<PAGE>
================================================================================
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
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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
SILICON VALLEY RESEARCH, INC.
6360 San Ignacio Avenue
San Jose, CA 95119
August 4, 1999
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
SILICON VALLEY RESEARCH, INC. on Monday, September 13, 1999, at the offices of
the Company's corporate counsel, Rosenblum, Parish & Isaacs, P.C.,160 West
Santa Clara Street, 15th Floor, San Jose, California, at 2:00 p.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 1999 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,
/s/ ROBERT R. ANDERSON
Robert R. Anderson
Chairman of the Board of Directors
Enclosures
<PAGE>
SILICON VALLEY RESEARCH, INC.
6360 San Ignacio Avenue
San Jose, CA 95119
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on Monday, September 13, 1999
----------------
Dear Shareholders:
You are invited to attend the Annual Meeting of Shareholders of SILICON
VALLEY RESEARCH, INC. (the "Company"), which will be held at 2:00 p.m.,
Pacific Daylight Time, on Monday, September 13, 1999, at the offices of the
Company's corporate counsel, Rosenblum, Parish & Isaacs, P.C.,160 West Santa
Clara Street, 15th Floor, 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 ratify the appointment of Moss Adams LLP as the Company's
independent public accountants for the fiscal year ending March 31, 2000.
3. 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 29, 1999 are entitled notice of, and to vote at, the meeting
and any adjournment thereof.
By Order of the Board of Directors
/s/ ROBERT R. ANDERSON
Robert R. Anderson
Chairman
San Jose, California
August 4, 1999
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>
PROXY STATEMENT
----------------
August 4, 1999
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 Monday, September 13,
1999, or any adjournment thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting. The date of this Proxy Statement is
August 4, 1999, 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, 1999 is
enclosed with this Proxy Statement.
Voting Securities. Only shareholders of record as of the close of business
on July 29, 1999 will be entitled to vote at the meeting and any adjournment
thereof. As of that date, there were 26,218,220 shares of common stock, no par
value ("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>
Stock Ownership of Certain Beneficial Owners and Management. The following
table sets forth certain information as of July 20, 1999, 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(1) of Class(2)
------------------------------ ----------------------- -----------
<S> <C> <C>
J.F. Shea Co., Inc.(3), (12)........ 9,547,687 30.0
655 Brea Canyon Road
Walnut, CA 91789
Austin Marxe(4)..................... 7,890,369 26.6
153 E. 53rd Street, 51st Floor
New York, NY 10022
Bay Area Micro-Cap Fund, L.P.(5),
(12)............................... 4,155,630 14.5
1151 Bay Laurel Drive
Menlo Park, CA 94025
David G. Arscott(6), (12)........... 2,751,315 9.9
1550 El Camino Real, Suite 275
Menlo Park, CA 94025
Robert R. Anderson(7), (12)......... 2,637,055 9.6
6360 San Ignacio Avenue
San Jose, CA 95119
James O. Benouis(8), (12)........... 2,240,755 8.4
7608 Highway 71 West, Suites C & D
Austin, TX 78735
Roy L. Rogers(9), (12).............. 1,964,057 7.2
2700 Sand Hill Road
Menlo Park, CA 94025
David R. Reebel..................... 1,384,615 5.3
6432 Old Harbor Lane
Austin, TX 78739
Minoru Takagi....................... 0 *
Laurence G. Colegate, Jr.(10)....... 114,942 *
David Knight........................ 0 *
All executive officers and directors
as a group(11) (4 persons)......... 7,629,125 25.6
</TABLE>
- --------
* Less than 1%
(1) Unless otherwise indicated below, each person or entity named in the
table has sole voting and sole investment power with respect to all
shares shown as beneficially owned, subject to community property laws
where applicable.
(2) Percentage of ownership is based on 26,218,220 shares of Common Stock
outstanding on July 20, 1999.
(3) Includes 3,460,395 shares and 5,600,518 shares subject to warrants
exercisable within 60 days of July 20, 1999 held by J.F. Shea Co., Inc.
("JFSCI"), 7,258 shares held by Peter O. Shea, Vice President and
Director of JFSCI, and 7,258 shares held by John F. Shea, President and
Director of JFSCI. Also includes 472,258 shares held by the E&M RP Trust
(of which Mr. Edmund H. Shea, Jr., Vice President and Director of JFSCI,
is trustee).
(4) Includes 1,331,784 shares and 1,331,784 shares subject to warrants
exercisable within 60 days of July 20, 1999 held by Special Situations
Private Equity Fund, L.P., 2,301,380 shares and 1,491,379 shares subject
to warrants exercisable within 60 days of July 20, 1999 held by Special
Situations Fund III, L.P. and 855,521 shares and 578,521 shares subject
to warrants exercisable within 60 days of July 20, 1999 held by
2
<PAGE>
Special Situations Cayman Fund, L.P. Mr. Marxe is a General Partner of
Special Situations Private Equity Fund, L.P., Special Situations Fund III,
L.P. and Special Situations Cayman Fund, L.P.
(5) Includes 1,628,165 shares and 2,473,665 shares subject to warrants
exercisable within 60 days of July 20, 1999 held by Bay Area Micro-Cap,
Fund L.P. ("BAMCF") and 53,800 shares held by Gregory F. Wilbur, a
General Partner of BAMCF.
(6) Includes 227,208 shares and 651,634 shares subject to warrants
exercisable within 60 days of July 20, 1999 held by Compass Chicago
Partners, L.P., 34,920 shares and 78,230 shares subject to warrants
exercisable within 60 days of July 20, 1999 held by Compass Management
Partners, L.P. and 777,137 shares and 958,088 shares subject to warrants
exercisable within 60 days of July 20, 1999 held by Compass Technology
Partners, L.P. Mr. Arscott is a General Partner of Compass Chicago
Partners, L.P., Compass Management Partners, L.P. and Compass Technology
Partners, L.P. Mr. Arscott disclaims beneficial ownership of the portion
of the shares and warrants that exceeds his proportionate interest in
the limited partnerships. Also includes 24,098 shares held directly by
Mr. Arscott.
(7) Includes 680,956 shares held in trusts of which Mr. Anderson is trustee,
including 610,956 shares held by the Robert R. and Sally E. Anderson
Trust, 12,500 shares held by the Robert K. Anderson Trust, 12,500 shares
held by the Sharon Davidson Trust, 35,000 shares held by the Timothy R.
Anderson Trust and 10,000 shares held by the Steven Davidson Trust. Also
includes 17,550 shares of which Mr. Anderson disclaims beneficial
ownership, including 2,550 shares owned by Sharon Davidson and 15,000
shares owned by Steven Davidson, two of Mr. Anderson's children. Also
includes 561,775 shares, 1,201,775 shares subject to warrants
exercisable within 60 days of July 20, 1999 and 174,999 shares subject
to options exercisable within 60 days of July 20, 1999 held directly by
Mr. Anderson.
(8) Includes 370,370 shares subject to warrants exercisable within 60 days
of July 20, 1999 and 105,000 shares subject to options exercisable
within 60 days of July 20, 1999.
(9) Includes 878,714 shares and 1,014,554 shares subject to warrants
exercisable within 60 days of July 20, 1999 held by the Rogers Family
Trust (of which Roy L. Rogers serves as trustee) and 15,000 shares held
by the Roy L. Rogers IRA. Also includes 45,789 shares and 10,000 shares
subject to options exercisable within 60 days of July 20, 1999.
(10) Includes 57,471 shares subject to warrants exercisable within 60 days of
July 20, 1999.
(11) Includes 279,999 shares subject to options exercisable within 60 days of
July 20, 1999 and 3,260,097 shares subject to warrants exercisable
within 60 days of July 20, 1999.
(12) The share amounts reflect the person's interests in the June and July,
1999 debt financing transaction that is discussed at "Certain
Transactions," supra. Please refer to that section for detail of the
change in the amounts shown above that may occur should the condition to
the July portion of the transaction remain unfulfilled as of July 31,
1999.
3
<PAGE>
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. Within this range, the authorized number
of directors is currently set at five. At the 1998 Annual Meeting of
Shareholders, four directors were elected to serve on the Company's Board of
Directors (the "Board") and there was one vacancy. In October 1998, Roy L.
Rogers resigned from his position on the Board and in December 1998, Thomas A.
Sherby resigned from his position on the Board. In June 1999, David G. Arscott
and David Knight were appointed to the Board. Management has nominated four
persons for election as director; therefore, unless an additional person is
nominated and elected, there will be one vacancy on the Board to be filled by
the Board with an interested and suitable candidate in the future.
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 Board. 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(1)(2)............................... 61 January 1994
Chairman
James O. Benouis....................................... 31 April 1998
President and CEO
David G. Arscott(1)(2)................................. 55 June 1999
David Knight(1)(2)..................................... 51 June 1999
</TABLE>
- --------
(1) Member of Audit Committee
(2) Member of Compensation Committee
Robert R. Anderson became Chairman of SVR in January 1994 and re-assumed the
position of Chief Executive Officer in December 1996 until August 1998. 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.
James O. Benouis became President and Chief Operating Officer of the Company
in March 1998 and was appointed Chief Executive Officer in August 1998. Mr.
Benouis came to the Company from Quality I.C. Corporation ("QIC"), an
integrated circuit design services company based in Austin, Texas, which was
acquired
4
<PAGE>
by the Company in March 1998, where he was President from 1995 to 1998. While
at QIC, his roles included project leadership for all IC design projects,
software enhancements and daily business operation management. He holds a
degree in Electrical Engineering from the University of Texas.
David G. Arscott is General Partner and Co-Founder of Compass Technology
Partners which invests in public and private technology companies. He began
his career with Citicorp Venture Capital Limited and in 1973 opened its West
Coast office. In 1978, Mr. Arscott co-founded Arscott Norton & Associates
which formed three venture capital funds. He is a director and past Chairman
of Lam Research Corporation and a director of Cyberstate University. He has
formerly served as President and Director of the Western Association of
Venture Capitalists. Mr. Arscott earned his B.A. degree from the College of
Wooster (1966) and his MBA from the University of Michigan.
David Knight is the Founder, Chairman and CEO of The Shearwater Group, Inc.,
a worldwide eda software distribution and support company founded in 1992
which provides software tools and turnkey hardware/software solutions for
Integrated Circuit ("IC") design. Prior to working at Shearwater, he co-
founded Ultratech Photomask and was Division President of Sierracin/EOI. Mr.
Knight has over thirty years experience in the IC design and manufacturing
industry.
Board Meetings and Committees
The Board met three times during the fiscal year ended March 31, 1999.
During the fiscal year ended March 31, 1999, the Audit Committee met once and
the Compensation Committee did not meet. 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 and a
Compensation 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. During fiscal
1999, Thomas A. Sherby and Roy L. Rogers served as members of the Audit
Committee and Robert R. Anderson, David G. Arscott, and David Knight 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. At various times during fiscal 1999, Roy L. Rogers, Thomas A.
Sherby and Robert R. Anderson served as members of the Compensation Committee.
Robert R. Anderson, David G. Arscott, and David Knight are the current members
of the Compensation Committee.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Moss Adams LLP as the Company's
independent auditors for the fiscal year ending March 31, 2000 and has further
directed that management submit the selection of independent auditors for
ratification by the stockholders at the Annual Meeting. Representatives from
Moss Adams LLP are expected to be present at the Annual Meeting, will have an
opportunity to make a statement, if they so desire, and will be available to
respond to appropriate questions.
Stockholder ratification of the selection of Moss Adams LLP as the Company's
independent auditors is not required by the Company's Bylaws or otherwise.
However, the Board is submitting the selection of Moss Adams LLP to the
stockholders for ratification as a matter of good corporate practice. In the
event the stockholders fail to ratify the appointment, the Board of Directors
will reconsider whether or not to retain that firm. Even if the selection is
ratified, the Board of Directors, in its discretion, may direct the
appointment of different independent auditors at any time during the year if
the Board of Directors determine that such a change would be in the best
interests of the Company and its stockholders.
5
<PAGE>
Vote Required and Board of Director's 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 UNANIMOUSLY
RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSAL TO RATIFY THE APPOINTMENT OF
MOSS ADAMS LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS.
6
<PAGE>
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth information concerning the compensation paid
for all services in all capacities to the Company during fiscal 1999, 1998 and
1997, (a) to the persons who served as the Company's Chief Executive Officer
during fiscal 1999 and (b) to the persons who served as executive officers
during fiscal 1999 whose salary and bonus for fiscal 1999 was at least
$100,000.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------------------ ------------
Other Annual All Other
Name and Fiscal Salary Bonus Compensation Options Compensation
Principal Position Year ($) ($)(1) ($)(2) (#) ($)(3)
------------------ ------ ------- ------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Robert R. Anderson...... 1999 20,833 0 -- 0 375
Chairman of the Board 1998 50,000 0 -- 290,000(4) 306
1997 50,000 0 -- 250,000 0
James O. Benouis........ 1999 175,000 0 -- 0 7,800
President and 1998 14,583 0 -- 350,000 650
Chief Executive Officer 1997 0 0 -- 0 0
Former Executive
Officers
- ----------------
Minoru Takagi........... 1999 150,000(5) 0 -- 0 0
Vice President of SVR, 1998 202,172(6) 0 -- 76,250(7) 0
and President of SVR
K.K. 1997 244,311 0 -- 30,000(8) 0
Laurence G. Colegate,
Jr. ................... 1999 155,000 0 -- 0 10,604
Senior Vice President, 1998 150,000 0 -- 120,000(9) 1,418
Finance and
Administration 1997 19,327 2,000 -- 100,000 77
</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.
(2) Such Other Annual Compensation did not exceed the lesser of (i) $50,000
or (ii) 10% of such executive officers' salary and bonus combined.
(3) All Other Compensation paid to the executive officers is comprised of
group-term life insurance premiums and auto allowances, except for $500
in 401(k) employer matching contributions for Mr. Colegate.
(4) Includes options for 290,000 shares which were repriced on July 17, 1997,
which replaced options granted in fiscal 1996 and 1997.
(5) Estimated amount.
(6) Represents a base salary of $191,892 and commissions in the amount of
$10,280.
(7) Includes options for 66,250 shares which were repriced on July 17, 1997,
which replaced options granted in fiscal 1992, 1994, 1995, 1996 and 1997.
(8) Includes options for 20,000 shares which were repriced on November 21,
1996, which replaced options granted in fiscal 1996.
(9) Includes options for 100,000 shares which were repriced on July 17, 1997,
which replaced options granted in fiscal 1997.
7
<PAGE>
Fiscal Year End Option Values (1)
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at Fiscal Year End(#) Fiscal Year End($)(2)
-------------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- -------------- --------------- ----------- -------------
<S> <C> <C> <C> <C>
Robert R. Anderson...... 153,331 146,669 -- --
James Benouis........... 70,000 280,000 -- --
Minoru Takagi........... 0 0 -- --
Laurence G. Colegate,
Jr. ................... 46,666 73,334 -- --
</TABLE>
- --------
(1) There were no exercises of options to purchase the Company's Common Stock
by the persons named in the Summary Compensation Table during fiscal 1999.
(2) The exercise prices of these stock options were above the market price of
the Company's Common Stock on March 31, 1999. The average of the high and
low market price as of March 31, 1999 was $0.135.
8
<PAGE>
The following table provides the specified information concerning all
repricings of options to purchase the Company's Common Stock held by any
executive officer from April 1, 1989 to March 31, 1999.
TEN-YEAR OPTION REPRICING
<TABLE>
<CAPTION>
Number of
Underlying Market Price Exercise Length of Original
Options of Stock at Price at Option Term
Repriced Time of Time of Remaining at Date
Repricing or Repricing or Repricing or New Exercise of Repricing or
Name and Position Date Amended(#) Amendments($) Amendment($) Price($) Amendment(1)
----------------- --------- ---------- ------------- ------------ ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Robert Anderson........ 7/17/97 250,000 0.8750 1.3125 0.8750 115 months
Chairman 7/17/97 40,000 0.8750 3.4376 0.8750 93 months
Former Executive Offi-
cers:
Laurence Colegate...... 7/17/97 100,000 0.8750 1.3125 0.8750 115 months
Former Senior VP,
Finance and
Administration
Donald Hanson.......... 7/17/97 100,000 0.8750 1.0625 0.8750 119 months
Former CTO
Minoru Takagi.......... 7/17/97 3,750 0.8750 1.7500 0.8750 51 months
Former VP and Pres. of
SVR K.K. 7/17/97 7,500 0.8750 2.3000 0.8750 69 months
7/17/97 12,500 0.8750 1.0000 0.8750 75 months
7/17/97 12,500 0.8750 1.1250 0.8750 81 months
7/17/97 10,000 0.8750 1.3125 0.8750 115 months
7/17/97 7,500 0.8750 2.5000 0.8750 103 months
7/17/97 12,500 0.8750 2.5000 0.8750 92 months
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 Moh......... 7/17/97 10,000 0.8750 1.6250 0.8750 83 months
Former VP of
Engineering and
Support 7/17/97 10,000 0.8750 1.3125 0.8750 115 months
7/17/97 25,000 0.8750 1.1875 0.8750 117 months
7/17/97 10,000 0.8750 2.5000 0.8750 98 months
7/17/97 5,000 0.8750 2.5000 0.8750 103 months
7/17/97 25,000 0.8750 2.5000 0.8750 100 months
7/17/97 12,500 0.8750 2.5000 0.8750 95 months
7/17/97 2,500 0.8750 2.5000 0.8750 87 months
11/21/96 2,500 2.5000 3.2500 2.5000 95 months
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 Wang......... 7/17/97 9,375 0.8750 1.7500 0.8750 83 months
Former VP and Pres. of
SVR--Asia Pacific 7/17/97 27,000 0.8750 1.3125 0.8750 115 months
7/17/97 15,000 0.8750 2.5000 0.8750 107 months
7/17/97 3,000 0.8750 2.5000 0.8750 103 months
7/17/97 5,000 0.8750 2.5000 0.8750 103 months
7/17/97 2,500 0.8750 2.5000 0.8750 95 months
11/21/96 2,500 2.5000 5.0000 2.5000 103 months
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............ 7/17/97 25,000 0.8750 1.3125 0.8750 115 months
Former VP of Sales 7/17/97 75,000 0.8750 2.5000 0.8750 111 months
11/21/96 75,000 2.5000 4.3200 2.5000 119 months
Glenn E. Abood......... 11/21/96 250,000 2.5000 3.1250 2.5000 102 months
Former CEO 11/21/96 100,000 2.5000 4.5000 2.5000 112 months
Cheryl Billings........ 11/21/96 6,000 2.5000 2.7500 2.5000 78 months
Former CFO 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 Ganapathy......... 11/21/96 100,000 2.5000 4.2510 2.5000 117 months
Former CTO
Craig Wentzel.......... 11/21/96 50,000 2.5000 7.5000 2.5000 108 months
Former VP of Sales 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.
9
<PAGE>
Director Compensation
Directors who are also Company employees receive no fee for serving as
directors. Mr. Anderson received $20,833 for serving as an officer and no fee
for serving as a director. Mr. Benouis received $182,800 for serving as an
officer and no fee for serving as a director. Effective April 1, 1995,
"Outside Directors", directors of the Company who are not at the time of
option grant employees of the Company or any parent or subsidiary corporation
of the Company, are paid a retainer of $8,000 per year, $1,000 for each Board
Meeting attended and $500 for each Committee meeting attended and "Investor
Directors", that is Outside Directors who own or are affiliates of those who
own 1% or more of the total combined voting power of the Company, are paid a
retainer of $6,000 per year, $500 for each Board meeting attended and $250 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.
General. The Directors' Plan was adopted by the Board on May 14, 1990 and
was approved by the Company's shareholders on 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 non-employee directors pursuant to the
Directors' Plan. A total of 225,000 shares have been reserved for issuance
under the Directors' Plan and as of July 20, 1999, there were approximately
101,000 shares available for future grants under the Directors' Plan.
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 20, 1999,
options to purchase 114,000 shares were outstanding under the Directors' Plan,
with exercise prices ranging from $0.14 to $1.4375, a weighted average
exercise price of $0.2811, and expiration dates ranging January 24, 2001 to
June 14, 2009. As of July 20, 1999, three Outside Directors were eligible to
participate in the Directors' Plan.
Automatic Grant of Options. The Directors' Plan presently provides that each
Outside Director who is initially elected or appointed to the Board will
automatically be granted an option to purchase 45,000 shares of the Company's
Common Stock on the day immediately following such initial election or
appointment (the "Initial Option"). The Directors' Plan also currently
provides for the automatic grant of an option to purchase 9,000 shares of the
Company's Common Stock to each Outside Director (the "Annual Option"). In
addition, the Directors' Plan provided 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 share of the Company's Common Stock on
the date of grant. As of July 20, 1999, the closing price of the Company's
Common Stock was $0.14. 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
10
<PAGE>
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, by May 14,
2010. 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.
Certain Transactions
On June 8, 1998, the Company completed a private placement of units
comprising 2,377,909 shares of Common Stock and warrants to purchase an
additional 2,377,909 shares of Common Stock at $0.37 per share with an
expiration date of May 29, 2005. Five of the investors were 5% shareholders,
officers or directors at the time of the offering and participated in the
offering, as follows:
Austin W. Marxe, a 10% shareholder, purchased 81,395 shares and 81,395
shares subject to warrants for Special Situations Private Equity Fund, L.P.
and 81,395 shares and 81,395 shares subject to warrants for Special
Situations Cayman Fund, L.P. Mr. Marxe is a General Partner of Special
Situations Private Equity Fund, L.P. and Special Situations Cayman Fund,
L.P.
J.F. Shea Co., Inc., a 10% shareholder, purchased 872,093 shares and
872,093 shares subject to warrants.
Bay Area Micro-Cap Fund, L.P., a 5% shareholder, purchased 348,837 shares
and 348,837 shares subject to warrants.
Robert R. Anderson, an officer and director of the Company, purchased
150,000 shares and 150,000 shares subject to warrants.
Roy L. Rogers, a director of the Company at the time, purchased 58,140
shares and 58,140 shares subject to warrants for the Rogers Family Trust.
11
<PAGE>
During June and July 1999, the Company undertook a subordinated debt
financing comprised of promissory notes ("Notes"), and warrants to purchase
shares of Common Stock ("Warrants"). The Notes are three-year notes with an
aggregate principal amount of $1,000,000, including second closing Notes as
described below. The Notes earn simple interest at a rate of ten percent per
year. The Company issued an aggregate of 8,000,000 Warrants at $0.01 per
Warrant, including second closing Warrants as described below. Each Warrant
will purchase one share of Common Stock at the exercise price of $0.125 per
share and has an expiration date of June 16, 2004.
This financing transaction is comprised of two closings. The first closing
took place on June 7, 1999. Five of the investors were 5% shareholders,
officers or directors at the time of the offering and participated in the
offering, as follows:
J.F. Shea Co., Inc., a 10% shareholder of the Company, purchased a
$250,000 Note and 2,000,000 Warrants.
Bay Area Micro-Cap Fund, L.P., a 10% shareholder of the Company,
purchased a $100,000 Note and 800,000 Warrants.
David G. Arscott, a director and 5% shareholder of the Company, purchased
a $50,000 Note and 400,000 Warrants for Compass Technology Partners, L.P.,
and a $50,000 Note and 400,000 Warrants for Compass Chicago Partners, L.P.
Mr. Arscott is a General Partner of Compass Technology Partners, L.P., and
Compass Chicago Partners, L.P.
Roy L. Rogers, a 5% shareholder of the Company, purchased a $50,000 Note
and 400,000 Warrants for the Rogers Family Trust.
Robert R. Anderson, an officer and director of the Company, purchased a
$50,000 Note and 400,000 Warrants.
The second closing, occurred on July 15, 1999, subject to one condition,
that the Company negotiate a workout agreement with the Credit Managers'
Association to resolve accounts payable issues. The workout must be acceptable
to holders of a majority in principal amount of the 258,704 Notes issued in
this closing, and must be negotiated on or before July 31, 1999. Six of the
investors in this closing were 5% shareholders, officers or directors at the
time of the offering and participated in the offering, as follows:
J.F. Shea Co., Inc., a 10% shareholder of the Company, purchased a
$80,000 Note and 640,000 Warrants.
Bay Area Micro-Cap Fund, L.P., a 10% shareholder of the Company,
purchased a $60,000 Note and 480,000 Warrants.
David G. Arscott, a director and 5% shareholder of the Company, purchased
a $15,740.74 Note and 125,926 Warrants for Compass Technology Partners,
L.P., a $15,740.74 Note and 125,926 Warrants for Compass Chicago Partners,
L.P and a $5,925.92 Note and 47,407 Warrants for Compass Management
Partners, L.P. Mr. Arscott is a General Partner of Compass Technology
Partners, L.P., Compass Chicago Partners, L.P. and Compass Management
Partners, L.P.
Roy L. Rogers, a 5% shareholder of the Company, purchased a $25,000 Note
and 200,000 Warrants for the Rogers Family Trust.
Robert R. Anderson, an officer and director of the Company, purchased a
$10,000 Note and 80,000 Warrants.
James O. Benouis, an officer and director of the Company, purchased a
$46,296.30 Note and 370,370 Warrants.
12
<PAGE>
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.
Independent Public Accountants
Members of the firm of Moss Adams 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. The Company's former principal
accountant, PricewaterhouseCoopers LLP resigned as of May 14, 1999, and the
services of Moss Adams LLP were retained on May 17, 1999.
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 regulations 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, 1999 with the exception
of a Form 5 for Thomas A. Sherby, a former director, that was filed with the
SEC one day past the due date.
13
<PAGE>
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 three non-employee directors; Messrs. Anderson, Arscott, and
Knight. None of these persons was a Committee member during fiscal year 1999,
except for Mr. Andersen who became a member during October 1998.
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 the Company's 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 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.
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 1999 Executive Compensation
Base Salary. The base salaries of the executive officers for fiscal year
1999 were set on an individual basis at various times by the Committee. 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. The Committee generally 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 1999. No bonuses were paid for fiscal 1999 to any executive officers. 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
14
<PAGE>
may grant additional stock options to executive officers to continue to retain
such executives and provide incentives. The size of the option grants is
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. There were
no stock options granted to executive officers during fiscal year 1999.
Fiscal Year 1999 CEO Compensation
Compensation for the CEO is determined through a process similar to that
discussed above for executive officers. Mr. Benouis received stock options for
350,000 shares and an annual salary of $175,000 when he joined the Company as
President and Chief Operating Officer in March 1998. In August 1998, he was
appointed Chief Executive Officer. Mr. Benouis did not receive a salary
increase and was not granted additional options. Mr. Benouis did not receive a
bonus for fiscal 1999.
Mr. Anderson agreed to re-assume the position of Chief Executive Officer in
December 1996, receiving stock options for 250,000 shares. Mr. Anderson agreed
to continue his annual salary of $50,000, which he received as a part-time
officer of the Company prior to December 1996. He held the position of CEO and
received a salary through August 1998. Mr. Anderson did not receive a bonus
for fiscal 1999.
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 1999. Since it is not expected
that the cash compensation to be paid to the Company's executive officers for
fiscal year 2000 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
Robert R. Anderson
15
<PAGE>
Compensation Committee Interlocks and Insider Participation
During fiscal 1999, the members of the Compensation Committee consisted of
Mr. Rogers and Dr. Sherby until their respective resignations. Mr. Anderson
became a member of the Compensation Committee in October 1998. None of these
persons was at any time during fiscal year 1999, or at any other time, an
officer or employee of the Company, except Mr. Anderson who was employed by the
Company until August 1998 and remains an officer. 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.
Performance Measurement Comparison
The following graph shows the total shareholder return of an investment of
$100 in cash on March 31, 1994 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
[PERFORMANCE GRAPH APPEARS HERE]
*The graph above assumes $100 invested on March 31, 1994 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>
3/94.................................... $100 $100 $100
3/95.................................... 305 116 127
3/96.................................... 410 153 171
3/97.................................... 103 183 231
3/98.................................... 83 271 349
3/99.................................... 12 321 560
</TABLE>
16
<PAGE>
SHAREHOLDER PROPOSALS TO BE PRESENTED
AT NEXT ANNUAL MEETING
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 April 3, 2000, 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.
Notice of a shareholder proposal not submitted for inclusion in the company's
proxy statement will be considered untimely if received after June 20, 2000.
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
/s/ ROBERT R. ANDERSON
Robert R. Anderson
Chairman
Dated August 4, 1999
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.
17
<PAGE>
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 or James O. Benouis, or
either of them, as proxies, 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 the offices
of the Company's corporate counsel, Rosenblum, Parish & Isaacs P.C., located at
160 West Santa Clara Street, 15th Floor, San Jose, California 95113, on Monday,
September 13, 1999, at 2:00 p.m. Pacific Daylight Time, and at any adjournment
or postponement 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 specified below.
The undersigned hereby acknowledges receipt of: (1)Notice of Annual Meeting of
Shareholders to be held on September 13, 1999, (2)the accompanying Proxy
Statement, and (3)the Annual Report of the Company for the fiscal year ended
March 31, 1999.
(Continued and to be dated and signed on the other side.)
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
SILICON VALLEY RESEARCH, INC.
September 13, 1999
The shares represented hereby will be voted as specified.
If no specification is made, such shares will be voted FOR proposals 1 and 2.
[X] Please mark your
votes as in this
example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
For Withheld Nominees:
1. Election of [_] [_] Robert R. Anderson
Directors James O. Benouis
David G. Arscott
David Knight
For all nominees except as noted below.
________________________________________________________
For Against Abstain
2. To ratify the appointment of Moss Adams LLP as the [_] [_] [_]
Company's independent public accountants for the
fiscal year ending March 31, 2000.
3. To transact such other business as may properly
come before the meeting or any adjournment thereof.
Mark here for change of address and note at left. [_]
Mark here if you plan on attending the annual
meeting in person. [_]
Mark here if you do not plan on attending the annual
meeting in person. [_]
Signature(s)_________________________________ Dated: _____________________,1999.
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 title as such. If a corporation, please sign in full corporate
name by President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
