SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ______________)
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/ / Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
XIOX CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ No fee required.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transactions applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / 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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(4) Date filed:
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XIOX CORPORATION
Airport Boulevard, Suite 700
Burlingame, California 94010
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 19, 1997
To the Stockholders of Xiox Corporation:
Notice is hereby given that the Annual Meeting of Stockholders
(the "Annual Meeting") of XIOX CORPORATION (the "Company") will be held at the
Company's principal executive offices located at 577 Airport Boulevard, Suite
700, Burlingame, California 94010 on Monday, May 19, 1997, at 11:00 a.m., local
time, for the following purposes:
1. To elect five directors of the Company to serve for the
ensuing year and until their successors are elected and
qualified.
2. To ratify the selection of KPMG Peat Marwick LLP as
independent accountants for the Company for the fiscal year
ending December 31, 1997.
3. To consider and vote upon a proposal to amend the Company's
1994 Stock Plan to increase by 150,000 the number of shares of
the Company's Common Stock reserved for issuance thereunder.
4. To act upon such other business as may properly come before
the meeting or any adjournment thereof.
The foregoing items of business are more fully described in
the Proxy Statement accompanying this Notice of Annual Meeting. The Board of
Directors has fixed the close of business on April 1, 1997 as the record date
for determining those stockholders who will be entitled to notice of and to vote
at the Annual Meeting or any adjournment of postponement thereof.
Representation of at least a majority of all outstanding
shares of common stock of the Company is required to constitute a quorum at the
Annual Meeting. Accordingly, it is important that your stock be represented at
the Annual Meeting. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED
ENVELOPE. Your proxy may be revoked in writing by you at any time prior to the
time it is voted.
By Order of the Board of Directors,
XIOX CORPORATION
/s/ Melanie D. Reid
------------------------------------
Burlingame, California Melanie D. Reid
April 14, 1997 Secretary
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS OF
XIOX CORPORATION
To Be Held May 19, 1997
This Proxy Statement is solicited on behalf of the Board of
Directors of Xiox Corporation ("Xiox" or the "Company") for use at the Company's
Annual Meeting of Stockholders (the "Annual Meeting") to be held on Monday, May
19, 1997, at 11:00 a.m., local time, at the Company's principal executive
offices located at 577 Airport Boulevard, Suite 700, Burlingame, California
94010, or at any adjournments or postponements thereof, for the purposes set
forth herein and in the accompanying Notice of Annual Meeting of Stockholders.
These proxy solicitation materials were mailed on or about April 14, 1997 to all
stockholders entitled to vote at the Annual Meeting.
Shares represented by proxies in the accompanying form which
are properly executed and returned to Xiox will be voted at the Annual Meeting
in accordance with the stockholders' instructions contained therein. If no
instructions are given on an executed and returned proxy with respect to a
matter set forth in the Notice of Meeting accompanying this Proxy Statement,
shares so represented will be voted in favor thereof and for the nominated
directors. Any proxy given by a shareholder may be revoked by him at any time
prior to its exercise by his taking any one of the following actions:
1. filing a written instrument revoking the proxy with the
Secretary of the Company;
2. filing a duly executed proxy bearing a later date with the
Secretary of the Company; or
3. attending the meeting and electing to vote in person.
The Company's principal executive offices are located at 577 Airport
Boulevard, Suite 700, Burlingame, California 94010.
The cost of this solicitation will be borne by Xiox.
Arrangements may be made with brokerage houses and other custodians, nominees
and fiduciaries to send proxies and proxy material to the beneficial owners of
stock and such persons may be reimbursed for their expenses. Proxies may be
solicited by the Company's directors, officers or regular employees, without
additional compensation, in person or by telephone, or telegraph.
The close of business on April 1, 1997 was the record date
(the "Record Date") for stockholders entitled to notice of and to vote at the
Annual Meeting. As of that date, Xiox had 2,372,384 shares of common stock, $.01
par value (the "Common Stock"), issued and outstanding. Each share of Common
Stock outstanding on the Record Date is entitled to one vote on all matters set
forth in this Proxy Statement.
1
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
FOR 1998 ANNUAL MEETING
Proposals of stockholders of the Company intended to be
presented by such stockholders at the Company's 1998 Annual Meeting of
Stockholders must be received by Xiox no later than December 23, 1997 in order
to be considered for possible inclusion in the proxy statement and form of proxy
related to that meeting. The proposal must be mailed to the Company's principal
executive offices, 577 Airport Boulevard, Suite 700, Burlingame, California
94010, Attention: Melanie D. Reid. Such proposals must comply with certain rules
and regulations promulgated by the Securities and Exchange Commission.
2
PROPOSAL ONE
ELECTION OF DIRECTORS
Nominees
A board of five directors is to be elected at the Annual
Meeting. Unless otherwise instructed, the proxy holders will vote all proxies
received by them for the nominees for directors listed below. In the event any
nominee is unable or declines to serve as a director at the time of the Annual
Meeting, the proxies will be voted for any nominee who shall be designated by
the present Board of Directors to fill the vacancy. In the event that additional
persons are nominated for election as directors, the proxy holders intend to
vote all proxies received by them for the nominees listed below. As of the date
of this Proxy Statement, the Company is not aware of any nominee who is unable
or unwilling to serve as a director. Notwithstanding the foregoing, if one or
more persons, other than those named below, are nominated as candidates for the
office of director, the enclosed proxy may be voted in favor of any one or more
of the nominees to the exclusion of others, and in such order of preference as
the proxies may determine in their discretion. The nominees for director to
serve for one year or until their successors are elected and qualified are set
forth below.
Name and Position(s) with the Company Director Since Age
William H. Welling 1989 63
Chairman, Chief Executive Officer
and Director
Mark A. Parrish, Jr. 1990 66
Director
Robert K. McAfee(1) 1985 66
Director
Bernard T. Marren(1) 1989 61
Director
Atam Lalchandani(1) 1996 53
Director
- ---------------------------
(1) Member of Audit and Compensation Committee.
The term of office of each person elected as a director will
continue until the next annual meeting of stockholders or until his successor
has been elected and qualified. There are no family relationships between any
directors or executive officers of the Company.
3
PROPOSAL ONE
ELECTION OF DIRECTORS (continued)
Business Experience of Directors
William H. Welling became a director of the Company and was
named Chairman of the Board of Directors and Chief Executive Officer in
September 1989. Since 1983 he has been Managing Partner of Venture Growth
Associates, an investment firm. Since April 1993 he has been director of Western
Micro Technology, Inc., a distributor of computer systems and products. Mr.
Welling also serves as a director on the boards of several private companies.
Mark A. Parrish, Jr. was appointed a director of the Company
in August 1990 and served as interim President and Chief Operating Officer from
January 1991 through July 1991. Since 1990, Mr. Parrish has worked as a
consultant. From 1987 until its sale in 1989, Mr. Parrish was President of the
Datachecker Systems Division, a $230 million point of sales systems subsidiary
of National Semiconductor Corporation. Between 1974 and 1987 Mr. Parrish held
various sales and marketing positions at National Semiconductor; starting as a
Major Accounts Manager in 1974, he was named Director of North American sales in
1980 and was appointed Vice President in 1982.
Robert K. McAfee became a director of the Company in September
1985. Mr. McAfee has been a management consultant for over 30 years serving both
major and small companies. In recent years he has worked extensively with the
World Bank and other regional development banks in introducing computer-based
systems and other modern management systems to railroads located throughout the
world.
Bernard T. Marren was appointed a director of the Company in
September 1989. Mr. Marren was a founder of Western Micro Technology, Inc.,
serving as President and Chief Operating Officer from 1977 to 1988. Mr. Marren
has been involved in the semiconductor industry since 1960. Mr. Marren was a
founder and first President of the Semiconductor Industry Association ("SIA").
He also served as President, Director and Chairman of the National Electronics
Distributor Association ("NEDA"). Currently he is Chairman of the Board and
Chief Executive Officer of Die Enhancements, Inc., a company that processes
silicon wafers to make die for the semiconductor industry.
Atam Lalchandani was appointed a director of the Company in
May 1996. He has been in the information technology business for the past 20
years. He was part of the financial management at National Semiconductor
Corporation, starting in 1977 and progressing to Chief Financial and
Administrative Officer for a subsidiary, National Advanced Systems from 1983 to
1989. During 1990 Mr. Lalchandani was the Chief Financial Officer of Oracle
Corporation's domestic operations. From 1990 to 1992 Mr. Lalchandani served
initially as Chief Financial Officer and later as Chief Executive Officer for
Objectivity, a database software company. Since 1992 Mr. Lalchandani has been a
financial and strategy consultant for various companies in the San Francisco Bay
Area. He is currently on the board of Harmony Foods in Santa Cruz, California,
as well as several high technology companies.
4
PROPOSAL ONE
ELECTION OF DIRECTORS (continued)
Vote Required
The five nominees receiving the highest number of affirmative
votes of the shares entitled to vote shall be elected as directors. Votes
withheld from any director are counted for purposes of determining the presence
or absence of a quorum, but have no other legal effect under Delaware law.
Board Meetings and Committees
The Board of Directors of the Company held four meetings
during the fiscal year ended December 31, 1996 ("fiscal year"). The Board of
Directors has one standing Committee, the Audit and Compensation Committee. The
members of the Audit and Compensation Committee are Atam Lalchandani, Bernard T.
Marren and Robert K. McAfee. The Audit and Compensation Committee approves the
Company's compensation arrangements including stock option grants and employee
benefits for the Company's management and employees and recommends the
engagement of the Company's independent auditors. During the year ended December
31, 1996, the Audit and Compensation Committee held four meetings. There is no
nominating committee or any other committee performing the functions of a
nominating committee.
During fiscal 1996, no director attended fewer than 75% of the
aggregate number of meetings of the Board of Directors and meetings of its
committees on which he served.
Recommendation of the Board of Directors
The Board of Directors recommends a vote FOR the nominees
listed herein.
5
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed KPMG Peat Marwick LLP,
independent accountants, to audit the financial statements of the Company for
the fiscal year ending December 31, 1997. Representatives of KPMG Peat Marwick
LLP are expected to be present at the meeting, will have the opportunity to make
a statement if they desire to do so and are expected to be available to respond
to appropriate questions. If the stockholders do not ratify the appointment of
KPMG Peat Marwick LLP, the Board of Directors will reconsider the appointment.
Recommendation of the Board of Directors
The Board of Directors recommends a vote FOR the ratification
of the selection of KPMG Peat Marwick LLP as the Company's independent
accountants for the fiscal year ending December 31, 1997.
6
PROPOSAL THREE
AMENDMENT TO THE 1994 STOCK PLAN
1994 Stock Plan
The Board of Directors is recommending stockholder approval of
an amendment of the Company's 1994 Stock Plan (the "1994 Plan") to increase the
number of shares issueable under the 1994 Plan by 150,000 shares to an aggregate
of 350,000 shares. The amendment was adopted by the Board of Directors in March
1997, subject to stockholder approval at the Annual Meeting.
The Company's 1994 Plan was adopted by the Board of Directors
in April 1994 and approved by the shareholders in May 1994. The 1994 Plan
replaced the Company's 1984 Stock Option Plan (the "1984 Option Plan"), which
terminated by its own terms in April 1994. Options granted under the 1984 Option
Plan were not terminated at the time such 1984 Option Plan expired, but remain
outstanding until the term of such options expires or such options are exercised
in accordance with their terms. Any shares previously reserved for issuance
under the 1984 Option Plan which are not subject to outstanding options shall
have been returned to the authorized but unissued Common Stock of the Company.
An aggregate of 100,000 shares was reserved for issuance under the 1994 Plan at
the time of its adoption. In 1995, the Board of Directors increased the number
of shares reserved for issuance under the 1994 Plan to 200,000, and such
increase was approved by the shareholders in 1995. At the Record Date, options
to purchase an aggregate of 178,179 shares having an average exercise price of
$3.40 per share and expiring from May 2003 to December 2006 were outstanding and
21,821 shares remained available for future grant under the 1994 Plan.
In March 1997, the Board of Directors unanimously adopted,
subject to shareholder approval, an amendment to the 1994 Plan to reserve an
additional 150,000 shares for issuance under the 1994 Plan. At the Annual
Meeting, the shareholders are being asked to approve this amendment to the 1994
Plan.
The essential features of the 1994 Plan are outlined below.
Purpose
The purposes of the 1994 Plan are to attract and retain the
best available personnel for positions of substantial responsibility, to provide
additional incentives to employees and consultants of the Company and to promote
the success of the Company's business.
7
PROPOSAL THREE
AMENDMENT TO THE 1994 STOCK PLAN (continued)
Administration
The 1994 Plan provides for administration by the Board of
Directors of the Company or by a committee of the Board. The 1994 Plan is
currently being administered by the Board of Directors. The interpretation and
construction of any provision of the 1994 Plan by the Board shall be final and
binding. Members of the Board receive no compensation for their services in
connection with the administration of the 1994 Plan.
Eligibility
The 1994 Plan provides for grants to employees (including
officers) of "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), and for grants of
nonstatutory stock options to employees and consultants. The Board of Directors
selects optionees and determines the number of shares to be subject to each
option. The 1994 Plan provides for a maximum of 200,000 option shares which may
be granted to any one employee. There is a limit of $100,000 on the aggregate
fair market value of shares subject to all incentive stock options which become
exercisable for the first time in any one calendar year.
Terms of Option
Each option is evidenced by a written stock option agreement
between the Company and the optionee and is generally subject to the terms and
conditions listed below, but specific terms may vary.
(a) Exercise of the Option. The Board of Directors or its
committee determines when options granted under the 1994 Plan may be exercised.
The current form of the option agreement generally used under the 1994 Plan
provides that options will be exercisable cumulatively to the extent of 25% of
the option shares on the date twelve months after the vesting commencement date
of the option and 1/48th of the option shares at the end of each month
thereafter. An option is exercised by giving written notice of exercise to the
Company, specifying the number of shares of Common Stock to be purchased and
tendering payment to the Company of the purchase price. Payment for shares
issued upon exercise of an option may consist of cash, check, exchange of shares
of the Company's Common Stock held for more than six months or such other
consideration as determined by the Board of Directors and as permitted by
applicable law. The current form of the option agreement only permits payment by
cash, check or exchange of shares.
(b) Option Price. The option price of the options granted
under the 1994 Plan is determined by the Board of Directors or its committee in
accordance with the 1994 Plan, but the option price of incentive stock options
and nonstatuatory stock options may not be less than 100% and 85%, respectively,
of the fair market value of the Company's Common Stock. The 1994 Plan provides
that because the Company's Common Stock is currently traded on the
8
PROPOSAL
THREE AMENDMENT TO THE 1994 STOCK PLAN (continued)
NASDAQ, the fair market value per share shall be the mean between the high bid
and low asked prices the Common Stock on the last market trading day prior to
the day of the grant of the option. With respect to any participant who owns
stock representing more than 10% of the voting power of the Company's capital
stock, the exercise price of any incentive or nonstatuatory stock option must
equal at least 110% of the fair market value per share on the date of the grant.
(c) Termination of Employment. The 1994 Plan provides that if
an optionee's employment by the Company is terminated for any reason, other than
death or disability, options may be exercised not later than thirty days after
the date of such termination and may be exercised only to the extent the options
were exercisable on the date of termination.
(d) Disability. If an optionee terminates his employment with
the Company as a result of his total or permanent disability, options may be
exercised within twelve months after the date of such termination and may be
exercised only to the extent the options were exercisable on the date of
termination.
(e) Death. If an optionee should die while an employee or a
consultant of the Company or during the thirty day period following the
termination of the optionee's employment or consultancy, the optionee's estate
may exercise the options at any time within twelve months after the date of
death but only to the extent that the options were exercisable on the date of
death or termination of employment.
(f) Termination of Options. The terms of all options granted
under the 1994 Plan may not exceed ten years from the date of grant. However,
any option granted to any optionee who, immediately before the grant of such
option, owned more than 10% of the total combined voting power of all classes of
stock of the Company or a parent or subsidiary corporation, may not have a term
of more than five years. Under the current form of option agreement, each option
has a term of five years and three months from the date of grant. No option may
be exercised by any person after such expiration.
(g) Nontransferability of Options. All options are
nontransferable by the optionee, other than by will or the laws of descent and
distribution, and, during the lifetime of the optionee, may be exercised only by
the optionee.
9
PROPOSAL THREE
AMENDMENT TO THE 1994 STOCK PLAN (continued)
Adjustment Upon Changes in Capitalization
In the event any change, such as a stock split or dividend, is
made in the Company's capitalization which results in an increase or decrease in
the number of outstanding shares of Common Stock without receipt of
consideration by the Company, an appropriate adjustment shall be made in the
option price and in the number of shares subject to each option. In the event of
the proposed dissolution or liquidation of the Company, all outstanding options
automatically terminate. In the event of a merger of the Company with or into
another corporation, or the sale of substantially all of the assets of the
Company, each outstanding option shall be assumed or an equivalent option or
right shall be substituted by the successor corporation or a parent or
subsidiary of the successor corporation. The administrator may, in lieu of such
assumption or substitution, provide for the optionee to have the right to
exercise the option as to all or a portion of the optioned stock, including
shares as to which it would not otherwise be exerciseable. If, in such event,
the option is not assumed or substituted, the option shall terminate as of the
date of the closing of merger. For the purposes of this paragraph, the option
shall be considered assumed if, following the merger or sale of assets, the
option or right confers the right to purchase, for each share of optioned stock
subject to the option immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, of other securities or property) received in
the merger or sale of assets by holders of Common Stock for each share held on
the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares); provided, however, that if such consideration received
in the merger or sale of assets was not solely common stock of the successor
corporation or its parent, the administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the option, for each share of optioned stock subject to the option,
to be solely common stock of the successor corporation or its parent equal in
fair market value to the per share consideration received by holders of Common
Stock in the merger or sale of assets.
Amendment and Termination
The Board of Directors may at any time amend or terminate the
1994 Plan, but no amendment or termination shall be made which would impair the
rights of any participant under any grant theretofore made without his or her
consent. In addition, the Company shall obtain shareholder approval of any
amendment to the 1994 Plan in such a manner and to the extent necessary to
comply with applicable law or regulation. In any event, the 1994 Plan will
terminate in 2004.
Federal Income Tax Information
Options granted under the 1994 Plan may be either "incentive
stock options," as defined in the Code, or nonstatuatory options.
10
PROPOSAL THREE
AMENDMENT TO THE 1994 STOCK PLAN (continued)
An optionee who is granted an incentive stock option will not
recognize taxable income either at the time the options is granted or upon its
exercise, although the exercise may subject the optionee to the alternative
minimum tax. Upon the sale or exchange of the shares more than two years after
grant of the option and one year after exercising the option, any gain or loss
will be treated as long-term capital gain or loss. If these holding periods are
not satisfied, the optionee will recognize ordinary income at the time of sale
or exchange equal to the difference between the exercise price and the lower of
(i) the fair market value of the shares at the date of the option exercise or
(ii) the sale price of the shares. A different rule for measuring ordinary
income upon such a premature disposition may apply if the optionee is also an
officer, director or 10% stockholder of the Company. The Company will be
entitled to a deduction in the same amount as the ordinary income recognized by
the optionee. Any gain recognized on such a premature disposition of the shares
in excess of the amount treated as ordinary income will be characterized as
long-term or short-term capital gain, depending on the holding period.
All other options which do not qualify as incentive stock
options are referred to as nonstatutory options. An optionee will not recognize
any taxable income at the time he is granted a nonstatutory option. However,
upon its exercise, the optionee will recognize taxable income generally measured
as the excess of the then fair market value of the shares purchased over the
purchase price. Any taxable income recognized in connection with an option
exercise by an optionee who is also an employee of the Company will be subject
to tax withholding by the Company. Upon resale of such shares by the optionee,
any difference between the sales price and the optionee's purchase price, to the
extent not recognized as taxable income as described above, will be treated as
long-term or short-term capital gain or loss, depending on the holding period.
The Company will be entitled to a tax deduction in the same
amount as the ordinary income recognized by the optionee with respect to shares
acquired upon exercise of a nonstatutory option.
The foregoing is only a summary of the effect of federal
income taxation upon the optionee and the Company with respect to the grant and
exercise of options under the 1994 Plan and does not purport to be complete.
Reference should be made to the applicable provisions of the Code. In addition,
this summary does not discuss the tax consequences of the optionee's death or
the income tax laws of any municipality, state or foreign country in which an
optionee may reside.
11
PROPOSAL THREE
AMENDMENT TO THE 1994 STOCK PLAN (continued)
Vote Required
Approval of the 1994 Plan requires the affirmative vote of the
holders of a majority of the shares presented at the Annual Meeting in person or
by proxy and entitled to vote as of the Record Date and such affirmative votes
must also constitute at least a majority of the required quorum. Votes against
or withheld are counted for purposes of determining the presence or absence of a
quorum at the Annual Meeting.
Recommendation of the Board of Directors
The Board of Directors recommends a vote FOR the approval of
the increase in the number of shares authorized for issuance under the 1994
Plan.
12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth the beneficial ownership of the
Common Stock of Xiox as of March 1, 1997 by (i) each director; (ii) the Chief
Executive Officer and each of the Company's other officers who received more
than $100,000 in total compensation for the year ended December 31, 1996 (such
officers, together with the Chief Executive Officer, are collectively referred
to as the "Named Executive Officers"); (iii) all directors and executive
officers as a group; and (iv) all those known by the Company to be beneficial
owners of more than five percent of the Company's Common Stock at March 1, 1997.
All shares are subject to the named person's sole voting and investment power
except where otherwise indicated and subject to community property laws where
applicable.
Shares Percent
Beneficially of
Name Owned(1) Total
- ---- -------- -----
Edmund H. Shea 563,342 (2) 23.7 %
655 Brea Canyon Rd
Walnut, CA 91789
William H. Welling 1,027,416 (3) 43.3 %
Atam Lalchandani 11,000 0.5 % (4)
Bernard T. Marren 66,193 (5) 2.8 % (4)
Robert K. McAfee 43,034 (6) 1.8 % (4)
Mark A. Parrish, Jr. 10,274 (7) 0.4 % (4)
Anthony DiIulio 35,300 (8) 1.5 % (4)
Melanie D. Reid 9,199 (9) 0.4 % (4)
David Y. Schlossman 40,878 (10) 1.7 % (4)
All directors and officers
as a group (10 persons) 1,806,636 (11) 73.9 % (4)
- ------------------
(1) This table is based upon information supplied by officers, directors and
principal stockholders. Unless otherwise indicated, the business address of
each of the beneficial owners listed in this table is: 577 Airport Blvd,
Suite 700, Burlingame, CA 94010.
(2) Represents 563,342 shares of Common Stock beneficially owned by Edmund and
Mary Shea Real Property Trust.
13
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT (continued)
(3) Represents 1,027,416 shares of Common Stock beneficially owned by Mr.
Welling including 104,678 shares owned directly and 922,738 shares owned
indirectly. Mr. Welling disclaims all beneficial ownership of 73,718 shares
held by family members and related trusts over which Mr. Welling exercises
no voting or dispositional power.
(4) Percentage of the sum of Common Stock outstanding and shares which may be
acquired by such individual or group upon exercise of outstanding options
which are exercisable within sixty (60) days.
(5) Includes 5,874 shares of Common Stock which may be acquired upon exercise
of outstanding options which are exercisable within sixty (60) days.
(6) Includes 7,874 shares of Common Stock which may be acquired upon exercise
of outstanding options which are exercisable within sixty (60) days.
(7) Includes 3,874 shares of Common Stock which may be acquired upon exercise
of outstanding options which are exercisable within sixty (60) days.
(8) Includes 22,600 shares of Common Stock which may be acquired upon exercise
of outstanding options which are exercisable within sixty (60) days.
(9) Includes 7,499 shares of Common Stock which may be acquired upon exercise
of outstanding options which are exercisable within sixty (60) days.
(10) Includes 25,974 shares of Common Stock which may be acquired upon exercise
of outstanding options which are exercisable within sixty (60) days.
(11) Includes 73,695 shares of Common Stock which may be acquired upon exercise
of outstanding options which are exercisable within sixty (60) days.
14
Executive Officers
In addition to Mr. Welling, the principal executive officers
of the Company and their ages as of April 1, 1997 are as follows:
Name Age Position
Wayne F. Benoit 48 Vice President of Business Development
Robert W. Boyd 34 Vice President of Operations
Anthony DiIulio 41 Vice President of Sales & Marketing
Melanie D. Reid 41 Vice President of Finance,
Chief Financial Officer & Secretary
David Schlossman 37 Vice President of Engineering
Wayne F. Benoit joined Xiox in December 1996 as Vice President
of Business Development. Prior to joining Xiox, Mr. Benoit was Chief Operating
Officer for ERS International from 1994 to 1996. From 1988 through 1993 Mr.
Benoit worked for Ungermann-Bass, most recently as Executive Vice President of
Product Operations from 1990 to 1993 and previously as Vice President and
Director of Engineering from 1988 through 1990. Prior to that Mr. Benoit was at
Linkware Corporation from 1984 to 1988, as President from 1986 to 1987 when it
was purchased by Ungermann Bass, and previously as Vice President of Marketing.
Formerly, Mr. Benoit held engineering roles at DTSS, Inc. and Epsilon Data
Management from 1973 to 1984. Mr. Benoit received his Bachelor of Arts degree in
Business and Experimental Psychology from Northeastern University and a Masters
in Personnel Services from University of New Hampshire.
Robert W. Boyd joined Xiox in July 1990 as a member of the
Sales Department. Mr. Boyd was promoted to Director of Sales in January 1994 and
to Vice President of Operations in March 1995. Prior to joining Xiox, Mr. Boyd
held sales and management positions at First Phone, Inc., a telecommunications
firm in Cambridge, Massachusetts. Mr. Boyd received his Bachelor of Science
degree in Business Administration at St. Michael's College.
Anthony DiIulio was appointed Vice-President of Sales and
Marketing in March 1995. Prior to that, Mr. DiIulio had held the position of
Vice President of Operations for Xiox Corporation since March 1991 when Xiox
acquired SFX, Inc. (then Summa Four Business Products, Inc.). Prior to the
acquisition, Mr. DiIulio was General Manager of Summa Four Business Products,
Inc. where he was responsible for sales, marketing and operations. From 1984 to
1987 Mr. DiIulio held several different positions with Wang Laboratories, Inc.
Mr. DiIulio received his Bachelor of Science degree from Northeastern University
and his Masters in Business Administration from New Hampshire College.
15
Executive Officers (continued)
Melanie D. Reid became Vice President of Finance and Chief
Financial Officer of the Company in July 1995. Prior to joining the Company, Ms.
Reid served as Director of Product Delivery and Controller of Product Operations
at UB Networks (formerly Ungermann Bass). From 1987 to 1990 Ms. Reid was a
financial manager in the Intercontinental Division of UB's parent, Tandem
Computers. Ms. Reid also held various financial and managerial positions at
Honeywell Information Systems from 1977 to 1987. Ms. Reid received her Bachelor
of Science degree in Accounting from Boston College and her Masters in Business
Administration from the University of Texas at Arlington.
David Y. Schlossman rejoined the Company as Vice President of
Engineering in January 1990 following a six-month period during which Mr.
Schlossman was with Applied Voice Technology, a telecommunications
voice-processing company. Mr. Schlossman originally joined Xiox in early 1984 as
a software engineer. Mr. Schlossman was promoted to Chief Engineer in January
1988 and to Vice President of Engineering in September 1988. Prior to joining
Xiox, Mr. Schlossman held software engineering posts at Columbia and New York
Universities and at several U. S. Government agencies and independent software
vendors. Mr. Schlossman received his Bachelor of Arts degree in computer science
from Ohio State University.
16
EXECUTIVE COMPENSATION
Summary of Officer Compensation
The following table shows, for the last three fiscal years
ending December 31, 1996, 1995 and 1994 certain compensation paid by the
Company, including salary, bonuses, stock options and certain other
compensation, to the Named Executive Officers in fiscal 1996:
Summary Compensation Table
Long-Term
Compensation
Annual Compensation Awards
-------------------- ------
Name and Salary Bonus Other Annual Options(2)
Principal Position Year ($) ($) ($)(1) (#)
- ------------------ ---- --- --- ------ ---
William H. Welling 1996 158,450 (3) 13,631 (4) 4,800 --
President and Chief 1995 152,214 (3) -- 4,800 --
Executive Officer 1994 94,519 (3) -- 2,300 --
Anthony DiIulio 1996 105,754 (5) 34,650 (6) 4,200 15,000
Vice President of 1995 102,308 (5) 43,533 (6) 4,200 --
Sales & Marketing (7) 1994 102,308 (5) 28,065 4,200 15,000
Melanie D. Reid
Vice President of 1996 108,431 13,700 (9) 4,200 20,000
Finance, Chief Financial 1995 51,747 (8) -- 2,100 20,000
Officer & Secretary 1994 -- -- -- --
David Y. Schlossman 1996 101,364 (10) 19,549 (11) 4,200 5,000
Vice President of 1995 103,088 (10) 12,000 4,200 5,000
Engineering 1994 95,383 (10) 12,000 4,200 --
<FN>
- ----------
(1) Automobile allowances.
(2) The Company has no stock appreciation rights. Options granted in 1996 were
exchanged for old options under 7/12/96 Stock Repricing.
(3) Includes $1,159 of salary earned in 1996 but to be paid in 1997 and payout
of paid-time-off balances of $2,791 in 1996, $2,214 in 1995 and $2,019 in
1994.
(4) Includes $9,650 of bonus earned in 1996 but paid in 1997.
(5) Includes $773 of salary earned in 1996 but to be paid in 1997 and payout of
paid-time-off balances of $1981 in 1996, $2,308 in 1995 and $2,308 in 1994.
(6) Includes $6,750 of bonus earned in 1996 but paid in 1997. Also includes
$19,620 in 1996 and $19,620 in 1995 of reportable relocation expense
associated with the sale of Mr. DiIulio's east coast residence.
(7) Mr. DiIulio became a Vice President of Sales and Marketing in March 1995.
Prior to that he was Vice President of Operations.
(8) Ms. Reid joined Xiox in July 1995.
(9) Includes $5,700 of bonus earned in 1996 but paid in 1997.
(10) Includes $744 of salary earned in 1996 but to be paid in 1997 and payout of
paid-time-off balances of $1431 in 1996, $6,788 in 1995 and $1,783 in 1994.
(11) Includes $4,995 of bonus earned in 1996 but paid in 1997.
</FN>
17
OPTIONS GRANTED DURING FISCAL 1996
The following table summarizes the grants of options to
purchase the Company's Common Stock made to the Named Executive Officers.
Option Grants in Last Fiscal Year
Individual Grants
- ----------------------------------------------------------------------------------------------------------
% of Total Potential Realizable
Value
Options at Assumed Annual
Rates
Granted to of Stock Price
Employees Exercise Appreciation
Options in Fiscal Price Expiration for Option Term
Name Granted(1) Year(2) ($/Sh) Date 5%($) 10%($)
- ---- ---------- ------- ------ ---- ----- ------
William H. Welling -- -- -- -- -- --
Anthony DiIulio 15,000 9 % $3.4375 3/29/04 $11,112 $23,930
Melanie D. Reid 20,000 12 % $3.4375 8/13/05 $14,816 $31,907
David Y. Schlossman 5,000 3 % $3.4375 8/13/05 $3,704 $ 7,977
<FN>
- ----------
(1) Options under the Company's 1994 Plan vest over a four-year period at a
rate of 25% of the option shares twelve months after vesting commencement
date and 2.08% per month each month thereafter. Options under the 1984
Option plan vest over a four-year period at a rate of 25% of the option
shares per year.
(2) Based upon 166,400 options granted to employees in 1996. Options granted to
Named Executive Officers were exchanged for older options on July 12, 1996.
</FN>
18
OPTION EXERCISES AND FISCAL 1996 YEAR-END VALUES
The following table provides the specified information
concerning exercises of options to purchase the Company's Common Stock and the
fiscal year-end value of unexercised options held by the Named Executive
Officers.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
Shares
Acquired on Value Number of Unexercised Value of Unexercised in-the
Exercise Realized Options at 12/31/96 (#) -Money Options at
-------- -------- ----------------------- -----------------
12/31/96($)(1)
--------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- --- --- ----------- ------------- ----------- -------------
William H. Welling -- -- -- -- -- --
Anthony DiIulio -- -- 15,100 15,000 $29,243 $ 938
Melanie D. Reid -- -- -- 20,000 -- $1,250
David Y. Schlossman -- -- 24,100 5,000 $51,188 $ 313
<FN>
- ----------
(1) Fair market value of the Company's Common Stock based upon the closing bid
price at December 31, 1996 ($3.50) minus the exercise price of the options.
</FN>
19
Audit and Compensation Committee Report
The Company applies a consistent philosophy to compensation
for all employees including senior management. The Company is based on the
premise that achievements of the Company result from the coordinated efforts of
all individuals working toward common objectives focused on meeting customer and
stockholder expectations.
The goals of the Company's compensation program are to align
compensation with business objectives and performance while enabling the Company
to attract, retain and reward employees who contribute to the long-term success
of the Company. In all cases attention is given to fairness in the
administration of pay and to ensure that all employees understand the related
performance evaluation and administration process.
The Company's compensation program for executive officers is
based on the principles described above. It is administered by the Audit and
Compensation Committee of the Board of Directors composed of the non-employee
directors listed at the end of this report. None of the non-employee directors
have any interlocking or other type of relationship that would call into
question their independence as a committee member.
The Company's executive compensation is intended to be
consistent with leading companies in the industry while being contingent upon
the Company's achievement of near and long-term objectives and goals. The
Company's executive philosophy is based on three components, each of which is
intended to serve the overall compensation philosophy.
Base Salary
Base salary is targeted at the competitive median for
competitors of similar size in the software industry. For the purposes of
establishing these levels, the Company compares itself to the American
Electronics Association sponsored salary surveys of software companies.
Salaries of executives are reviewed by the Audit and
Compensation Committee on an annual basis and may be increased at that time
based upon: (i) the Audit and Compensation Committee's agreement that the
individual's contributions to the Company have increased and (ii) increases in
median competitive pay levels.
In October 1996, the Board of Directors, on the recommendation
of the Audit and Compensation Committee, increased the base salaries paid to
each of the Named Executive Officers. Mr. Welling, President and Chief Executive
Officer, Mr. DiIulio, Vice President of Sales & Marketing and Mr. Schlossman,
Vice President of Engineering, received base salary increases of 6.1%. Ms. Reid,
Vice President of Finance, Chief Financial Officer and Secretary, received a
base salary increase of 5.5%.
Annual Incentives
Annual incentives for executives are intended to reflect the
Audit and Compensation Committee's belief that management's contribution to
stockholder returns comes from maximizing earnings and the quality of those
earnings. Incentive compensation is based
20
Audit and Compensation Committee Report (continued)
upon the Company's 1990 Profit Sharing Plan that sets aside up to 10% of the
Company's operating earnings in which all eligible employees of the Company
share on a pro rata basis. In May 1996 an executive bonus plan ( "Executive
Compensation Plan") was approved by the Audit and Compensation Committee for
eligible senior management to replace their participation in the 1990 Profit
Sharing Plan. In fiscal 1996, the Executive Compensation Plan period covered the
second, third and fourth fiscal quarters. The key elements of the Executive
Compensation Plan included measurement of pre-tax profit, total revenue and
management by objectives ("MBOs") versus pre-established plans. Bonuses were
paid following the end of each fiscal half. Participants must be an employee at
the time of distribution to receive bonuses under the Executive Compensation
Plan.
Long-Term Incentives
The Audit and Compensation Committee also endorses the
position that stock ownership by management is beneficial in aligning management
and stockholder interests and in enhancing stockholder value. Stock options are
also used to retain and motivate executives to improve the Company's long-term
stock market performance. Stock options are granted at the prevailing market
value. Grants awarded vest over four years, at a rate of 25% of the option
shares twelve months after vesting commencement date and 2.08% per month each
month thereafter.
The Audit and Compensation Committee determines the number of
options to be granted based upon comparison within the competitive marketplace.
Outstanding historical performance by an individual is additionally recognized
through larger than normal option grants.
Report on Repricing of Options
- --------------------------------------------------------------------------------
On July 12, 1996, all employees of the Company, including the
Chief Executive Officer and the three other most highly compensated executive
officers, were given the opportunity to exchange existing, higher priced options
granted under the 1994 Plan for new options with an exercise price of $ 3.4375
per share, which price was equal to the mean between the high bid and low asked
prices for the Company's Common Stock on the last market trading day prior to
July 12, 1996.
The Company believes that given the disparity, on July 12,
1996, between the trading price of its Common Stock and the exercise price of
certain existing stock options, such repricing was desirable in order to provide
incentive to the Company's employees to work towards the future growth of the
Company and to retain key personnel.
Respectfully submitted,
Bernard T. Marren, Chairman
Robert K. McAfee
Atam Lalchandani
- --------------------------------------------------------------------------------
21
TABLE OF TEN-YEAR OPTION REPRICINGS
The following table sets forth option information concerning
options of Xiox Corporation's officers which were repriced during fiscal 1996.
Number of Market Price Length of Original
Securities of Stock at Exercise Price Option Term
Underlying Options Time of at Time of New Remaining at Date
Repriced or Repricing or Repricing or Excercise or Repricing or
Name Date Amended (#) Amendment ($) Amendment ($) Price($) Amendment (Yrs)
- ---- ---- ----------- ------------- ------------- -------- ---------------
Robert W. Boyd
Vice President 7/12/96 5,000 $3.4375 $5.000 $3.4375 7 years 8 months
Operations 7/12/96 13,000 $3.4375 $4.1250 $3.4375 9 years 1 month
Anthony DiIulio
Vice President
Sales & Marketing 7/12/96 15,000 $3.4375 $ 5.000 $3.4375 7 years 8 months
Melanie D. Reid
Vice President
Finance/ Chief
Financial Officer 7/12/96 20,000 $3.4375 $4.1250 $3.4375 9 years 1 month
David Y. Schlossman
Vice President
Engineering 7/12/96 5,000 $3.4375 $4.1250 $3.4375 9 years 1 month
22
Director Compensation
During the year ended December 31, 1996, Messrs. Lalchandani,
Marren, McAfee and Parrish were paid directors' fees of $300 for each of the
meetings of the Board they attended in 1996. Nonemployee directors participate
in the Company's 1994 Plan. The 1994 Plan provides for an automatic grant of a
nonstatutory stock option to purchase 1,000 shares of Common Stock to each
nonemployee director who is elected or re-elected to the Board of Directors at
each Annual Meeting of the Company's stockholders. The terms and conditions of
each option grant to any director shall be as set forth in the stock option
agreement entered into between the Company and the nonemployee director. None of
the directors held consulting contracts with the Company during 1996.
SECTION 16(A) 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 certain reports of ownership with the
Securities and Exchange Commission (the "Commission") and with the National
Association of Securities Dealers. Such officers, directors and shareholders are
also required by Commission rules to provide the Company with copies of all
Section 16(a) forms that they file. Based solely on its review of copies of such
forms received by the Company, or on written representations from certain
reporting persons, the Company believes that, during the period from January 1,
1996 to December 31, 1996, its executive officers, directors and ten percent
stockholders filed all required Section 16(a) reports on a timely basis.
23
OTHER MATTERS
The Company knows of no other matters to be submitted at the
Annual Meeting. If any other matters properly come before the meeting, it is the
intention of the persons named in the enclosed proxy card to vote the shares
they represent as the Board of Directors may recommend.
By Order of the
Board of Directors,
XIOX CORPORATION
/s/ Melanie D. Reid
-------------------------
Melanie D. Reid
Secretary
April 14, 1997
Burlingame, California
24
APPENDIX A
PROXY XIOX CORPORATION PROXY
Annual Meeting of Stockholders to be Held on May 19, 1997
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints William H. Welling and Melanie D. Reid,
and each or either of them, as proxies of the undersigned, with full power of
substitution, and hereby authorizes them to represent and to vote, as designated
on the other side, all of the shares of Common Stock of Xiox Corporation held of
record by the undersigned as of April 1, 1997 at the Annual Meeting of
Stockholders of Xiox Corporation to be held May 19, 1997, or at any adjournment
thereof.
(Continued, and to be signed on the other side)
- ------------------------------------------------------------------------------------------------------------------------------------
[X] Please mark
your votes
as this
WITHHOLD
1. ELECTION OF DIRECTORS FOR FOR ALL FOR AGAINST ABSTAIN
INSTRUCTION: if you wish to [ ] [ ] 2. Proposal to ratify the appointment of KPMG Peat [ ] [ ] [ ]
withhold authority to vote for Marwick LLP as independent accountants for the
any individual nominee, strike fiscal year ending December 31, 1997.
a line through that nominee's
name in the list below: 3. Proposal to amend the Company's 1994 Stock Plan to [ ] [ ] [ ]
increase by 150,000 the number of shares of the
William H. Welling, Mark A. Parrish, Jr., Company's Common Stock reserved for issuance thereunder.
Robert K. McAfee, Bernard T. Marren,
Atam Lalchandani
- ------------------------------------------------
I PLAN TO ATTEND THE MEETING [ ]
In their discretion, the Proxies are
authorized to vote upon such other
matter(s) which may properly come before
the meeting and at any adjournment(s)
thereof.
The shares covered by this proxy will be
voted in accordance with the
undersigned(s) instructions with respect
to any matter in which a choice is
specified. If this proxy is returned
without indicating specific
instructions, all shares represented
herein will be voted for the Director
nominees listed, and as recommended by
the Board of Directors on all other
proposals. Each of the proxies or their
substitutes as shall be present and
acting at the Annual Meeting shall have
and may exercise all of the powers of
all said proxies hereunder.
Signature(s)___________________________________________________________ Dated _______________________, 1997
Note: Please sign as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please five full title as such.
- ------------------------------------------------------------------------------------------------------------------------------------