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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Aspect Development, Inc.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
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PRELIMINARY COPIES
ASPECT DEVELOPMENT, INC.
1300 Charleston Road
MOUNTAIN VIEW, CA 94043
TO THE STOCKHOLDERS:
You are cordially invited to attend the Annual Meeting of Stockholders of
Aspect Development, Inc. on Tuesday, June 16, 1998 at 10:00 a.m., Pacific
Daylight Time, at Michael's of Shoreline located at 2960 N. Shoreline Blvd.,
Mountain View, California 94043.
The matters expected to be acted upon at the meeting are described in
detail in the attached Notice of Annual Meeting of Stockholders and Proxy
Statement. Also enclosed is a copy of the 1997 Aspect Development, Inc. Annual
Report, which includes audited financial information and certain other
information.
It is important that you use this opportunity to take part in the affairs
of Aspect Development, Inc. by voting on the business to come before this
meeting. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN,
DATE AND RETURN THE ACCOMPANYING PROXY PROMPTLY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. Returning the proxy does not deprive you of your right to attend the
meeting and vote your shares in person.
We look forward to seeing you at the meeting.
Sincerely,
Romesh Wadhwani
Chairman and Chief Executive Officer
Enclosures
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PRELIMINARY COPIES
ASPECT DEVELOPMENT, INC.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 16, 1998
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TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Aspect
Development, Inc., a Delaware corporation (the "Company"), will be held on
Tuesday, June 16, 1998 at 10:00 a.m., local time, at Michael's of Shoreline
located at 2960 N. Shoreline Blvd., Mountain View, California 94043, for the
following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are duly elected and qualified.
2. To approve an amendment to the Company's 1992 Employee Stock Option
Plan to increase the number of shares of Common Stock reserved for
issuance thereunder by 1,100,000 shares.
3. To approve an amendment to the Company's Restated Certificate of
Incorporation to increase the number of shares of the Company's
Common Stock authorized for issuance by 55,000,000 shares, to a
total of 75,000,000 shares.
4. To ratify the appointment of Ernst & Young LLP as independent
auditors for the Company for the fiscal year ending December 31,
1998.
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on April 20, 1998 are
entitled to notice of and to vote at the Annual Meeting.
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 sign and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the Annual Meeting may vote in person even if he or she has returned a proxy.
By Order of the Board of Directors
Romesh Wadhwani
Chairman and Chief Executive Officer
Mountain View, California
April 30, 1998
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WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO
COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE
ENVELOPE PROVIDED.
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PRELIMINARY COPIES
ASPECT DEVELOPMENT, INC.
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PROXY STATEMENT
FOR
1998 ANNUAL MEETING OF STOCKHOLDERS
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INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of Aspect Development, Inc. (the
"Company") for use at the Annual Meeting of Stockholders to be held on Tuesday,
June 16, 1998 at 10:00 a.m., local time, and at any adjournment thereof, for the
purposes set forth herein and in the accompanying Notice of Annual Meeting of
Stockholders. The Annual Meeting will be held at Michael's of Shoreline located
at 2960 N. Shoreline Blvd., Mountain View, California 94043. The Company's
principal executive offices are located at 1300 Charleston Road, Mountain View,
California 94043. Its telephone number at that address is (650) 428-2700.
These proxy solicitation materials were mailed on or about May 4, 1998,
together with the Company's Annual Report to all stockholders entitled to vote
at the meeting.
RECORD DATE
Stockholders of record at the close of business on April 20, 1998 (the
"Record Date"), are entitled to notice of and to vote at the Annual Meeting. As
of the Record Date, a total of xx,xxx,xxx shares of the Company's common stock,
$0.001 par value ("Common Stock"), were issued and outstanding. For information
regarding security ownership by management and by the beneficial owners of more
that 5% of the Company's Common Stock, see "Principal Stockholders and Share
Ownership by Management." The closing sale price of the Company's Common Stock
on the Nasdaq National Market on the Record Date was $xx.xx per share.
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 a written notice of revocation or a duly executed proxy bearing a later
date or by attending the meeting and voting in person.
VOTING AND SOLICITATION
Each stockholder is entitled to one vote for each share of Common Stock on
all matters presented at the Annual Meeting. Stockholders do not have the right
to cumulate their votes in the election of directors.
The cost of soliciting proxies will be borne by the Company. In addition,
the Company may reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
materials to such beneficial owners. Proxies may also be solicited by certain
of the Company's directors, officers, and regular employees, without additional
compensation, personally or by telephone, telegram, letter or facsimile.
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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. 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 adjournments 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.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting
is a majority of the shares of Common Stock outstanding on the Record Date.
Shares that are voted "FOR," "AGAINST" or "ABSTAIN" with respect to a matter as
well as any broker non-votes with respect to such matter, are treated as being
present at the meeting for purposes of establishing a quorum.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company which are intended to be presented
by such stockholders at the Company's 1999 Annual Meeting of Stockholders must
be received by the Company no later than December 31, 1998 in order to be
considered for inclusion in the proxy statement and form of proxy relating to
that meeting.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
A board of five directors is to be elected at the Annual Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for the Company's five nominees named below, all of whom are presently directors
of the Company. In the event that any nominee of the company is unable or
declines to serve as a director at the time of the Annual Meeting, the proxies
will be voted for any nominee who shall be designated by the present Board of
Directors to fill the vacancy. It is not expected that any nominee will be
unable or will decline to serve as a director. The term of office of each
person elected as a director will continue until the next Annual Meeting of
Stockholders or until a successor has been elected and qualified.
The names of the nominees and certain information about them are as
follows:
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION
- ----------------------------------- --- ----------------------------------------------------
<S> <C> <C>
Romesh Wadhwani 50 Chairman of the Board and Chief Executive
Officer of the Company
Joseph A. Prang 43 President and Chief Operating Officer of the Company
Steven Goldby 57 Chairman of the Board and Chief Executive Officer
of MDL Information Systems, Inc.
Dennis G. Sisco 51 Partner of Behrman Capital
Mark A. Stevens 38 General Partner of Sequoia Capital
</TABLE>
Dr. Wadhwani founded the Company in 1990 and has served as Chairman of the
Board of Directors and Chief Executive Officer of the Company since January
1991. From January 1982 to March 1989, Dr. Wadhwani served as the Chief
Executive Officer of Cimflex Teknowledge Corp., ("Cimflex"), a provider of
factory automation products and systems. Dr. Wadhwani continued to serve as
Chairman of the Board of Cimflex until July 1990. From
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1973 to 1981, Dr. Wadhwani was Chief Executive Officer of Compuguard
Corporation, a provider of building automation systems. Dr. Wadhwani received
his Ph.D. and M.S. in Electrical Engineering from Carnegie-Mellon University.
Mr. Prang joined the Company as President and Chief Operating Officer in
May 1994. Mr. Prang has also served as a Director of the Company since October
1995. Prior to joining the Company, from January 1986 to May 1994, he served in
numerous capacities at Cadence Design Systems, Inc., an electronic design
automation software developer, including Vice President of Marketing, Vice
President and General Manger of System Design Division and President of Systems
Division. From June 1979 to January 1986, Mr. Prang served as Vice President of
GenRad, a company specializing in simulation and test systems. Mr. Prang holds a
B.S. in engineering technology and an M.S.M. from Purdue University.
Mr. Goldby was appointed to the Company's Board of Directors in March 1993.
Mr. Goldby is the Chairman of the Board of Directors and Chief Executive Officer
of MDL Information Systems, Inc., an enterprise software company, where he has
been employed since January 1982.
Mr. Sisco was appointed to the Company's Board of Directors in September
1994. Mr. Sisco has been a Partner in Behrman Capital, a private equity
investment firm, since January 1998. Mr. Sisco was an Executive Vice President
at Cognizant Corporation, an information services company, from February 1995
until February 1997. Prior to that time, beginning in July 1993, Mr. Sisco was
a Senior Vice President at the Dun & Bradstreet Corporation. From December 1988
to February 1997, Mr. Sisco also served as President of Cognizant Enterprises, a
venture capital firm. Mr. Sisco also serves as a director of TSI Software
International, Inc., a software products firm, Oasis Healthcare Systems, a
software firm specializing in clinical information systems, and Gartner Group,
Inc., a market research firm.
Mr. Stevens was appointed to the Company's Board of Directors in March
1993. Mr. Stevens has been a General Partner of Sequoia Capital, a venture
capital investment fund, since March 1993. Prior to that time, beginning in July
1989, Mr. Stevens was an associate at Sequoia Capital. Mr. Stevens is a director
of several privately held companies. Mr. Stevens holds a B.S. in electrical
engineering, a B.A. in economics and an M.S. in computer engineering from the
University of Southern California and an M.B.A. from the Harvard Business
School.
There is no family relationship between any of the directors and executive
officers of the Company.
REQUIRED VOTE; RECOMMENDATION OF THE BOARD OF DIRECTORS
The five nominees receiving the highest number of affirmative votes at the
Annual shall be elected as directors. Votes withheld from any director are
counted for purposes of determining the presence or absence of a quorum for the
transaction of business, but have no effect on the outcome of the vote.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
NOMINEES LISTED ABOVE.
BOARD MEETINGS AND COMMITTEES
The Board of Directors has two standing committees, an Audit Committee and
a Compensation Committee. It currently has no nominating committee or committee
performing a similar function.
The Audit Committee, which currently consists of Messrs. Stevens and
Goldby, reviews the results and scope of the audit and other services provided
by the Company's independent auditors. The Audit Committee held one meeting
during fiscal 1997.
The Compensation Committee, which currently consists of Messrs. Stevens and
Goldby, provides recommendations concerning salaries and incentive compensation
for employees of and consultants to
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the Company. During fiscal 1997, the Compensation Committee did not hold any
formal meetings but took action by written consent 15 times.
The Board of Directors held a total of three meetings and took action by
written consent two times during 1997. No incumbent director during the last
fiscal year attended fewer than 75% of the aggregate of (i) the total number of
meetings of the Board of Directors and (ii) the total number of meetings held by
all committees of the Board on which he served.
COMPENSATION OF DIRECTORS
Directors of the Company do not receive cash for services provided as a
director. From time to time, directors who are not employees of the Company
have received grants of options to purchase the Company's Common Stock. Under
the 1996 Outside Directors Stock Option Plan (the "Directors Plan"), as
described below, directors who are not employees of the Company will receive
yearly grants of options to purchase Common Stock. The Company does not pay
additional amounts for committee participation or special assignments of the
Board of Directors.
The Directors Plan provides for the automatic grant of nonstatutory stock
options to directors of the Company who are not employees of the Company or any
parent or subsidiary corporation of the Company (``Outside Directors''). Under
the Directors Plan, each Outside Director who had not previously been granted an
option under any stock option plan of the Company was granted automatically on
the effective date of the Company's initial public offering (the "IPO") an
option to purchase 5,000 shares of Common Stock. Each new Outside Director
elected after the IPO will be granted on the date of election an option to
purchase 15,000 shares of Common Stock. Such options become vested in three
annual installments on the anniversaries of the date of grant. In addition,
each Outside Director previously granted an option under the Directors Plan is
granted automatically on the date of each subsequent annual meeting of
stockholders an option to purchase 5,000 shares of Common Stock. Each such
option becomes vested in full on the third anniversary of the date of grant.
The exercise price of each option granted under the Directors Plan is equal the
fair market value of the Common Stock on the date of grant. The term of each
option is ten years. Options granted under the Directors Plan are
nontransferable.
PROPOSAL NO. 2
APPROVAL OF AMENDMENT OF
AMENDED AND RESTATED
1992 STOCK OPTION PLAN
As of January 31, 1998, only 128,846 shares remained available for future
option grants under the Company's Amended and Restated 1992 Stock Option Plan
(the "Option Plan"), which amount the Board of Directors believes to be
insufficient to satisfy the Company's anticipated equity incentive objectives.
Accordingly, in February 1998, the Board of Directors approved, subject to
stockholder approval, the reservation of an additional 1,100,000 shares for
issuance under the Option Plan.
The Internal Revenue Code of 1986, as amended (the "Code") limits the
amount of compensation paid to a corporation's chief executive officer and four
other most highly compensated officers which may be deductible as an expense for
federal income tax purposes. To enable the Company to continue to deduct in
full all amounts of ordinary income recognized by its executive officers in
connection with options granted under the Option Plan, the Board of Directors
has amended the Option Plan, subject to stockholder approval, to limit to
500,000 the maximum number of shares for which options may be granted to any
employee in any fiscal year (the "Grant Limit"). However, the Company's stock
option grants typically do not approach this limit.
The stockholders are now being asked to approve the increase from 3,930,000 to
5,030,000 in the maximum aggregate number of shares that may be issued under the
Option Plan and the establishment of the Grant Limit. The Board of Directors
believes that approval of these amendments is in the best interests of the
Company and its
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stockholders because the availability of an adequate stock option program is an
important factor in attracting, motivating and retaining qualified officers,
employees and consultants essential to the success of the Company and in
aligning their long-term interests with those of the stockholders.
DESCRIPTION OF THE OPTION PLAN
The following summary of the Option Plan, as amended, is qualified in its
entirety by the specific language of the Option Plan, a copy of which is
available to any stockholder upon request.
General. The Option Plan provides for the grant of incentive stock options
within the meaning of section 422 of the Code and nonstatutory stock options. As
of January 31, 1998, options to purchase 1,729,399 shares of Common Stock
granted pursuant to the Option Plan had been exercised, options to purchase an
aggregate of 2,071,755 shares were outstanding, and 128,846 shares of Common
Stock remained available for future grants under the Option Plan, provided that
the stockholders approve the increase in the number of shares authorized under
the Option Plan approved by the Board of Directors in February 1998. In addition
to the Option Plan, the Company maintains the Aspect Development, Inc. 1997
Nonstatutory Stock Option Plan (the "Nonstatutory Plan") pursuant to which an
aggregate of 1,200,000 shares of the Company's Common Stock may be issued. The
Nonstatutory Plan provides for the grant of nonstatutory stock options to
employees and consultants of the Company (excluding officers and directors of
the Company). As of January 31, 1998, options to purchase 1,494 shares of Common
Stock granted pursuant to the Nonstatutory Plan had been exercised, options to
purchase an aggregate of 835,800 shares were outstanding, and 362,706 shares of
Common Stock remained available for future grants under the Nonstatutory Plan.
Shares Subject to Plan. The Board has amended the Option Plan, subject to
stockholder approval, to increase by 1,100,000 the maximum number of authorized
but unissued or reacquired shares of the Company's Common Stock issuable
thereunder to an aggregate of 5,030,000. In the event of any stock dividend,
stock split, reverse stock split, recapitalization, combination,
reclassification, or similar change in the capital structure of the Company,
appropriate adjustments will be made to the shares subject to the Option Plan,
to the Grant Limit and to outstanding options. To the extent any outstanding
option under the Option Plan expires or terminates prior to exercise in full or
if shares issued upon exercise of an option are repurchased by the Company, the
shares of Common Stock for which such option is not exercised or the repurchased
shares are returned to the Option Plan and become available for future grant.
Administration. The Option Plan is administered by the Board of Directors
or a duly appointed committee of the Board (hereinafter referred to as the
"Board"). With respect to the participation of individuals whose transactions
in the Company's equity securities are subject to Section 16 of the Securities
Exchange Act of 1934 (the "Exchange Act"), the Option Plan must be administered
in compliance with the requirements, if any, of Rule 16b-3 under the Exchange
Act. Subject to the provisions of the Option Plan, the Board determines the
persons to whom options are to be granted, the number of shares to be covered by
each option, whether an option is to be an incentive stock option or a
nonstatutory stock option, the terms of exercisability of each option and the
vesting of the shares acquired, including the effect thereon of an optionee's
termination of service, the exercise price and type of consideration to be paid
to the Company upon exercise of an option, the duration of each option, and all
other terms and conditions of the options. Subject to certain limitations, the
Option Plan provides for indemnification by the Company of any director, officer
or employee against all reasonable expenses, including attorneys' fees, incurred
in connection with any legal action arising from such person's action or failure
to act in administering the Option Plan. The Board will interpret the Option
Plan and options granted thereunder, and all determinations of the Board will be
final and binding on all persons having an interest in the Option Plan or any
option.
Eligibility. All employees (including directors who are employees) and
consultants of the Company or of any present or future parent or subsidiary
corporations of the Company are eligible to participate in the Option Plan. In
addition, options may be granted to prospective employees and consultants in
connection with written offers of employment or engagement. However, any such
options may not become exercisable prior to such individual's commencement of
service. Nonemployee directors are not eligible to receive grants under the
Option Plan. As of March 31, 1998, the Company had approximately 560 employees,
including eight executive officers, two directors who were also employees and
approximately five consultants. Any person eligible under the Option
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Plan may be granted a nonstatutory option. However, only employees may be
granted incentive stock options. Subject to stockholder approval, no employee
may be granted, in any fiscal year, options under the Option Plan for more
shares than the Grant Limit.
Terms and Conditions of Options. Each option granted under the Option Plan
is evidenced by a written agreement between the Company and the optionee
specifying the number of shares subject to the option and the other terms and
conditions of the option, consistent with the requirements of the Option Plan.
The exercise price per share must equal at least the fair market value of a
share of the Company's Common Stock on the date of grant of an incentive stock
option and at least 85% of the fair market value of a share of the Common Stock
on the date of grant of a nonstatutory stock option. The exercise price of any
incentive stock option granted to a person who at the time of grant owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or any parent or subsidiary corporation of the Company (a
"Ten Percent Stockholder") must be at least 110% of the fair market value of a
share of the Company's Common Stock on the date of grant. On April ___, 1998,
the closing price of a share of the Company's Common Stock was $________, as
reported on the Nasdaq National Market.
Generally, the exercise price may be paid in cash, by check, or in cash
equivalent, by tender of shares of the Company's Common Stock owned by the
optionee having a fair market value not less than the exercise price, by the
assignment of the proceeds of a sale or loan with respect to some or all of the
shares of Common Stock being acquired upon the exercise of the option, by means
of a promissory note, by any other lawful consideration approved by the Board or
by any combination of these. The Board may restrict the forms of payment
permitted in connection with any option grant.
Options granted under the Option Plan will become exercisable and vested at
such times and subject to such conditions as specified by the Board. Generally,
options granted under the Option Plan are exercisable on and after the date of
grant, subject to the Company's right to reacquire at the optionee's exercise
price any unvested shares held by the optionee upon termination of employment or
service with the Company or if the optionee attempts to transfer any unvested
shares. Shares subject to options generally vest in installments subject to the
optionee's continued employment or service. The maximum term of incentive stock
options granted under the Option Plan is ten years, except that an incentive
stock option granted to a Ten Percent Stockholder may not have a term longer
than five years. Consistent with the Code, the Option Plan does not limit the
term of nonstatutory stock options granted under the Option Plan.
Stock options are nontransferable by the optionee other than by will or by
the laws of descent and distribution, and are exercisable during the optionee's
lifetime only by the optionee.
Transfer of Control. The Option Plan provides that in the event of (i) a
sale or exchange by the stockholders of more than 50% of the Company's voting
stock, (ii) a merger or consolidation to which the Company is a party, (iii) the
sale, exchange or transfer of all or substantially all of the assets of the
Company, or (iv) a liquidation or dissolution of the Company, wherein the
stockholders of the Company immediately before any such event do not retain
direct or indirect beneficial ownership of more than 50% of the total combined
voting power of the voting stock of the Company, its successor, or the
corporation to which the assets of the Company were transferred (a "Transfer of
Control"), the Board may arrange with the surviving, continuing, purchasing or
successor corporation or parent corporation thereof (the "Acquiring
Corporation") to assume or substitute substantially equivalent new options for
the options outstanding under the Option Plan. To the extent that the options
outstanding under the Option Plan are not assumed, replaced, or exercised prior
to such event, they will terminate.
Termination or Amendment. The Option Plan currently provides that, unless
sooner terminated, no incentive stock options may be granted under the Option
Plan after May 1, 2006. However, if the stockholders approve the proposed
increase in the number of shares issuable under the Option Plan, such term shall
be extended until February 10, 2008. The Board may terminate or amend the
Option Plan at any time, but, without stockholder approval, the Board may not
amend the Option Plan to increase the total number of shares of Common Stock
reserved for issuance thereunder, change the class of persons eligible to
receive incentive stock options, or expand the class of persons eligible to
receive nonstatutory stock options. No amendment or termination of the Plan may
adversely affect an outstanding option without the
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consent of the optionee, unless the amendment is required to preserve the
option's status as an incentive stock option or is necessary to comply with any
applicable law or regulation.
SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES OF THE OPTION PLAN
The following summary is intended only as a general guide as to the United
States federal income tax consequences under current law of participation in the
Option Plan and does not attempt to describe all possible federal or other tax
consequences of such participation or tax consequences based on particular
circumstances.
Incentive Stock Options. An optionee recognizes no taxable income for
regular income tax purposes as the result of the grant or exercise of an
incentive stock option qualifying under section 422 of the Code. Optionees who
do not dispose of their shares for two years following the date the option was
granted nor within one year following the exercise of the option will normally
recognize a mid-term or long-term capital gain or loss equal to the difference,
if any, between the sale price and the purchase price of the shares. If an
optionee satisfies such holding periods upon a sale of the shares, the Company
will not be entitled to any deduction for federal income tax purposes. If an
optionee disposes of shares within two years after the date of grant or within
one year from the date of exercise (a "disqualifying disposition"), the
difference between the fair market value of the shares on the exercise date and
the option exercise price (not to exceed the gain realized on the sale if the
disposition is a transaction with respect to which a loss, if sustained, would
be recognized) will be taxed as ordinary income at the time of disposition. Any
gain in excess of that amount will be a capital gain. If a loss is recognized,
there will be no ordinary income, and such loss will be a capital loss. A
capital gain or loss will be mid-term or long-term if the optionee's holding
period is more than 12 months. Any ordinary income recognized by the optionee
upon the disqualifying disposition of the shares generally should be deductible
by the Company for federal income tax purposes, except to the extent such
deduction is limited by applicable provisions of the Code or the regulations
thereunder.
The difference between the option exercise price and the fair market value
of the shares on the exercise date of an incentive stock option is an adjustment
in computing the optionee's alternative minimum taxable income and may be
subject to an alternative minimum tax which is paid if such tax exceeds the
regular tax for the year. Special rules may apply with respect to certain
subsequent sales of the shares in a disqualifying disposition, certain basis
adjustments for purposes of computing the alternative minimum taxable income on
a subsequent sale of the shares and certain tax credits which may arise with
respect to optionees subject to the alternative minimum tax.
Nonstatutory Stock Options. Options not designated or qualifying as
incentive stock options will be nonstatutory stock options. Nonstatutory stock
options have no special tax status. An optionee generally recognizes no taxable
income as the result of the grant of such an option. Upon exercise of a
nonstatutory stock option, the optionee normally recognizes ordinary income in
the amount of the difference between the option exercise price and the fair
market value of the shares on the exercise date. If the optionee is an
employee, such ordinary income generally is subject to withholding of income and
employment taxes. Upon the sale of stock acquired by the exercise of a
nonstatutory stock option, any gain or loss, based on the difference between the
sale price and the fair market value on the exercise date, will be taxed as
capital gain or loss. A capital gain or loss will be mid-term or long-term if
the optionee's holding period is more than 12 months. No tax deduction is
available to the Company with respect to the grant of a nonstatutory option or
the sale of the stock acquired pursuant to such grant. The Company generally
should be entitled to a deduction equal to the amount of ordinary income
recognized by the optionee as a result of the exercise of a nonstatutory option,
except to the extent such deduction is limited by applicable provisions of the
Code or the regulations thereunder.
NEW PLAN BENEFITS AND ADDITIONAL INFORMATION
The future grant of options under the Option Plan will be made at the
discretion of the Board, and, accordingly, are not yet determinable. In
addition, benefits under the Option Plan will depend on a number of factors,
including the fair market value of the Company's Common Stock on future dates
and the exercise decisions made by the optionees. Consequently, it is not
possible to determine the benefits that might be received by optionees receiving
discretionary grants under the Option Plan. The numbers of shares of Common
Stock subject to
7
<PAGE>
options granted under the Option Plan to certain persons during the year ended
December 31, 1997 are as follows: Messrs. Wadhwani, Prang, Althoff, Dury and
Horne were granted options to purchase 125,000 shares, 35,000 shares, 35,063
shares, 10,000 shares and 5,000 shares, respectively; all current executive
officers as a group were granted options to purchase an aggregate of 408,688
shares; and all current employees, including officers who are not executive
officers, as a group were granted options to purchase an aggregate of 357,950
shares. During such fiscal year, no options were granted under the Option Plan
to (i) any current directors who are not executive officers, or (ii) any
associates of any current directors who are not executive officers or of any
executive officers, and no person other than those individuals set forth above
was granted five percent or more of the total amount of options granted under
the Option Plan during that period.
REQUIRED VOTE; RECOMMENDATION OF THE BOARD OF DIRECTORS.
The affirmative vote of a majority of the votes cast on the proposal at the
Annual Meeting of Stockholders, at which a quorum representing a majority of all
outstanding shares of Common Stock of the Company is present, either in person
or by proxy, is required for approval of this proposal. Votes for and against,
abstentions and broker non-votes will each be counted as present for purposes of
determining the presence of a quorum. Abstentions and broker non-votes will
have no effect on the outcome of this vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF AN
INCREASE BY 1,100,000 IN THE MAXIMUM AGGREGATE NUMBER OF SHARES ISSUABLE UNDER
THE OPTION PLAN AND THE ESTABLISHMENT OF THE GRANT LIMIT.
PROPOSAL NO. 3
APPROVAL OF AMENDMENT TO RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE THE AUTHORIZED
COMMON STOCK OF THE COMPANY
On April ___, 1998, the Board authorized an amendment to the Company's
Restated Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 20,000,000 to 75,000,000. The Company's Restated
Certificate of Incorporation currently authorizes the issuance by the Company of
up to 20,000,000 shares of Common Stock and 2,000,000 shares of Preferred Stock,
$0.001 par value per share (the "Preferred Shares"). As of April 20, 1998 there
were approximately __________ shares of Common Stock issued and outstanding,
approximately _______shares of Common Stock reserved for issuance under various
stock plans of the Company and its subsidiaries and approximately ______shares
of Common Stock remaining available for future issuance. No Preferred Shares
are issued or outstanding. The stockholders are now being asked to approve this
proposed amendment.
The Board believes that the proposed increase is desirable so that, as the
need may arise, the Company will have more flexibility to issue shares of Common
Stock in connection with future opportunities for expanding the business through
investments or acquisitions, possible future stock dividends or stock splits,
and for other general corporate purposes. There are no preemptive rights with
respect to the Company's Common Stock.
Authorized but unissued shares of the Company's Common Stock may be issued
at such times, for such purposes and for such consideration as the Board may
determine to be appropriate without further authority from the Company's
stockholders, except as otherwise required by applicable law or Nasdaq Stock
Market policies. The increase in authorized Common Stock will not have any
immediate effect on the rights of existing stockholders. To the extent that the
additional authorized shares are issued in the future, they will decrease the
existing stockholders' percentage equity ownership; depending upon the price at
which they are issued, they could be either dilutive or nondilutive to the
existing stockholders.
8
<PAGE>
The increase in the authorized number of shares of Common Stock and the
subsequent issuance of such shares could have the effect of delaying or
preventing a change in control of the Company without further action by the
stockholders. Shares of authorized and unissued Common Stock could (within the
limits imposed by applicable law) be issued in one or more transactions which
would make a change in control of the Company more difficult, and therefore less
likely. Any such issuance of additional stock could have the effect of diluting
the earnings per share and book value per share of outstanding shares of Common
Stock, and such additional shares could be used to dilute the stock ownership or
voting rights of a person seeking to obtain control of the Company.
REQUIRED VOTE; RECOMMENDATION OF THE BOARD OF DIRECTORS
The affirmative vote of a majority of all outstanding shares of Common
Stock of the Company is required for approval of this proposal. Abstentions and
broker non-votes will each have the same effect as a negative vote on this
proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE PROPOSAL TO
AMEND THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER
OF AUTHORIZED SHARES OF THE COMPANY'S COMMON STOCK FROM 20,000,000 SHARES TO
75,000,000 SHARES.
PROPOSAL NO. 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP, independent
auditors, to audit the financial statements of the Company for the fiscal year
ending December 31, 1998. Ernst & Young LLP (or its predecessor firm) has
audited the Company's financial statements since the Company's inception. A
representative of Ernst & Young LLP is expected to be present at the meeting,
will have the opportunity to make a statement, and is expected to be available
to respond to appropriate questions.
REQUIRED VOTE; RECOMMENDATION OF THE BOARD OF DIRECTORS
Stockholder ratification of the selection of Ernst & Young LLP as the
Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of Ernst & Young LLP
to the stockholders for ratification as a matter of good corporate practice. If
the stockholders fail to ratify the selection, the Board will reconsider whether
or not to retain that firm. Even if the selection is ratified, the Board in its
discretion may direct the appointment of a different accounting firm at any time
during the year if the Board determines that such a change would be in the best
interests of the Company and its stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION
OF THE APPOINTMENT OF E&Y AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL
YEAR ENDING DECEMBER 31. 1998.
9
<PAGE>
PRINCIPAL STOCKHOLDERS AND SHARE OWNERSHIP BY MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock of
the company as of February 28, 1998 by (i) each stockholder known by the Company
to be a beneficial owner of more than five percent of its Common Stock; (ii)
each of the officers named in the Summary Compensation Table, (iii) each of the
Company's directors; and (iv) all directors and executive officers as a group.
<TABLE>
<CAPTION>
Number of Shares
Beneficial Owner (1) Percent
- -------------------------------------------------------------------------- ----------------- -------------------
<S> <C> <C>
Romesh Wadhwani (2) 3,280,000 22.4%
1300 Charleston Road
Mountain View, CA 94043
Putnam Investments, Inc. (3) 970,467 6.6%
One Post Office Square
Boston, MA 2109
AMVESCAP PLC (4) 747,900 5.1%
11 Devonshire Square
London EC2M 4YR
England
Joseph Prang (5) 449,704 3.1%
James Althoff (6) 201,191 1.4%
David Dury (7) 110,463 *
David James Horne (8) 55,339 *
Dennis Sisco (9) 15,280 *
Mark A. Stevens (10) 1,250 *
Steven Goldby (11) 1,250 *
All directors and executive officers as a group (13 persons) (12) 4,452,336 30.4%
</TABLE>
- -------------------------------------------------------------------------------
* Less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "SEC"). In computing the number of
shares beneficially owned by a person and the percentage ownership of that
person, shares of Common Stock subject to options or warrants held by that
person that are currently exercisable, or become exercisable within 60 days
following February 28, 1998, are deemed outstanding. However, such shares
are not deemed outstanding for purposes of computing the percentage
ownership of any other person. Where noted, the options held by certain
individuals named in the table are immediately exercisable, subject to a
right of repurchase in favor of the Company for all exercised unvested
shares at the original purchase price upon termination of employment.
Except as indicated in the footnotes to the table, the persons named in the
table have sole voting and investment power with respect to all shares of
Common Stock shown as beneficially owned by them, subject to community
property laws.
(2) Includes 250,000 shares subject to immediately exercisable options, 181,251
of which would not be vested within 60 days of February 28, 1998.
10
<PAGE>
(3) Based solely on an amendment to Schedule 13G filed with the SEC on January
21, 1998. Includes 889,967 held by Putnam Investment Management, Inc. (of
which 716,467 are specifically held by Putnam OTC & Emerging Growth Fund)
and 80,500 shares held by The Putnam Advisory Company, Inc.
(4) Based solely on an amendment to Schedule 13G filed with the SEC on February
11, 1998, which states that each of AMVESCAP PLC, AVZ, Inc., A I M
Management Group Inc., AMVESCAP Group Services, Inc., INVESCO, Inc.,
INVESCO North American Holdings, Inc., INVESCO Capital Management, Inc.,
INVESCO Funds Group, Inc., INVESCO Management & Research, Inc. and INVESCO
Realty Advisers, Inc. may be deemed to beneficially own 747,900 shares of
Common Stock of the Company and that each entity may be deemed to have
shared voting and dispositive power over such shares.
(5) Includes 79,312 shares subject to immediately exercisable options, 76,464
of which would not be vested within 60 days of February 28, 1998.
(6) Includes 140,063 shares subject to immediately exercisable options, 51,721
of which would not be vested within 60 days of February 28, 1998.
(7) Includes 106,000 shares subject to immediately exercisable options, 63,752
of which would not be vested within 60 days of February 28, 1998.
(8) Includes 55,000 shares subject to immediately exercisable options, 37,606
of which would not be vested within 60 days of February 28, 1998.
(9) Includes 2,395 shares subject to options which are exercisable within 60
days of February 28, 1998.
(10) Represents 1,250 shares subject to options which are exercisable within 60
days of February 28, 1998.
(11) Represents 1,250 shares subject to options which are exercisable within 60
days of February 28, 1998.
(12) Includes 1,007,508 shares subject to options that are immediately
exercisable or will be exercisable within 60 days of February 28, 1998. Of
the shares subject to immediately exercisable options, 653,683 of these
shares would not be vested within 60 days of February 28, 1998.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act ("Section 16(a)") requires the Company's
officers and directors, and persons who own more than 10% of the Company's
outstanding Common Stock, to file reports of ownership on Form 3 and changes in
ownership on Form 4 or Form 5 with the Securities and Exchange Commission (the
"SEC") and Nasdaq. Such officers, directors and ten-percent stockholders are
also required by SEC rules to furnish the Company with copies of all such forms
that they file.
Based solely on its review of the copies of such forms received by the
Company, or written representations from certain reporting persons that no other
reports were required for such persons, the Company believes that during fiscal
1997 all Section 16(a) filing requirements applicable to its officers, directors
and 10% stockholders were complied with.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In fiscal 1997, Messrs. Stevens and Goldby served as members of the
Compensation Committee. No member of the Compensation Committee is or was
formerly an officer or an employee of the Company or its subsidiaries. No
interlocking relationship exists between the Company's Board of Directors or
Compensation Committee and the board of directors or compensation committee of
any other company, nor has any such interlocking relationship existed in the
past.
11
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information for the fiscal years ended
December 31, 1997, 1996 and 1995 concerning the compensation of the Chief
Executive Officer of the Company and the four other most highly compensated
executive officers of the Company as of December 31, 1997 whose total salary and
bonus for the year ended December 31, 1997 exceeded $100,000, for services in
all capacities to the Company and its subsidiaries:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation Awards
-------------------
Annual Compensation Securities
------------------- Underlying All Other
Name and Principal Position Year Salary Bonus Options Compensation
- ---------------------------------------- ---- -------- --------- ------------------- ------------
<S> <C> <C> <C> <C> <C>
Romesh Wadhwani 1997 $200,000 $100,000 125,000 $4,337 (1)
Chairman of the Board 1996 $200,000 $ 90,000 125,000 $9,640 (1)
and Chief Executive Officer 1995 $200,000 $ 90,000 --- ---
Joseph Prang 1997 $185,000 $ 85,000 35,000 ---
President, Chief Operating 1996 $185,000 $ 76,500 50,000 ---
Officer and Director 1995 $185,000 $ 76,500
James Althoff 1997 $159,597 $ 48,373 35,063 ---
Executive Vice President 1996 $145,000 $ 45,000 25,000 ---
and Chief Technical Officer 1995 $145,000 $ 45,000 --- ---
David Dury (2) 1997 $169,209 $ 37,500 10,000 ---
Vice President and 1996 $114,968 $ 10,000 100,000 ---
Chief Financial Officer 1995 --- --- --- ---
David James Horne (3) 1997 $138,692 $ 30,079 5,000 ---
Vice President 1996 $ 35,308 --- 55,000 ---
Marketing 1995 --- --- --- ---
</TABLE>
- -------------------------------------------------------------------------------
(1) Represents amounts paid by the Company for executive life insurance for
which Dr. Wadhwani's estate is the beneficiary.
(2) Mr. Dury joined the Company in April 1996 as Vice President and Chief
Financial Officer.
(3) Mr. Horne joined the Company in September 1996 as Vice President of
Marketing.
12
<PAGE>
OPTIONS GRANTS IN FISCAL 1997
The following table provides the specified information concerning grants of
options to purchase the Common Stock made during the fiscal year ended December
31, 1997 to the persons named in the Summary Compensation Table:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual
% of Total Rates of Stock Price
Number of Options Appreciation for Option Term (1)
Options Granted to Expiration --------------------------------
Name Granted (2) Employees Price (3) Date 5% ($) 10% ($)
- ------------------------- ---------------- ------------------ --------- ---------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Romesh Wadhwani 125,000 5.96% $21.75 6/4/07 1,709,807 4,332,987
Joseph Prang 35,000 1.67% $21.75 6/4/07 478,746 1,213,236
James Althoff 35,063 1.67% $21.75 6/4/07 479,608 1,215,420
David Dury 10,000 0.48% $21.75 6/4/07 136,785 346,639
David James Horne 5,000 0.24% $21.75 6/4/07 68,392 173,319
________________
</TABLE>
(1) Potential gains are net of exercise price, but before taxes associated with
exercise. These amounts represent certain assumed rates of appreciation
only, in accordance with the SEC's rules. Actual gains, if any, on stock
option exercises are dependent on the future performance of the Common
Stock, overall market conditions and the optionholders' continued
employment through the vesting period. The amounts reflected in this table
may not necessarily be achieved.
(2) All options granted in fiscal 1997 under the Company's 1992 Stock Option
Plan (the "1992 Option Plan") are immediately exercisable subject to the
Company's right to repurchase unvested shares at the original exercise
price upon termination of the optionee. Options and underlying shares
generally vest over a four year period at the rate of one-fourth on the
first anniversary of the date of grant and 1/48 per month thereafter for
each full month of the optionee's continuous employment with the Company.
Under the 1992 Option Plan, the Board retains discretion to modify the
terms, including the price, of outstanding options.
(3) All options listed were granted at market value on the date of grant, based
on the closing sales price on the date of grant.
OPTION EXERCISES AND YEAR-END HOLDINGS
The following table provides the specified information concerning exercises
of options to purchase the Common Stock in the fiscal year ended December 31,
1997, and unexercised options held as of December 31, 1997, by the persons named
in the Summary Compensation Table:
13
<PAGE>
AGGREGATED OPTION EXERCISES
AND FISCAL YEAR-END VALUES
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised In-the-Money
Unexercised Options at 12/31/97 Options at 12/31/97(1)
Shares Acquired $ Value ---------------------------------------- -------------------------------------
Name Upon Exercise Realized Exercisable (2) Unexercisable Exercisable (2) Unexercisable
- --------------------- --------------- ---------- -------------------- ------------------ ---------------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Romesh Wadhwani - N/A 250,000 - $9,387,500 -
Josesph Prang - N/A 85,000 - $3,333,750 -
James Althoff 275,000 $8,589,258 190,063 - $8,932,156 -
David Dury 4,000 $ 109,122 116,000 - $5,072,500 -
David James Horne 5,000 $ 96,250 55,000 - $1,763,750 -
_______________
</TABLE>
(1) Based on a fair market value of $52.00, the closing price of the Common
Stock on December 31, 1997 as reported by the Nasdaq National Market.
(2) All options granted in fiscal 1997 under the 1992 Option Plan are
immediately exercisable subject to the Company's right to repurchase
unvested shares at the original exercise price upon termination of the
optionee. Options and underlying shares generally vest over a four year
period at the rate of one-fourth on the first anniversary of the date of
grant and 1/48 per month thereafter for each full month of the optionee's
continuous employment with the Company. Under the 1992 Option Plan, the
Board retains discretion to modify the terms, including the price, of
outstanding options.
CHANGE OF CONTROL ARRANGEMENTS
The agreements for options granted under the 1992 Stock Option Plan (the
"1992 Option Plan") generally provide that the options may be immediately
exercised, but that shares acquired upon such exercise will be subject to a
repurchase right which lapses over a four-year period beginning on the date the
option was granted. The agreements with respect to options to purchase 250,000
and 79,312 shares granted to Messrs. Wadhwani and Prang, respectively, provide
that, in the event that the Company is acquired by another entity, the
repurchase option applicable to such shares will lapse immediately upon the
effective date of the transfer of control. The agreement with respect to an
option to purchase 106,000 shares granted to David Dury provides that, in the
event the Company is acquired by another entity within two years of his hire
date, the repurchase option applicable to such shares will lapse with respect to
25% of such shares upon termination of Mr. Dury's employment with the acquiror.
The agreement with respect to an option to purchase 55,000 shares granted to
David Horne provides that, in the event the Company is acquired by another
entity, the repurchase option applicable to such shares will lapse with respect
to 25% of such shares upon termination of Mr. Horne's employment with the
acquiror.
Pursuant to the terms of an employment offer letter dated April 29, 1994
from the Company to Mr. Prang, the Company sold 550,000 shares of its Common
Stock to Mr. Prang for an aggregate purchase price of $110,000, subject to a
repurchase option in favor of the Company which lapses over a four-year period.
In the event that the Company is acquired by another entity, the repurchase
option applicable to such shares will lapse immediately if the acquiror
terminates Mr. Prang's employment without cause prior to April 29, 1998.
14
<PAGE>
OTHER BUSINESS
The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy card to vote the shares they represent as
the Board of Directors may recommend.
It is important that your shares be represented at the meeting, regardless
of the number of shares which you hold. You are, therefore, urged to execute and
return, at your earliest convenience, the accompanying proxy card in the
envelope which has been enclosed.
By Order of the Board of Directors
Romesh Wadhwani
Chairman and Chief Executive Officer
Mountain View, California
April 30, 1998
15
<PAGE>
PRELIMINARY COPIES
ASPECT DEVELOPMENT, INC.
Proxy for the Annual Meeting of Stockholders
TO BE HELD ON JUNE 16, 1998
Solicited by the Board of Directors
The undersigned hereby appoints Romesh Wadhwani and David Dury, and each of
them, with full power of substitution, to represent the undersigned and to vote
all of the shares of stock in Aspect Development, Inc., a Delaware corporation
(the "Company"), which the undersigned is entitled to vote at the Annual Meeting
of Stockholders of the Company to be held at Michael's of Shoreline located at
2960 N. Shoreline Blvd., Mountain View, California 94043 on June 16, 1998 at
10:00 a.m. local time, and at any adjournment or postponement thereof (1) as
hereinafter specified upon the proposals listed on the reverse side and as more
particularly described in the Proxy Statement of the Company dated April 30,
1998 (the "Proxy Statement"), receipt of which is hereby acknowledged, and (2)
in their discretion upon such other matters as may properly come before the
meeting.
THE SHARES REPRESENTED HEREBY SHALL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, SUCH SHARES SHALL BE VOTED FOR PROPOSALS 1 THROUGH 4.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE
SIDE
1
<PAGE>
[X] Please mark
votes as in
this example
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO
SIGN AND PROMPTLY MAIL THIS PROXY IN THE RETURN ENVELOPE SO THAT YOUR STOCK
MAY BE REPRESENTED AT THE MEETING.
A vote FOR the following proposals is recommended by the Board of
Directors:
1. To elect the following five persons as directors to serve for the
ensuing year and until their successors are duly elected and qualified:
Romesh Wadhwani
Joseph A. Prang
Steven Goldby
Dennis Sisco
Mark A. Stevens
[_] FOR all nominees [_] WITHHOLD AUTHORITY to Vote
listed above (except FOR all nominees listed
as marked to the above.
contrary below.)
[_] ________________________
FOR all nominees except
as noted above.
2. To approve an amendment to the Company's 1992 Employee Stock Option
Plan to increase the number of shares of Common Stock reserved for
issuance thereunder by 1,100,000 shares.
[_] FOR [_] AGAINST [_] ABSTAIN
3. To approve an amendment to the Company's Restated Certificate of
Incorporation to increase the number of shares of the Company's Common
Stock authorized for issuance by 55,000,000 shares, to a total of
75,000,000 shares.
[_] FOR [_] AGAINST [_] ABSTAIN
4. To ratify the appointment of Ernst & Young LLP as independent auditors
for the Company for the fiscal year ending December 31, 1998.
[_] FOR [_] AGAINST [_] ABSTAIN
[_] MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT MARK HERE
IF YOU PLAN
TO ATTEND
THE MEETING [_]
<TABLE>
<S> <C>
PLEASE SIGN HERE. If shares of stock are held jointly, Signature: ______________________ Date: ________
both or all of such persons should sign. Corporate or Signature: ______________________ Date: ________
partnership proxies should be signed in full corporate
or partnership name by an authorized person. Persons
signing in a fiduciary capacity should indicate their
full titles in such capacity.
</TABLE>
PLEASE VOTE, SIGN, DATE AND RETURN THE PROXY CARD
USING THE ENCLOSED ENVELOPE.
2
