POWERWAVE TECHNOLOGIES INC, DEF 14A, 2000-03-28

POWERWAVE TECHNOLOGIES INC
DEF 14A, 2000-03-28
RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT

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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:

[_] Preliminary Proxy Statement [_] Confidential, for Use Of The
Commission Only (As Permitted By
Rule 14a-6(e)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (Section) 240.14a-11(c) or (Section)
240.14a-12

POWERWAVE TECHNOLOGIES, 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:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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Notes:

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[LOGO OF POWERWEAVE TECHNOLOGIES(R) APPEARS HERE]

POWERWAVE TECHNOLOGIES, INC.
2026 McGaw Avenue
Irvine, California 92614

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 26, 2000

To Our Shareholders:

The Annual Meeting of Shareholders of Powerwave Technologies, Inc. (the
"Company") will be held at the Orange County Airport Hilton, 18800 MacArthur
Boulevard, Irvine, California, 92612 on Wednesday, April 26, 2000 at 10:00 a.m.,
local time, for the following purposes:

1. To elect eight directors to hold office until the next Annual Meeting
of Shareholders or until their successors are duly elected and qualified;

2. To approve an amendment to the Company's Amended and Restated
Certificate of Incorporation to increase the number of authorized shares of
Common Stock thereunder from 40,000,000 to 135,000,000 and to effect a
three-for-one stock split of the Company's Common Stock;

3. To approve the adoption of the 2000 Stock Option Plan and authorize the
issuance of 880,000 shares of Common Stock thereunder;

4. To ratify the appointment of Deloitte & Touche LLP as independent
auditors; and

5. The transaction of such other business as may properly come before the
meeting or any adjournment or postponement thereof.

Only shareholders of record at the close of business on February 28, 2000,
(the "Record Date") are entitled to notice of and to vote at the Annual Meeting.
A list of shareholders as of the Record Date will be available during normal
business hours for examination by any shareholder for any purpose germane to the
Annual Meeting for a period of ten days prior to April 26, 2000, at the offices
of the Company, 2026 McGaw Avenue, Irvine, California 92614.

All shareholders are urged to attend the meeting in person or by proxy.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE SIGN AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTPAID ENVELOPE.
The proxy is revocable and will not affect your right to vote in person in the
event you attend the Annual Meeting. You may revoke your proxy at any time
before it is voted. If you receive more than one proxy card because your shares
are registered in different names or at different addresses, please sign and
return each proxy card so your shares will be represented at the Annual Meeting.
In addition, if you plan to attend the Annual Meeting in person, please check
the appropriate box so that we can ensure we have proper accommodations.

By Order of the Board of Directors
Kevin T. Michaels
Senior Vice President, Finance,
Irvine, California Chief Financial Officer
March 27, 2000 and Secretary
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POWERWAVE TECHNOLOGIES, INC.
_______________________

PROXY STATEMENT
_______________________

ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 26, 2000

General Information

This proxy statement contains information related to the solicitation of
proxies by and on behalf of the Board of Directors of Powerwave Technologies,
Inc. (the "Company") for use in connection with the Annual Meeting of
Shareholders to be held on Wednesday, April 26, 2000, beginning at 10:00 a.m.,
local time, at the Orange County Airport Hilton, 18800 MacArthur Boulevard,
Irvine, California 92612 and any and all adjournments or postponements thereof.

The persons named as proxies were designated by the Board of Directors and are
officers and/or directors of the Company. Any proxy may be revoked or
superseded by executing a later proxy or by giving notice of revocation in
writing to the Secretary prior to, or at, the Annual Meeting, or by the person
who executed the proxy attending the Annual Meeting and voting in person. All
proxies that are properly completed, signed and returned to the Company prior to
the meeting, and not revoked, will be voted in accordance with the instruction
given in the proxy. If a choice is not specified in the proxy, the proxy will
be voted FOR the election of the director nominees listed below in Proposal 1
and FOR Proposals 2, 3 and 4 described in the following pages.

This Proxy Statement and the accompanying proxy are being mailed to
shareholders on or about March 28, 2000. The cost of preparing, assembling and
mailing the Notice of Annual Meeting of Shareholders, Proxy Statement and form
of Proxy and the cost of soliciting proxies will be paid by the Company. The
Company has retained Georgeson Shareholder Communications Inc. to handle the
proxy solicitation for a fee of approximately $6,500, plus out of pocket
expenses. Proxies may be solicited by personal interview, mail and telephone.
The Company has contacted brokerage houses, other custodians and nominees to ask
whether other persons are the beneficial owners of the shares that they hold in
street name, and if that is the case, will supply additional copies of the proxy
material for distribution to such beneficial owners. The Company will reimburse
such parties for their reasonable expenses in sending proxy materials to the
beneficial owners of the shares. In addition, some of the officers, directors
and employees of the Company may solicit proxies personally, by telephone or
fax.

Voting at the Meeting

The shares of Common Stock constitute the only class of securities of the
Company entitled to notice of, to attend and to vote at, the Annual Meeting.
Only shareholders of record at the close of business on February 28, 2000, will
be entitled to notice of and to vote at the Annual Meeting or any adjournment or
postponement thereof. As of February 28, 2000, there were 20,373,618 shares of
Common Stock issued and outstanding, each share being entitled to one vote on
each matter to be voted upon. The presence at the Annual Meeting, in person or
by proxy, of the holders of a majority of the shares of Common Stock outstanding
on February 28, 2000 will constitute a quorum.

Votes at the Annual Meeting, including those cast in person or by proxy, will
be tabulated by the Inspector of Elections appointed by the Board of Directors.
Abstentions and broker non-votes are each included in the determination of the
number of shares present and voting for the purpose of determining whether a
quorum is present, and each is tabulated separately. Abstentions will be
treated as shares present and entitled to vote for purposes of any matter for
which a majority of shares present are required for passage and, accordingly,
will have the effect of votes against such matters. With respect to shares
relating to any proxy as to which a broker non-vote is indicated on a matter,
those shares will not be considered present and entitled to vote with respect to
any such matter and, accordingly will have no effect on any matter for which a
majority of shares present are required for passage. Abstentions or non-votes
or other failures to vote will have no such effect in the election of directors,
who

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will be elected by a plurality of the affirmative votes cast. With respect to
any matter brought before the Annual Meeting requiring the affirmative vote of a
majority or other proportion of the outstanding shares, an abstention or non-
vote will have the same effect as a vote against the matter being voted upon.

Security Ownership of Certain Beneficial Owners, Directors and Executive
Officers

The following table sets forth information concerning the ownership of the
Company's outstanding Common Stock as of February 29, 2000, except as otherwise
noted, by persons who are directors, Named Executive Officers (as defined under
the heading "Summary Compensation"), nominees or persons known to the Company to
be beneficial owners of five percent or more of its outstanding Common Stock.
The table also includes the stock ownership of all directors and Named Executive
Officers of the Company as a group.

<TABLE>
<CAPTION>
Percentage of
Number of Shares Shares
Name and Address of Beneficial Owner Beneficially Owned /(1)/ Outstanding /(1)/
- ------------------------------------ ------------------------ -----------------
<S> <C> <C>
AMVESCAP PLC........................... 1,772,200 (2) 8.7%
1315 Peachtree Street, N.E.
Atlanta, GA 30309

Bruce C. Edwards /(3)/................... 234,375 1.1%
Stephen C. Cooper /(4)/.................. 20,000 *
Kevin T. Michaels /(5)/.................. 14,030 *
Anthony J. Zuanich /(6)/................. 15,083 *
John L. Clendenin /(7)/.................. 24,041 *
Gregory M. Avis.......................... - -
David L. George /(8)/.................... 1,875 *
Eugene L. Goda........................... - *
Carl W. Neun............................. - -
Safi U. Qureshey /(9)/................... 2,500 *
Andrew J. Sukawaty /(10)/................ 14,375 *
All Executive Officers and
Directors as a Group
(11 persons) /(11)/...................... 326,279 1.6%
</TABLE>

________________

* Less than 1%
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of Common Stock
subject to options or warrants currently exercisable, or exercisable within
60 days of February 29, 2000, are deemed outstanding for computing the
percentage of the person holding such options or warrants but are not
deemed outstanding for computing the percentage of any other person. As of
February 29, 2000, the Company had a total of 20,381,993 shares of Common
Stock issued and outstanding. Except as indicated by footnote and subject
to community property laws where applicable, to the knowledge of the
Company, the persons named in this table have sole voting and investment
power with respect to all shares of Common Stock shown to be beneficially
owned by them.
(2) Based on a Schedule 13G dated February 3, 2000, filed by AMVESCAP PLC with
the Securities and Exchange Commission. The Schedule 13G states that
voting and investment power is shared with various of its subsidiaries with
respect to all 1,772,200 of the listed shares.
(3) Includes options exercisable for 9,375 shares within 60 days of February
29, 2000.
(4) Consists of options exercisable for 20,000 shares within 60 days of
February 29, 2000.
(5) Includes options exercisable for 13,083 shares within 60 days of February
29, 2000.
(6) Includes options exercisable for 12,083 shares within 60 days of February
29, 2000.
(7) Includes options exercisable for 21,041 shares within 60 days of February
29, 2000.
(8) Consists of options exercisable for 1,875 shares within 60 days of February
29, 2000.
(9) Consists of 2,500 shares owned by Skyline Nevada, LLC, a limited liability
company of which Mr. Qureshey is a majority owner. Mr. Qureshey disclaims
beneficial ownership of such shares, except to the extent of his pecuniary
interest therein. The address of Skyline Nevada, LLC is 15941 Red Hill
Avenue, Suite 205, Tustin, CA 92780.
(10) Consists of options exercisable for 14,375 shares within 60 days of
February 29, 2000.
(11) Includes options exercisable for 91,832 shares within 60 days of February
29, 2000 (see notes 3, 4, 5, 6, 7, 8 and 10).

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Proposal 1

ELECTION OF DIRECTORS

Directors are elected at each Annual Meeting of Shareholders and hold office
until the next Annual Meeting of Shareholders or until their successor is duly
elected and qualified. The number of directors fixed by the bylaws of the
Company are nine, however, the Company has only identified, and is only
nominating eight directors.

Of the eight nominees for election to the Board of Directors, all are
currently serving as Directors of the Company and all but two, Messrs. Neun and
Qureshey, were elected to their present terms of office by the shareholders at
the Company's most recent Annual Meeting of Shareholders, held in September
1999. Proxies cannot be voted for more than eight director nominees. Unless
authority to vote for directors has been withheld in the proxy, the persons
named in the enclosed proxy intend to vote at the Annual Meeting for the
election of the eight nominees presented below. Persons named as proxies may
not vote for the election of any person to the office of director for which a
bona fide nominee is not named in the Proxy Statement. All nominees have
consented to serve as a director for the ensuing year. Although the Board of
Directors does not contemplate that any of the nominees will be unable to serve,
if any nominee withdraws or otherwise becomes unavailable to serve, the persons
named in the enclosed proxy will vote for any substitute nominee designated by
the Board of Directors. The nominees receiving a plurality of the affirmative
votes will be elected. The term of office of each of the current directors
expires on the date of the Annual Meeting.

The names and certain information concerning the persons to be nominated as
directors by the Board of Directors at the Annual Meeting are set forth below.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH OF THE
---
NOMINEES NAMED BELOW.

Gregory M. Avis, 41, has been a member of the Company's Board of Directors
since October 1995. Mr. Avis has been a managing partner of Summit Partners, a
venture capital investment firm, since January 1990. Mr. Avis also serves on
the Board of Directors of Ditech Communications Corp., MCK Communications Corp.,
Splash Technology Holdings, Inc. and a number of privately held companies.

John L. Clendenin, 65, has been non-executive Chairman of the Company's Board
of Directors since January 3, 1999 and has been a member of the Board of
Directors since May 1998. Mr. Clendenin is a Chairman Emeritus of BellSouth
Corporation, a telecommunications holding company. He served as Chairman of the
Board of BellSouth until December 31, 1997 and as President and Chief Executive
Officer from 1984 until his retirement at the end of 1996. Prior to BellSouth,
Mr. Clendenin was President of Southern Bell from April 1981 to December 1983.
He also serves on the Board of Directors of Coca-Cola Enterprises, Inc., Equifax
Inc., National Service Industries, Inc., Nabisco Group Holdings Corp., Nabisco
Holdings Corp., The Kroger Company, Springs Industries, Inc., The Home Depot,
Inc. and Wachovia Corporation.

Bruce C. Edwards, 46, joined the Company in February 1996 as President and
Chief Executive Officer and Director. Mr. Edwards was Executive Vice President,
Chief Financial Officer and Director of AST Research, Inc., a personal computer
company, from July 1994 to December 1995 and Senior Vice President, Finance and
Chief Financial Officer of AST Research, Inc. from March 1988 to July 1994. Mr.
Edwards currently serves on the Board of Directors of HMT Technology Corporation
and Metawave Communications Corporation.

David L. George, 46, has been a member of the Company's Board of Directors
since November 1995. Mr. George is one of the founders and has served as
Executive Vice President and Chief Technical Officer of ComSpace Corporation,
formerly known as Unique Technologies, International, L.L.C., a wireless
technology development company, since February 1994. Mr. George also serves on
the Board of Directors of ComSpace Corporation. From November 1983 to February
1994, Mr. George served as Vice President, Director of Operations, Commercial
Division of Uniden America. Mr. George has been a member of the Institute of
Electrical and Electronic Engineers (I.E.E.E.) for more than 20 years.

Eugene L. Goda, 63, has been a member of the Company's Board of Directors
since November 1995. Since June 1997, Mr. Goda has served as Chairman of the
Board, President and Chief Executive Officer of Objectshare

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Inc., formerly known as Park Place Digitalk, a software company. From October
1991 to October 1995, Mr. Goda served as Chief Executive Officer of Simulation
Sciences, Inc., a software company. From July 1989 to September 1991, he served
as Chief Executive Officer of Meridian Software Systems.

Carl W. Neun, 56, has been a member of the Company's Board of Directors since
February 2000. Mr. Neun is the Chairman of Wirex Communications, Inc. a
provider of Linux based software. From 1993 to January 2000, Mr. Neun was
Senior Vice President and Chief Financial Officer of Tektronix, Inc. From 1987
to 1993 he was Senior Vice President of Administration and Chief Financial
Officer of Conner Peripherals, Inc. Mr. Neun currently serves on the Board of
Directors of Merix Corp., the Oregon Museum of Science and Industry and the
Christie School.

Safi U. Qureshey, 49, has been a member of the Company's Board of Directors
since February 2000. Mr. Qureshey was the cofounder and former Chief Executive
Officer and Chairman of AST Research, Inc. a personal computer manufacturer.
Mr. Qureshey currently serves on the Board of Directors of CarPrices.com,
NextCard, Nexgenix and Connectcom. Mr. Qureshey is also President of the
Southern California Chapter of The Indus Entrepreneurs (TiE-SC) which is a
networking and mentoring organization for entrepreneurs. Mr. Qureshey is also a
former member of President Clinton's Export Council and was a Regent's Professor
at the Graduate School of Management , University of California, Irvine.

Andrew J. Sukawaty, 44, has been a member of the Company's Board of Directors
since May 1998. Mr. Sukawaty has served as Chief Executive Officer of Sprint
PCS since September 1996. Prior to joining Sprint PCS, Mr. Sukawaty was Chief
Executive Officer of NTL Limited, a British diversified broadcast transmission
and communications company, since 1994. From 1989 to 1994, he was Chief
Operating Officer of Mercury One-2-One, a PCS service provider in the United
Kingdom. Prior to 1989, Mr. Sukawaty held various positions with US WEST, Inc.,
a telecommunications holding company.

Board Committees, Attendance at Meetings and Compensation

The Audit Committee of the Board of Directors for the fiscal year ended
January 2, 2000 consisted of Messrs. Avis and George. The Audit Committee
recommends to the Board of Directors the independent public accountants to be
selected to audit the Company's annual financial statements and approves any
special assignments given to such accountants. The Audit Committee also reviews
the planned scope of the annual audit and the independent accountants' letter of
comments and management's response thereto, any major accounting changes made or
contemplated and the effectiveness and efficiency of the Company's internal
accounting staff. The Audit Committee held three meetings during the fiscal
year ended January 2, 2000.

The Compensation Committee for the fiscal year ended January 2, 2000 consisted
of Messrs. Goda, Clendenin and Sukawaty. The Compensation Committee establishes
remuneration levels for executive officers of the Company, reviews management
organization and development, and reviews executive compensation and significant
employee benefit programs. The Compensation Committee held three meetings
during the fiscal year ended January 2, 2000. The Board of Directors does not
have a standing nominating committee.

For fiscal 1999, the Company's non-employee directors, other than Gregory M.
Avis who waived his fees, received a retainer fee of $20,000 per year payable in
quarterly installments and $1,000 per meeting attended (excluding phone
meetings) of the Board of Directors. The non-executive Chairman of the Board of
Directors receives an additional retainer fee of $20,000 per year payable in
quarterly installments. Directors of the Company who are also employees receive
no additional compensation for their services as a director.

Effective December 6, 1999, each of the following non-employee directors
(Messrs. Clendenin, George, Goda and Sukawaty) were granted an option to
purchase 5,000 shares of Common Stock at an exercise price of $68.50 per share
under the 1996 Director Stock Option Plan. Upon their appointment as directors
in February of 2000, Messrs. Neun and Qureshey were each granted an option to
purchase 30,000 shares of Common Stock at an exercise price of $99.875 per share
under the 1996 Director Stock Option Plan.

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The Board of Directors held nine meetings during the fiscal year ended January
2, 2000. Each director attended at least 80% of all meetings of the Board of
Directors, with the exception of Messrs. Neun and Qureshey who were appointed in
February 2000. Each director attended all committee meetings on which that
director served.

1996 Director Stock Option Plan

The Company's 1996 Director Stock Option Plan (the "Director Plan"), became
effective December 5, 1996, and was amended in August 1998 to increase the
number of shares of Common Stock available for issuance under the plan from
200,000 to 400,000. The Director Plan provides that each member of the
Company's Board of Directors who is not an employee or paid consultant of the
Company automatically will be eligible to receive options to purchase stock
under the Director Plan. Pursuant to the terms of the Director Plan, each
director elected after December 5, 1996 will be granted an initial option under
the plan covering 30,000 shares of Common Stock, which option shall vest at the
rate of 25% on the first anniversary of the grant date and the remaining 75%
shall vest in equal monthly installments over the following three years.
Furthermore, on December 5, 1996 and on each anniversary date thereof, each
director who shall have been an eligible participant under the Director Plan for
at least six (6) months shall be granted an annual option under the Director
Plan to purchase 5,000 shares of Common Stock. The Director Plan provides that
the exercise price per share of grants issued under the Director Plan shall be
equal to 100% of the fair market value of a share of Common Stock on the grant
date. There were 180,000 options outstanding under the Director Plan as of
February 29, 2000 at a weighted average exercise price of $50.38 per share.
There are 210,000 shares available for grant under the Director Plan at February
29, 2000.

Proposal 2

APPROVAL OF AN AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
THEREUNDER FROM 40,000,000 TO 135,000,000 AND TO EFFECT A THREE-FOR-ONE STOCK
SPLIT OF THE COMPANY'S COMMON STOCK

General

The Company's Amended and Restated Certificate of Incorporation currently
authorizes the issuance of 40,000,000 shares of Common Stock and 5,000,000
shares of Preferred Stock. In March 2000, the Board of Directors adopted a
resolution approving and declared advisable a three-for-one stock split of the
Common Stock, subject to shareholder approval of an amendment to the Amended and
Restated Certificate of Incorporation to increase the number of authorized
shares of the Common Stock from 40,000,000 to 135,000,000. No change is being
proposed to the authorized number of shares of Preferred Stock. An increase in
the authorized Common Stock is necessary to permit the proposed stock split to
occur, since the Company does not have enough authorized but unissued shares of
Common Stock to carry out the stock split. If the shareholders approve this
Proposal 2 (the "Capitalization Amendment"), the first sentence of the first
paragraph of Article IV of the Company's Amended and Restated Certificate of
Incorporation would be amended to read in its entirety as follows:

"The total number of shares of all classes of
capital stock which the Corporation shall have the
authority to issue is 140,000,000, of which (i)
135,000,000 shares shall be designated "Common
Stock" and shall have a par value of $0.0001 per
share; and (ii) 5,000,000 shares shall be
designated "Preferred Stock" and shall have a par
value of $0.0001 per share. Upon the effectiveness
of this Certificate of Amendment of Amended and
Restated Certificate of Incorporation, each issued
and outstanding share of the Corporation's Common
Stock, par value $0.0001 per share, shall
automatically and without any action on the part
of the holder thereof be reclassified as and
changed into three shares of the Corporation's
Common Stock, par value $0.0001 per share."

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Reasons for the Stock Split

The price per share of the Common Stock has increased since the completion
of the Company's most recent stock offering on March 11, 1999, when the Common
Stock was selling at $26.75 per share. The closing price on The Nasdaq Stock
Market as of March 13, 2000 was $188.125 per share. The price per share is
currently in a price range that makes the Common Stock less affordable for
purchase in lots of 100 or more shares, particularly for individual investors.
Following the stock split, the Board of Directors believes that the price per
share of the Common Stock will be more affordable, which should enable a broader
range of investors to make a purchase of the Common Stock, thus creating more
liquidity in each shareholder's investment in the Company. The proposed three-
for-one stock split is expected to increase the number of shares traded in the
public market, which the Company believes will establish a more liquid market in
the Common Stock.

Effect of the Stock Split

The intended stock split would not change the shareholders' equity of the
Company, nor would the split affect the relative rights of any shareholder or
result in a dilution or diminution of any shareholders' proportionate interest
in the Company. However, since the stock split would result in each
shareholder's interest being represented by a greater number of shares, it is
possible that higher brokerage commissions may be payable after the intended
stock split upon a sale or transfer of a shareholder's same relative interest in
Common Stock because that interest would be represented by a greater number of
shares.

The Company has been advised by counsel that the intended stock split would
not result in the recognition of a taxable gain or loss to the shareholders for
federal income tax purposes. In addition, the tax basis for shares in the hands
of a shareholder prior to the distribution of the stock split shares would
become the tax basis for the total number of shares to be held by such
shareholder immediately after such distribution, and the holding period of the
newly acquired shares would be deemed to be the same as the holding period of
the corresponding shares held prior to the stock split. However, each
shareholder should consult his or her own tax advisor with respect to the
particular tax consequences, if any, to him or her of the stock split, including
the applicability and effect of any state, local or foreign tax laws.

In connection with the stock split, the number of shares of Common Stock
underlying outstanding stock options and reserved for issuance under the
Company's various stock option and stock purchase plans would be proportionately
adjusted pursuant to the terms of such plans to reflect the stock split
described above, and the exercise prices per share of outstanding options under
such Company plans would be proportionately reduced.

If the proposed Capitalization Amendment is not approved by shareholders,
the existing Amended and Restated Certificate of Incorporation will continue in
effect and the Company will not effect the stock split.

Implementation of the Stock Split

Upon receipt by the Company of the requisite approvals, the Company will
apply to The Nasdaq Stock Market for the continued listing of the Common Stock
on a post-split basis and will notify Nasdaq of the intended effective date
("Effective Date") of the stock split, which will be at least 10 days after such
notification. The stock split will be effected by the filing of an amendment to
the Company's Amended and Restated Certificate of Incorporation with the
Delaware Secretary of State. Shareholders will not receive certificates
representing additional shares resulting from the stock split, but will be
credited with the additional shares of Common Stock. Because the Company
currently has no fractional shares of Common Stock outstanding, no fractional
shares will be issued as a result of the proposed three-for-one stock split.

Impact on the Company's Consolidated Financial Statements

On the Company's consolidated balance sheet, the stock split will result in
the allocation of an amount equal to the aggregate par value of the additional
shares issued in connection with the stock split (approximately $4,100.00) to
the "common stock" line of shareholders' equity, and a corresponding deduction
of the same amount from the "additional paid-in capital" line. The Company's
reported amounts of authorized and issued shares will

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also be adjusted on a three-for-one basis. The stock split will not affect the
Company's income or cash flow statements, except to the extent of the costs of
this Proxy Statement and related activities to effect the Capitalization
Amendment and resulting stock split, which costs are not expected to be material
to the Company's results of operations. The stock split will affect all earnings
per share amounts reflected on the income statement, since earnings per share
will be restated for the periods presented to reflect the increase in the number
of shares of Common Stock outstanding.

Reasons for the Increase in the Number of Authorized Shares of Common Stock

The Company's reserve of authorized but unissued shares of Common Stock has
been substantially depleted in recent years as a result of the Company's
financing activities through the sale of Common Stock and the granting of stock
options under stock option plans. As of March 9, 2000, the Company was
authorized to issue 40,000,000 shares of Common Stock and had 20,390,643 shares
of Common Stock outstanding. The proposed Capitalization Amendment will
increase the number of authorized shares of Common Stock from 40,000,000 to
135,000,000. If the proposed Capitalization Amendment is approved, the number
of shares of Common Stock outstanding immediately following the stock split
would be approximately 61,171,929, a number well over the currently authorized
40,000,000 shares of Common Stock. Moreover, in order to provide that the
Company will have a sufficient number of authorized and unissued shares of
Common Stock for other corporate opportunities, such as additional stock
offerings, acquisitions, stock dividends and compensation plans, the Board of
Directors has decided to increase the number of authorized shares of Common
Stock from 40,000,000 to 135,000,000. However, other than the shares of Common
Stock the Company has reserved for issuance under its existing stock option
plans, and the shares of Common Stock the Company intends to reserve for
issuance under the 2000 Plan (as described in Proposal 3 below), the Company
currently has no specific commitments or agreements to issue any shares of
Common Stock pursuant to any stock offerings, acquisitions, stock dividends or
compensation plans. Also, while this is not the intent of this Proposal, in
addition to general corporate purposes, the proposed share increase can be used
to make a change in control of the Company more difficult. See "Potential Anti-
Takeover Effect of Authorized Securities" below.

The additional shares of Common Stock for which authorization is sought
would be identical to the shares of Common Stock of the Company authorized prior
to approval of this Proposal. Holders of Common Stock do not have preemptive
rights to subscribe to additional securities that may be issued by the Company,
which means that current shareholders do not have a prior right to purchase any
new issue of capital stock of the Company in order to maintain their
proportionate ownership of the Company.

As of the Record Date, a total of 20,373,618 shares of Common Stock of the
Company were issued and outstanding, and a total of 3,470,303 shares of Common
Stock were committed for issuance pursuant to outstanding stock options and
stock purchase rights under the Company's stock option plans and stock purchase
plans. This total committed for issuance includes existing grants as well as
shares available for grant under all of the Company's stock option plans, and
includes the amounts outstanding under the Company's 1995 Stock Option Plan.
See the description of the "1995 Stock Option Plan" in the Compensation section
of this Proxy Statement for information concerning the non-dilutive nature of
the 1995 Stock Option Plan. As of the Record Date, no shares of the Company's
Preferred Stock, of which 5,000,000 shares are authorized, were issued or
outstanding. No increase in the number of authorized shares of Preferred Stock
of the Company is proposed or anticipated at the present time.

If approved, the increased number of authorized shares of Common Stock will
be available for issue from time to time for such purposes and consideration as
the Board of Directors may approve, and no further vote of shareholders of the
Company will be required, except as provided under Delaware law or under
applicable stock exchange or stock market rules. The availability of additional
shares for issuance, without the delay and expense of obtaining shareholder
approval at a special meeting, will restore the Company's flexibility to issue
Common Stock to a level that the Board of Directors believes is advisable.
However, except as described above, the Company currently has no specific
commitments or agreements to issue any shares of Common Stock.

8
<PAGE>

Potential Anti-Takeover Effect of Authorized Securities

The increase in the authorized Common Stock may facilitate certain anti-
takeover devices that may be advantageous to management if management attempts
to prevent or delay a change of control. The Board of Directors could create
impediments to a takeover or transfer of control of the Company by causing such
additional authorized shares to be issued to a holder or holders who might side
with the Board of Directors in opposing a takeover bid. In this connection, the
Board of Directors could issue shares of Common Stock to a holder that would
thereby have sufficient voting power to assure that certain types of proposals
would not receive the requisite shareholder vote, including any proposal to
remove directors, to accomplish certain business combinations opposed by the
Board of Directors, or to alter, amend or repeal provisions in the Company's
Amended and Restated Certificate of Incorporation or Bylaws relating to any such
action. Furthermore, the existence of such shares might have the effect of
discouraging any attempt by a person or entity, through the acquisition of a
substantial number of shares of Common Stock, to acquire control of the Company,
since the issuance of such shares could dilute the Common Stock ownership of
such person or entity. Employing such devices may adversely impact shareholders
who desire a change in management or who desire to participate in a tender offer
or other sale transaction involving the Company. By use of such anti-takeover
devices, the Board of Directors may thwart a merger or tender offer even though
shareholders might be offered a substantial premium over the then current market
price of the Common Stock. At the present time, the Company is not aware of any
contemplated mergers, tender offers or other plans by a third party to attempt
to effect a change in control of the Company, and this Proposal is not being
made in response to any such attempt.

The Amended and Restated Certificate of Incorporation of the Company
authorizes the issuance of 5,000,000 shares of Preferred Stock, all of which
remain undesignated ("Preferred Stock"). The Board of Directors, within the
limitations and restrictions contained in the Amended and Restated Certificate
of Incorporation and without further action by the Company's shareholders, has
the authority to issue the undesignated Preferred Stock from time to time in one
or more series and to fix the number of shares and the relative rights,
conversion rights, voting rights, rights and terms of redemption, liquidation
preferences and any other preferences, special rights and qualifications of any
such series. Any issuance of Preferred Stock with voting rights could, under
certain circumstances, have the effect of delaying or preventing a change in
control of the Company by increasing the number of outstanding shares entitled
to vote and increasing the number of votes required to approve a change in
control of the Company.

The Company is also governed by Section 203 of the Delaware General
Corporation Law (the "Delaware anti-takeover law"), which provides that certain
"business combinations" between a Delaware corporation whose stock is generally
traded or held of record by more than 2,000 stockholders, such as the Company,
and an "interested stockholder" (generally defined as a stockholder who
beneficially owns 15% or more of a Delaware corporation's voting stock) are
prohibited for a three-year period following the date that such stockholder
became an "interested stockholder," unless certain exceptions apply. The term
"business combination" is defined generally to include, among other
transactions, mergers, tender offers and transactions which increase an
"interested stockholder's" percentage ownership of stock in a Delaware
corporation.

While it may be deemed to have potential anti-takeover effects, the
proposed amendment to increase the authorized Common Stock is not prompted by
any specific effort or takeover threat currently perceived by the Board of
Directors. Moreover, the Board of Directors does not currently intend to
propose additional anti-takeover measures in the foreseeable future.

Board of Directors' Reservation of Rights

The Board of Directors retains the authority to take or to authorize
discretionary actions as may be appropriate to carry out the purposes and
intentions of this Proposal, including without limitation editorial
modifications or any other change to the Capitalization Amendment which the
Board of Directors may adopt without shareholder vote in accordance with the
Delaware General Corporation Law.

No Dissenters' Rights

Under Delaware law, shareholders are not entitled to dissenters' rights of
appraisal with respect to the proposed Capitalization Amendment.

9
<PAGE>

Required Vote and Recommendation of Board of Directors

The affirmative vote of a majority of the outstanding shares of Common
Stock on the Record Date will be required to approve the Capitalization
Amendment. Both abstentions and broker non-votes are not affirmative votes and,
therefore, will have the same effect as votes against this Proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE CAPITALIZATION
AMENDMENT WHICH INCREASES THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK UNDER
THE COMPANY'S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION FROM 40,000,000
TO 135,000,000 AND TO EFFECT A THREE-FOR-ONE STOCK SPLIT OF THE COMPANY'S COMMON
STOCK

Proposal 3

APPROVAL OF THE ADOPTION OF THE 2000 STOCK OPTION PLAN AND THE AUTHORIZATION OF
THE ISSUANCE OF 880,000 SHARES OF COMMON STOCK THEREUNDER

General

The Company's shareholders are being asked to approve the 2000 Stock Option
Plan (the "2000 Plan") which will be in addition to the Company's 1995 Stock
Option Plan, the 1996 Stock Incentive Plan and the 1996 Director Stock Option
Plan. The 2000 Plan authorizes the issuance of up to 880,000 shares of the
Company's Common Stock pursuant to the terms of the 2000 Plan. The purposes of
the 2000 Plan are to attract and retain the best available personnel for
positions of substantial responsibility with the Company and to provide
participants with additional incentives in the form of options to purchase the
Company's Common Stock which will encourage them to acquire a proprietary
interest in, and to align their financial interests with those of the Company
and its shareholders.

The 2000 Plan was adopted by the Board of Directors on March 17, 2000, subject
to the approval of the Company's shareholders. The following is a summary of
the principal features of the 2000 Plan. The summary, however, does not purport
to be a complete description of all the provisions of the 2000 Plan. Any
shareholder of the Company who wishes to obtain a copy of the actual plan
document may do so without charge upon written request to the Secretary at the
Company's principal executive offices in Irvine, California.

Eligibility

Employees and consultants or independent advisors who are in the service of
the Company or its subsidiaries (whether now existing or subsequently
established) will be eligible to participate in the 2000 Plan. The Company's
executive officers and other highly paid employees will also be eligible to
participate in the 2000 Plan. Non-employee Directors of the Company are not
eligible to participate in the 2000 Plan.

Share Grant and Valuation

The 2000 Plan provides for the granting of only nonstatutory stock options to
employees, executive officers and consultants of the Company. The exercise
price per share of Common Stock of the Company covered by each option shall be
equal to 100% of the fair market value of the Common Stock on the date that the
option is granted. In no event shall any participant under the 2000 Plan be
granted options covering more than 300,000 shares in any one calendar year. All
options granted pursuant to the 2000 Plan shall have a maximum term of no more
than five (5) years from the grant date.

10
<PAGE>

Administration

Authority to control and manage the 2000 Plan is vested with the Company's
Board of Directors, which has sole discretion and authority, consistent with the
provisions of the 2000 Plan, to determine the administration of the 2000 Plan.
The Board of Directors may delegate such responsibilities in whole or in part to
a committee consisting of two (2) or more members of the Board of Directors or
two (2) or more executive officers of the Company (the "Administrator"). All
option grants to executive officers of the Company shall be approved by the
Board of Directors or the Compensation Committee of the Board of Directors.

The Administrator of the 2000 Plan shall have the authority, consistent with
the provisions of the 2000 Plan and the authority granted by the Board of
Directors, to determine which eligible participants will receive options, the
time when options will be granted, the terms of options granted and the number
of shares which will be subject to options granted under the 2000 Plan.
Notwithstanding the foregoing, the Administrator shall not have the authority to
amend an Option Agreement to effect a "re-pricing" of the exercise price of an
option either by (i) lowering the exercise price of a previously granted option
or (ii) by canceling a previously granted option and granting a new option,
except that changes in the Company's capital structure or a change in control of
the Company pursuant to the terms of the 2000 Plan shall not be considered a re-
pricing of such option.

Acceleration

In the event of an acquisition of the Company, whether by merger or asset sale
or a sale of stock by the shareholders, if such acquisition is not approved by a
majority of the Board of Directors, then concurrent with the effective date of
such an acquisition, all then currently outstanding options shall be accelerated
and all holders of such options shall have the right to exercise such options in
respect to any or all shares subject thereto which have not previously been
exercised. If, within 180 days of a change of control of the Company
(regardless of its approval or non-approval by the Board of Directors), an
individual participant's status as an employee is terminated by the Company or
its successor other than for cause, then such participant's options, to the
extent not previously accelerated, shall be accelerated and such participant
shall have the right to exercise such options which are then currently
outstanding and not previously exercised.

The acceleration of vesting in the event of a change in the ownership or
control of the Company may be seen as an anti-takeover provision and may have
the effect of discouraging a merger proposal, a takeover attempt or other
efforts to gain control of the Company.

Changes in Capitalization of the Company

The recommended three-for-one stock split of the Company's Common Stock
contained in Proposal 2 will have the effect of increasing the number of shares
available for grant under the 2000 Plan by 1,760,000 shares. If the
shareholders approve Proposal 2 and this Proposal 3, the initially authorized
880,000 shares under the 2000 Plan will increase to a total of 2,640,000 as
adjusted for the three-for-one split. In the event that any other change is
made to the outstanding shares of Common Stock by reason of any
recapitalization, stock dividend, stock split, combination of shares, exchange
of shares or other change in corporate structure effected without the Company's
receipt of consideration, appropriate adjustments will be made to (i) the
maximum number of shares issuable under the 2000 Plan, (ii) the maximum number
of options that any one person may be granted under the 2000 Plan in any one
calendar year, and (iii) the number of options and the exercise price per share
in effect under each outstanding option in order to prevent the dilution or
enlargement of benefits thereunder.

Amendment and Termination

The Board may amend or modify the 2000 Plan in any or all respects subject to
any required shareholder approval and no such changes or amendments shall be
made which substantially affect or impair the rights of any participant under an
outstanding option agreement without such participant's consent. The Board may
terminate the 2000 Plan at any time, and the 2000 Plan will in all events
terminate on March 17, 2010.

11
<PAGE>

Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code disallows a tax deduction to
publicly held companies for compensation paid to certain of their executive
officers, to the extent that compensation exceeds $1 million per covered officer
in any fiscal year. The limitation applies only to compensation which is not
considered to be performance-based. Compensation deemed paid by the Company in
connection with exercises of non-statutory stock options granted under the 2000
Plan qualifies as performance-based compensation for purposes of Section 162(m)
if such plan is administered by a committee of "outside directors" as defined
under Section 162(m). The Company believes that any compensation deemed paid by
it in connection with exercises of non-statutory options will qualify as
performance-based compensation for purposes of Code Section 162(m) and will not
have to be taken into account for purposes of the $1 million limitation per
covered individual on the deductibility of the compensation paid to certain
executive officers of the Company. Accordingly, the Company believes that all
compensation deemed paid with respect to those options will remain deductible by
the Company without limitation under Code Section 162(m).

Accounting Treatment

Option grants made to employees under the 2000 Plan will generally not result
in any charge to the Company's earnings. However, the Company must disclose in
footnotes and pro-forma statements to the Company's consolidated financial
statements, the impact those options would have upon the Company's reported
earnings were the value of those options at the time of grant treated as a
compensation expense. The number of outstanding options may be a factor in
determining the Company's earnings per share on a fully-diluted basis.

Required Vote and Recommendation of the Board of Directors

The approval of the adoption of the 2000 Plan will require the affirmative
vote of the holders of a majority of the outstanding shares of the Company's
Common Stock present or represented and voting at the Annual Meeting.
Abstentions are not affirmative votes and, therefore, will have the same effect
as votes against this Proposal. Broker non-votes will not be considered present
and entitled to vote with respect to this Proposal, and accordingly will have no
effect on the passage of this Proposal. Should the required shareholder
approval not be obtained, then the 2000 Plan will not be implemented.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO APPROVE THE
ADOPTION OF THE 2000 STOCK OPTION PLAN AND AUTHORIZATION OF THE ISSUANCE OF
880,000 SHARES OF COMMON STOCK THEREUNDER.

Proposal 4

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

The Board of Directors, acting upon the recommendation of the Audit Committee,
has appointed the independent accounting firm of Deloitte and Touche LLP,
certified public accountants, to audit the accounts of the Company and its
subsidiaries for the 2000 fiscal year. Deloitte and Touche LLP has audited the
accounts and records of the Company and its subsidiaries since 1995. If the
shareholders do not ratify the appointment of Deloitte & Touche LLP, the Board
will reconsider the appointment of independent public accountants.

Representatives of Deloitte and Touche LLP are expected to be present at the
Annual Meeting and will have the opportunity to make a statement if they so
desire and will also be available to respond to appropriate questions.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS OF THE COMPANY FOR
THE 2000 FISCAL YEAR.

12
<PAGE>

Executive Officers

The following table sets forth certain information regarding the Company's
executive officers:

Name Position
---- --------

Bruce C. Edwards....President, Chief Executive Officer and Director
Stephen C. Cooper...Executive Vice President, Operations
Kevin T. Michaels...Senior Vice President, Finance, Chief Financial Officer and
Secretary
Anthony J. Zuanich..Senior Vice President, Sales and Marketing

Stephen C. Cooper, 51, joined the Company in February 1999 as Executive Vice
President, Operations. Prior to joining the Company, Mr. Cooper worked for
Hewlett Packard Company for the past 25 years in a variety of management
positions in the United States and Asia. Most recently, Mr. Cooper was the
Operations Manager for the Hewlett Packard Power Amplifier business in Folsom,
California which was acquired by Powerwave in October, 1998.

Kevin T. Michaels, 41, joined the Company in June 1996 as Vice President,
Finance and Chief Financial Officer and was appointed Secretary in June 1996.
Mr. Michaels was named Senior Vice President, Finance in February 2000. Prior
to joining the Company, Mr. Michaels worked for AST Research, Inc. for eight
years, most recently as Vice President, Treasurer from October 1995 to June
1996. From July 1991 to October 1995 Mr. Michaels was Treasurer of AST Research,
Inc. and from June 1988 to June 1991, he was Assistant Treasurer.

Anthony J. Zuanich, 56, joined the Company in June 1998 as Senior Vice
President, Sales and Marketing. Prior to joining the Company, Mr. Zuanich was
employed at Gregory Associates as Senior Vice President, Global Sales and
Marketing from July 1995 to December 1997. From December 1973 to October 1994,
Mr. Zuanich held various executive positions with Triad Systems Corporation, an
integrated computer systems manufacturer.

13
<PAGE>

Summary Compensation

The following table sets forth summary information concerning compensation
paid by, or accrued for services rendered to, the Company in all capacities
during the past three fiscal years to the Company's Chief Executive Officer and
to each of the three additional officers whose salary and bonus exceeded
$100,000 (the "Named Executive Officers").

Summary Compensation Table
--------------------------

<TABLE>
<CAPTION>
Long-term
Compensation
Annual ------------
Compensation Awards
------------ ----------- All Other
Name and Principal Position Year Salary ($) Bonus ($) Options (#) Compensation ($)
- ---------------------------------------- ---- ---------- --------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Bruce C. Edwards........................ 1999 242,500 250,000 - 5,601 /(1)/
President and Chief Executive Officer.. 1998 179,230 - 75,000 3,474
1997 135,000 375,000 - 15,400

Stephen C. Cooper (2)................... 1999 169,525 175,000 160,000 6,774 /(3)/
Executive Vice President, Operations... 1998 - - - -
1997 - - - -

Kevin T. Michaels....................... 1999 150,000 150,000 - 5,601 /(4)/
Senior Vice President, Finance, 1998 124,230 - 50,000 5,289
Chief Financial Officer and Secretary 1997 99,231 90,000 - 13,943

Anthony J. Zuanich(5)................... 1999 175,000 125,000 20,000 248,989 /(6)/
Senior Vice President, Sales 1998 94,230 - 100,000 121,177
and Marketing.......................... 1997 - - - -
</TABLE>

_____________________

(1) Included in this amount are the Company's 401(k) plan matching contribution
of $2,000 and health care coverage of $3,601.
(2) Mr. Cooper joined the Company in February of 1999 as Executive Vice
President, Operations, at an annual salary of $210,000.
(3) Included in this amount are the Company's 401(k) plan matching contribution
of $485, health care coverage of $418 and relocation expenses of $5,871.
(4) Included in this amount is the Company's 401(k) plan matching contribution
of $2,000 and health care coverage of $3,601.
(5) Mr. Zuanich joined the Company as Senior Vice President, Sales and
Marketing in June of 1998 at a base salary of $175,000 and an annual
commission of $75,000.
(6) Included in this amount are $75,000 of annual commission, the Company's
401(k) plan matching contribution of $2,000, health care coverage of $1,989
and relocation expenses of $170,000.

14
<PAGE>

Option Grants in Last Fiscal Year

The following table sets forth certain information concerning grants of
options to each of the Company's Named Executive Officers during the fiscal year
ended January 2, 2000. In addition, in accordance with the rules and
regulations of the Securities and Exchange Commission, the following table sets
forth the hypothetical gains that would exist for the options based on the
assumption that the stock price were to appreciate annually by 5% and 10%,
respectively. The rates do not represent the Company's estimate or projection
of future Common Stock prices and no assurance can be given that the share price
will appreciate at the rates shown in the table.

Option Grants During Fiscal 1999

<TABLE>
<CAPTION>
Number of % of Total Potential Realizable Value
Securities Options at Assumed Annual Rates
Underlying Granted to Exercise of Stock Price Appreciation
Options Employees in Price Expiration for Option Term
---------------------------
Name Granted (#) Fiscal Year/(1)/ ($/Share) Date/(2)/ 5% 10%
- -------------------- ---------- ---------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Stephen C. Cooper 160,000 18.0% 18.8750 01/15/2009 $1,899,262 $4,813,102
Anthony J. Zuanich 20,000 2.2% 19.1875 01/12/2009 $ 241,338 $ 611,599
</TABLE>

(1) Options to purchase an aggregate of 898,650 shares of Common Stock were
granted to employees, including the Named Executive Officers, during the
fiscal year ended January 2, 2000.
(2) Options granted have a term of 10 years, subject to earlier termination in
certain events related to termination of employment.

Aggregated Option Exercises in Last Fiscal Year and Year End Value Table

The following table sets forth certain information concerning the exercise of
options by each of the Company's Named Executive Officers during the fiscal year
ended January 2, 2000, including the aggregate value of gains on the date of
exercise. In addition, the table includes the number of shares covered by both
exercisable and unexercisable stock options as of January 2, 2000. Also
reported are the values for "in the money" options which represent the positive
spread between the exercise prices of any such existing stock options and the
fiscal year end price of common stock.

Aggregated Option Exercises during Fiscal 1999
and Option Values at January 2, 2000

Number of Securities Value of
Underlying Unexercised Unexercised In-the-Money
Shares Options at 01/02/2000 Options at 01/02/2000 /(2)/
Acquired Value --------------------- -------------------------
Name on Exercise Realized /(1)/ Exercisable Unexercisable Exercisable Unexercisable
- -------- ----------- -------------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Bruce C. Edwards 131,250 $4,293,674 21,875 81,250 $1,183,984 $3,729,687
Stephen C. Cooper - - - 160,000 - $6,320,000
Kevin T. Michaels 41,500 $2,000,166 14,333 59,167 $ 750,881 $2,742,515
Anthony J. Zuanich - - 37,500 82,500 $1,518,750 $3,315,000
</TABLE>

(1) Market value on the date of exercise of shares, less option exercise price.
(2) In accordance with the Securities and Exchange Commission's rules, values
are calculated by subtracting the exercise price from the fair market value
of the underlying common stock. For purposes of this table, fair market
value per share is deemed to be $58.375, the Company's closing Common Stock
price reported by Nasdaq on December 31, 1999.

15
<PAGE>

Compensation Committee Interlocks and Insider Participation

During fiscal 1999, the Compensation Committee consisted of John L. Clendenin,
Eugene L. Goda and Andrew J. Sukawaty, none of whom served as an employee of the
Company.

Transactions with Management and Others

David L. George, a member of the Board of Directors of the Company, is an
Executive Vice President and Director of ComSpace Corporation. Alfonso G.
Cordero, a former director and former Chairman Emeritus of the Company, is also
a member of the Board of Directors of ComSpace Corporation. ComSpace Corporation
is a customer of the Company and has purchased products from the Company on
terms which management believes were no less favorable than could otherwise be
obtained from unaffiliated third parties. Sales to ComSpace Corporation were $0
in fiscal 1999, $0 in fiscal 1998 and less than $35,000 in fiscal 1997.

The Company leases its manufacturing and headquarters facility and its
Southern California sales and engineering facility, both located in Irvine,
California, from CNH, LLC, a California limited liability company owned by
Alfonso G. Cordero, the founder and a former director of the Company, a former
employee and a current employee, all of whom are shareholders of the Company.
The Company believes that three individuals in the aggregate were holders of
approximately 2% of the Company's Common Stock outstanding as of January 2,
2000. The leases on both facilities expire on July 15, 2006. The Company also
leases additional parking spaces from CNH, LLC. Total rent paid in fiscal 1999
to CNH, LLC was approximately $846,000.

On April 28, 1998 the Company purchased $2.5 million of 13.75% Senior Secured
Bridge Notes due April 28, 2000 (the "Notes") from Metawave Communications
Corporation, a supplier of "smart antennas" to the wireless communications
market and a customer of the Company, in a private offering. The President of
the Company joined the Board of Directors of Metawave Communications Corporation
in May 1998. The total amount raised in the offering was $29.0 million. The
Notes initially accrued interest at a rate of 13.75% per annum and interest was
payable semi-annually. The Notes contained provisions to increase the rate of
interest during the life of the Notes if the Notes were not repaid prior to
maturity. The Notes were secured by certain assets of Metawave Communications
Corporation and were redeemed in full on April 28, 1999. Upon the redemption of
the Notes, the Company received related warrants for shares of Metawave
Communications Corporation Series D Preferred Stock. For fiscal 1999, Metawave
Communications Corporation accounted for less than 5% of the Company's revenues.

In June 1997, the Company entered into an agreement to purchase 45% of the
capital stock of Teletransfer, S.A. de C.V., ("Teletransfer") a private Mexican
company operating several two-way dispatch radio services in Mexico. The
Company invested a total of $600,000 for its 45% interest in the Teletransfer.
Due to ongoing operating losses at Teletransfer since 1997, the Company has
expensed the majority of its investment in Teletransfer. Beginning in 1998, the
Company undertook efforts to sell its investment in Teletransfer. In June 1999,
the Company sold its entire investment in Teletransfer to Mr. Alfonso G. Cordero
for $300,000. Pursuant to the terms of the sale agreement, if within eighteen
(18) months of the sale Mr. Cordero is able to sell the investment in
Teletransfer at a price greater than $300,000, Mr. Cordero will pay to the
Company the amount the investment is sold for greater than $300,000 up to a
maximum additional amount of $300,000.

The Company has entered into indemnification agreements with its directors,
certain executive officers and certain affiliated entities. Such agreements
require the Company to indemnify such individuals to the fullest extent
permitted by Delaware law.

The Company believes that all of the transactions set forth above were made on
terms no less favorable to the Company than could otherwise be obtained from
unaffiliated third parties.

1995 Stock Option Plan

The Company's 1995 Stock Option Plan (the "1995 Plan"), as amended, permits
executive personnel, key employees and non-employee members of the Board of
Directors of the Company to participate in ownership of the

16
<PAGE>

Company. The 1995 Plan is administered by the Compensation Committee of the
Company's Board of Directors. The 1995 Plan provides for the grant of
nonstatutory stock options under the applicable provisions of the Internal
Revenue Code. The option price per share may not be less than 85% of the fair
market value of a share of Common Stock on the grant date as determined by the
closing price of the Company's Common Stock as reported by Nasdaq on the grant
date. In addition, the exercise price may not be less than 110% of the fair
market value of a share of Common Stock on the grant date for any individual
possessing 10% or more of the voting power of all classes of stock of the
Company. Options generally vest at the rate of 25% on the first anniversary date
and 2% per month thereafter and expire no later than ten years after the grant
date. Up to 1,938,615 shares of the Company's Common Stock were reserved for
issuance under the 1995 Plan. Pursuant to a stockholders' agreement dated as of
November 8, 1996, between the Company and certain of its original shareholders,
those certain shareholders agreed that once the Company issued an initial
1,095,000 shares of Common Stock under the 1995 Plan, any additional shares
issued under that 1995 Plan upon an option exercise will be coupled with a pro
rata redemption from those shareholders of an equal number of shares at a
redemption price equaling the option exercise price. The Company and those
certain shareholders have agreed that this share redemption agreement applies
only to the exercise of options to purchase a total of 843,615 shares of the
Company's Common Stock. As of February 29, 2000, a total of 1,689,941 options
have been exercised under the 1995 Plan. A total of 594,941 shares of Common
Stock have been funded from those shareholders party to the stockholder's
agreement. The effect of this transaction is to eliminate any dilution from the
further exercise of options under the 1995 Plan. At February 29, 2000, there
were 248,427 options outstanding under the 1995 Plan at a weighted average
exercise price of $9.57. There are 247 shares available for grant under the 1995
Plan at February 29, 2000.

The 1995 Plan provides that the 1995 Plan itself and all outstanding options
shall terminate upon the occurrence of a consolidation or merger in which the
Company is not the surviving corporation or the sale of substantially all of
the Company's assets and certain other similar events, in each case unless the
1995 Plan is assumed by the successor corporation. In the event that an option
holder's employment is terminated (other than for cause) within 180 days after
any such transaction, such option holder's options shall become exercisable in
full on the date of termination.

1996 Stock Incentive Plan

The Company's 1996 Stock Incentive Plan (the "1996 Plan"), as amended, became
effective December 5, 1996, and was amended in August 1998 to increase the
number of shares of Common Stock available for issuance under the plan from
1,500,000 to 3,000,000. The 1996 Plan provides for the granting of "incentive
stock options," within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), nonstatutory options and restricted stock
grants to directors, officers, employees and consultants of the Company, except
that incentive stock options may not be granted to non-employee directors or
consultants. As of February 29, 2000, all of the options granted under the 1996
Plan have been nonstatutory options. The 1996 Plan provides that for
nonstatutory stock options, the option price per share may not be less than 85%
of the fair market value of a share of Common Stock on the grant date and that
the exercise price may not be less than 110% of the fair market value of a share
of Common Stock on the grant date for any individual possessing 10% or more of
the voting power of all classes of stock of the Company. The purpose of the
1996 Plan is to provide participants with incentives which will encourage them
to acquire a proprietary interest in, and continue to provide services to, the
Company. The 1996 Plan is administered by the Compensation Committee of the
Board of Directors, which has sole discretion and authority, consistent with the
provisions of the 1996 Plan, to determine which eligible participants will
receive options, the time when options will be granted, the terms of options
granted and the number of shares which will be subject to options granted under
the 1996 Plan. As of February 29, 2000, a total of 499,200 options have been
exercised under the 1996 Plan. There were 1,976,664 options outstanding under
the 1996 Plan as of February 29, 2000, at a weighted average exercise price of
$23.50 per share. There are 524,136 shares available for grant under the 1996
Plan at February 29, 2000.

In the event of a merger of the Company with or into another corporation, or a
consolidation, acquisition of stock or assets or other change in control
transaction involving the Company, each option becomes exercisable in full,
unless such option is assumed by the successor corporation. In the event the
transaction is not approved by a majority of the "Continuing Directors" (as
defined in the 1996 Plan), each option becomes fully vested and exercisable in
full immediately prior to the consummation of such transaction, whether or not
assumed by the successor corporation. In addition, in the event that an option
holder's employment by the Company is terminated

17
<PAGE>

(other than for cause) within 180 days after a change in control, such option
holder's options become exercisable in full on the date of termination.

Employee Stock Purchase Plan

The Company's Employee Stock Purchase Plan (the "Purchase Plan") became
effective on December 5, 1996. The Purchase Plan covers an aggregate of 500,000
shares of Common Stock. The Purchase Plan, which is intended to qualify as an
"employee stock purchase plan" under Section 423 of the Internal Revenue Code,
is implemented utilizing six-month offerings with purchases occurring at six
month intervals. The Purchase Plan is administered by the Board of Directors.
Employees are eligible to participate if they are employed by the Company for at
least 20 hours per week and if they have been employed by the Company for at
least 90 days. The Purchase Plan permits eligible employees to purchase Common
Stock through payroll deductions, which may not exceed 20% of an employee's
compensation. The price of Common Stock purchased under the Purchase Plan will
be 85% of the lower of the fair market value of the Common Stock at the
beginning of each six-month offering period or on the applicable purchase date.
Employees may end their participation in any offering at any time during the
offering period, and participation ends automatically on termination of
employment. The Board may at any time amend or terminate the Purchase Plan,
except that no such amendment or termination may adversely affect options
previously granted under the Purchase Plan. During fiscal 1999, the fourth and
fifth purchases under the Purchase Plan occurred on January 31, 1999 and July
31, 1999, respectively. A total of 31,789 shares of the Company's Common Stock
were purchased in the fourth purchase at $10.20 per share and 26,188 shares were
purchased in the fifth offering at $22.7375 per share. On January 31, 2000, a
total of 21,537 shares were purchased in the sixth offering under the Purchase
Plan at a price of $30.3875 per share. As of February 29, 2000, there were
rights to purchase approximately 3,000 shares outstanding under the Purchase
Plan and there were 322,204 shares available for purchase under such plan.

401(k) and Profit Sharing Plan

The Company sponsors a Future Income Program Plan and Trust (the "401(k)
Plan") covering the Company's full-time employees located in the United States.
The 401(k) Plan is intended to qualify under Section 401(k) of the Code, so that
contributions to the 401(k) Plan by employees or by the Company, and the
investment earnings thereon, are not taxable to employees until withdrawn from
the 401(k) Plan, and so that contributions by the Company, if any, will be
deductible by the Company when made. Pursuant to the 401(k) Plan, employees may
elect to reduce their current compensation by up to 15% of their base salary,
subject to Internal Revenue Service limitations, and to have the amount of such
reduction contributed to the 401(k) Plan.

The 401(k) Plan provided for employer matching contributions up to a maximum
of 20% of each eligible employee's annual contribution for the year ended
January 2, 2000. For fiscal 1999, the Company contributed $243,254 to the
401(k) Plan as matching contributions.

The 401(k) Plan permits, but does not require, additional profit sharing
contributions from the Company on behalf of eligible employees. Any profit
sharing contribution is approved by the Board of Directors. There were no
profit sharing contributions authorized for the year ended January 2, 2000.

Board Compensation Committee Report on Executive Compensation

The Company's compensation policies applicable to its executive officers are
administered by the Compensation Committee (the "Committee") of the Board of
Directors. The Committee is made up of three non-employee directors. For the
fiscal year ended January 2, 2000, the Committee was composed of Messrs.
Clendenin, Goda and Sukawaty. The Company's executive compensation programs are
designed to attract, motivate and retain the executive talent needed to optimize
shareholder value. The programs are designed to enhance shareholder value by
aligning the financial interests of the executive officers of the Company with
those of its shareholders.

18
<PAGE>

Compensation Philosophy

The Company's executive compensation programs are based on the belief that the
interests of the executives should be closely aligned with the Company's
shareholders. In support of this philosophy, a meaningful portion of each
executive's compensation is placed at-risk and is linked to the accomplishment
of specific results that are expected to lead to the creation of value for the
Company's shareholders from both the short-term and long-term perspectives.
With this pay-for-performance and shareholder alignment orientation, the
Company's compensation policies and programs are designed to (1) attract,
develop, reward and retain highly qualified and productive individuals; and (2)
motivate executives to improve the overall performance and profitability of the
Company.

There are three primary components of executive compensation: base salary, the
annual management bonus plan, and stock option grants. While the elements of
compensation are considered separately, the Committee takes into account the
total compensation package afforded by the Company to the individual executive.

Base Salary. Salaries paid to executive officers (other than the Chief
Executive Officer) are reviewed annually by the Chairman and the Chief Executive
Officer based upon their assessment of the nature of the position and the
contribution, experience and Company tenure of the executive officer. The
Chairman and the Chief Executive Officer review all salary recommendations with
the Committee. The Chairman reviews any salary recommendations for the Chief
Executive Officer with the Committee, which then approves or disapproves such
recommendations.

Annual Management Bonus. Annual management bonuses for fiscal 1999 paid to
executive officers of the Company were based upon individual and corporate
performance objectives and were paid from a Company-wide bonus pool which
totaled approximately $6.5 million. All employees of the Company are eligible
to participate in the bonus pool and goals and objectives are measured on a bi-
annual basis. The size of the pool was based upon overall Company performance
as compared to both budgeted fiscal year performance and the extent to which the
Company achieved its overall financial goals of growth in earnings, growth in
revenues and market share and return on shareholders equity and the executive's
achievement of their individual goals and objectives. The amount of the bonus
pool is subject to the approval of the Committee. Once the overall bonus pool
is approved, the Company's employees are eligible for their individual target
bonuses (as a percentage of annual salary) based upon the Company's overall
achievement of its financial goals, and an additional percentage based upon
individual achievement of their objectives. The Committee reviews and approves
all bonuses for executive officers, based upon an evaluation of their individual
performance and contribution to the Company's overall performance.

Stock Options. Stock options are designed to align the interests of
executives with those of the shareholders. Stock option grants may be made to
executive officers when one of the following events occurs: upon initial
employment, upon promotion to a new, higher level position that entails
increased responsibilities and accountability, for the recognition of superior
performance or as an incentive for continual service with the Company as well as
continued superior performance. The Chairman or the Chief Executive Officer
recommends the number of options to be granted, within a range associated with
the individual executive's salary level, and presents this to the Committee and
the entire Board of Directors for their review and approval. The Committee takes
into account the total compensation offered to its executives when considering
the number of options awarded. The Chief Executive Officer and the Chief
Financial Officer comprise the members of the Company's Option Committee, and
are empowered by the Board of Directors and the Committee to grant options to
non-officer employees of the Company up to a grant amount of 20,000 shares per
employee. All grants for employees of the Company in excess of this amount are
submitted to the Committee for approval. All grants for officers of the Company
are submitted to both the Committee and the entire Board of Directors for
approval.

CEO Compensation

The Committee increased Mr. Edwards' base salary effective February 1, 1999,
from $185,000 to $250,000, a level the Committee believes is equivalent to the
base salaries for Chief Executives at similarly situated companies.

19
<PAGE>

For fiscal 1999, Mr. Edwards was paid a management bonus of $250,000 from the
Company's annual management bonus pool. Mr. Edwards' bonus was based on the
Company's financial performance and on his achievement of individual objectives
as set by the Board of Directors at the start of the fiscal year.

Policy Regarding Section 162(m) of the Internal Revenue Code

The Committee has reviewed the Company's executive compensation plans to
determine if revisions may be necessary due to provisions of Section 162(m) of
the Internal Revenue Code which generally disallows a tax deduction to public
corporations for compensation paid to any of the corporation's executive
officers in excess of $1,000,000 during any fiscal year. It is the current
policy of the Committee to preserve, to the extent reasonably possible, the
Company's ability to obtain a corporate tax deduction for compensation paid to
executive officers of the Company to the extent consistent with the best
interests of the Company and its shareholders. The Committee continually
reviews the Company's existing executive compensation plans and will propose
changes, if necessary and reasonable, to ensure compliance with the provisions
of Section 162(m) which allow performance-based compensation to be excluded from
the deduction limits.

The Compensation Committee of the Board of Directors:

John L. Clendenin
Eugene L. Goda
Andrew J. Sukawaty

Market for Registrant's Common Equity and Related Shareholder Matters

The Company's Common Stock is quoted on the Nasdaq National Market ("Nasdaq")
under the symbol PWAV. Set forth below are the high and low sales prices as
reported by Nasdaq for the Company's Common Stock for the periods indicated.

<TABLE>
<CAPTION>
High Low
---- ---
<S> <C> <C>
Fiscal Year 1998
First Quarter Ended March 29, 1998............................................ $ 20.0000 $ 9.1250
Second Quarter Ended June 28, 1998............................................ $ 22.9375 $13.1250
Third Quarter Ended September 27, 1998........................................ $ 19.0000 $ 6.3750
Fourth Quarter Ended January 3, 1999.......................................... $ 20.0000 $ 5.6250

Fiscal Year 1999
First Quarter Ended April 4, 1999............................................. $ 31.1875 $16.8125
Second Quarter Ended July 4, 1999............................................. $ 36.8750 $21.6250
Third Quarter Ended October 3, 1999........................................... $ 49.7500 $30.3750
Fourth Quarter Ended January 2, 2000.......................................... $ 80.0625 $47.8125

Fiscal Year 2000
First Quarter through March 20, 2000.......................................... $205.0000 $45.8750
</TABLE>

There were approximately 54 security holders of record as of February 28,
2000. The Company believes there are approximately 13,600 shareholders of the
Company's Common Stock held in street name. The Company has not paid any
dividends to date and does not anticipate paying any dividends on the Common
Stock in the foreseeable future. The Company anticipates that all future
earnings will be retained to finance future growth.

20
<PAGE>

Stock Performance Comparison

The following graph compares the cumulative total shareholder returns for the
Company's Common Stock with the cumulative total return of the S&P 500 Index,
and the S&P Communication Equipment Index. The presentation assumes $100
invested on December 5, 1996 in the Company's Common Stock, the S&P 500 Index
and the S&P Communication Equipment Index with all dividends reinvested. No
cash dividends were declared on the Company's Common Stock during this period.
Shareholder returns over the indicated period should not be considered
indicative of future shareholder returns.

[PERFORMANCE GRAPH APPEARS HERE]

POWERWAVE S&P
Measurement Period TECHNOLOGIES, S&P 500 COMMUNICATIONS
(Fiscal Year Covered) INC. INDEX EQUIPMENT
- --------------------- ------- ------ ---------

Measurement Pt-12/06/96 $100 $100 $100
FYE 12/96 $130 $ 98 $ 99
FYE 12/97 $122 $131 $129
FYE 12/98 $162 $168 $227
FYE 12/99 $508 $203 $497

Notwithstanding anything to the contrary set forth in the Company's previous
filings under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, that might incorporate future filings, including this
Proxy Statement, in whole or in part, the Board Compensation Committee Report on
Executive Compensation and the Stock Performance Comparison graph shall not be
incorporated by reference into any such filings.

ANNUAL REPORT

The Company's Annual Report, including audited consolidated financial
statements and schedules thereto for the fiscal year ended January 2, 2000 is
being forwarded to each shareholder with this Proxy Statement. The Annual
Report is not to be regarded as proxy soliciting material or as a communication
by means of which any solicitation is to be made. The Company will send to
shareholders upon written request, without charge a copy of the Annual Report on
Form 10-K (without exhibits), for the fiscal year end January 2, 2000. See the
last page of this Proxy Statement for information.

OTHER MATTERS

The Board of Directors has no knowledge of any other matters which shall come
before the Annual Meeting. If any other matters shall properly come before the
Annual Meeting, the persons named in the proxies will have discretionary
authority to vote the shares thereby represented in accordance with their best
judgment.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership with the Securities and Exchange Commission ("SEC") and Nasdaq.
Directors, executive officers and greater than ten-percent beneficial owners are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file.

21
<PAGE>

Based solely on a review of the copies of such forms received by the Company
and on written representations from certain reporting persons that no Forms 5
were required for those persons, the Company believes that, during the period
from January 4, 1999 to January 2, 2000, all filing requirements applicable to
its directors, executive officers and greater than ten-percent beneficial owners
were met as except as noted below:

Mr. Zuanich did not report an August 1999 purchase transaction on Form 4.
This transaction was subsequently reported on Form 5 for the 1999 fiscal year.

PROPOSALS OF SHAREHOLDERS

Any shareholders desiring to submit a proposal for action at the Company's
Annual Meeting of Shareholders to be held in 2001, and presentation in the
Company's Proxy Statement with respect to such meeting should arrange for such
proposal to be delivered to the Secretary of the Company at its principal place
of business no later than December 10, 2000 in order to be considered for
inclusion in the Company's Proxy Statement relating to that meeting. Matters
pertaining to such proposals, including the number and length thereof,
eligibility of persons entitled to have such proposals included and other
aspects are regulated by the Securities and Exchange Act of 1934, Rules and
Regulations of the SEC and other laws and regulations to which interested
persons should refer.

On May 21, 1998 the SEC adopted an amendment to Rule 14a-4 as promulgated
under the Securities and Exchange Act of 1934, as amended. The amendment to
Rule 14a-4(c) (1) governs the Company's use of its discretionary proxy voting
authority with respect to a shareholder proposal which is not addressed in the
Company's Proxy Statement. The new amendment provides that the Company will be
allowed to use its discretionary voting authority when the proposal is raised at
the meeting, without any discussion of the matter in the Proxy Statement, in two
situations: (i) if a proponent of a proposal fails to notify the Company at
least 45 days prior to the current year's anniversary of the date of the mailing
of the prior year's Proxy Statement, or (ii) if the date of the Company's annual
meeting has changed by more than thirty (30) days from the prior year, if notice
is not received a reasonable time before the Company mails the Proxy Statement
for the current year.

With respect to the Company's upcoming Annual Meeting of Shareholders, as of
the date of the mailing of this Proxy Statement, the Company has not been
provided notice of any shareholder proposals. Therefore, the Company will be
allowed to use its voting authority as discussed above.

Submitted by:

Kevin T. Michaels
Senior Vice President, Finance
Chief Financial Officer and Secretary

Dated: March 27, 2000

COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K (WITHOUT EXHIBITS) AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE PROVIDED TO SHAREHOLDERS
WITHOUT CHARGE UPON WRITTEN REQUEST TO THE CORPORATE SECRETARY, POWERWAVE
TECHNOLOGIES, INC., 2026 MCGAW AVENUE, IRVINE, CALIFORNIA 92614. SHAREHOLDERS
CAN ALSO ELECTRONICALLY REQUEST THE ANNUAL REPORT USING THE COMPANY'S INVESTOR
RELATIONS PAGE ON ITS WORLDWIDE WEB SITE AT WWW.POWERWAVE.COM. THE COMPANY'S
WEB SITE DOES NOT CONSTITUTE PART OF THIS PROXY AND IS NOT REGARDED AS PROXY
SOLICITING MATERIAL OR AS A COMMUNICATIONS BY MEANS OF WHICH ANY SOLICITATION IS
TO BE MADE.

22
<PAGE>

REVOCABLE PROXY
POWERWAVE TECHNOLOGIES, INC.
ANNUAL MEETING OF SHAREHOLDERS--April 26, 2000

The undersigned shareholder(s) of Powerwave Technologies, Inc. (the
"Company") hereby nominates, constitutes and appoints Bruce C. Edwards and
Kevin T. Michaels, and each of them, the attorney, agent and proxy of the
undersigned, with full power of substitution, to vote all stock of the Company
which the undersigned is entitled to vote at the Annual Meeting of Shareholders
of the Company to be held at the Orange County Airport Hilton, 18800 MacArthur
Boulevard, Irvine, California, 92612 on Wednesday, April 26, 2000 at 10:00
a.m., and any and all adjournments thereof, as fully with the same force and
effect as the undersigned might or could do if personally present thereat, as
follows:

1. Election of Directors. Authority to elect the eight (8) persons named in
the Notice of Annual Meeting dated March 27, 2000, to the Board of Directors to
serve until the next Annual Meeting of Shareholders or until their successors
are duly elected and qualified.
<TABLE>
<C> <S>
[_] FOR all Nominees listed below [_] WITHHOLD AUTHORITY to vote for all Nominees
(except as indicated to the contrary listed below
below)
</TABLE>
Gregory M. Avis, John L. Clendenin, Bruce C. Edwards, David L. George, Eugene
L. Goda, Carl W. Neun, Safi U. Qureshey, Andrew J. Sukawaty

Instruction: To withhold authority to vote for any individual Nominee,
write that Nominee's name in the space provided below.

-------------------

2. Amendment to the Amended and Restated Certificate of Incorporation. To
approve an amendment to the Company's Amended and Restated Certificate of
Incorporation to increase the number of authorized shares of Common Stock
thereunder from 40,000,000 to 135,000,000 and to effect a three-for-one stock
split of the Company's Common Stock.

[_] FOR [_] AGAINST [_] ABSTAIN

3. Adoption of the 2000 Stock Option Plan. To approve the adoption of the
2000 Stock Option Plan and authorize the issuance of 880,000 shares of Common
Stock thereunder.

[_] FOR [_] AGAINST [_] ABSTAIN

4. Ratification of Appointment of Independent Auditors. To ratify the
appointment of Deloitte & Touche LLP as independent auditors.

[_] FOR [_] AGAINST [_] ABSTAIN

In their discretion, the proxies are authorized to transact such other
business as may properly come before the meeting or any adjournment or
postponement thereof, including procedural and other matters relating to the
conduct of the meeting.
<PAGE>

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED
PRIOR TO ITS EXERCISE.
PLEASE SIGN AND DATE BELOW, AND RETURN THIS CARD IN THE ENVELOPE PROVIDED.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSALS 1, 2, 3 AND
4. THE PROXY CONFERS AUTHORITY TO AND SHALL BE VOTED "FOR" THE ELECTION OF THE
EIGHT NOMINEES LISTED ON THE REVERSE SIDE AND "FOR" PROPOSALS 2, 3 AND 4 UNLESS
OTHERWISE INDICATED, IN WHICH CASE THE PROXY SHALL BE VOTED IN ACCORDANCE WITH
SUCH INSTRUCTIONS.

-----------------------------------
(Number of Shares)

-----------------------------------
Dated

-----------------------------------
(Please Print Name)

-----------------------------------
(Signature of Shareholder)

-----------------------------------
(Please Print Name)

-----------------------------------
(Please date this Proxy and sign
your name as it appears on your
stock certificates. Executors,
administrators, trustees, etc.,
should give their full titles. All
joint owners should sign.)

I/We do __ do not __ expect to attend the Meeting. Number of Persons________