<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box: [_]Confidential, for Use of the
Commission Only (as Permitted by
Rule 14a-6(e)(2))
[_]Preliminary Proxy Statement
[X]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Tut Systems, Inc.
-----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X]No fee required.
[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------
[_]Fee paid previously with preliminary materials.
[_]Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[TUT SYSTEMS LOGO]
TUT SYSTEMS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 19, 1999
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Tut
Systems, Inc., a Delaware corporation (the "Company" or "Tut"), will be held
on Wednesday, May 19, 1999 at 10:00 a.m., local time, at the Marriott Hotel
Walnut Creek, 2355 North Main Street, Walnut Creek, California, for the
following purposes:
1. To elect three (3) Class I directors for a term of three years and until
their successors are duly elected and qualified;
2. To ratify the appointment by the Board of Directors of
PricewaterhouseCoopers LLP as independent auditors of the Company for
the fiscal year ending December 31, 1999; and
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 March 22, 1999 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 vote,
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 if he or she previously returned a Proxy.
By order of the Board of Directors of Tut
Systems, Inc.
/s/ Nelson Caldwell
------------------------------------------
Nelson Caldwell
Vice President Finance and Chief
Financial Officer
Pleasant Hill, California
April 9, 1999
<PAGE>
TUT SYSTEMS, INC.
PROXY STATEMENT
FOR 1999 ANNUAL MEETING OF STOCKHOLDERS
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of Tut Systems, Inc. (the
"Company" or "Tut") for use at the Annual Meeting of Stockholders to be held
on Wednesday, May 19, 1999 at 10:00 a.m., local time, or at any adjournment
thereof (the "Annual Meeting" or "Meeting"), for the purposes set forth herein
and in the accompanying Notice of Annual Meeting of Stockholders. The Annual
Meeting will be held at the Marriott Hotel Walnut Creek, 2355 North Main
Street, Walnut Creek, California. The Company's headquarters are located at
2495 Estand Way, Pleasant Hill, California 94523. The Company's telephone
number at that location is (925) 682-6510.
These proxy solicitation materials were mailed on or about April 9, 1999 to
all stockholders entitled to vote at the Meeting.
RECORD DATE; OUTSTANDING SHARES
Stockholders of record at the close of business on March 22, 1999 (the
"Record Date") are entitled to notice of and to vote at the Meeting. At the
Record Date, 11,452,978 shares of the Company's Common Stock, $0.001 par
value, were issued and outstanding. The closing price of the Company's Common
Stock on the Record Date, as reported by Nasdaq, was $44.00 per share.
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 Company or its
transfer agent a written notice of revocation or a duly executed proxy bearing
a later date or by attending the Meeting and voting in person.
VOTING AND SOLICITATION
On all matters other than the election of directors, each share has one
vote. See "ELECTION OF DIRECTORS--Required Vote."
The cost of soliciting proxies will be borne by the Company. The Company has
retained the services of American Stock Transfer & Trust Company to aid in the
solicitation of proxies. The Company will reimburse American Stock Transfer &
Trust Company for reasonable out-of-pocket expenses. In addition, the Company
may reimburse brokerage firms and other persons representing beneficial owners
of shares for their expenses in forwarding solicitation material 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, telegram, telefax or otherwise.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company which are intended to be presented
by such stockholders at the Company's next Annual Meeting of Stockholders to
be held in 2000 must be received by the Company no later than December 9, 1999
in order that they may be considered for possible inclusion in the proxy
statement and form of proxy relating to that meeting.
In addition, the Company's Bylaws establish an advance notice procedure with
regard to certain matters, including stockholder proposals not included in the
Company's proxy statement, to be brought before an annual meeting of
stockholders. For nominations or other business to be properly brought before
the meeting by a stockholder, such stockholder must provide written notice
delivered to the Secretary of the Company 90 days in
1
<PAGE>
advance of the annual or special meeting, which notice must contain specified
information concerning the matters to be brought before such meeting and
concerning the stockholder proposing such matters. In the event that less than
100 days notice or prior public disclosure of the date of the meeting is given
or made to stockholders, notice by the stockholder to be timely must be
received not later than the close of business on the tenth day following the
earlier of the day on which such notice of the date of the annual meeting was
mailed or such public disclosure was made. A copy of the full text of the
Bylaw provision discussed above may be obtained by writing to the Secretary of
the Company. All notices of proposals by stockholders, whether or not included
in the Company's proxy materials, should be sent to Tut Systems, Inc., 2495
Estand Way, Pleasant Hill, California 94523.
The attached proxy card grants the proxy holders discretionary authority to
vote on any matter raised at the meeting. If a stockholder intends to submit a
proposal at the next annual meeting of stockholders, which is not eligible for
inclusion in the proxy statement relating to that meeting, the stockholder
must give notice to the Company in accordance with the requirements set forth
in the Securities Exchange Act of 1934, as amended, no later than February 10,
2000. If a stockholder does not comply with the foregoing notice provision,
the proxy holders will be allowed to use their discretionary voting authority
when and if the proposal is raised at the next annual meeting of stockholders.
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 "ABSTAIN" on a matter are treated as being present at the meeting
for purposes of establishing a quorum and are also treated as shares entitled
to vote (the "Votes Cast") at the Annual Meeting with respect to such matter.
While there is no definitive statutory or case law authority in Delaware as
to the proper treatment of abstentions, the Company believes that abstentions
should be counted for purposes of determining both (i) the presence or absence
of a quorum for the transaction of business and (ii) the total number of Votes
Cast with respect to a matter (other than the election of directors). In the
absence of controlling precedent to the contrary, the Company intends to treat
abstentions in this manner. Accordingly, with the exception of the proposal
for the election of directors, abstentions will have the same effect as a vote
against the proposal. Because directors are elected by a plurality vote,
abstentions in the election of directors have no impact once a quorum exists.
In a 1988 Delaware case, Berlin v. Emerald Partners, the Delaware Supreme
Court held that, while broker non-votes may be counted for purposes of
determining the presence or absence of a quorum for the transaction of
business, broker non-votes should not be counted for purposes of determining
the number of Votes Cast with respect to the particular proposal on which the
broker has expressly not voted. Broker non-votes with respect to proposals set
forth in this Proxy Statement will therefore be counted only for purposes of
determining the presence or absence of a quorum and will not be considered
Votes Cast. Accordingly, broker non-votes will not affect the determination as
to whether the requisite majority of Votes Cast has been obtained with respect
to a particular matter.
FISCAL YEAR END
The Company's fiscal year ends on December 31. The Company's last fiscal
year ended on December 31, 1998 and is referred to herein as the "Last Fiscal
Year".
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers,
directors and persons who own more than 10% of a registered class of the
Company's equity securities to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the "SEC"). Such
executive officers, directors and ten-percent stockholders are also required
by SEC rules to furnish the Company with copies of all forms that they file
pursuant to Section 16(a). During the Last Fiscal Year, the Section 16(a)
filing requirements were not applicable to the Company's executive officers,
directors and ten-percent stockholders.
2
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
GENERAL
The Company's Board of Directors is currently comprised of nine (9)
directors who are divided equally into three classes with overlapping three-
year terms. A director serves in office until his or her respective successor
is duly elected and qualified or until his or her earlier death or
resignation. Any additional directorships resulting from an increase in the
number of directors will be distributed among the three classes so that, as
nearly as possible, each class will consist of an equal number of directors.
NOMINEES FOR CLASS I DIRECTORS
Three Class I directors are to be elected at the Annual Meeting for a three-
year term ending in 2002. The Board of Directors has nominated BRION
APPLEGATE, CLIFFORD H. HIGGERSON and DAVID SPRENG for re-election as Class I
directors. Unless otherwise instructed, the persons named in the enclosed
proxy intend to vote proxies received by them for the re-election of Messrs.
Applegate, Higgerson and Spreng. The Company expects that each of Messrs.
Applegate, Higgerson and Spreng will accept such nomination; however, in the
event that any nominee is unable to or declines to serve as a director at the
time of the Annual Meeting, proxies will be voted for a substitute nominee or
nominees designated by the present Board of Directors. The term of office of
each person elected as a director will continue until such director's term
expires in 2002 or until such director's successor has been elected and
qualified.
INFORMATION REGARDING NOMINEES AND OTHER DIRECTORS
Set forth below is certain information regarding the nominees for Class II
directors and each other director of the Company whose term of office
continues after the Annual Meeting. Information as to the stock ownership of
each director and all current directors and executive officers of the Company
as a group is set forth below under "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT".
<TABLE>
<CAPTION>
Director
Name Age Principal Occupation Since
---- --- -------------------- --------
<C> <C> <S> <C>
Class I Directors
Brion Applegate........ 45 Managing General Partner of Spectrum 1996
Equity Investors, L.P.
Clifford H. Higgerson.. 59 General Partner of Vanguard Venture 1993
Partners and a Partner of
Communications Ventures, Inc.
David Spreng........... 37 Managing General Partner of Crescendo 1994
Venture Management LLC
Class II Directors
Neal Douglas........... 40 General Partner of AT&T Ventures 1997
George Middlemas....... 52 Managing General Partner of Apex 1995
Partners
Matthew Taylor......... 40 Chairman of the Board and Chief 1994
Technical Officer of the Company
Class III Directors
Salvatore D'Auria...... 43 President and Chief Executive Officer 1994
of the Company
Roger Moore............ 57 President, Chief Executive Officer and 1997
a Director of Illuminet, Inc.
Saul Rosenzweig........ 73 General Partner of Rosetree Partners 1993
and President of RZGroup, Inc.
</TABLE>
3
<PAGE>
NOMINEES FOR CLASS I DIRECTORS FOR A TERM EXPIRING IN 2002
Brion Applegate has served as a director of the Company since August 1996.
Mr. Applegate was a co-founder of Spectrum and has served as a Managing
General Partner since February 1993. Prior to that time, he was a General
Partner of funds managed by Burr, Egan, Deleage & Co., a venture capital firm,
from 1982 to 1993. Mr. Applegate holds a B.A. in Liberal Arts from Colgate
University and an M.B.A. from Harvard University.
Clifford H. Higgerson has served as a director for the Company since July
1993. Since 1991, Mr. Higgerson has been a general partner of Vanguard Venture
Partners ("Vanguard"), a venture capital firm specializing in high technology
start-ups. Since 1986, Mr. Higgerson has also been a partner of Communications
Ventures, Inc. Mr. Higgerson also is a director of Advanced Fibre
Communications, Ciena Corporation, a manufacturer of multiplexing systems, and
Digital Microwave Corporation. Mr. Higgerson earned his B.S. in Electrical
Engineering from the University of Illinois and an M.B. A. in Finance from the
University of California at Berkeley.
David Spreng has served as a director of the Company since February 1994.
Mr. Spreng has served as the Managing General Partner of Crescendo Venture
Management, LLC since September 1998. Mr. Spreng served as President of IAI
Ventures, Inc. from March 1996 to September 1998 and served in various
capacities at Investment Advisers, Inc. ("IAI") since 1989 Mr. Spreng is also
a director of GalaGen, Inc., a pharmaceutical company, and PACE Health
Management. Mr. Spreng holds a B.S. in Finance and Accounting from the
University of Minnesota.
INCUMBENT CLASS II DIRECTORS WHOSE TERMS EXPIRE IN 2000
Neal Douglas has served as a director of the Company since December 1997.
Since January 1993, he has been a General Partner of AT&T Ventures, a venture
capital firm. From May 1989 to January 1993, Mr. Douglas was a partner of New
Enterprise Associates, a venture capital firm. Additionally, he was a Member
of the Technical Staff at Bell Laboratories. He also serves as a director of
Cellnet Data Systems, Inc., a provider of fixed network wireless information
services, FVC.COM, Inc., an Internet video applications company, and several
privately held companies. He received a B.S. in Electrical Engineering from
Cornell University, an M.S. in Electrical Engineering from Stanford
University, and an M.B.A. from the University of California at Los Angeles.
George Middlemas has served as a director of the Company since April 1995.
Mr. Middlemas has been managing General Partner of Apex Partners, a venture
capital firm, since 1991. Prior to that time, Mr. Middlemas served as Vice
President and principal with Inco Venture Capital Management, and a vice
president and member of the investment committee of Citicorp Venture Capital.
Mr. Middlemas holds an M.B.A. from Harvard University, an M.A. in Political
Science from the University of Pittsburgh and a B.A. in History and Political
Science from The Pennsylvania State University. Mr. Middlemas serves on the
Boards of Directors of e.Spire Communications, Inc., a network company, Pure
Cycle Corporation, a water and water recycling technology company, and
Security Dynamics Technologies, Inc., an enterprise network and data security
products company.
Matthew Taylor is a co-founder of the Company and has served as Chairman of
the Board of Directors, Chief Technical Officer and Secretary of the Company
since August 1994. From April 1989 to August 1994, Mr. Taylor was President
and Chief Executive Officer of the Company. Prior to that time, Mr. Taylor was
the Vice President of Engineering and a co-founder of Alameda Instruments,
Inc., a semiconductor equipment company, from 1987 to 1989. Mr. Taylor holds a
B.S. in Biology and an M.S. in Engineering Science from the University of
California at Berkeley.
4
<PAGE>
INCUMBENT CLASS III DIRECTORS WHOSE TERMS EXPIRE IN 2001
Salvatore D'Auria has served as President, Chief Executive Officer and a
director of the Company since August 1994. He served as the Company's Chief
Operating Officer from May 1994 to August 1994. From August 1993 to May 1994,
Mr. D'Auria performed various consulting services for networking software
companies. Mr. D'Auria joined Central Point Software in October 1989 as
Director of Product Marketing and was appointed as Vice President of Marketing
in April 1990, and held various Vice President positions until August 1993.
From 1980 to 1989, Mr. D'Auria served in various marketing and management
positions at Hewlett-Packard. Mr. D'Auria holds a B.S. in Physics from
Clarkson University.
Roger Moore has served as a director of the Company since March 1997. Mr.
Moore has served as President and Chief Executive Officer of Illuminet, Inc.
("Illuminet"), a provider of network, database and billing services to the
communications industry, since October 1998, and as a director of Illuminet
since September 1998. Mr. Moore also served as President and Chief Executive
Officer of Illuminet from January 1996 to August 1998. From September 1998 to
October 1998, Mr. Moore served as President, Chief Executive Officer and a
director of VINA Technologies, Inc., a telecommunications equipment company.
From November 1985 to December 1995, Mr. Moore served in various executive
capacities at Northern Telecom Ltd., including Vice President, Major Accounts
and President, Northern Telecom Japan. Mr. Moore holds a B.S. in General
Science from Virginia Polytechnic Institute and State University.
Saul Rosenzweig has served as a director of the Company since July 1993. Mr.
Rosenzweig has been a general partner of Rosetree Partners, a venture
investing group, since 1982. He has also served as President of RZGroup, Inc.,
a communications management firm, since 1981. Mr. Rosenzweig holds B.S.
degrees in Naval Science and in Industrial Management from Georgia Institute
of Technology.
There are no family relationships among any of the Company's directors or
executive officers.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of twelve meetings during
the Last Fiscal Year. During the fiscal year ended December 31, 1998, no
director other than Brion Applegate attended fewer than 75% of the meetings of
the Board of Directors or the meetings of committees, if any, upon which such
director served. Certain matters approved by the Board of Directors were
approved by unanimous written consent.
The Audit Committee of the Board of Directors, which was formed in August
1995, currently consists of Clifford H. Higgerson, Saul Rosenzweig and David
Spreng. The Audit Committee, reviews the Company's annual audit and is
primarily responsible for approving the services performed by the Company's
independent auditors and for reviewing and evaluating the Company's accounting
principles and its systems of internal accounting controls. The Audit
Committee held a total of two (2) meetings during the Last Fiscal Year.
The Compensation Committee, which was formed in August 1995, is currently
composed of Brion Applegate, Neal Douglas and Roger Moore. The Compensation
Committee, which generally meets in conjunction with Board meetings and as
deemed necessary by the Board of Directors, reviews and approves the Company's
executive compensation policy and makes recommendations concerning the
Company's employee benefit policies. The Compensation Committee held a total
of five (5) meetings during the Last Fiscal Year.
The Board of Directors does not have a nominating committee nor any
committee performing such function.
DIRECTOR COMPENSATION
Directors currently receive no cash fees for services provided in that
capacity but are reimbursed for out-of-pocket expenses they incur in
connection with attendance at meetings of the Board of Directors. In addition,
in the past, certain directors have been granted stock options for their
service on the Board. The Company does not intend to pay cash fees for the
services of its Board members in the immediate future, nor to provide for the
automatic grant of stock options to its directors.
5
<PAGE>
Options may also be granted to Directors under the Company's 1998 Stock Plan
(the "Stock Plan"), which was approved by the Company's stockholders in
September 1998. The Board, in its discretion, selects Directors to whom
options may be granted, the time or times at which such options may be
granted, the number of shares subject to each grant and the period over which
such options become exercisable. All options granted to Directors under the
Stock Plan contain the following provisions: the exercise price per share of
Common Stock is 100% of the fair market value of the Company's Common Stock on
the date the option is granted; the term of the option may be no more than ten
years from the date of grant; and the option may be exercised only while the
Outside Director remains a director or within ninety days after the date he or
she ceases to be a director or service provider of the Company; upon a
proposed liquidation or dissolution of the Company, the options will terminate
immediately prior to such action; and in the event of a merger or sale of
substantially all of the Company's assets, each option may be assumed or an
equivalent option substituted by the successor corporation. The Board may at
any time amend, alter, suspend or discontinue the Stock Plan, subject to
stockholder approval in certain circumstances.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee are Messrs. Applegate,
Moore and Douglas. None of the members of the Compensation Committee of the
Board of Directors is currently or has been, at any time since the formation
of the Company, an officer or employee of the Company. During fiscal year
1998, no executive officer of the Company (i) served as a member of the
compensation committee (or other board committee performing similar functions
or, in the absence of any such committee, the board of directors) of another
entity, one of whose executive officers served on the Company's Compensation
Committee, (ii) served as a director of another entity, one of whose executive
officers served on the Company's Compensation Committee, or (iii) served as a
member of the compensation committee (or other board committee performing
similar functions or, in the absence of any such committee, the board of
directors) of another entity, one of whose executive officers served as a
director of the Company.
REQUIRED VOTE
If a quorum is present and voting, the three nominees for director receiving
the highest number of votes will be elected to the Board of Directors. Votes
withheld from any director are counted for purposes of determining the
presence or absence of a quorum, but have no other legal effect under Delaware
law. See "INFORMATION CONCERNING SOLICITATION AND VOTING--QUORUM; ABSTENTIONS;
BROKER NON-VOTES."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF
THE NOMINEES LISTED ABOVE.
6
<PAGE>
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
In February 1999, the Board of Directors of the Company adopted a resolution
whereby PricewaterhouseCoopers LLP was selected as the Company's independent
auditors to audit the financial statements of the Company for the Last Fiscal
Year. PricewaterhouseCoopers LLP (or its predecessor, Coopers & Lybrand
L.L.P.) has audited the Company's financial statements since 1992. The Board
of Directors recommends that stockholders vote for ratification of such
appointment. In the event of a negative vote or ratification, the Board of
Directors will reconsider its selection. A representative of
PricewaterhouseCoopers LLP is expected to be available at the Annual Meeting
with the opportunity to make a statement if such representative desires to do
so, and is expected to be available to respond to appropriate questions.
REQUIRED VOTE
Although stockholder approval is not required for the appointment of
PricewaterhouseCoopers LLP since the Board of Directors has the responsibility
for selecting auditors, the Board of Directors has conditioned its appointment
of the Company's independent auditors upon the receipt of the affirmative vote
of a majority of the votes duly cast at the Annual Meeting. In the event that
the stockholders do not approve the selection of PricewaterhouseCoopers LLP,
the Board of Directors will reconsider its selection.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP
AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE 1999 FISCAL YEAR.
7
<PAGE>
OTHER INFORMATION
Executive Officers
In addition to Messrs. D'Auria and Taylor, the following persons are
executive officers of the Company:
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Nelson Caldwell...... 42 Vice President of Finance and Chief Financial Officer
Allen Purdy.......... 49 Vice President of Sales
Thomas Warner........ 42 Vice President of Engineering
Nicholas Berberi..... 43 Vice President of Licensing Business Development
Craig Bender......... 57 Vice President of Market Development
Craig Stouffer....... 35 Vice President of Marketing
Shaw Matthews........ 56 Vice President of Operations
</TABLE>
- --------
Nelson Caldwell has served as Vice President of Finance and Chief Financial
Officer of the Company since June 1997. From May 1995 to May 1997, Mr.
Caldwell served as Chief Financial Officer and Secretary of Telechips
Corporation ("Telechips"), a computer telephony device company. Mr. Caldwell
also served as the interim President and Chief Executive Officer and a
director of Telechips from February 1997 to May 1997. Telechips filed for
bankruptcy under Chapter 7 of the Federal Bankruptcy Code on June 30, 1997.
Prior to that time, Mr. Caldwell held various positions at Coopers & Lybrand
L.L.P. from June 1989 through April 1995, most recently as Manager in the
Business Assurance practice. Mr. Caldwell holds a B.S. in Business
Administration from California State University, Chico, and is a Certified
Public Accountant.
Allen Purdy has served as Vice President of Sales of the Company since
January 1997. Prior to joining the Company, Mr. Purdy was Regional Sales
Manager and, most recently, Director of Sales of Applied Digital Access, Inc.,
a provider of network management and testing equipment for the
telecommunications industry, from November 1992 to January 1997, and was a
Regional Sales Manager with TeleSciences, Inc. from June 1989 to November
1992. Mr. Purdy holds a B.S. in Industrial Engineering from Rutgers University
and an M.B.A. from Rider College.
Thomas Warner has served as Vice President of Engineering of the Company
since February 1997. Prior to that time, Mr. Warner served in various
positions at Ericsson Fiber Access, a division of Ericsson Inc. from March
1990 through February 1997, most recently as Vice President of Systems
Management. Mr. Warner holds a B.S.E.E. from the University of Illinois at
Champaign-Urbana.
Nicholas Berberi has served as Vice President of Licensing Business
Development of the Company since July 1998. From February 1996 to July 1998,
Mr. Berberi served as Vice President of Customer Support. From September 1995
until January 1996, Mr. Berberi served as a Vice President of a business unit
of the Company. Mr. Berberi was Director of Product Marketing from August 1994
to September 1995, and a Product Marketing Manager from July 1991 to August
1994 at VLSI Technology, Inc., a semiconductor company. From June 1989 to July
1991, he was a Product Marketing Manager at Hitachi America, Ltd. Mr. Berberi
holds a B.S.E.E. from Syracuse University.
Craig Bender has served as Vice President of Market Development of the
Company since June 1997. Prior to that time, Mr. Bender was with Integrated
Network Corporation ("INC") where he served as Vice President of Marketing
from 1988 to 1992, as Vice President of International Business Development
from 1992 to 1996 and as Vice President of INC's DAGAZ division until 1997.
Mr. Bender holds a B.S.E.E. from Syracuse University, an M.S.E.E. from the
University of California at Los Angeles and an AT&T-sponsored Executive M.B.A.
from Pace University.
Craig Stouffer has served as Vice President of Marketing of the Company
since April 1998. Before joining the Company, Mr. Stouffer was a co-founder of
Vergent Inc., a telecommunications switching equipment
8
<PAGE>
company, and served as its President from January 1997 to November 1997. From
October 1989 to December 1996, Mr. Stouffer served as President and Chief
Executive Officer and was also a co-founder and director of Mobius Computer
Corporation, a producer of network servers. Prior to that time, Mr. Stouffer
served in various technical and marketing roles at Hewlett-Packard. Mr.
Stouffer holds B.S. degrees in both Computer Science and Theoretical Physics
from Indiana University.
Shaw Matthews has served as Vice President of Operations of the Company
since June 1998. He served as the Company's Director of Operations from August
1997 to June 1998, and as a Quality Manager of the Company from February 1996
to August 1997. From October 1987 to February 1996, Mr. Matthews was a
Consulting Engineering Manager of Storage Technology Corporation
("StorageTek"), and from October 1982 to October 1988, Mr. Matthews served in
various engineering and operating positions at StorageTek. Mr. Matthews holds
a B.S. in Mathematics from the University of Illinois at Chicago and an M.S.
in Operations Research from the Illinois Institute of Technology.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 1, 1999 certain information with
respect to the beneficial ownership of the Company's Common Stock by (i) each
person known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock, (ii) each of the Company's directors,
(iii) the Named Executive Officers and (iv) all directors and executive
officers as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES APPROXIMATE
NAME BENEFICIALLY OWNED(1) PERCENTAGE OWNED (2)
- ---- --------------------- -------------------
<S> <C> <C>
Microsoft Corporation (3).......... 1,083,503 9.5%
First Analysis Corporation (4)..... 897,835 7.8
Investment Advisers, Inc. (5)...... 864,097 7.5
Vanguard IV, L.P. (6).............. 658,591 5.8
AT & T Ventures (7)................ 625,000 5.5
Clifford H. Higgerson (8).......... 658,591 5.8
Neal Douglas (9)................... 625,000 5.5
Brion Applegate (10)............... 541,667 4.7
George Middlemas (11).............. 539,411 4.7
Matthew Taylor (12)................ 365,767 3.2
Salvatore D'Auria (13)............. 206,250 1.8
Saul Rosenzweig (14)............... 110,913 1.0
Thomas Warner (15)................. 41,927 *
Allen Purdy (16)................... 35,287 *
Nelson Caldwell (17)............... 20,312 *
Roger Moore (18)................... 6,000 *
David Spreng....................... -- *
All directors and executive 3,205,159 27.4%
officers as a group (16 persons)
(19)..............................
</TABLE>
- --------
* Less than 1%.
(1) Except pursuant to applicable community property laws or as indicated in
the footnotes to this table, to the Company's knowledge, each
stockholder identified in the table possesses sole voting and investment
power with respect to all shares of Common Stock shown as beneficially
owned by such stockholder.
(2) Applicable percentage ownership based on 11,450,998 shares of Common
Stock outstanding as of March 1, 1999, together with applicable options
for such stockholder. Beneficial ownership is determined in accordance
with the rules of the Securities and Exchange Commission ("Commission"),
based on factors including voting and investment power with respect to
shares. Shares of Common Stock subject to options currently exercisable,
or exercisable within 60 days after March 1, 1999 are not deemed
outstanding for computing the percentage ownership of any other person.
9
<PAGE>
(3) The address of record for Microsoft Corporation is One Microsoft Way,
Building 8, Redmond, WA 98502-6399.
(4) The address of record for First Analysis Corporation is 233 S. Wacker
Drive, Suite 9500, Chicago, IL 60606. Consists of 377,601 shares held by
Apex Investment Fund II, L.P., 158,810 shares held by Apex Investment
Fund 111, L.P., 156,926 shares held by The Productivity Fund II, L.P.,
and 204,498 shares held by Environmental Private Equity Fund. First
Analysis Corporation disclaims beneficial ownership of these shares
except to the extent of its proportional partnership interest therein.
(5) The address of record for each member of Investment Advisors, Inc. is
3700 First Bank Place, 601 Second Avenue South, Minneapolis, MN 55402.
Consists of 396,376 shares held by and 2,000 shares issuable pursuant to
options exercisable within 60 days of December 31, 1998 and held by IAI
Investment Funds VI, Inc. (IAI Emerging Growth Fund), 258,697 shares held
by and 2,049 shares issuable pursuant to options exercisable within 60
days of December 31, 1998 and held by IAI Investment Funds IV, Inc. (IAI
Regional Fund), 87,580 shares held by and 1,500 shares issuable pursuant
to options exercisable within 60 days of December 31, 1998 and held by
IAI Investment Funds VIII, Inc. (IAI Value Fund), 58,387 shares held by
and 1,000 shares issuable pursuant to options exercisable within 60 days
of December 31, 1998 and held by IAI Investment Funds VI, Inc. (IAI
Midcap Growth Fund), and 55,556 shares held by and 952 shares issuable
pursuant to options exercisable within 60 days of December 31, 1998 and
held by IAI Investment Funds VII, Inc. (IAI Growth & Income Fund). These
mutual funds are part of an affiliated group of registered investment
corporations referred to collectively as the IAI Mutual Funds and are
managed by Investment Advisers, Inc. Investment Advisers, Inc. is a
registered investment adviser under the Investment Advisers Act of 1940
and an affiliate of IAI Ventures.
(6) The address of record for Vanguard IV, L.P. is 555 University Avenue,
Palo Alto, CA 94301.
(7) The address of record for AT&T Ventures is 3000 Sand Hill Road, Building
One, Suite 285, Menlo Park, CA 94025. Consists of 312,500 shares held by
AT&T Venture Fund II, L.P. and 312,500 shares held by Venture Fund I,
L.P.
(8) Consists of 658,591 shares held by Vanguard IV, L.P. Mr. Higgerson is a
general partner of Vanguard IV, L.P. Mr. Higgerson disclaims beneficial
ownership of these shares except to the extent of his proportional
partnership interest therein.
(9) Consists of 625,000 shares held by AT&T Ventures. Mr. Douglas is a
general partner of AT&T Ventures. Mr. Douglas disclaims beneficial
ownership of these shares except to the extent of his proportional
partnership interest therein.
(10) Consists of 541,667 shares held by Spectrum Equity Investors, L.P. Mr.
Applegate is a managing general partner of Spectrum Equity Investors,
L.P. Mr. Applegate disclaims beneficial ownership of these shares except
to the extent of his proportional partnership interest therein.
(11) Includes 536,411 shares held by Apex Investment Funds. Mr. Middlemas is
the Managing General Partner of Apex Investment Funds. Mr. Middlemas
disclaims beneficial ownership of these shares except to the extent of
his proportional partnership interest therein.
(12) Includes 3,646 shares issuable pursuant to options exercisable within 60
days of March 1, 1999. Also includes 40,000 shares owned by Mr. Taylor
but which are subject to an option to purchase such shares held by
certain third parties.
(13) Includes 183,368 shares issuable pursuant to options or rights
exercisable within 60 days of March 1, 1999.
(14) Consists of 104,913 shares held by Rosetree Partners General Partnership
and 6,000 shares held by Rosebranch 1998 Limited Partnership. Mr.
Rosenzweig is a general partner of Rosetree Partners General Partnership
and is Co-Trustee of the general partner of Rosebranch 1998 Limited
Partnership. Mr. Rosenzweig disclaims beneficial ownership of these
shares except to the extent of his proportional partnership interest
therein.
(15) Includes 5,235 shares issuable pursuant to options exercisable within 60
days of March 1, 1999.
(16) Consists of 34,287 shares issuable pursuant to options exercisable within
60 days of March 1, 1999.
(17) Includes 4,037 shares issuable pursuant to options exercisable within 60
days of March 1, 1999.
10
<PAGE>
(18) Includes 5,000 shares issuable pursuant to options exercisable within 60
days of March 1, 1999.
(19) Includes an aggregate of 258,482 shares issuable pursuant to options
exercisable within 60 days of March 1, 1999. Also includes an aggregate of
541,667 shares held by Spectrum Equity Investors, L.P., 536,411 shares
held by Apex Investment Funds, 658,591 shares held by Vanguard IV, L.P.,
625,000 shares held by AT&T Ventures, 104,913 shares held by Rosetree
Partners General Partnership and 6,000 shares held by Rosebranch 1998
Limited Partnership.
11
<PAGE>
EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION
The following table shows, as to any person serving as Chief Executive
Officer during fiscal 1998 and each of the four other most highly compensated
executive officers whose salary plus bonus exceeded $100,000 (the "Named
Executive Officers"), information concerning compensation paid for services to
the Company during the Last Fiscal Year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION(1)
------------------------------------- --------------------------
SECURITIES
NAME AND PRINCIPAL OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR BONUS($) COMPENSATION($)(1) OPTIONS(#) COMPENSATION($)
------------------ ---- SALARY($) -------- ------------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Salvatore D'Auria....... 1998 187,500 110,000 -- 75,000 18,230(2)
President and Chief
Executive Officer
Matthew Taylor.......... 1998 149,808 35,100 -- 12,500 --
Chairman of the Board,
Chief Technical Officer
and Secretary
Thomas Warner........... 1998 140,000 25,875 -- 13,750 --
Vice President of
Engineering
Allen Purdy............. 1998 138,962 71,875 -- 12,500 --
Vice President of Sales
Nelson Caldwell......... 1998 118,442 31,625 -- 12,500 --
Vice President, Finance
and Chief Financial
Officer
</TABLE>
- --------
(1) Other annual compensation in the form of perquisite and other personal
benefits, securities or property has been omitted in those cases where the
aggregate amount of such compensation is the lesser of either $50,000 or
10% of the total of annual salary and bonus reported for the Named
Executive Officer.
(2) Represents the principal portion of certain indebtedness between the
Company and Mr. D'Auria which was forgiven during the year ended December
31, 1999. See "Certain Transactions."
12
<PAGE>
STOCK OPTION GRANTS AND EXERCISES
The following table shows, as to each Named Executive Officer, information
concerning stock options granted during the Last Fiscal Year.
OPTION GRANTS DURING YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------
POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS EXERCISE PRICE APPRECIATION
UNDERLYING GRANTED IN PRICE FOR OPTION TERM
OPTIONS FISCAL ($/SHARE) EXPIRATION ---------------------
NAME GRANTED (1) YEAR (2) (3) DATE 10% ($)
- ---- ----------- ---------- --------- ---------- 5% ($) ----------
<S> <C> <C> <C> <C> <C> <C>
Salvatore D'Auria....... 75,000 18.1% 2.40 2/18/08 113,201 286,874
President and Chief
Executive Officer
Matthew Taylor.......... 12,500 3.0% 2.40 2/18/08 18,867 47,812
Chairman of the Board,
Chief Technical Officer
and Secretary
Thomas Warner........... 13,750 3.3% 2.40 2/18/08 20,754 52,593
Vice President of
Engineering
Allen Purdy............. 12,500 3.0% 2.40 2/18/08 18,867 47,812
Vice President, of
Sales
Nelson Caldwell......... 6,250 1.5% 2.40 2/18/08 9,433 23,906
Vice President, Finance 6,250 1.5% 15.00 9/16/08 58,959 149,413
and Chief Financial
Officer
</TABLE>
- --------
(1) The options granted to Messrs. D'Auria, Taylor, Warner, Purdy and Caldwell
vest as to 1/48th of the shares for each month which expires from the date
of grant.
(2) In 1998 the Company granted employees, consultants and directors options
to purchase an aggregate of 413,825 shares of Common Stock.
(3) The exercise price per share of each option was equal to the fair value of
the Common Stock on the date of grant as determined in good faith by the
Board of Directors on such date based upon such factors as the purchase
price paid by investors for shares of the Company's securities and the
Company's financial outlook and results of operations. Such exercise
prices are significantly lower than prices paid by investors purchasing
shares of the Company's preferred stock in transactions taking place
approximately contemporaneously with the grant of such options. In making
its determination as to the exercise price of such options, the Board
considered the fact that the Company's preferred stock carried certain
rights, preferences and privileges, including a preference upon
liquidation, sale or merger, enhanced voting rights and antidulution
rights, and purchasers of such preferred stock received additional
contractual rights, including registration rights and information rights.
(4) In accordance with the rules of the Securities and Exchange Commission
(the "Commission"), shown are the gains or "option spreads" that would
exist for the respective options granted These gains are based on the
assumed rates of annual compound stock price appreciation of 5% and 10%
from the date the option was granted over the full option term. These
assumed annual compound rates of stock price appreciation are mandated by
the rules of the Commission and do not represent the Company's estimate or
projection of future Common Stock prices.
13
<PAGE>
AGGREGATE OPTION EXERCISES IN 1998 AND
YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-
OPTIONS AT FISCAL YEAR THE-MONEY OPTIONS AT
SHARES END FISCAL YEAR END (1)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE(#) REALIZED UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- EXERCISABLE ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Salvatore D'Auria... ... 2,049 $29,997 197,951 59,375 $2,866,128 $748,125
President and Chief
Executive Officer
Matthew Taylor.......... -- -- 2,604 9,896 32,810 124,690
Chairman of the Board,
Chief Technical Officer
and Secretary
Thomas Warner........... 26,224 377,031 8,724 48,802 123,629 686,189
Vice President of
Engineering............
Allen Purdy............. -- -- 29,557 39,193 423,090 548,910
Vice President, of
Sales
Nelson Caldwell ........ 11,198 158,681 4,947 33,855 58,367 401,727
Vice President, Finance
and Chief Financial
Officer
</TABLE>
- --------
(1) The fair market value of the Company's Common Stock as determined by the
Board of Directors on or about December 31, 1998 was $15.00 per share.
CERTAIN TRANSACTIONS
During the Last Fiscal Year, the Company granted options to its executive
officers and directors. The Company intends to grant options to its executive
officers and directors in the future. See "PROPOSAL ONE--Director
Compensation" and "EXECUTIVE COMPENSATION--Stock Option Grants and Exercises."
On April 17, 1995 the Company loaned to Salvatore D'Auria, the Company's
President and Chief Executive Officer, an aggregate of $125,000 pursuant to a
Loan Agreement and Secured Promissory Note (the "Loan Agreement"). The loan
did not bear interest. Pursuant to the Loan Agreement, the Company forgave 25%
of the principal amount of the loan each year. The loan was discharged in full
as of the end of the Last Fiscal Year.
On August 27, 1997 the Company and Microsoft entered into a Licensing and
Cooperative Marketing Agreement (the "Microsoft License Agreement") pursuant
to which the Company and Microsoft Corporation ("Microsoft") agreed to
cooperate in the development and marketing of future implementations of the
Company's HomeRun technology. Each party will own a half interest in the
other's technology embodied in works made jointly by them. In connection with
the Microsoft License Agreement, the Company issued Microsoft a warrant to
purchase up to 666,836 shares of Series G Preferred Stock at an exercise price
of $10.00 per share. This warrant was exercised immediately prior to the
closing of the Company's initial public offering on February 3, 1999.
Microsoft is a principal stockholder of the Company. See SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
From December 1997 through May 1998, the Company sold an aggregate of
1,250,006 shares of Series G Preferred Stock, at a per share purchase price of
$12.00, in a private placement equity financing with certain stockholders and
directors of the Company, including: (i) an aggregate of 125,000 shares
purchased by AT&T
14
<PAGE>
Ventures, a principal stockholder of the Company and of which Neal Douglas, a
director of the Company, is a general partner; (ii) an aggregate of 416,667
shares purchased by Microsoft, a principal stockholder of the Company; (iii)
an aggregate of 28,835 shares purchased by entities affiliated with Apex
Investment Funds ("Apex"), of which Mr. Middlemas, a director of the Company,
is Managing General Partner; (iv) an aggregate of 47,650 shares purchased by
entities affiliated with First Analysis Corporation, a principal stockholder
of the Company (including shares purchased by Apex); (v) an aggregate of
50,000 shares purchased by Investment Advisers Inc., a principal stockholder
of the Company; (vi) an aggregate of 8,334 shares purchased by Vanguard, a
principal stockholder of the Company, of which Clifford H. Higgerson is a
general partner; and (vii) an aggregate of 41,667 shares purchased by Spectrum
Equity Investors, L.P., for which Brion Applegate, a director of the Company,
serves as managing general partner. See "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT."
The Company has entered into indemnification agreements with its executive
officers, directors and certain significant employees containing provisions
that are in some respects broader than the specific indemnification provisions
contained in the General Corporation Law of Delaware. These agreements
provide, among other things, for indemnification of the executive officers,
directors and certain significant employees in proceedings brought by third
parties and in stockholder derivative suits. Each agreement also provides for
advancement of expenses to the indemnified party.
15
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors establishes the general
compensation policies of the Company as well as the compensation plans and
specific compensation levels for executive officers. It also administers the
Company's employee stock benefit plan for executive officers. The Compensation
Committee is currently composed of independent, non-employee directors who,
except as disclosed under "Compensation Committee Interlocks and Insider
Participation," have no interlocking relationships as defined by the
Securities and Exchange Commission.
The Compensation Committee believes that the compensation of the executive
officers, including that of the Chief Executive Officer (collectively the
"Executive Officers"), should be influenced by the Company's performance. The
Committee establishes the salaries and bonuses of all of the Executive
Officers by considering (i) the Company's financial performance for the past
year, (ii) the achievement of certain objectives related to the particular
Executive Officer's area of responsibility, (iii) the salaries and bonuses of
executive officers in similar positions of comparably-sized companies and (iv)
the relationship between revenue and executive officer compensation. The
Committee believes that the Company's executive officer salaries and bonuses
in the Last Fiscal Year were comparable in the industry for similarly-sized
businesses.
In addition to salary and bonus, the Committee, from time to time, grants
options to Executive Officers. The Committee thus views option grants as an
important component of its long-term, performance-based compensation
philosophy. Since the value of an option bears a direct relationship to the
Company's stock price, the Committee believes that options motivate Executive
Officers to manage the Company in a manner which will also benefit
shareholders. As such, options are granted at the current market price. And
one of the principal factors considered in granting options to an Executive
Officer is the Executive Officer's ability to influence the Company's long-
term growth and profitability.
Compensation Committee of the Board
of Directors
Brion Applegate
Roger Moore
Neal Douglas
THE FOREGOING COMPENSATION COMMITTEE REPORT 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 PAST OR FUTURE FILING UNDER THE
SECURITIES ACT OR THE EXCHANGE ACT, EXCEPT TO THE EXTENT THE COMPANY
SPECIFICALLY INCORPORATES IT BY REFERENCE INTO SUCH FILING.
16
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return to stockholders on
the Company's Common Stock with the cumulative total return of the Nasdaq
Stock Market Index-U.S. ("Nasdaq US") and the Hambrecht & Quist Technology
Index ("H&Q Technology"). The graph assumes that $100 was invested on January
29, 1999, the date of the Company's initial public offering, in the Company's
Common Stock, the Nasdaq US Index and the H&Q Technology Index, including
reinvestment of dividends. No dividends have been declared or paid on the
Company's Common Stock. Historic stock price performance is not necessarily
indicative of future stock price performance.
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------
Total Return Analysis 1/29/99 3/22/99
- ------------------------------------------------------------------
Tut Systems, Inc. $100.00 $244.44
- ------------------------------------------------------------------
H&Q Technology Index $100.00 $ 92.24
- ------------------------------------------------------------------
Nasdaq Composite $100.00 $ 95.66
- ------------------------------------------------------------------
</TABLE>
Source: Carl Thompson Associates www.ctaonline.com (800) 959-9677.
Data from Bloomberg Financial Markets.
Total Return Analysis
<TABLE>
<CAPTION>
1/29/99 3/22/99
- ---------------------------------------
<S> <C> <C>
Tut Systems, Inc. $100.00 $244.44
- ---------------------------------------
H&Q Technology Index $100.00 $ 92.24
- ---------------------------------------
Nasdaq Composite $100.00 $ 95.66
</TABLE>
Source: Carl Thompson Associates www.ctaonline.com (800) 959-9677. Data from
Bloomberg Financial Markets.
THE INFORMATION CONTAINED IN THE STOCK 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 OR THE EXCHANGE ACT, EXCEPT TO THE EXTENT THE COMPANY
SPECIFICALLY INCORPORATES IT BY REFERENCE INTO SUCH FILING.
17
<PAGE>
OTHER MATTERS
The Board of Directors does not know of any other matters to be presented 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.
It is important that your shares be represented at the meeting, regardless of
the number of shares which you hold. You are, therefore, urged to execute and
return, at your earliest convenience, the accompanying proxy in the envelope
which has been enclosed.
THE BOARD OF DIRECTORS
Pleasant Hill, California
Dated: April 9, 1999
18
<PAGE>
Appendix A
PROXY TUT SYSTEMS, INC. PROXY
Annual Meeting of Stockholders May 19, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned stockholder of Tut Systems, Inc., a Delaware Corporation
(the "Company") acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated April 9, 1999, and the 1998 Annual
Report to Stockholders (which has been provided in the form of the Company's
initial public offering prospectus along with certain supplemental materials),
and appoints Salvatore D'Auria and Nelson Caldwell, or either of them, as the
proxies and attorneys-in-fact, with full power to each of substitution on behalf
and in the name of the undersigned to vote and otherwise represent all of the
shares registered in the name of the undersigned at the 1999 Annual Meeting of
Stockholders of the Company to be held on Wednesday, May 19, 1999 at 10:00 a.m.
(local time) at the Marriott Hotel Walnut Creek, 2355 North Main Street, Walnut
Creek, California, and any adjournment thereof with the same effect as if the
undersigned were present and voting such shares, on the following matters and in
the following manner:
TO ASSURE YOUR REPRESENTATION AT THE
ANNUAL MEETING, PLEASE MARK, SIGN AND
DATE THIS PROXY AND
RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE.
(Continue and to be signed on reverse side.)
<PAGE>
TUT SYSTEMS, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. (X)
<TABLE>
<S> <C> <C> <C>
1. The election of the following persons as Class FOR ALL
I directors of the Company to serve for a term of FOR WITHHOLD (Except Nominee(s)
three years and until their successors shall be ALL ALL written below)
duly elected and qualified - Nominees: Brion ( ) ( ) ( )
Applegate, David Spreng, and Clifford H.
Higgerson.
2. To ratify the appointment of FOR AGAINST ABSTAIN
PricewaterhouseCoopers LLP as independent ( ) ( ) ( )
auditors for the Company for the fiscal year
ending December 31, 1999.
3. To vote or otherwise represent the shares on FOR AGAINST ABSTAIN
any other business which may properly come before ( ) ( ) ( )
the meeting or any adjournment thereof, according
to their discretion and in their discretion.
</TABLE>
The shares represented by this proxy will be voted in accordance with the
specification made. If no specification is made, the shares represented by this
proxy will be voted for each of the above persons and proposals, and for or
against such other matters as may properly come before the meeting as the
proxyholders deem advisable.
Dated: _________________, 1999
Signature(s) ------------------------
------------------------
(Title, if appropriate)---------------
Sign exactly as your name(s) appear on the stock certificate. A corporation is
requested to sign its name by its President or other authorized officer, with
the office held designated. Executors, administrators, trustees, etc., are
requested to so indicate when signing, if stock is registered in two names, both
should sign.
I plan to attend the meeting: Yes ____ No _____
