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:
|X| Preliminary Proxy Statement
|_| Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
SPECTRIAN CORPORATION
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(Name of Registrant as Specified in its Charter)
SPECTRIAN CORPORATION
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
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(4) Proposed maximum aggregate value of transaction:
(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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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
SPECTRIAN CORPORATION
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 26, 1998
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Spectrian Corporation, a Delaware corporation (the "Company"), will be held on
Friday, June 26, 1998, at 10:00 a.m. local time, at 160 Gibraltar Court,
Sunnyvale, California 94089, for the following purposes:
1. To elect six (6) directors to serve for the ensuing year
and until their successors are duly elected and qualified.
2. To consider a proposal to amend the Certificate of
Incorporation of the Company to provide that the Company not be
governed by the Delaware anti-takeover statute (Section 203 of the
Delaware General Corporation Law).
3. To approve and to amend the Certificate of Incorporation of
the Company to provide (i) the adoption of the 1998 Employee Stock
Purchase Plan, (ii) the reservation of 250,000 shares of Common Stock
for sale thereunder and (iii) an annual increase in the number of
shares of Common Stock by the lesser of 300,000 shares or 2% of
outstanding shares of Common Stock.
4. To ratify the appointment of KPMG Peat Marwick LLP as
independent accountants of the Company for the fiscal year ending March
31, 1999.
5. To transact such other business as may properly come before
the Annual Meeting, including any motion to adjourn to a later date to
permit further solicitation of proxies if necessary, or before any
adjournments thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. Only stockholders of record at the close of
business on May 18, 1998 are entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed Proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if he or she has returned a Proxy.
Sincerely,
Bruce R. Wright
Secretary
Sunnyvale, California
May 28, 1998
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YOUR VOTE IS IMPORTANT.
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE AND RETURN IT
IN THE ENCLOSED ENVELOPE.
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<PAGE>
SPECTRIAN CORPORATION
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PROXY STATEMENT FOR 1998
ANNUAL MEETING OF STOCKHOLDERS
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed Proxy is solicited on behalf of the Board of Directors
(the "Board") of SPECTRIAN CORPORATION, a Delaware corporation (the "Company" or
"Spectrian"), for use at the Annual Meeting of Stockholders (the "Annual
Meeting") to be held Friday, June 26, 1998, at 10:00 a.m. local time, or at any
adjournment thereof, for the purposes set forth herein and in the accompanying
Notice of Annual Meeting of Stockholders. The Annual Meeting will be held at 160
Gibraltar Court, Sunnyvale, California 94089. The Company's principal executive
offices are located at 350 W. Java Drive, Sunnyvale, California 94089, and its
telephone number at that location is (408) 745-5400.
These proxy solicitation materials were first mailed on or about May
28, 1998 to all stockholders entitled to vote at the meeting.
Record Date; Outstanding Shares
Stockholders of record at the close of business on May 18, 1998 (the
"Record Date") are entitled to notice of and to vote at the meeting. The Company
has one series of Common Shares outstanding, designated Common Stock, $.001 par
value per share. As of April 17, 1998, 10,904,351 shares of the Company's Common
Stock were issued and outstanding and held of record by 356 stockholders.
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 (a) delivering to the Secretary
of the Company a written notice of revocation or a duly executed proxy bearing a
later date or (b) attending the meeting and voting in person.
Voting and Solicitation
Each stockholder is entitled to one vote for each share of Common Stock
held by the stockholder on the Record Date. A quorum comprising the holders of a
majority of the outstanding shares of Common Stock on the Record Date must be
present or represented for the transaction of business at the Annual Meeting.
Abstentions and broker nonvotes will be counted in establishing the quorum.
Each stockholder is entitled to one vote for each share held. Every
stockholder voting for the election of directors (Proposal One) may cumulate
such stockholder's votes and give one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of shares that such
stockholder is entitled to vote, or distribute such stockholder's votes on the
same principle among as many candidates as the stockholder may select, provided
that votes cannot be cast for more than six candidates. However, no stockholder
shall 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 the stockholder's votes. On all other matters, each share of Common
Stock has one vote. A quorum
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comprising the holders of the majority of the outstanding shares of Common Stock
on the record date must be present or represented for the transaction of
business at the Annual Meeting. Abstentions and broker non-votes will be counted
in establishing the quorum.
This solicitation of proxies is made by the Company, and all related
costs will be borne by the Company. In addition, the Company may reimburse
brokerage firms and other persons representing beneficial owners of shares for
their expenses in forwarding solicitation 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 or telegram.
Deadline for Receipt of Stockholder Proposals
Proposals of stockholders of the Company that are intended to be
presented by such stockholders at the Company's 1999 Annual Meeting of
Stockholders must be received by the Company no later than April 15, 1999 in
order that they may be considered for inclusion in the proxy statement and form
of proxy relating to that meeting.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
<TABLE>
The following table sets forth certain information regarding the
beneficial ownership of Common Stock of the Company as of April 17, 1998 as to
(i) each person who is known by the Company to own beneficially more than 5% of
the outstanding shares of Common Stock, (ii) each director, (iii) each of the
executive officers named in the Summary Compensation Table below and (iv) all
directors and executive officers as a group.
<CAPTION>
Five Percent Stockholders, Common Stock Approximate
Directors and Certain Executive Officers Beneficially Owned Percentage Owned(1)
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<S> <C> <C>
Kopp Investment Advisors, Inc.(2).......................................... 2,496,650 22.9%
6600 France Avenue South
Suite 672
Edina, MN 55433
Becker Capital Management, Inc.(3)......................................... 650,360 6.0
1211 SW Fifth Avenue, Suite 2185
Portland, Oregon 97204
Garrett A. Garrettson(4)................................................... 90,283 *
James A. Cole(5)........................................................... 7,284 *
Martin Cooper(6)........................................................... 20,000 *
Charles D. Kissner......................................................... -- *
Robert Wilson(7)........................................................... 3,750 *
Eric A. Young(8)........................................................... 3,750 *
Bruce R. Wright(9)......................................................... 29,508 *
Stephen B. Greenspan(10)................................................... 52,110 *
William Zucker(11)......................................................... 13,710 *
Joseph M. Veni(12)......................................................... 21,760 *
All Directors and executive officers as a group (12 persons)(13)........... 287,777 2.6%
<FN>
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* Less than 1%
(1) Applicable percentage ownership is based on 10,904,351 shares of Common
Stock outstanding as of April 17, 1998 together with applicable options
for such stockholder. Beneficial ownership is determined in accordance
with the rules of the Securities and Exchange Commission (the
"Commission"), and includes voting and investment power with respect to
shares. Shares of Common Stock subject to options currently exercisable or
exercisable within 60 days after April 17, 1998 are deemed outstanding for
computing the percentage ownership of the person holding such options, but
are not deemed outstanding for computing the percentage of any other
person.
(2) Reflects ownership as reported on Schedule 13G/A dated February 10, 1998
with the Commission by Kopp Investment Advisors, Inc. ("KIA"). Represents
shares beneficially owned by (i) KIA, a registered investment advisor,
(ii) Kopp Holding Company ("Holding") and (iii) LeRoy C. Kopp individually
and through his ownership of a controlling interest in KIA and his control
over Holdings. KIA has sole voting power over 614,000 shares of the
Company's Common Stock, sole dispositive power over 468,000 shares of the
Company's Common Stock and shared dispositive power over 1,942,650 shares
of the Company's Common Stock. Holding has beneficial ownership of
2,410,650 shares of the Company's Common Stock. Mr. Kopp has beneficial
ownership of 2,496,650 shares of the Company's Common Stock and sole
voting and dispositive power over 86,000 shares of the Company's Common
Stock.
(3) Reflects beneficial ownership as reported on Schedule 13G filed with the
Commission by Becker Capital Management, Inc. ("Becker") on February 13,
1998. Becker is a registered investment advisor pursuant to the Investment
Advisors Act of 1940, as amended. Becker has sole voting and dispositive
power over 650,300 shares of the Company's Common Stock.
(4) Includes 84,819 shares issuable pursuant to options exercisable within 60
days of April 17, 1998.
(5) Includes 3,750 shares issuable pursuant to options exercisable within 60
days of April 17, 1998.
(6) Includes 20,000 shares issuable pursuant to options exercisable within 60
days of April 17, 1998.
(7) Includes 3,750 shares issuable pursuant to options exercisable within 60
days of April 17, 1998.
(8) Includes 3,750 shares issuable pursuant to options exercisable within 60
days of April 17, 1998.
(9) Includes 29,167 shares issuable pursuant to options exercisable within 60
days of April 17, 1998.
(10) Includes 52,110 shares issuable pursuant to options exercisable within 60
days of April 17, 1998.
(11) Includes 11,101 shares issuable pursuant to options exercisable within 60
days of April 17, 1998.
(12) Includes 18,756 shares issuable pursuant to options exercisable within 60
days of April 17, 1998.
(13) Includes 264,842 shares issuable pursuant to options exercisable within 60
days of April 17, 1998.
</FN>
</TABLE>
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<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
Nominees
A board of six directors is to be elected at the Annual Meeting of
Stockholders. Unless otherwise instructed, the proxy holders will vote the
proxies received by them for the Company's six nominees named below, all of whom
are presently directors of the Company. In the event that any nominee of the
Company is unable or declines to serve as a director at the time of the Annual
Meeting of Stockholders, the proxies will be voted for any nominee who shall be
designated by the present Board of Directors to fill the vacancy. The Company is
not aware of any nominee who will be unable or will decline to serve as a
director. 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 assure the election of
as many of the nominees listed below as possible, and, in such event, the
specific nominees to be voted for will be determined by the proxy holders. The
term of office for each person elected as a director will continue until the
next Annual Meeting of Stockholders or until a successor has been elected and
qualified
Vote Required
If a quorum is present and voting, the six nominees receiving the
highest number of votes will be elected to the Board of Directors. Abstentions
and "broker non-votes" are not counted in the election of directors.
Nominees
<TABLE>
The names of the nominees and certain information about them are set
forth below:
<CAPTION>
Director
Name of Nominee Age Position with Company Since
- -------------------------------------------- ---- --------------------------------------- --------------
<S> <C> <C> <C>
Garrett A. Garrettson....................... 54 President, Chief Executive Officer and 1996
Director
James A. Cole (1)........................... 55 Director 1985
Martin Cooper (2)........................... 69 Director 1994
Charles D. Kissner.......................... 50 Director 1998
Robert C. Wilson (2)........................ 78 Director 1995
Eric A. Young (1)........................... 42 Director 1991
<FN>
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(1) Member of Compensation Committee.
(2) Member of Audit Committee.
</FN>
</TABLE>
There is no family relationship between any director or executive
officer of the Company.
Garrett A. Garrettson joined the Company in April 1996 as President,
Chief Executive Officer and Director. Between March 1993 and March 1996 he was
President and Chief Executive Officer of Censtor Corporation, a company that
designs and sells technology related to magnetic recording heads for the disk
drive industry. From November 1986 to March 1993, he served as a Vice President
of the Imprimis subsidiary of Control Data Corporation, a computer systems
company and subsequently with Seagate Technology, Inc., ("Seagate") a company
that designs and manufactures disk drives, when Seagate acquired the Imprimis
subsidiary in 1989. Prior to 1986, Mr. Garrettson held a variety of positions
with Hewlett Packard Company and served in the U.S. Navy. Mr. Garrettson also
serves on the Boards of Directors of Benton Oil and Gas Company and RedLake
Imaging
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<PAGE>
Corporation. He received his B.S. and M.S. in Engineering Physics and a Ph.D. in
Mechanical Engineering from Stanford University.
James A. Cole has been a director of the Company since June 1985. He
was a General Partner of Spectra Enterprise Associates, a venture capital firm,
from October 1986 to November 1997 and has been a partner with Windward
Ventures, a venture capital firm, since November 1997. Prior to 1986, Mr. Cole
spent twenty years in various microwave integrated circuit companies, including
Amplica Inc., where he was a co-founder and served as Chief Operating Officer.
Amplica became a public company in 1981 and was acquired by Comsat Corporation
in 1982. He presently serves on the Boards of Directors of Vitesse Semiconductor
Corp., a semiconductor manufacturer, and Gigatronics Inc., a microwave
instrument supplier.
Martin Cooper has been a director of the Company since January 1994.
Mr. Cooper has served as Chairman and Chief Executive Officer of Array Comm,
Incorporated, a wireless technology manufacturer, since April 1992 and as
Chairman of Dyna, Incorporated, a consulting company, since 1986. From 1985 to
December 1992, he served as President of Cellular Pay Phone Incorporated, a
cellular pay telephone company. From 1982 to 1986, he was a co-founder, Chairman
and Chief Executive Officer of Cellular Business Systems, Inc., a management
information company. From 1954 to 1983, Mr. Cooper served in a variety of
positions including Corporate Vice President, Division Manager and Corporate
Director of Research and Development of Motorola. Mr. Cooper currently serves on
the Board of Directors of Conductus, Inc., a superconducting products company.
He is a Fellow of the IEEE and of the Radio Club of America and a recipient of
the IEEE Centennial medal. He serves on the Advisory Board of the International
National Electronics Consortium and serves on its Board of Directors. He
received a B.S. and an M.S. in Electrical Engineering from the Illinois
Institute of Technology.
Charles D. Kissner has served as a director of the Company since March
1998. Mr. Kissner has served as Chief Executive Officer of Digital Microwave
Corporation ("Digital"), a wireless telecommunications equipment company, since
July 1995 and was named Chairman of Digital's Board of Directors in August 1996.
Prior to joining Digital, Mr. Kissner served from July 1993 to July 1995 as Vice
President and General Manager of Microelectronics Division of M/A-COM, Inc., a
manufacturer of radio and microwave communication products. From February 1990
to July 1993, Mr. Kissner served as president, Chief Executive Officer and a
Director of Aristacom International, Inc., a communications software company.
From 1971 to 1990, Mr. Kissner was an executive with AT&T and Fujitsu in a
variety of positions. Mr. Kissner is also a member of the Board of Directors of
American Medical Flight Support, Inc., a non-profit medical transportation
company. Mr. Kissner received a B.S. in Industrial Management and Electrical
Engineering from California State Polytechnic University and an M.B.A. from the
University of Santa Clara.
Robert C. Wilson has served as a director of the Company since October
1995. Mr. Wilson has been Chairman of Wilson & Chambers, a venture capital and
consulting firm, since December 1982. Mr. Wilson served as President, Chief
Executive Officer and Chairman of the Board at Memorex Corporation from 1974
until 1980. From 1971 to 1974, Mr. Wilson served as President and Chief
Executive Officer of Collins Radio Company, a communications company. From 1969
to 1971, Mr. Wilson was employed by Rockwell International, a diversified
manufacturing company, first as President of Commercial Products and later as
Executive Vice President. He is currently a member of the Boards of Directors of
Gigatronics Inc., a microwave instrument supplier, and of Resound Corporation, a
hearing device manufacturer company. Mr. Wilson received a B.S. in Engineering
from the University of California at Berkeley.
Eric A. Young has been a director of the Company since January 1991. He
is a co-founder of Canaan Partners, a venture capital investment firm, and has
served as a General Partner of Canaan Partners since its inception in 1987.
Prior to such time, Mr. Young was a Senior Vice President of GE Venture Capital,
a venture capital investment firm and a subsidiary of General Electric Co. He
presently serves on the Board of Directors of
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Integrated Packaging Assembly Corporation. He received a B.S. in Mechanical
Engineering at Cornell University and received an M.M. in Finance from
Northwestern University.
Board Meetings and Committees
The Board of Directors of the Company held a total of nine meetings
during fiscal 1998. No director attended fewer than 90% of the meetings of the
Board of Directors and committees thereof, if any, upon which such director
served. The Board of Directors has an Audit Committee and a Compensation
Committee. The Board of Directors has no nominating committee or any committee
performing such functions.
The Audit Committee, which consisted of Messrs. Cooper and Wilson
during fiscal 1998, is responsible for overseeing actions taken by the Company's
independent auditors and reviews the Company's internal financial controls. The
Audit Committee met once during fiscal 1998.
The Compensation Committee, which consisted of Messrs. Cole and Young
during fiscal 1998, met twice during fiscal 1998. The duties of the Compensation
Committee include determining salaries, incentives and other forms of
compensation for directors, officers and other employees of the Company and
administering various incentive compensation and benefit plans.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consists of Messrs. Cole and Young. Mr.
Garrettson, who is President and Chief Executive Officer of the Company, has
participated in all discussions and decisions regarding salaries and incentive
compensation for all employees and consultants to the Company, except that Mr.
Garrettson was excluded from discussions regarding his own salary and incentive
compensation.
PROPOSAL TWO
AMENDMENT TO CERTIFICATE OF INCORPORATION
Introduction
In connection with the reincorporation of the Company from California
to Delaware in 1997 (the "Reincorporation"), certain institutional stockholders
of the Company requested that the Board of Directors put before the stockholders
a proposal to amend the Certificate of Incorporation of the Company to provide
that the Company not be governed by Section 203 of the Delaware General
Corporation Law ("Section 203"), the Delaware anti-takeover statute (referred to
hereinafter as "opting out"). If approved by the stockholders, the amendment to
the Company's Certificate of Incorporation directing that Section 203 shall not
apply to the Company will become effective 12 months after the date of such
approval. The proposed amendment to the Company's Certificate of Incorporation
would read "This Corporation elects not be governed by Section 203 of the
Delaware General Corporation Law." FOR THE REASONS STATED BELOW, THE BOARD OF
DIRECTORS OF THE COMPANY RECOMMENDS THAT STOCKHOLDERS VOTE "AGAINST" THIS
PROPOSAL.
Pursuant to such request, the Board of Directors of the Company has
considered whether it should recommend that the stockholders approve a proposal
to opt out of Section 203. The Board of Directors is recommending that
stockholders vote against the Proposal, because it believes that the best
interests of the Company and its stockholders will be served by allowing the
Company to take advantage of the limitations on unsolicited takeovers provided
by Section 203. In connection with the Reincorporation, the Company did
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not implement many of the various mechanisms which may enhance the Board's
ability to negotiate favorable terms for the stockholders in the event of an
unsolicited takeover attempt. The Board of Directors does not believe that in
the absence of the protections provided by Section 203, the Company's existing
defensive measures are sufficient to deter a two-tier tender offer in which the
stockholders may not be treated fairly by an acquirer.
The proposal to elect not to be governed by Section 203 is not being
proposed in order to enable or deter an unsolicited takeover attempt, nor is it
in response to any present attempt known to the Board of Directors to acquire
control of the Company, obtain representation on the Board of Directors or take
significant action that affects the Company. Stockholders are urged to read
carefully the following sections of this Proxy Statement before voting on the
proposal to opt out of Section 203.
Vote Required for the Proposal to Opt Out of Section 203
Approval of the Proposal to opt out of Section 203 which will also
constitute approval of the amendment to the Certificate of Incorporation, will
require the affirmative vote of the holders of a majority of the outstanding
shares of the Company's Common Stock. The effect of an abstention or a broker
non-vote is the same as that of a vote against the Proposal.
THE BOARD RECOMMENDS A VOTE "AGAINST" THE PROPOSAL TO OPT OUT OF
SECTION 203.
Mechanics of Section 203
In recent years, a number of states have adopted special laws designed
to make certain kinds of "unfriendly" corporate takeovers, or other transactions
involving a corporation and one or more of its significant stockholders, more
difficult. Under Section 203, certain "business combinations" with "interested
stockholders" of Delaware corporations are subject to a three-year moratorium
unless specified conditions are met.
Section 203 prohibits a Delaware corporation from engaging in a
"business combination" with an "interested stockholder" for three years
following the date that such person or entity becomes an interested stockholder.
With certain exceptions, an interested stockholder is a person or entity who or
which owns, individually or with or through certain other persons or entities,
fifteen percent (15%) or more of the corporation's outstanding voting stock
(including any rights to acquire stock pursuant to an option, warrant,
agreement, arrangement or understanding, or upon the exercise of conversion or
exchange rights, and stock with respect to which the person has voting rights
only), or is an affiliate or associate of the corporation and was the owner,
individually or with or through certain other persons or entities of fifteen
percent (15%) or more of such voting stock at any time within the previous three
years, or is an affiliate or associate of any of the foregoing.
For purposes of Section 203, the term "business combination" is defined
broadly to include mergers with or caused by the interested stockholder, sales
or other dispositions to the interested stockholder (except proportionately with
the corporation's other stockholders) of assets of the corporation or a direct
or indirect majority-owned subsidiary equal in aggregate market value to ten
percent (10%) or more of the aggregate market value of either the corporation's
consolidated assets or all of its outstanding stock, the issuance or transfer by
the corporation or a direct or indirect majority-owned subsidiary of stock of
the corporation or such subsidiary to the interested stockholder (except for
certain transfers in a conversion or exchange or a pro rata distribution or
certain other transactions, none of which increase the interested stockholder's
proportionate ownership of any class or series of the corporation's or such
subsidiary's stock or of the corporation's voting stock); or receipt by the
interested stockholder (except proportionately as a stockholder), directly or
indirectly, of any loans, advances, guarantees, pledges or other financial
benefits provided by or through the corporation or a subsidiary.
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The three-year moratorium imposed on business combinations by Section
203 does not apply if: (i) prior to the date on which such stockholder becomes
an interested stockholder the board of directors approves either the business
combination or the transaction that resulted in the person or entity becoming an
interested stockholder; (ii) upon consummation of the transaction that made him
or her an interested stockholder, the interested stockholder owns at least
eighty-five percent (85%) of the corporation's voting stock outstanding at the
time the transaction commenced (excluding from the eighty-five percent (85%)
calculation shares owned by directors who are also officers of the target
corporation and shares held by employee stock plans that do not give employee
participants the right to decide confidentially whether to accept a tender or
exchange offer); or (iii) on or after the date such person or entity becomes an
interested stockholder, the board approves the business combination and it is
also approved at a stockholder meeting by sixty-six and two-thirds percent (66
2/3 %) of the outstanding voting stock not owned by the interested stockholder.
Section 203 only applies to certain publicly held corporations that
have a class of voting stock that is (i) listed on a national securities
exchange, (ii) quoted on an interdealer quotation system of a registered
national securities association or (iii) held of record by more than 2,000
stockholders. Although a Delaware corporation to which Section 203 applies may
elect not to be governed by Section 203, the Company did not so elect to be
excluded from the statutory provisions of Section 203 at the time of the
Reincorporation. Should the holders of a majority of the outstanding shares of
the Company vote to opt out of Section 203, Delaware law requires that such
action by the stockholders would not take effect until one year after the vote
occurs.
Section 203 will encourage any potential acquirer to negotiate with the
Company's Board of Directors. Section 203 also might have the effect of limiting
the ability of a potential acquirer to make a two-tiered bid for the Company in
which all stockholders would not be treated equally. Stockholders should note,
however, that the application of Section 203 to the Company confers upon the
Board the power to reject a proposed business combination in certain
circumstances, even though a potential acquirer may be offering a substantial
premium for the Company's shares over the then-current market price. Section 203
would also discourage certain potential acquirers unwilling to comply with its
provisions.
For the reasons set forth below, the Board of Directors urges you to vote
against the Proposal:
The Board of Directors of the Company believes that the interests of
its stockholders are better served by continuing to be governed by Section 203
for the following reasons: (i) Section 203 does not affect the stockholders'
voting rights, (ii) Section 203 does not interfere with the ability of an
existing stockholder or third party to make a tender offer directly to the
Company's stockholders, (iii) Section 203 does not interfere with market
purchases of additional shares of the Company's Common Stock by an existing
stockholder or a third party, (iv) Section 203 does not prevent the Company
stockholders from electing a new board of directors, (v) Section 203 does not
interfere or prohibit with a proxy contest by interested stockholders to elect a
board of directors, (vi) Section 203 does not prevent an interested stockholder
who has obtained control of the Company from carrying on the Company's business
in an ordinary manner of entering into a merger or other business combination as
long as it is with an unrelated party and (vii) even if the Board of Directors
of the Company does not vote in favor of a proposed transaction with an
interested stockholder, the stockholders of the Company retain the ultimate
ability to allow the transaction to proceed if at least 66% vote in favor of the
transaction. As Section 203 provides a framework within which potential
acquirers are required to treat stockholders equally and limits opportunities
for coercive tactics without impairing the ability of the stockholders to accept
a tender offer or to replace the management and directors of the Company, the
Board of Directors believes that it is not appropriate to opt out of Section
203.
In its legislative synopsis that accompanied the adoption of Section
203, the Delaware General Assembly states that "Section 203 is intended to
strike a balance between the benefits of an unfettered market for corporate
shares and the well documented and judicially recognized need to limit abusive
takeover tactics." Section 203 was
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the result of extensive legislative hearings and has been the subject of
numerous scholarly articles. Few companies elect not to be governed by Section
203. The Board of Directors believes that Section 203 enhances the likelihood
that stockholders will receive a full and fair offer, if an offer is made,
because it better enables the Board of Directors to negotiate and thereby
improve the terms of any such offer on behalf of all stockholders.
Anti-takeover Implications of Existing Charter Documents
Delaware, like many other states, permits a corporation to adopt a
number of measures through amendment of the certificate of incorporation or
bylaws or otherwise, which measures are designed to reduce a corporation's
vulnerability to unsolicited takeover attempts. Nevertheless, certain effects of
Section 203 may be considered to have anti-takeover implications. See
"--Mechanics of Section 203."
The Certificate of Incorporation of the Company permits cumulative
voting, and such method of voting may make it more difficult to remove any given
board member. Other measures permitted under Delaware law, which the Company
does not intend to implement include the establishment of a staggered board of
directors, elimination of the ability of 10% or more stockholders to call
special meetings of the stockholders, and elimination of actions by written
consent of the stockholders.
In addition, Delaware law permits a corporation to adopt such measures
as shareholder rights plans designed to reduce a corporation's vulnerability to
unsolicited takeover attempts. Prior to the Reincorporation, the Company adopted
such a plan in October 1996 (the "Rights Plan"), and the Reincorporation did not
constitute a triggering event pursuant to such plan or affect the Rights Plan in
any material respect. There is substantial judicial precedent in the Delaware
courts as to the legal principles applicable to such defensive measures and as
to the conduct of a board of directors under the business judgment rule with
respect to unsolicited takeover attempts. Pursuant to the Rights Plan, the
Company declared a dividend of one Common Share Purchase Right (a "Right") for
each outstanding share of Common Stock and each share of Common Stock issued
thereafter. Initially, each Right entitles holders of Common Stock to purchase
from the Company one share of Common Stock at an exercise price of $126.00,
subject to adjustment. The Rights are not exercisable until the occurrence of
specified events.
The Rights will become exercisable only if a person or group acquires
15% or more of the Company's Common Stock or announces a tender offer or
exchange offer which would result in its ownership of 15% or more of the Common
Stock. At the time the Board of Directors adopted the Rights Plan, a stockholder
of the Company, Kopp Investment Advisors and its affiliates ("Kopp"), held more
than 15% of the Company's Common Stock. In order to avoid triggering the Rights
Plan by virtue of such pre-existing interest, the Company and Kopp entered into
an agreement and the Rights Plan was amended such that the Rights will become
exercisable upon Kopp acquiring or announcing a tender offer or exercise offer
which would result in its ownership of 25% or more of the outstanding shares of
the Company. Ten days after such acquisition or offer, each Right becomes
exercisable at the Right's then current exercise price, for shares of Common
Stock of the Company (or, in certain circumstances as determined by the Board of
Directors, a combination of cash, property, Common Stock or other securities)
having a value of twice the Right's exercise price. Alternatively, if the
Company is involved in a merger or other business combination transaction with
another person ten or more days after such acquisition or offer, each Right
becomes exercisable, at the Right's then current exercise price, for shares of
common stock of such other person having a value of twice the Right's exercise
price. The Rights are redeemable up to ten days following the announcement of
such acquisition or offer, subject to extension by the Board of Directors, at a
price of $0.01 per Right. The Rights Plan expires in October 2006 unless the
Rights are earlier redeemed by the Company.
The Rights Plan is intended to protect the stockholders in the event of
an unsolicited offer to acquire, or the acquisition of, 15% or more of the
Common Stock of the Company. The Rights are not intended to prevent a takeover
of the Company and will not interfere with any tender offer or business
combination approved by the
-9-
<PAGE>
Board of Directors. The Rights encourage persons seeking control of the Company
to initiate such an acquisition or offer to acquire through arm's-length
negotiations with the Board of Directors.
The Board of Directors has no present intention to amend the
Certificate of Incorporation or Bylaws to include additional provisions other
than those now present in its Certificate of Incorporation and Bylaws which
might deter an unsolicited takeover attempt. However, in the discharge of its
fiduciary obligations to its stockholders, the Board of Directors of the Company
will continue to evaluate the Company's vulnerability to potential unsolicited
bids to acquire the Company on unfavorable terms and to consider strategies to
enhance the Board's ability to negotiate with an unsolicited bidder.
PROPOSAL THREE
ADOPTION OF 1998 EMPLOYEE STOCK PURCHASE PLAN
At the Annual Meeting, the stockholders are being asked to approve (i)
the adoption of the Company's 1998 Employee Stock Purchase Plan (the "Purchase
Plan") (ii) the initial reservation of 250,000 shares for sale thereunder and
(iii) an annual increase in the number of shares reserved for sale thereunder by
the lesser of 300,000 or 2% the Company's total outstanding capital stock on the
last day of the prior fiscal year. The adoption of the Purchase Plan was
approved by the Board of Directors in April 1998.
The purpose of the Purchase Plan is to provide employees of the Company
with an opportunity to purchase Common Stock of the Company through accumulated
payroll deductions. The Company believes that stock ownership is one of the
prime methods of attracting and retaining key personnel responsible for the
continued development and growth of the Company's business. In addition, an
employee stock purchase plan is considered a competitive necessity in the high
technology industry.
In connection with its initial public offering in 1994, the Company
implemented the 1994 Employee Stock Purchase Plan (the "1994 Plan"). The 1994
Plan provided for 24 month offering periods divided into six month purchase
periods. Due to the volatility of the market price for the Company's Common
Stock in 1997, the number of shares of Common Stock to be purchased by
participants in the 1994 Plan exceeded the total number of shares of Common
Stock reserved for sale under the 1994 Plan. Pursuant to the terms of the 1994
Plan, the Board of Directors terminated the open offering periods in December
1997 and suspended the start of any future offering periods of the 1994 Plan.
The reserved shares in the 1994 Plan were allocated on a pro-rata basis to the
1994 Plan participants when the offering periods were terminated in December
1997. Due to the Company's experience with the 1994 Plan, the Purchase Plan
differs from the 1994 Plan in that the offering periods will be of 12 months
duration and the number of shares reserved for issuance thereunder will be
refreshed annually (without further action by the stockholders) by the lesser of
300,000 shares or 2% of the Company's outstanding capital stock on the last day
of the prior fiscal year. The Company believes that these differences will make
a pro rata distribution under the Purchase Plan less likely.
Recent Accounting Pronouncement
A recent interpretation of generally accepted accounting principles
requires the Company to record a charge to earnings if certain conditions apply
to an employee stock purchase plan. This interpretation was announced in
September 1997 in the consensus issued by the Emerging Issues Task Force
entitled Accounting for Increased Share Authorizations in an IRS Section 423
Employee Stock Purchase Plan under APB Opinion No. 25, Accounting for Stock
Issued to Employees (Issue No. 97-12) ("EITF 97-12"). Generally, if (i) at the
beginning of an offering period, the shares reserved for issuance under an
employee stock purchase plan are insufficient to cover all shares issuable
throughout the offering period, (ii) stockholders subsequently approve
additional shares
-10-
<PAGE>
allocable to an offering period which commenced prior to the stockholder
approval date, and (iii) the fair market value of the stock subject to the plan
on the subsequent stockholder approval date is higher than the fair market value
on the date when the offering period commenced, then the Company will be
required to record a charge to earnings to reflect the theoretical compensatory
element of the difference in fair market value.
Under prior practice, the Company typically would seek stockholder
approval for additional shares when the shares remaining under the 1994 Plan
appeared insufficient for the ensuing 12-month time frame. However, the 1994
Plan provided for 24 month offering periods consisting of four six month
purchase periods and a new offering period began every six months (see
discussion below regarding Purchase Plan Offering Periods and Purchase Periods).
Applied to this structure, the treatment specified by EITF 97-12 would have
required that, in order to avoid a potential earnings charge, the number of
shares reserved for issuance under the 1994 Plan must never be permitted to
decline below a level required to maintain at least 24 months of projected
purchases.
Two variables that may affect the amount of an earnings charge required
under EITF 97-12 are substantial hiring rates, which affect new enrollments to
the plan, and volatility over time in the market value of the Company's Common
Stock. In order to minimize the possibility or extent of non-cash earnings
charges required by EITF 97- 12 in the future and, in particular, to avoid a
charge relating to the offering period scheduled to commence in January 1998,
the Board of Directors terminated the 1994 Plan. However, the Board of Directors
believes that employee stock purchase plans provide valuable incentives to
employees and therefore has adopted the Purchase Plan. The Purchase Plan is
designed to decrease the future dilutive impact of employee stock purchases
through Company sponsored plans. The 1998 Purchase Plan provides for shorter 12
month offering periods and also contains the automatic refresh provision
described below in order to minimize the likelihood of future earnings charges
relating to EITF 97-12. The number of shares reserved for issuance under the
Purchase Plan would be increased automatically each year on the date of the
Annual Meeting of Stockholders commencing in 1999 by an amount equal to the
lesser of (i) 300,000 shares or (ii) 2% of the outstanding shares of the Company
on the last day of the prior fiscal year. If the adoption to the Purchase Plan
is approved, the maximum number of shares which could be issued under the
Purchase Plan over its term would be 2,950,000 shares.
Vote Required
The affirmative vote of a majority of the Votes Cast will be required
by law to approve the adoption of the Purchase Plan. For this purpose, the
"Votes Cast" are defined to be the shares of the Company's Common Stock
represented and voting at the Annual Meeting. In addition, the affirmative votes
must constitute at least a majority of the required quorum, which quorum is a
majority of the shares outstanding at the Record Date. Votes that are cast
against the proposal will be counted for purposes of determining both (i) the
presence or absence of a quorum and (ii) the total number of Votes Cast with
respect to the proposal. Abstentions will 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 the proposal. Accordingly,
abstentions will have the same effect as a vote against the proposal. Broker
non-votes will be counted for purposes of determining the presence or absence of
a quorum for the transaction of business, but will not be counted for purposes
of determining the number of Votes Cast with respect to this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
ADOPTION OF THE PURCHASE PLAN.
The essential terms of the Purchase Plan, as amended, are summarized as
follows:
Summary of the Purchase Plan
-11-
<PAGE>
General. The purpose of the Purchase Plan is to provide employees with
an opportunity to purchase Common Stock of the Company through payroll
deductions.
Administration. The Purchase Plan may be administered by the Board of
Directors (the "Board") or a committee appointed by the Board. All questions of
interpretation or application of the Purchase Plan are determined by the Board
or its appointed committee, and its decisions are final, conclusive and binding
upon all participants.
Eligibility. Each employee of the Company (including officers), whose
customary employment with the Company is at least twenty (20) hours per week and
more than five (5) months in any calendar year, is eligible to participate in an
Offering Period (as defined below); provided, however, that no employee shall be
granted an option under the Purchase Plan (i) to the extent that, immediately
after the grant, such employee would own 5% of either the voting power or value
of the stock of the Company, or (ii) to the extent that his or her rights to
purchase stock under all employee stock purchase plans of the Company accrues at
a rate which exceeds twenty-five thousand dollars ($25,000) worth of stock
(determined at the fair market value of the shares at the time such option is
granted) for each calendar year. Eligible employees become participants in the
Purchase Plan by filing with the Company a subscription agreement authorizing
payroll deductions prior to the beginning of each Offering Period unless a later
time for filing the subscription agreement has been set by the Board.
Participation in an Offering. The Purchase Plan is implemented by
consecutive overlapping offering periods lasting for twelve months (an "Offering
Period"), with a new Offering Period commencing on May 1 and November 1 of each
year; provided, however that the first Offering Period under the Plan shall
commence on July 1, 1998 and end on April 30, 1999. Common Stock may be
purchased under the Purchase Plan every six (6) months (a "Purchase Period"),
unless the participant withdraws or terminates employment earlier. To the extent
the fair market value of the Common Stock on any exercise date in an Offering
Period is lower than the fair market value of the Common Stock on the first day
of the Offering Period, then all participants in such Offering Period will be
automatically withdrawn from such Offering Period immediately after the exercise
of their options on such exercise date and automatically re-enrolled in the
immediately following Offering Period as of the first day thereof. The Board may
change the duration of the Purchase Periods or the length or date of
commencement of an Offering Period. To participate in the Purchase Plan, each
eligible employee must authorize payroll deductions pursuant to the Purchase
Plan. Such payroll deductions may not exceed 15% of a participant's
compensation. Compensation is defined as base straight time gross earnings,
sales commissions, bonuses, incentive compensation and payments for overtime and
shift premium. Once an employee becomes a participant in the Purchase Plan, the
employee will automatically participate in each successive Offering Period until
such time as the employee withdraws from the Purchase Plan or the employee's
employment with the Company terminates. At the beginning of each Offering
Period, each participant is automatically granted options to purchase shares of
the Company's Common Stock. The option expires at the end of the Purchase Period
or upon termination of employment, whichever is earlier, but is exercised at the
end of each Purchase Period to the extent of the payroll deductions accumulated
during such Purchase Period. The number of shares subject to the option may not
exceed 5,000 shares of the Company's Common Stock on the first day of the
Purchase Period.
Purchase Price, Shares Purchased. Shares of Common Stock may be
purchased under the Purchase Plan at a price not less than 85% of the lesser of
the fair market value of the Common Stock on (i) the first day of the Offering
Period or (ii) the last day of Purchase Period; provided, however, that under
certain circumstances, the Purchase Price may be adjusted to a price not less
than 85% of the lesser of the fair market value on the Common Stock on (i) the
date the Company's shareholders approve an increase in shares reserved for
issuance under the Purchase Plan or (ii) the last day of the Purchase Period.
The "fair market value" of the Common Stock on any relevant date will be the
closing price per share as reported on The Nasdaq National Market (or the mean
of the closing bid and asked prices, if no sales were reported) as quoted on
such exchange or reported in The Wall Street Journal. The number of shares of
Common Stock a participant purchases in each Purchase Period is determined
-12-
<PAGE>
by dividing the total amount of payroll deductions withheld from the
participant's compensation during that Purchase Period by the purchase price.
Termination of Employment. Termination of a participant's employment
for any reason, including disability or death, or the failure of the participant
to remain in the continuous scheduled employ of the Company for at least 20
hours per week, cancels his or her option and participation in the Purchase Plan
immediately. In such event, the payroll deductions credited to the participant's
account will be returned to him or her or, in the case of death, to the person
or persons entitled thereto as provided in the Purchase Plan.
Adjustment Upon Change in Capitalization. In the event that the stock
of the Company is changed by reason of any stock split, reverse stock split,
stock dividend, combination, reclassification or other change in the capital
structure of the Company effected without the receipt of consideration,
appropriate proportional adjustments shall be made in the number and class of
shares of stock subject to the Purchase Plan, the number and class of shares of
stock subject to options outstanding under the Purchase Plan, and the exercise
price of any such outstanding options. Any such adjustment shall be made by the
Board, whose determination shall be conclusive.
Dissolution or Liquidation. In the event of a proposed dissolution or
liquidation, the offering period then in progress will be shortened and a new
exercise date will be set.
Merger or Asset Sale. In the event of a merger of the Company with or
into another corporation or a sale of substantially all of the Company's assets,
each outstanding option may be assumed or substituted for by the successor
corporation. If the successor corporation refuses to assume or substitute for
the outstanding options, the offering period then in progress will be shortened
and a new exercise date will be set.
Amendment and Termination of the Plan. The Board of Directors may at
any time terminate or amend the Purchase Plan. An Offering Period may be
terminated by the Board of Directors at the end of any Purchase Period if the
Board determines that termination of the Purchase Plan is in the best interests
of the Company and its shareholders. No amendment shall be effective unless it
is approved by the holders of a majority of the votes cast at a duly held
shareholders' meeting, if such amendment would require shareholder approval in
order to comply with Section 423 of the Code. The Purchase Plan will terminate
in April, 2008.
Withdrawal. Generally, a participant may withdraw from an Offering
Period at any time without affecting his or her eligibility to participate in
future Offering Periods. However, once a participant withdraws from a particular
offering, that participant may not participate again in the same offering.
Federal Tax Information for Purchase Plan. The Purchase Plan, and the
right of participants to make purchases thereunder, is intended to qualify under
the provisions of Sections 421 and 423 of the Code. Under these provisions, no
income will be taxable to a participant until the shares purchased under the
Purchase Plan are sold or otherwise disposed of. Upon sale or other disposition
of the shares, the participant will generally be subject to tax and the amount
of the tax will depend upon the holding period. If the shares are sold or
otherwise disposed of more than two (2) years from the first day of the Offering
Period or more than one (1) year from the date of transfer of the stock to the
participant, then the participant will recognize ordinary income measured as the
lesser of (i) the excess of the fair market value of the shares at the time of
such sale or disposition over the purchase price, or (ii) an amount equal to 15%
of the fair market value of the shares as of the first day of the Offering
Period. Any additional gain will be treated as long-term capital gain. If the
shares are sold or otherwise disposed of before the expiration of this holding
period, the participant will recognize ordinary income generally measured as the
excess of the fair market value of the shares on the date the shares are
purchased over the purchase price. Any additional gain or loss on such sale or
disposition will be long-term or short-term capital gain or loss, depending on
the holding period. The Company is not entitled to a deduction for amounts taxed
as ordinary income or capital gain
-13-
<PAGE>
to a participant except to the extent of ordinary income is recognized by
participants upon a sale or disposition of shares prior to the expiration of the
holding period(s) described above.
The foregoing is only a summary of the effect of federal income
taxation upon the participant and the Company with respect to the shares
purchased under the Purchase Plan. Reference should be made to the applicable
provisions of the Code. In addition, the summary does not discuss the tax
consequences of a participant's death or the income tax laws of any state or
foreign country in which the participant may reside.
Participation in the 1994 Plan and the Purchase Plan
Participation in the Purchase Plan is voluntary and is dependent on
each eligible employee's election to participate and his or her determination as
to the level of payroll deductions. Accordingly, future purchases under the
Purchase Plan are not determinable. Non-employee directors are not eligible to
participate in the Purchase Plan.
<TABLE>
The following table sets forth certain information regarding shares
purchased during the fiscal year ended March 31, 1998 by each of the executive
officers named in the Summary Compensation Table below who participated in the
1994 Plan, all current executive officers as a group, all non-employee directors
as a group and all other employees who participated in the 1994 Plan as a group:
<CAPTION>
Number of Shares
Name of Individual or Identity of Group and Position Purchased (#) Dollar Value ($)(1)
- --------------------------------------------------------------------------- ---------------- -------------------
<S> <C> <C>
Garrett A. Garrettson, President, Chief Executive Officer and Director..... 3,004 $ 65,845
Stephen B. Greenspan, Executive Vice President and Chief
Operating Officer.................................................... -- --
Bruce R. Wright, Executive Vice President Finance and
Administration, Chief Financial Officer and Secretary................ 341 985
Joseph M. Veni, Senior Vice President, Sales and Marketing................. 3,004 65,845
William Zucker, Vice President, Marketing.................................. 1,990 35,514
All Current Executive Officers as a group (7 persons)...................... 14,339 299,640
Non-Executive Officer Directors as a group*................................ -- --
All Other Employees as a group............................................. 193,038 3,402,577
<FN>
- ---------------------------
* Not eligible to participate in the 1994 Plan or the Purchase Plan.
(1) Market value of shares on date of purchase minus the purchase price under the 1994 Plan.
</FN>
</TABLE>
-14-
<PAGE>
PROPOSAL FOUR
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP, independent
auditors, to audit the consolidated financial statements of the Company for the
fiscal year ending March 31, 1999, and recommends that stockholders vote for
ratification of such appointment. Although action by stockholders is not
required by law, the Board of Directors has determined that it is desirable to
request approval of this selection by the stockholders. Notwithstanding the
selection, the Board of Directors, in its discretion, may direct the appointment
of new independent auditors at any time during the year, if the Board of
Directors feels that such a change would be in the best interest of the Company
and its stockholders. In the event of a negative vote on ratification, the Board
of Directors will reconsider its selection.
KPMG Peat Marwick LLP has audited the Company's financial statements
annually since 1993. Representatives of KPMG Peat Marwick LLP are expected to be
present at the meeting with the opportunity to make a statement if they desire
to do so and are expected to be available to respond to appropriate questions.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT AUDITORS OF THE
COMPANY FOR THE FISCAL YEAR ENDING MARCH 31, 1999.
-15-
<PAGE>
EXECUTIVE COMPENSATION AND OTHER MATTERS
Executive Compensation
SUMMARY COMPENSATION TABLE
<TABLE>
The following Summary Compensation Table sets forth certain information
regarding the compensation of the Chief Executive Officer of the Company and the
other four most highly compensated executive officers of the Company for
services rendered in all capacities to the Company for the fiscal year ended
March 31, 1998.
<CAPTION>
Long-Term
Compensation
Awards
----------------
Number of
Annual Compensation(1) Securities
-------------------------------- Underlying
Name and Principal Position Fiscal Year Salary Bonus(2) Options
- ------------------------------------------------------ ---------------- ---------------- ------------- -----------------
<S> <C> <C> <C> <C>
Garrett A. Garrettson................................ 1998 $275,000 $54,000 25,000
President, Chief Executive Officer and Director(3) 1997 250,159 46,470 250,000
1996 -- -- --
Stephen B. Greenspan................................. 1998 195,192 31,735 10,000
Executive Vice President and Chief Operating Officer(4) 1997 153,831 81,433 100,000
1996 -- -- --
Bruce R. Wright...................................... 1998 175,384 8,000 10,000
Executive Vice President, Finance and Administration, 1997 -- -- --
Chief Financial Officer and Secretary(5) 1996 -- -- --
Joseph M. Veni....................................... 1998 145,192 33,824 10,000
Senior Vice President, Sales and Marketing(6) 1997 120,803 31,799 75,000
1996 65,356 38,516 --
William Zucker(7).................................... 1998 138,462 34,250 10,000
Vice President, Marketing 1997 135,503 25,721 --
1996 46,154 18,750 --
<FN>
- ---------------------------
(1) Other than salary and bonus described herein, the Company did not pay the
persons named in the Summary Compensation Table any compensation,
including incidental personal benefits, in excess of 10% of such Named
Executive Officer's salary.
(2) Represents bonuses relating to performance of services for the Company in
fiscal 1998, some of which was paid in fiscal 1999.
(3) Mr. Garrettson became President, Chief Executive Officer and director of
the Company in April 1996.
(4) Mr. Greenspan became Executive Vice President, Operations in April 1996
and was appointed Chief Operating Officer in April 1997.
(5) Mr. Wright joined the Company as Executive Vice President, Finance and
Administration, Chief Financial Officer and Secretary in May 1997.
(6) Mr. Veni joined the Company in April 1, 1992 as Vice President of Sales.
He was named Senior Vice President, Sales and Marketing in April 1996.
(7) Mr. Zucker joined the Company in October 1995 as Vice President of
Engineering. He was named Vice President of Product Line Management in
August 1996 and he became Vice President of Marketing in April 1997.
</FN>
</TABLE>
-16-
<PAGE>
Option Grants in Last Fiscal Year
<TABLE>
The following table provides information concerning each grant of
options to purchase the Company's Common Stock made during the fiscal year ended
March 31, 1998 to the Named Executive Officers.
<CAPTION>
Potential Realizable Value
Number of % of Total Minus-Exercise Price at
Securities Options Stock-Price-Appreciation-for
Underlying Granted to Exercise Option-Term(1)
Option Employees in Price-Per Expiration ----------------------------
Name Granted(2) Fiscal Year Share (3)(4) Date 5% 10%
- -------------------------- ---------- ------------ ------------ ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Garrett A. Garrettson 25,000 3.0% 22.25 11/18/07 $ 349,823 $ 886,579
Stephen B. Greenspan 10,000 1.2% 17.25 01/13/08 108,484 274,921
Bruce R. Wright 10,000 1.2% 17.25 01/13/08 108,484 274,921
Joseph M. Veni 10,000 1.2% 17.25 01/13/08 108,484 274,921
William Zucker 10,000 1.2% 17.25 01/13/08 108,484 274,921
<FN>
- ---------------------------
(1) Potential realizable value is based on the assumption that the Common
Stock of the Company appreciates at the annual rate shown (compounded
annually) from the date of grant until the expiration of the 10 years
option term. These numbers are calculated based on the requirements
promulgated by the Commission and do not reflect the Company's estimate of
future stock price growth.
(2) Except as noted, all options shown granted in fiscal 1998 are exercisable
starting one year after the date of grant, with 1/48th% of the shares
becoming exercisable each at the end of every month thereafter, with full
vesting occurring on the fourth anniversary of the date of grant. Under
the 1992 Stock Plan, the Board of Directors retains the discretion to
modify the terms, including the price, of outstanding options.
(3) Options were granted at an exercise price equal to the fair market value
of the Company's Common Stock, as determined by reference to the closing
price reported on the Nasdaq National Market on the date of grant, or as
determined by the Board of Directors prior to the Company's securities
being traded on the Nasdaq National Market.
(4) Exercise price and tax withholding obligations may be paid in cash,
promissory note, by delivery of already-owned shares subject to certain
conditions, or pursuant to a cashless exercise procedure under which the
optionee provides irrevocable instructions to a brokerage firm to sell the
purchased shares and to remit to the Company, out of the sale proceeds, an
amount equal to the exercise price plus all applicable withholding taxes.
</FN>
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
The following table sets forth certain information regarding the
exercise of stock options during fiscal 1998 and the value of options held as of
March 31, 1998 by the Named Executive Officers.
<CAPTION>
Number of Securities Value of Unexercised
Underlying-Unexercised In the Money Options at
Shares Options at March 31, 1998(#) March 31,-1998($)(2)
Acquired on Value -------------------------------- --------------------------------
Name Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------- ----------- ---------- --------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Garrett A. Garrettson........... 45,000 $980,782 70,504 159,496 $149,821 $285,804
Stephen B. Greenspan............ -- -- 40,251 63,741 16,824 25,676
Bruce R. Wright................. -- -- 25,000 85,000 71,875 215,625
Joseph M. Veni.................. 21,898 $566,737 15,484 60,187 61,666 197,786
William Zucker.................. 15,000 $458,125 232,721 523,167 649,163 984,012
<FN>
- ---------------------------
(1) Market value of the Company's Common Stock at the exercise date minus the
exercise price.
(2) Market value of the Company's Common Stock at fiscal year-end minus the
exercise price.
</FN>
</TABLE>
Employment Contracts and Change-in-control Arrangements
The Company has entered into employment agreements with Garrett A.
Garrettson, Stephen B. Greenspan and Bruce R. Wright (collectively, the
"Employees"). The Employees are eligible to participate in the Company's
employee benefit plans and executive compensation programs.
-17-
<PAGE>
In April 1996, the Company appointed Garrett A. Garrettson as the
Company's President, Chief Executive Officer and director of the Company. Mr.
Garrettson entered into an employment agreement with the Company pursuant to
which he receives an annual base salary of $275,000 and received a one-time
signing bonus of $25,000 in fiscal 1997. The agreement provides for additional
variable compensation in the target amount of $100,000 per year starting in
fiscal year 1997. The Company also granted Mr. Garrettson options to purchase
250,000 shares of Common Stock shortly after he commenced employment with the
Company. These shares are subject to vesting over four years and were priced at
the fair market value of the Company's Common Stock at the time of grant in
April 1996. On August 27, 1996, the Board of Directors of the Company authorized
the reduction of the exercise price of options to purchase 250,000 shares of the
Company's Common Stock granted to Mr. Garrettson in April 1996 in connection
with his employment agreement. Mr. Garrettson's hiring package included an
agreement by the Company to protect the value of Mr. Garrettson's options from a
significant decrease in the price of the Company's common stock in the period
following his hiring by the Company. Mr. Garrettson's April 1996 options had
exercise prices of $21.375 per share, and such exercise price was substantially
higher than the $13.75 per share market price of the Company's Common Stock at
the time of the reissuance. Mr. Garrettson's April 1996 options were exchanged
as of August 27, 1996 for nonstatutory options with exercise prices of $14.50
per share. The vesting periods and expiration dates of Mr. Garrettson's options
were unchanged as a result of the reissuance. The agreement also provides that
in the event that Mr. Garrettson's employment is terminated by the Company, for
any reason other than misconduct, the Company will continue Mr. Garrettson's
base salary for nine months.
In April 1996, in connection with his acceptance of employment with the
Company, Stephen B. Greenspan, Chief Operating Officer, entered into an
employment agreement with the Company pursuant to which he is to receive an
annual base salary of $175,000. The agreement provides for additional variable
compensation in the target amount of $100,000 per year starting in fiscal year
1997. The Company also granted Mr. Greenspan options to purchase 80,000 shares
of Common Stock shortly after he commenced employment with the Company. These
shares are subject to vesting over four years and are priced at the fair market
value of the Common Stock at the time of grant. The agreement also provides that
in the event that Mr. Greenspan's employment is terminated by the Company, for
any reason other than misconduct, the Company will continue Mr. Greenspan's base
salary for six months. Mr. Greenspan was granted an additional option to
purchase 10,000 shares of the Company's Common Stock in August 1996 at an
exercise price of $14.50 per share and subject to four years vesting.
In May 1997 the Company appointed Bruce R. Wright as the Company's
Executive Vice President, Finance and Administration, Chief Financial Officer
and Secretary. Mr. Wright entered into an Employment Offer Letter with the
Company pursuant to which he receives an annual base salary of $200,000. Mr.
Wright is also eligible for up to $100,000 of variable compensation per year in
connection with the Company's Executive Variable Compensation Plan. Mr. Wright
received an option to acquire 100,000 shares of the Company's Common Stock
shortly after he commenced employment with the Company. These shares are subject
to vesting over four years and are priced at the fair market value of the
Company's Common Stock at the date of grant.
Upon the termination of either of Mr. Garrettson or Mr. Greenspan's
employment with the Company for any reason whatsoever, including a Constructive
Termination (defined below), and other than a voluntary termination or
termination for Cause (defined below) or disability or death, such individual is
entitled to a severance payment at the then applicable base salary rate, and
payment of COBRA benefits for nine months in the case of Mr. Garrettson and six
months in the case of Mr. Greenspan. In addition, the Messrs. Garrettson and
Greenspan will have three months from the date of such termination of employment
described above, or if terminated due to a disability or death, in which to
exercise their stock options. Upon the termination of either of Mr. Garrettson
or Mr. Greenspan's employment with the Company due to a disability, such
individual is entitled to a severance payment equal to the amount by which such
Employee's then applicable base salary rate exceeds all disability payments
under the Company's insurance plans and any state or federal disability plans.
Such severance payment shall be made for nine months for Mr. Garrettson and six
months for Mr. Greenspan. Neither Mr. Garrettson or Mr. Greenspan shall be
entitled to severance payments if his employment is voluntarily
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terminated or terminated for cause or by death. Constructive Termination means a
material reduction in salary or benefits not agreed to by Mr. Garrettson or Mr.
Greenspan, as the case may be, or a material change in such individual's
responsibilities, or a requirement to relocate more than 25 miles. Termination
for "Cause" means termination of employment as a result of (i) an act or acts of
dishonesty undertaken by Mr. Garrettson or Mr. Greenspan, as the case may be,
and intended to result in substantial gain or personal enrichment at the expense
of the Company, (ii) willful, deliberate and persistent failure by Mr.
Garrettson or Mr. Greenspan, as the case may be, to perform his duties, or (iii)
such individual's conviction of a felony.
In the event there is a change in control of the Company in which
substantially all the Company's assets are acquired, each of Mr. Garrettson's,
Mr. Greenspan's and Mr. Wright's options will vest in full. For purposes of the
options held by Messrs. Garrettson, Greenspan and Wright, a change of control is
defined to mean the occurrence of any of the following events: (i) any "person"
or "group" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 50% or more of the
total voting power represented by the Company's then outstanding voting
securities; (ii) a change in the composition of the Board of Directors of the
Company occurring within a two-year period, as a result of which fewer than a
majority of the directors are Incumbent Directors, where "Incumbent Directors"
means directors who either (A) are directors of the Company as of the date of
grant of the option or (B) are elected, or nominated for election, to the Board
of Directors of the Company with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but shall
not include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company); or (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
the Company's assets (other than to a subsidiary or subsidiaries).
Compensation of Directors
Non-employee directors currently receive a quarterly retainer of
$3,000, a fee of $2,000 for attendance at each general Board of Directors
meeting, and $1,000 for attendance at each committee meeting for services
provided in that capacity and are reimbursed for out-of-pocket expenses incurred
in connection with attendance at meetings of the Board of Directors and
committees of the Board. The Company's Director Plan provides that options may
be granted to non-employee directors of the Company who do not represent
stockholders holding more than 1% of the Company's outstanding Common Stock
pursuant to an automatic nondiscretionary grant mechanism. Each Outside Director
is automatically granted an Option to purchase 5,000 shares (the "First Option")
on the date on which such person first becomes an Outside Director. After the
First Option has been granted to an Outside Director, such Outside Director is
thereafter automatically granted an Option to purchase 5,000 shares at the next
meeting of the Board of Directors following the Annual Meeting of Stockholders
in each year, if, on such date, he shall have served on the Board for at least
six (6) months. The "First Option" granted shall be exercisable only while the
Outside Director remains a director with the Company, and vests in installments
cumulatively as to 25% of the Shares subject to the Option on each anniversary
of its date of grant. Subsequent option grants are exercisable only while the
Outside Director remains a director of the Company, and vest as to 2.08% of the
Shares subject to the Option on each monthly anniversary of its date of grant.
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Report of the Board of Directors on Executive Compensation
During the fiscal year ended March 31, 1998 the Company's executive
compensation program was approved by the Board of Directors as a whole rather
than the Compensation Committee of the Board of Directors. The following is the
report of the Board of Directors with respect to the compensation paid to the
Company's executive officers during fiscal 1998. Actual compensation earned
during the fiscal year by the Named Executive Officers is shown in the Summary
Compensation Table above.
Compensation Philosophy
The Company's philosophy in setting its compensation policies for
executive officers is to maximize stockholder value over time. The primary goal
of the Company's executive compensation program is therefore to closely align
the interests of the executive officers with those of the Company's
stockholders. To achieve this goal the Company attempts to (i) offer
compensation opportunities that attract and retain executives whose abilities
are critical to the long-term success of the Company, motivate individuals to
perform at their highest level and reward outstanding achievement, (ii) maintain
a significant portion of the executive's total compensation at risk, tied to
achievement of financial, organizational and management performance goals, and
(iii) encourage executives to manage from the perspective of owners with an
equity stake in the Company.
The compensation program for the Company's executive officers consists
of the following components:
o Base Salary
o Quarterly and Annual Cash Incentives
o Long-Term Stock Option Incentives
Base Salary
The Board of Directors reviewed and approved fiscal 1998 base salaries
for the Chief Executive Officer and other Named Executive Officers at the
beginning of the fiscal year. Base salaries were established by the Board based
upon competitive compensation data, an executive's job responsibilities, level
of experience, individual performance and contribution to the business. In
addition, the level of base salaries of each of Mr. Garrettson, the Chief
Executive Officer, Mr. Greenspan and Mr. Wright were governed by employment
agreements entered into with such executives in connection with their original
employment with the Company, and such employment agreements were reviewed and
approved by the Board of Directors. The terms of these employment agreements are
described in the section entitled, "Employment Contracts and Change-In-Control
Arrangements." Officer salaries have been targeted at or above the average rates
paid by competitors to enable the Company to attract, motivate, reward and
retain highly skilled executives. In order to evaluate the Company's competitive
posture in the industry, the Board reviewed and analyzed the compensation
packages, including base salary levels, offered by other high technology
companies. The competitive information was obtained from surveys prepared by
national consulting companies or industry associations (e.g., Radford
Associates, Coopers & Lybrand and the American Electronics Association). The
surveys include, but are not limited to, data from all industries represented in
the Standard & Poor's Communication Equipment Manufacturer Index, the "line of
business index" used in the stock performance graph set forth below. See
"Performance Graph." In making base salary decisions, the Board exercised its
discretion and judgment based upon these factors. No specific formula was
applied to determine the weight of each factor. The Company hired Mr. Garrettson
in March 1996 and negotiated the terms of his employment with him at that time.
Mr. Garrettson commenced his employment with the Company in April 1996. The
fiscal 1998 base salary set forth in Mr. Garrettson's employment agreement,
$275,000 per year, stemmed from that negotiation
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and reflects the Board of Directors' policy of fixing compensation at or above
the average rates paid by its competitors.
Quarterly and Annual Cash Incentives
Quarterly and annual incentive bonuses for executive officers are
intended to reflect the Board's belief that a significant portion of the
compensation of each executive officer should be contingent upon the performance
of the Company, as well as the individual contribution of each executive
officer. To carry out this philosophy, the Company has implemented a Variable
Compensation Bonus Plan, which compensates officers in the form of quarterly and
annual cash bonuses. At the beginning of fiscal 1998, the Board of Directors
established target bonuses for each executive officer as a percentage of the
officer's base salary. The target level of bonuses which the executive officers
were eligible to receive varied from 25% to 60% of base salaries. The Variable
Compensation Bonus Plan is intended to motivate and reward executive officers by
directly linking the amount of any cash bonus to specific Company-based
performance targets and specific individual-based performance targets. The Named
Executive Officers, including Mr. Garrettson, Mr. Greenspan and Mr. Wright, must
successfully achieve these performance targets which are submitted by management
to the Board for its evaluation and approval at the beginning of each fiscal
quarter. The Company-based performance goals are tied to different indicators of
Company performance, such as achievement of specific levels of orders, sales and
pre-tax profits. These Company-based performance goals vary from quarter to
quarter, may be subjective in nature and are competitively sensitive to the
Company's business and operations. The individual's performance goals are tied
to different indicators of the individual Named Executive Officer's performance,
such as having received an order from a specific customer, achieved an R&D
project milestone, or achieved a desired on-time customer delivery. The Board
evaluates the completion of the Company and individual goals and approves a
performance rating relative to the goals so completed. This scoring is
subjective and is influenced by the Board's perception of the importance of the
various corporate and individual goals. At the end of the fiscal year, when
determining the bonus payment for the fourth fiscal quarter, the Board considers
the overall performance of the Company and each individual during the entire
fiscal year, including the fourth quarter. Actual bonuses awarded during fiscal
1998 ranged from 4.6% to 24.7% of the Named Executive Officers' base salaries.
Pursuant to his employment agreement with the Company, Mr. Garrettson was
eligible to receive variable compensation in fiscal 1998 targeted at $100,000,
to be paid quarterly based upon the attainment of Company and mutually
agreed-upon individual goals. More specifically, the Board of Directors
evaluated Mr. Garrettson's performance by assigning certain weights to targets
for quarterly results including revenue, earnings per share and return on net
assets. In the first fiscal quarter, based on the Company's achievement of the
performance targets set forth above, the Board of Directors granted Mr.
Garrettson variable compensation of $54,000, or approximately 19.6% of his base
salary. The Board of Directors did not award Mr. Garrettson any variable
compensation in the subsequent three quarters of fiscal 1998, as the Company did
not meet its performance targets.
Long-Term Stock Option Incentives
The Board provides the Company's Named Executive Officers with
long-term incentive compensation through grants of options to purchase the
Company's Common Stock. The Board believes that stock options provide the
Company's Named Executive Officers with the opportunity to purchase and maintain
an equity interest in the Company and to share in the appreciation of the value
of the Company's Common Stock. The Board believes that stock options directly
motivate an executive to maximize long-term stockholder value. The options also
utilize vesting periods that encourage key executives to continue in the employ
of the Company. With the exception of the regrant of options to Mr. Garrettson
noted below (which was at a price above then-current fair market value), all
options granted to executive officers to date have been granted at the fair
market value of the Company's Common Stock on the date of grant. The Board
considers the grant of each option subjectively, reviewing factors such as the
individual performance of the Named Executive Officer and the anticipated
contribution of the Named Executive Officer to the attainment of the Company's
long-term strategic performance goals. Long-term incentives
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<PAGE>
granted in prior years are also taken into account. To fiscal 1998, the Board of
Directors granted Mr. Garrettson options to purchase 25,000 shares of Common
Stock at an exercise price of $22.25 per share, the closing price of the
Company's Common Stock on the date of grant. Such grants reflect the Board of
Directors' policy of fixing compensation, including long-term incentive
compensation, at or above the average rates paid by its competitors. These
options vested at the rate of one-quarter of the shares subject to the options
on the first anniversary of the date of grant and the remaining shares vest
monthly at a rate of 1/48 of the total of each grant per month. The Board of
Directors believes that this vesting structure provides appropriate alignment of
Mr. Garrettson's interests with those of the Company's stockholders while also
providing him with incentives to remain at the Company.
Section 162(m)
The Board has considered the potential future effects of Section 162(m)
of the Internal Revenue Code on the compensation paid to the Company's executive
officers. Section 162(m) disallows a tax deduction for any publicly-held
corporation for individual compensation exceeding $1.0 million in any taxable
year for any of the Named Executive Officers, unless compensation is
performance-based. The Company has adopted a policy that, where reasonably
practicable, the Company will seek to qualify the variable compensation paid to
its executive officers for an exemption from the deductibility limitations of
Section 162(m).
Respectfully submitted by:
Garrett A. Garrettson Martin Cooper
Robert C. Wilson James A. Cole
Eric A. Young Charles D. Kissner
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Performance Graph
Set forth below is a line graph comparing the annual percentage change
in the cumulative return to the stockholders of the Company's Common Stock with
the cumulative return of the Standard & Poor's 500 Index and of the Standard &
Poor's Communication Equipment Manufacturer Index for the period commencing
August 3, 1994 (the date of the Company's initial public offering) and ending on
March 31, 1998. Returns for the indices are weighted based on market
capitalization at the beginning of each fiscal year.
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
8/03/94 3/31/95 3/31/96 3/31/97 3/31/98
Spectrian Corporation 100 236 175 86 [TO COME]
S&P 500 Index 100 111 147 176 [TO COME]
S&P Communications 100 142 205 242 [TO COME]
Equipment Index
- ---------------------------
(1) The graph assumes that $100 was invested on August 3, 1994 in the
Company's Common Stock and in the Standard & Poor's 500 Index and in
the Standard & Poor's Communication Equipment Manufacturer Index and
that all dividends were reinvested. No dividends have been declared or
paid on the Company's Common Stock. Stockholder returns over the
indicated period should not be considered indicative of future
stockholder returns.
The information contained above under the captions "Report of the Board
of Directors on Executive Compensation" and "Performance Graph" 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 it by reference into such filing.
Section 16 Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's executive officers and directors, and
persons who own more than ten percent of a registered class of the Company's
equity securities to file reports of ownership and changes in ownership with the
Securities and Exchange Commission ("Commission") and the National Association
of Securities Dealers, Inc. Executive officers, directors and greater than ten
percent stockholders are required by Commission regulation to furnish the
Company with copies of all Section 16(a) forms they file. Based solely in its
review of the copies of such forms received by it, or written representations
from certain reporting persons, the Company believes that, during fiscal 1998
all executive officers and directors of the Company complied with all applicable
filing requirements.
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<PAGE>
CERTAIN TRANSACTIONS
The Company believes that the transactions set forth above were made on
terms no less favorable to the Company than could have been obtained from
unaffiliated third parties. All future transactions, including loans, between
the Company and its officers, directors, principal stockholders and their
affiliates will be approved by a majority of the Board of Directors, including a
majority of the independent and disinterested outside directors, and will
continue to be on terms no less favorable to the Company than could be obtained
from unaffiliated third parties.
OTHER MATTERS
The Company knows of no other matters to be submitted at the meeting.
If any other matters properly come before the meeting, it is the intention of
the persons named in the enclosed form of Proxy to vote the shares they
represent as the Board of Directors may recommend.
THE BOARD OF DIRECTORS
Dated: May 28, 1998
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SPECTRIAN CORPORATION
1998 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 1998 Employee Stock
Purchase Plan of Spectrian Corporation.
1. Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
(d) "Company" shall mean Spectrian Corporation and any
Designated Subsidiary of the Company.
(e) "Compensation" shall mean all base straight time gross
earnings, commissions, overtime, shift premium, incentive compensation,
incentive payments, and bonuses.
(f) "Designated Subsidiary" shall mean any Subsidiary which
has been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(g) "Employee" shall mean any individual who is an Employee of
the Company for tax purposes whose customary employment with the Company is at
least twenty (20) hours per week and more than five (5) months in any calendar
year. For purposes of the Plan, the employment relationship shall be treated as
continuing intact while the individual is on sick leave or other leave of
absence approved by the Company. Where the period of leave exceeds 90 days and
the individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship shall be deemed to have terminated on the
91st day of such leave.
(h) "Enrollment Date" shall mean the first day of each
Offering Period.
(i) "Exercise Date" shall mean the last Trading Day of each
Purchase Period.
<PAGE>
(j) "Fair Market Value" shall mean, as of any date, the value
of Common Stock determined as follows:
(1) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day on the date of such determination, as reported in
The Wall Street Journal or such other source as the Board deems reliable, or;
(2) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean of the closing bid and asked prices for the
Common Stock on the date of such determination, as reported in The Wall Street
Journal or such other source as the Board deems reliable, or;
(3) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Board.
(k) "Offering Periods" shall mean the periods of approximately
twelve (12) months during which an option granted pursuant to the Plan may be
exercised, commencing on the first Trading Day on or after May 1 and November 1
of each year and terminating on the last Trading Day in the periods ending
twelve months later; provided, however, that the first Offering Period under the
Plan shall commence with the first Trading Day on or after July 1, 1998, and
shall end on the last Trading Day on or before April 30, 1998. The duration and
timing of Offering Periods may be changed pursuant to Section 4 of this Plan.
(l) "Plan" shall mean this 1998 Employee Stock Purchase Plan.
(m) "Purchase Price" shall mean 85% of the Fair Market Value
of a share of Common Stock on the Enrollment Date or on the Exercise Date,
whichever is lower; provided however, that, in the event (i) the Company's
shareholders approve an increase in the number of shares available for issuance
under the Plan, (ii) all or a portion of such additional shares are to be issued
with respect to one or more Offering Periods that are underway at the time of
such shareholder approval ("New Shares"), and (iii) the Fair Market Value of a
share of Common Stock on the date of such approval (the "Authorization Date
FMV") is higher than the Fair Market Value on the Enrollment Date for any such
Offering Period, the Purchase Price with respect to New Shares shall be 85% of
the Authorization Date FMV or the Fair Market Value of a share of Common Stock
on the Exercise Date, whichever is lower.
(n) "Purchase Period" shall mean the approximately six month
period commencing after one Exercise Date and ending with the next Exercise
Date, except that the first Purchase Period of any Offering Period shall
commence on the Enrollment Date and end with the
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<PAGE>
next Exercise Date; provided, however, that the first Purchase Period under the
Plan shall commence with the first Trading Day on or after July 1, 1998, and
shall end on the last Trading Day on or before October 31, 1998.
(o) "Reserves" shall mean the number of shares of Common Stock
covered by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.
(p) "Subsidiary" shall mean a corporation, domestic or
foreign, of which not less than 50% of the voting shares are held by the Company
or a Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.
(q) "Trading Day" shall mean a day on which national stock
exchanges and the Nasdaq System are open for trading.
3. Eligibility.
(a) Any Employee who shall be employed by the Company on a
given Enrollment Date shall be eligible to participate in the Plan.
(b) Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option under the Plan (i) to
the extent that, immediately after the grant, such Employee (or any other person
whose stock would be attributed to such Employee pursuant to Section 424(d) of
the Code) would own capital stock of the Company and/or hold outstanding options
to purchase such stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of the capital stock of the
Company or of any Subsidiary, or (ii) to the extent that his or her rights to
purchase stock under all employee stock purchase plans of the Company and its
subsidiaries accrues at a rate which exceeds twenty-five thousand dollars
($25,000) worth of stock (determined at the fair market value of the shares at
the time such option is granted) for each calendar year in which such option is
outstanding at any time.
4. Offering Periods. The Plan shall be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after May 1 and November 1 of each year, or on such other date
as the Board shall determine, and continuing thereafter until terminated in
accordance with Section 20 hereof; provided, however, that the first Offering
Period under the Plan shall commence with the first Trading Day on or after July
1, 1998 and shall end on the last Trading Day on or before April 30, 1998. The
Board shall have the power to change the duration of Offering Periods (including
the commencement dates thereof) with respect to future offerings without
shareholder approval if such change is announced at least five (5) days prior to
the scheduled beginning of the first Offering Period to be affected thereafter.
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<PAGE>
5. Participation.
(a) An eligible Employee may become a participant in the Plan
by completing a subscription agreement authorizing payroll deductions in the
form of Exhibit A to this Plan and filing it with the Company's payroll office
prior to the applicable Enrollment Date.
(b) Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the last payroll in
the Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.
6. Payroll Deductions.
(a) At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding fifteen percent (15%) of
the Compensation which he or she receives on each pay day during the Offering
Period.
(b) All payroll deductions made for a participant shall be
credited to his or her account under the Plan and shall be withheld in whole
percentages only. A participant may not make any additional payments into such
account.
(c) A participant may discontinue his or her participation in
the Plan as provided in Section 10 hereof, or may increase or decrease the rate
of his or her payroll deductions during the Offering Period by completing or
filing with the Company a new subscription agreement authorizing a change in
payroll deduction rate. The Board may, in its discretion, limit the number of
participation rate changes during any Offering Period. The change in rate shall
be effective with the first full payroll period following five (5) business days
after the Company's receipt of the new subscription agreement unless the Company
elects to process a given change in participation more quickly. A participant's
subscription agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 10 hereof.
(d) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a
participant's payroll deductions may be decreased to zero percent (0%) at any
time during a Purchase Period. Payroll deductions shall recommence at the rate
provided in such participant's subscription agreement at the beginning of the
first Purchase Period which is scheduled to end in the following calendar year,
unless terminated by the participant as provided in Section 10 hereof.
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<PAGE>
(e) At the time the option is exercised, in whole or in part,
or at the time some or all of the Company's Common Stock issued under the Plan
is disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but shall not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee.
7. Grant of Option. On the Enrollment Date of each Offering Period,
each eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Purchase Period more than 5,000
shares of the Company's Common Stock (subject to any adjustment pursuant to
Section 19), and provided further that such purchase shall be subject to the
limitations set forth in Sections 3(b) and 12 hereof. Exercise of the option
shall occur as provided in Section 8 hereof, unless the participant has
withdrawn pursuant to Section 10 hereof. The option shall expire on the last day
of the Offering Period.
8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in Section 10 hereof, his or her option for the purchase of shares
shall be exercised automatically on the Exercise Date, and the maximum number of
full shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Purchase Period or Offering Period, subject to earlier with drawal by the
participant as provided in Section 10 hereof. Any other monies left over in a
participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to purchase
shares hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, of a certificate representing the shares
purchased upon exercise of his or her option.
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<PAGE>
10. Withdrawal.
(a) A participant may withdraw all but not less than all the
payroll deductions credited to his or her account and not yet used to exercise
his or her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit B to this Plan. All of the participant's payroll
deductions credited to his or her account shall be paid to such participant
promptly after receipt of notice of withdrawal and such participant's option for
the Offering Period shall be automatically terminated, and no further payroll
deductions for the purchase of shares shall be made for such Offering Period. If
a participant withdraws from an Offering Period, payroll deductions shall not
resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.
(b) A participant's withdrawal from an Offering Period shall
not have any effect upon his or her eligibility to participate in any similar
plan which may hereafter be adopted by the Company or in succeeding Offering
Periods which commence after the termination of the Offering Period from which
the participant withdraws.
11. Termination of Employment. Upon a participant's ceasing to be an
Employee, for any reason, he or she shall be deemed to have elected to withdraw
from the Plan and the payroll deductions credited to such participant's account
during the Offering Period but not yet used to exercise the option shall be
returned to such participant or, in the case of his or her death, to the person
or persons entitled thereto under Section 15 hereof, and such participant's
option shall be automatically terminated. The preceding sentence
notwithstanding, a participant who receives payment in lieu of notice of
termination of employment shall be treated as continuing to be an Employee for
the participant's customary number of hours per week of employment during the
period in which the participant is subject to such payment in lieu of notice.
12. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.
13. Stock.
(a) Subject to adjustment upon changes in capitalization of
the Company as provided in Section 19 hereof, the maximum number of shares of
the Company's Common Stock which shall be made available for sale under the Plan
shall be 250,000 shares, plus an annual increase to be added on the first day of
the Company's fiscal year beginning in 1999 equal to the lesser of (i) 300,000
shares, (ii) 2% of the outstanding shares on the last day of the prior fiscal
year such date or (iii) a lesser amount determined by the Board. If, on a given
Exercise Date, the number of shares with respect to which options are to be
exercised exceeds the number of shares then available under the Plan, the
Company
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<PAGE>
shall make a pro rata allocation of the shares remaining available for purchase
in as uniform a manner as shall be practicable and as it shall determine to be
equitable.
(b) The participant shall have no interest or voting right in
shares covered by his option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan
shall be registered in the name of the participant or in the name of the
participant and his or her spouse.
14. Administration. The Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.
15. Designation of Beneficiary.
(a) A participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
participant's account under the Plan in the event of such partici pant's death
subsequent to an Exercise Date on which the option is exercised but prior to
delivery to such participant of such shares and cash. In addition, a participant
may file a written designation of a beneficiary who is to receive any cash from
the participant's account under the Plan in the event of such participant's
death prior to exercise of the option. If a participant is married and the
designated beneficiary is not the spouse, spousal consent shall be required for
such designation to be effective.
(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.
16. Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at assignment,
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<PAGE>
transfer, pledge or other disposition shall be without effect, except that the
Company may treat such act as an election to withdraw funds from an Offering
Period in accordance with Section 10 hereof.
17. Use of Funds. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.
18. Reports. Individual accounts shall be maintained for each
participant in the Plan. Statements of account shall be given to participating
Employees at least annually, which statements shall set forth the amounts of
payroll deductions, the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.
19. Adjustments Upon Changes in Capitalization, Dissolution,
Liquidation, Merger or Asset Sale.
(a) Changes in Capitalization. Subject to any required action
by the shareholders of the Company, the Reserves, the maximum number of shares
each participant may purchase each Purchase Period (pursuant to Section 7), as
well as the price per share and the number of shares of Common Stock covered by
each option under the Plan which has not yet been exercised shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration". Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board. The New
Exercise Date shall be before the date of the Company's proposed dissolution or
liquidation. The Board shall notify each participant in writing, at least ten
(10) business days prior to the New Exercise Date, that the Exercise Date for
the participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.
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<PAGE>
(c) Merger or Asset Sale. In the event of a proposed sale of
all or substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, each outstanding option shall be
assumed or an equivalent option substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the option, any
Purchase Periods then in progress shall be shortened by setting a new Exercise
Date (the "New Exercise Date") and any Offering Periods then in progress shall
end on the New Exercise Date. The New Exercise Date shall be before the date of
the Company's proposed sale or merger. The Board shall notify each participant
in writing, at least ten (10) business days prior to the New Exercise Date, that
the Exercise Date for the participant's option has been changed to the New
Exercise Date and that the participant's option shall be exercised automatically
on the New Exercise Date, unless prior to such date the participant has
withdrawn from the Offering Period as provided in Section 10 hereof.
20. Amendment or Termination.
(a) The Board of Directors of the Company may at any time and
for any reason terminate or amend the Plan. Except as provided in Section 19
hereof, no such termination can affect options previously granted, provided that
an Offering Period may be terminated by the Board of Directors on any Exercise
Date if the Board determines that the termination of the Plan is in the best
interests of the Company and its shareholders. Except as provided in Section 19
hereof, no amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant. To the extent necessary to
comply with Section 423 of the Code (or any successor rule or provision or any
other applicable law, regulation or stock exchange rule), the Company shall
obtain shareholder approval in such a manner and to such a degree as required.
(b) Without shareholder consent and without regard to whether
any participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period, establish a limit on the number of shares purchasable by all
participants at the end of each Purchase Period, establish the exchange ratio
applicable to amounts withheld in a currency other than U.S. dollars, permit
payroll withholding in excess of the amount designated by a participant in order
to adjust for delays or mistakes in the Company's processing of properly
completed withholding elections, establish reasonable waiting and adjustment
periods and/or accounting and crediting procedures to ensure that amounts
applied toward the purchase of Common Stock for each participant properly
correspond with amounts withheld from the participant's Compensation, and
establish such other limitations or procedures as the Board (or its committee)
determines in its sole discretion advisable which are consistent with the Plan.
21. Notices. All notices or other communications by a participant to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form
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<PAGE>
specified by the Company at the location, or by the person, designated by the
Company for the receipt thereof.
22. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company may
require the person exercising such option to represent and warrant at the time
of any such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.
23. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 20 hereof.
24. Automatic Transfer to Low Price Offering Period. To the extent
permitted by any applicable laws, regulations, or stock exchange rules if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Fair Market Value of the Common Stock on the Enrollment Date
of such Offering Period, then all participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period as of the first day thereof.
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<PAGE>
EXHIBIT A
SPECTRIAN CORPORATION
1998 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
_____ Original Application Enrollment Date: ___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)
1. ___________________________ hereby elects to participate in the
Spectrian Corporation 1998 Employee Stock Purchase Plan (the "Employee
Stock Purchase Plan") and subscribes to purchase shares of the
Company's Common Stock in accordance with this Subscription Agreement
and the Employee Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount
of ____% of my Compensation on each payday (not to exceed 15%) during
the Offering Period in accordance with the Employee Stock Purchase
Plan. (Please note that no fractional percentages are permitted.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price
determined in accordance with the Employee Stock Purchase Plan. I
understand that if I do not withdraw from an Offering Period, any
accumulated payroll deductions will be used to automatically exercise
my option.
4. I have received a copy of the complete Employee Stock Purchase Plan. I
understand that my participation in the Employee Stock Purchase Plan is
in all respects subject to the terms of the Plan. I understand that my
ability to exercise the option under this Subscription Agreement is
subject to shareholder approval of the Employee Stock Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan should
be issued in the name(s) of (Employee or Employee and Spouse only):
______________________________________.
6. I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Enrollment Date (the first day of the
Offering Period during which I purchased such shares) or one year after
the Exercise Date, I will be treated for federal income tax purposes
<PAGE>
as having received ordinary income at the time of such disposition in
an amount equal to the excess of the fair market value of the shares at
the time such shares were purchased by me over the price which I paid
for the shares. I hereby agree to notify the Company in writing within
30 days after the date of any disposition of my shares and I will make
adequate provision for Federal, state or other tax withholding
obligations, if any, which arise upon the disposition of the Common
Stock. The Company may, but will not be obligated to, withhold from my
compensation the amount necessary to meet any applicable withholding
obligation including any withholding necessary to make available to the
Company any tax deductions or benefits attributable to sale or early
disposition of Common Stock by me. If I dispose of such shares at any
time after the expiration of the 2-year and 1-year holding periods, I
understand that I will be treated for federal income tax purposes as
having received income only at the time of such disposition, and that
such income will be taxed as ordinary income only to the extent of an
amount equal to the lesser of (1) the excess of the fair market value
of the shares at the time of such disposition over the purchase price
which I paid for the shares, or (2) 15% of the fair market value of the
shares on the first day of the Offering Period. The remainder of the
gain, if any, recognized on such disposition will be taxed as capital
gain.
7. I hereby agree to be bound by the terms of the Employee Stock Purchase
Plan. The effectiveness of this Subscription Agreement is dependent
upon my eligibility to participate in the Employee Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the
Employee Stock Purchase Plan:
NAME: (Please print)___________________________________________________________
(First) (Middle) (Last)
_______________________________ __________________________________
Relationship
__________________________________
(Address)
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<PAGE>
Employee's Social
Security Number: __________________________________
Employee's Address: __________________________________
__________________________________
__________________________________
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated:_________________________ __________________________________
Signature of Employee
__________________________________
Spouse's Signature
(If beneficiary other than spouse)
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<PAGE>
EXHIBIT B
SPECTRIAN CORPORATION
1998 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the Spectrian
Corporation 1998 Employee Stock Purchase Plan which began on ____________,
19____ (the "Enrollment Date") hereby notifies the Company that he or she hereby
withdraws from the Offering Period. He or she hereby directs the Company to pay
to the undersigned as promptly as practicable all the payroll deductions
credited to his or her account with respect to such Offering Period. The
undersigned understands and agrees that his or her option for such Offering
Period will be automatically termi nated. The undersigned understands further
that no further payroll deductions will be made for the purchase of shares in
the current Offering Period and the undersigned shall be eligible to participate
in succeeding Offering Periods only by delivering to the Company a new
Subscription Agreement.
Name and Address of Participant:
__________________________________
__________________________________
__________________________________
Signature:
__________________________________
Date:_____________________________
<PAGE>
Exhibit C
PROXY
SPECTRIAN CORPORATION PROXY
1998 ANNUAL MEETING OF STOCKHOLDERS
June 26, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of SPECTRIAN CORPORATION, a Delaware
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated May 28, 1998, and hereby appoints
Garrett A. Garrettson and Bruce R. Wright, and each of them, proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the 1998 Annual Meeting
of Stockholders of SPECTRIAN CORPORATION to be held on June 26, 1998 at 10:00
a.m. local time, at 160 Gibraltar Court, Sunnyvale, California 94089 and at any
adjournment or adjournments thereof, and to vote all shares of Common Stock
which the undersigned would be entitled to vote if then and there personally
present, on the matters set forth on the reverse side.
(Continued, and to be signed on the other side)
- --------------------------------------------------------------------------------
1. ELECTION OF DIRECTORS: WITHHOLD
NOMINEES: FOR FOR ALL
Garrett A. Garrettson, [ ] [ ]
James A. Cole, Eric A. Young,
Robert C. Wilson, Martin Cooper,
Charles D. Kissner
INSTRUCTION: To withhold authority to vote
for any individual nominee, write that
nominee's name in the space provided
below.
------------------------------------------
FOR AGAINST ABSTAIN
2. Amendment of Certificate of [ ] [ ] [ ]
Incorporation to provide that the
Company not be governed by the
Delaware anti-takeover statute.
3. Adoption of 1998 Employee Stock [ ] [ ] [ ]
Purchase Plan:
4. Appointment of KPMG Peat Marwick as [ ] [ ] [ ]
independent auditors of Spectrian
Corporation for the fiscal year
ending March 31, 1999:
and, in their discretion, upon such other matter or matters which may properly
come before the meeting or any adjournment or adjournments thereof. THIS PROXY
WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED, WILL BE
VOTED FOR THE ELECTION OF DIRECTORS, THE ADOPTION OF THE 1998 EMPLOYEE STOCK
PURCHASE PLAN AND THE APPOINTMENT OF KPMG PEAT MARWICK, AGAINST THE PROPOSAL TO
ELECT NOT TO BE GOVERNED BY THE DELAWARE ANTI-TAKEOVER STATUTE OR AS SAID
PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING, INCLUDING, AMONG OTHER THINGS, CONSIDERATION OF ANY MOTION MADE FOR
ADJOURNMENT OF THE MEETING.
Signature(s)__________________________________________ Dated______________, 1998
This proxy should be marked, dated and signed by the stockholder(s) exactly as
his or her name appears hereon, and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so indicate. If shares are held
by joint tenants or as community property, both should sign.
