def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box: |
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o Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
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þ Definitive Proxy Statement |
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o Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
ELECTRONICS FOR IMAGING,
INC.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
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þ No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11. |
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1) Title of each class of securities to which transaction applies: |
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2) Aggregate number of securities to which transaction applies: |
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): |
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4) Proposed maximum aggregate value of transaction: |
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o Fee paid previously with preliminary materials. |
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o 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. |
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1) Amount Previously Paid: |
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2) Form, Schedule or Registration Statement No.: |
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SEC 1913 (02-02) |
Persons who are to respond to the collection of information
contained in this form are not required to respond unless the form displays a currently valid
OMB control number. |
TABLE OF CONTENTS
ELECTRONICS FOR IMAGING, INC.
303 Velocity Way
Foster City, California 94404
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on June 2, 2005
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders
of Electronics for
Imaging, Inc., a Delaware corporation (the
Company), will be held on Thursday, June 2,
2005 at 9:00 a.m., Pacific Daylight Time, at the
Companys Corporate headquarters, 303 Velocity Way,
Foster City, California 94404 for the following purposes:
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1. To elect nine (9) directors to serve for the
ensuing year or until their successors are duly elected and
qualified. |
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2. To transact such other business as may properly come
before the meeting or any adjournment or postponement thereof. |
The foregoing items of business are more fully described in the
Proxy Statement accompanying this Notice. The Board of Directors
has approved the proposals described in the Proxy Statement and
recommends that you vote FOR each proposal.
Only stockholders of record at the close of business on
April 12, 2005 are entitled to notice of and to vote at the
Annual Meeting and at any adjournment or postponement thereof.
All stockholders are cordially invited to attend the Annual
Meeting in person. However, to assure your representation at the
Annual Meeting, you are urged to mark, sign, date and return the
enclosed proxy for that purpose. Any stockholder attending the
Annual Meeting may vote in person even if he or she has returned
a proxy.
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Sincerely, |
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/s/ Joseph Cutts |
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Joseph Cutts |
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Secretary |
Foster City, California
April 26, 2005
YOUR VOTE IS IMPORTANT
IN ORDER TO ENSURE YOUR REPRESENTATION AT THE MEETING,
YOU ARE REQUESTED TO VOTE ELECTRONICALLY OR
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY
AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED
ENVELOPE.
ELECTRONICS FOR IMAGING, INC.
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
General
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of
Electronics for
Imaging, Inc., a Delaware corporation (the
Company), for use at the Annual Meeting of
Stockholders to be held Thursday, June 2, 2005 at
9:00 a.m., Pacific Daylight Time (the Annual
Meeting), or at any adjournment or postponement thereof.
The Annual Meeting will be held at the Companys corporate
headquarters, 303 Velocity Way, Foster City, California
94404. The Company intends to mail this proxy statement and
accompanying proxy card on or about April 26, 2005 to
stockholders entitled to vote at the Annual Meeting.
At the Annual Meeting, the stockholders of the Company will be
asked: (1) to elect nine (9) directors to serve for
the ensuing year or until their successors are duly elected and
qualified; and (2) to transact such other business as may
properly come before the meeting or any adjournment or
postponement thereof. All proxies which are properly completed,
signed and returned to the Company prior to the Annual Meeting,
will be voted.
Voting Rights and Outstanding Shares
Only stockholders of record at the close of business on
April 12, 2005 (the Record Date) are entitled
to notice of and to vote at the Annual Meeting. As of the Record
Date, the Company had outstanding and entitled to vote
54,107,668 shares of Common Stock. A quorum is a majority
of the voting power of the shares entitled to vote at the Annual
Meeting. As there were 54,107,668 eligible votes as of the
record date, we will need at least 27,053,835 votes present in
person or by proxy at the Annual Meeting for a quorum to exist.
Each holder of record of Common Stock on such date will be
entitled to one vote per each share on all matters to be voted
upon by the stockholders and are not entitled to cumulate votes
for the election of directors.
A plurality of the shares of common stock voting in person or by
proxy is required to elect each of the nominees for director. A
plurality means that the nominees receiving the largest number
of votes cast will be elected. All votes will be tabulated by
the inspector of election appointed for the meeting, who will
separately tabulate affirmative and negative votes, abstentions
and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the
stockholders and will have the same effect as negative votes.
Broker non-votes are counted towards a quorum, but are not
counted for any purpose in determining whether a matter has been
approved.
In the event that sufficient votes in favor of the proposals are
not received by the date of the Annual Meeting, the persons
named as proxies may propose one or more adjournments of the
Annual Meeting to permit further solicitation of proxies. Any
such adjournment will require the affirmative vote of the
holders of a majority of the outstanding shares present in
person or by proxy at the Annual Meeting.
Solicitation
The cost of preparing, assembling, printing and mailing the
Proxy Statement, the Notice of Annual Meeting and the enclosed
proxy, as well as the cost of soliciting proxies relating to the
Annual Meeting will be borne by the Company. The Company will
request banks, brokers, dealers and voting trustees or other
nominees to solicit their customers who are beneficial owners of
shares listed of record in names of nominees,
and will reimburse such nominees for the reasonable
out-of-pocket expenses of such solicitations. The original
solicitation of proxies by mail may be supplemented by
telephone, facsimile, email and personal solicitation by
directors, officers and regular employees of the Company or, at
the Companys request, The Altman Group. No additional
compensation will be paid to directors, officers or other
regular employees of the Company for such services, but The
Altman Group will be paid its customary fee, estimated to be
approximately $7,500, if it renders solicitation services.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by
the person giving it at any time before its use by delivering to
the Secretary of the Company at the Companys principal
executive office, 303 Velocity Way, Foster City, California
94404, a written notice of revocation or a duly executed proxy
bearing a later date or it may be revoked by attending the
Annual Meeting and voting in person. Attendance at the Annual
Meeting will not, by itself, revoke a proxy.
Stockholder Proposals To Be Presented at Next Annual
Meeting
The deadline for submitting a stockholder proposal for inclusion
in the Companys proxy statement and form of proxy for the
Companys annual meeting of stockholders to be held in the
year 2006, pursuant to Rule 14a-8 of the Securities and
Exchange Commission, is December 27, 2006. The Rules of the
Securities Exchange Commission also establish a deadline with
respect to discretionary voting for submission of stockholder
proposals that are not intended to be included in the
Companys Proxy Statement (the Discretionary Voting
Deadline). The Discretionary Vote Deadline for the
year 2006 Annual Meeting is March 13, 2006. If a
Stockholder gives notice of such proposal after the
Discretionary Vote Deadline, the Companys proxy holders
will be allowed to use their discretionary voting authority to
vote the shares they represent as the Board of Directors may
recommend, which may include a vote against the stockholder
proposal when and if the proposal is raised at the
Companys 2005 Annual Meeting.
The Annual Report on Form 10-K of the Company, for the
fiscal year ended December 31, 2004, has been mailed
concurrently with the mailing of the Notice of Annual Meeting
and Proxy Statement to all stockholders entitled to notice of
and to vote at the Annual Meeting. The Annual Report on
Form 10-K is not incorporated into this Proxy Statement and
is not considered proxy soliciting material. If, for whatever
reason, you need another copy, we will provide one to you free
of charge upon your written request to Investor Relations at
Electronics For Imaging, Inc., 303 Velocity Way, Foster
City, California 94404.
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PROPOSAL ONE
ELECTION OF DIRECTORS
Nominees
There are nine nominees for the nine board positions presently
authorized by the Companys bylaws. Unless otherwise
instructed, the proxy holders will vote the proxies received by
them for the nine nominees named below. Proxies cannot be voted
for more Directors than the nine nominees named. In the event
that any management nominee is unable or declines to serve as a
director at the time of the Annual Meeting, the proxies will be
voted for the 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 in
such a manner as will assure the election of as many of the
nominees listed below as possible. Each person has been
recommended for nomination by the Nominating and Governance
Committee and has been nominated by the Board for election. Each
person nominated for election has agreed to serve, and the
Company is not aware of any nominee who will be unable or will
decline to serve as a director. The term of office for each
person elected as a director will continue until the next Annual
Meeting of Stockholders or until his successor has been elected
and qualified, or until such directors earlier death,
resignation or removal.
The names of the nominees, each of whom is currently a director
of the Company elected by the stockholders or appointed by the
Board, and certain information about them are set forth below.
Mr. Paisley was appointed to the Board of Directors on
July 9, 2004.
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Name of Nominee and Principle Occupation |
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Director Since | |
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Gill Cogan
Founding Partner, Lightspeed Venture Partners (a venture capital
firm)
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53 |
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1992 |
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Jean-Louis Gassée
General Partner, Allegis Capital (a venture investments firm)
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61 |
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1990 |
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Guy Gecht
Chief Executive Officer of the Company
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39 |
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2000 |
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James S. Greene
Vice President, Cisco Systems (a supplier of network equipment
and network management for the Internet)
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51 |
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2000 |
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Dan Maydan
President Emeritus, Applied Materials Inc. (a semiconductor
manufacturing equipment company)
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69 |
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1996 |
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David Peterschmidt
Chief Executive Officer, Openwave Systems Inc. (a software
company)
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57 |
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2003 |
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Fred Rosenzweig
President of the Company
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49 |
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2000 |
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Thomas I. Unterberg
Chairman, C.E. Unterberg Towbin (an investment banking firm)
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74 |
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1990 |
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Christopher B. Paisley
Executive Professor, Santa Clara University
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52 |
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2004 |
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Mr. Cogan is a founding Partner of Lightspeed Venture
Partners established in 2000. Previously, he was Managing
General Partner of Weiss, Peck & Greer Venture
Partners, L.P. from 1991 until 2000. From 1986 to 1990,
Mr. Cogan was a partner of Adler & Company, a
venture capital group handling technology-related investments.
From 1983 to 1985, he was Chairman and Chief Executive Officer
of Formtek, an imaging and data management computer company,
whose products were based upon technology developed at
Carnegie-Mellon University. Mr. Cogan is currently a
director of several privately held companies. Mr. Cogan
holds an MBA from the University of California at
Los Angeles.
3
Mr. Gassée is currently General Partner at Allegis
Capital, a venture investments firm. From May 1979 to
October 2002, Mr. Gassée served as a director
and, in addition, from January 2002 as Chief Executive
Officer of Computer Access Technology Corp., a communication
protocol expert company. From 1990 to January 2002,
Mr. Gassée was the Chief Executive Officer of
Be Inc., a personal computer technology company.
Mr. Gassée served as the President of Apple Products,
a division of Apple Computer, Inc. (Apple), a
manufacturer of personal computers and related software, from
August 1988 to February 1990. From June 1987 to
August 1988, Mr. Gassée served as Senior Vice
President of research and development of Apple, and from
June 1985 to June 1987, he served as Vice President of
product development. He was also the founding General Manager
for Apple Computer France, SARL. Before joining Apple,
Mr. Gassée was President and General Manager of the
French subsidiary of Exxon Business Systems. In addition,
Mr. Gassée has held several management positions with
Data General Corporation, including General Manager for France,
Area Manager for Latin countries and Marketing Manager for
Europe. He also spent six years with Hewlett-Packard Company,
where he served in several positions, including Sales Manager of
Europe. Mr. Gassée is a director of PalmSource PSRC.
Mr. Gecht was appointed Chief Executive Officer of the
Company as of January 1, 2000. From July 1999 to
January 2000, he served as President of the Company. From
January 1999 to July 1999, he was Vice President and
General Manager of Server Products. From October 1995
through January 1999, he served as Director of Software
Engineering. Prior to joining the Company, Mr. Gecht was
Director of Engineering at Interro Systems, a technology
company, from 1993 to 1995. From 1991 to 1993, he served as
Software Manager of ASP Computer Products, a networking
company and from 1990 to 1991 he served as Manager of Networking
Systems for Apple Israel, a technology company. From 1985 to
1990, he served as an officer in the Israeli Defense Forces,
managing an engineering development team, and later was an
acting manager of one of the IDF high-tech departments.
Mr. Gecht holds a B.S. in Computer Science and Mathematics
from Ben Gurion University in Israel.
Mr. Greene is currently a Vice President of Cisco Systems
where he is responsible for the Global Financial Services
business. From January 2004 until February 2005,
Mr. Greene was the President and General Manager for the
Global Financial Services business of TeleTech Holdings, Inc., a
customer management services company. From September 2001
until February 2004, Mr. Greene was a Senior Vice
President with Cap Gemini Ernst & Young where he served
clients in the global financial services industries. Prior to
that he was Chief Executive Officer and President of Abilizer
Solutions Inc., a global player in the Enterprise Information
Portal software business. Prior to Abilizer, Mr. Greene was
a Senior Partner with Accenture. Mr. Greene joined
Accenture in 1979 and left in 2000 as the Managing Partner of
their Western
Region. Mr. Greene received his B.A. in Economics from the
University of California at Davis and his M.B.A. from
Santa Clara University.
Dr. Maydan has been President Emeritus of Applied Materials
Inc., a semiconductor manufacturing equipment company, since
April 2003 and a member of that companys Board of
Directors since June 1992. Prior to that, he had been President
of Applied Materials since January 1994. From March 1990 to
January 1994, Dr. Maydan served as Applied Materials
Executive Vice President, with responsibility for all product
lines and new product development. Before joining Applied
Materials in September 1980, Dr. Maydan spent thirteen
years managing new technology development at Bell Laboratories
during which time he pioneered laser recording of data on
thin-metal films and made significant advances in
photolithography and vapor deposition technology for
semiconductor manufacturing. In 1998, Dr. Maydan was
elected to the National Academy of Engineering. He serves on the
Board of Directors of Drexler Technology and Advisory Board of
Komatsu Electronics. Dr. Maydan received his B.S. and
M.S. degrees in electrical engineering from Technion, the
Israel Institute of Technology, and his Ph.D. in Physics from
Edinburgh University in Scotland.
Mr. Peterschmidt has been the Chief Executive Officer and
President of Openwave Systems Inc. since November 2004. Prior to
that, Mr. Peterschmidt served as Chief Executive Officer of
Securify Inc. from 2003 to 2004. Prior to that,
Mr. Peterschmidt served as President and Chief Executive
Officer of Inktomi from 1996 to 2002. From 1991 to 1996,
Mr. Peterschmidt served as Chief Operating Officer at
Sybase. Prior to Sybase, from 1988 to 1990 Mr. Peterschmidt
was the owner and general manager of
E2,
a management consulting firm specializing in strategic planning.
Mr. Peterschmidt has held numerous leadership positions at
technology and
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consulting companies including, System Industries, Lex Computer
Products and Hamilton/ Avnet. He serves on the Board of
Directors of Business Objects and Openwave Systems Inc.
Mr. Peterschmidt received an M.B.A. from Chapman College
and a B.A. in Political Science from the University of Missouri.
Mr. Rosenzweig was appointed President of the Company as of
January 1, 2000. From July 1999 to January 2004 he served
as Chief Operating Officer. From August 1998 to July 1999,
Mr. Rosenzweig served as Executive Vice President. From
January 1995 to August 1998, Mr. Rosenzweig served as Vice
President, Manufacturing and Support. From May 1993 to January
1995, Mr. Rosenzweig served as Director of Manufacturing.
From July 1992 to May 1993, he was a plant general manager at
Tandem Computers Corporation. From October 1989 to July 1992,
Mr. Rosenzweig served as a systems and peripheral test
manager at Tandem Computers Corporation. Mr. Rosenzweig
holds a B.S. in Metallurgical Engineering from The Pennsylvania
State University and an M.B.A. from the University of California
at Berkeley.
Mr. Unterberg is the co-founder and has served as a
Chairman of C.E. Unterberg Towbin, an investment banking firm,
since June 1989. He was a Managing Director of Shearson Lehman
Hutton Inc. from January 1987 to January 1989. Prior to that, he
was Chairman of the Board, Chief Executive Officer and Senior
Managing Director of L.F. Rothschild, Unterberg, Towbin
Holdings, Inc. and was associated with such firm or its
predecessors from 1956. Mr. Unterberg is also a director of
Systems & Computer Technology Corporation, ServiceWare
Inc. and Reasoning. Mr. Unterberg is a graduate of
Princeton University and received an M.B.A. from the Wharton
School, University of Pennsylvania.
Mr. Paisley was appointed to the Board of Directors on
July 9, 2004. He has been the Deans Executive
Professor of Accounting and Finance in the Leavey School of
Business at Santa Clara University since January 2001. From
September 1985 until May 2000, Mr. Paisley was the Senior
Vice President of Finance and Chief Financial Officer of 3Com
Corporation. Mr. Paisley is also a director of Silicon
Image, Brocade Communication Systems and Volterra.
Mr. Paisley received a B.A. in Economics from the
University of California, Santa Barbara and an M.B.A. from
the University of California, Los Angeles. Mr. Paisley
serves as the Chairman of our Audit Committee.
Directors are elected by a plurality of the votes present in
person or represented by proxy and entitled to vote.
The Companys Board of Directors recommends a vote
FOR all nine nominees listed above.
COMMITTEES OF THE BOARD OF DIRECTORS
Meetings of Board of Directors and Committees
The Board of Directors of the Company held a total of four
(4) meetings during 2004. The Board has established the
following Committees to assist the Board in discharging its
duties: (i) an Audit Committee, (ii) a Compensation
Committee, (iii) a Nominating and Governance Committee,
(iv) a Non-Officer Stock Option Committee, and (v) an
Employee Stock Purchase Plan Committee. Current copies of the
charters for the Audit Committee, the Compensation Committee and
the Nominating and Governance Committee as well as the Board of
Director Guidelines can be found on the Companys website
at www.efi.com. Each director attended 75% or more of the
aggregate meetings of the Board of Directors and of the
committees thereof, if any, upon which such director served
during 2004.
The Audit Committee consists of Directors Cogan, Greene, Paisley
and Maydan. The Audit Committee conducted six (6) meetings
during 2004. The Audit Committee approves the engagement of and
the services to be performed by the Companys independent
auditors and reviews the Companys accounting principles
and its system of internal accounting controls. The Board has
determined that all members of the Audit Committee are
independent as that term is defined in
Rule 4200 of the listing standards of the Nasdaq National
Market and also meet the additional criteria for independence of
Audit Committee members set forth in Rule 10A-3(b)(1) under
the Securities Exchange Act of 1934, as amended. In addition,
our Board of
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Directors has determined that Chris Paisley is an audit
committee financial expert as defined by the Securities
and Exchange Commission.
The Audit Committee oversees the Companys Ethics Program,
which presently includes, among other things, the Companys
Code of Business Conduct and Ethics, the Companys Code of
Ethics for the Management Team, the Companys Code of
Ethics for the Accounting and Finance Team, the Companys
Code of Ethics for the Sales Team (collectively, the
Codes), an Internal Audit Committee responsible for
receiving and investigating complaints, a 24-hour global
toll-free hotline and an internal website whereby employees can
anonymously submit complaints via email. The Companys
Codes can be found on the Companys website at www.efi.com.
Principal Accountant Fees and Services
During the fiscal years ended December 31, 2004 and 2003
PricewaterhouseCoopers, LLP, our independent registered public
accounting firm, provided various audit, audit related and
non-audit services to the Company as follows:
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2004 | |
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2003 | |
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Audit Fees(a)
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$ |
1,158,018 |
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$ |
902,274 |
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Audit Related Fees(b)
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$ |
70,000 |
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$ |
212,732 |
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Tax Fees(c)
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$ |
37,191 |
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$ |
105,821 |
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All Other Fees(d)
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$ |
31,543 |
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Total
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$ |
1,296,752 |
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$ |
1,220,827 |
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(a) Audit Fees. Audit Fees consist of fees billed
for professional services rendered for the audit of the
Companys consolidated financial statements and review of
the interim consolidated financial statements included in
quarterly reports and services that are normally provided by
PricewaterhouseCoopers LLP in connection with statutory and
regulatory filings or engagements. |
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(b) Audit Related Fees. Audit Related Fees consist
of fees billed for assurance and related services that are
reasonably related to the performance of the audit or review of
the Companys consolidated financial statements and are not
reported under Audit Fees. These services include
accounting consultations in connection with acquisitions, 404
attestation services as well as attest services that are not
required by statute or regulation, and consultations concerning
financial accounting and reporting standards. |
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(c) Tax Fees. Tax Fees consist of fees billed for
professional services for tax compliance, tax advice and tax
planning. These services include assistance regarding federal,
state and international compliance and mergers and acquisitions. |
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(d) All Other Fees. All other fees consist of
services provided to expatriate employees and seminars. No such
services were provided by PricewaterhouseCoopers in 2003. |
The Audit Committee is responsible for pre-approving audit and
non-audit services provided to the Company by the independent
auditors (or subsequently approving non-audit services in those
circumstances where a subsequent approval is necessary and
permissible); in this regard, the Audit Committee has the sole
authority to approve the hiring and firing of the independent
auditors, all audit engagement fees and terms and all non-audit
engagements, as may be permissible, with the independent
auditors;
The Audit Committee of the Board has considered whether
provision of the services described in sections (b), (c)
and (d) above is compatible with maintaining the
independent auditors independence and has determined that
such services have not adversely affected PricewaterhouseCoopers
LLPs independence. All of the services of each
of (b), (c), and (d) were approved by the Audit
Committee.
The Audit Committee has selected PricewaterhouseCoopers LLP, its
independent registered public accounting firm, to audit the
consolidated financial statements of the Company for the fiscal
year ending
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December 31, 2005. PricewaterhouseCoopers LLP has audited
the Companys financial statements since 1992.
Representatives of PricewaterhouseCoopers 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 Compensation Committee consists of Directors Gassée and
Peterschmidt. The Compensation Committee conducted one
(1) meeting during 2004. The Board has determined that all
members of the Compensation Committee are
independent as that term is defined in
Rule 4200 of the listing standards of the Nasdaq National
Market. The Compensation Committee reviews and approves the
Companys executive compensation policy and administers the
Companys Stock Plans.
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Nominating and Governance Committee |
The Nominating and Governance Committee consists of Directors
Maydan, Greene and Gassée. The Board established the
Nominating and Governance Committee in March 2003 and it
undertook its actions by unanimous written consent during 2004.
The Board has determined that all members of the Nominating and
Governance Committee are independent as that term is
defined in Rule 4200 of the listing standards of the Nasdaq
National Market. The Nominating and Governance Committee
develops and recommends governance principles and recommends
director nominees.
Consideration of Director Nominees
The policy of the Nominating and Governance Committee is to
consider properly submitted stockholder nominations for
candidates for membership on the Board as described below under
Identifying and Evaluating Nominees for Directors.
In evaluating such nominations, the Nominating and Governance
Committee seeks to achieve a balance of knowledge, experience
and capability on the Board and to address the membership
criteria set forth under Director Qualifications.
The Nominating and Governance Committee will consider
suggestions of nominees from stockholders. Stockholders may
recommend individuals for consideration by submitting the
materials set forth below to the Company addressed to the
Nominating and Governance Committee at the Companys
headquarters address. To be timely, the written materials must
be submitted within the time permitted for submission of a
stockholder proposal for inclusion in the Companys proxy
statement for the subject annual meeting.
The written materials must include: (1) all information
relating to the individual recommended that is required to be
disclosed pursuant to Regulation 14A under the Securities
Exchange Act of 1934 (including such persons written
consent to being named in the proxy statement as a nominee and
to serving as a director if elected); (2) the name(s) and
address(es) of the stockholders making the nomination and the
amount of the Companys securities that is owned
beneficially and of record by such Stockholder(s);
(3) appropriate biographical information (including a
business address and a telephone number) and a statement as to
the individuals qualifications, with a focus on the
criteria described above; (4) a representation that the
stockholder is a holder of stock of the Company entitled to vote
on the date of submission of such written materials and
(5) any material interest of the stockholder in the
nomination.
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Any stockholder nominations proposed for consideration by the
Nominating and Governance Committee should be addressed to:
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Electronics for Imaging, Inc. |
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Attention: Nominating and Governance Committee |
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c/o Joseph Cutts |
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303 Velocity Way, |
|
Foster City, CA 94404 |
The Nominating and Governance Committee has established the
following minimum criteria for evaluating prospective board
candidates:
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Reputation for integrity, strong moral character and adherence
to high ethical standards. |
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Holds or has held a generally recognized position of leadership
in community and/or chosen field of endeavor, and has
demonstrated high levels of accomplishment. |
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Demonstrated business acumen and experience, and ability to
exercise sound business judgment and common sense in matters
that relate to the current and long-term objectives of the
Company. |
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Ability to read and understand basic financial statements and
other financial information pertaining to the Company. |
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Commitment to understand the Company and its business, industry
and strategic objectives. |
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Commitment and ability to regularly attend and participate in
meetings of the Board of Directors, Board Committees and
stockholders, number of other company Boards on which the
candidate serves and ability to generally fulfill all
responsibilities as a director of the Company. |
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Willingness to represent and act in the interests of all
stockholders of the Company rather than the interests of a
particular group. |
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Good health and the ability to serve. |
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For prospective non-employee directors, independence under SEC
and applicable stock exchange rules, and the absence of any
conflict of interest (whether due to a business or personal
relationship) or legal impediment to, or restriction on, the
nominee serving as a director. |
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Willingness to accept the nomination to serve as a director of
the Company. |
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Other Factors for Potential Consideration |
The Nominating and Governance Committee will also consider the
following factors in connection with its evaluation of each
prospective nominee:
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Whether the prospective nominee will foster a diversity of
skills and experiences. |
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Whether the nominee possesses the requisite education, training
and experience to qualify as financially literate or
as an audit committee financial expert under
applicable SEC and stock exchange rules. |
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Composition of Board and whether the prospective nominee will
add to or complement the Boards existing strengths. |
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Identifying and Evaluating Nominees for Directors |
The Nominating and Governance Committee initiates the process by
preparing a slate of potential candidates who, based on their
biographical information and other information available to the
Nominating
8
and Governance Committee, appear to meet the criteria specified
above and/or who have specific qualities, skills or experience
being sought (based on input from the full Board).
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Outside Advisors. The Nominating and Governance Committee
may engage a third-party search firm or other advisors to assist
in identifying prospective nominees. |
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Nomination of Incumbent Directors. The re-nomination of
existing directors is not viewed as automatic, but is based on
continuing qualification under the criteria set forth above. |
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For incumbent directors standing for re-election, the Nominating
and Governance Committee will assess the incumbent
directors performance during his or her term, including
the number of meetings attended, level of participation, and
overall contribution to the Company; the number of other company
Boards on which the individual serves, composition of the Board
at that time, and any changed circumstances affecting the
individual director which may bear on his or her ability to
continue to serve on the Board. |
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Management Directors. The number of officers or employees
of the Company serving at any time on the Board should be
limited such that, at all times, a majority of the directors is
independent under applicable SEC and Nasdaq National
Market rules. |
After reviewing appropriate biographical information and
qualifications, first-time candidates will be interviewed by at
least one member of the Nominating and Governance Committee and
by the Chief Executive Officer. Upon completion of the above
procedures, the Nominating and Governance Committee shall
determine the list of potential candidates to be recommended to
the full Board for nomination at the annual meeting or
appointment to the Board between annual meetings. The Board of
Directors will select the slate of nominees only from candidates
identified, screened and approved by the Nominating and
Governance Committee.
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Non-Officer Stock Option Committee |
The Non-Officer Stock Option Committee consists of Director
Gecht. The Non-Officer Stock Option Committee undertook its
actions by unanimous written consent during 2004. The
Non-Officer Stock Option Committee has the authority to grant
stock awards to eligible persons who are not subject to
Section 16 of the Exchange Act of 1934.
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Employee Stock Purchase Plan Committee |
The Employee Stock Purchase Plan Committee consists of Directors
Gecht and Rosenzweig. The Employee Stock Purchase Plan Committee
undertook its actions by unanimous written consent during 2004.
The Employee Stock Purchase Plan Committee is responsible for
the administration of the Employee Stock Purchase Plan.
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COMMUNICATION WITH THE BOARD |
Stockholders who wish to communicate with the Board should send
such communications via regular mail addressed to the
Companys Corporate Secretary, Joseph Cutts, at Electronics
for Imaging, Inc., 303 Velocity Way, Foster City,
California 94404. He will review each such communication and
forward it to the appropriate Board member or members as he
deems appropriate.
The Company encourages its directors to attend the annual
meeting of stockholders. Last year two of the Companys
directors attended the annual meeting of stockholders.
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COMPENSATION OF DIRECTORS |
In 2004, outside members of the Board of Directors were entitled
to receive cash compensation in the amount of $20,000 per
year plus $1,000 per Board of Directors meeting attended in
person or $500 per Board of Directors meeting attended by
telephone and $1,000 per Committee meeting attended, except
for Audit Committee meetings, in addition to reimbursement of
reasonable expenses incurred in attending meetings;
9
Audit Committee members receive $2,000 per Audit Committee
meeting attended. The Audit Committee Chairperson receives
$4,000 per meeting attended and the Compensation Committee
Chairperson receives $2,000 per meeting attended. During
2004, none of the outside members of the Board of Directors
received stock options, except for Christopher Paisley who
received an option to purchase 30,000 shares of stock
at an exercise price of $20.39 vesting over a period of
30 months in equal monthly increments, with the options
expiring at the end of seven years.
SECURITY OWNERSHIP
Except as otherwise indicated below, the following table sets
forth certain information regarding beneficial ownership of
Common Stock of the Company as of March 25, 2005 by
(i) each person known by the Company to be the owner of
more than 5% of the outstanding shares of Common Stock,
(ii) each director and nominee for director,
(iii) each executive officer listed in the Summary
Compensation Table, and (iv) all executive officers and
directors as a group.
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Common Stock | |
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Percent | |
Name of Beneficial Owner(1) |
|
No. of Shares | |
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Owned | |
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| |
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| |
Fidelity Management & Research(1)
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7,774,565 |
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14.4 |
% |
82 Devonshire Street
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Boston, Massachusetts 02109
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Smith Barney Asset Management(1)
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7,400,199 |
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13.7 |
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388 Greenwich Street
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New York, New York 10013
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Neuberger Berman, LLC(1)
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5,285,927 |
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9.8 |
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605 Third Avenue
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New York, New York 10158
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Wellington Management Company LLP(1)
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3,646,700 |
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6.7 |
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75 State Street
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Boston, Massachusetts 02109
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Stichting Pensionenfonds ABP(1)
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3,120,000 |
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5.8 |
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Oude Lindestratt 70
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Postbus 2889
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6401 DL Heerlen
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Netherlands
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Fred Rosenzweig(2)
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375,750 |
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* |
|
Guy Gecht(3)
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266,517 |
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* |
|
Thomas Unterberg(4)
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206,868 |
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* |
|
Joseph Cutts(5)
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151,797 |
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* |
|
Gill Cogan(6)
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92,868 |
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* |
|
Jean-Louis Gassée(7)
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82,868 |
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* |
|
Dan Maydan(8)
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61,928 |
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* |
|
James S. Greene(9)
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49,868 |
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* |
|
David Peterschmidt(10)
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39,466 |
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* |
|
Christoper Paisley(11)
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9,000 |
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* |
|
All executive officers and directors as a group (10 persons)(12)
|
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1,333,930 |
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2.0 |
% |
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|
(1) |
This table is based upon information supplied by officers,
directors and principal stockholders and Schedules 13D and 13G
filed with the Commission as of March 25, 2005. Unless
otherwise indicated in the footnotes to this table and subject
to community property laws where applicable, each of the
stockholders named in this table has sole voting and
investment power with respect to the shares |
10
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indicated as beneficially owned. Applicable percentages are
based on 54,074,695 shares outstanding on March 25,
2005 adjusted as required by rules promulgated by the Securities
and Exchange Commission (the SEC). |
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(2) |
Includes 365,750 shares of Common Stock issuable upon
exercise of options granted to Mr. Rosenzweig under the
1990 and/or 1999 Stock Plan which are exercisable within
60 days of March 25, 2005. |
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(3) |
Includes 252,875 shares of Common Stock issuable upon the
exercise of options granted to Mr. Gecht under the 1990
and/or 1999 Stock Plans which are exercisable within
60 days of March 25, 2005. |
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(4) |
Includes 87,868 shares of Common Stock issuable upon
exercise of options granted to Mr. Unterberg under the 1990
and/or 1999 Stock Plan which are exercisable within 60 days
of March 25, 2005; 4,000 shares of Common Stock are
beneficially owned by Mr. Unterbergs spouse. |
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(5) |
Includes 108,175 shares of Common Stock issuable upon
exercise of options granted to Mr. Cutts under the 1990
and/or 1999 Stock Plan which are exercisable within 60 days
of March 25, 2005. |
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(6) |
Includes 82,868 shares of Common Stock issuable upon
exercise of options granted to Mr. Cogan under the 1990
and/or 1999 Stock Plan which are exercisable within 60 days
of March 25, 2005. |
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(7) |
Includes of 82,868 shares of Common Stock issuable upon
exercise of options granted to Mr. Gassée under the
1990 and/or 1999 Stock Plan which are exercisable within
60 days of March 25, 2005. |
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(8) |
Includes 60,368 shares of Common Stock issuable upon
exercise of options granted to Mr. Maydan under the 1990
and/or 1999 Stock Plan which are exercisable within 60 days
of March 25, 2005. |
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(9) |
Includes 49,868 shares of Common Stock issuable upon
exercise of options granted to Mr. Greene under the 1999
Stock Plan which are exercisable within 60 days of
March 25, 2005. |
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(10) |
Includes 36,466 shares of Common Stock issuable upon
exercise of options granted to Mr. Peterschmidt under the
1996 Splash Technology and/or 1999 Stock Plan which are
exercisable within 60 days of March 25, 2005. |
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(11) |
Includes 9,000 shares of Common Stock issuable upon
exercise of options granted to Mr. Paisley under the 2004
Stock Plan which are exercisable within 60 days of
March 25, 2005. |
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(12) |
Includes an aggregate of 1,136,106 shares of Common Stock
issuable upon the exercise of options granted to executive
officers and directors collectively under the 1990, 1996 Splash
Technology, 1999 and 2004 Stock Plans which are exercisable
within 60 days of March 25, 2005. |
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the Exchange Act requires the
Companys officers, directors and persons who beneficially
own more than ten percent of a registered class of the
Companys equity securities, to file reports of security
ownership and changes in such ownership with the Securities and
Exchange Commission (the SEC). Officers, directors
and greater than ten percent beneficial owners also are required
by rules promulgated by the SEC to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such forms furnished
to the Company, or written representations that no Form 5
filings were required, the Company believes that during the
period from January 1, 2004 to December 31, 2004, all
Section 16(a) filing requirements applicable to officers,
directors or greater than ten percent beneficial owners were
complied with.
11
EXECUTIVE OFFICERS
The following table lists certain information regarding the
Companys executive officers as of April 1, 2005.
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Name |
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Age | |
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Position |
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Guy Gecht
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39 |
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|
Chief Executive Officer |
Fred Rosenzweig
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49 |
|
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President |
Joseph Cutts
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|
41 |
|
|
Chief Financial Officer, Chief Operating Officer and Corporate
Secretary |
Mr. Gecht was appointed Chief Executive Officer of the
Company as of January 1, 2000. From July 1999 to January
2000, he served as President of the Company. From January 1999
to July 1999, he was appointed Vice President and General
Manager of Server Products of the Company. From October 1995
through January 1999, he served as Director of Software
Engineering. Prior to joining the Company, Mr. Gecht was
Director of Engineering at Interro Systems, a technology
company, from 1993 to 1995. From 1991 to 1993, he served as
Software Manager of ASP Computer Products, a networking company
and from 1990 to 1991 he served as Manager of Networking Systems
for Apple Israel, a technology company. From 1985 to 1990, he
served as an officer in the Israeli Defense Forces, managing an
engineering development team, and later was an acting manager of
one of the IDF high-tech departments. Mr. Gecht holds a
B.S. in Computer Science and Mathematics from Ben Gurion
University in Israel.
Mr. Rosenzweig was appointed President of the Company as of
January 1, 2000. From July 1999 until January 2004, he
served as Chief Operating Officer of the Company. From August
1998 to July 1999, Mr. Rosenzweig served as Executive Vice
President of the Company. From January 1995 to August 1998,
Mr. Rosenzweig served as Vice President, Manufacturing and
Support of the Company. From May 1993 to January 1995,
Mr. Rosenzweig served as Director of Manufacturing of the
Company. Prior to joining the Company, from July 1992 to May
1993, he was a plant general manager at Tandem Computers
Corporation. From October 1989 to July 1992, Mr. Rosenzweig
served as a systems and peripheral test manager at Tandem
Computers Corporation. Mr. Rosenzweig holds a B.S. in
Metallurgical Engineering from The Pennsylvania State University
and an M.B.A. from the University of California at Berkeley.
Mr. Cutts was appointed Chief Operating Officer in January
2004. Mr. Cutts was appointed Chief Financial Officer and
Corporate Secretary of the Company in April 2000. From January
1999 until April 2000, Mr. Cutts served as the
Companys Vice President of Finance. From March 1997 to
January 1999, Mr. Cutts served as Director of Finance of
the Company. Mr. Cutts served as the Director of Finance
for the Nestlé Beverage Company from June 1994 until he
joined the Company in March 1997. Mr. Cutts serves on the
Board of Directors of Claria Corporation, an online marketing
company, and has been the Chairman of their Audit Committee
since February 2004. Mr. Cutts holds a B.S. in Finance from
The Pennsylvania State University and an M.M. from Northwestern
University.
12
EXECUTIVE COMPENSATION
Compensation of Executive Officers
The SEC requires the following table to set forth certain
summary information regarding compensation paid by the Company
for services rendered during the fiscal years ended
December 31, 2004, 2003 and 2002 to all individuals serving
as the Companys Chief Executive Officer during the last
complete fiscal year and its four most highly compensated
executive officers other than the Chief Executive Officer (the
Named Officers) whose salary and bonus for the 2004
fiscal year was in excess of $100,000. The Company has only
three executive officers, all of whom are included in the table
below.
Summary Compensation Table
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Long-Term Compensation | |
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Awards | |
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Annual Compensation | |
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| |
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| |
|
Restricted | |
|
Number of | |
|
All Other | |
Name and Principal Position |
|
Year | |
|
Salary (1) | |
|
Bonus (1) | |
|
Stock Awards | |
|
Options | |
|
Compensation | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
($) | |
|
($) | |
|
($) | |
|
|
|
($) | |
Guy Gecht
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|
|
2004 |
|
|
|
570,000 |
|
|
|
|
(7) |
|
|
|
|
|
|
|
(8) |
|
|
8,800 |
(5) |
Chief Executive Officer
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|
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2003 |
|
|
|
480,000 |
|
|
|
593,640 |
(2) |
|
|
|
|
|
|
175,000 |
|
|
|
8,800 |
(5) |
|
|
|
2002 |
|
|
|
436,000 |
(3) |
|
|
471,388 |
(4) |
|
|
|
|
|
|
145,000 |
|
|
|
8,800 |
(5) |
Fred Rosenzweig
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|
|
2004 |
|
|
|
510,000 |
|
|
|
|
(7) |
|
|
|
|
|
|
|
(8) |
|
|
8,800 |
(5) |
President
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|
|
2003 |
|
|
|
460,000 |
|
|
|
502,960 |
(2) |
|
|
|
|
|
|
150,000 |
|
|
|
8,800 |
(5) |
|
|
|
2002 |
|
|
|
417,833 |
(3) |
|
|
410,186 |
(4) |
|
|
|
|
|
|
100,000 |
|
|
|
8,800 |
(5) |
Joseph Cutts
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|
|
2004 |
|
|
|
350,000 |
|
|
|
|
(7) |
|
|
|
|
|
|
|
(8) |
|
|
8,800 |
(5) |
Chief Financial Officer,
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|
|
2003 |
|
|
|
300,000 |
|
|
|
218,240 |
(2) |
|
|
986,000 |
(6) |
|
|
87,000 |
|
|
|
8,800 |
(5) |
Chief Operating Officer
|
|
|
2002 |
|
|
|
272,500 |
(3) |
|
|
186,198 |
(4) |
|
|
|
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|
50,000 |
|
|
|
8,800 |
(5) |
and Corporate Secretary
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|
|
|
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(1) |
Amounts shown include cash and non-cash compensation earned and
received by each Named Officer as well as amounts earned but
deferred at the election of those Named Officers. |
|
(2) |
Represents bonuses accrued in 2003 under the Executive Bonus
Plan and paid in March 2004. |
|
(3) |
Effective beginning July 15, 2002 through the end of 2002,
Messrs. Gecht, Rosenzweig and Cutts voluntarily
relinquished 20% of their monthly salary. A portion of the
relinquished salary was subject to repayment in the form of a
bonus in 2003 based upon the achievement of Company financial
objectives established in June 2002 for the second half of 2002
which were achieved and such amounts were paid. |
|
(4) |
Represents bonuses accrued in 2002 under the Executive Bonus
Plan and paid in February 2003, including amounts relating to
the 2002 relinquished salary which was tied to the achievement
of Company financial objectives for the second half of 2002. |
|
(5) |
Represents the matching contribution which the Company made on
behalf of each Named Officer to the Companys 401(k) Plan
and automobile allowance. |
|
(6) |
Mr. Cutts received 40,000 shares of restricted Common
Stock on December 15, 2003. The stock is scheduled to vest
at a rate of 25% per year over 4 years. As of
December 31, 2004, the stock had a value of $696,400. |
|
(7) |
No bonus was paid to the executive officers for the year ending
December 31, 2004 as the Company did not meet the criteria
set by the Board for the payment of bonuses to senior management. |
|
(8) |
No stock option grant was made to the executive officers during
the year ending December 31, 2004. |
STOCK OPTION GRANTS AND EXERCISES
No grants were made to the Executive Officers in 2004. No
company-wide grants were made to the employees in 2004.
13
Aggregated Option Exercises as of December 31, 2004 and
Year End Option Values
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|
Value of the Unexercised |
|
|
Shares | |
|
Value | |
|
Number of Unexercised | |
|
In-the-Money Options |
|
|
Acquired | |
|
Realized | |
|
Options at 12/31/04 | |
|
at 12/31/04(2) |
|
|
on | |
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| |
|
| |
|
|
Name |
|
Exercise | |
|
(1) | |
|
Exercisable | |
|
Unexercisable | |
|
Exercisable | |
|
Unexercisable |
|
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| |
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| |
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| |
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| |
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| |
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($ amounts in thousands) |
Guy Gecht
|
|
|
147,250 |
|
|
$ |
1,489 |
|
|
|
225,500 |
|
|
|
127,500 |
|
|
$ |
59 |
|
|
$ |
|
|
Fred Rosenzweig
|
|
|
97,000 |
|
|
$ |
1,388 |
|
|
|
345,333 |
|
|
|
101,667 |
|
|
$ |
26 |
|
|
$ |
|
|
Joseph Cutts
|
|
|
39,000 |
|
|
$ |
410 |
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|
|
95,300 |
|
|
|
61,550 |
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|
$ |
69 |
|
|
$ |
|
|
|
|
(1) |
This amount represents the market value of the underlying
securities on the exercise date minus the exercise price of such
options. |
|
(2) |
This amount represents the market value of the underlying
securities relating to in-the-money options at
December 31, 2004 minus the exercise price of such options. |
EMPLOYMENT AGREEMENTS
The Company entered into employment agreements with
Messrs. Gecht, Rosenzweig and Cutts in August 2003. The
employment agreements provide that each executives
employment shall continue to be at will. The
employment agreements state an annual base salary, subject to
any increases annually as the Companys Board shall
authorize from time to time in connection with an annual review
and provides for such performance bonus amounts as the
Companys Board authorizes. The employment agreements
contain certain provisions that take effect upon a change in
control of the Company, voluntary resignation, termination for
cause and termination for other reasons.
The employment agreements provide that if the executives
employment is involuntarily terminated, the executive shall be
entitled to receive (i) their annual salary for twelve
(12) months plus an amount equal to the bonus the executive
would have earned had he been employed by the Company at the end
of the year (prorated for the period of time worked),
(ii) the vesting of additional options shall accelerate and
become exercisable by the executive or the executives
representative, as the case may be, as if the executive had
remained continuously employed for a period of six
(6) months following such termination, and such options
shall remain exercisable for the period prescribed in the
executives stock option agreements and (iii) COBRA
coverage (Medical, Dental and Vision) paid for by the Company
for twelve (12) months from the executives
termination date if the executive elects continuation coverage
pursuant to the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended (COBRA), within the time period
prescribed pursuant to COBRA.
If the executive voluntarily resigns or is terminated for cause,
the employment agreements do not provide for severance benefits.
The employment agreements provide that upon termination in a
change of control, the executives shall be entitled to receive
(i) their annual salary for twenty-four (24) months
plus an amount equal to the bonus the executive would have
earned that year had he been employed by the Company at the end
of the year (prorated for the period of time worked),
(ii) the vesting of all of their options shall accelerate
in full and become exercisable by the executive or the
executives representative, as the case may be, for one
year from the executives termination date and
(iii) COBRA coverage (Medical, Dental and Vision) paid for
the Company for eighteen (18) months from the
executives termination date if the executive elects
continuation coverage pursuant to COBRA, within the time period
prescribed pursuant to COBRA.
Any severance payments, except for the current bonus to which
the executive is entitled to receive, shall be paid in a lump
sum within thirty (30) days of the executives
termination. The current bonus to which the executive is
entitled to receive shall be paid in a lump sum within thirty
(30) days of the date that the Companys audit is
complete for such year.
14
EXECUTIVE COMPENSATION AND RELATED INFORMATION
Compensation Committee Report
The Report of the Compensation Committee shall not be deemed to
be incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing
under the Securities Act of 1933 as amended (the
Securities Act) or under the Exchange Act, except to
the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed
filed under such acts.
The Compensation Committee (the Committee) of the
Board of Directors sets the compensation of the Chief Executive
Officer, reviews the design, administration and effectiveness of
compensation programs for other key executives, and approves
stock option grants for all executive officers. The Committee,
serving under a charter adopted by the Board of Directors, is
composed entirely of outside directors who have never served as
officers of the Company.
Compensation Philosophy and Objectives
The Company operates in the extremely competitive and rapidly
changing high technology industry. The Committee believes that
the compensation programs for the executive officers should be
designed to attract, motivate and retain talented executives
responsible for the success of the Company and should be
determined within a competitive framework based on the
achievement of designated financial targets and individual
contribution. Within this overall philosophy, the
Committees objectives are to:
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Offer a total compensation program that takes into consideration
the compensation practices of a group of twenty
(20) specifically identified peer companies (the Peer
Companies) and other selected companies with which the
Company competes for executive talent. |
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Provide annual variable incentive awards that are based on the
Companys overall financial performance in terms of
designated corporate objectives and the relative performance of
the Peer Companies as well as individual contributions. |
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Align the financial interests of executive officers with those
of stockholders by providing significant equity-based, long-term
incentives. |
Compensation Components and Process
The three major components of the Companys executive
officer compensation are (i) base salary,
(ii) incentive bonuses, and (iii) stock options.
The Committee determines the compensation levels for the
executive officers with the assistance of the Companys
Human Resources Department, which works with an independent
executive compensation consulting firm that provides the
Committee with executive compensation data drawn from a survey
of twenty (20) similarly sized technology companies which
have been identified as the Peer Companies; the survey of Peer
Companies was based on equity compensation only.
The positions of the Companys CEO and executive officers
were compared with those of their counterparts at the Peer
Companies, and the market compensation levels for comparable
positions were examined to determine base salary, target
incentives, total cash compensation and stock option grants.
Base Salary. The base salary for each executive officer
is determined at levels considered appropriate for comparable
positions at the Peer Companies.
Incentive Bonuses. To reinforce the attainment of Company
goals, the Committee believes that a substantial portion of the
annual total compensation of each executive officer should be in
the form of variable incentive pay. The annual incentive pool
for executive officers is determined on the basis of the
Companys achievement of the financial performance targets
approved by the Board of Directors and established at the
beginning of the fiscal year and also includes a component for
the executives individual contribution. The
15
incentive plan sets a threshold level of Company performance
based on both revenue and net income that must be attained
before any incentives are awarded. Once the fiscal years
threshold is achieved, specific formulas are in place to
calculate the actual incentive payment for each officer. An
incentive bonus target is set for each executive officer based
on targets for comparable positions at the Peer Companies and is
stated in terms of a percentage of the officers base
salary for the year. The executive officers may elect to receive
a portion of his bonus in shares of restricted stock in lieu of
cash. If the officer elects to receive restricted stock, the
restrictions will be lifted only upon the Company achieving a
higher threshold level than the bonus requirement of the blended
revenue and net income from the approved Board Plan for the
year. If the test is failed in 2006, for fiscal year 2005, then
the same test will be performed in 2007 for fiscal year 2006. If
the test is failed in 2007, then the test will revert to a lower
threshold test for the 2007 fiscal year in 2008. The testing
will continue until either the Company achieves the threshold
performance level or until 2011. The restrictions will lapse in
2011, regardless of the Companys performance.
Stock Options. The Companys stock plans are
long-term incentive plans for all employees. These plans are
intended to align stockholder and employee interests by creating
a direct link between long-term rewards and the value of the
Companys shares. The Compensation Committee believes that
long-term stock ownership by executive officers and all
employees is an important factor in achieving above average
growth in share value and in retaining valued employees. Since
the value of an option bears a direct relationship to the
Companys stock price, the Compensation Committee believes
that options motivate executive officers and employees to manage
the Company in a manner which will benefit all stockholders.
The stock plans authorize the Compensation Committee to award
stock options to employees at any time. Options are generally
granted at the time of initial employment with the Company, and
at later dates at the discretion of the Compensation Committee.
The size of initial and subsequent grants are determined by a
number of factors including comparable grants to executive
officers and employees by other companies which compete in the
Companys industry. The exercise price per share of the
stock options is equal to the closing price of a share of the
Companys Common Stock on the day prior to the date the
options are granted.
CEO Salary. The annual base salary for Mr. Gecht was
established by the Compensation Committee on April 11,
2005, for the period from January 1, 2005 to
December 31, 2005. The Compensation Committee left
Mr. Gechts annual base salary for 2005 unchanged at
$570,000. In addition, Mr. Gecht was granted an option to
purchase 216,667 shares of common stock and
43,333 shares of restricted common stock. If Mr. Gecht
has remained continuously employed by the Company, on
January 31, 2006, 25% of the options will vest, and
thereafter, an additional 2.5% of the options will vest monthly,
with full vesting on June 30, 2008. If the Company achieves
certain levels of revenue and net income under the approved
Board plan covering that fiscal year, the restricted stock will
vest according to the following schedule: (i) 25% of the
shares each year over two years and (ii) 50% of the shares
over the third year. If the performance test has not been met,
the restrictions on vesting will remain in place until the
performance test has been met. To the extent vesting has been
deferred because the Company had not met the performance test
for such fiscal year, upon the achievement of such test, the
shares shall vest as if the Company had achieved the performance
targets in the 2005 fiscal year. If, however, on
November 30, 2011, the performance test has still not been
met, all restrictions will lapse.
Mr. Gechts bonus for the 2005 fiscal year is targeted
to be 100% of his annual base salary. Mr. Gecht has elected
to receive 50% of his bonus for the 2005 fiscal year in the form
of 18,411 shares of restricted common stock, in lieu of
cash. If the Company achieves certain levels of revenue and net
income under the approved Board plan covering that fiscal year,
the restrictions on vesting will lapse with respect to 100% of
the shares on January 31, 2006. If the performance test has
not been met, the restrictions on vesting will remain in place
until the performance test has been met. If the restrictions on
vesting have not been lifted by 2007, then for each following
year, the performance test will be made at a lower threshold of
each years approved Board plan until 2011. If, however, on
January 31, 2011, the performance test has still not been
met, all restrictions will lapse. The Compensation
Committees decision was based on a review of salary levels
paid to chief executive officers of the Peer Companies as well
as Mr. Gechts performance in managing the increased
complexity of the growing organization. Mr. Gecht did not
receive a 2004 fiscal year incentive bonus as the Company did not
16
meet the criteria necessary for the bonus to be awarded.
Mr. Gechts incentive compensation was based on the
incentive plan used for all executive officers and was
considered at risk with no dollar guarantees.
Compliance with Section 162(m) of the Internal Revenue
Code
Section 162(m) of the Internal Revenue Code generally
disallows a tax deduction to public corporations for
compensation over $1 million paid for any fiscal year to
each of the corporations chief executive officer and the
four other most highly compensated executive officers as of the
end of the fiscal year. However, Section 162(m) exempts
qualifying performance-based compensation from the deduction
limit if certain requirements are met. Although the Company
considers the impact of Section 162(m) when developing and
implementing executive compensation programs, the Company
believes that it is important and in the best interests of
stockholders to preserve flexibility in designing compensation
programs. Accordingly, the Company has not adopted a policy that
all compensation must qualify as deductible under
Section 162(m). The Company has from time to time approved,
and may in the future approve, compensation arrangements for
certain officers that are not fully deductible. Further, because
of ambiguities and uncertainties as to the application and
interpretation of Section 162(m) and the regulations issued
thereunder, no assurance can be given, notwithstanding the
Companys efforts, that compensation intended by the
Company to satisfy the requirements for deductibility under
Section 162(m) does in fact do so.
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Submitted by: |
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Jean-Louis Gassée |
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Chairman of the Compensation Committee |
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David Peterschmidt |
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Member of the Compensation Committee |
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
Jean-Louis Gassée has served on the Compensation Committee
of the Board of Directors from its formation in August 1992
through December 31, 2004. David Peterschmidt has served on
the Compensation Committee of the Board of Directors from his
appointment in May 2003 through December 31, 2004. No
member of this Committee was at any time during the 2004 fiscal
year or at any other time an officer or employee of the Company,
nor did any member of this Committee have any relationships
requiring disclosure by the Company under the SECs rules
requiring disclosure of certain relationships and related party
transactions.
No executive officer of the Company serves as a member of the
board of directors or compensation committee of any other entity
that has one or more executive officers serving as a member of
the Companys Board of Directors or Compensation Committee.
RELATED TRANSACTIONS
The Company has entered into employment agreements with certain
of its executive officers. See Employment Agreements.
Mr. Unterberg, a director of the Company, is the Chairman
and co-founder of C.E. Unterberg, Towbin, an investment
banking firm (CEUT). On February 10, 2005, the
Company executed an engagement letter (the Engagement
Letter) with CEUT, pursuant to which CEUT agreed to
provide financial advisory and investment banking services to
the Company. Under the terms of the Engagement Letter, in
exchange for such services, the Company will pay to CEUT fees
and expense reimbursements at market comparable rates. In
connection with the Engagement Letter, the Company has also
agreed to a standard indemnity of CEUT in connection with its
services. Due to this engagement, Mr. Unterberg has recused
himself from any voting related to transactions covered by this
agreement.
17
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG ELECTRONICS FOR IMAGING, INC., NASDAQ US INDEX
AND
NASDAQ COMPUTERS AND MANUFACTURERS INDEX
The stock price performance graph below includes information
required by the SEC and shall not be deemed incorporated by
reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act or
under the Exchange Act, except to the extent the Company
specifically incorporates this information by reference, and
shall not otherwise be deemed soliciting material or filed under
such Acts.
The following graph demonstrates a comparison of cumulative
total returns based upon an initial investment of $100 in the
Companys Common Stock as compared with the NASDAQ
US Index and the NASDAQ Computers and Manufacturers Index.
The stock price performance shown on the graph below is not
necessarily indicative of future price performance and only
reflects the Companys relative stock price for the
five-year period ending on December 31, 2004. All values
assume reinvestment of dividends and are calculated at
December 31 of each year.
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12/31/99 |
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12/29/00 |
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12/31/01 |
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12/31/02 |
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12/31/03 |
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12/31/04 |
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EFI
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100 |
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23.98 |
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38.38 |
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27.97 |
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44.77 |
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29.95 |
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Nasdaq Computer Manufacturer Stocks
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100 |
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56.34 |
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38.89 |
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25.82 |
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36.26 |
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47.41 |
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Nasdaq US
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100 |
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60.17 |
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47.73 |
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32.98 |
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49.42 |
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53.74 |
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18
AUDIT COMMITTEE REPORT
The information contained in this report and information
earlier in this report regarding the independence of the
Companys Audit Committee members shall not be deemed to be
soliciting material or filed or
incorporated by reference in future filings with the Securities
and Exchange Commission, or subject to the liabilities of
Section 18 of the Securities Exchange Act of 1934, except
to the extent that the Company specifically requests that it be
treated as soliciting material or incorporates it by reference
into a document filed under the Securities Act of 1933, as
amended, or Securities Exchange Act of 1934, as amended.
The following is the report of the audit committee with respect
to the Companys audited financial statements for the
fiscal year ended December 31, 2004, included in the
Companys Annual Report on Form 10-K for that year.
The audit committee has reviewed and discussed these audited
financial statements with management of the Company.
The audit committee has discussed with the Companys
independent registered public accounting firm,
PricewaterhouseCoopers LLP, the matters required to be
discussed by SAS 61 (Codification of Statements on Auditing
Standards, AU Section 380) as amended, which includes,
among other items, matters related to the conduct of the audit
of the Companys financial statements.
The audit committee has received the written disclosures and the
letter from PricewaterhouseCoopers LLP required by
Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees) as
amended, and has discussed with PricewaterhouseCoopers LLP
the independence of PricewaterhouseCoopers LLP from the
Company.
Based on the review and discussions referred to above in this
report, the audit committee recommended to the Companys
Board of Directors that the audited financial statements be
included in the Companys Annual Report on Form 10-K
for the year ended December 31, 2004 for filing with the
Securities and Exchange Commission.
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Submitted by the Audit Committee |
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of the Board of Directors: |
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Chris Paisley |
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Chairman of the Audit Committee |
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Gill Cogan |
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Member of the Audit Committee |
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Dan Maydan |
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Member of the Audit Committee |
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James S. Greene |
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Member of the Audit Committee |
19
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.
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By Order of the Board of Directors |
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/s/ Joseph Cutts |
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Joseph Cutts |
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Secretary |
Dated: April 26, 2005
The company files annual reports, quarterly reports, proxy
statements, and other documents with the Securities and Exchange
Commission (SEC) under the Securities Exchange Act of 1934
(Exchange Act). The public may read and copy any materials that
the company files with the SEC at the SECs Public
Reference Room at 450 Fifth Street N.W.,
Washington, D.C. 20549. The public may obtain
information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. Also, the SEC maintains an
Internet website that contains reports, proxy and information
statements, and other information regarding issuers, including
the company, that file electronically with the SEC. The public
can obtain any documents that the company files with the SEC at
http://www.sec.gov.
The corporation also makes available free of charge through its
Internet website (http://www.efi.com) the companys Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K, and, if applicable, amendments
to those reports filed or furnished pursuant to the Exchange Act
as soon as reasonably practicable after the company
electronically files such material with, or furnishes it to, the
SEC.
20
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS OF
ELECTRONICS FOR IMAGING, INC.
ANNUAL MEETING OF STOCKHOLDERS
June 2, 2005
The undersigned stockholder of ELECTRONICS FOR
IMAGING, INC., a Delaware corporation, hereby acknowledges
receipt of the Notice of Annual Meeting of Stockholders and
Proxy Statement, each dated April 26, 2005, and hereby
appoints Guy Gecht and Joseph Cutts, or either of them, his or
her proxies and attorneys-in-fact, with full power to each of
substitution, on behalf and in the name of the proxies, to
represent the undersigned at the 2005 Annual Meeting of
Stockholders of ELECTRONICS FOR IMAGING, INC. to be held on
Thursday, June 2, 2005 at 9:00 a.m., Pacific Daylight
Time, at Electronics for Imaging, Inc., 303 Velocity Way,
Foster City, California 94404, and at any adjournment or
adjournments thereof, and to vote all shares of Common Stock that
the undersigned would be entitled to vote if then and there
personally present, on the matters set forth on the reverse
side. The undersigned hereby revokes all proxies previously
given by the undersigned to vote at the Annual Meeting of
Stockholders of Electronics for Imaging, Inc., or any
adjournment or postponement thereof.
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SEE
REVERSE SIDE
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CONTINUED AND TO BE SIGNED ON THE REVERSE
SIDE |
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SEE REVERSE
SIDE |
ANNUAL MEETING OF STOCKHOLDERS OF
ELECTRONICS FOR IMAGING, INC.
June 2, 2005
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
ê Please detach along perforated line and
mail in the envelope provided. ê
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PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x
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1. ELECTION OF DIRECTORS: |
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NOMINEES: |
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FOR ALL NOMINEES
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¡ ¡ |
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Gill Cogan
Jean-Louis Gassée |
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WITHHOLD AUTHORITY
FOR ALL NOMINEES
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¡
¡
¡
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Guy Gecht
James S. Greene
Dan Maydan |
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FOR ALL EXCEPT
(See instructions below)
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¡
¡
¡
¡
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David Peterschmidt
Fred Rosenzweig
Thomas I. Unterberg
Christopher B. Paisley |
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INSTRUCTION: |
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To withhold authority to vote for any individual nominee(s),
mark FOR ALL EXCEPT and
fill in the circle next to each nominee you wish to withhold, as shown here: l |
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To change the address on your account,
please check the box at right and
indicate your new address in the address space above. Please note that changes
to the registered name(s) on the account may not be submitted via this method. |
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2. |
In their discretion, the Proxies are authorized to vote upon such other matter or
matters that may properly come before the meeting or any adjournment thereof. |
THIS PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED, WILL BE VOTED FOR ELECTION OF ALL THE
NOMINEES FOR DIRECTORS, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS
AS MAY PROPERLY COME BEFORE THE MEETING.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
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Signature of Stockholder |
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Date: |
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Signature of Stockholder |
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Date: |
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Note: |
Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If
the signer is a corporation), please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
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