SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment no. 1)
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
[X] Definitive Proxy Statement Commission Only (as permitted by
[ ] Definitive Additional Materials Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
STANFORD TELECOMMUNICATIONS, INC.
------------------------------------------------------------------------
(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 transactions applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
STANFORD TELECOMMUNICATIONS, INC.
Notice of Annual Meeting of Stockholders
To Be Held June 24, 1998
The Annual Meeting of the Stockholders of Stanford Telecommunications,
Inc. (the "Company") will be held at the Sunnyvale Hilton, 1250 Lakeside Drive,
Sunnyvale, California 94086, on Wednesday, June 24, 1998, at 6:00 p.m. local
time, for the following purposes:
1. To elect six Directors to serve for the ensuing year as set forth in
the attached Proxy Statement.
2. To amend the 1992 Employee Stock Purchase Plan increasing the number
of shares of Common Stock issuable thereunder from 400,000 to 700,000.
3. To ratify the selection of Arthur Andersen LLP as the Company's
independent public accountants for the current fiscal year.
4. To transact such other business as may properly come before the
meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on May 1, 1998
as the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and any adjournment thereof. In accordance with
Delaware law, a complete list of stockholders entitled to notice of and to vote
at the meeting will be available at the Company's executive offices, 1221
Crossman Avenue, Sunnyvale, California 94089, for ten days prior to the meeting.
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE SIGN, DATE
AND RETURN THE ENCLOSED PROXY PROMPTLY.
By order of the Board of Directors,
JEROME F. KLAJBOR
Secretary
Sunnyvale, California
May 29, 1998
<PAGE>
STANFORD TELECOMMUNICATIONS, INC.
1221 Crossman Avenue
Sunnyvale, California 94089
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Stanford Telecommunications, Inc., a Delaware
corporation (the "Company"), of proxies in the accompanying form to be used at
the Annual Meeting of Stockholders to be held at the Sunnyvale Hilton, 1250
Lakeside Drive, Sunnyvale, California 94086, on June 24, 1998 at 6:00 p.m. local
time and any adjournment thereof. Proxies may be revoked at any time before they
are voted by filing with the Secretary of the Company a written notice of
revocation or by duly executing a proxy bearing a later date. A proxy may also
be revoked before it is voted by any stockholder present at the meeting who
expresses a desire to vote his or her shares of common stock, par value $.01 per
share, of the Company ("Common Stock") in person. Subject to any such
revocation, all shares of Common Stock represented by properly executed proxies
will be voted in accordance with the specifications on the enclosed proxy. If no
choice is so specified, the shares will be voted FOR the election of the six
nominees for Director listed in this Proxy Statement, FOR amending the Employee
Stock Purchase Plan increasing the number of shares of Common Stock issuable
thereunder from 400,000 to 700,000 and FOR the ratification of Arthur Andersen
LLP as the Company's independent public accountants.
The close of business on May 1, 1998 has been fixed as the record date
for determining the holders of Common Stock entitled to notice of and to vote at
the meeting. On such date, there were 12,975,088 shares of Common Stock
outstanding and entitled to vote. Each outstanding share of Common Stock is
entitled to one vote on all matters including the election of Directors whose
names have been placed in nomination. A majority of the outstanding shares will
constitute a quorum for the transaction of business at the meeting. Abstentions
and broker non-votes will be counted for purposes of determining the presence or
absence of a quorum. The six nominees receiving the highest number of votes will
be elected as the Directors of the Company. Abstentions and broker non-votes
will be counted in tabulations of the votes cast for amending the Employee Stock
Purchase Plan and the ratification of the selection of Arthur Andersen LLP, as
the Company's independent public accountant and, as a result, will have the same
effect as negative votes.
A copy of the Company's 1998 Annual Report to Stockholders containing
financial statements for fiscal year 1998 accompanies this Proxy Statement. The
Company's fiscal year is composed of four 13-week quarters, each of which ends
on the Thursday closest to the corresponding calendar quarter end. Fiscal year
1998 ended on March 26, 1998.
This Proxy Statement and the accompanying form of proxy are first being
sent to stockholders on or about May 29, 1998.
The expense of printing and mailing proxy material will be borne by the
Company. The Company will reimburse brokers and nominees for their reasonable
out-of-pocket expenses in forwarding soliciting material to beneficial owners of
shares held of record by such brokers and nominees. In addition to the
solicitation of proxies by mail, solicitation may be made by certain Directors,
Officers and other employees of the Company by personal interview, telephone or
telefax; no additional compensation will be paid for such solicitation.
-1-
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
Six directors are to be elected to serve until the next Annual Meeting
of Stockholders and until their respective successors are duly elected. Each of
the nominees named below is presently a Director of the Company. In the event
that any nominee becomes unable or declines to serve for any reason, proxies may
be voted for the election of the balance of those nominees named and for such
other person or persons as the proxy holders or the present Board of Directors
(the "Board") may select, or the size of the Board may be reduced in accordance
with the by-laws of the Company. The Board has no reason to believe that any of
the nominees named will be unable or unwilling to serve.
INFORMATION WITH RESPECT TO NOMINEES AND DIRECTORS
<TABLE>
Set forth below are the names and ages of the nominees and Directors,
their principal occupations at present and for the past five years, certain
directorships held by certain of the nominees and the year in which each became
a Director of the Company.
<CAPTION>
Name and Principal Occupation at Present Director
and for the Past Five Years; Directorships Since Age
------------------------------------------ ----- ---
<S> <C> <C>
James J. Spilker, Jr........................................................... 1973 64
Dr. Spilker, a founder of the Company, is Chairman of the Board and
Principal Scientist. He served as President and Chief Executive Officer
of the Company from August 1981 to June 1995.
Val P. Peline.................................................................. 1985 67
Dr. Peline was elected as a Director of the Company in October 1985.
Dr. Peline joined the Company as its President and Chief Executive
Officer effective June 5, 1995. Dr. Peline served as President of the
Electronic Systems Group, a division of Lockheed Corp., from 1987 until
he retired from such position in March 1995. Dr. Peline had been
President of the Lockheed Space Division from 1984 to March 1987.
Michael Berberian.............................................................. 1989 64
Mr. Berberian, a private investor, was appointed to fill a vacancy on
the Board of Directors in December 1989. From 1973 to 1990, he served
on the Board of Directors of Lockheed Corp.
-2-
<PAGE>
Leonard Schuchman.............................................................. 1985 61
Mr. Schuchman was elected as a Director of the Company in April 1985.
Mr. Schuchman joined the Company in January 1976 and became Vice
President in February 1977. He is responsible for directing the
Company's Communications and Navigation Systems Operation.
John W. Brownie................................................................ 1973 64
Mr. Brownie, a founder of the Company, served as Executive Vice
President of the Company from June 1982 and as General Manager from
July 1981 until his retirement in January 1985. He has been a Director
of the Company since the Company's organization in May 1973.
C. Jerome Waylan............................................................... 1994 56
Dr. Waylan was appointed to fill a vacancy on the Board of Directors
in May 1994. Dr. Waylan served as President of GTE Spacenet
Corporation from 1985 to 1993 and as Executive Vice President of GTE
Mobilnet from 1993 until his retirement in April 1996. From May 1996
to September 1997, Dr. Waylan served as Executive Vice President of
NextWave Telecom, Inc. Dr. Waylan has been a Director of Globecomm
Systems, Inc. since February 1997. Dr. Waylan is currently the Chief
Executive Officer of Constellation Communications Inc.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL
NOMINEES NAMED ABOVE.
-3-
<PAGE>
BOARD OF DIRECTOR'S MEETINGS AND COMMITTEES
The Company's Board held four meetings during fiscal year 1998 and
acted on two matters by unanimous written consent. Each Director attended at
least 75% of the meetings of the Board and of the committees of the Board on
which he serves.
The Board has a Compensation Committee, an Audit Committee and a Stock
Plans Committee. There is no nominating committee or any committee performing a
similar function.
The Compensation Committee held one meeting in fiscal year 1998 and
took all other actions by unanimous written consent. Its function is to
determine or review and pass upon management's recommendations with respect to
executive compensation and incentive bonuses. The members of the Compensation
Committee during fiscal year 1998 were Dr. C. Jerome Waylan and Messrs. Michael
Berberian and John W. Brownie.
The Audit Committee held two meetings in fiscal year 1998. Its
functions are to monitor the effectiveness of the audit effort, to monitor the
Company's financial and accounting organization and financial reporting and to
select a firm of independent public accountants, whose duty it is to audit the
books and accounts of the Company. The members of the Audit Committee during
fiscal year 1998 were Dr. Waylan and Messrs. Berberian and Brownie.
The Stock Plans Committee held one meeting in fiscal year 1998 and took
all other actions by unanimous written consent. Its functions are to supervise
and manage the Company's Employee Stock Purchase Plan and the 1991 Stock Option
Plan. The members of the Stock Plans Committee during fiscal year 1998 were Dr.
Waylan and Messrs. Berberian and Brownie.
DIRECTORS' FEES
Each non-employee Director of the Company receives an annual fee of
$15,000 and is entitled to reimbursement for reasonable travel costs associated
with his attendance at meetings of the Board and committees of the Board on
which he serves.
-4-
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
<TABLE>
The following table provides certain summary information concerning
compensation paid for fiscal years 1996, 1997 and 1998 to the Company's Chief
Executive Officer and to each of the other five most highly compensated
executive officers (collectively, the "Named Executive Officers").
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
--------------------------------- -----------------
Securities
Name and Fiscal Underlying All Other
Principal Position Year Salary Bonus (1) Options Compensation (2)
- ------------------------------- --------- --------------- --------------- ----------------- --------------------
<S> <C> <C> <C> <C> <C>
Val P. Peline 1998 $381,642 $105,579 10,000 $10,110
Chief Executive Officer 1997 $351,931 $103,576 100,000 $10,057
and President 1996 $235,400 $0 220,000 $ 2,944
James J. Spilker, Jr.(3) 1998 $270,386 $64,327 5,000 $6,750
Chairman of the Board 1997 $257,309 $66,003 0 $6,000
1996 $240,011 $0 7,900 $4,500
Gary S. Wolf 1998 $207,996 $45,083 5,000 $6,281
Executive Vice President 1997 $180,331 $44,279 59,000 $6,264
1996 $161,013 $0 5,300 $4,750
Leonard Schuchman 1998 $203,752 $28,878 3,500 $13,936
Vice President and 1997 $192,523 $40,264 6,000 $10,255
Director 1996 $183,019 $0 6,024 $6,770
John E. Ohlson 1998 $190,389 $35,678 3,500 $8,136
Vice President 1997 $178,388 $36,960 6,000 $8,004
1996 $168,002 $0 5,530 $5,754
Ernest L. Dickens, Jr. 1998 $173,261 $40,099 3,500 $6,291
Vice President 1997 $160,396 $32,564 11,000 $7,264
1996 $149,372 $11,530 4,458 $4,679
<FN>
- -------------------
(1) Represents incentive bonuses paid during the fiscal year for prior year's
performance pursuant to the Management Incentive Plan.
(2) Fiscal year 1998, other compensation includes (i) the Company's
contribution to the Pension and Profit Sharing portions of the Stanford
Telecommunications, Inc. Employee Retirement Program of $6,000 for each
officer; (ii) Company-paid life insurance premiums as follows: Val P.
Peline, $4,110; Gary S. Wolf, $281; Leonard Schuchman, $3,436; John E.
Ohlson, $636; Ernest L. Dickens, Jr. $291 and (iii) patent issue awards
of $4,500, $1,500 and $750 for Leonard Schuchman, John E. Ohlson and
James J. Spilker, Jr. respectively.
(3) Since June 1995, Dr. Spilker has served as Principal Scientist for the
Company.
</FN>
</TABLE>
-5-
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
The following table provides information on options granted in fiscal
year 1998 to the Named Executive Officers.
<CAPTION>
Percent of
Total Potential Realizable Value at
Number of Options Assumed Annual Rates of Stock
Securities Granted to Price Appreciation for Option
Underlying Employees Exercise Term (2)
Options in Fiscal Price Per Expiration ---------------------------------
Name Granted (1) Year Share Date 5% 10%
- ------------------------ -------------- ----------- ----------- ----------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Val P. Peline 10,000 5.9% $15.25 4/29/07 $95,906 $243,046
James J. Spilker, Jr. 5,000 3.0 15.25 4/29/07 47,953 121,523
Gary S. Wolf 5,000 3.0 15.25 4/29/07 47,953 121,523
Leonard Schuchman 3,500 2.1 16.75 4/01/07 36,869 93,433
John E. Ohlson 3,500 2.1 16.75 4/01/07 36,869 93,433
Ernest L Dickens, Jr. 3,500 2.1 16.75 4/01/07 36,869 93,433
<FN>
(1) All options granted in fiscal year 1998 were granted pursuant to the 1991
Stock Option Plan (the "Option Plan"). The Option Plan provides for
granting either incentive or non-qualified stock options. All options
granted in fiscal year 1998 were non-qualified stock options granted at
100% of the fair market value of the Common Stock on the date of grant.
The options generally expire ten years from date of grant, unless earlier
terminated in certain events related to termination of employment. The
options vest 25% per year on each of the first four anniversaries of the
option grant date, except those granted to Dr. Peline which vest 100%
after one year, but vesting ceases when the optionee terminates
employment. All options granted under the Option Plan which have been
held for at least one year will vest in full in the event of the sale,
dissolution or liquidation of the Company, a merger or consolidation in
which the Company is not the surviving corporation or becomes the
subsidiary of another entity, or an offer to all stockholders of the
Company to purchase more than 50% of the Company's outstanding shares.
(2) The 5% and the 10% assumed rates of appreciation applied to the option
exercise price over the option term are prescribed by the rules of the
SEC and do not represent the Company's estimate or projection of the
future price of its Common Stock. If the Common Stock does not appreciate
above the exercise price, the Named Executive Officers will receive no
benefit from the options.
</FN>
</TABLE>
-6-
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
<TABLE>
The following table shows the number of shares of Common Stock
represented by outstanding stock options held by each of the Named Executive
Officers as of the end of the fiscal year 1998. On such date, the closing price
of the Common Stock on the Nasdaq National Market was $17.81 per share.
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options at Fiscal Options at Fiscal
Year-End Year-End
Shares Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
- --------------------------- ------------------ -------- ------------- -------------
<S> <C> <C> <C> <C>
Val P. Peline 0 Shares n/a 320,000/10,000 $2,353,750/$25,625
Common Stock Common Stock
James J. Spilker, Jr. 0 shares n/a 19,000/11,100 $218,738/$75,406
Common Stock Common Stock
Gary S. Wolf 0 shares n/a 50,120/60,940 $459,499/$317,010
Common Stock Common Stock
Leonard Schuchman 0 shares n/a 53,702/25,262 $545,600/$189,985
Common Stock Common Stock
John E. Ohlson 0 shares n/a 15,744/12,446 $168,268/$62,503
Common Stock Common Stock
Ernest L. Dickens 3,542 shares $56,715 4,104/15,334 $18,565/$55,778
Common Stock Common Stock
</TABLE>
-7-
<PAGE>
COMPENSATION AND STOCK PLANS COMMITTEES'
REPORT ON EXECUTIVE COMPENSATION
Executive Compensation
The Compensation Committee of the Board of Directors is responsible for
developing and recommending to the Board policies on compensation of the
Company's senior executives. The Stock Plans Committee of the Board of Directors
administers the Company's stock option plans and recommends to the Board
policies on stock options and other equity-based incentives. Set forth below, in
accordance with the rules of the Securities and Exchange Commission ("SEC"), is
a joint report of the Compensation and Stock Plans Committees concerning those
policies and how they were applied to the fiscal 1998 compensation to Dr. Val P.
Peline, President and Chief Executive Officer, and to all other executive
officers of the Company.
General Executive Compensation Policies
The Company's compensation program is designed to attract and retain
qualified executives and to ensure that their efforts are directed toward the
long-term interests of the Company and its stockholders. To that end, the
Company strives to pay competitive base salaries and to provide incentives to
its executives by linking individual compensation to Company and business unit
performance through an annual incentive bonus plan, and linking executive and
stockholder interests through a stock option plan.
Each of the Compensation and Stock Plans Committees annually review
salaries, incentive compensation and stock options, and other aspects of
executive compensation. In general, the purpose of such reviews is to ensure
that the Company's overall executive compensation program remains competitive
with other companies that are similar in revenues, profitability, asset size and
markets served and that executive pay reflects both the individual's performance
and the overall performance of the Company. Salary survey information from
Western Management Group and Radford Associates for companies designated as
"high technology companies," many of which are included in the S&P High
Technology Index (the "Comparable Companies"), as well as other publicly
available sources are used in the evaluation to determine the competitiveness of
the executive compensation program. The Compensation Committee attempts to
establish base salaries for the Company's executive officers in the median range
of the Comparable Companies. The target for incentive compensation is mid-range
for Comparable Companies. This approach reflects the Compensation Committee's
aim to be competitive in the market for executive talent, without lowering its
performance expectations.
In determining fiscal year 1998 compensation for the executive
officers, the Compensation Committee reviewed the Company's financial results
for fiscal year 1997, together with a comparison against plan and results
achieved during prior fiscal years. The Compensation Committee evaluates company
performance based primarily on profitability, with consideration also given to
revenue growth. For fiscal year 1997, revenues increased by 15% from fiscal year
1996. Net income for fiscal year 1997 increased to $8,011,000 from $6,173,000 in
fiscal year 1996.
Summary of Fiscal Year 1998 Compensation Programs
For fiscal year 1998, the executive compensation program consisted of
base salary and eligibility for participation in the Management Incentive Plan
and the Management Option Incentive Program.
Base Salary
The Compensation Committee determines the base salaries of the
Company's executive officers based on the Company's revenues and profitability
for the prior year, its assessment of individual
-8-
<PAGE>
performance, and the comparability considerations described above. The average
base salary for executive officers during fiscal year 1998 increased 6.9% from
fiscal 1997.
Management Incentive Plan
Under the Management Incentive Plan which was adopted during fiscal
year 1996, executive officers as well as other key management and technical
personnel may receive incentive compensation based upon the Company and
participants achieving mutually agreed upon measurable objectives. The
Management Incentive Plan contemplates that, each year, the Board will establish
the Company objectives, and the Company objectives will become the objectives of
the President and the Chairman of the Board. The President then will establish
individual objectives for the executive officers who report directly to him, and
each of such executive officers then will establish objectives for those persons
who participate in the Management Incentive Plan and report to him. The
President will review and approve the objectives for all participants to assure
that the individual objectives collectively will serve the Company in achieving
the objectives set by the Board. At the end of each fiscal year, each
participant will become eligible for an award under the Management Incentive
Plan based on the Company achieving the objectives set forth by the Board and
the participant's performance and accomplishment toward the objectives set forth
for such participant. Awards to executive officers will be determined by the
Compensation Committee after the Company evaluation and bonus pools are
established by the Board. The Board will establish the bonus pool by a formula
based on the performance of the Company and of each of the participants.
Payments in the amount of $319,644 were paid out to executive officers under the
Management Incentive Program during fiscal year 1998 in recognition of
performance during fiscal year 1997. The Compensation Committee has determined
that no incentive payments will be made during fiscal year 1999 based upon the
results achieved against the stated objectives during fiscal year 1998.
Stock Options
The Compensation and Stock Plans Committees view stock options as a
means of linking executive and stockholder interests. Each year, the Stock Plans
Committee considers and may approve stock option grants, determining such
aspects as grant size, vesting schedules and plan participants.
Management Option Incentive Program
In May 1993, the Board of Directors adopted an Officers' Option
Incentive Program to establish a policy governing annual options grants to
eligible officers. During fiscal year 1996, the Board of Directors revised the
Officer's Option Incentive Program to expand the number of management personnel
eligible for option grants under the program and renamed the program the
Management Option Incentive Program, to be effective beginning in fiscal year
1997. Under the Management Option Incentive Program, management personnel who
participate in the Company's Management Incentive Plan will be considered for a
stock option grant under the revised program. The number of options already held
by the eligible participants is not a factor in determining whether an otherwise
eligible officer will receive an option grant. It is anticipated that annual
option grants will be made to certain officers of the Company, including the
Named Executive Officers; however, the Compensation and Stock Plans Committees
may exclude certain officers from receiving options as they deem appropriate.
Options proposed under this program are subject to the Stock Plans Committee's
discretion under the provisions of the Company's 1991 Stock Option Plan. During
fiscal year 1998, a total of 163,900 options were granted pursuant to the
Management Option Incentive Program for 1997 performance, of which the Executive
Officers received an aggregate of 36,500 options. See "Executive
Compensation--Option Grants in Last Fiscal Year." The number of shares of Common
Stock underlying each option granted was based primarily on a formula tied to
the optionee's base salary.
-9-
<PAGE>
Dr. Peline's Fiscal Year 1998 Compensation
The Compensation and Stock Plans Committees annually review Dr.
Peline's performance to determine his base salary, incentive compensation and
stock option grants. The purpose of this review is to ensure that Dr. Peline's
compensation package remains competitive with chief executives of other
companies similar to the Company in revenues, profitability, asset size and
markets served. Salary survey information from Western Management Group and
Radford Associates as well as other publicly available sources are used to
determine the competitiveness of Dr. Peline's overall compensation. The
Compensation Committee has determined that the President's base salary should be
competitive with those companies contained in the salary surveys and tied to the
Company's financial performance. Given the Company's increased revenues and
profitability in fiscal year 1997 and the Compensation Committee's assessment of
Dr. Peline's contribution to those performance measures during fiscal year 1997,
Dr. Peline received a salary increase from $360,000 to $385,000. In addition,
Dr. Peline was evaluated as a "Superior" contributor under the Company's
Management Incentive Program which resulted in additional incentive compensation
of $105,579. Finally, the Stock Plan Committee approved an option grant of
10,000 shares to Dr. Peline based upon his fiscal year 1997 performance and to
provide an incentive for future performance.
Policy with Respect to Deductibility of Compensation
Section 162(m) of the Internal Revenue Code, as amended, generally
disallows tax deductions by a company for compensation paid to certain of such
company's executive officers in excess of $1,000,000 per person during the
fiscal year. Final regulations under Section 162(m) (the "Final Rules") were
issued by the Internal Revenue Service in December 1995 and include an exemption
from the deduction limitation for compensation that is "performance-based"
within the meaning of Section 162(m) and the Final Rules.
The Compensation and Stock Plans Committees intend to include
performance-based compensation in the executive compensation program to the
extent reasonably necessary in order to minimize the effects of Section 162(m).
However, in light of the Company's intent to remain competitive in its
compensation of executives and other employees, the Company reserves the right
to pay compensation that is not performance-based and thus would not be tax
deductible.
COMPENSATION COMMITTEE
C. Jerome Waylan
Michael Berberian
John W. Brownie
STOCK PLANS COMMITTEE
Michael Berberian
John W. Brownie
C. Jerome Waylan
-10-
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The SEC requires disclosure where an executive officer of a company
served or serves as a director or on the compensation committee of another
entity and an executive officer of such other entity served or serves as a
director or on the compensation committee of the Company. The Company does not
have any such interlocks. Decisions as to executive compensation are made by the
Compensation Committee and the Stock Plans Committee. During fiscal year 1998,
the Compensation and Stock Plans Committees were comprised entirely of
non-employee Directors. Mr. Brownie, who serves as member of both such
committees, was a former officer of the Company.
Mr. Brownie retired from the Company in 1985.
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the percentage change in the
cumulative total stockholder return on the Company's Common Stock against the
cumulative total return of the S&P High Technology Composite Index and the S&P
500 Composite Index for a period of five fiscal years ended March 31, 1998.
"Total return," for the purpose of this graph, assumes reinvestment of all
dividends.
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
<TABLE>
Comparison of Cumulative Total Return
Stanford Telecommunications, Inc. Common Stock
S & P High Technology Composite Index and S & P 500 Composite Index
<CAPTION>
1993 1994 1995 1996 1997 1998
-------------------------- ------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stanford Telecom 100.00 174.31 167.57 324.32 362.16 364.86
-------------------------- ------------- ------------- ------------- ------------- ------------- -------------
S & P High Technology 100.00 117.62 148.84 200.95 271.66 410.57
-------------------------- ------------- ------------- ------------- ------------- ------------- -------------
S & P 500 100.00 101.47 117.27 154.92 185.63 274.73
-------------------------- ------------- ------------- ------------- ------------- ------------- -------------
</TABLE>
-11-
<PAGE>
STOCK OWNERSHIP
<TABLE>
The following table sets forth, as of March 31, 1998, the names and
addresses of all persons who beneficially owned, to the knowledge of the
Company, more than 5% of the outstanding shares of Common Stock, and the number
of shares beneficially owned by each Director and nominee, each Named Executive
Officer and all Directors and executive officers as a group. Except as otherwise
indicated and subject to community property laws where applicable, each person
has sole investment and voting power with respect to the shares shown. Ownership
information is based upon information furnished by the respective persons.
<CAPTION>
Beneficial Ownership of
Common Stock
--------------------------------------
Number of Percent
Shares of Class
----------------- -----------------
<S> <C> <C>
Directors and Executive Officers:
James J. Spilker, Jr. (1) .................................................... 1,275,314 9.8%
1221 Crossman Avenue
Sunnyvale, California 94089
Michael Berberian ........................................................... 822,850 6.3%
5200 North Palm, Suite 203
Fresno, California 93704
Val P. Peline (2)............................................................. 332,500 2.6%
Leonard Schuchman (3)......................................................... 296,702 2.3%
John E. Ohlson (4)............................................................ 168,962 1.3%
Gary S. Wolf (5).............................................................. 110,337 *
John W. Brownie (6)........................................................... 44,950 *
Ernest L. Dickens (7)......................................................... 7,833 *
C. Jerome Waylan (8) ......................................................... 1,000 *
All Directors and executive officers as a group
(12 persons) (9).............................................................. 3,103,462 23.9%
5% Stockholder:
Kopp Investment Advisors, Inc.; Leroy C. Kopp (10)............................ 3,470,656 26.8%
7701 France Avenue South, Suite 500
Edina, Minnesota 55435
<FN>
*Less than 1%
Footnotes appear on the following page.
-12-
<PAGE>
- ---------------
(1) Includes 22,400 shares subject to options exercisable within 60 days
after March 31, 1998 and 20,000 shares held by Dr. Spilker's wife.
(2) Includes 330,000 shares subject to options exercisable within 60 days
after March 31, 1998.
(3) Includes 70,327 shares subject to options exercisable within 60 days
after March 31, 1998.
(4) Includes 19,799 shares subject to options exercisable within 60 days
after March 31, 1998.
(5) Includes 55,160 shares subject to options exercisable within 60 days
after March 31, 1998 and 3,000 shares held by Mr. Wolf's minor
daughter.
(6) Consists of shares held in trust for John W. and Alice Brownie.
(7) Consists of shares subject to options exercisable within 60 days after
March 31, 1998.
(8) Consists of shares held by Dr. Waylan and his wife in Joint Tenancy.
(9) Includes an aggregate of 540,654 shares subject to options exercisable
within 60 days after March 31, 1998.
(10) According to Amendment No. 2 to Schedule 13D(the "Schedule 13D") filed
with the SEC by (I) Kopp Investment Advisors, Inc., a Minnesota
corporation ("KIA"), (ii) Kopp Holding Company, a Minnesota corporation
and the parent corporation of KIA ("KHC"), and (iii) LeRoy C. Kopp, the
sole stockholder of KHC ("Kopp" and collectively with KIA and KHC, the
"reporting persons"), KIA beneficially owns 3,292,656 shares of Common
Stock and Kopp beneficially owns 3,470,656 shares of Common Stock
(including the shares beneficially owned by KIA). KHC, as the parent
corporation of KIA reports indirect ownership of the Common Stock
beneficially owned by KIA. KIA reports shared investment power with
respect to all of the shares of Common Stock it beneficially owns (by
virtue of limited powers of attorney and/or investment advisory
agreements) and reports sole voting power with respect to 131,000
shares. Kopp reports sole voting and sole investment power with respect
to 178,000 shares of Common Stock he beneficially owns, which shares
are held directly by the Kopp Holding Company Profit Sharing Plan, for
which Kopp serves as the sole trustee (12,000 shares), the Kopp Family
Foundation, for which Kopp serves as a director (40,000 shares), and
the LeRoy C. Kopp Individual Retirement Account (126,000 shares). All
of the reporting persons have the same business address.
</FN>
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's Directors and executive officers and holders of more than
10% of the outstanding Common Stock ("insiders") to file with the SEC reports of
ownership and changes in ownership of Common Stock and other equity securities
of the Company. Insiders also are required to furnish the Company with a copy of
all reports that they file with the SEC pursuant to Section 16(a).
Based solely on its review of such reports or written representations
with respect to Section 16(a) reports by insiders, the Company believes that
during fiscal year 1998, each of the insiders complied with all applicable
filing requirements under Section 16(a).
-13-
<PAGE>
PROPOSAL 2
AMENDMENT TO EMPLOYEE STOCK PURCHASE PLAN
The Board has unanimously approved and recommends that the stockholders
approve an amendment to the Company's Employee Stock Purchase Plan (the "Plan"),
to increase the number of shares of Common Stock issuable thereunder from
400,000 to 700,000 (the "Proposed Amendment"). A copy of the Plan can be
obtained from the Secretary of the Company at the Company's executive offices
located at 1221 Crossman Avenue, Sunnyvale, California 94089.
Description of the Plan
The Plan was established in July 1992 to provide Eligible Employees
(defined below) with an opportunity to purchase Common Stock, in order to
increase the employees' proprietary interests in the success of the Company.
Each of the Eligible Employees may elect on a quarterly basis (a "Participation
Period") to purchase Common Stock through payroll deductions of up to 10% of
such employee's salary or up to 500 shares of Common Stock per Participation
Period, whichever is lower. Eligible Employees who elect to participate in the
Plan for one Participation Period continue to participate in each succeeding
Participation Period, until such employee changes his or her level of
participation in the Plan, or withdraws from the Plan, in writing.
Common Stock is purchased on behalf of participating employees at the
end of each Participation Period, at a price per share equal to 85% of the fair
market value of the Common Stock on the first day of the Participation Period or
on the last day of the Participation Period, whichever is lower. Common Stock so
purchased is held in an individual brokerage account established for each
participating employee at Charles Schwab & Co., Inc. No fees are charged by
Charles Schwab & Co., Inc. for maintaining such brokerage accounts.
Eligible Employees
Employees of the Company who have been employed by the Company for at
least three (3) months and are regularly scheduled to work more than 20 hours
per week ("Eligible Employees") are eligible to participate in the Plan. As of
April 1, 1998, approximately 880 persons were Eligible Employees. Executive
officers of the Company, but not Directors, may be Eligible Employees. Currently
275 Eligible Employees are participating in the Plan.
Approval
The Proposed Amendment to the Plan will not be effective, unless it is
approved and ratified by the vote of shares of Common Stock present in person or
represented by proxy at the Annual Meeting and entitled to vote on such matter.
Irrespective of whether the Proposed Amendment is ratified and approved, the
Plan will expire on June 30, 2002.
The Board of Directors believes that the Plan is an important means by
which the interests of the employees can be aligned with the interests of the
stockholders. Increasing the number of shares of Common Stock issuable under the
Plan is intended to enable all participating Eligible Employees to participate
in the Plan to the maximum extent desirable through the full term of the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL AND RATIFICATION
OF THE PROPOSED AMENDMENT TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK
ISSUABLE UNDER THE PLAN FROM 400,000 TO 700,000.
-14-
<PAGE>
PROPOSAL 3
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board has selected Arthur Andersen LLP to serve as the Company's
independent public accountants for fiscal year 1999. While it is not required to
do so, the Board is submitting to the stockholders the selection of that firm
for ratification in order to ascertain the stockholders' views. If such
selection is not ratified by the affirmative vote of a majority of the shares of
Common Stock present or represented at the meeting and entitled to vote, the
Board will reconsider its selection.
Representatives of Arthur Andersen LLP are expected to be present at
the meeting and available to respond to appropriate questions. Such
representatives will have the opportunity to make a statement if they desire to
do so.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF ARTHUR ANDERSEN LLP.
STOCKHOLDER PROPOSALS
To be considered for presentation at the 1999 Annual Meeting of
Stockholders, a stockholder proposal must be received at the offices of the
Company not later than January 29, 1999.
OTHER MATTERS
Management knows of no other business which will be presented for
consideration at the meeting. If any other business is properly brought before
the meeting, it is intended that proxies in the enclosed form will be voted in
respect thereof in accordance with the judgment of the persons voting the
proxies.
Whether or not you intend to be present at this meeting, you are urged
to return your proxy promptly.
By order of the Board of Directors
JEROME F. KLAJBOR
Secretary
-15-
<PAGE>
Stanford Telecommunications, Inc. 25 August 1993
EMPLOYEE STOCK PURCHASE PLAN
Section 1. Establishment of the Plan
The Stanford Telecommunications, Inc. Employee Stock Purchase Plan (the
"Plan") is established to provide Eligible Employees with an opportunity to
purchase common stock of STANFORD TELECOMMUNICATIONS, INC. (the "Company") so
that they may increase their proprietary interests in the success of the
Company. The Plan, which provides for the purchase of stock through regular
payroll withholding, is intended to qualify under Section 423 of the Internal
Revenue Code of 1986, as amended.
Section 2. Definitions
(a) "Board of Directors" means the Board of Directors of Stanford
Telecommunications, Inc., a Delaware corporation. "Directors" means members of
the Board of Directors.
(b) "Committee" means any committee appointed to administer the Plan,
as provided in Section 3.
(c) "Compensation" means the total compensation received by a
Participant from the Company during a Participation Period, including bonuses
and commissions, but excluding special payments (such as moving expenses) and
income with respect to stock options or other stock purchases.
(d) "Date of Grant" means the first day of a Participation Period.
(e) "Eligible Employee" means any regular employee of a Participating
Company whose date of hire was at least three (3) months prior to the
commencement of a Participation Period and who is customarily employed for more
than twenty (20) hours per week and who is an active employee at the
commencement of a Participation Period.
(f) "Executive Officer" shall mean any person who is an "officer" of
the Company within the meaning of Rule 16a-1(f) as promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(g) "Fair Market Value" of a share of Stock means (i) if the Stock is
traded on NASDAQ, the average of the NASDAQ closing bid and asked prices on the
applicable date, (ii) if the Stock is traded on the NASDAQ National Market, the
last price on the applicable date, or (iii) if the Stock is traded on a national
exchange, the closing price on the applicable date. In the event the Stock is
not traded on the date as of which the Fair Market Value is to be determined,
Fair Market Value shall be determined as of the next preceding date on which the
Stock is traded. "Open Fair Market Value" means the Fair Market Value on the
next preceding date on which Stock is traded.
(h) "Participant" means an Eligible Employee who elects to participate
in the Plan, as provided in Section 5 hereof.
(i) "Participating Company" means the Company and such present or
future Subsidiaries of the Company as the Board of Directors shall from time to
time designate.
<PAGE>
(j) "Participation Period" means a period during which contributions
may be made toward the purchase of Stock under the Plan, as determined pursuant
to Section 5(b).
(k) "Plan Account" means the account established for each Participant
pursuant to Section 5(d).
(l) "Purchase Price" means the price at which Participants may purchase
stock under Section 5 of the Plan, as determined pursuant to Section 5(c).
(m) "Stock" means the common stock of the Company, $.01 par value.
(n) "Subsidiary" means a subsidiary corporation as defined in Section
424(f) of the Internal Revenue Code of 1986, as amended.
Section 3. Administration
The Plan shall be administered by the Board of Directors. The
interpretation and construction by the Board of Directors of any provisions of
the Plan or of any right to purchase Stock granted under it shall be conclusive
and binding on all persons. No Director shall be liable for any action, omission
or determination taken, omitted or made under or in connection with the Plan in
good faith.
The Board of Directors may delegate administration of the Plan to a
Committee consisting of not less than three (3) members of the Board of
Directors. The Board of Directors may from time to time remove members from, or
add members to, the Committee. Vacancies on the Committee, howsoever caused,
shall be filled by the Board of Directors. The Committee shall select one of its
members as chairman, and shall hold meetings at such times and places as it may
determine.
Section 4. Number of Shares To Be Offered and To Be Purchased
The maximum aggregate number of shares which shall be offered under the
Plan shall be two hundred thousand (200,000) shares of Stock, subject to
adjustment as provided in Section 8 hereof. In the event that the aggregate
number of shares which all Participants elect to purchase during a Participation
Period shall exceed the number of shares remaining available for issuance under
the Plan, then the number of shares to which each Participant shall become
entitled shall be determined by multiplying the number of shares available for
issuance by a fraction the numerator of which is the sum of the number of shares
the Participant has elected to purchase pursuant to Section 5 and denominator of
which is the sum of the number of shares which all employees have elected to
purchase pursuant to Section 5.
Section 5. Eligibility and Participation Purchase of Shares
(a) Eligibility and Participation. Any person who qualifies as an
Eligible Employee on the Date of Grant with respect to a Participation Period
may elect to participate in the Plan for such Participation Period. An Eligible
employee may elect to participate by executing the enrollment form prescribed
for such purpose by the Committee. The enrollment form shall be filed with the
Committee no later than the first day of the Participation Period. The Eligible
Employee shall designate on the enrollment form the percentage of his or her
Compensation which he or she elects to have withheld for the purchase of Stock,
which may be any whole percentage from one percent (1%) to ten percent (10%) of
the Participant's Compensation.
<PAGE>
By enrolling in the Plan, a Participant shall be deemed to
have elected to purchase the maximum number of whole shares of Stock which can
be purchased with the amount of the Participant's Compensation which is withheld
during the Participation Period; provided, however, that with respect to any
Participation Period, no Participant may purchase more than two hundred fifty
(250) shares of Stock or shares of Stock in excess of the amounts set forth in
Section 9.
Once enrolled, a Participant will continue to participate in
the Plan for each succeeding Participation Period until he or she terminates
participation or ceases to qualify as an Eligible Employee. If a Participant
desires to change the rate of payroll withholding, he or she may do so effective
for the next Participation Period by filing a new enrollment form with the
Committee at any time prior to the first day of the Participation Period for
which such change is to be effective.
(b) Participation Periods. The Plan shall be implemented by one or
more Participation Periods of three months duration. The Board of Directors may
determine the commencement dates of each Participation Period, provided that no
Participation Period shall have a commencement date after March 1, 2002.
(c) Purchase Price. The Purchase Price for each share of Stock is to be
purchased pursuant to this Section 5 shall be the lesser of (i) eighty-five
percent (85%) of the Opening Fair Market Value of such share on the Date of
Grant in the Participation Period, or (ii) eighty-five percent (85%) of the Fair
Market Value of such share on the last trading day during the Participation
Period.
(d) Contributions. The Purchase Price for each share of Stock to be
purchased pursuant to this Section 5 will be payable by each Participant by
means of payroll deduction. Payroll deductions for the amount of Compensation
designated by the Participant to Section 5(a) shall commence with the first
paycheck issued during the Participation Period and shall be deducted from each
subsequent paycheck throughout the Participation Period. The amount deducted
from each paycheck shall be the amount determined pursuant to Section 5(a) as of
the beginning of the Participation Period and no adjustments will be made for
any changes in salary or status during the Participation Period.
(e) Purchase of Shares. The Company will maintain a Plan Account on its
books in the name of each Participant. At the close of each pay period, the
amount deducted from the Participant's Compensation will be credited to the
Participant's Plan Account. As of the last day of each Participation Period, the
amount then in the Participant's Plan Account will be divided by the Purchase
Price and the amount in the Participant's Plan account shall be used to purchase
the number of whole shares which result. Share certificates representing the
number of shares of Stock so purchased shall be issued and delivered to the
Participant as soon as reasonably practicable after the close of the
Participation Period. Any surplus in a Participant's Plan Account attributable
to fractional share interests will be carried over to the next Participation
Period. Any amount remaining in the Participant's Plan Account caused by
anything other than a surplus due to fractional shares shall be refunded to the
Participant in cash.
(f) Resales by Persons Subject to Section 16 of Exchange Act. All
shares of Stock purchased under the Plan by persons subject to Section 16 of the
Exchange Act (including Executive Officers and Directors) must be held, and may
not be sold, given away or otherwise transferred, for a period of at least six
(6) months following the date on which the purchase price for such shares is
determined pursuant to Section (5) hereof.
(g) Compliance with Section 16 of Exchange Act. With respect to persons
subject to Section 16 of the Exchange Act (including Executive Officers and
Directors), transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 (or its successors) as
<PAGE>
promulgated under the Exchange Act. To the extent any provision of the Plan or
action by the Board of Directors or Committee pursuant to the Plan fails to so
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Board of Directors.
Notwithstanding the foregoing, each person subject to Section
16 of the Exchange Act shall be responsible for his or her compliance with
Section 16, including compliance with Rule 16b-3, and the Company shall have no
obligation or liability for failure to so comply.
(h) Withdrawal. A Participant may elect to withdraw from participation
under the Plan at any time up to the last day of a Participation Period by
filing the prescribed form with the Committee. At the time of withdrawal, the
amount credited to the Participant's Plan Account will be refunded in cash,
without interest. Any Executive Officer or Director who is a Participant but who
withdraws from participation shall not be eligible to become a Participant again
for a period of six (6) months following such withdrawal.
Section 6. Effect of Termination of Employment
Termination of employment for any reason including without limitation,
death, disability or retirement, shall be treated as an automatic withdrawal
pursuant to Section 5(h). A transfer from the Company to a Subsidiary, from one
Subsidiary to another, or from a Subsidiary to the Company shall not be treated
as a termination of employment.
Section 7. Rights Not Transferable
The rights or interest of any Participant in the Plan, in any right
granted under the Plan, or in any Stock or moneys to which he or she may be
entitled under the Plan, shall not be transferable by voluntary or involuntary
assignment or by operation of law, or by any other manner otherwise than by will
or the applicable laws of descent and distribution and shall be exercisable
during the lifetime of the Participant only by the Participant. If the
Participant shall in any manner attempt to transfer, assign or otherwise
encumber his or her rights or interest under the Plan, other than by will, such
act shall be treated as an automatic withdrawal under Section 5(h).
Section 8. Recapitalization, Etc.
The aggregate number of shares of Stock offered under the Plan and the
number and price of shares which any Participant has elected to purchase
pursuant to Section 5 shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Stock resulting from a subdivision or
consolidation of shares or any other capital adjustment, the payment of a stock
dividend, or other increase or decrease in such shares effected without receipt
of consideration by the Company. In the event of a dissolution or liquidation of
the Company, or a merger or consolidation to which the Company is a constituent
corporation, this plan shall terminate, unless the plan of merger, consolidation
or reorganization provides otherwise, and all amounts then remaining in each
Participant's Plan Account shall be refunded, without interest.
Section 9. Limitation on Stock Ownership.
Notwithstanding any provision herein to the contrary no Participant
shall be permitted to elect to participate in the Plan with respect to a
Participation Plan (i) if such Participant, as of the Date of Grant for such
Participation Period, would own stock possessing five percent (5%) or more of
the total combined voting power or value classes of Stock of the Company or any
parent or Subsidiary of the Company, or (ii) if under the terms of the Plan the
rights of the employee to purchase Stock under this and all other qualified
employee stock purchase plans of the Company or its Subsidiaries would accrue at
a rate that exceeds $25,000 of Fair Market Value of such Stock (determined at
the time such right
<PAGE>
or option is granted) for each calendar year for which such right or option is
outstanding at any time. For purposes of this Section 9, ownership of Stock
shall be determined by the attribution rules of Section 424 (d) of the Internal
Revenue Code of 1986, as amended, and Participants shall be considered to own
any Stock which they have a right or option to purchase under this or any other
plan.
Section 10. Rights as an Employee
Nothing in the Plan shall be construed to give any person the right to
remain in the employ of the Company or a Subsidiary or to effect the right of
the Company and its Subsidiaries to terminate the employment of any person at
any time with or without cause. Except as otherwise specifically provided
herein, all Eligible Employees shall have the same rights and privileges
pursuant to the Plan.
Section 11. Rights as a Stockholder
A Participant shall have no rights as a stockholder with respect to any
shares he or she may have a right to purchase under the Plan until the date of
issuance of a stock certificate to such Participant for shares issued pursuant
to the Plan.
Section 12. Withholding Taxes
Any taxes required by law to be withheld on account of this Plan shall
be deducted and withheld accordingly. A Participant may become liable for taxes
when he or she disposes of shares of Stock acquired under this Plan, and the
Company shall not in any way be responsible for any tax liability incurred by
any participant as a result of this Plan.
Section 13. Amendment or Termination of the Plan
The Board of Directors shall have the right to amend, modify or
terminate the Plan at any time without notice, provided that no Participant's
existing rights are adversely affected thereby, and provided further that,
except as provided in Section 8 hereof, no increase in the aggregate number of
shares to be issued under the Plan shall be effective until such increase is
approved by a vote of the stockholders of the Company in the manner provided in
Section 14 hereof. Notwithstanding the foregoing, the provisions of the Plan, as
they apply to Executive Officers and Directors, which state the amount and price
of Stock that may be purchased or specify the timing of permitted purchases or
set forth a formula that determines such amount, price and timing shall not be
amended more frequently than once every six months, other than to comport with
changes in the Internal Revenue Code of 1986, as amended, the Employee
Retirement Income Security Act of 1974, as amended, or the rules and regulations
thereunder. The Plan shall terminate on June 30, 2002, if it has not been
earlier terminated pursuant to this Section 13.
Section 14. Ratification of the Plan
The Plan shall become effective as of July 1, 1992 provided that it is
approved and ratified by the vote of the holders of at least a majority of the
outstanding shares of Stock of the Company within twelve (12) months after the
date upon which the Plan is approved by the Board of Directors. If no such
shareholder approval and ratification is obtained within such period, this Plan
shall be void and of no further force and effect.
<PAGE>
APPENDIX A
PROXY
STANFORD TELECOMMUNICATIONS, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS JUNE 24, 1998
James J. Spilker, Jr. and Jerome F. Klajbor, or either of them each
with the power of substitution, are hereby authorized to represent and vote as
designated on the reverse side the shares of the undersigned at the Annual
Meeting of Stockholders of Stanford Telecommunications, Inc. to be held on
Wednesday, June 24, 1998, or at any adjournment of the Annual Meeting.
YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO THE VOTE AT THE ANNUAL
MEETING.
The undersigned hereby revoke any proxy or proxies heretofore given to
vote such shares, and acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement relating to the June 24, 1998 Annual Meeting of Stockholders.
Shares represented by this proxy will be voted as directed by the
stockholder. If no such directions are indicated, the proxies will have the
authority to vote "FOR" the election of directors and "FOR" items 2 and 3.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT IN THE
ACCOMPANYING ENVELOPE.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SEE REVERSE
SIDE SIDE
<PAGE>
[X] Please mark
votes as in
this example.
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND
"FOR" ITEMS 2 AND 3.
<S> <C> <C>
1. Election of Directors. FOR AGAINST ABSTAIN
Nominees: Michael Berberian, John W. Brownie, Val P. Peline, 2. Amendment to Employee Stock [ ] [ ] [ ]
Leonard Schuchman, James J. Spilker, Jr., Purchase Plan increasing
C. Jerome Waylan number of Common Stock
issuable thereunder from
[ ] FOR [ ] WITHHELD 400,000 to 700,000.
ALL FROM ALL
NOMINEES NOMINEES FOR AGAINST ABSTAIN
3. Ratification of the
[ ] ______________________________________________ appointment of Arthur Anderson [ ] [ ] [ ]
For all nominees except as noted above LLP as the Company's
independent auditors for the
current fiscal year.
4. Upon any other matters which might properly come before this
meeting.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please sign exactly as your name appears on this proxy. If
signing for executor, trust, or corporation, title and capacity
should be stated. If shares are held jointly, each holder should
sign.
Signature:____________________ Date:_______________ Signature:____________________ Date:_______________
</TABLE>
