SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment no. __)
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted by
[ ] Definitive Additional Materials Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
ASANTE TECHNOLOGIES, 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 transactions applies:
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(2) Aggregate number of securities to which transactions 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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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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<PAGE>
ASANTE TECHNOLOGIES, INC.
-------------------------------------
Notice of Annual Meeting of Stockholders
To Be Held On February 24, 2000
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Asante
Technologies, Inc. (the "Company"), a Delaware corporation, will be held on
February 24, 2000, at 10:00 a.m., local time, at the Company's principal
executive offices, located at 821 Fox Lane, San Jose, California 95131 for the
following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To ratify the appointment of PricewaterhouseCoopers, LLP as the
Company's independent accountants for the fiscal year ending
September 30, 2000.
3. To transact such other business as may properly come before the
meeting and any adjournment or postponement 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 January 3, 2000
are entitled to notice of and to vote at the meeting and any adjournment
thereof.
All stockholders are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting, we urge you to mark,
sign, date and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if such stockholder has returned a proxy.
FOR THE BOARD OF DIRECTORS
Anthony Contos
Secretary
San Jose, California
January 21, 2000
<PAGE>
ASANTE TECHNOLOGIES, INC.
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed Proxy is solicited on behalf of the Board of Directors of
Asante Technologies, Inc. (the "Company") for use at the Annual Meeting of
Stockholders to be held on February 24, 2000, at 10:00 a.m., local time, or at
any adjournment or postponement thereof, for the purposes set forth herein and
in the accompanying Notice of Annual Meeting of Stockholders. The Annual
Meeting will be held at the Company's principal executive offices, located at
821 Fox Lane, San Jose, California 95131. The telephone number at that location
is (408) 435-8388.
These proxy solicitation materials and the Company's Annual Report to
Stockholders (on Form 10-K) for the year ended October 2, 1999, including
financial statements, were mailed on or about January 24, 2000, to all
stockholders entitled to vote at the meeting.
Record Date and Voting Securities
Stockholders of record at the close of business on January 3, 2000, are
entitled to notice of and to vote at the meeting. At the record date, 9,303,797
shares of the Company's Common Stock, $0.001 par value, were issued and
outstanding. No shares of the Company's Preferred Stock are outstanding. Based
on the last reported sale on the NASDAQ OTC (Over-the-Counter) Bulletin Board
on January 3, 2000, the market value of one share of the Company's Common Stock
closed at $2.53.
Revocability of Proxies
Any proxy given may be revoked by the person giving it at any time before
its use by delivering to the Secretary of the Company a written notice of
revocation or a duly executed proxy bearing a later date or by attending the
meeting and voting in person.
Voting and Solicitation
Each share shall have one vote for the election of directors, unless
cumulative voting is invoked. Each stockholder voting for 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 (four) multiplied by
the number of shares held by such stockholder, or may 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 than four
directors. However, no stockholder will be entitled to cumulate votes unless
the candidate's name has been placed in nomination prior to the voting, and the
stockholder, or any other stockholder, has given notice at the meeting prior to
the voting of the intention to cumulate votes. If any stockholder gives such
notice, all stockholders may cumulate their votes for the candidates in
nomination. In the event that cumulative voting is invoked, the proxy holders
will have the discretionary authority to vote all proxies received by them in
such a manner as to ensure the election of as many of the Board of Directors'
nominees as possible. See "PROPOSAL 1--ELECTION OF DIRECTORS." On all other
matters, each share has one vote.
The Company will bear the cost of soliciting proxies. The Company will
also reimburse brokerage firms and other persons representing beneficial owners
of shares for their expenses in forwarding solicitation material to such
beneficial owners. Solicitation of proxies by mail may be supplemented by
telephone, telegram, facsimile or personal solicitation by directors, officers
or regular employees of the Company. No additional compensation will be paid to
such persons for such services.
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 2001 Annual Meeting must be
received by the Company no later than September 25, 2000, in order that they
may be included in the proxy statement and form of proxy relating to that
meeting.
1
<PAGE>
PROPOSAL 1--ELECTION OF DIRECTORS
Nominees
Wilson Wong, Jeff Lin, Edmond Tseng and Michael Kaufman were re-elected to
the Board of Directors at last year's Annual Meeting of Stockholders. The
Company's Bylaws provide for a variable Board of between 3 and 7 members. The
number of Board members had previously been set at six. However, effective as
of January 17, 2000, the Board reduced the number of Directors to four. Due to
the fact that only four Directors are currently serving on the Board, this
change will not affect any of the Directors standing for reelection. There are
currently four seats authorized on the Board of Directors, all of which will be
filled by directors to be elected at the Annual Meeting.
<TABLE>
Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the Company's four nominees named below, all of whom are
currently directors of the Company. In the event that any nominee of the
Company is unable or declines to serve as a director at the time of the Annual
Meeting, the proxies will be voted for any substitute nominee who shall be
designated by the current Board of Directors to fill the vacancy. It is not
expected that any nominee listed below 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 in
such a manner in accordance with cumulative voting as will ensure 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. In
any event, the proxy holders cannot vote for more than four duly nominated
persons. The term of office of each person elected as a director will continue
until the next Annual Meeting of Stockholders or until such director's
successor has been elected and qualified.
<CAPTION>
Director
Name Age Principal Occupation Since
---------------------------- ----- ---------------------------------------------- ---------
<S> <C> <C> <C>
Wilson Wong ................ 52 President and Chief Executive Officer of the 1988
Company and Chairman of the Board of
Directors
Jeff Yuan-Kai Lin .......... 48 President, Lite-on Communications, Inc. 1988
Michael D. Kaufman ......... 57 Managing General Partner, 1995
MK Global Ventures
Edmond Y. Tseng ............ 52 President and Chief Executive Officer, 1989
OSE, Inc.
</TABLE>
Mr. Wong co-founded the Company in 1988, and effective January 1, 1999,
assumed the positions of President, Chief Executive Officer and Chairman of the
Board of Directors, and will continue as Vice President of Engineering. Prior
to his return to the Company as Vice President of Engineering on September 10,
1998, Mr. Wong was Chief Executive Officer of Pixo Arts Corporation. From 1994
to August 1997, he served as Vice President and General Manager for the
Company. From 1993 to 1994, he served as Vice President and General Manager for
the Company's Client Access products. From 1988 to 1993, he served as the
Company's President and Chief Executive Officer.
Mr. Lin is President and Chief Executive Officer of Lite-On Communications
Corporation, which is an internetworking company located in Taiwan. Lite-on
Communications is a subsidiary of Lite-On Group, which is one of Asante's OEM
suppliers in Asia. Mr. Lin co-founded Asante Technologies, Inc. (the "Company")
in 1988, and served as President, Chief Executive Officer and Chairman of the
Board of Directors from July 1994 until December 31, 1998. Since his
resignation as President and Chairman of the Board of Directors, Mr. Lin has
served as a Director of the Company. Mr. Lin also held the position of Vice
President of Engineering from November 1997 until August 1998. From June 1993
through July 1994, he served as Vice President, General Manager of Network
Systems Business for the Company. From 1991 to 1993, he served as the Company's
Chairman of the Board of Directors and Chief Operating Officer. From 1988 to
1991, Mr. Lin served as the Company's Vice President of Operations and
Engineering, Chief Financial Officer and Secretary.
2
<PAGE>
Mr. Kaufman has served as Managing General Partner of MK Global Ventures,
a venture capital management company, since he founded the firm in 1987. Mr.
Kaufman also currently serves as a director of Davox Corporation, a provider of
call technology and integration systems; Disc, Inc., a manufacturer of
high-capacity storage libraries; HyperMedia Communications, Inc., a wireless
networking products manufacturer; Syntellect Inc., a provider of voice
processing and computer telephony integration, and Human Pheromone Sciences,
Inc. (Erox Corporation), a manufacturer of fragrance and toiletry products.
Mr. Tseng has served as President and Chief Executive Officer of OSE,
Inc., a semiconductor products company which serves as the exclusive North
American sales representative for Orient Semiconductor Electronics, Ltd., since
January 1990. See "Security Ownership of Directors, Officers and Certain
Beneficial Owners" and "Certain Relationships and Related Transactions." Prior
to that time, Mr. Tseng was the Director of Engineering at Condata, Inc., an
electronics products and engineering
consulting company.
There are no family relationships among the directors and executive
officers of the Company.
Board Meetings and Committees
The Board of Directors of the Company held a total of 4 meetings and acted
by written consent 3 times during the fiscal year ended October 2, 1999. During
fiscal 1999, no director attended fewer than 75% of the meetings of the Board
of Directors and its committees upon which such director served. The Board of
Directors has an Audit Committee and a Compensation Committee. The Board of
Directors has no nominating committee or any committee performing similar
functions.
The Audit Committee of the Board of Directors, which currently consists of
Mr. Kaufman and Mr. Tseng, met 1 time during the last fiscal year. The Audit
Committee is responsible for reviewing annual audited financial statements,
approving the services performed by the Company's independent accountants, and
reviewing and evaluating the Company's accounting principles and its system of
internal accounting controls. The Audit Committee is also responsible for
handling disagreements with the Company's independent accountants or the
termination of their engagement.
The Compensation Committee of the Board of Directors, which consisted of
Mr. Kaufman and Mr. Tseng, met 1 time during the year. The Compensation
Committee reviews and approves the Company's executive compensation policy,
including the salaries and target bonuses of the Company's executive officers.
In addition, the Compensation Committee administers the Company's stock plans,
which includes recommending or approving the grant of options to new and
existing employees (including officers and employee directors). Since the
Compensation Committee held only 1 meeting during the last fiscal year, the
Company's compensation policies have been reviewed and ratified by the
Company's Board of Directors.
Compensation of Directors
Directors who are employees of the Company receive no fees for services
provided in that capacity, but are reimbursed for out-of-pocket expenses
incurred in connection with attendance at meetings of the Board of Directors
and its committees. See "EXECUTIVE COMPENSATION."
Directors who are not employees of the Company receive a fee of $1,000 for
each meeting attended and are also reimbursed for out-of-pocket expenses
incurred in connection with their attendance at meetings of the Board of
Directors and its committees.
Non-employee Directors are also entitled to participate in the Company's
1993 Directors' Stock Option Plan (the "Directors' Plan"). The Directors' Plan,
which was adopted by the Board of Directors in September 1993, and approved by
the stockholders in October 1993, authorizes a total of 300,000 shares of
Common Stock for issuance pursuant to options granted under the Directors'
Plan. The Directors' Plan provides for an automatic grant of 40,000 shares of
Common Stock to each non-employee Director on the date on which such individual
first becomes a director. As approved by stockholders at the 1996 Annual
Shareholder's Meeting, the Directors' Plan also provides that each non-employee
Director will be granted additional options for the purchase of 10,000 shares
of Common Stock at the Board meeting immediately following the annual
anniversary date of the non-employee Director's commencement of service on the
Board of Directors.
3
<PAGE>
Initial options granted under this plan have terms of ten years and
typically the shares underlying the option vest over four years at the rate of
25% on the one year anniversary date, with the remaining shares vesting monthly
in equal increments over the remaining three years. Subsequent options granted
under this plan have a term of ten years and typically vest over the four years
at the rate of 25% annually from the anniversary date. The exercise price of
each option granted equals 100% of the fair market value of the Common Stock,
based on the closing price of the Common Stock as previously reported on the
NASDAQ National Market and now reported on the OTC (Over-the-Counter) Bulletin
Board on the date of grant. Options granted under the Directors' Plan must be
exercised within three months following the end of the optionee's tenure as a
director of the Company, or within six months after the termination of a
director's tenure due to death or disability; options not so exercised are then
cancelled and may be reissued pursuant to the 1993 Directors' Stock Option
Plan. The Directors' Plan is designed to work automatically, without
administration; to the extent administration is necessary, however, the
Directors' Plan has been structured so that options granted to non-employee
Directors who administer the Company's stock plans shall qualify as
transactions exempt from Section 16(b) of the Securities Exchange Act of 1934,
as amended, pursuant to Rule 16b-3 promulgated thereunder.
In September 1993, Mr. Tseng received an option to purchase 40,000 shares
of Common Stock exercisable at a price of $7.50 per share. In July 1995, Mr.
Kaufman received an option to purchase 40,000 shares of Common Stock
exercisable at $4.63 per share.
Pursuant to the amendment of the Directors' Plan approved by the
stockholders at the 1996 Annual Meeting, additional options for the purchase of
10,000 shares of Common Stock were automatically earned on the anniversary of
each non-employee Director's service on the Company's Board and issued as of
the date of the next Board meeting subsequent to such anniversary. Mr. Kaufman
earned annual options for the purchase of 10,000 shares of Common Stock in
April 1996, April 1997, April 1998 and April 1999 at exercise prices of $5.88,
$6.31, $2.34 and $.94, respectively. Annual options to Mr. Tseng for the
purchase of 10,000 shares of Common Stock were issued in September 1996,
October 1997, November 1998 and October 1999 for, $6.13, $5.14, $2.38 and $.875
respectively.
Vote Required and Recommendation of Board of Directors
The four nominees receiving the highest number of affirmative votes of the
shares present or represented and entitled to be voted for them shall be
elected as Directors. Votes withheld from any director will be counted for
purposes of determining the presence or absence of a quorum for the transaction
of business at the meeting, but have no other legal effect upon election of
directors under Delaware law.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE
NOMINEES SET FORTH HEREIN.
PROPOSAL 2--RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected PricewaterhouseCoopers LLP,
independent accountants, to audit the financial statements of the Company for
the year ending September 30, 2000, and recommends that the 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.
PricewaterhouseCoopers LLP has audited the Company's financial statements
since fiscal 1993. Representatives of PricewaterhouseCoopers LLP are expected
to be present at the Annual Meeting and will have the opportunity to make a
statement if they so desire. The representatives also are expected to be
available to respond to appropriate questions from stockholders.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2000.
4
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS,
OFFICERS AND CERTAIN BENEFICIAL OWNERS
<TABLE>
The following table sets forth certain information known to the Company
with respect to beneficial ownership of the Company's Common Stock as of
January 3, 2000, by (i) each beneficial owner of more than 5% of the Company's
Common Stock, (ii) the Company's Chief Executive Officer and each of the four
other most highly compensated executive officers during the year ended October
2, 1999, (collectively, the "Named Officers"), (iii) each director of the
Company and (iv) all directors and executive officers of the Company as a
group. Except as otherwise indicated, each person has sole voting and
investment power with respect to all shares shown as beneficially owned,
subject to community property laws where applicable.
<CAPTION>
Shares Percentage
Beneficially Beneficially
Beneficial Owner Owned Owned
----------------------------------------------- -------------- -------------
<S> <C> <C>
Jeff Yuan-Kai Lin(1) .......................... 1,323,000 14.1%
Wilson Wong(2) ................................ 1,499,249 16.0%
Dr. Eugene C.Y. Duh(3) ........................ 1,191,073 12.7%
OSE, Inc.(4) .................................. 71,665 *
MK GVD Fund(5) ................................ 500,000 5.3%
Michael D. Kaufman(6) ......................... 96,333 1.0%
Edmond Tseng(7) ............................... 98,333 1.0%
Richard Strong(10) ............................ 0 *
Anthony Contos(8) ............................. 23,677 *
John Jeng(9) .................................. 21,084 *
Bill Fenley(11) ............................... 0 *
All directors and executive officers as a group
(11 persons) ................................. 4,824,414 51.5%
<FN>
* Represents less than one percent of the outstanding Common Stock.
------------
(1) The address for Mr. Lin is Lite On Communications Corporation, 2F-1, No. 9
Prosperity 1st Road, Science Based Industrial Park, Hsinchu, Taiwan, ROC.
(2) The address for Mr. Wong is 821 Fox Lane, San Jose, California 95131.
(3) The address for Dr. Duh is Orient Semiconductor Electronics, Ltd., No.
12-2 Nei Huang S. Rd., NEPZ Kaohsiung 81120, Taiwan, ROC.
(4) Dr. Duh is a Director and Mr. Tseng is President of OSE, Inc. As such, Dr.
Duh and Mr. Tseng may be deemed to be beneficial owners of these shares.
(5) The address for MK GVD Fund and Mr. Kaufman is 2471 E. Bayshore Road,
Suite 520, Palo Alto, California 94303. Mr. Kaufman and Gregory Lahann are
general partners of MK GVD Management. Each of these individuals shares
voting and investment power with respect to the shares held by MK GVD
Fund, and therefore may be deemed to be beneficial owners of such shares.
(6) Includes 55,000 shares issuable under stock options exercisable within 60
days of January 3, 2000.
(7) Includes 55,000 shares issuable under stock options exercisable within 60
days of January 3, 2000.
(8) Includes 20,185 shares issuable under stock options exercisable within 60
days of January 3, 2000.
(9) Includes 18,104 shares issuable under stock options exercisable within 60
days of January 3, 2000.
(10) Mr. Richard Strong resigned effective August 6, 1999, no options are
exercisable at this time.
(11) Mr. Bill Fenley resigned effective May 3, 1999, no options are exercisable
at this time.
</FN>
</TABLE>
5
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
<TABLE>
The following table sets forth all compensation received by the Named
Officers for services rendered to the Company in all capacities for fiscal
years ended September 27, 1997, October 3, 1998 and October 2, 1999:
<CAPTION>
Annual Compensation
------------------------------------------
Other Annual
Name and Principal Position Year Salary Bonus Compensation ($)
------------------------------------- ------ ------------- --------- ------------------
<S> <C> <C> <C> <C>
Wilson Wong 1999 166,673 -- --
President and Chief Executive Officer 1998 15,884 -- --
Chairman of the Board 1997 125,144 -- --
Jeff Yuan-Kai Lin(2) 1999 76,081 -- --
President and Chief Executive Officer 1998 200,008 28,750
Chairman of the Board 1997 203,854 15,000
John Jeng(3) 1999 118,700 -- --
Vice President of Operations
Anthony Contos(4) 1999 110,355 -- --
Vice President Finance & 1998 (7) -- --
Administration and Secretary 1997 (7) -- --
Richard Strong(5) 1999 165,484 -- 2,846
Vice President of Worldwide Sales 1998 166,106 -- 5,977
1997 180,627 22,680 9,332
Bill Fenley(6) 1999 112,098 -- 2,600
Vice President of Marcom & 1998 131,224 -- 4,800
OEM Sales 1997 171,485 4,800
Long-Term
Compensation Awards
-----------------------------------
Number
Restricted of Shares
Stock Underlying LTIP All Other
Name and Principal Position Awards Options Payouts Compensation(1)
------------------------------------- ------------ ------------ --------- ----------------
<S> <C> <C> <C> <C>
Wilson Wong -- 600,000 -- 1,651
President and Chief Executive Officer -- -- -- 101
Chairman of the Board -- -- -- 475
Jeff Yuan-Kai Lin(2) -- 50,000 -- 305
President and Chief Executive Officer 2,059
Chairman of the Board 1,412
John Jeng(3) -- 65,600 408
Vice President of Operations
Anthony Contos(4) -- 9,400 208
Vice President Finance & -- 3,000 --
Administration and Secretary -- 1,000 --
Richard Strong(5) -- 50,000 513
Vice President of Worldwide Sales -- 5,000 340
-- 2,880 --
Bill Fenley(6) -- 25,000 919
Vice President of Marcom & 5,000 1,498
OEM Sales 2,000 461
<FN>
------------
(1) Amount consists of premiums paid by the Company for life insurance,
including compensation relating to over $50,000 Life Insurance and
Executive Life.
(2) Mr. Lin resigned from Asante Technologies, Inc. on December 31, 1998. He
continues to serve on the Board of Directors.
(3) Mr. Jeng joined the Company on December 7, 1998.
(4) Mr. Contos has been an employee of the Company since June 1, 1994.
Effective on August 30, 1999, he was appointed as Vice President of
Finance and Administration. He was named Secretary of the Company on
October 27, 1999.
(5) Mr. Strong joined the Company on May 1, 1996. Effective on January 18, 1999
he was appointed as Vice President of Sales. He resigned from the Company
effective on August 6, 1999.
(6) Mr. Fenley joined the Company on January 2, 1996. Effective on November 16,
1998 he was appointed as Vice President of Product Marketing and OEM
Business. He resigned from the Company effective on June 16, 1999.
(7) Annual salary and bonuses did not exceed $100,000 for fiscal 1997 or 1998.
</FN>
</TABLE>
Option Grants in Last Fiscal Year
The following table sets forth certain information with respect to stock
options granted to each of the Named Officers during the fiscal year ended
October 2, 1999. In accordance with the rules of the Securities and Exchange
Commission, also shown below is the potential realizable value over the term of
the option (the period from the grant date to the expiration date) based on
assumed rates of stock appreciation of 5% and 10%, compounded annually. These
amounts are based on certain assumed rates of appreciation and do not represent
the Company's estimate of future stock price. Actual gains, if any, on stock
option exercises will be dependent on the future performance of the Common
Stock.
6
<PAGE>
<TABLE>
Option Grants in Last Fiscal Year
<CAPTION>
Individual Grants
-------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of
Number of % of Stock Price
Shares Total Options Appreciation
Underlying Granted to Exercise for Option Term(3)
Options Employees in Price Expiration ----------------------
Name Granted(1) Fiscal Year(2) Per Share Date 5% 10%
--------------------------- ------------ ---------------- ----------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Wilson Wong(4) ............ 600,000 36.08% .9375 8/2/09 297,053 839,780
Anthony Contos ............ 700 2.50 11/20/08 1,101 2,789
1,000 .9375 7/26/09 590 1,494
7,700 0.57% .8750 5/14/09 4,238 10,738
Jeff Yuan-Kai Lin ......... 50,000 3.01% 2.50 11/20/08 78,612 199,218
Richard Strong ............ 50,000 3.01% 1.875 1/19/09 58,959 149,413
Bill Fenley ............... 25,000 1.50% 2.50 11/20/08 39,306 99,609
John Jeng ................. 60,000 1.8750 1/19/09 70,751 179,296
5,600 3.94% .8750 5/14/09 3,082 7,809
<FN>
------------
(1) All options were granted under either the Company's 1990 Stock Option Plan
or the Company's Key Executive Stock Plan and have exercise prices equal
to the fair market value on the grant date.
(2) Based on options to purchase an aggregate of 1,663,005 shares granted in
fiscal 1999.
(3) Market value of option grants is based on the price of the last reported
sale of the Company's Common Stock on the NASDAQ OTC (Over-the-Counter)
Bulletin Board of $2.53 per share on January 3, 2000.
(4) Option granted at 110% of fair market value as required by the Key
Executive Stock Option Plan. The options vest over a four-year period,
with 12.5% becoming vested six months from January 1, 1999, the effective
date of his appointment as President & CEO, and a total of 25% becoming
vested one year from such date. The remaining options vest at a rate of
1|M/48th of the total shares vesting each month following.
</FN>
</TABLE>
Option Exercises and Holdings
<TABLE>
The following table provides information with respect to option exercises
in fiscal 1999, by the Named Officers and the value of such officers'
unexercised options at October 2, 1999:
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
<CAPTION>
Number of Shares
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options at
Shares Fiscal Year-End Fiscal Year-End(1)
Acquired Value ------------------------------- ------------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
--------------------------- ------------- ---------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Wilson Wong ............... -- -- 75,000 525,000 53,850 376,950
Anthony Contos ............ -- -- 14,716 12,684 33 7,517
Jeff Yuan-Kai Lin ......... -- -- -- -- -- --
Richard Strong ............ -- -- 39,877 -- -- --
John Jeng ................. -- -- -- 65,600 -- 4/fc,900
Bill Fenley ............... -- -- -- -- -- --
<FN>
------------
(1) Market value of unexercised options is based on the price of the last
reported sale of the Company's Common Stock on the NASDAQ OTC
(Over-the-Counter) Bulletin Board of $1.75 per share on October 1, 1999
(the last trading day for fiscal 1999), minus the exercise price.
</FN>
</TABLE>
Compensation Committee Interlocks and Insider Participation
For the fiscal year ended October 2, 1999, the Compensation Committee
consisted of Mr. Kaufman and Mr. Tseng, neither of whom is an officer of the
Company. The Company is not aware of any interlocks or insider participation
required to be disclosed under applicable rules of the Securities and Exchange
Commission.
7
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company subcontracts the manufacturing of a substantial portion of its
products through Orient Semiconductor Electronics, Ltd. ("OSE"). Under the
Company's arrangement with OSE, the Company purchases certain components from
third party vendors and sells these components to OSE at cost. OSE purchases or
manufactures other components, assembles printed circuit boards, and tests and
packages products for the Company on a purchase order basis. The Company is
obligated to purchase products only to the extent it has signed firm purchase
commitments with OSE. During fiscal 1997, 1998 and 1999, the Company's
purchases from OSE totaled $16.8 million, $8.2 million and $8.4 million,
respectively. The Company's arrangement with OSE provides for payment terms of
45 days from date of receipt of product. The Company sells certain component
parts to OSE with payment terms similar to those granted to the Company. OSE
and its affiliates are significant stockholders of the Company. See "Security
Ownership of Directors, Officers and Certain Beneficial Owners."
The information contained in the following report of the Board of
Directors and the Performance Graph set forth on page 11, shall not be deemed
to be "soliciting material" or to be "filed" with the Securities and Exchange
Commission, nor shall such information be incorporated by reference into any
future filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent that the Company
specifically incorporates such information by reference into such filing.
COMPENSATION COMMITTEE REPORT OF THE BOARD OF DIRECTORS
In fiscal 1999, the Compensation Committee ("Committee") consisted of Mr.
Kaufman and Mr. Tseng, neither of whom is or has been an employee of the
Company. The Committee is responsible for reviewing the compensation and
benefits for the Company's executive officers, as well as supervising and
making recommendations to the Board on compensation matters generally. The
Committee also administers the Company's stock option and purchase plans and
makes grants to executive officers under the Company's 1990 Stock Option Plan
and Key Executive Stock Plan.
The Committee held one meeting during fiscal 1999. The following report is
submitted on behalf of the Board of Directors.
Compensation Policies
The Company operates in the high technology industry, characterized by
rapid changes and extreme competition. The Board's compensation philosophy is
to provide cash and equity incentives to the Company's executive officers and
other employees to attract highly qualified personnel in order to maintain the
Company's competitive position. The Board's compensation program goals are to:
attract, retain and motivate qualified executive officers and employees who
contribute to the Company's long-term success; align the compensation of
executive officers with the Company's business objectives and performance; and
align incentives for executive officers with the interests of stockholders in
maximizing value.
Compensation Components
The compensation for executive officers generally consists of salary,
annual incentives and stock option awards.
Base Salary. The salaries of each of the executive officers of the Company
are generally based on salary levels of similarly sized companies, primarily
those located in Silicon Valley. The Committee reviews generally available
surveys and other published compensation data. The compensation of the
executive officers, including the Chief Executive Officer, are generally
reviewed annually by the Committee and/or the Board and adjusted on the basis
of performance, the Company's results for the previous year and competitive
conditions.
Bonuses. The Company's intention is to develop bonus compensation plans
designed to reward the Company's executive officers based on the Company's
financial performance. There is no bonus plan in
8
<PAGE>
place for officers at this time. In April 1997, the Company established an
updated bonus plan for fiscal 1997, under which the executive officers were
eligible to earn quarterly cash bonus payments. Criteria for earning the
bonuses under this plan consisted of achieving certain operating profit levels
and return on shareholder equity. This plan was approved by the Board of
Directors in fiscal 1997, and replaced the Company's 1995 bonus plan.
Equity-Based Compensation. The Company enables all eligible employees,
including executive officers other than Mr. Wong, to purchase the Company's
Common Stock at a discount by participating in the Company's 1993 Employee
Stock Purchase Plan. In addition, the Company periodically grants to its
executive officers stock options under the 1990 Plan, and the Key Executive
Plan, and grants to other employees stock options under the 1990 Plan, in order
to provide additional incentive for such persons. The Board believes that such
incentive promotes the long-term interests of the Company's stockholders.
Options generally vest over a four-year period to encourage option holders to
continue employment with the Company. In granting options, the Committee takes
into account each individual's level of responsibility within the Company and
such individual's expected future contribution, as well as the number of shares
and outstanding options already held by the individual. The Board has adopted a
stock option grant policy, pursuant to which employees (including officers
except for Mr. Wong) may receive annual stock option grants, generally on their
review date with the Company, in amounts based on certain criteria including
continuous time with the Company, current salary, responsibilities, and job
performance. Employees may also be entitled to receive additional option grants
where the employee's job has significantly changed through growth or promotion.
The exercise price of all options is the market price on the date of grant.
Compensation of Chief Executive Officer
The process of determining the compensation for the Company's Chief
Executive Officer and the factors taken into consideration in such
determination are generally the same as the process and factors used in
determining the compensation of all of the executive officers of the Company.
Tax Deductibility of Executive Compensation
Section 162(m) of the Code limits the federal income tax deductibility of
compensation paid to the Company's Chief Executive Officer and to each of the
other four most highly compensated executive officers. The Company may deduct
such compensation only to the extent that during any fiscal year the
compensation paid to any such individual does not exceed $1,000,000, unless
compensation is performance-based and meets certain specified conditions
(including stockholder approval). Based on the Company's current compensation
plans and policies and the transition rules of Section 162(m), the Company and
the Board do not anticipate, for the near future, that the Company will lose
any significant tax deduction for executive compensation.
Report on Repricing of Stock Options
During fiscal year 1998 there was a significant decrease in the market
price of the Company's Common Stock due, in part, to the Company's financial
loss. As a result of this market decline, most of the Company's previously
issued stock options, which were originally issued with exercise prices ranging
from $.105 to $9.00, were substantially "underwater". To address this issue,
the Compensation Committee of the Board of Directors determined to offer a
repricing of the Company's outstanding stock options. The repricing was done in
an effort to retain the Company's quality employees who had lost a significant
portion of their financial interest in the Company because their options were
"out of the money". Subsequent to the Company's 1998 fiscal year end, the
Compensation Committee approved a repricing program whereby eligible employees
holding "underwater" outstanding stock options issued pursuant to the Company's
1990 Stock Option Plan and the Key Executive Plan could elect to have such
options repriced to the closing price per share of the Company's common stock
on the NASDAQ NMS as of November 23, 1998 (the "Effective Date"). Eligible
employees included any employee who currently owned "underwater" stock options
and who was employed by the Company on November 23, 1998. If an eligible
employee chose to reprice his or her stock options, the vesting schedule would
restart as of the Effective Date. Eligible employees had until 9:00 AM PST on
the Effective Date to elect whether to participate in the repricing program.
9
<PAGE>
Of 1,411,372 outstanding stock options eligible for repricing, 353,037
stock options were elected to be repriced. The repricing date was November 20,
1998. The closing price of the Company's Common Stock as reported on the NASDAQ
NMS on November 20, 1998 was $2.50 per share.
Stock options are intended to provide an incentive to the Company's
officers and employees. The Compensation Committee believes that such equity
incentives are a significant factor in the Company's ability to attract, retain
and motivate officers and employees who are critical to the Company's long-term
success. In repricing the stock options, the Compensation Committee considered
the current limited availability to qualified officers and employees and the
fact that many of the Company's officers and employees are not being
compensated in accordance with industry standards. In light of the above, the
Compensation Committee believes that the repricing of the options is an
important component of the incentives offered to officers and employees of the
Company and believes it is in the best interest of the Company and its
shareholders.
<TABLE>
Ten-Year Option/SAR Repricings
<CAPTION>
Length
Number of Market Price Exercise Original
Options/ of Stock at Price At Option Term
SARs Time of Time of Remaining
Repriced or Repricing or Repricing or New At Date of
Amended Amendment Amendment Exercise Repricing or
Name Date (#) ($) ($) Price ($) Amendment
------------------------ ---------- ------------- -------------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jeff Yuan-Kai Lin ...... 11/20/98 50,000 2.50 6.25 2.50 7.15 Years
Anthony Contos ......... 11/20/98 700 2.50 6.25 2.50 8.65 Years
William Fenley ......... 11/20/98 25,000 2.50 6.25 2.50 7.15 Years
Rusty Callihan* ........ 08/12/94 5,000 5.00 7.75 5.00 9.70 Years
<FN>
------------
* This repricing occurred during Mr. Callihan's previous period of employment.
This option was cancelled on July 17, 1996, when Mr. Callihan resigned.
</FN>
</TABLE>
This report presented herein was approved by a motion of the Board of
Directors.
FOR THE COMPENSATION COMMITTEE
Michael Kaufman
Edmond Tseng
10
<PAGE>
PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total stockholder
return, calculated on a dividend reinvested basis, for Asant[00e9]
Technologies, Inc., the NASDAQ Composite Total Return Index (US) and the
Hambrecht & Quist Technology Index. The graph assumes that $100 was invested in
the Company's Common Stock, the NASDAQ Composite Total Return Index (US) and
the Hambrecht & Quist Technology Index from the date of the Company's initial
public offering, December 10, 1993, through October 1, 1999, the last trading
day of the Company's 1999 fiscal year. Because the Company effected its initial
public offering on December 10, 1993, the information in the graph is provided
in quarterly intervals. Historic stock price performance is not necessarily
indicative of future stock price performance.
THE H&Q TOTAL RETURN GROWTH & TECHNOLOGY INDICE
Asante Technologies Inc (ASNT)
Cumulative Total Return
--------------------------------------
9/94 9/95 9/96 9/97 9/98 9/99
ASANTE TECHNOLOGIES, INC. 100 144 123 102 33 37
NASDAQ STOCK MARKET (U.S.) 100 138 164 225 229 372
HAMBRECHT & QUIST TECHNOLOGY 100 175 192 287 267 514
[GRAPHIC OMITTED]
11
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors, and persons who own more than
10% of the Company's Common Stock, to file reports of ownership on Form 3 and
changes in ownership on Form 4 or 5 with the Securities and Exchange Commission
(the "SEC"). Such executive officers, directors and 10% stockholders are also
required by SEC rules to furnish the Company with copies of all Section 16(a)
forms they file. Based solely upon its review of copies of such forms received
by it, or on written representations from certain reporting persons that no
other filings were required for such persons, the Company believes that, during
the year ended October 2, 1999, its executive officers, directors and 10%
stockholders complied with all applicable Section 16(a) filing requirements.
OTHER MATTERS
The Company knows of no other matters to be submitted at the meeting. If
any other matters properly come before the meeting or any adjournment or
postponement thereof, it is the intention of the persons named in the enclosed
form of Proxy to vote the shares they represent as the Board of Directors may
recommend.
For the Board of Directors
Anthony Contos
Secretary
Dated: January 21, 2000
12
