undersigned stockholder of Pyramid Technology Corporation, a Delaware
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated December 7, 1994, and hereby
appoints Richard H. Lussier and Kent L. Robertson, 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 1994 Annual
Meeting of Stockholders of Pyramid Technology Corporation to be held on
January 26, 1995, at 9:00 a.m., local time, at the Westin Hotel, 5101 Great
America Parkway, Santa Clara, California, and at any adjournment or
adjournments thereof, and to vote all shares of Common Stock which the
undersigned would be entitled to vote if then and there personally present,
on the matters set forth below:
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR THE AMENDMENT OF
THE AMENDED 1987 EMPLOYEE STOCK PURCHASE PLAN, FOR THE APPOINTMENT OF ERNST &
YOUNG LLP AS THE INDEPENDENT AUDITORS OF THE CORPORATION FOR FISCAL 1995, AND AS
SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THE
MEETING.
(Continued and to be signed on the other side)
/X/ Please mark
your votes
as this
__________
COMMON
1. ELECTION OF DIRECTORS
If you wish to withhold authority to vote for any individual nominee,
strike a line through that nominee's name in the list below:
FOR WITHHOLD
all nominees authority
listed below for all
(except as nominees
indicated). listed below
/ / / /
Rudolf Bodo; John S. Chen; Paul J. Chiapparone; Donald E. Guinn;
Jack L. Hancock; Richard H. Lussier; Clarence W. Spangle; George D. Wells
2. Proposal to approve the amendment of the amended 1987 Employee Stock
Purchase Plan to increase the number of shares reserved for issuance
thereunder by 700,000:
/ / FOR / / AGAINST / / ABSTAIN
3. Ratification of the appointment of Ernst & Young LLP as the independent
auditors of the corporation for fiscal 1995;
/ / FOR / / AGAINST / / ABSTAIN
and, in their discretion, upon such other matter or matters which may properly
come before the meeting or any adjournment or adjournments thereof;
DATED:_______________________________________
_____________________________________________
(Signature)
_____________________________________________
(Signature)
(This Proxy should be marked, dated and 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.)
<PAGE> 19
Appendix A
(Revised as of 10/92)
PYRAMID TECHNOLOGY CORPORATION
1987 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the Employee Stock Purchase
Plan of Pyramid Technology Corporation.
1. Purpose. The purpose of the Plan is to provide employees of
the Company and its Designated Subsidiaries with an opportunity to purchase
Common Stock of the Company through accumulated payroll deductions. It is the
intention of the Company to have the Plan qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as
amended. The provisions of the Plan shall, accordingly, be construed so as to
extend and limit participation in a manner consistent with the requirements of
that section of the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(c) "Common Stock" shall mean the Common Stock of the
Company.
(d) "Company" shall mean Pyramid Technology Corporation,
a Delaware corporation.
(e) "Compensation" shall mean all regular straight time
gross earnings, but excluding variable compensation for field sales personnel
and incentive bonuses, overtime, shift premium, lead pay and automobile
allowances, and other compensation.
(f) "Continuous Status as an Employee" shall mean the
absence of any interruption or termination of service as an Employee.
Continuous Status as an Employee shall not be considered interrupted in the
case of a leave of absence agreed to in writing by the Company, provided that
such leave is for a period of not more than 90 days or reemployment upon the
expiration of such leave is guaranteed by contract or statute.
<PAGE> 20
(g) "Designated Subsidiaries" shall mean the Subsidiaries
which have been designated by the Board from time to time in its sole
discretion as eligible to participate in the Plan.
(h) "Employee" shall mean any person, including an
officer, who is customarily employed for at least twenty (20) hours per week
and more than five (5) months in a calendar year by the Company or one of its
Designated Subsidiaries.
(i) "Enrollment Date" shall mean the first day of each
Offering Period.
(j) "Exercise Date" shall mean the date one day less than
six months, twelve months, eighteen months, or twenty-four months after the
Enrollment Date of an Offering Period.
(k) "Exercise Period" shall mean a period commencing on
an Enrollment Date or on the day after an Exercise Date and terminating one day
less than six (6) months later.
(l) "Offering Period" shall mean a period of twenty-four
(24) months during which an option granted pursuant to the Plan may be
exercised.
(m) "Plan" shall mean this Employee Stock Purchase Plan.
(n) "Subsidiary" shall mean a corporation, domestic or
foreign, of which not less than 50% of the voting shares are held by the
Company or a Subsidiary, whether or not such corporation now exists or is
hereafter organized or acquired by the Company or a Subsidiary.
3. Eligibility.
(a) Any Employee as defined in paragraph 2 who shall be
employed by the Company on a given Enrollment Date shall be eligible to
participate in the Plan.
(b) Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option under the Plan (i) if,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 425(d) of the Code)
would own stock and/or hold outstanding options to purchase stock possessing
five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or of any
2
<PAGE> 21
Subsidiary of the Company, or (ii) which permits his or her rights to
purchase stock under all employee stock purchase plans of the Company and
its Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand
Dollars ($25,000) worth of stock (determined at the fair market value of the
shares at the time such option is granted) for each calendar year in which
such option is outstanding at any time.
4. Offering Periods. The Plan shall be implemented by
consecutive Offering Periods with a new Offering Period commencing on or about
October 1 and April 1 of each year commencing on or about October 1, 1987, and
continuing thereafter until terminated in accordance with paragraph 19 hereof.
The Board of Directors of the Company shall have the power to change the
duration of Offering Periods with respect to future offerings without
shareholder approval if such change is announced at least fifteen (15) days
prior to the scheduled beginning of the first Offering Period to be affected.
5. Participation.
(a) An eligible Employee may become a participant in the
Plan by completing a subscription agreement authorizing payroll deduction in
the form of Exhibit A to this Plan and filing it with the Company's payroll
office prior to the applicable Enrollment Date, unless a later time for filing
the subscription agreement is set by the Board for all eligible Employees with
respect to a given Offering Period. An eligible Employee may participate in an
Offering Period only if, as of the Enrollment Date of such Offering Period,
such Employee is not participating in any prior Offering Period and has not
participated in any prior Offering Period which is continuing at the time of
such proposed enrollment.
(b) Payroll deductions for a participant shall commence
on the first payroll following the Enrollment Date and shall end on the last
payroll in the Offering Period to which such authorization is applicable,
unless sooner terminated by the participant as provided in paragraph 10.
6. Payroll Deductions.
(a) At the time a participant files his or her
subscription agreement, he or she shall elect to have payroll deductions made
on each payday during the Offering Period in whole percentages between 0% and
10%, inclusive, of the Compensation which he receives on each payday during the
Offering Period, and the aggregate of such payroll deductions during the
Offering Period shall not exceed ten percent (10%)
3
<PAGE> 22
of the participant's aggregate Compensation during said Offering Period.
(b) All payroll deductions made for a participant shall
be credited to his or her account under the Plan. A participant may not make
any additional payments into such account.
(c) A participant may discontinue his or her
participation in the Plan as provided in paragraph 10, or may change the rate
of his or her payroll deductions (within the limitations of Section 6(a)) by
giving written notice to the Company authorizing a change in payroll deduction
rate in the form of Exhibit B to this Plan. The change in rate shall be
effective (i) in the case of a decrease in rate, with the first payroll period
following the Company's receipt of the notice of rate change, or at the
beginning of the next Exercise Period following the Company's receipt of the
notice of rate change, as the participant shall specify in such notice, and
(ii) in the case of an increase in rate, at the beginning of the next Exercise
Period following the Company's receipt of the notice of rate change.
7. Grant of Option.
(a) On the Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period up to a
number of shares of the Company's Common Stock determined by dividing such
Employee's payroll deductions accumulated during such Offering Period and prior
to such Exercise Date by the lower of (i) eighty-five percent (85%) of the fair
market value of a share of the Company's Common Stock on the Enrollment Date or
(ii) eighty-five percent (85%) of the fair market value of a share of the
Company's Common Stock on the Exercise Date; provided that in no event shall an
Employee be permitted to purchase during each Offering Period more than a
number of shares determined by dividing $50,000 by the fair market value of a
share of the Company's Common Stock on the Enrollment Date, and provided
further that such purchase shall be subject to the limitations set forth in
Section 3(b) and 12 hereof. The option shall be automatically exercised on the
Exercise Dates during the Offering Period, unless the participant has withdrawn
pursuant to Section 10, and shall expire on the last day of the Offering
Period. Fair market value of a share of the Company's Common Stock shall be
determined as provided in Section 7(b) herein.
(b) The option price per share of the shares offered in a
given Offering Period shall be the lower of: (i) 85% of the fair market value
of a share of the
4
<PAGE> 23
Common Stock of the Company on the Enrollment Date; or (ii) 85% of the fair
market value of a share of the Common Stock of the Company on the Exercise
Date. The fair market value of the Company's Common Stock on a given date
shall be determined by the Board in its discretion; provided, however, that
where there is a public market for the Common Stock, the fair market value per
share shall be the closing price of the Common Stock for such date, as reported
by the NASDAQ National Market System, or, in the event the Common Stock is
listed on a stock exchange, the fair market value per share shall be the
closing price on such exchange on such date, as reported in the Wall Street
Journal.
8. Exercise of Option. The participant's option for the purchase
of shares will be exercised automatically on each Exercise Date of each
Offering Period, and the maximum number of full shares subject to option will
be purchased for such participant at the applicable option price with the
accumulated payroll deductions in his or her account, unless prior to such
Exercise Date the participant has withdrawn from the Offering Period or from an
Exercise Period as provided in paragraph 10. During a participant's lifetime,
a participant's option to purchase shares hereunder is exercisable only by him
or her. Any amount remaining in the participant's account after an Exercise
Date shall be held in the account until the next Exercise Date in such Offering
Period, unless the Offering Period has been over-subscribed or has terminated
with such Exercise Date, in which case such amount shall be refunded to the
participant.
9. Delivery. As promptly as practicable after each Exercise
Date, the Company shall arrange the delivery to each participant, as
appropriate, of a certificate representing the shares purchased upon exercise
of his or her option.
10. Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all
the payroll deductions credited to his or her account and not yet used to
exercise his or her option under the Plan at any time by giving written notice
to the Company in the form of Exhibit C to this Plan. All of the participant's
payroll deductions credited to his or her account will be paid to such
participant promptly after receipt of notice of withdrawal and such
participant's option for the current Offering Period will be automatically
terminated, and no further payroll deductions for the purchase of shares will
be made during the Offering Period. If a participant withdraws from an
Offering Period, payroll deductions will not resume at the beginning of the
succeeding Offering Period unless the participant delivers to the Company a new
subscription agreement.
5
<PAGE> 24
(b) Upon termination of the participant's Continuous
Status as an Employee prior to the Exercise Date of an Exercise Period for any
reason, including retirement or death, the payroll deductions credited to such
participant's account during the Offering Period but not yet used to exercise
the option will be returned to such participant or, in the case of his or her
death, to the person or persons entitled thereto under paragraph 14, and such
participant's option will be automatically terminated.
(c) In the event an Employee fails to remain in
Continuous Status as an Employee of the Company for at least twenty (20) hours
per week during an Offering Period in which the Employee is a participant, he
or she will be deemed to have elected to withdraw from the Plan and the payroll
deductions credited to his account will be returned to such participant and
such participant's option terminated.
(d) A participant's withdrawal from an Offering Period
will not have any effect upon his or her eligibility to participate in any
similar plan which may hereafter be adopted by the Company or in succeeding
Offering Periods which commence after the termination of the Offering Period
from which the participant withdraws. A participant who so withdraws may not
participate in any Offering Period which commences prior to the end of the
Offering Period from which he withdrew.
11. Interest. No interest shall accrue on the payroll deductions
of a participant in the Plan.
12. Stock.
(a) The maximum number of shares of the Company's Common
Stock which shall be made available for sale under the Plan shall be 1,150,000
shares, subject to adjustment upon changes in capitalization of the Company as
provided in paragraph 18. If on a given Exercise Date the number of shares
with respect to which options are to be exercised exceeds the number of shares
then available under the Plan, the Company shall make a pro rata allocation of
the shares remaining available for purchase in as uniform a manner as shall be
practicable and as it shall determine to be equitable.
(b) The participant will have no interest or voting right
in shares covered by his option until such option has been exercised.
6
<PAGE> 25
(c) Shares to be delivered to a participant under the
Plan will be registered in the name of the participant or in the name of the
participant and his or her spouse.
13. Administration. The Plan shall be administered by the Board
of the Company or a committee of members of the Board appointed by the Board.
The administration, interpretation or application of the Plan by the Board or
its committee shall be final, conclusive and binding upon all participants.
Members of the Board who are eligible Employees are permitted to participate in
the Plan, provided that:
(a) Members of the Board who are eligible to participate
in the Plan may not vote on any matter affecting the administration of the Plan
or the grant of any option pursuant to the Plan.
(b) If a Committee is established to administer the Plan,
no member of the Board who is eligible to participate in the Plan may be a
member of the Committee.
14. Designation of Beneficiary.
(a) A participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
participant's account under the Plan in the event of such participant's death
subsequent to an Exercise Date on which the option is exercised but prior to
delivery to such participant of such shares and cash. In addition, a
participant may file a written designation of a beneficiary who is to receive
any cash from the participant's account under the Plan in the event of such
participant's death prior to exercise of the option.
(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known
to the Company, then to such other person as the Company may designate.
15. Transferability. Neither payroll deductions credited to a
participant's
7
<PAGE> 26
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and
distribution or as provided in paragraph 14 hereof) by the participant. Any
such attempt at assignment, transfer, pledge or other disposition shall be
without effect, except that the Company may treat such act as an election to
withdraw funds from an Offering Period in accordance with paragraph 10.
16. Use of Funds. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose,
and the Company shall not be obligated to segregate such payroll deductions.
17. Reports. Individual accounts will be maintained for each
participant in the Plan. Statements of account will be given to participating
Employees semi-annually promptly following the Exercise Date, which statements
will set forth the amounts of payroll deductions, the per share purchase price,
the number of shares purchased and the remaining cash balance, if any.
18. Adjustments Upon Changes in Capitalization. Subject to any
required action by the shareholders of the Company, the number of shares of
Common Stock covered by each option under the Plan which has not yet been
exercised and the number of shares of Common Stock which have been authorized
for issuance under the Plan but have not yet been placed under option
(collectively, the "Reserves"), as well as the price per share of Common Stock
covered by each option under the Plan which has not yet been exercised, shall
be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock, or
any other increase or decrease in the number of shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration". Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an option.
In the event of the proposed dissolution or liquidation of the
Company, the Offering Period will terminate immediately prior to the
consummation of such
8
<PAGE> 27
proposed action, unless otherwise provided by the Board. In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, each option under the
Plan shall be assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the Board determines, in the exercise of its sole discretion and in lieu
of such assumption or substitution, that the participant shall have the right
to exercise the option as to all of the optioned stock, including shares as to
which the option would not otherwise be exercisable. If the Board makes an
option fully exercisable in lieu of assumption or substitution in the event of
a merger or sale of assets, the Board shall notify the participant that the
option shall be fully exercisable for a period of thirty (30) days from the
date of such notice, and the option will terminate upon the expiration of such
period.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the
price per share of Common Stock covered by each outstanding option, in the
event that the Company effects one or more reorganizations, recapitalizations,
rights offerings or other increases or reductions of shares of its outstanding
Common Stock, and in the event of the Company being consolidated with or merged
into any other corporation.
19. Amendment or Termination.
(a) Amendment and Termination. The Board may at any time
amend, alter, suspend or discontinue the Plan, but, except as provided in
paragraph 18 no amendment, alteration, suspension or discontinuation shall be
made which would impair the rights of any Employee under any grant theretofore
made, without his or her consent. In addition, to the extent necessary and
desirable to comply with Rule 16b-3 under the Securities and Exchange Act of
1934, as amended (the "Exchange Act") or with Section 423 of the Code (or any
other applicable law or regulation, including the requirements of the NASD or
an established stock exchange), the Company shall obtain shareholder approval
of any Plan amendment in such a manner and to such a degree as required.
(b) Effect of Amendment or Termination. Except as
provided in paragraph 18, any such amendment or termination of the Plan shall
not affect options already granted and such options shall remain in full force
and effect as if this Plan had not been amended or terminated, unless mutually
agreed otherwise between the Employee and the Board, which agreement must be in
writing and signed by the Employee and the Company, provided that an Offering
Period may be terminated by
9
<PAGE> 28
the Board of Directors on any Exercise Date if the Board determines that the
termination of the Plan is in the best interests of the Company and its
shareholders.
20. Notices. All notices or other communications by a participant
to the Company under or in connection with the Plan shall be deemed to have
been duly given when received in the form specified by the Company at the
location, or by the person, designated by the Company for the receipt thereof.
21. Shareholder Approval. Continuance of the Plan shall be
subject to approval by the shareholders of the Company within twelve months
before or after the date the Plan is adopted. If such shareholder approval is
obtained at a duly held shareholders' meeting, it may be obtained by the
affirmative vote of the holders of a majority of the shares of the Company
present or represented and voting thereon, which approval shall be obtained in
such a manner and to such a degree as required and desirable to comply with
Rule 16b-3 under the Exchange Act or with Section 423 of the Code (or any other
applicable law or regulation, including the requirements of the NASD or an
established stock exchange).
In the case of approval by written consent, it must be
obtained by the unanimous written consent of all shareholders of the Company,
or by written consent of a smaller percentage of shareholders but only if the
Board determines, after consultation with the Company's legal counsel, that the
written consent of such a smaller percentage of shareholders will comply with
all applicable laws and will not adversely affect the qualifications of the
Plan under Section 423 of the Code.
22. Conditions Upon Issuance of Shares. Shares shall not be
issued with respect to an option unless the exercise of such option and the
issuance and delivery of such shares pursuant thereto shall comply with all
applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the Securities Exchange Act
of 1934, as amended, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
As a condition to the exercise of an option, the Company may
require the person exercising such option to represent and warrant at the time
of any such exercise that the shares are being purchased only for investment
and without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable
10
<PAGE> 29
provisions of law.
23. Term of Plan. The Plan shall become effective upon the
earlier to occur of its adoption by the Board of Directors or its approval by
the shareholders of the Company as described in paragraph 21. It shall
continue in effect for a term of twenty (20) years unless sooner terminated
under paragraph 19.
11
<PAGE> 30
PYRAMID TECHNOLOGY CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
(Enrollment Form)
_____ Original Application Enrollment Date: _______________
_____ Re-enrollment
_____ Change of Beneficiary
1. I, ___________________________________, hereby elect to
participate in the Pyramid Technology Corporation Employee Stock Purchase Plan
(the "Stock Purchase Plan") and subscribe to purchase shares of the Company's
Common Stock in accordance with this Subscription Agreement and the Stock
Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the
amount of ______% (in whole percentages between 0% and 10%, inclusive) of my
Compensation on each payday during the Offering Period in accordance with the
Stock Purchase Plan.
3. I understand that said payroll deductions shall be accumulated for
the purchase of shares of Common Stock at the applicable purchase price
determined in accordance with the Stock Purchase Plan. I further understand
that, except as otherwise set forth in the Stock Purchase Plan, shares will be
purchased for me automatically on each Exercise Date unless I otherwise
withdraw from the Stock Purchase Plan by giving written notice to the Company
for such purpose.
4. I have received a copy of the Company's most recent prospectus
which describes the Stock Purchase Plan and a copy of the complete "Pyramid
Technology Corporation Employee Stock Purchase Plan." I understand that my
participation in the Stock Purchase Plan is in all respects subject to the
terms of the Plan.
5. Shares issued for me under the Stock Purchase Plan should be issued
in the name(s) of: _____________________________________________________________
______________________________________________.
6. I understand that if I dispose of any shares received by me
pursuant to the Plan within two years after the Enrollment Date (the first day
of the Offering Period during which I purchased such shares) or within one year
after the date on which such shares were purchased, I will be treated for
federal income tax purposes as having received ordinary income at the time of
such disposition in an amount equal to the excess of the fair market value of
the shares at the time such shares were purchased over the price which I paid
for the shares. I hereby agree to notify the Company in writing of any such
disposition. However, if I dispose of such shares at any time after
EXHIBIT A
<PAGE> 31
the expiration of the above holding periods, I understand that I will be
treated for federal income tax purposes as having received income only at the
time of such disposition, and that such income will be taxed as ordinary income
only to the extent of an amount equal to the lesser of (1) the excess of the
fair market value of the shares at the date of sale over the purchase price of
the shares, or (2) 15% of the fair market value of the shares on the first day
of the offering period. The remainder of the gain, if any, recognized on such
disposition will be taxed as capital gain.
7. I hereby agree to be bound by the terms of the Stock Purchase
Plan. The effectiveness of this Subscription Agreement is dependent upon my
eligibility to participate in the Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the Stock
Purchase Plan.
BENEFICIARY: ______________________________________________________
Name (Please Print)
____________________ ______________________________________
Relationship
______________________________________
(Address)
BENEFICIARY: ______________________________________________________
Name (Please Print)
____________________ ______________________________________
Relationship
______________________________________
(Address)
DATED: ______________ ______________________________________
Signature of Employee
______________________________________
______________________________________
(Address)
Soc. Sec. No. ________________________
<PAGE> 32
PYRAMID TECHNOLOGY CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF RATE CHANGE
I wish to
_____ Increase
_____ Decrease
my rate of payroll deduction for the Employee Stock Purchase Plan to _______%
(in whole percentages between 0% and 10%, inclusive) of my Compensation on each
payday during my participation in the Stock Purchase Plan.
I understand that if this Notice increases my rate of payroll deductions, it
shall be effective at the beginning of the next Exercise Period following the
Company's receipt of this Notice, and that if this Notice decreases my rate of
payroll deductions, it shall be effective as indicated below (check applicable
box):
_____ with the first payroll period following the Company's
receipt of this Notice
_____ with the next Exercise Period following the Company's
receipt of this Notice
I understand that I may change the payroll deduction rate by submitting a
revised Notice of Rate Change.
__________________ _________________________________
Date Signature of Participant
__________________________________
Print Name
EXHIBIT B
<PAGE> 33
PYRAMID TECHNOLOGY CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
I hereby notify the Company that I wish to withdraw from the Offering Period of
the Pyramid Technology Corporation Employee Stock Purchase Plan which began on
____________________________, (the "Enrollment Date"). I hereby direct the
Company to pay to me as promptly as possible all payroll deductions credited to
my account and not yet used to purchase stock. I understand and agree that my
option for such Offering Period will be automatically terminated and no further
payroll deductions will be made for the purchase of shares in the current
Offering Period.
I further understand that I may not re-enroll in the Plan until the expiration
of the two-year Offering Period in which I enrolled, at which time I shall be
eligible to participate in succeeding Offering Periods by delivering to the
Company a new Subscription Agreement.
____________________ ___________________________________
Date Signature of Participant
___________________________________
Print Name
EXHIBIT C
