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FORTE SOFTWARE, INC.
1800 HARRISON STREET
OAKLAND, CALIFORNIA 94612
July 22, 1998
TO THE STOCKHOLDERS OF FORTE SOFTWARE, INC.
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Forte Software, Inc. (the "Company"), which will be held at the Lakeview Club,
300 Lakeside Drive, 28th Floor, Oakland, California 94612, on Wednesday, August
26, 1998, at 11:00 a.m.
Details of the business to be conducted at the Annual Meeting are given in
the attached Proxy Statement and Notice of Annual Meeting of Stockholders.
It is important that your shares be represented and voted at the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. Returning the proxy does NOT deprive you of your right to attend the
Annual Meeting. If you decide to attend the Annual Meeting and wish to change
your proxy vote, you may do so automatically by voting in person at the meeting.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in the affairs of the Company. We look
forward to seeing you at the Annual Meeting.
Sincerely,
/s/ Martin J. Sprinzen
Martin J. Sprinzen
PRESIDENT, CHIEF EXECUTIVE OFFICER AND
CHAIRMAN OF THE BOARD OF DIRECTORS
<PAGE>
FORTE SOFTWARE, INC.
1800 HARRISON STREET
OAKLAND, CALIFORNIA 94612
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 26, 1998
The Annual Meeting of Stockholders ("Annual Meeting") of Forte Software,
Inc. (the "Company") will be held at the Lakeview Club, 300 Lakeside Drive, 28th
Floor, Oakland, California 94612, on Wednesday, August 26, 1998, at 11:00 a.m.
Pacific Time for the following purposes:
1. To elect four directors of the Board of Directors to serve until the
next Annual Meeting or until their successors have been duly elected and
qualified;
2. To consider a proposal to ratify the appointment of Ernst & Young LLP as
the Company's independent public accountants for the fiscal year ending March
31, 1999; and
3. To transact such other business as may properly come before the meeting
or any adjournments or postponements thereof.
The foregoing items of business are more fully described in the attached
Proxy Statement.
Only stockholders of record at the close of business on July 1, 1998 are
entitled to notice of, and to vote at, the Annual Meeting and at any
adjournments or postponements thereof. A list of such stockholders will be
available for inspection at the Company's headquarters located at 1800 Harrison
Street, 24th Floor, Oakland, California during ordinary business hours for the
ten-day period prior to the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Bob L. Corey
Bob L. Corey
SECRETARY
Oakland, California
July 22, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE ANNUAL MEETING. IF
YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO CHANGE YOUR PROXY VOTE, YOU
MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE MEETING.
<PAGE>
FORTE SOFTWARE, INC.
1800 HARRISON STREET
OAKLAND, CALIFORNIA 94612
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 26, 1998
These proxy materials are furnished in connection with the solicitation of
proxies by the Board of Directors of Forte Software, Inc., a Delaware
corporation (the "Company"), for the Annual Meeting of Stockholders (the "Annual
Meeting") to be held at the Lakeview Club, 300 Lakeside Drive, 28th Floor,
Oakland, California 94612, on Wednesday, August 26, 1998, at 11:00 a.m. Pacific
Time, and at any adjournment or postponement of the Annual Meeting. These proxy
materials were first mailed to stockholders on or about July 22, 1998.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Annual Meeting
are summarized in the accompanying Notice of Annual Meeting of Stockholders.
Each proposal is described in more detail in this Proxy Statement.
VOTING RIGHTS AND SOLICITATION OF PROXIES
The Company's Common Stock is the only type of security entitled to vote at
the Annual Meeting. On July 1, 1998, the record date for determination of
stockholders entitled to vote at the Annual Meeting, there were 19,875,283
shares of Common Stock outstanding. Each stockholder of record on July 1, 1998
is entitled to one vote for each share of Common Stock held by such stockholder
on July 1, 1998. Shares of Common Stock may not be voted cumulatively. 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.
QUORUM REQUIRED
The Company's bylaws provide that the holders of a majority of the Company's
Common Stock issued and outstanding and entitled to vote at the Annual Meeting,
present in person or represented by proxy, shall constitute a quorum for the
transaction of business at the Annual Meeting. Abstentions and broker non-votes
will be counted as present for the purpose of determining the presence of a
quorum.
VOTES REQUIRED
PROPOSAL 1. Directors are elected by a plurality of the affirmative votes
cast by those shares present in person or represented by proxy and entitled to
vote at the Annual Meeting. The four nominees for director receiving the highest
number of affirmative votes will be elected. Abstentions and broker non-votes
are not counted toward a nominee's total. Stockholders may not cumulate votes in
the election of directors.
PROPOSAL 2. Ratification of the appointment of Ernst & Young LLP as the
Company's independent public accountants for the fiscal year ending March 31,
1999 requires the affirmative vote of a majority of those shares present in
person, or represented by proxy, and cast either affirmatively or negatively at
the Annual Meeting. Abstentions and broker non-votes will not be counted as
having been voted on the proposal.
1
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PROXIES
Whether or not you are able to attend the Company's Annual Meeting, you are
urged to complete and return the enclosed proxy, which is solicited by the
Company's Board of Directors and which will be voted as you direct on your proxy
when properly completed. In the event no directions are specified, such proxies
will be voted FOR the Nominees of the Board of Directors (as set forth in
Proposal No. 1), FOR Proposal No. 2, and in the discretion of the proxy holders,
as to other matters that may properly come before the Annual Meeting. You may
also revoke or change your proxy at any time before the Annual Meeting. To do
this, send a written notice of revocation or another signed proxy with a later
date to the Secretary of the Company at the Company's principal executive
offices before the beginning of the Annual Meeting. You may also automatically
revoke your proxy by attending the Annual Meeting and voting in person. All
shares represented by a valid proxy received prior to the Annual Meeting will be
voted.
SOLICITATION OF PROXIES
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing, and mailing of this Proxy Statement, the proxy,
and any additional soliciting material furnished to stockholders. Copies of
solicitation material will be furnished to brokerage houses, fiduciaries, and
custodians holding shares in their names that are beneficially owned by others
so that they may forward this solicitation material to such beneficial owners.
In addition, the Company may reimburse such persons for their costs of
forwarding the solicitation material to such beneficial owners. The original
solicitation of proxies by mail may be supplemented by solicitation by
telephone, telegram, or other means by directors, officers, employees, or agents
of the Company. No additional compensation will be paid to these individuals for
any such services. Except as described above, the Company does not presently
intend to solicit proxies other than by mail.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The directors who are being nominated for election to the Board of Directors
(the "Nominees"), their ages as of May 31, 1998, their positions and offices
held with the Company and certain biographical information are set forth below.
The proxy holders intend to vote all proxies received by them in the
accompanying form FOR the Nominees listed below unless otherwise instructed. 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 may be
designated by the present Board of Directors to fill the vacancy. As of the date
of this Proxy Statement, the Board of Directors is not aware of any Nominee who
is unable or will decline to serve as a director. The four Nominees receiving
the highest number of affirmative votes of the shares entitled to vote at the
Annual Meeting will be elected directors of the Company to serve until the next
Annual Meeting or until their successors have been duly elected and qualified.
<TABLE>
<CAPTION>
NOMINEES AGE POSITION
- ------------------------------- --- ----------------------------------------------------------------------
<S> <C> <C>
Martin J. Sprinzen............. 49 President, Chief Executive Officer and Chairman of the Board of
Directors
Christos M. Cotsakos(1)(2)..... 49 Director
Thomas A. Jermoluk(2).......... 41 Director
William H. Younger, 48 Director
Jr.(1)(2)......................
</TABLE>
- ------------------------
(1) Member of Audit Committee
(2) Member of Compensation Committee
MARTIN J. SPRINZEN co-founded the Company in February 1991 and has served as
its President, Chief Executive Officer and Chairman of the Board of Directors
since inception. Mr. Sprinzen also served as the Company's Secretary from
inception to January 1996. From May 1988 to November 1990, Mr. Sprinzen was
employed by Ingres Corp., a RDBMS company, as Executive Vice President,
International Operations.
2
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From October 1986 to May 1988, Mr. Sprinzen was President and Chief Executive
Officer of NASTEC, Corp., a computer-aided software engineering company. From
July 1984 to October 1986, Mr. Sprinzen was employed by Ingres Corp., as Vice
President, Engineering. From December 1979 to June 1984, Mr. Sprinzen was
employed by Candle Corp., a mainframe software management tools company, where
his last position was Vice President, Technology. Mr. Sprinzen holds a B.S.
degree in electrical engineering from The Cooper Union.
CHRISTOS M. COTSAKOS has been a director of the Company since October 1996.
Mr. Cotsakos joined E*TRADE Group, Inc., a leading branded provider of online
investing services, in March 1996 as President, Chief Executive Officer and
director. Prior to his recruitment to E*TRADE, he served as President, Co-Chief
Executive Officer, Chief Operating Officer and director of A. C. Nielsen, Inc.
from March 1995 to January 1996; and held various senior executive positions at
A. C. Nielsen from March 1992 to March 1995. Mr. Cotsakos joined A. C. Nielsen
after 19 years with the Federal Express Corporation from 1973 to 1992, where he
held a number of senior executive positions both in the United States and
Europe. Mr. Cotsakos serves as a director of National Processing, Inc., a
provider of transaction processing services and customized processing software;
Omega Research, a leading provider of real-time investment analysis software for
the Windows operating system; and of various boards of privately-held technology
companies. Mr. Cotsakos was named by FORBES ASAP as one of the "Thirty Who
Matter" in the new technology elite in October 1996. COMMUNICATIONS WEEK named
Mr. Cotsakos as one of the ten leaders receiving its 1997 Visionary Awards;
INSTITUTIONAL INVESTOR named him as one of the financial online elite in
September 1997; and TICKER MAGAZINE named Mr. Cotsakos as one of the Power Fifty
in June 1998. A decorated Vietnam Veteran, Mr. Cotsakos received a BA (CUM
LAUDE) from William Paterson College, an MBA (SUMMA CUM LAUDE) from Pepperdine
University (he is a life member of Pepperdine Association) and is currently in
his fourth year of pursuing a PhD in the field of economics at the Management
School, University of London.
THOMAS A. JERMOLUK has been a director of the Company since February 1996.
Mr. Jermoluk currently serves as President, Chief Executive Officer and as
Chairman of the board of directors of @Home, Inc., a distributor of high-speed
interactive services to residences and businesses using the cable industry's
hybrid-fiber coaxial (HFC) infrastructure and its own network architecture. From
1986 to 1996, Mr. Jermoluk was employed by Silicon Graphics, Inc., a
manufacturer of high performance visual computing systems, as President and a
member of its board of directors from 1994 to 1996, and as Chief Operating
Officer from 1992 to 1996. Mr. Jermoluk's other positions at Silicon Graphics
included Executive Vice President from 1991 to 1992 and Vice President/General
Manager, Advanced Systems Division, from 1988 to 1991. Mr. Jermoluk holds a B.S.
degree in computer science/electrical engineering and an M.S. degree in computer
science from Virginia Tech.
WILLIAM H. YOUNGER, JR., has been a director of the Company since February
1991. Mr. Younger is the managing director of Sutter Hill Ventures, L.P., a
venture capital management firm, where he has been employed since 1981. Mr.
Younger currently serves as a director of Celeritek, Inc., Oasis Health Care
Systems and Information Advantage Corporation. Mr. Younger holds a B.S.E.E.
degree from the University of Michigan and an M.B.A. from Stanford University.
The Company currently has authorized six directors. Each director holds
office until the next annual meeting of stockholders or until his successor is
duly elected and qualified. The officers serve at the discretion of the Board.
There are no family relationships between any of the directors or officers of
the Company.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During the fiscal year ended March 31, 1998, the Board of Directors held
nine (9) meetings and acted by written consent on one (1) occasion. For the
fiscal year, each of the current directors during the term of their tenure, with
the exception of Mr. Jermoluk, attended or participated in at least 75% of the
aggregate of (i) the total number of meetings or actions by written consent of
the Board of Directors and (ii) the total number of meetings held by all
Committees of the Board of Directors on which each such director served.
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<PAGE>
The Board of Directors has two standing committees: the Audit Committee and the
Compensation Committee.
During the fiscal year ended March 31, 1998, the Audit Committee of the
Board of Directors met three (3) times. The Audit Committee reviews, acts on and
reports to the Board of Directors with respect to various auditing and
accounting matters, including the selection of the Company's auditors, the scope
of the annual audits, fees to be paid to the Company's auditors, the performance
of the Company's auditors and the accounting practices of the Company. The
members of the Audit Committee are Messrs. Cotsakos and Younger.
During the fiscal year ended March 31, 1998, the Compensation Committee of
the Board of Directors met six (6) times and acted by written consent on one (1)
occasion. The Compensation Committee reviews the performance and sets the
compensation of the Chief Executive Officer of the Company, and approves the
compensation of the other executive officers of the Company and reviews the
compensation programs for other key employees, including salary and cash bonus
levels. The Compensation Committee administers the 1996 Stock Option Plan, the
1997 Stock Option Plan and the Employee Stock Purchase Plan. The members of the
Compensation Committee are Messrs. Jermoluk, Cotsakos and Younger.
DIRECTOR COMPENSATION
Each non-employee Board member receives an annual retainer of $10,000. The
Company does not pay compensation for committee participation or special
assignments of the Board of Directors.
Non-employee Board members are also eligible for option grants pursuant to
the provisions of the Automatic Option Grant Program under the Company's 1996
Stock Option Plan. Under the Automatic Option Grant Program, each individual who
first becomes a non-employee Board member will be granted an option to purchase
15,000 shares on the date such individual joins the Board, provided such
individual has not been in the prior employ of the Company. In addition, at each
Annual Stockholders Meeting, each individual who continues to serve and has
served as a non-employee Board member for at least six months prior to such
Annual Meeting will receive an additional option grant to purchase 3,000 shares
of Common Stock, whether or not such individual has been in the prior employ of
the Company.
On August 12, 1997, each of Messrs. Cotsakos, Jermoluk, and Younger was
granted an option to purchase 3,000 shares of Common Stock at an exercise price
of $11.50 per share under the Automatic Option Grant Program; such option shares
vest over 24 months. On September 12, 1997, Messrs. Cotsakos and Jermoluk were
granted options outside the Automatic Option Grant Program to purchase 10,000
and 3,000 shares of Common Stock, respectively, at an exercise price of $15.06
per share (which was the market value on the date of grant). Mr. Jermoluk's
option becomes exercisable in full on the first anniversary of the date of
grant. Mr. Cotsakos's option becomes exercisable with respect to 33.33% of the
option shares on the first anniversary of the date of grant and with respect to
1/36th of the total number of shares at the close of each month of service
thereafter.
Directors who are also employees of the Company are eligible to receive
options under the 1996 Stock Option Plan. Such employee-directors are also
eligible to participate in the Company's Employee Stock Purchase Plan, provided
that such employee-director does not hold an amount of Common Stock equal to or
greater than five percent of the total outstanding Common Stock.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED HEREIN.
4
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of May 31, 1998 certain information with
respect to shares beneficially owned by (i) each person who is known by the
Company to be the beneficial owner of more than five percent of the Company's
outstanding shares of Common Stock, (ii) each of the Company's directors, and
the executive officers named in the Summary Compensation Table and (iii) all
current directors and executive officers as a group. Beneficial ownership has
been determined in accordance with Rule 13d-3 under the Securities Exchange Act
of 1934, as amended. Under this rule, certain shares may be deemed to be
beneficially owned by more than one person (if, for example, persons share the
power to vote or the power to dispose of the shares). In addition, shares are
deemed to be beneficially owned by a person if the person has the right to
acquire shares (for example, upon exercise of an option or warrant) within sixty
(60) days of the date as of which the information is provided; in computing the
percentage ownership of any person, the amount of shares is deemed to include
the amount of shares beneficially owned by such person (and only such person) by
reason of such acquisition rights. As a result, the percentage of outstanding
shares of any person as shown in the following table does not necessarily
reflect the person's actual voting power at any particular date.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
--------------------------------------
BENEFICIAL OWNER NUMBER OF SHARES PERCENTAGE OF CLASS
- ------------------------------------------------------------------------------------- ---------------- -------------------
<S> <C> <C>
Christos M. Cotsakos(1).............................................................. 18,000 *
Thomas A. Jermoluk(2)................................................................ 21,000 *
William H. Younger, Jr.(3)........................................................... 228,872 1.2
Martin J. Sprinzen(4)................................................................ 1,498,761 7.5
Paul Butterworth(5).................................................................. 619,508 3.1
Michael Hedger(6).................................................................... 245,187 1.2
David Taber(7)....................................................................... 151,254 *
James Wambach(8)..................................................................... 123,989 *
Rodger Weismann...................................................................... 467,980 2.4
All directors and executive officers as a group (9 persons)(9)....................... 3,374,551 16.3
---------------- ---
</TABLE>
* Less than 1% of the outstanding shares of Common Stock.
(1) Includes options immediately exercisable into 18,000 shares of Common Stock
under the 1996 Stock Option Plan.
(2) Includes options immediately exercisable into 21,000 shares of Common Stock
under the 1996 Stock Option Plan.
(3) Includes 93,018 shares of Common Stock held of record by Sutter Hill
Ventures, a California Limited Partnership, and beneficially owned by Mr.
Younger and options immediately exercisable into 3,000 shares of Common
Stock under the 1996 Stock Option Plan.
(4) Includes options immediately exercisable into 265,622 shares of Common Stock
under the 1996 Stock Option Plan.
(5) Includes options immediately exercisable into 234,625 shares of Common Stock
under the 1996 Stock Option Plan. All shares beneficially owned by Paul
Butterworth are held in a revocable trust dated January 3, 1996. Mr.
Butterworth is the trustee of the revocable trust.
(6) Includes options immediately exercisable into 227,500 shares of Common Stock
under the 1996 Stock Option Plan and 4,400 options exercisable within 60
days of May 31, 1998.
(7) Includes options immediately exercisable into 150,000 shares of Common Stock
under the 1996 Stock Option Plan.
5
<PAGE>
(8) Includes options immediately exercisable into 100,000 shares of Common Stock
under the 1996 Stock Option Plan and 21,000 options exercisable within 60
days of May 31, 1998 under the 1996 Stock Option Plan.
(9) Includes options immediately exercisable into 1,019,747 shares of Common
Stock under the 1996 Stock Option Plan and 25,400 options exercisable within
60 days of May 31, 1998 under the 1996 Stock Option Plan.
EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL ARRANGEMENTS
The Compensation Committee as administrator of the 1996 Stock Option Plan
has the authority to provide for the accelerated vesting of the shares of Common
Stock subject to outstanding options held by the Chief Executive Officer and any
other executive officer in connection with certain changes in control of the
Company or the subsequent termination of the officer's employment following the
change in control event.
In 1997, the Company entered into agreements with its executive officers
that provide for full acceleration of vesting of any executive officer's
unvested option shares or restricted stock in the event such officer's
employment is terminated for any reason other than cause, or the officer resigns
for good reason, within 12 months following certain changes in control of the
Company. "Cause" includes the unauthorized use or disclosure of the confidential
information or trade secrets of the Company, which use causes material harm to
the Company, conviction of or a plea of "guilty" or "no contest" to a felony,
gross negligence, material failure to comply with Company policy or continued
failure to perform assigned duties after receiving written notification from the
Company. During the six months immediately following the change in control,
"good reason" is defined as a reduction in base salary or target bonus (other
than a general reduction of senior management salaries) or a relocation of the
officer's principal place of work by 40 miles or more, and after the sixth month
following the change in control, "good reason" also includes a material
reduction in authority or responsibilities of the officer.
The change in control agreements described above do not affect the
enforceability of the change in control arrangements that were entered into in
1995, which provide for acceleration of vesting of 50% of an executive officer's
unvested option shares or restricted stock in the event the officer's employment
terminates for any reason other than his voluntary resignation within one year
following a change in control. These arrangements will apply to the extent the
1997 agreements do not apply.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Company's Board of Directors (the
"Committee") has the authority to establish the level of base salary payable to
the Chief Executive Officer ("CEO") and to administer the Company's 1996 Stock
Option Plan, 1997 Stock Option Plan and Employee Stock Purchase Plan. In
addition, the Committee has the responsibility for approving the individual
bonus programs to be in effect for the CEO, all other executive officers and
certain other key employees of the Company.
Subject to the Committee's approval as described in the previous sentence,
the CEO has the responsibility for developing and approving the bonus programs
to be in effect for all executive officers other than the CEO and other key
employees each fiscal year. For fiscal 1998, the process utilized by the CEO in
determining executive officer compensation levels took into account both
qualitative and quantitative factors. Among the factors considered by the CEO
were informal surveys conducted by Company personnel and a formal survey
conducted by a consulting firm among local companies. The Committee approved the
final compensation decisions concerning such officers.
GENERAL COMPENSATION POLICY. The CEO's fundamental policy is to offer the
Company's executive officers competitive compensation opportunities based upon
overall Company performance, their individual contribution to the financial
success of the Company and their personal performance. It is the CEO's objective
to have a substantial portion of each officer's compensation contingent upon the
Company's performance, as well as upon his or her own level of performance.
Accordingly, each executive officer's
6
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compensation package consists of: (i) base salary, (ii) cash bonus awards and
(iii) long-term stock-based incentive awards.
In preparing the performance graph for this Proxy Statement, the Company has
selected the Nasdaq Stock Market--U.S. Companies Index and the Nasdaq Stock
Market Computer & Data Processing Index. The companies included in the formal
survey utilized by the Company and the Company's informal survey are not
necessarily those included in the Indices, because the latter were determined
not to be competitive with the Company for executive talent or because
compensation information was not available to the Company.
BASE SALARY. The base salary for each executive officer is set on the basis
of personal performance and the salary level in effect for comparable positions
at companies that compete with the Company for executive talent.
ANNUAL CASH BONUSES. Each executive officer has an established bonus target
each fiscal year. The annual pool of bonuses for executive officers is
determined on the basis of the Company's achievement of the financial
performance targets established at the start of the fiscal year and a range for
the executive's contribution. Actual bonuses paid reflect an individual's
accomplishment of both corporate and functional objectives.
LONG-TERM INCENTIVE COMPENSATION. During fiscal 1998, the Committee made
option grants to Messrs. Butterworth, Hedger, Taber, Weismann and Wambach under
the 1996 Stock Option Plan. Generally, a significant grant is made in the year
that an officer commences employment. Grants in subsequent years may also occur,
depending on officers' performance. Generally, the size of each grant is set at
a level that the Committee deems appropriate to create a meaningful opportunity
for stock ownership based upon the individual's position with the Company, the
individual's potential for future responsibility and promotion, the individual's
performance in the recent period and the number of unvested options held by the
individual at the time of the new grant. The relative weight given to each of
these factors will vary from individual to individual at the Committee's
discretion.
Each grant allows the officer to acquire shares of the Company's Common
Stock at a fixed price per share (the market price on the grant date) over a
specified period of time. The option vests in periodic installments over a
four-year period, contingent upon the executive officer's continued employment
with the Company. Accordingly, the option will provide a return to the executive
officer only if he or she remains in the Company's employ, and then only if the
market price of the Company's Common Stock appreciates over the option term.
In an effort to increase retention of key employees of the Company, the
Committee also made option grants to Messrs. Butterworth, Hedger, Taber and
Wambach and other key employees under the 1996 Stock Option Plan that vest in
periodic installments over a three-year period rather than the Company's
standard four-year vesting period. The vesting of these option grants is
contingent upon the executive officer's continued employment with the Company.
In addition, the Committee accelerated the vesting of certain options previously
granted to Messrs. Hedger and Weismann.
CEO COMPENSATION. The annual base salary for Mr. Sprinzen, the Company's
President and CEO, was established by the Committee primarily on the basis of
Mr. Sprinzen's personal performance of his duties and the salary level in effect
for comparable positions at companies that compete with the Company for
executive talent.
The components of the CEO's fiscal 1998 incentive compensation were
dependent upon the Company's financial performance and achievement of certain
corporate objectives, and provided no dollar guarantees. The bonus paid to the
CEO for fiscal 1998 was based on an incentive plan similar to the plans in place
for the other officers. Specifically, a target incentive was established at the
beginning of the fiscal year using an agreed-upon formula based on Company
revenue and profit. Each fiscal year, the annual incentive plan is reevaluated
with a new achievement threshold and new targets for revenue and profit.
7
<PAGE>
TAX LIMITATION. As a result of Federal tax legislation enacted in 1993, a
publicly-held company such as the Company will not be allowed a Federal income
tax deduction for compensation paid to certain executive officers to the extent
that compensation exceeds $1 million per officer in any year. The stockholders
approved the Company's 1996 Stock Option Plan, which includes a provision that
limits the maximum number of shares of Common Stock for which any one
participant may be granted stock options per calendar year. Accordingly, any
compensation deemed paid to an executive officer when he exercises an option
under the 1996 Stock Option Plan with an exercise price equal to the fair market
value of the option shares on the grant date generally will qualify as
performance-based compensation that will not be subject to the $1 million
limitation. Since it is not expected that the cash compensation to be paid to
the Company's executive officers for the 1999 fiscal year will exceed the $1
million limit, the Committee will defer any decision on whether to limit the
dollar amount of the cash compensation payable to the Company's executive
officers to the $1 million cap.
OPTION REPRICING PROGRAM. Competition for skilled engineers, sales
personnel and other key employees in the software industry is intense, and the
use of stock options for retention and motivation of such personnel is
widespread in high-technology industries. The Committee believes that stock
options are a critical component of the compensation offered by the Company to
promote long-term retention of key employees, motivate high levels of
performance and recognize employee contributions to the success of the Company.
The market price of the Common Stock decreased from a high of $81.75 in May 1996
to a low of $8.25 in April 1997. In light of this substantial decline in market
price, the Committee believed that the outstanding stock options with an
exercise price in excess of the actual market price were no longer an effective
tool to encourage employee retention or to motivate high levels of performance.
As a result, in April 1997, the Committee approved an option repricing program
under which options to acquire 614,797 shares of Common Stock that were
originally issued with exercise prices ranging from $8.83 to $54.75 per share
were reissued with an exercise price of $8.31 per share, the fair market value
of the Common Stock at the repricing date. These options will continue to vest
under the original terms of the option grant, except that no options may be
exercised for a period of one year from the repricing date. The following table
sets forth information concerning options held by an executive officer that were
repriced during the last ten completed fiscal years:
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
SECURITIES ORIGINAL
UNDERLYING EXERCISE OPTION TERM
NUMBER OF MARKET PRICE OF PRICE AT TIME REMAINING AT
OPTIONS STOCK AT TIME OF OF REPRICING NEW DATE OF
REPRICED OR REPRICING OR OR AMENDMENT EXERCISE REPRICING OR
NAME DATE AMENDED (#) AMENDMENT ($) ($) PRICE ($) AMENDMENT
- --------------------------------------------- ------- ----------- ---------------- ------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Michael Hedger............................... 4/25/97 12,000 8.31 28.75 8.31 9.4 years
James Wambach................................ 4/25/97 80,000 8.31 33.75 8.31 9.8 years
</TABLE>
Compensation Committee
Christos M. Cotsakos
Thomas A. Jermoluk
William H. Younger, Jr.
8
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company's Board of Directors was formed in
May 1995, and the members of the Compensation Committee are Messrs. Cotsakos,
Jermoluk, and Younger. None of these individuals was at any time during fiscal
1998, or at any other time, an officer or employee of the Company. No executive
officer of the Company served as a member of the board of directors of any
entity that had one or more executive officers serving as a member of the
Company's Board of Directors or Compensation Committee.
STOCK PERFORMANCE GRAPH
The graph set forth below compares the cumulative total stockholder return
on the Company's Common Stock between March 11, 1996 (the date the Company
effected its initial public offering) and March 31, 1998 with the cumulative
total return of (i) the Nasdaq Stock Market--U.S. Companies Index (the "Nasdaq
Stock Market--U.S. Index") and (ii) the Nasdaq Stock Market Computer & Data
Processing Index (the "Nasdaq Computer & Data Processing Index"), over the same
period. This graph assumes the investment of $100.00 on March 11, 1996 in the
Company's Common Stock, the Nasdaq Stock Market-- U.S. Index and the Nasdaq
Computer & Data Processing Index, and assumes the reinvestment of dividends, if
any.
The comparisons shown in the graph below are based upon historical data, and
the Company cautions that the stock price performance shown in the graph below
is not indicative of, nor intended to forecast, the potential future performance
of the Company's Common Stock. Information used in the graph was obtained from
The Nasdaq Stock Market, a source believed to be reliable, but the Company is
not responsible for any errors or omissions in such information.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG FORTE SOFTWARE, INC.,
THE NASDAQ STOCK MARKET-U.S. INDEX AND THE NASDAQ COMPUTER & DATA PROCESSING
INDEX
COMPARISON OF 24 MONTH CUMULATIVE
TOTAL RETURN*
AMONG FORTE SOFTWARE, INC.
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE NASDAQ COMPUTER & DATA
PROCESSING INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FORTE' SOFTWARE,
INC. NASDAQ STOCK MARKET - NASDAQ COMPUTER &
<S> <C> <C> <C>
U.S. Index Data Processing Index
3/11/96 $100 $100 $100
3/31/96 $193 $102 $103
3/31/97 $110 $114 $113
3/31/98 $35.71 $172.33 $197.23
</TABLE>
* $100 INVESTED ON 3/11/96 IN STOCK OR INDEX -- INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING MARCH 31.
9
<PAGE>
<TABLE>
<CAPTION>
3/11/96 3/31/96 3/31/97 3/31/98
------- ------- ------- -------
<S> <C> <C> <C> <C>
Forte Software, Inc. $100 $193 $110 $ 35.71
Nasdaq Stock Market--U.S. Index $100 $102 $114 $172.33
Nasdaq Computer & Data Processing Index $100 $103 $113 $197.23
</TABLE>
The Company effected its initial public offering on March 11, 1996 at a per
share price of $21.00. The closing price of Common Stock on March 12, 1996, its
first day of public trading, was $38.25 per share. The graph above commences
with the initial public offering price of $21.00.
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate this Proxy
Statement or future filings made by the Company under those statutes, the
Compensation Committee Report and Stock Performance Graph are not deemed filed
with the Securities and Exchange Commission and shall not be deemed incorporated
by reference into any of those prior filings or into any future filings made by
the Company under those statutes.
10
<PAGE>
EXECUTIVE COMPENSATION AND RELATED INFORMATION
The following Summary Compensation Table sets forth the compensation earned
for the three fiscal years ended March 31, 1998 by the Company's Chief Executive
Officer and the four other most highly compensated executive officers
(collectively, the "Named Officers"), each of whose aggregate compensation for
fiscal 1998 exceeded $100,000 for services rendered in all capacities to the
Company and its subsidiaries for that fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
FISCAL ------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($)(1) BONUS ($) OPTIONS (#) COMPENSATION(2)
- -------------------------------------------------------------- ------ ------------- --------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Martin J. Sprinzen ........................................... 1998 288,625 73,855 0 2,603
President and Chief Executive Officer 1997 250,075 112,260 0 2,053
1996 209,494 105,000 0 1,496
Paul Butterworth ............................................. 1998 150,000 56,000 100,000 1,185
Senior Vice President, Software 1997 135,000 51,380 0 1,027
Development and Support and Chief 1996 130,000 48,500 0 546
System Architect
Michael Hedger ............................................... 1998 152,000 102,400(6) 112,000(8) 3,000
Executive Vice President, Worldwide 1997 152,000 122,860(6) 12,000 600
Field Operations 1996 119,700 48,000(6) 127,500 400
James Wambach (3) ............................................ 1998 175,000 100,800(6) 180,000(9) 978
Senior Vice President, North 1997 35,900 20,800(6) 80,000 0
American Sales
David Taber (4) .............................................. 1998 79,600 25,208 150,000 252
Senior Vice President, Marketing
Rodger Weismann (5) .......................................... 1998 157,250(7) 15,000 100,000 3,064
Senior Vice President, Finance and 1997 135,000 51,380 0 1,699
Administration, Chief Financial 1996 125,000 60,600 0 1,454
Officer and Secretary
</TABLE>
- ------------------------
(1) Salary includes amounts deferred under the Company's 401(k) Plan.
(2) Represents premiums for term life insurance.
(3) Mr. Wambach joined the Company in January 1997.
(4) Mr. Taber joined the Company in September 1997.
(5) Mr. Weismann resigned from the Company on March 1, 1998.
(6) Includes sales commissions.
(7) Includes accrued vacation and sabbatical.
(8) Includes 12,000 options that were repriced in April 1997. See the discussion
of the option repricing program and the option repricing table in the
Compensation Committee Report.
(9) Includes 80,000 options that were repriced in April 1997. See the discussion
of the option repricing program and the option repricing table in the
Compensation Committee Report.
11
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning the stock option grants
made to each of the Named Officers in the fiscal year ended March 31, 1998. No
stock appreciation rights were granted to these individuals during such year.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
NUMBER OF INDIVIDUAL GRANTS RATES OF STOCK
SECURITIES ---------------------------------------- PRICE APPRECIATION
UNDERLYING % OF TOTAL EXERCISE FOR OPTION TERM
OPTIONS OPTIONS GRANTED PRICE (3)
GRANTED TO EMPLOYEES IN ($/SH) EXPIRATION ------------------
NAME (#) FISCAL YEAR (1) (2) DATE 5% ($) 10% ($)
- ------------------------------------------------------ ---------- --------------- --------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Martin J. Sprinzen.................................... 0 -- -- -- -- --
Paul Butterworth...................................... 100,000(4) 3.3% 8.31 4/25/07 522,611 1,324,400
Michael Hedger........................................ 30,000(5) 0.1% 8.31 4/25/07 156,783 397,320
70,000(6) 2.3% 5.94 2/10/08 261,494 662,678
12,000(7) 0.3% 8.31 9/10/06 62,713 158,928
David Taber........................................... 100,000(8) 3.3% 14.63 9/5/07 920,073 2,331,645
50,000(9) 1.6% 5.94 2/10/08 186,782 473,342
James Wambach......................................... 20,000(10) 0.7% 8.31 4/25/07 104,522 264,880
40,000(11) 1.3% 11.50 7/15/07 289,292 733,122
40,000(12) 1.3% 5.94 2/10/08 149,425 378,673
70,000(13) 2.3% 8.31 1/20/07 418,089 1,059,520
10,000(14) 0.3% 8.31 1/20/07 52,261 132,440
Rodger Weismann....................................... 100,000(15) 3.3% 8.31 4/25/07 522,611 1,324,400
</TABLE>
- ------------------------
(1) Based on an aggregate of 3,056,797 options granted in the 1998 fiscal year.
(2) The exercise price may be paid in cash, in shares of the Company's Common
Stock valued at fair market value on the exercise date or through a cashless
exercise procedure involving a same-day sale of the purchased shares. The
Company may also finance the option exercise by loaning the optionee
sufficient funds to pay the exercise price for the purchased shares,
together with any federal and state income tax liability incurred by the
optionee in connection with such exercise.
(3) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by rules of the Securities and Exchange Commission. There can
be no assurance provided to any executive officer or any other holder of the
Company's securities that the actual stock price appreciation over the
10-year option term will be at the assumed 5% and 10% levels or at any other
defined level. Unless the market price of the Common Stock appreciates over
the option term, no value will be realized from the option grants made to
the executive officers.
(4) These options vest ratably over 48 months commencing on April 25, 1997.
(5) These options vest on February 25, 2004; vesting may accelerate upon
achievement of certain performance goals.
(6) These options vest ratably over 36 months commencing on February 10, 1998,
except that no part of the option is exercisable until February 10, 1999.
(7) These options vest ratably over 60 months commencing on April 27, 1997.
(8) These options vest ratably over 48 months commencing on September 5, 1997,
except that no part of the option is exercisable until September 5, 1998.
(9) These options vest ratably over 24 months commencing on February 10, 1998,
except that no part of the option is exercisable until February 10, 1999.
12
<PAGE>
(10) These options vest on April 25, 2004; vesting may accelerate upon
achievement of certain performance goals.
(11) 20,000 of these options vest ratably over 48 months commencing on July 15,
1997. 8,695 of these options vest on July 15, 2003; vesting may accelerate
upon achievement of certain performance goals. 2,610 of these options vest
on July 15, 2004; vesting may accelerate upon achievement of certain
performance goals. 8,695 of these options vest on July 15, 2005; vesting may
accelerate upon achievement of certain performance goals.
(12) These options vest ratably over 36 months commencing on February 10, 1998,
except that no part of the option is exercisable until February 10, 1999.
(13) These options vest ratably over 48 months commencing on January 20, 1997.
(14) These options vest on January 19, 2004; vesting may accelerate upon
achievement of certain performance goals.
(15) The option vests at a rate of 500 shares at the end of each month in year
one, 3,000 shares at the end of each month in year two, 2,750 shares at the
end of each month in year three and 2,083 shares at the end of each month in
year four commencing on April 25, 1997. Mr. Weismann resigned from the
Company on March 1, 1998.
The following table sets forth information concerning option exercises in
fiscal 1998 and option holdings as of the end of fiscal 1998 with respect to
each of the Named Officers. No stock appreciation rights were outstanding at the
end of that year.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING
SHARES VALUE REALIZED (MARKET UNEXERCISED OPTIONS AT VALUE OF UNEXERCISED IN-THE- MONEY
ACQUIRED ON PRICE AT EXERCISE LESS FY-END(#) OPTIONS AT FY-END ($)(2)
EXERCISE EXERCISE PRICE) (1) ----------------------------------- -----------------------------------
NAME (#) ($) EXERCISABLE (3) UNEXERCISABLE (3) EXERCISABLE (3) UNEXERCISABLE (3)
- ----------------- ----------- ---------------------- --------------- ----------------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Martin J.
Sprinzen....... 109,378 839,728 85,940 179,682 644,550 1,347,615
Paul
Butterworth.... 0 0 85,668 148,957 470,640 539,048
Michael Hedger... -- -- 56,266 183,234 394,995 1,086,255
David Taber...... -- -- 0 150,000 0 375,000
James Wambach.... -- -- 19,666 160,334 0 300,000
Rodger
Weismann....... 52,500 654,061 5,000 95,000 -- --
</TABLE>
- ------------------------
(1) Upon exercise of the options, an option holder did not necessarily receive
the amount reported above under the column "Value Realized." The amounts
reported above under the column "Value Realized" merely reflect the amount
by which the fair market value of the Common Stock of the Company on the
date the option was exercised exceeded the exercise price of the option. The
option holder does not realize any cash until the shares of Common Stock
issued upon exercise of the options are sold.
(2) Based on the closing price of the Company's Common Stock at fiscal year-end
($7.50) less the exercise price payable for such shares.
(3) Certain of the options listed in the table are immediately exercisable. Any
shares purchased under such options before they have vested will be subject
to repurchase by the Company at the original exercise price per share upon
the optionee's cessation of service. The remaining options listed in the
table become exercisable in installments.
13
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Company is asking the stockholders to ratify the appointment of Ernst &
Young LLP as the Company's independent public accountants for the fiscal year
ending March 31, 1999. In the event the stockholders fail to ratify the
appointment, the Board of Directors will reconsider its selection. Even if the
appointment is ratified, the Board of Directors, in its discretion, may direct
the appointment of a different independent accounting firm at any time during
the year if the Board of Directors feels that such a change would be in the
Company's and its stockholders' best interests. Representatives of Ernst & Young
LLP are expected to be present at the Annual Meeting, will have the opportunity
to make a statement if they desire to do so, and will be available to respond to
appropriate questions.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
SELECTION OF ERNST & YOUNG LLP TO SERVE AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE FISCAL YEAR ENDING MARCH 31, 1999.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's Certificate of Incorporation limits the liability of its
directors for monetary damages arising from a breach of their fiduciary duty as
directors, except to the extent otherwise required by the Delaware General
Corporation Law. Such limitation of liability does not affect the availability
of equitable remedies such as injunctive relief or rescission.
The Company's Bylaws provide that the Company shall indemnify its directors
and officers to the fullest extent permitted by Delaware law, including in
circumstances in which indemnification is otherwise discretionary under Delaware
law. The Company has also entered into indemnification agreements with its
officers and directors containing provisions that may require the Company, among
other things, to indemnify such officers and directors against certain
liabilities that may arise by reason of their status or service as directors or
officers (other than liabilities arising from willful misconduct of a culpable
nature), to advance their expenses incurred as a result of any proceeding
against them as to which they could be indemnified, and to obtain directors' and
officers' insurance if available on reasonable terms.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The members of the Board of Directors, the executive officers of the Company
and persons who hold more than 10% of the Company's outstanding Common Stock are
subject to the reporting requirements of Section 16(a) of the Securities
Exchange Act of 1934, as amended, which require them to file reports with
respect to their ownership of the Company's Common Stock and their transactions
in such Common Stock. Based upon (i) the copies of Section 16(a) reports that
the Company received from such persons for their transactions in the Common
Stock and their Common Stock holdings for the fiscal year ending March 31, 1998
and (ii) the written representations received from one or more of such persons
that no annual Form 5 reports were required to be filed by them for the 1998
fiscal year, the Company believes that all reporting requirements under Section
16(a) for such fiscal year were met in a timely manner by its executive
officers, Board members and greater than 10% stockholders.
FORM 10-K
THE COMPANY WILL MAIL WITHOUT CHARGE, UPON WRITTEN REQUEST, A COPY OF THE
COMPANY'S FORM 10-K REPORT FOR FISCAL 1998, INCLUDING THE FINANCIAL STATEMENTS,
SCHEDULES AND LIST OF EXHIBITS. REQUESTS SHOULD BE SENT TO FORTE SOFTWARE, INC.,
1800 HARRISON STREET, 7TH FLOOR, OAKLAND, CALIFORNIA 94612, ATTN: MARY
LLEWELLYN, INVESTOR RELATIONS.
14
<PAGE>
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Stockholder proposals that are intended to be presented at the 1999 Annual
Meeting that are eligible for inclusion in the Company's proxy statement and
related proxy materials for that meeting under the applicable rules of the
Securities and Exchange Commission must be received by the Company not later
than March 17, 1999 in order to be included. Such stockholder proposals should
be addressed to Forte Software, Inc.
OTHER MATTERS
The Board knows of no other matters to be presented for stockholder action
at the Annual Meeting. However, if other matters do properly come before the
Annual Meeting or any adjournments or postponements thereof, the Board intends
that the persons named in the proxies will vote upon such matters in accordance
with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Bob L. Corey
Bob L. Corey
SECRETARY
Oakland, California
July 22, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE ANNUAL MEETING. IF
YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO CHANGE YOUR PROXY VOTE, YOU
MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE MEETING.
THANK YOU FOR YOUR ATTENTION TO THIS MATTER. YOUR PROMPT RESPONSE WILL GREATLY
FACILITATE ARRANGEMENTS FOR THE ANNUAL MEETING.
15
<PAGE>
FORTE SOFTWARE, INC.
P ANNUAL MEETING OF STOCKHOLDERS, AUGUST 26, 1998
R THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
FORTE SOFTWARE, INC.
O
The undersigned revokes all previous proxies, acknowledges receipt
X of the Notice of the Annual Meeting of Stockholders to be held on August
26, 1998 and the Proxy Statement and appoints Martin J. Sprinzen and
Y Bob L. Corey, and each of them, the Proxy of the undersigned, with full
power of substitution, to vote all shares of Common Stock of Forte
Software, Inc. (the "Company") which the undersigned is entitled to
vote, either on his or her own behalf or on behalf of any entity or
entities, at the Annual Meeting of Stockholders to be held at the
Lakeview Club, 300 Lakeside Drive, 28th Floor, Oakland, California
94612 on Wednesday, August 26, 1998, at 11:00 a.m. local time and at
any adjournment or postponement thereof (the "Annual Meeting"), with
the same force and effect as the undersigned might or could do if
personally present thereat. The shares represented by this Proxy shall
be voted in the manner set forth on the reverse side.
SEE REVERSE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
<PAGE>
/x/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES LISTED
BELOW AND A VOTE FOR THE OTHER PROPOSALS. THIS PROXY, WHEN PROPERLY
EXECUTED, WILL BE VOTED AS SPECIFIED BELOW. THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE NOMINEES LISTED BELOW AND FOR THE OTHER PROPOSALS IF NO
SPECIFICATION IS MADE.
1. To elect the following directors to serve for a term ending upon the 1999
Annual Meeting of Stockholders or until their successors are elected and
qualified:
NOMINEES: Martin J. Sprinzen, William H. Younger, Jr., Thomas A. Jermoluk
and Christos M. Cotsakos.
FOR / / WITHHOLD / /
ALL AUTHORITY
NOMINEES TO VOTE FOR
ALL NOMINEES
/ / ___________________________
For all nominees, except for any nominee(s) whose name is written in the
space provided above.
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending March 31, 1999.
FOR AGAINST ABSTAIN
/ / / / / /
3. To transact such other business as may properly come before the Annual
Meeting and at any adjournment or postponement thereof.
MARK HERE / /
FOR ADDRESS
CHANGE AND
NOTE BELOW
Please sign your name.
Signature: ________________________________ Date: _____________
Signature: ________________________________ Date: _____________
