<PAGE> 1
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:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Silicon Valley Research, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
PRELIMINARY COPIES
SILICON VALLEY RESEARCH, INC.
6360 SAN IGNACIO AVENUE
SAN JOSE, CA 95119
July 29, 1997
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
SILICON VALLEY RESEARCH, INC. on Thursday, September 4, 1997, at the Company's
corporate headquarters, 6360 San Ignacio Avenue, San Jose, California, at 9:00
a.m., Pacific Daylight Time.
The matters expected to be acted upon at the meeting are described in
detail in the attached Notice of Annual Meeting of Shareholders and Proxy
Statement. Also enclosed is a copy of the 1997 SILICON VALLEY RESEARCH, INC.
Annual Report, which includes audited financial statements and certain other
information.
It is important that you use this opportunity to take part in the affairs
of SILICON VALLEY RESEARCH, INC. by voting on the business to come before this
meeting. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN,
DATE AND RETURN THE ACCOMPANYING PROXY PROMPTLY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. Returning the proxy does not deprive you of your right to attend the
meeting and vote your shares in person.
We look forward to seeing you at the meeting.
Sincerely,
Robert R. Anderson
Chief Executive Officer and
Chairman of the Board of Directors
Enclosures
<PAGE> 3
SILICON VALLEY RESEARCH, INC.
6360 SAN IGNACIO AVENUE
SAN JOSE, CA 95119
--------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, SEPTEMBER 4, 1997
--------------
Dear Shareholders:
You are invited to attend the Annual Meeting of Shareholders of SILICON
VALLEY RESEARCH, INC. (the "Company"), which will be held at 9:00 a.m., Pacific
Daylight Time, on Thursday, September 4, 1997, at the Company's corporate
headquarters, 6360 San Ignacio Avenue, San Jose, California, for
the following purposes:
1. To elect four directors of the Company to serve until the next
Annual Meeting of Shareholders and until their respective successors
have been elected and qualified or until their earlier resignation
or removal.
2. To amend the Company's Amended and Restated Articles of
Incorporation to increase the number of shares of Common Stock
authorized from 25,000,000 to 40,000,000
3. To approve an amendment to the Company's 1988 Stock Option Plan that
increases the number of shares authorized to be issued thereunder
from 2,745,976 to 3,745,976.
4. To approve an amendment to the Company's 1990 Directors' Stock
Option Plan that increases the number of shares authorized to be
issued thereunder from 125,000 to 225,000
5. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Shareholders of record of the Company's Common Stock at the close of
business on July 15, 1997 are entitled notice of, and to vote at, the meeting
and any adjournment thereof.
By Order of the Board of Directors
Robert R. Anderson
Chairman
San Jose, California
July 29, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND
RETURN THE ACCOMPANYING PROXY PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE SO
THAT YOUR SHARES MAY BE REPRESENTED AT THE MEETING.
<PAGE> 4
PROXY STATEMENT
JULY 29, 1997
The accompanying proxy is solicited on behalf of the Board of Directors of
SILICON VALLEY RESEARCH, INC., a California corporation (the "Company"), for use
at the Annual Meeting of Shareholders to be held on September 4, 1997, or any
adjournment thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting. The date of this Proxy Statement is July 29, 1997, the
approximate date on which this Proxy Statement and the accompanying form of
proxy were first sent or given to shareholders.
GENERAL INFORMATION
Annual Report. An annual report for the fiscal year ended March 31,
1997 is enclosed with this Proxy Statement.
Voting Securities. Only shareholders of record as of the close of business
on July 15, 1997 will be entitled to vote at the meeting and any adjournment
thereof. As of that date, there were _________ shares of Common Stock of the
Company issued and outstanding. Shareholders may vote in person or by proxy.
Each holder of shares of Common Stock is entitled to one (1) vote for each share
of stock held on the proposals presented in this Proxy Statement. The Company's
Bylaws provide that a majority of all of the shares of the stock entitled to
vote, whether present in person or represented by proxy, shall constitute a
quorum for the transaction of business at the meeting.
Shareholders have cumulative voting rights in the election of directors.
Under the cumulative voting method, a shareholder may multiply the number of
shares owned by the number of directors to be elected and cast this total number
of votes for any one candidate or distribute the total number of votes in any
proportion among as many candidates as the shareholder desires. A shareholder
may not cumulate his or her votes for a candidate unless such candidate's name
has been placed in nomination prior to the voting and unless a shareholder has
given notice at the meeting, prior to the voting, of his or her intention to
cumulate his or her votes. If any shareholder gives such notice, all
shareholders may then cumulate their votes. Management is hereby soliciting
discretionary authority to cumulate votes represented by proxies if cumulative
voting is invoked.
Solicitation of Proxies. The cost of soliciting proxies will be borne by
the Company. In addition, the Company will solicit shareholders by mail through
its regular employees and will request banks and brokers, and other custodians,
nominees and fiduciaries, to solicit their customers who have stock of the
Company registered in the names of such persons and will reimburse them for
their reasonable, out-of-pocket costs. The Company may use the services of its
officers, directors and others to solicit proxies, personally or by telephone,
without additional compensation.
Voting of Proxies. All valid proxies received prior to the meeting will be
voted. All shares represented by a proxy will be voted, and where a shareholder
specifies by means of the proxy a choice with respect to any matter to be acted
upon, the shares will be voted in accordance with the specification so made. If
no choice is indicated on the proxy, the shares will be voted in favor of the
proposal. A shareholder giving a proxy has the power to revoke his or her proxy,
at any time prior to the time it is voted, by delivery to the Secretary of the
Company of a written instrument revoking the proxy or a duly executed proxy with
a later date, or by attending the meeting and voting in person.
<PAGE> 5
Stock Ownership of Certain Beneficial Owners and Management. The following
table sets forth certain information as of July 15, 1997, with respect to the
beneficial ownership of the Company's Common Stock by (i) all persons known by
the Company to be the beneficial owners of more than 5% of the outstanding
Common Stock of the Company, (ii) each director and director-nominee of the
Company, (iii) the persons named in the Summary Compensation Table below and
(iv) all executive officers and directors of the Company as a group.
<TABLE>
<CAPTION>
Name and Address of Beneficial Amount and Nature of Percent
Owner or Identity of Group Beneficial Ownership of Class
- ----------------------------- -------------------- --------
<S> <C> <C>
Austin Marxe .............................
153 E. 53rd Street, 51st Floor
New York, NY 10022
J.F. Shea ................................
655 Brea Canyon Road
Walnut, California 91789
Robert R. Anderson .......................
6360 San Ignacio Avenue
San Jose, California 95119
Roy L. Rogers ............................
2800 Sand Hill Road, Suite 120
Menlo Park, California 94025
Minoru Takagi ............................
Teng-Sheng Moh ........................... *
Ching-Chy Wang ........................... *
Benjamin Huberman ........................ *
Thomas R. Sherby ......................... *
Yoshio Nishi ............................. *
All executive officers and directors as
a group (10 persons) .....................
Former Officers
Glenn E. Abood ........................... *
Arthur Monk .............................. *
Craig Wentzel ............................ *
</TABLE>
- ----------
* Less than 1%
2
<PAGE> 6
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's directors are elected annually to serve until the next
annual meeting of shareholders and thereafter until their successors are elected
and are qualified. The Bylaws of the Company authorize a flexible number of
directors ranging from five to nine. Following the Annual Meeting of
Shareholders that will be held on September 4, 1997, there will be one vacancy
on the Company's Board of Directors.
Unless otherwise directed by shareholders, the proxyholders will vote all
shares represented by proxies held by them for the election of the following
nominees, all of whom are now members of the Company's Board of Directors. The
Company is advised that all of the nominees have indicated their availability
and willingness to serve if elected. In the event that any nominee becomes
unavailable or unable to serve as a director of the Company prior to the voting,
the proxyholders will refrain from voting for the unavailable nominee and will
vote for a substitute nominee for the office of director as the Board may
recommend. If a quorum is present and voting, the four nominees for director
receiving the highest number of votes will be elected directors. Abstentions and
shares held by brokers that are present but not voted because the brokers were
prohibited from exercising discretionary authority, i.e. "broker non-votes",
will be counted as present for purposes of determining if a quorum is present.
DIRECTORS/NOMINEES
The names of the nominees to the Board and their respective ages are as
follows:
<TABLE>
<CAPTION>
Name Age Director Since
---- --- --------------
<S> <C> <C>
Robert R. Anderson (3) 59 January 1994
Benjamin Huberman (2) 59 October 1995
Roy L. Rogers (1) (2) 62 January 1994
Thomas A. Sherby (1) 63 September 1994
</TABLE>
- ------------------
(1) Member of Audit Committee
(2) Member of Compensation Committee
(3) Member of Nominating Committee
Mr. Anderson has been Chairman of SVR since January 1994 and Chief
Executive Officer since December 1996. Prior to that, Mr. Anderson was Chief
Executive Officer from April 1994 until July 1995 and was Chief Financial
Officer from September 1994 to November 1995. Mr. Anderson co-founded KLA
Instruments Corporation ("KLA"), a supplier of equipment for semiconductor
companies, in 1975. He served as Vice-Chairman of the Board of KLA from November
1991 to March 1994 and served as Chairman of the Board of KLA from May 1985 to
November 1991. Prior to that, Mr. Anderson served as Chief Operating Officer and
Chief Financial Officer of KLA for nine years. Mr. Anderson currently serves as
a director of Applied Science & Technology Inc., a supplier of systems
components for the semiconductor industry.
Mr. Huberman has been a director of SVR since October 1995. For the past
six years, Mr. Huberman has been President of the Huberman Consulting Group in
Washington, D.C. He has held numerous governmental positions, including Deputy
Director of the White House Office of Science and Technology Policy. He is also
a member of the Chief of Naval Operations' Executive Panel and has been Chairman
of the Technical Advisory Panel to the U.S. Space Command. He
3
<PAGE> 7
currently serves on the boards of Zycad Corp., an electronic design automation
company and Audre Recognition Systems, Inc., a developer of software which is
used to convert documents into digital data.
Mr. Rogers has been a director of SVR since January 1994. For the last ten
years, Mr. Rogers has served as a general partner of two venture capital limited
partnerships, R & W Ventures I and R & W Ventures II. Previously, for a 15-year
period, he held management positions in research, institutional sales and
corporate finance at Hambrecht & Quist, an investment banking firm.
Mr. Sherby has been a director of SVR since September 1994. He has served
as the Chief Executive Officer and Chairman of the Board of Directors of Knights
Technology, Inc. a supplier of prepackaged software since April 1989. He has
over 20 years of management experience in the electronics and computer
industries with Fairchild Semiconductor, Dataproducts Corp., a manufacturer of
peripheral data processing equipment, and AT & T Global Information Solutions
(formerly NCR Corporation), a manufacturer of computers and peripherals.
BOARD MEETINGS AND COMMITTEES
The Board met seven times during the fiscal year ended March 31, 1997.
Each director attended at least 75% of the meetings of the Board and the
Committees on which he served during such period.
Standing committees of the Board include an Audit Committee, a
Compensation Committee and a Nominating Committee. The Audit Committee
recommends engagement of the Company's independent accountants, reviews the
scope of the audit, considers comments made by the independent accountants and
reviews the non-audit services provided by the Company's independent
accountants. The Audit Committee met eleven times during fiscal 1997. At various
times during fiscal 1997, John Doyle, Robert Anderson, Thomas A. Sherby and Roy
L. Rogers served as members of the Audit Committee. Thomas Sherby and Roy Rogers
are the current members of the Audit Committee.
The Compensation Committee reviews and sets the level of cash and other
remuneration for the executive officers of the Company, subject to approval by
the Board. The Compensation Committee met twice during fiscal 1997. At various
times during fiscal 1997, Roy L. Rogers, Thomas Sherby and John Doyle served as
members of the Compensation Committee. Roy L. Rogers and Benjamin Huberman are
the current members of the Compensation Committee.
The Nominating Committee searches for and selects new members to fill
vacancies on the Board occurring between shareholder meetings and determines
which candidates will be presented to the shareholders as nominees for election,
subject to approval by the Board. Robert R. Anderson is the current member of
the Nominating Committee. The Nominating Committee will consider nominees for
director recommended by the shareholders of the Company to the Secretary at the
corporate headquarters.
PROPOSAL NO. 2
AMENDMENT OF THE COMPANY'S AMENDED AND RESTATED
ARTICLES OF INCORPORATION TO INCREASE THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK
The Company's Amended and Restated Articles of Incorporation currently
authorize the issuance of up to twenty five million (25,000,000) shares of
Common Stock. The Board of
4
<PAGE> 8
Directors proposes that the Amended and Restated Articles of Incorporation be
amended to increase the number of shares of Common Stock authorized to forty
million (40,000,000) .
As of July 15, 1997 approximately ___________ shares of the Company's
Common Stock were outstanding and approximately __________ shares of the
Company's Common Stock were reserved for issuance upon the exercise of
outstanding options and other contingent issuances of the Company's Common
Stock. The Board of Directors believes that the Company needs to increase the
authorized number of shares of Common Stock in order to continue to issue
options to attract and motivate employees, to enable the Company to attract and
retain qualified persons to serve as non-employee directors of the Company and
to have flexibility to raise capital in the future by issuing shares of its
Common Stock. As set forth elsewhere in this Proxy Statement, the Company plans
to increase the shares reserved under its Employee Stock Option Plan and the
Directors' Stock Option Plan.
A director and an executive officer/director, in consideration of the
Company's private placement of equity securities in April 1997 agreed to not
exercise any of their options and/or warrants to purchase shares of the
Company's Common Stock, until one of several conditions are met, including, such
time as the Company has received shareholder approval and effectively amended
its Amended and Restated Articles of Incorporation to increase its authorized
shares of Common Stock to cover the issuance of shares of Common Stock upon all
other contingent issuances of shares of Common Stock by the Company. Each such
officer and director has a personal interest in the proposed amendment to the
Amended and Restated Articles of Incorporation.
VOTE REQUIRED AND BOARD OF DIRECTORS' RECOMMENDATION
The affirmative vote of a majority of the outstanding shares of the
Company's Common Stock entitled to vote at the Annual Meeting of Shareholders,
at which a quorum is present and voting either in person or by proxy, is
required for approval of the proposals to amend the Amended and Restated
Articles of Incorporation to increase the authorized stock. Abstentions and
broker non-votes will each be counted as present for purposes of determining the
presence of a quorum. Abstentions will have the same effects as a negative vote.
Broker non-votes will have no effect on the outcome of this vote. The Board
believes that the proposed amendment to the Amended and Restated Articles of
Incorporation is in the best interests of the shareholders of the Company for
the reasons stated above. THEREFORE, THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSAL TO AMEND THE COMPANY'S AMENDED
AND RESTATED ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK.
PROPOSAL NO. 3
AMENDMENT TO 1988 STOCK OPTION PLAN
The 1988 Stock Option Plan (the "1988 Plan") was adopted by the Board on
May 16, 1988 and was approved by the Company's shareholders on August 23, 1988.
The 1988 Plan initially provided for the issuance of options to purchase up to
300,000 shares of Common Stock, plus any shares that were or that became
available for issuance under the Company's 1984 Employee Stock Option Plan which
expired in August 1989. Options to purchase 375,976 shares became available for
issuance under the former 1984 Employee Stock Option Plan. An amendment to the
1988 Plan to increase by 320,000 the number of shares reserved for issuance
thereunder and to make certain changes required by the California Department of
Corporations was approved by the Board on March 22, 1993 and by the Company's
shareholders on August 26, 1993. An amendment to the 1988 Plan to increase by
250,000 the number of shares reserved for issuance thereunder was approved by
the Board on May 16, 1994 and by the Company's shareholders on September 8,
1994. An amendment to the 1988 Plan to increase by 500,000 the number of shares
reserved for issuance thereunder was approved by the Board on July 24, 1995 and
by the Company's
5
<PAGE> 9
shareholders on September 6, 1995. An amendment to the 1988 Plan to increase by
1,000,000 the number of shares reserved for issuance thereunder was approved by
the Board on May 15, 1996 and by the Company's shareholders on September 19,
1996. Accordingly, a total of 2,745,976 shares have been reserved for issuance
under the 1988 Plan and as of July 15, 1997 there were approximately _________
shares available for issuance.
On June 6, 1997, the Board amended the 1988 Plan, subject to shareholder
approval, to increase the number of shares authorized to be issued thereunder
from 2,745,976 to 3,745,976. As of July 15 1997, options to purchase __________
shares were outstanding under the 1988 Plan, with exercise prices ranging from
$__________ to $__________ , a weighted average exercise price of $__________ ,
and expiration dates ranging from __________ to __________ , and __________
persons were eligible to participate in the 1988 Plan.
A summary of the principal provisions of the 1988 Plan and the proposed
amendments thereto is set forth below under "1988 Stock Option Plan."
The Board of Directors now seeks shareholder approval of the amendment to
the Company's 1988 Plan to increase the number of shares of the Company's Common
Stock available for issuance thereunder by 1,000,000 shares from a total of
2,745,976 shares to a total of 3,745,976 shares. An increase in the number of
shares reserved for issuance under the 1988 Plan is needed to enable the Company
to continue to grant options to employees in accordance with its existing
compensation policies. Management of the Company believes that the ability to
grant options to employees is essential to the Company's ability to attract and
retain highly qualified employees.
Since each executive officer of the Company is eligible to participate in
the 1988 Plan, each such officer has a personal interest in the proposed
amendment to the 1988 Plan.
VOTE REQUIRED AND BOARD OF DIRECTORS RECOMMENDATION.
The affirmative vote of a majority of the votes present and entitled to
vote at the Annual Meeting of Shareholders, at which a quorum representing a
majority of all outstanding shares of Common Stock of the Company is present and
voting, either in person or by proxy, is required for approval of this proposal.
Abstentions and broker non-votes will each be counted as present for purposes of
determining the presence of a quorum. Abstentions will have the same effect as a
negative vote on this proposal. Broker non-votes will have no effect on the
outcome of this vote.
The Board of Directors believes that the proposed amendment to increase
the share reserve of the 1988 Stock Option Plan is in the best interests of the
shareholders and the Company for the reasons stated above. THEREFORE, THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THIS PROPOSAL TO
INCREASE THE AGGREGATE MAXIMUM NUMBER OF SHARES ISSUABLE UNDER THE 1988 PLAN BY
1,000,000 SHARES.
PROPOSAL NO. 4
THE AMENDMENT TO THE 1990 DIRECTORS' STOCK OPTION PLAN.
The 1990 Directors' Stock Option Plan (the "Directors' Plan") was adopted
by the Board on May 14, 1990 and was approved by the Company's shareholders on
July 10, 1990. A total of 75,000 shares of Common Stock has been reserved for
issuance under the Directors' Plan. To the extent that any outstanding option
under the Directors' Plan expires or terminates prior to exercise in full, the
shares of Common Stock for which such option is not exercised become available
for future grants under the Directors' Plan. An amendment to the Directors' Plan
to increase by 50,000 the number of shares reserved for issuance thereunder was
approved by the Board on July 24, 1995
6
<PAGE> 10
and by the Company's shareholders on September 6, 1995. Accordingly, a total of
125,000 shares have been reserved for issuance under the Directors' Plan and as
of July 15, 1997 there were approximately __________ shares available for
issuance.
On June 6, 1997, the Board amended the Directors' Plan, subject to shareholder
approval, to increase the number of shares authorized to be issued thereunder
from 125,000 to 225,000. As of July 15, 1997, options to purchase ___ shares
were outstanding under the Directors' Plan, with exercise prices ranging from
___ to ___, a weighted average exercise price of ___, and expiration dates
ranging from ___ to ___.
A summary of the principal provisions of the Directors' Plan and the
proposed amendments thereto is set forth below under "1990 Directors' Stock
Option Plan."
The Board of Directors now seeks shareholder approval of the amendments
to the Company's Directors' Plan to increase the number of shares of the
Company's Common Stock available for issuance thereunder by 100,000 shares from
a total of 125,000 to a total of 225,000 shares. An increase in the number of
shares reserved for issuance under the Directors' Plan is needed to enable the
Company to continue to grant options to directors in accordance with its
existing compensation policies. Management of the Company believes that the
ability to grant options to directors is essential to the Company's ability to
attract and retain highly qualified non-employee directors.
Since each director of the Company is eligible to participate in the
Directors' Plan, each such director has a personal interest in the proposed
amendment to the Directors Plan.
VOTE REQUIRED AND BOARD OF DIRECTORS RECOMMENDATION
The affirmative vote of a majority of the votes present and entitled to
vote at the Annual Meeting of Shareholders, at which a quorum representing a
majority of all outstanding shares of Common Stock of the Company is present and
voting, either in person or by proxy, is required for approval of this proposal.
Abstentions and broker non-votes will each be counted as present for purposes of
determining the presence of a quorum. Abstentions will have the same effect as a
negative vote on this proposal. Broker non-votes will have no effect on the
outcome of this vote.
The Board of Directors believes that the proposed amendment to increase
the share resource of the 1990 Directors' Stock Option Plan are in the best
interests of the shareholders and the Company for the reasons stated above.
THEREFORE, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL
OF THIS PROPOSAL TO INCREASE THE AGGREGATE MAXIMUM NUMBER OF SHARES ISSUABLE
UNDER THE 1990 DIRECTORS' PLAN BY 100,000 SHARES.
7
<PAGE> 11
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth information concerning the compensation
paid to the two persons who served as the Company's Chief Executive Officer
during fiscal 1997 and the Company's three most highly compensated executive
officers who were serving as executive officers at the end of fiscal 1997 whose
salary and bonus for fiscal 1997 was at least $100,000 and two other former
executive officers whose salary and bonus for fiscal 1997 was at least $100,000
and who would have been among the Company's most highly compensated executive
officers, but for the fact that the individuals were not serving as executive
officers of the Company at the end of fiscal 1997, for all services in all
capacities to the Company during fiscal 1997, 1996 and 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
------------------------------------ ------------------------------
ALL OTHER
FISCAL SALARY BONUS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) (#) ($)(2)
- --------------------------- ------ ------ ------- ------- -------------
<S> <C> <C> <C> <C> <C>
Robert R. Anderson (3) 1997 50,000 0 250,000 0
Chairman of the Board 1996 85,322 85,803 40,000 0
and Chief Executive Officer 1995 2,000 0 0 0
Minoru Takagi 1997 244,311 0 30,000(15) 0
Vice President of SVR 1996 260,047(4) 0 20,000 0
and President of SVR K.K. 1995 271,930(5) 0 12,500 0
Dr. Teng-Sheng Moh (6) 1997 116,667 12,067 75,000(16) 11,375
Vice President of
Engineering 1996 94,271 37,521 42,500 0
and Support 1995 64,795 9,477 12,500 0
Dr. Ching-Chy Wang (7) 1997 108,024(8) 6,852 77,500(17) 8,613
Vice President of SVR 1996 94,167 17,133 20,500 0
and President of
SVR-Asia Pacific 1995 75,000 9,743 3,125 0
Former Officers:
Glenn E. Abood (9) 1997 142,500 22,206 450,000(18) 53,675
Chief Executive Officer 1996 131,415 51,701 250,000 31,408
1995 - - - -
Arthur E.B. Monk (10) 1997 124,993(11) 11,329 11,000 104,063
Vice President of Marketing and 1996 121,501 45,303 16,000 9,326
Corporate Development 1995 83,689 10,000 50,000 6,248
Craig Wentzel (12) 1997 143,063(13) 0 60,500(19) 66,175
Vice President of Sales 1996 48,709(14) 0 60,500 2,600
1995 - - - -
</TABLE>
- ----------------------
(1) The Executive Officers participated in a Bonus Plan known as the
"Management By Objectives" ("MBO") plan. Under this plan bonuses were paid
to officers quarterly based, in part, on the officer achieving
predetermined goals and, in part, on the profitability of the Company.
8
<PAGE> 12
(2) Other Compensation paid to the current executive officers and Arthur Monk
comprise car allowances. Amounts paid to Mr. Abood were $47,500 for
severance, $25,206 for moving expenses and the remainder for car
allowances. Other compensation for Mr. Wentzel was $30,000 for severance,
$30,000 for forgiveness of debt and the remainder for car allowances.
(3) Mr. Anderson became Chairman of SVR in January 1994 and resumed the
position of Chief Executive Officer in December 1996. Prior to that, Mr.
Anderson was Chief Executive Officer from April 1994 until July 1995 and
Chief Financial Officer from September 1994 to November 1995.
(4) Represents a base salary of $211,449 and commissions in the amount of
$48,598.
(5) Represents a base salary of $197,348 and commissions in the amount of
$74,582.
(6) Dr. Teng-Sheng Moh joined SVR as Senior Technologist in June 1994, was
named Director of Engineering in June 1995 and was named Vice President of
Engineering in November 1995. Dr. Moh has over 11 years experience in EDA
research and development.
(7) Dr. Ching-Chy Wang joined SVR in June 1994 as Principle Technologist and
was named Vice President of SVR and President of SVR Asia Pacific in
February 1996.
(8) Represents a base salary of $105,567 and commissions in the amount of
$2,457.
(9) Mr. Abood became Chief Executive Officer in July 1995 and terminated
December 1996. See also "Employment Agreements and Change-in-Control
Arrangements," later herein.
(10) Mr. Monk joined the Company as Vice President of Marketing in July 1994,
was named Vice President of Corporate Development in February 1995, was
named Vice President of Marketing and Corporate Development in April 1996
and terminated October 1996.
(11) Represents a base salary of $99,000 and commissions in the amount of
$25,993.
(12) Mr. Wentzel joined the Company as Vice President of Eastern Area Sales in
December 1995; became Vice President of Sales in April 1996 and terminated
January 1997.
(13) Represents a base salary of $90,000 and commissions in the amount of
$53,063.
(14) Represents a base salary of $40,000 and commissions in the amount of
$8,709.
(15) Includes options for 20,000 shares which were repriced on November 21,
1996, which amended options granted in fiscal 1996.
(16) Includes options for 55,000 shares which were repriced on November 21,
1996, which amended options granted in fiscal 1995, 1996 and 1997.
(17) Includes options for 35,500 shares which were repriced on November 21,
1996, which amended options granted in fiscal 1996 and 1997.
(18) Includes options for 350,000 shares which were repriced on November 21,
1996, which amended options granted in fiscal 1996 and 1997.
(19) Includes options for 60,500 shares which were repriced on November 21,
1996, which amended options granted in fiscal 1996.
9
<PAGE> 13
The following table sets forth certain information regarding individual
grants of stock options pursuant to the Company's 1988 Stock Option Plan during
fiscal 1997 to each of the persons named in the Summary Compensation Table
above.
OPTION GRANTS IN FISCAL 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZED VALUE AT
PERCENT OF ASSUMED ANNUAL RATES OF STOCK
OPTIONS TOTAL OPTIONS PRICE APPRECIATION FOR OPTION
GRANTED GRANTED TO EXERCISE TERM (1)
(SHARES) EMPLOYEES IN PRICE EXPIRATION ------------------------------
(#)(2) FISCAL 1997 ($/SH)(3) DATE (4) 5% 10%
----------- ------------- ----------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert R. Anderson 250,000 10% 1.3125 2/19/07 206,719 521,719
Minoru Takagi 10,000 * 1.3125 2/19/07 8,269 20,869
7,500 * 2.5000(5) 2/27/06 11,813 29,813
12,500 * 2.5000(5) 4/03/05 19,688 49,688
Teng-Sheng Moh 10,000 * 1.3125 2/19/07 8,269 20,869
10,000 * 4.7500 8/01/06 29,925 75,525
10,000 * 2.5000(5) 8/01/06 15,750 39,750
5,000 * 2.5000(5) 2/27/06 7,875 19,875
25,000 1% 2.5000(5) 11/22/05 39,375 99,375
12,500 * 2.5000(5) 6/01/05 19,688 49,688
2,500 * 2.5000(5) 10/17/04 3,938 9,938
Ching-Chy Wang 27,000 1% 1.3125 2/19/07 22,326 56,346
15,000 * 6.7500 7/01/06 63,788 160,988
15,000 * 2.5000(5) 7/01/06 23,625 59,625
3,000 * 2.5000(5) 2/27/06 4,725 11,925
15,000 * 2.5000(5) 2/13/06 23,625 59,625
2,500 * 2.5000(5) 6/01/05 3,938 9,938
Former Officers:
Glenn E. Abood 100,000 4% 4.5000 4/01/06 283,500 715,500
100,000 4% 2.5000(5) 4/01/06 157,500 397,500
250,000 10% 2.5000(5) 5/10/05 393,750 993,750
Arthur E.B. Monk 6,000 * 4.7500 2/27/06 17,955 45,315
5,000 * 4.8750 2/13/06 15,357 38,757
Craig Wentzel 5,500 * 2.5000(5) 2/27/06 8,663 21,863
5,000 * 2.5000(5) 2/13/06 7,875 19,875
50,000 2% 2.5000(5) 11/27/05 78,750 198,750
</TABLE>
*less than 1%
- -----------------
(1) Potential gains are net of exercise price, but before taxes associated
with exercise. These amounts represent certain assumed rates of
appreciation only based on Securities and Exchange Commission rules.
Actual gains, if any, on stock option exercises are dependent on future
performance of the Common Stock, overall market conditions and the
individual option holder's continued employment through the vesting
period.
(2) Unless otherwise indicated, all options were granted under the Company's
1988 Stock Option Plan. Options become exercisable as the underlying
shares vest. Generally, 20% of the shares subject to an option vest one
year after the date of grant, and the remaining shares vest in equal
monthly installments over the following four years. The Board retains
discretion to modify the terms (including the price) of outstanding
options granted under
10
<PAGE> 14
the 1988 Stock Option Plan. See also "Employment Agreements and
Change-in-Control Arrangements."
(3) All of these options have an exercise price equal to the fair market value
of the Company's Common Stock on the date of grant, except those noted as
having been amended, see footnote (5) below.
(4) The expiration date is the earlier to occur of six years after the options
have become fully vested or ten years after the date of grant. These
options vest over five years, 20% the first year, plus 1/60 per month over
the next four years.
(5) On November 21, 1996, the Compensation Committee of the Board of Directors
approved an offer to all employees permitting an election to amend options
with exercise prices in excess of $2.50 to change the exercise price to
the fair market value of the Company's Common Stock on that date, which
was $2.50, with continuation of the existing vesting schedule. These
options were amended.
The following table sets forth certain information concerning the
number and value at March 31, 1997 of unexercised options held by each of the
persons named in the Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF SECURITIES UNEXERCISED IN-THE-
UNDERLYING UNEXERCISED MONEY OPTIONS AT
OPTIONS AT FISCAL YEAR END(#) FISCAL YEAR END ($)(1)
----------------------------- ----------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert R. Anderson 0 -- 27,082 272,918 -- --
Minoru Takagi 0 -- 38,904 27,346 -- --
Teng-Sheng Moh 0 -- 23,540 51,460 -- --
Ching-Chy Wang 0 -- 11,435 60,440 -- --
Former Officers:
Glenn E. Abood 0 -- 0 350,000 -- --
Arthur E.B. Monk 28,125 20,859.38 0 37,875 -- --
Craig Wentzel 0 -- 18,766 41,734 -- --
</TABLE>
- -------------------
(1) The exercise prices of these stock options were above the market price of
the Company's Common Stock on March 31, 1997. The average of the high and low
market price as of March 31, 1997 was $1.125.
11
<PAGE> 15
The following table provides the specified information concerning all
repricings of options to purchase the Company's Common Stock held by any
executive officer.
TEN-YEAR OPTION REPRICING
<TABLE>
<CAPTION>
Length of
Number of Market Price Option Term
Underlying of Stock at Exercise Price Remaining at
Options Time of at Time of New Date of
Repricing Repriced or Repricing or Repricing or Exercise Repricing or
Name Date Amended(#) Amendment($) Amendment($) Price($) Amendment (1)
- ---- ---- ---------- ------------ ------------ -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Minoru Takagi 11/21/96 12,500 2.5000 3.4376 2.5000 100 months
11/21/96 7,500 2.5000 4.7500 2.5000 111 months
Teng-Sheng 11/21/96 2,500 2.5000 3.2500 2.5000 95 months
Moh 11/21/96 12,500 2.5000 5.0000 2.5000 103 months
11/21/96 25,000 2.5000 6.7500 2.5000 108 months
11/21/96 5,000 2.5000 4.7500 2.5000 111 months
11/21/96 10,000 2.5000 4.7500 2.5000 116 months
Ching-Chy 11/21/96 2,500 2.5000 5.0000 2.5000 103 months
Wang 11/21/96 15,000 2.5000 4.8750 2.5000 111 months
11/21/96 3,000 2.5000 4.7500 2.5000 111 months
11/21/96 15,000 2.5000 6.7500 2.5000 115 months
Warren Wong 11/21/96 75,000 2.5000 4.3200 2.5000 119 months
Former Officers:
Glenn E. 11/21/96 250,000 2.5000 3.1250 2.5000 102 months
Abood 11/21/96 100,000 2.5000 4.5000 2.5000 112 months
Cheryl 11/21/96 6,000 2.5000 2.7500 2.5000 78 months
Billings 11/21/96 7,500 2.5000 5.0000 2.5000 103 months
11/21/96 10,000 2.5000 4.8750 2.5000 111 months
11/21/96 4,500 2.5000 4.7500 2.5000 111 months
11/21/96 13,726 2.5000 5.1250 2.5000 118 months
11/21/96 15,000 2.5000 4.2510 2.5000 117 months
Gopi 11/21/96 100,000 2.5000 4.2510 2.5000 117 months
Ganapathy
Craig Wentzel 11/21/96 50,000 2.5000 7.5000 2.5000 108 months
11/21/96 5,000 2.5000 4.8750 2.5000 111 months
11/21/96 5,500 2.5000 4.7500 2.5000 111 months
</TABLE>
- ---------------
(1) Repriced options continue to vest on the same schedule as the original
option which is generally a five year vesting schedule with 20% vested one year
after original grant date and 1/60 vested monthly for the remaining four years.
12
<PAGE> 16
DIRECTOR COMPENSATION
Mr. Anderson received $50,000 for serving as an officer and no fee for
serving as a director. Mr. Anderson received options as set forth above under
"Option Grants in Fiscal 1997". Mr. Abood received $218,381 for serving as an
officer and no fee for serving as a director during the portion of the year he
was employed by the Company (see notes to Summary Compensation Table). Mr. Abood
received options as set forth above under "Option Grants in Fiscal 1997".
Officer Directors (defined below) receive no fee for serving as directors.
Effective April 1, 1995, Investor Directors (as defined below) are paid a
retainer of $6,000 per year, $500 for each Board meeting attended and $250 for
each Committee meeting attended; and Outside Directors (as defined below) are
paid a retainer of $8,000 per year, $1,000 for each Board Meeting attended and
$500 for each Committee meeting attended. Each of the Company's non-employee
directors is eligible to receive options under the Company's 1990 Directors'
Stock Option Plan, the terms of which are described below under "1990 Directors'
Stock Option Plan."
CERTAIN TRANSACTIONS
In January 1994, the Company issued to Robert R. Anderson, for $25,000, a
warrant to purchase 125,000 shares of the Company's Common Stock at $0.88 per
share. This warrant expires on January 20, 1999.
The subordinated debt which was issued in September 1994, under an
agreement with certain investors, required quarterly payments of interest at 7
1/2% and was subordinated to all indebtedness of the Company to banks, insurance
companies, factors or other lending or financial institutions regularly engaged
in the business of lending money, and was due in September 1996. One of the
investors was a 5% shareholder, J.F. Shea, and two were directors, Robert R.
Anderson and Roy L. Rogers, of the Company. The investors also purchased
warrants for $52,000 in cash entitling them to purchase 258,333 shares of
unregistered Common Stock of the Company at a price of $1.50 per share at any
time prior to September 1, 1999. This subordinated debt was paid in full by the
Company in February 1996.
On April 16, 1997 the Company completed a private placement of units
comprising 4,517,242 shares of Common Stock and warrants to purchase an
additional 4,517,242 shares of Common Stock at $1.31 per share through April 15,
2000. Four of the investors are 5% shareholders and participated in the
offering, as follows:
Austin W. Marxe purchased 574,713 shares and 574,713 shares subject to
warrants held by Special Situation Private Equity Fund, L.P., 862,069
shares and 862,069 subject to warrants held by Special Situation Fund III,
L.P. and 287,356 shares and 287,356 subject to warrants held by Special
Situations Cayman Fund, L.P. Mr. Marxe is a General Partner of Special
Situations Equity Fund, L.P., Special Situation Fund III, L.P.
and Special Situations Cayman Fund, L.P.
J.F. Shea Co., Inc. purchased 1,149,425 shares and 1,149,425 shares
subject to warrants.
Robert R. Anderson, an officer and director of the Company, purchased
287,356 shares and 287,356 subject to warrants.
Roy L. Rogers, a director of the Company, purchased 172,414 shares and
172,414 subject to warrants for the Rogers Family Trust.
13
<PAGE> 17
EMPLOYMENT AGREEMENTS AND CHANGE-IN-CONTROL ARRANGEMENTS
Under the Company's 1988 Stock Option Plan, in the event of a dissolution
or liquidation of the Company, a merger in which the Company is not the
surviving corporation, a transaction or series of transactions in which 50% or
more of the then outstanding voting stock is sold or otherwise transferred to a
single transferee or group of related transferees, or the sale of all or
substantially all of the assets of the Company, any or all outstanding options
may be assumed or replaced by the successor corporation, which assumption or
replacement shall be binding on all optionees. In the alternative, the successor
corporation may substitute equivalent options or provide substantially similar
consideration to optionees as was provided to shareholders (after taking into
account the existing provisions of the options). The successor corporation may
also issue, in place of outstanding shares of the Company held by the optionee,
substantially similar shares or other property subject to repurchase
restrictions no less favorable to the optionee.
Under the Company's Directors Plan, in the event of a Transfer of Control
(as defined in the Directors Plan) of the Company, any unexercisable or unvested
portion of outstanding options will be immediately exercisable and vested in
full as of the date 10 days prior to the date of the Transfer of Control. In
addition, the Board of Directors of the Company, in its sole discretion, may
arrange for the acquiring corporation to either assume the Company's rights and
obligations under outstanding options or substitute substantially equivalent
options for the acquiring corporation's stock for outstanding options. Any
options which are neither assumed or substituted by the acquiring corporation in
connection with the Transfer of Control nor exercised as of the date of the
Transfer of Control will terminate and cease to be outstanding as of the date of
the Transfer of Control.
In December 1996, Mr. Abood was removed from his position as Chief
Executive Officer. In October 1995, the Company entered into an employment
agreement with Mr. Abood pursuant to which Mr. Abood received monthly severance
payments at his final salary rate for six months following his termination.
Pursuant to the agreement, the Company had advanced Mr. Abood $100,000 as a
three year forgivable loan bearing interest at 5.9% per annum (one third of the
principal and all accrued interest on such loan was forgiven annually beginning
on the first anniversary of the loan, October 15, 1996). Additionally, the
contract provided for approximately $32,000 in reimbursement of relocation
expenses. Pursuant to the agreement, Mr. Abood was granted an option to purchase
250,000 shares of the Company's Common Stock at the fair market value on date of
grant. The agreement provided that Mr. Abood would receive stock option grants
to purchase 50,000 shares at the fair market value on the date of grant on each
of the first and second anniversaries of Mr. Abood's employment with the
Company. On April 8, 1996, the Compensation Committee of the Board of Directors
granted Mr. Abood a stock option for 100,000 shares pursuant to Mr. Abood's
employment contract. All of Mr. Abood's stock options have subsequently expired
unexercised.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company's Board of Directors approved a change in the Company's
independent accountants for the fiscal year ending March 31, 1996, from Coopers
& Lybrand L.L.P. to Price Waterhouse LLP on March 29, 1996, based on the
recommendation of the Audit Committee of the Board of Directors. The former
accountants neither resigned nor declined to stand for reelection. The
Registrant's Audit Committee and Board of Directors determined that sound
business practice suggested that it would be appropriate to consider
periodically whether the Registrant would be able to reduce its overall
accounting costs, while maintaining or enhancing the efficiency of the audit
process, by seeking competitive proposals on its accounting work. After
reviewing the proposals received (including a fee quote from its former
accountants), the Audit Committee recommended to the full Board that the
Registrant change accounting firms.
14
<PAGE> 18
During the interim period from April 1, 1995 through March 29, 1996, there
were no disagreements between the Company and Coopers & Lybrand L.L.P. on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which, if not resolved to the satisfaction of
Coopers & Lybrand L.L.P. would have caused it to make reference to the subject
matter of the disagreement in connection with its report. No "reportable event"
described in Item 304 of Regulation S-B (during such period of time the Company
was a small business issuer reporting under Regulation S-B) has occurred within
the period from April 1, 1995 through March 29, 1996.
The Company did not consult with Price Waterhouse LLP during the period
from April 1, 1995 through March 29, 1996, on any matter which was the subject
of any disagreement or any reportable event or on the application of accounting
principles to a specified transaction, either completed or proposed, or the type
of audit opinion that might be rendered on the Company's financial statements.
Members of the firm of Price Waterhouse LLP, the Company's principal
accountant for the current fiscal year, and for the most recently completed
fiscal year, are invited to the shareholders' meeting and are expected to
attend. They will have an opportunity, if they so desire, to make a statement
and will be available to respond to appropriate questions, if any there be.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), 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 with the SEC initial reports of ownership and reports
of changes in ownership of Common Stock and other equity securities of the
Company. Officers, directors and greater than ten percent beneficial owners are
required by SEC regulation to furnish the Company with copies of all reports
they file under Section 16(a).
To the Company's knowledge, based solely on its review of the copies of
such reports furnished to the Company and written representation that no other
reports were required, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten-percent beneficial owners were complied
with during the fiscal year ended March 31, 1997.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
The Compensation Committee (The "Committee") of the Board of Directors
is comprised of two nonemployee directors; Roy L. Rogers and Benjamin
Huberman.
COMPENSATION COMMITTEE POLICY
The Committee establishes base salary levels and target bonuses for the
Chief Executive Officer ("CEO") and other executive officers of the Company at,
or about, the beginning of each fiscal year. The Committee acts on behalf of the
Board of Directors to establish the general compensation policy of the company
for all executive officers of the Company. The Committee administers the equity
incentive plans, including the Company's 1988 Stock Option Plan and the Bonus
Plan for executive officers. The Committee believes that the compensation of the
CEO and the other executive officers should be commensurate with Company
performance and the individual executive's performance. The Committee also
believes that such compensation should be competitive with the compensation
executive officers receive at similar companies for similar services. In this
way, the Company will be able to attract and retain competent executive talent.
Consistent with this policy, a designated portion of the compensation of each
executive officer is
15
<PAGE> 19
contingent upon corporate performance and the executive's performance. Equity
incentives for executive officers are provided through the granting of stock
options under the Company's 1988 Stock Option Plan. During the formal Committee
meetings in fiscal year 1997, all discussions regarding compensation of the then
CEO, Glenn Abood, were held without his attendance. None of the other executive
officers of the Company were present during the discussions regarding their
compensation. Robert R. Anderson resumed the role of Chief Executive Officer of
the Company in December 1996, subsequent to the meeting of the Committee for
fiscal year 1997. His salary did not increase as a result of his resuming the
position of Chief Executive Officer, however he was granted 250,000 stock
options under the Company's 1988 Stock Option Plan.
In determining the executive officers' salaries, incentive compensation,
and stock option grants, the Committee makes reference to the Radford Survey of
competitive salaries in the technology sector for similar positions, informal
surveys and inquiries, which may be conducted by the Company from time to time,
and the Committee members' own knowledge and familiarity with competitive
compensation rates of executive officers within the electronics industry.
In preparing the performance graph for this Proxy Statement, The Company
has selected the Standard & Poors' High Technology Composite Index (The "S&P
High Technology Index"). The companies that the Company included in its
stratified salary surveys are not necessarily those included in the indices, as
such companies may not be competitive with the Company for executive talent.
FISCAL YEAR 1997 EXECUTIVE COMPENSATION
Base Salary. The base salaries of the executive officers for fiscal year
1997 were set by the Committee in April of 1996. The Committee set these
salaries on the basis of personal performance and the levels it believes are
comparable with other companies that compete for similar executive talent and
intends to compensate executive officers at the middle of the range of employees
of similar rank. The executive officers also qualify for and enjoy the standard
benefits that are available to full-time employees of the Company including
participation in a 401(k) plan.
Bonus Plan. This plan was established, and is administered, to encourage
personal performance and enhance overall company performance. The bonus is paid
quarterly and is based on the Company's profit and revenue goals (one half of
which is based on achievement of the annual revenue goal and one half of which
is based on achievement of the quarterly profit goal). The maximum potential
bonus payment for each executive officer who is a vice president is up to 35%
(25% for executive officers who are not vice presidents) of his or her annual
base salary if all goals are achieved and lower amounts are payable for partial
achievement of goals. This plan was in effect throughout fiscal year 1997 and
bonuses were paid to all executive officers except the Vice President of Sales
who does not participate in this plan but participates in an incentive-driven
commission plan not administered by the Committee. The Committee believes that
the Company's bonus plan is instrumental in encouraging top performance from its
executive officers.
Stock Options. Stock options are granted to executive officers when they
first join the Company, in connection with a significant increase in
responsibility, or to attain equality with a peer group. The Committee may grant
additional stock options to executive officers to continue to retain such
executives and provide incentives. The size of the option grants are determined
based on expected future performance, existing options held by each optionee and
other employees of similar rank and past performance. Generally, stock options
become exercisable as they vest at a price that is equal to the fair market
value of the Company's common stock on the date of grant. Generally, stock
options vest over a five-year period and are contingent on the continued
employment of the executive officer with the Company. At the beginning of fiscal
year 1997, the Committee granted incentive stock options to two then executive
officers. During fiscal year 1997, the Committee granted stock options to three
new executive officers as an incentive to join the Company; and stock options
were granted to three employees who were promoted to executive
16
<PAGE> 20
officers. Additional stock options were granted by the Committee during fiscal
year 1997 as incentives to six executive officers.
FISCAL YEAR 1997 CEO COMPENSATION
Mr. Anderson agreed to resume the position of Chief Executive Officer in
December 1996, receiving stock options for 250,000 shares. Until the Company
becomes profitable, Mr. Anderson agreed to continue his annual salary of
$50,000, which he received as a part-time officer of the Company.
Mr. Abood became the President and CEO of the Company in July 1995. The
Company and Mr. Abood entered into an employment agreement following arms-length
negotiations. Under this agreement, Mr. Abood was entitled to an annual salary
of $175,000, participation in the Company's employment benefit plans, and annual
incentive compensation payments. Pursuant to this employment agreement, Mr.
Abood was also granted stock options. See "Employment Agreements and
Change-in-Control Agreements" for a description of the terms of Mr. Abood's
employment agreement. In December 1996, Mr. Abood was removed from his position
as Chief Executive Officer.
TAX LIMITATION
Section 162(m) of the Internal Revenue Code limits deductions for
compensation paid to certain executive officers to the extent that such
compensation exceeds $1 million per officer in any year. An exemption from the
Section 162(m) limit exists for "performance-based" compensation. Compensation
recognized by an executive officer when he or she exercises an outstanding
option under the 1988 Stock Option Plan with an exercise price equal to the fair
market value of the option shares on the grant date will qualify as
performance-based compensation that will not be subject to the Section 162(m) $1
million limitation. The Company did not pay any nondeductible compensation to
any of its executive officers in fiscal year 1997. Since it is not expected that
the cash compensation to be paid to the Company's executive officers for fiscal
year 1998 will exceed the $1 million limit per officer, the Committee will defer
any decision on whether to limit the dollar amount of all other compensation
payable to the Company's executive officers to the $1 million upper limit.
Compensation Committee
Roy L. Rogers
Benjamin Huberman
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON REPRICING
OF OPTIONS
In November 1996, the Compensation Committee considered the options held
by the Company's executive officers and employees and the fact that a broad
decline in the price of the Common Stock of the Company had resulted in a
substantial number of stock options granted pursuant to the Company's Amended
1988 Stock Option Plan (the "Option Plan") having exercise prices well above the
recent historical trading prices of the Common Stock. The Committee was advised
by management that management believed employee turnover was likely to increase
in part because a substantial component of their compensation was comprised of
options with exercise prices well above the then current trading
17
<PAGE> 21
price, making such compensation less attractive than compensation offered by
other companies in the same geographic location granting options offering
greater opportunity for appreciation.
The Committee believed that (i) the Company's success in the future would
depend in large part on its ability to retain a number of its highly skilled
technical and managerial personnel, (ii) that competition for such personnel
would be intense, (iii) that the loss of key employees could have a significant
adverse impact on the Company's business, and (iv) that it would be important
and cost-effective to provide equity incentives to employees and executive
officers of the Company to improve the Company's performance and the value of
the Company for its stockholders. The Committee considered granting new options
to existing employees at fair market value, but recognized that the size of the
option grants required to offset the decline in market price would result in
significant additional dilution to stockholders. Considering these factors, the
Committee determined it to be in the best interests of the Company and its
stockholders to restore the incentives for employees and executive officers to
remain as employees of the Company and to exert their maximum efforts on behalf
of the Company by amending stock options under the Option Plan at the optionee's
election, to change the exercise price to the current market value of the
Company's Common Stock.
Accordingly, in November 1996, the Committee approved an offer to all
employees of the Company, including executive officers, to exchange outstanding
options with exercise prices above the then current trading price for options
with an exercise price equal to the current trading price. Options for 1,182,165
shares with exercise prices ranging from $2.5625 to $8.8750 were exchanged for
options for an equal number of shares at an exercise price of $2.50, the fair
market value of the Company's Common Stock on November 21, 1996, the date of the
Committee's approval of the repricing. See EXECUTIVE COMPENSATION AND OTHER
MATTERS - "Ten-Year Option Repricings" table for further information concerning
the repricing.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company's Board of Directors was formed
on January 23, 1995. The members of the Compensation Committee were Mr. Rogers
and Mr. Sherby. On August 30, 1996, Mr. Sherby resigned from the Compensation
Committee and Mr. Doyle was appointed to the Compensation Committee by the Board
of Directors. Neither of these persons was at any time during fiscal year 1997,
or at any other time, an officer or employee of the Company. No executive
officer of the Company serves as a member of the board of directors or
Compensation Committee of any entity that has one or more executive officers
serving as a member of the Company's Board of Directors or Compensation
Committee, except that Mr. Anderson serves as a member of the Board of Directors
of Knights Technology, Inc., a privately held company, which Mr. Sherby serves
as CEO and Chairman.
18
<PAGE> 22
PERFORMANCE MEASUREMENT COMPARISON
The following graph shows the total shareholder return of an investment of
$100 in cash on March 31, 1992 for (i) the Company's Common Stock, (ii) the
Standard & Poor's 500 Composite Index (the "S&P 500") and (iii) the S&P High
Technology Index (the "S&P HTC"). All values assume reinvestment of the full
amount of all dividends and are calculated as of March 31 of each year:
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG SILICON VALLEY RESEARCH, INC., THE S&P 500 INDEX
AND THE S&P HIGH TECH COMPOSITE INDEX
[GRAPH]
*The Graph Above Assumes $100 Invested on March 31, 1992 in Stock or Index --
Including Reinvestment of Dividends, Calculated as of Each Fiscal Year Ending
March 31. The Graph Above Was Plotted Using the Following Data:
<TABLE>
<CAPTION>
Measurement Period Silicon Valley S&P High Tech
(Fiscal Year Covered) Research, Inc. S&P 500 Composite
- --------------------- -------------- ------- ---------
<S> <C> <C> <C>
3/92 $ 100 $ 100 $ 100
3/93 124 115 110
3/94 61 117 130
3/95 186 134 165
3/96 249 177 223
3/97 62 212 301
</TABLE>
CHANGES TO BENEFIT PLAN
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<PAGE> 23
The Company has proposed an amendment to increase the number of shares
available for issuance under the Company's 1990 Directors' Stock Option Plan
from 125,000 to 225,000. Only non-employee directors of the Company are eligible
to participate in the Directors' Plan. During fiscal 1998, options granted to
all outside directors as a group are expected to total 9,000 shares. Exercise
prices are based upon the fair market value of the date of grant.
1988 STOCK OPTION PLAN
Set forth below is a summary of the principal features of the 1988 Plan,
which summary is qualified in its entirety by reference to the terms and
conditions of the 1988 Plan. The Company will provide, without charge, to each
person to whom a proxy statement is delivered, upon request of such person and
by first class mail, a copy of the 1988 Plan. Any such request should be
delivered as follows: Secretary, Silicon Valley Research, Inc., 6360 San Ignacio
Avenue, San Jose, CA 95119.
SUMMARY OF THE PROVISIONS OF THE 1988 PLAN
General. The 1988 Plan was adopted by the Board on May 16, 1988 and was
approved by the Company's shareholders on August 23, 1988. As adopted, the 1988
Plan provided for the issuance of options to purchase up to 300,000 shares of
Common Stock, plus any shares that were or that became available for issuance
under the Company's 1984 Employee Stock Option Plan which expired in August
1989. Options to purchase 375,976 shares became available for issuance under the
former 1984 Employee Stock Option Plan. An amendment to the 1988 Plan to
increase by 320,000 the number of shares reserved for issuance thereunder and to
make certain changes required by the California Department of Corporations was
approved by the Board on March 22, 1993 and by the Company's shareholders on
August 26, 1993. An amendment to the 1988 Plan to increase by 250,000 the number
of shares reserved for issuance thereunder was approved by the Board on May 16,
1994 and by the Company's shareholders on September 8, 1994. An amendment to the
1988 Plan to increase by 500,000 the number of shares reserved for issuance
thereunder was approved by the Board on July 24, 1995 and by the Company's
shareholders on September 6, 1995. An amendment to the 1988 Plan to increase by
1,000,000 the number of shares reserved for issuance thereunder was approved by
the Board on May 15, 1996 and by the Company's shareholders on September 19,
1996. Accordingly, a total of 2,745,976 shares have been reserved for issuance
under the 1988 Plan and as of July 15, 1997 there were approximately __________
shares available for issuance (without taking into account the proposed share
reserve increase).
On June 6, 1997, the Board amended the 1988 Plan, subject to shareholder
approval, to (i) increase the number of shares authorized to be issued
thereunder from 2,745,976 to 3,745,976. As of July 15, 1997, options to purchase
__________ shares were outstanding under the 1988 Plan, with exercise prices
ranging from $__________ to $__________, a weighted average exercise price of $
, and expiration dates ranging from __________ to __________ and ____ persons
were eligible to participate in the 1988 Plan.
Eligibility. Options may be granted under the 1988 Plan to employees,
officers, directors who are also employees, consultants, independent contractors
and advisers of the Company, or of any parent, subsidiary or affiliate of the
Company. Options granted under the 1988 Plan may be incentive stock options
("ISOs") within the meaning of section 422(b) of the Code or non-qualified stock
options ("NQSOs"); however, only employees (including officers and directors who
are also employees) of the Company, or a parent or subsidiary of the Company,
may be granted ISOs. No person may be granted options under the 1988 Plan to
purchase in excess of 250,000 shares in any fiscal year.
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<PAGE> 24
Administration. The 1988 Plan may be administered by the Board or by a
committee appointed by the Board. The Board or committee has discretion to
select optionees and to establish the terms and conditions of each option,
subject to the provisions of the 1988 Plan.
Terms and Conditions of Options. Each option granted under the 1988 Plan
is evidenced by a written stock option grant between the Company and the
optionee, specifying the number of shares subject to the option and the other
terms and conditions of the option, consistent with the requirements of the 1988
Plan. The exercise price of an option granted under the 1988 Plan must be at
least 100% of the fair market value of the Company's Common Stock on the date of
grant, except that for the grant of an option to a person holding 10% or more of
the total combined voting power of all classes of stock of the Company or any
parent or subsidiary of the Company (a "10% Shareholder") the exercise price
must be at least 110% of the fair market value of the Company's Common Stock on
the date of grant. As of July 15, 1997, the closing price the Company's Common
Stock was $ .
Options granted under the 1988 Plan will become exercisable and vested at
such times as specified by the Board or committee. Generally, options granted
under the 1988 Plan become exercisable as the underlying shares vest. Generally,
20% of the shares subject to an option vest one year after the date of grant and
the remaining shares in equal monthly installments over the following four
years, subject to the optionee's continued employment or service. The maximum
term of options granted under the Option Plan is ten years (except in the case
of an option granted to a 10% Shareholder, which must be exercised within five
years of the date of grant). Options are nontransferable by the optionee other
than by will or by the laws of descent and distribution, and are exercisable
during the optionee's lifetime only by the optionee.
Upon the termination of employment of an optionee for any reason other
than death or disability, the optionee's option may be exercised to the extent
(and only to the extent) that it was exercisable by the optionee on the date of
termination, within three months of the date of termination or such shorter
period as specified in the stock option grant. If the termination is due to the
death or disability of an optionee, this exercise period is extended to 12
months from the date of termination, or such shorter period as specified in the
stock option grant.
FEDERAL INCOME TAX INFORMATION
The following summary is intended only as a general guide as to the United
States federal income tax consequences under current law with respect to
participation in the 1988 Plan and does not attempt to describe all possible
federal or other tax consequences of such participation. Furthermore, the tax
consequences of options are complex and subject to change, and a taxpayer's
particular situation may be such that some variation of the described rules is
applicable. Optionees should consult their own tax advisors prior to the
exercise of any option and prior to the disposition of any shares of Common
Stock acquired upon the exercise of an option.
ISOs. The optionee will recognize no income upon the grant of an ISO and
incur no tax on its exercise (unless the optionee is subject to the alternative
minimum tax (the "AMT") described below). If the optionee holds the stock
acquired upon exercise of an ISO (the "ISO Shares") for at least one year after
the date the option was exercised and for at least two years after the date the
option was granted, the optionee generally will realize long-term capital gain
or loss (rather than ordinary income or loss) upon the disposition of the ISO
Shares. This gain or loss will be equal to the difference between the amount
realized upon such disposition and the amount paid for the ISO Shares.
If the optionee disposes of ISO Shares prior to the expiration of either
required holding period (a "disqualifying disposition"), the difference between
the fair market value of the ISO Shares on the date of exercise and the option
exercise price will be treated as ordinary income. Any gain in excess of that
amount will be a capital gain. If a loss is recognized, there will be no
ordinary income, and such loss will be a capital loss. A capital gain or loss
will be long-term if the
21
<PAGE> 25
optionee's holding period is more than 12 months. Any ordinary income recognized
by the optionee upon the disposition of the shares should be deductible by the
Company for federal income tax purposes.
Alternative Minimum Tax. Generally, the difference between the fair market
value of stock purchased by an exercise of an ISO (generally measured as of the
date of exercise) and the amount paid for that stock upon exercise of an ISO is
an adjustment to income for purposes of calculating the AMT (which is imposed
only to the extent that it exceeds the taxpayer's regular tax). Special rules
may apply with respect to certain subsequent sales of the shares in a
disqualifying disposition, certain basis adjustments for purposes of computing
the AMT income on a subsequent sale of the shares and certain tax credits which
may arise with respect to optionees subject to the AMT.
NQSOs. An optionee will not recognize any taxable income at the time a
NQSO is granted. However, upon exercise of a NQSO the optionee will include in
income, as compensation, an amount equal to the difference between the fair
market value of the shares on the date of exercise (in most cases) and the
optionee's purchase price. The included amount will be treated as ordinary
income by the optionee and may be subject to income and employment tax
withholding by the Company (either by payment in cash by the optionee or
withholding from the optionee's salary) if the optionee is an employee or former
employee. Upon resale of the shares by the optionee, any subsequent appreciation
or depreciation in the value of the shares will be treated as capital gain or
loss. A capital gain or loss will be long-term if the optionee's holding period
is more than 12 months. The Company will generally be entitled to a deduction to
the extent that the optionee recognizes ordinary income upon the exercise of a
NQSO and the Company satisfies any applicable withholding and reporting
requirements.
PROPOSED AMENDMENT
The amendment to the 1988 Plan, if approved by the required vote of the
shareholders of the Company at the Meeting, will increase the number of shares
of the Company's Common Stock that may be issued under the 1988 Plan from
2,745,976 to 3,745,976.
1990 DIRECTORS' STOCK OPTION PLAN
Set forth below is a summary of the principal features of the Directors'
Plan, as amended, which summary is qualified in its entirety by reference to the
terms and conditions of the Directors' Plan. The Company will provide, without
charge, to each person to whom a proxy statement is delivered, upon request of
such person and by first class mail, a copy of the Directors' Plan. Any such
request should be delivered as follows: Secretary, Silicon Valley Research,
Inc., 6360 San Ignacio Avenue, San Jose, CA 95119.
SUMMARY OF THE PROVISIONS OF THE PLAN AS AMENDED
General. The Directors' Plan was adopted by the Board on May 14, 1990 and
was approved by the Company's shareholders July 10, 1990. As adopted, a total of
75,000 shares of Common Stock were reserved for issuance under the Directors'
Plan. To the extent that any outstanding option under the Directors' Plan
expires or terminates prior to exercise in full, the shares of Common Stock for
which such option is not exercised become available for future grants under the
Directors' Plan. The Board and the shareholders have amended the Directors' Plan
from time to time in order to increase the number of shares issuable thereunder
and to modify the provisions regarding the grant of nonqualified stock options
to nonemployee directors pursuant to the Directors' Plan. A total of 125,000
shares have been reserved for issuance under the Directors' Plan and as of July
15, 1997, there were approximately ____ shares available for future grants under
the Directors' Plan.
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<PAGE> 26
On June 6, 1997, the Board amended the Directors Plan, subject to
shareholder approval, to increase the number of shares issuable thereunder from
125,000 to 225,000 (without taking into account the proposed share reserve
increase).
Administration. The Directors Plan is administered by the Board or a duly
appointed committee of the Board. However, under the Directors Plan, as amended,
the Board or the committee has no discretion to select the non-employee
directors of the Company who are granted options under the Directors Plan, to
set the exercise price of such options, to determine the number of shares for
which or the time at which particular options are granted or to establish the
duration of such options, except in the sense of administering the Directors
Plan subject to its provisions. The Board or committee is authorized to
interpret the Directors Plan and options granted under the Directors Plan, and
all such determinations of the Board or committee will be final and binding on
all persons having an interest in the Directors Plan or any option.
Eligibility. The Directors Plan provides for the automatic grant of stock
options (as discussed below) to directors of the Company who are not at the time
of option grant employees of the Company or of any parent or subsidiary
corporation of the Company (the "Outside Directors"). As of July 15, 1997,
options to purchase ___ shares were outstanding under the Directors Plan, with
exercise prices ranging from $____ to $____, a weighted average exercise price
of $____, and expiration dates ranging ____ to ____. As of July 15, 1997, three
Outside Directors were eligible to participate in the Directors Plan.
Automatic Grant of Options. In order to establish levels of automatic
grants to attract and retain qualified Outside Directors to contribute to the
long-term success of the Company, the Board amended the Directors Plan effective
January 23, 1995 (the "Effective Date") to provide that each Outside Director
who is initially elected or appointed to the Board after the Effective Date will
automatically be granted an option to purchase 15,000 shares of the Company's
Common Stock on the day immediately following such initial election or
appointment; provided, however, that for Outside Directors who own 1% or more of
the total combined voting power of the Company ("Investor Directors"), the
option will be for 10,000 shares (the "Initial Option). The Board amended the
Directors Plan to provide that the size of the Initial Option for each Outside
Director (who is not an Investor Director) elected after September 19, 1996 will
be 20,000 shares. In addition, the Board amended the Directors Plan to provide
that each Outside Director (who is not an Investor Director) who received an
Initial Option prior to June 20, 1996 will receive an additional grant of 5,000
shares pursuant to the Directors Plan, effective as of September 19, 1996,
provided that he was serving as an Outside Director as of the date as such. To
provide options of the same size to the Outside Directors serving on the Board
on the Effective Date each Outside Director then holding office was
automatically granted an option to purchase 15,000 shares of the Company's
Common Stock (10,000 shares for an Investor Director), less the number of shares
subject to options granted to such Outside Director under the Directors Plan
prior to the Effective Date. The Directors Plan also provides for the automatic
grant of an option to purchase 1,500 shares of the Company's Common Stock to
each Outside Director on April 1, 1995 and each anniversary thereof; provided,
however, that the size of such option will be 1,000 shares for Investor
Directors (the "Annual Option"). The Board has amended the Directors Plan to
provide that the size of the Annual Option for each Outside Director (who is not
an Investor Director) granted after the date of this Meeting will be 3,000
shares. In addition, the Board has amended the Directors Plan to provide that
each Outside Director (who is not an Investor Director) who received an Annual
Option prior to June 20, 1996 will receive an additional grant of 1,500 shares
pursuant to the Directors Plan provided that he is serving as an Outside
Director as of September 19, 1996. In addition, the Directors Plan provides for
the grant of an option on February 11, 1997 to each Outside Director who was
serving as a member of the Audit Committee of the Board on such date, which
option was for 10,000 shares (reduced by the number of shares subject to any
other options granted to the Outside Director on such date).
Terms and Conditions of Options. The exercise price of any option granted
under the Directors Plan must equal the fair market value, as determined
pursuant to the Directors Plan, of a
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<PAGE> 27
share of the Company's Common Stock on the date of grant. As of July 15, 1997,
the closing price of the Company's Closing Stock was $ . Each option granted
under the Directors Plan is evidenced by a written agreement between the Company
and the Outside Director specifying the number of shares subject to the option
and the other terms and conditions of the option, consistent with the
requirements of the Directors Plan. No option is exercisable after the
expiration of 10 years after the date such option is granted, subject to earlier
termination in the event the optionee ceases to be a director of the Company or
in the event of a Transfer of Control of the Company, as discussed below.
One-fourth of the shares subject to an option granted under the Directors Plan
generally become vested and exercisable one year after the date of grant and the
remaining shares vest in equal monthly installments over a three-year period
thereafter.
Shares subject to an option granted under the Directors Plan may be
purchased for cash, or in cash equivalent, by tender of shares of the Company's
Common Stock owned by the optionee having a fair market value not less than the
exercise price, by the assignment of the proceeds of a sale of some or all of
the shares of Common Stock being acquired upon the exercise of the option, or by
any combination of these. During the lifetime of the optionee, the option may be
exercised only by the optionee or the optionee's guardian or legal
representative. An option may not be transferred or assigned, except by will or
the laws of descent and distribution.
Transfer of Control. A "Transfer of Control" will be deemed to occur upon
any of the following events in which the shareholders of the Company do not
retain, directly or indirectly, at least a majority of the beneficial interest
in the voting stock of the Company or its successor: (i) the direct or indirect
sale or exchange by the shareholders of the Company of all or substantially all
of the stock of the Company, (ii) a merger in which the Company is a party, or
(iii) the sale, exchange or transfer of all or substantially all of the assets
of the Company. A Transfer of Control will also occur in the event of a
liquidation or dissolution of the Company. In the event of a Transfer of Control
of the Company, all shares subject to options outstanding under the Directors
Plan will become immediately exercisable and fully vested as of the date 10 days
prior to such event. In addition, the Board may arrange with the surviving,
continuing, successor, or purchasing corporation or parent corporation thereof
(the "Acquiring Corporation") to either assume outstanding options or substitute
options for the Acquiring Corporation's stock for the outstanding options. Any
options which are neither assumed or substituted for by the Acquiring
Corporation nor exercised as of the date of the Transfer of Control will
terminate effective as of such date.
Termination or Amendment. All options must be granted, if at all, within
10 years from May 14, 1990, the date the Directors Plan was initially adopted by
the Board. The Board or committee may terminate or amend the Directors Plan at
any time, but, without shareholder approval, the Board may not amend the
Directors Plan to increase the total number of shares of Common Stock reserved
for issuance thereunder or expand the class of persons eligible to receive
options.
SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES OF THE DIRECTORS PLAN
The federal income tax consequences of the options granted under the
Directors Plan are the same as the federal income tax consequences described for
nonqualified stock options granted pursuant to the Directors Plan set forth
above.
PROPOSED AMENDMENTS
The amendment to the 1990 Directors' Stock Option Plan, if approved by the
required vote of the shareholders of the Company at the Meeting, will increase
the number of shares of the Company's Common Stock that may be issued under the
Directors Plan from 125,000 to 225,000.
SHAREHOLDER PROPOSALS TO BE PRESENTED
AT NEXT ANNUAL MEETING
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<PAGE> 28
Proposals of shareholders intended to be presented at the next Annual
Meeting of the Shareholders of the Company must be received at the Company's
principal office not later than May 7, 1998, and satisfy the conditions
established by the Securities and Exchange Commission for shareholder proposals
to be included in the Company's proxy statement for that meeting.
OTHER BUSINESS
The Board does not presently intend to bring any other business before the
Meeting, and, so far as is known to the Board, no matters are to be brought
before the Meeting except as specified in the accompanying notice. As to any
business that may properly come before the Meeting, however, it is intended that
proxies, in the form enclosed, will be voted in respect thereof, in accordance
with the judgment of the persons voting such proxies.
By Order of the Board of Directors
Robert R. Anderson
Chairman
Dated July 29, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND
RETURN THE ACCOMPANYING PROXY PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE SO
THAT YOUR SHARES MAY BE REPRESENTED AT THE MEETING.
25
<PAGE> 29
SILICON VALLEY RESEARCH, INC.
ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert R. Anderson with full power of
substitution, to vote all shares of Silicon Valley Research, Inc. (the
"Company"), which the undersigned is entitled to vote at the Annual Meeting of
Shareholders to be held at our corporate headquarters, located at 6360 San
Ignacio Avenue, San Jose, California 95119, on Thursday, September 4, 1997, at
9:00 a.m. Pacific Daylight Time, and at any adjournment thereof, hereby
ratifying all that said proxy or his substitute may do by virtue hereof, and the
undersigned authorizes and instructs said proxy to vote as follows:
[X] Please mark your votes as this example
1. Election of Directors Nominees: For Withheld
Robert R. Anderson
Benjamin Huberman ___ ___
Roy L. Rogers
Thomas A. Sherby
2. To approve an amendment to the Company's Amended
and Restated Articles of Incorporation to
increase the number of shares of Common Stock
authorized from 25,000,000 to 40,000,000 ___ ___
3. To approve an amendment to the Company's 1988
Stock Option Plan that increases the number of
shares authorized to be issued thereunder
from 2,745,976 to 3,745,976 ___ ___
4. To approve amendments to the Company's Directors'
Stock Option Plan, that increases the number of
shares authorized to be issued thereunder from
125,000 to 225,000 ___ ___
*Note: Such other business as may properly come before the meeting or any
adjournment thereof
Dated ,1997
- ------------------------------ -------------
(Signature of Stockholder)
Dated , 1997
- ------------------------------ -------------
(Signature of Stockholder)
*Note: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full titles as such.
