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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
Genesys Telecommunications Laboratories, Inc.
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(Name of Registrant as Specified In Its Charter)
Genesys Telecommunications Laboratories, Inc.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] 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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GENESYS TELECOMMUNICATIONS LABORATORIES, INC.
NOVEMBER 12, 1997
TO THE SHAREHOLDERS OF GENESYS TELECOMMUNICATIONS LABORATORIES, INC.:
You are invited to attend the Annual Meeting of Shareholders ("Annual
Meeting") of Genesys Telecommunications Laboratories, Inc. (the "Company")
which will be held at The Clift Hotel located at 495 Geary Street, San
Francisco, California 94102 on Wednesday, December 10, 1997, at 9:00 a.m.
Details of the business to be conducted at the Annual Meeting are given in
the attached Notice of Annual Meeting and Proxy Statement.
If you do not plan to attend the Annual Meeting, please sign, date, and
return the enclosed proxy promptly in the accompanying reply envelope. If you
decide to attend the Annual Meeting and wish to change your proxy vote, you
may do so automatically by voting in person at the Annual Meeting.
We look forward to seeing you at the Annual Meeting.
Gregory Shenkman
President and Chief Executive
Officer
San Francisco, California
YOUR VOTE IS IMPORTANT
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE REQUESTED
TO COMPLETE, SIGN, AND DATE THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE AND
RETURN IT IN THE ENCLOSED ENVELOPE (TO WHICH NO POSTAGE NEED BE AFFIXED IF
MAILED IN THE UNITED STATES).
<PAGE>
GENESYS TELECOMMUNICATIONS LABORATORIES, INC.
1155 MARKET STREET
SAN FRANCISCO, CALIFORNIA 94103
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 10, 1997
The Annual Meeting of Shareholders ("Annual Meeting") of Genesys
Telecommunications Laboratories, Inc. (the "Company") will be held at The
Clift Hotel located at 495 Geary Street, San Francisco, California 94102, on
Wednesday, December 10, 1997, at 9:00 a.m. for the following purposes:
1. To elect five directors to the Board of Directors to serve until the
next Annual Meeting and until their successors have been elected and
qualified;
2. To ratify the selection of Arthur Andersen, LLP, as the Company's
independent public accountants for the fiscal year ending June 30, 1998;
and
3. To act upon such other matters as may properly come before the meeting
or any adjournments or postponements thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. The record date for determining those
shareholders who will be entitled to notice of, and to vote at, the meeting
and at any adjournment thereof is October 15, 1997. The stock transfer books
will not be closed between the record date and the date of the meeting. A list
of shareholders entitled to vote at the Annual Meeting will be available for
inspection at the offices of the Company.
Whether or not you plan to attend the meeting, please complete, date, sign,
and return the enclosed proxy promptly in the accompanying reply envelope.
Your proxy may be revoked at any time prior to the Annual Meeting. If you
decide to attend the Annual Meeting and wish to change your proxy vote, you
may do so automatically by voting in person at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Michael J. McCloskey
Secretary
San Francisco, California
November 12, 1997
<PAGE>
GENESYS TELECOMMUNICATIONS LABORATORIES, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
These proxy materials are furnished in connection with the solicitation of
proxies by the Board of Directors of Genesys Telecommunications Laboratories,
Inc., a California corporation (the "Company"), for the Annual Meeting of the
Shareholders (the "Annual Meeting") to be held at 9:00 a.m. on Wednesday,
December 10, 1997, at The Clift Hotel located at 495 Geary Street, San
Francisco, California 94102 and at any adjournment or postponement of the
Annual Meeting. These proxy materials were first mailed to shareholders on or
about November 12, 1997.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Annual Meeting
are summarized in the accompanying Notice of Annual Meeting of Shareholders.
Each proposal is described in more detail in this Proxy Statement.
VOTING RIGHTS AND SOLICITATION
VOTING
The Company's Common Stock is the only type of security entitled to vote at
the Annual Meeting. On October 15, 1997, the record date for determination of
shareholders entitled to vote at the Annual Meeting, there were 19,850,509
shares of Common Stock outstanding. Each shareholder of record on October 15,
1997, is entitled to one vote for each share of Common Stock held by such
shareholder on October 15, 1997. Abstentions and broker non-votes are counted
as present for the purpose of determining the presence of a quorum for the
transaction of business. In the election of directors, the five candidates
receiving the highest number of affirmative votes will be elected. As is more
fully described in Proposal 1, shareholders may cumulate votes with respect to
the election of directors. Proposal 2 requires for approval (i) the
affirmative vote of a majority of those shares present and voting, and (ii)
the affirmative vote of a majority of the required quorum. Thus, abstentions
and broker non-votes can have the effect of preventing approval of a proposal
where the number of affirmative votes, though a majority of the votes cast,
does not constitute a majority of the required quorum.
PROXIES
Whether or not you are able to attend the Company's Annual Meeting, you are
urged to complete and return the enclosed proxy, which is solicited by the
Company's Board of Directors and which will be voted as you direct on your
proxy when properly completed. In the event no directions are specified, such
proxies will be voted FOR Proposal No. 1--Election of Directors and FOR
Proposal No. 2--Ratification of Independent Public Accountants and, in the
discretion of the proxy holders, as to other matters that may properly come
before the Annual Meeting. You may revoke or change your proxy at any time
before the Annual Meeting. To do this, send a written notice of revocation or
another signed proxy with a later date to the Secretary of the Company at the
Company's principal executive offices before the beginning of the Annual
Meeting. You may also revoke your proxy by attending the Annual Meeting and
voting in person.
SOLICITATION OF PROXIES
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing, and mailing of this Proxy Statement, the
proxy, and any additional soliciting material furnished to shareholders.
Copies of solicitation material will be furnished to brokerage houses,
fiduciaries, and custodians holding shares in their names that are
beneficially owned by others so that they may forward this solicitation
material to such beneficial owners. In addition, the Company may reimburse
such persons for their costs of forwarding the solicitation material to such
beneficial owners. The original solicitation of proxies by mail may be
supplemented by solicitation by telephone, telegram, or other means by
directors, officers, employees, or agents of the Company. No additional
compensation will be paid to these individuals for any such services. Except
as described above, the Company does not presently intend to solicit proxies
other than by mail.
1
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
GENERAL
The names of persons who are nominees for director and their positions and
offices with the Company are set forth in the table below. The proxy holders
intend to vote all proxies received by them in the accompanying form for the
nominees listed below unless otherwise instructed. In the event any nominee is
unable or declines to serve as a director at the time of the Annual Meeting,
the proxies will be voted for any nominee who may be designated by the present
Board of Directors to fill the vacancy. As of the date of this Proxy
Statement, the Board of Directors is not aware of any nominee who is unable or
will decline to serve as a director. The five (5) nominees receiving the
highest number of affirmative votes of the shares entitled to vote at the
Annual Meeting will be elected directors of the Company to serve until the
next Annual Meeting and until their successors have been elected and
qualified.
<TABLE>
<CAPTION>
NOMINEES AGE POSITIONS AND OFFICES HELD WITH THE COMPANY
-------- --- -------------------------------------------
<C> <C> <S>
Gregory Shenkman........ 35 President, Chief Executive Officer and Director
Alec Miloslavsky........ 34 Vice Chairman of the Board, Director and Chief
Technical Officer
James Jordan............ 57 Chairman of the Board and Director
Bruce Dunlevie.......... 41 Director
Paul D. Levy............ 42 Director
</TABLE>
BUSINESS EXPERIENCE OF DIRECTORS
Mr. Shenkman co-founded the Company and has served as its President and
Chief Executive Officer since the Company's formation in October 1990 and as a
director since January 1993.
Mr. Miloslavsky co-founded the Company and has served as its Chief Technical
Officer since the Company's formation in October 1990, as a director since
January 1993 and as Vice Chairman of the Board since March 1997. Prior to co-
founding the Company, Mr. Miloslavsky worked as an independent software
consultant.
Mr. Jordan has served as director of the Company since November 1995 and as
Chairman of the Board since March 1997. From July 1992 to December 1994, Mr.
Jordan served as Chairman of the Board, President and Chief Executive Officer
of Kalpana, Inc., a provider of Ethernet switches. Prior to joining Kalpana in
July 1992, Mr. Jordan served as President of Telebit Corporation, a provider
of remote access solutions for computer networks. Prior to this time, Mr.
Jordan was a founder and Executive Vice President of Ungermann-Bass, Inc., a
network company. Mr. Jordan holds a B.S. in business and marketing from the
University of Utah.
Mr. Dunlevie has served as director of the Company since July 1996. Mr.
Dunlevie is a General Partner of Benchmark Capital LLC, a venture capital firm
founded by Mr. Dunlevie in May 1995. Mr. Dunlevie is also a General Partner of
Merrill, Pickard, Anderson & Eyre. Mr. Dunlevie has also served as Vice
President and General Manager of the Personal Computer Division of Everex
Systems, Inc., a personal computer manufacturer, and as an investment banker
with Goldman, Sachs & Co. He is also a director of Geoworks, Inc. and Rambus,
Inc. Mr. Dunlevie holds an M.B.A. from Stanford Graduate School of Business
and a B.A. from Rice University.
Mr. Levy has served as director of the Company since February 1997. In 1981,
Mr. Levy co-founded Rational Software Corporation, a software company
providing products that automate component-based development of software. He
is currently Chairman of the Board and Chief Executive Officer of Rational.
Prior to September 1996, Mr. Levy served as President and Chief Executive
Officer of Rational. Since August 1996, he has served as a director of
Peerless Systems Corporation, a provider of software-based imaging systems for
the digital document product marketplace. Mr. Levy holds a B.S. degree in
economics from the United States Air Force Academy and an M.S. degree in
engineering-economic systems from Stanford University.
2
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BOARD COMMITTEES AND MEETINGS
During the fiscal year ended June 30, 1997, the Board of Directors held six
meetings (and acted by unanimous written consent 14 times). During this
period, each of the directors attended or participated in more 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
each such director served.
The Company has two standing Committees: the Audit Committee and the
Compensation Committee.
The Audit Committee is responsible for reviewing the scope and results of
audits and other services provided by the Company's independent public
accountants. This Committee held two meetings during the last fiscal year.
This Committee currently consists of Messrs. Jordan, Dunlevie and Levy.
The Compensation Committee is responsible for reviewing the compensation
arrangements in effect for the Company's senior management and for
administering all the Company's employee benefit plans, including the 1997
Stock Incentive Plan and the Employee Stock Purchase Plan. This Committee,
currently comprising of Messrs. Jordan, Dunlevie and Levy, did not hold any
meetings in the last fiscal year.
DIRECTOR COMPENSATION
Except for grants of stock options, directors of the Company generally do
not receive compensation for services rendered as a director. In addition, the
Company does not pay cash compensation for committee participation or special
assignments of the Board of Directors. Non-employee Board members receive
option grants at periodic intervals under the Automatic Option Grant Program
of the Company's 1997 Stock Incentive Plan and are also eligible to receive
discretionary option grants under the Discretionary Option Grant Program of
such plan.
Under the Automatic Option Grant Program of the 1997 Stock Incentive Plan,
each individual who first becomes a non-employee Board member, whether through
appointment by the Board or upon election by the Shareholders, will receive
two option grants at the time of his or her initial appointment or election,
provided such individual has not otherwise been in the prior employ of the
Company. One such option grant will be for 30,000 shares of Common Stock and
the other for 20,000 shares of Common Stock. In addition, at each Annual
Shareholders Meeting, beginning with the 1998 Annual Meeting, each individual
who is to continue to serve as a non-employee Board member will receive an
option grant for 7,500 shares of Common Stock, whether or not such individual
has been in the prior employ of the Company.
Each automatic option grant will have an exercise price per share equal to
the fair market value per share of Common Stock on the grant date and will
have a maximum term of 10 years, subject to earlier termination following the
optionee's cessation of Board service. Each automatic option will be
immediately exercisable for all of the option shares; however, any shares
purchased upon exercise of the option will be subject to repurchase, at the
option exercise price paid per share, should the optionee's service as a non-
employee Board member cease prior to vesting in those shares. The shares
subject to each 30,000-share grant will vest as to 25% of the option shares
upon the optionee's completion of each of the four (4) years of Board service
after the grant date. The shares subject to each 20,000-share grant will vest
as to 25% of the option shares on each of the fifth, sixth, seventh and eighth
anniversaries of the option grant date. However, vesting of the shares subject
to each 20,000-share grant will be subject to acceleration after the close of
each fiscal year, beginning with the 1998 fiscal year, in the event that the
optionee has served on a committee of the Board of Directors in such fiscal
year. Vesting of 2,500 shares will accelerate with respect to each committee
of the Board of Directors on which the optionee has served, up to a maximum of
two committees, and will be conditioned on the optionee having attended at
least 75% of the meetings held by such committee during the fiscal year. The
shares to be accelerated will be those shares which would otherwise have been
the first shares to vest in accordance with the four (4)-year vesting schedule
described above. The shares subject to each annual 7,500-share grant will vest
upon the optionee's completion of one year of Board service measured from the
grant date. However, each outstanding option will immediately vest upon (i)
certain changes in the ownership or control of the Company or (ii) the death
or
3
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disability of the optionee while serving as a Board member. In the event of a
hostile tender offer for more than 50% of the Company's outstanding voting
stock, the holders of outstanding options under the Automatic Option Grant
Program will have the right to surrender those options, whether or not those
options are otherwise at the time exercisable for vested shares, in return for
a cash distribution from the Company in an amount equal to the excess of (i)
the take-over price of the shares of Common Stock at the time subject to each
surrendered option over (ii) the aggregate exercise price payable for those
shares. The take-over price in clause (i) will be the greater of (a) the fair
market value per share of Common Stock on the date the option is surrendered
to the Company in connection with the hostile tender offer or (b) the highest
reported price per share of Common Stock paid by the tender offeror in
effecting such hostile take-over.
On February 28, 1997, the Company granted to each of Messrs. Dunlevie,
Jordan and Levy an option to purchase 30,000 shares of Common Stock and an
option to purchase 20,000 shares of Common Stock, each at an exercise price of
$7.50 per share, the fair market value per share of Common Stock on the grant
date. The options are subject to the same terms and conditions as those
described above with respect to the 30,000 and 20,000-share options granted
under the Automatic Option Grant Program of the 1997 Stock Incentive Plan.
In addition, on February 28, 1997, Mr. Levy purchased 30,000 vested shares
of Common Stock at a purchase price of $7.50 per share.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends a vote FOR the nominees listed herein.
4
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PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Company is asking the shareholders to ratify the selection of Arthur
Andersen, LLP as the Company's independent public accountants for the fiscal
year ending June 30, 1998. The affirmative vote of the holders of a majority
of shares represented and voting at the Annual Meeting will be required to
ratify the selection of Arthur Andersen, LLP.
In the event the shareholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the selection is ratified,
the Board of Directors, in its discretion, may direct the appointment of a
different independent accounting firm at any time during the year if the Board
of Directors feels that such a change would be in the Company's and its
shareholders' best interests.
In February 1997, the Company's Board of Directors retained Arthur Andersen,
LLP as its independent public accountants and dismissed the Company's former
public accountants, Coopers and Lybrand LLP. Arthur Andersen, LLP audited the
Company's financial statements for fiscal 1996 and 1997. The decision to
change independent public accountants was approved by resolution of the Board
of Directors. The former independent public accountants' report on the
Company's financial statements at and for the years ended June 30, 1994 and
1995 did not contain an adverse opinion, a disclaimer of opinion or any
qualifications or modifications related to uncertainty, limitation of audit
scope or application of accounting principles. Coopers & Lybrand LLP did not
issue an audit report on the Company's financial statements for any other
period. There were no disagreements with the former public accountants on any
matter of accounting principles or practices, financial statement disclosure
or auditing scope or procedure with respect to the Company's consolidated
financial statements up through the time of dismissal that, if not resolved to
the former public accountants' satisfaction, would have caused them to make
reference to the subject matter of the disagreement in connection with their
report. Prior to retaining Arthur Andersen, LLP, the Company had not consulted
with Arthur Andersen, LLP regarding accounting principles.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that the shareholders vote FOR the
ratification of the selection of Arthur Andersen, LLP to serve as the
Company's independent auditors for the fiscal year ending June 30, 1998.
5
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OWNERSHIP OF SECURITIES
The following table sets forth certain information known to the Company with
respect to beneficial ownership of the Company's Common Stock as of September
30, 1997 for (i) all persons who are beneficial owners of more than five
percent of the Company's Common Stock, (ii) each director and nominee for
director, (iii) the Company's Chief Executive Officer, Chief Technical Officer
and the four other highest-paid executive officers named in the Summary
Compensation Table below, and (iv) all current officers and directors as a
group as of September 30, 1997.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
BENEFICIALLY PERCENT
OWNED(1) OWNED(2)
------------ --------
<S> <C> <C>
Gregory Shenkman(3)................................... 3,385,250 17.1%
1155 Market Street
San Francisco, CA 94103
Alec Miloslavsky(4)................................... 3,385,250 17.1%
1155 Market Street
San Francisco, CA 94103
Entities affiliated with Benchmark Capital LLC(5)..... 1,897,368 9.6%
2840 Sand Hill Road
Suite 200
Menlo Park, CA 94025
Entities affiliated with Weiss Peck & Greer(6)........ 813,378 4.1%
555 California Street, Suite 4760
San Francisco, CA 94104
James Jordan(7)....................................... 652,668 3.3%
Bruce Dunlevie(8)..................................... 1,947,368 9.8%
Paul Levy(9).......................................... 87,000 *
Michael J. McCloskey(10).............................. 480,000 2.4%
Richard DeGolia(11)................................... 438,370 2.4%
Seth Homayoon(12)..................................... 480,000 2.4%
William Wesemann(13).................................. 480,000 2.4%
All current officers and directors as a group (13
persons)(14)......................................... 12,049,156 60.2%
</TABLE>
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* Less than one percent.
(1) Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the persons named in the table have
sole voting and investment power with respect to all shares of Common
Stock. The number of shares beneficially owned includes Common Stock of
which such individual has the right to acquire beneficial ownership
either currently or within 60 days after September 30, 1997, including,
but not limited to, upon the exercise of an option.
(2) Percentage of beneficial ownership is based upon 19,848,259 shares of
Common Stock, all of which were outstanding on September 30, 1997. For
each individual, this percentage includes Common Stock of which such
individual has the right to acquire beneficial ownership either currently
or within 60 days of September 30, 1997, including, but not limited to,
upon the exercise of an option; however, such Common Stock shall not be
deemed outstanding for the purpose of computing the percentage owned by
any other individual. Such calculation is required by General Rule 13d-
3(d)(1)(i) under the Securities Exchange Act of 1934.
(3) Includes 36,000 shares held by Norm and Maya Shendon and 180,000 shares
held by Dmitry and Maria Shenkman, of which Mr. Shenkman disclaims
beneficial ownership. Includes 360,000 shares held by Dmitry Shenkman,
Trustee of the Michelle Shenkman 1996 Trust u/t/a dated March 18, 1996,
360,000 shares held by Dmitry Shenkman, Trustee of the Nikita Anthony
Shenkman 1996 Trust u/t/a dated March 18, 1996, 928,000 shares held by
Gregory and Yelena Shenkman, Trustees of the Shenkman Family
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Trust u/t/a dated March 7, 1996 and 500,000 shares held by Shenkman
Partners. Also includes 326,625 unvested shares which are subject to
repurchase by the Company at the purchase price paid per share.
(4) Includes 180,000 shares held by Anatoly and Zhanna Elkinbard, and 180,000
shares held by Larry and Lidia Miloslavsky, of which Mr. Miloslavsky
disclaims beneficial ownership. Excludes 2,250 shares held by Lidia
Miloslavsky and options exercisable by Lidia Miloslavsky to purchase a
total of 1,500 shares of Common Stock which options were exercisable
within 60 days of September 30, 1997, of which Mr. Miloslavsky disclaims
beneficial ownership. Includes 360,000 shares held by Larry Miloslavsky
and Anatoly Elkinbard, Trustees of the Miloslavsky 1996 Irrevocable Trust
u/t/a dated March 13, 1996, 120,000 shares held by Larry and Lidia
Miloslavsky, Trustees of the Joshua Trobnikov Miloslavsky 1996 Trust
u/t/a dated March 15, 1996 and 350,000 shares held by Miloslavsky
Partners. Also includes 326,625 unvested shares which are subject to
repurchase by the Company at the purchase price paid per share.
(5) Consists of 219,987 shares held by Benchmark Founders' Fund, L.P. and
1,677,381 shares held by Benchmark Capital Partners, L.P. Mr. Dunlevie, a
director of the Company, is an affiliate of the foregoing entities and
may be deemed to share voting and investment power with respect to such
shares. Mr. Dunlevie disclaims beneficial ownership of such shares,
except to the extent of his pecuniary interest in such shares arising
from his interests in the entities referred to above.
(6) Consists of 444,102 shares held by WPG Enterprise Fund II, L.P. and
369,276 shares held by Weiss Peck & Greer Venture Associates III, L.P.
(7) Includes options exercisable by Mr. Jordan to purchase a total of 50,000
shares of Common Stock, which options were issued and became exercisable
on February 28, 1997. Also includes 286,000 unvested shares which are
subject to repurchase by the Company at the purchase price paid per
share.
(8) Includes 1,897,368 shares beneficially owned by entities affiliated with
Benchmark Capital, LLC. Includes options exercisable by Mr. Dunlevie to
purchase a total of 50,000 shares of Common Stock, which options were
issued and became exercisable on February 28, 1997.
(9) Includes options exercisable by Mr. Levy to purchase a total of 20,000
shares of Common Stock, which options were issued and became exercisable
on February 28, 1997. Also, includes 30,000 unvested shares which are
subject to repurchase by the Company at the purchase price paid per
share.
(10) Includes 340,000 unvested shares which are subject to repurchase by the
Company at the purchase price paid per share.
(11) Includes 42,370 shares held by Richard C. DeGolia or Jennifer H. DeGolia,
as Trustees of the RJ Family Trust u/t/a dated 6/16/95. Also, includes
252,000 unvested shares which are subject to repurchase by the Company at
the purchase price paid per share.
(12) Includes 320,000 unvested shares which are subject to repurchase by the
Company at the purchase price paid per share.
(13) Includes 320,000 unvested shares which are subject to repurchase by the
Company at the purchase price paid per share.
(14) Includes (i) 2,611,250 unvested shares which are subject to repurchase by
the Company at the purchase price paid per share, and (ii) 172,500 shares
issuable upon exercise of stock options exercisable within 60 days of
September 30, 1997.
COMPLIANCE WITH SEC REPORTING REQUIREMENTS
Under the securities laws of the United States, the Company's directors,
executive officers, and any persons holding more than ten percent of the
Company's Common Stock are required to report initial ownership of the
Company's Common Stock and any subsequent changes in ownership to the
Securities and Exchange Commission ("SEC"). Specific due dates have been
established by the SEC, and the Company is required to disclose in this Proxy
Statement any failure to file by these dates. Based upon (i) the copies of
Section 16(a) reports that the Company received from such persons for their
1997 fiscal year transactions and (ii) the written representations received
from one or more of such persons that no annual Form 5 reports were required
to be filed for them for the 1997 fiscal year, the Company believes that there
has been compliance with all Section 16(a) filing requirements applicable to
such officers, directors, and ten-percent beneficial owners.
7
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EXECUTIVE COMPENSATION AND RELATED INFORMATION
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
currently comprised of three non-employee directors, James Jordan, Bruce
Dunlevie and Paul D. Levy, and was formed in March 1997, in anticipation of
the initial public offering of the Company's Common Stock.
For the 1997 fiscal year, all compensation decisions with respect to base
salaries and bonuses for the Company's executive officers were made by the
Board of Directors. Beginning after the Company's initial public offering in
June 1997, the Committee administers the Company's compensation policies and
programs and has primary responsibility for executive compensation matters,
including the establishment of the base salaries of the Company's executive
officers, the approval of individual bonuses and bonus programs for executive
officers and the administration of certain employee benefit programs. In
addition, the Committee has exclusive responsibility for administering the
Company's 1997 Stock Incentive Plan, under which stock option grants and
direct stock issuances may be made to executive officers and other employees.
The following is a summary of policies which the Committee applies in setting
the compensation levels for the Company's executive officers.
General Compensation Policy. The overall policy of the Committee is to offer
the Company's executive officers competitive compensation opportunities based
upon their personal performance, the financial performance of the Company and
their contribution to that performance. One of the primary objectives is to
have a substantial portion of each executive officer's compensation contingent
upon the Company's financial success as well as upon such executive officer's
own level of performance. Each executive officer's compensation package is
comprised of two principal elements: (i) base salary, which will be determined
on the basis of the individual's position and responsibilities with the
Company, the level of his or her performance, and the financial performance of
the Company, and (ii) long-term stock-based incentive awards designed to
strengthen the mutuality of interests between the executive officers and the
Company's shareholders. Generally, as an executive officer's level of
responsibility increases, a greater portion of that individual's total
compensation will be dependent upon the Company's performance and stock price
appreciation rather than base salary. In a limited number of cases the
Committee may also make incentive performance awards payable in cash, based
upon a formula which takes into account Company and individual performance.
Factors. The primary factors which will be taken into consideration in
establishing the components of each executive officer's compensation package
for the 1998 fiscal year are summarized below. However, the Committee may, in
its discretion, apply entirely different factors, such as different measures
of financial performance, for future fiscal years.
Base Salary. In setting the base salary for each executive officer, the
Committee reviews published compensation survey data for its industry. The
base salary for each officer will reflect the salary levels for comparable
positions in published surveys as well as the individual's personal
performance and internal alignment considerations. During the 1997 fiscal
year, the Board increased the base salaries of all of its executive officers
to bring them closer to the levels of base salaries paid to executives of
similarly-sized companies in the industry.
Long-Term Stock-Based Incentive Compensation. From time to time, the
Committee will make option grants to the Company's executive officers under
the 1997 Stock Incentive Plan. The grants will be designed to align the
interests of each executive officer with those of the shareholders and provide
each individual with a significant incentive to manage the Company from the
perspective of an owner with an equity stake in the business. Each grant will
allow the officer to acquire shares of the Company's Common Stock at a fixed
price per share (the market price on the grant date) over a specified period
of time (up to ten (10) years), thus providing a return to the executive
officer only if the market price of the shares appreciates over the option
term and the officer continues in the Company's employ. The size of the option
grant to each executive officer will be designed to create a meaningful
opportunity for stock ownership and will be based upon the executive officer's
current position with the Company, internal comparability with option grants
made to other Company executives, the executive officer's current level of
performance and the executive officer's potential for future responsibility
8
<PAGE>
and promotion over the option term. The Committee will also take into account
the number of vested and unvested options held by the executive officer in
order to maintain an appropriate level of equity incentive for that
individual. However, the Committee does not intend to adhere to any specific
guidelines as to the relative option holdings of the Company's executive
officers.
CEO Compensation. The compensation payable to Mr. Shenkman, the Company's
Chief Executive Officer during fiscal year 1997, was determined by the Board
of Directors. Mr. Shenkman's base salary at the beginning of the 1997 fiscal
year was set at $100,000. In January 1997, the Board adjusted that base salary
to $180,000, which the Board felt would be more competitive with the base
salary levels in effect for chief executive officers at similarly-sized
companies within the industry. In addition, in February 1997, Mr. Shenkman was
granted an option to purchase 150,000 shares of Common Stock. The option has
an exercise price of $7.50 per share, the fair market value per share of
Common Stock on the grant date, and is intended to maintain Mr. Shenkman's
option holdings in the Company at a competitive level with the holdings of
other chief executive officers at similarly-sized companies within the
industry.
Compliance with Internal Revenue Code Section 162(m). Section 162(m) of the
Internal Revenue Code generally disallows a tax deduction to publicly-held
companies for compensation paid to certain executive officers, to the extent
that compensation exceeds $1 million per officer in any year. The compensation
paid to the Company's executive officers for the 1997 fiscal year did not
exceed the $1 million limit per officer, and it is not expected the
compensation to be paid to the Company's executive officers for the 1998
fiscal year will exceed that limit. In addition, the Company's 1997 Stock
Incentive Plan is structured so that any compensation deemed paid to an
executive officer in connection with the exercise of his or her outstanding
options under such plan will qualify as performance-based compensation which
will not be subject to the $1 million limitation. Because it is very unlikely
that the cash compensation payable to any of the Company's executive officers
in the foreseeable future will approach the $1 million limit, the Committee
has decided at this time not to take any other action to limit or restructure
the elements of cash compensation payable to the Company's executive officers.
The Committee will reconsider this decision should the individual compensation
of any executive officer ever approach the $1 million level.
Submitted by both the Board of Directors and the Compensation Committee of
the Company's Board of Directors:
James Jordan, Board and Compensation Committee Member
Bruce Dunlevie, Board and Compensation Committee Member
Paul D. Levy, Board and Compensation Committee Member
Gregory Shenkman, Board Member
Alec Miloslavsky, Board Member
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Company's Board of
Directors are named as above in the Compensation Committee Report. No member
of the Committee was at any time during the 1997 fiscal year or at any other
time an officer or employee of the Company.
9
<PAGE>
STOCK PERFORMANCE GRAPH
The graph depicted below shows the Company's stock price as an index
assuming $100 invested on June 16, 1997, along with the composite prices of
companies listed in the Nasdaq Stock Market (U.S.) Index and the Hambrecht &
Quist Technology Index.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG GENESYS TELECOMMUNICATIONS, NASDAQ STOCK MARKET (U.S.)
AND H & Q TECHNOLOGY
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period GENESYS NASDAQ H & Q
(Fiscal Year Covered) TELECOMM. STOCK MARKET TECHNOLOGY
- --------------------- --------- ------------ ----------
<S> <C> <C> <C>
Measurement Pt- 6/17/97 $100 $100 $100
FYE 6/97 $154 $100 $ 99
</TABLE>
- --------
Notes
(1) The Company's fiscal year ended on June 30, 1997.
(2) No cash dividends have been declared on the Company's Common Stock.
Shareholder returns over the indicated period should not be considered
indicative of future shareholder returns.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933 or the Securities Exchange
Act of 1934 that might incorporate future filings made by the Company under
those statutes, the preceding Report of the Compensation Committee of the
Board of Directors on Executive Compensation and the Company Stock Performance
Graph will not be incorporated by reference into any of those prior filings,
nor will such report or graph be incorporated by reference into any future
filings made by the Company under those statutes.
10
<PAGE>
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the compensation earned, by the Company's
Chief Executive Officer, the Company's Chief Technical Officer and the four
other highest-paid executive officers whose salary and bonus for the 1997
fiscal year was in excess of $100,000, for services rendered in all capacities
to the Company and its subsidiaries for the 1996 and 1997 fiscal years. No
other executive officer who would have otherwise been includable in such table
on the basis of salary and bonus earned for the 1997 fiscal year has been
excluded by reason of his or her termination of employment during that fiscal
year. The individuals included in the table will be collectively referred to
as the "Named Officers."
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
------------- ---------------------
RESTRICTED
STOCK
NAME AND PRINCIPAL POSITION YEAR SALARY AWARDS OPTIONS
--------------------------- ---- -------- ---------- -------
<S> <C> <C> <C> <C>
Gregory Shenkman..................... 1997 $135,510 -- 150,000
President and 1996 88,885 $ 0(1) --
Chief Executive Officer
Alec Miloslavsky..................... 1997 133,333 -- 150,000
Vice Chairman and 1996 86,538 0(1) --
Chief Technical Officer
Michael J. McCloskey................. 1997 142,645 0(2)(6) --
Vice President, Finance and 1996 -- -- --
International, Chief Financial
Officer and Secretary
Richard DeGolia...................... 1997 142,500 0(4)(6) --
Vice President, Business 1996 -- 0(5) --
Development(3)
Seth Homayoon........................ 1997 160,500 0(5)(6) --
Vice President, Network 1996 2,000 --
Services(7)
William Wesemann..................... 1997 180,000(8) 0(5)(6) --
Vice President, Sales 1996 29,397(9) -- --
</TABLE>
- --------
(1) In August 1995, each of Messrs. Shenkman and Miloslavsky purchased
1,206,000 shares of Common Stock at $0.0167 per share, the fair market
value per share of the Common Stock on the purchase date, and payment was
made through the issuance of full-recourse promissory notes for the amount
of the purchase price, bearing interest at the rate of 6.5% per annum and
secured by the purchased shares. The shares are subject to repurchase by
the Company, at the purchase price paid per share, upon the officer's
termination of service with the Company prior to vesting in the shares.
The Company's repurchase right lapses with respect to, and each officer
vests in, 25% of the shares as of October 15, 1995 and the balance in a
series of 36 equal monthly installments thereafter. In June 1997, both Mr.
Shenkman and Mr. Miloslavsky repaid to the Company the aggregate principal
and interest due under their promissory notes.
(2) Mr. McCloskey became an employee of the Company in July 1996. In September
1996, Mr. McCloskey was awarded the right to purchase 480,000 shares of
Common Stock at $0.375 per share, the fair market value per share of the
Common Stock on the grant date, which right was exercised by him in
November 1996 and January 1997 through the issuance of full-recourse
promissory notes in an aggregate principal amount of $180,000, bearing
interest at the rate of 6.6% per annum and secured by the purchased
shares. Principal and interest on such note are due and payable on the
earliest of (i) five years from the date of
11
<PAGE>
issuance, (ii) the sale of the purchased shares or (iii) 90 days following
the date of Mr. McCloskey's termination of service with the Company. The
shares are subject to repurchase by the Company, at the purchase price paid
per share, upon Mr. McCloskey's termination of service with the Company
prior to vesting in the shares. The Company's repurchase right lapses with
respect to, and Mr. McCloskey vests in, 25% of the shares on July 17, 1997,
and the balance in a series of 36 equal monthly installments thereafter.
(3) Mr. DeGolia became an employee of the Company in September 1997. Prior to
that time, Mr. DeGolia was a consultant to the Company.
(4) In September 1996, Mr. DeGolia was awarded the right to purchase 36,000
shares of Common Stock at $0.375 per share, the fair market value per
share of the Common Stock on the grant date, which right was exercised by
him in November 1996 through the issuance of a full-recourse promissory
note for the amount of the purchase price bearing interest at the rate of
6.6% per annum and secured by the purchased shares. Principal and interest
on such note are due and payable on the earliest of (i) five years from
the date of issuance, (ii) the sale of the purchased shares or (iii) 90
days following the date of Mr. DeGolia's termination of service with the
Company. The shares are subject to repurchase by the Company, at the
purchase price paid per share, upon Mr. DeGolia's termination of service
prior to vesting in the shares. The Company's repurchase right lapses with
respect to, and Mr. DeGolia vests in, 25% of the shares on September 30,
1997 and the balance in a series of 36 equal monthly installments
thereafter.
(5) In March 1996, Mr. DeGolia purchased 360,000 shares of Common Stock and
Messrs. Homayoon and Wesemann each purchased 480,000 shares of Common
Stock at $0.0167 per share, the fair market value per share of the Common
Stock on the purchase date. In the case of Mr. DeGolia, such shares were
purchased through the issuance of full-recourse promissory notes for the
amount of the purchase price bearing interest at the rate of 6.5% per
annum and secured by the purchased shares. Principal and interest on such
note are due and payable on the earliest of (i) five years from the date
of issuance, (ii) the sale of the purchased shares or (iii) 90 days
following the date of Mr. DeGolia's termination of service with the
Company. The shares are subject to repurchase by the Company, at the
purchase price paid per share, upon the officer's termination of service
prior to vesting in the shares. The vesting commencement dates for the
shares purchased by Messrs. DeGolia, Homayoon and Wesemann are March 1,
1996, May 13, 1996 and May 23, 1996, respectively. The Company's
repurchase right lapses with respect to, and each officer vests in, 25% of
his shares on the first anniversary of his respective vesting commencement
date and as to the balance in a series of 36 equal monthly installments
thereafter.
(6) The aggregate value of each named officer's unvested shares as of the end
of the 1997 fiscal year, based on the market price of $27.75 per share,
the closing selling price per share of Common Stock on the Nasdaq National
Market the last day of the 1997 fiscal year, less the purchase price paid
per share, was the following: each of Messrs. Shenkman and Miloslavsky--
$11,148,787; Mr. DeGolia--$7,849,492; Mr. McCloskey--$13,140,000; each of
Messrs. Homayoon and Wesemann--$9,706,655. Dividends will be payable on
the shares if and to the extent paid on the Common Stock generally.
(7) Mr. Homayoon became an employee of the Company in June 1996.
(8) Includes $30,000 earned as sales commissions.
(9) Mr. Wesemann became an employee of the Company in May 1996. Mr. Wesemann's
salary for the 1996 fiscal year included sales commissions of $11,667.
12
<PAGE>
STOCK OPTIONS
The following table provides information with respect to the stock option
grants made during the 1997 fiscal year under the Company's 1997 Stock
Incentive Plan to the Named Officers. No stock appreciation rights were
granted to the Named Officers during such fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------
POTENTIAL REALIZABLE
% OF TOTAL VALUE OF ASSUMED ANNUAL
NUMBER OF OPTIONS RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE FOR OPTION TERM(1)
OPTIONS IN FISCAL PRICE EXPIRATION -----------------------
NAME GRANTED YEAR ($/SHARE)(2) DATE 5% 10%
- ---- ---------- ---------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Gregory Shenkman........ 150,000(3) 2.65 $7.50 02/27/07 $ 707,506 $ 1,792,960
Alec Miloslavsky........ 150,000(3) 2.65 7.50 02/27/07 707,506 1,792,960
Michael J. McCloskey.... -- -- -- -- -- --
Richard DeGolia......... -- -- -- -- -- --
Seth Homayoon........... -- -- -- -- -- --
William Wesemann........ -- -- -- -- -- --
</TABLE>
- --------
(1) Potential realizable value is based on assumption that the market price of
the Common Stock appreciates at the annual rate shown (compounded
annually) from the date of grant until the end of the 10-year option term.
There can be no assurance that the actual stock price appreciation over
the 10-year option term will be at the assumed 5% and 10% levels or at any
other defined level.
(2) The exercise price may be paid in cash, in shares of the Company's Common
Stock valued at fair market value on the exercise date or through a
cashless exercise procedure involving a same-day sale of the purchased
shares. The Company may also finance the option exercise by loaning the
optionee sufficient funds to pay the exercise price for the purchased
shares.
(3) Mr. Shenkman and Mr. Miloslavsky were each awarded an option to purchase
150,000 shares of Common Stock at an exercise price of $7.50 per share,
the fair market value of the Common Stock on the February 28, 1997 date of
grant, as determined by the Board of Directors. Each option has a maximum
term of 10 years measured from the grant date, subject to earlier
termination upon the optionee's cessation of service with the Company.
Each option becomes exercisable as to 25% of the option shares on the
first anniversary of the option grant date and the balance in a series of
36 equal monthly installments thereafter. In the event of an acquisition
of the Company by merger or asset sale, the options will accelerate in
full unless assumed by the acquiring corporation.
13
<PAGE>
STOCK OPTION EXERCISES AND YEAR-END HOLDINGS
The table below sets forth information with respect to the Named Officers
concerning the unexercised options held by them as of the end of the 1997
fiscal year. No stock options or stock appreciation rights were exercised by
such individuals during such fiscal year, and no stock appreciation rights
were outstanding at the end of such fiscal year.
AGGREGATED FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT JUNE 30, 1997 AT JUNE 30, 1997(1)
------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Gregory Shenkman............ 0 150,000 $ 0 $3,037,500
Alec Miloslavsky............ 0 150,000 0 3,037,500
Michael J. McCloskey........ -- -- -- --
Richard DeGolia............. -- -- -- --
Seth Homayoon............... -- -- -- --
William Wesemann............ -- -- -- --
</TABLE>
- --------
(1) Based upon the market price of $27.75 per share, the closing selling price
per share of Common Stock on the Nasdaq National Market on the last day of
the 1997 fiscal year, less the option exercise price payable per share.
EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL AGREEMENTS
The Company has not entered into an Employment Contract with any of its
current executive officers and each officer's employment may be terminated at
any time at the discretion of the Board of Directors.
In connection with an acquisition of the Company by merger or asset sale, in
the event that Mr. Shenkman or any other executive officer's level of cash
compensation and duties with the Company are not maintained in his position
with the acquiring entity, any unvested shares of the Company's Common Stock
held by him as of such date will immediately vest in full as of the closing
date of such acquisition. In addition, the options granted in the 1997 fiscal
year to Messrs. Shenkman and Miloslavsky will accelerate in full in connection
with an acquisition of the Company by merger or asset sale, unless such
options are to be assumed by the successor entity. As administrator of the
Company's 1997 Stock Incentive Plan, the Compensation Committee has the
authority to provide for accelerated vesting of the shares of Common Stock
subject to any outstanding options held by Mr. Shenkman and the Company's
other executive officers or any unvested shares held by those individuals
under such plan, in the event their employment were to be terminated (whether
involuntarily or through a forced resignation) following (i) an acquisition of
the Company by merger or asset sale or (ii) a change in control of the Company
effected through a successful tender offer for more than 50% of the Company's
outstanding voting securities or through a change in the majority of the Board
as a result of one or more contested elections for Board membership.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In March 1996, James Jordan, a director of the Company, purchased 67,668
shares of the Company's Series A Preferred Stock at a price of $2.2167 per
share.
In March 1996, Richard DeGolia, the Company's Vice President, Business
Development, purchased 47,370 shares of the Company's Series A Preferred Stock
at a price of $2.2167 per share.
In March 1996, entities affiliated with Benchmark Capital LLC ("Benchmark"),
a greater than 5% shareholder of the Company, purchased shares of the
Company's Series A Preferred Stock at a price of $2.2167 per share in the
following amounts: Benchmark Capital Partners, L.P. (199,812 shares); and
Benchmark
14
<PAGE>
Founders' Fund, L.P. (23,274 shares). In April 1996, the Company granted
Benchmark a warrant to purchase 420,282 shares of Common Stock at an exercise
price of $5.9483 per share (subject to adjustment upon occurrence of certain
events) which was exercised in June 1997. This warrant was issued in exchange
for consulting services provided to the Company by Bruce Dunlevie, a director
of the Company and an affiliate of Benchmark. In June 1996, Benchmark
purchased shares of the Company's Series B Preferred Stock at a price of
$3.6883 per share in the following amounts: Benchmark Capital Partners, L.P.
(957,084); and Benchmark Founders' Fund, L.P. (127,416 shares).
During fiscal 1995 and 1996, the Company borrowed an aggregate of $104,500
and $720,000, respectively, from officers, shareholders and their affiliates.
Of these amounts $39,000 and $25,000 was outstanding as of June 30, 1995 and
1996, respectively. Certain of these related party loans were non-interest
bearing, however, the computed interest related to the borrowings was
immaterial.
During fiscal 1995 and 1996, the Company received $394,000 and $50,000 of
revenue, respectively, from sales to a company in which Gregory Shenkman, the
Company's President and Chief Executive Officer and a director of the Company,
and Alec Miloslavsky, the Company's Vice Chairman of the Board and Chief
Technical Officer and a director of the Company, held an ownership interest.
The Company has also granted options to certain of its directors and
executive officers. See "Executive Compensation and Related Information--Stock
Options."
SHAREHOLDER PROPOSALS FOR 1998 PROXY STATEMENT
Shareholder proposals that are intended to be presented at the Company's
annual meeting of shareholders to be held in 1998 must be received by the
Company no later than July 15, 1998 in order to be included in the proxy
statement and related proxy materials.
OTHER MATTERS
The Board of Directors knows of no other matters to be presented for
shareholder action at the Annual Meeting. However, if other matters do
properly come before the Annual Meeting or any adjournments or postponements
thereof, the Board of Directors intends that the persons named in the proxies
will vote upon such matters in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
Michael J. McCloskey
Secretary
15
<PAGE>
GENESYS TELECOMMUNICATIONS LABORATORIES, INC.
PROXY
ANNUAL MEETING OF SHAREHOLDERS, DECEMBER 10, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF GENESYS
TELECOMMUNICATIONS LABORATORIES, INC.
The undersigned revokes all previous proxies, acknowledges receipt of the
notice of annual meeting of shareholders to be held on December 10, 1997 and the
proxy statement, and appoints Gregory Shenkman and Michael McCloskey or either
of them the proxy of the undersigned, with full power of substitution, to vote
all shares of Common Stock of Genesys Telecommunications Laboratories, Inc.,
with full power of substitution, to vote all shares of Common Stock of Genesys
Telecommunications Laboratories, Inc. that the undersigned is entitled to vote,
either on his or her own behalf or on behalf of an entity or entities, at the
Annual Meeting of Shareholders of the Company to be held at The Clift Hotel
located at 495 Geary Street, San Francisco, California 94102 on Wednesday,
December 10, 1997 at 9:00 a.m., and at any adjournment or postponement thereof,
with the same force and effect as the undersigned might or could do if
personally present thereat. The shares represented by this proxy shall be voted
in the manner set forth below.
1. ELECTION OF ALL NOMINEES LISTED BELOW TO THE BOARD OF DIRECTORS TO SERVE
UNTIL THE NEXT ANNUAL MEETING AND UNTIL THEIR SUCCESSORS HAVE BEEN DULY
ELECTED AND QUALIFIED, EXCEPT AS NOTED (WRITE THE NAMES, IF ANY, OF
NOMINEES FOR WHOM YOU WITHHOLD AUTHORITY TO VOTE):
NOMINEES: GREGORY SHENKMAN, ALEC MILOSLAVSKY, JAMES JORDAN, BRUCE DUNLEVIE,
PAUL D. LEVY
[_] FOR all nominees [_] WITHHOLD from all nominees [_] _______________
For all nominees
except as noted above
2. PROPOSAL TO RATIFY THE SELECTION OF ARTHUR ANDERSEN, LLP, AS THE COMPANY'S
INDEPENDENT ACCOUNTS FOR THE FISCAL YEAR ENDING JUNE 30, 1998.
FOR AGAINST ABSTAIN
[_] [_] [_]
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW [_]
Please sign your name exactly as it appears hereon. If acting as an attorney,
executor, trustee,or in other representative capacity, sign name and title.
Signature Date: Signature: Date:
------------- -------------- ----------- ---------
