SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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
COMMUNICATION INTELLIGENCE CORPORATION
(Name of Registrant as Specified In Its Charter)
NOT APPLICABLE
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction Computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated
and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by Exchange Act
Rule 0- 11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
COMMUNICATION INTELLIGENCE CORPORATION
275 Shoreline Drive, Suite 500
Redwood Shores, California 94065
-----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-----------
June 12, 2000
-----------
To the Stockholders of Communication Intelligence Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of Communication Intelligence Corporation, a Delaware
corporation (the "Company"), will be held at the Hotel Sofitel, 223 Twin Dolphin
Drive, Redwood Shores, California 94065, on June 12, 2000, at 1:00 p.m. Pacific
Time, for the following purposes, all as more fully described in the attached
Proxy Statement:
1. To elect five directors to serve until their respective successors are duly
elected and qualified.
2. To ratify the appointment of Stonefield Josephson, Inc. as the Company's
independent accountants for the year ending December 31, 2000.
3. To transact such other business as may properly come before the Annual
Meeting.
The Board of Directors has fixed the close of business on April 19,
2000 as the record date for the determination of stockholders entitled to notice
of, and to vote on the matters proposed at, the Annual Meeting and any
adjournments or postponements thereof.
YOUR VOTE IS IMPORTANT
EVEN IF YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE
COMPLETE, SIGN, DATE AND RETURN THE PROXY IN THE ENVELOPE PROVIDED SO THAT YOUR
SHARES MAY BE VOTED AT THE ANNUAL MEETING. IF YOU EXECUTE A PROXY, YOU STILL MAY
ATTEND THE ANNUAL MEETING AND VOTE IN PERSON.
Redwood Shores, California By Order of the Board of Directors
May 1, 2000
/s/Guido DiGregorio
Guido DiGregorio
President and Chief Executive Officer
<PAGE>
COMMUNICATION INTELLIGENCE CORPORATION
275 Shoreline Drive, Suite 500
Redwood Shores, California 94065
-------------
PROXY STATEMENT
-------------
ANNUAL MEETING OF STOCKHOLDERS
-------------
INTRODUCTION
This Proxy Statement and the accompanying proxy is being furnished to
stockholders of Communication Intelligence Corporation, a Delaware corporation
(the "Company"), in connection with the solicitation of proxies by the Board of
Directors for the Company's Annual Meeting of Stockholders to be held at the
Hotel Sofitel, 223 Twin Dolphin Drive, Redwood Shores, California 94065, on June
12, 2000, at 1:00 p.m. Pacific Time, and any and all adjournments or
postponements thereof (the "Annual Meeting").
At the Annual Meeting, stockholders of the Company as of the close of
business on April 19, 2000 (the "Record Date") will be asked to consider and
vote upon the following: (i) the election of five directors to serve until their
respective successors are duly elected and qualified (Proposal 1); and (ii) the
ratification of the appointment of Stonefield Josephson, Inc. as the Company's
independent accountants for the year ending December 31, 2000 (Proposal 2). This
Proxy Statement and the accompanying proxy, together with a copy of the
Company's Annual Report to Stockholders, are first being mailed or delivered to
stockholders of the Company on or about May 1, 2000.
Representatives of Stonefield Josephson, Inc., are expected to be
present at the Annual Meeting and will be given the opportunity to address the
stockholders if they so desire and will be available to respond to appropriate
questions.
WHETHER OR NOT YOU ATTEND THE ANNUAL MEETING, YOUR VOTE IS IMPORTANT.
ACCORDINGLY, YOU ARE ASKED TO SIGN AND RETURN THE PROXY, REGARDLESS OF THE
NUMBER OF SHARES YOU OWN. SHARES CAN BE VOTED AT THE ANNUAL MEETING ONLY IF THE
HOLDER IS REPRESENTED BY PROXY OR IS PRESENT.
VOTING SECURITIES
As of April 19, 2000 (the "Record Date"), 84,455,178 shares of the
Company's common stock, par value $0.01 per share (the "Common Stock"), were
issued and outstanding. Each holder of outstanding shares of Common Stock as of
the Record Date is entitled to one vote per share on all matters to come before
the Annual Meeting. Only holders of record of Common Stock at the close of
business on the Record Date are entitled to notice of, and to vote at, the
Annual Meeting.
Approval of Proposal 1 to elect five directors requires the affirmative
vote of holders representing a plurality of the shares of Common Stock
represented in person or by proxy at the Annual Meeting. Approval of Proposal 2
to ratify the appointment of Stonefield Josephson, Inc. as the Company's
independent accountants for the year ending December 31, 2000 requires the
affirmative vote of holders representing a majority of the shares of Common
Stock represented in person or by proxy at the Annual Meeting.
Each enclosed proxy provides that a stockholder who holds shares of the
Company's Common Stock as of the Record Date may specify that his or her shares
of that class be voted "for," "against" or "abstain" from voting with respect to
each of the proposals presented at the Annual Meeting. If an enclosed proxy is
properly executed, duly returned to the Company in time for the Annual Meeting
and not revoked, your shares will be voted in accordance with the instructions
contained thereon. Where a signed proxy is returned and no specific instructions
are indicated, your shares represented thereby will be voted FOR each of the
proposals.
Proxies marked as abstaining will be treated as present for the purpose
of determining whether there is a quorum for the Annual Meeting, but will not be
counted as voting on any matter as to which abstinence is indicated. Thus, an
abstaining vote in the election of directors will have no legal effect on the
outcome, however, an abstention as to any other matter will have the same legal
effect as a vote against such matter. Proxies returned by brokers as "non-votes"
on behalf of shares held in street name because discretion has been withheld as
to one or more matters on the agenda for the Annual Meeting will not be treated
as present for purposes of determining whether there is a quorum for the Annual
Meeting unless the broker is given discretion to vote on at least one matter on
the agenda.
1
<PAGE>
Any stockholder who executes and returns a proxy may revoke it in
writing at any time before it is voted at the Annual Meeting by: (i) filing with
the Secretary of the Company, at the above address, written notice of such
revocation bearing a later date than the proxy or a subsequent proxy relating to
the same shares; or (ii) attending the Annual Meeting and voting in person
(although attendance at the Annual Meeting will not in and of itself constitute
revocation of a proxy).
Each enclosed proxy gives discretionary authority to the persons named
therein with respect to any amendments or modifications of the Company proposals
and any other matters that may be properly proposed at the Annual Meeting. As of
the date hereof, the Company is not aware of any such amendment or modification
or other matter to be presented for action at the Annual Meeting. However, if
any other matter properly comes before the Annual Meeting, the proxies solicited
hereby will be exercised in accordance with the reasonable judgment of the
proxyholders named therein.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of April 19, 2000 with
respect to the beneficial ownership of (i) any person known to be the beneficial
owner of more than 5% of any class of voting securities of the Company, (ii)
each director and director nominee of the Company, (iii) each of the current
executive officers of the Company named in the Summary Compensation Table of
this Proxy Statement under the heading "Executive Compensation" and (iv) all
directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Common Stock
-----------------------------
-----------------------------
Name of Beneficial Owner Number Percent
of Shares of Class
<S> <C> <C>
Philip Sassower (1)........................... 2,866,574 3.3%
Guido DiGregorio (2).......................... 650,420 *
C. B. Sung (3)................................ 535,420 *
Jeffrey Steiner (4)........................... 75,000 2.1
Jess M. Ravich (5)............................ 1,772,318 *
Marjorie Bailey (6)........................... 66,800 *
All directors and executive
officers as a group (6 persons).............. 5,966,532 7.0
</TABLE>
- -----------
* Less than 1%.
(1) The number of shares of Common Stock includes (a) 1,432,873 shares held
by Mr. Sassower and (b) 1,433,701 shares held by the Philip S. Sassower
1996 Charitable Remainder Annuity Trust (the "1996 CRAT"), of which Mr.
Sassower and his wife are co-trustees. Mr. Sassower may be deemed to
beneficially own the shares of Common Stock held by the 1996 CRAT. The
business address of Mr. Sassower is Phoenix Enterprises LLC, 135 East
57th Street, 12th Floor, New York, New York 10022. Mr. Sassower is the
Chairman of the Board and Secretary of the Company, as well as Chairman
of the Executive and Finance Committees of the Company's Board of
Directors. See "Certain Relationships and Related Transactions".
(2) The number of shares of Common Stock represents 650,420 shares issuable
upon the exercise of stock options that are exercisable within 60 days
of April 19, 2000. The number includes only 650,420 of the 1,800,000
shares issuable upon the exercise of stock options granted to Mr.
DiGregorio in January 1999. The business address of Mr. DiGregorio is
275 Shoreline Drive, Suite 500, Redwood Shores, California 94065. See
"Certain Relationships and Related Transactions".
(3) The number of shares of Common Stock includes (a) 237,051 shares held
by the Sung Family Trust of which Mr. Sung is a trustee, (b) 3,369
shares held by the Sung-Kwok Foundation of which Mr. Sung is the
Chairman, and (c) 295,000 shares of Common Stock issuable upon the
exercise of stock options or warrants which are exercisable within 60
days of April 19, 2000. Mr. Sung may be deemed to beneficially own the
shares held by the Sung Family Trust and the Sung-Kwok Foundation. The
business address of Mr. Sung is, UNISON Group, 651 Gateway Boulevard,
#880, South San Francisco, California 94080.
(4) The number of shares of Common Stock includes (a) 1,703,786 shares held
by the Fairchild Holding Corporation ("Fairchild"), a wholly-owned
subsidiary of RHI Holdings, Inc. ("RHI") of which Mr. Steiner is
Chairman, CEO and President and (b) 20,000 shares issuable upon the
exercise of options which are exercisable within 60 days of April 19,
2000. Mr. Steiner may be deemed to beneficially own the shares held by
the Fairchild Holding Corporation. Mr. Steiner's business address is
c/o The Fairchild Corporation, P.O. Box 10803, Chantilly, Virginia
20153.
2
<PAGE>
(5) The number of shares of Common Stock includes (a) 1,506,435 shares held
by the Ravich Revocable Trust of 1989 (the "Ravich Trust"), of which
Mr. Ravich is the trustee, (b) 190,883 shares issuable upon the
exercise of warrants which are exercisable within 60 days of April 19,
2000 held by the Ravich Trust, and (c) 75,000 shares issuable upon the
exercise of options held by Mr. Ravich which are exercisable within 60
days of April 19, 2000. Mr. Ravich is a trustee of the Ravich Trust,
and may be deemed to beneficially own the shares held by or issuable to
the Ravich Trust. Mr. Ravich's business address is U.S. Bancorp
Investments, Inc., 11766 Wilshire Blvd., Suite 870, Los Angeles,
California 90025.
(6) The number of shares of Common Stock includes only 66,800 of 400,000
shares issuable upon the exercise of stock options granted to Ms.
Bailey in November 1999. The 66,800 shares are exercisable within 60
days of April 19, 2000. The business address of Ms. Bailey is 275
Shoreline Drive, Suite 500, Redwood Shores, California 94065.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers, directors and persons who own
more than ten percent of a registered class of the Company's equity securities
to file certain reports regarding ownership of, and transactions in, the
Company's securities with the Securities and Exchange Commission (the "SEC").
These officers, directors and stockholders are also required by SEC rules to
furnish the Company with copies of all Section 16(a) reports that are filed with
the SEC. Based solely on a review of copies of such forms received by the
Company, and written representations received by the Company from certain
reporting persons, the Company believes that for the year ended December 31,
1999 all Section 16(a) reports required to be filed by the Company's executive
officers, directors and 10% stockholders were filed on a timely basis, except
for Jeffrey Steiner's Form 4 for March 1999 which was filed in February 2000.
PROPOSAL 1
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Board of Directors shall
consist of such number of directors, with a minimum of three, as the Board of
Directors may determine from time to time. Currently, the Board has determined
that the authorized number of directors is five. The five persons listed below
are the nominees for election as directors at the Annual Meeting. Each director
elected at this Meeting will serve until his successor is duly elected and
qualified or his earlier resignation, removal or disqualification.
Unless otherwise instructed, the proxyholders named in the accompanying
proxy will vote the shares represented by proxies received by them for the
election of the five nominees to the Board of Directors named below. In the
event that any nominee of the Company is unable or declines to serve as a
director at the time of the Annual Meeting, the shares will be voted for the
election of any nominee designated by the present Board of Directors. The
Company is not aware of any nominee who will be unable or will decline to serve
as a director. In the event that additional persons are properly nominated for
election as directors, the proxyholders intend to vote all proxies received by
them for the election of as many of the nominees listed below as possible. The
proxies cannot be voted for a greater number of persons than the number of
nominees named.
Director Nominees
The following table sets forth certain information concerning the
nominees:
<TABLE>
<CAPTION>
Year First Elected
Name Age or Appointed
<S> <C> <C> <C>
Guido D. DiGregorio......... 61 1997
Jess M. Ravich.............. 42 1998
Philip S. Sassower.......... 60 1994
Jeffrey Steiner............. 63 1998
C. B. Sung.................. 75 1986
</TABLE>
The business experience of each of the director nominees for at least the
past five years includes the following:
3
<PAGE>
Guido D. DiGregorio was appointed Chief Executive Officer in June 1999 and
President in November 1997. From November 1997 to June 1999 he was also the
Company's Chief Operating Officer. He was a partner in DH Partners, Inc. (a
management consultant) from 1996 to 1997. Prior to that, Mr. DiGregorio was
recruited by a number of companies to reverse a trend of financial losses,
serving as President and CEO of each of the following companies: Display
Technologies, Inc. (a manufacturer of video data monitors) from 1994 to 1996,
Superior Engineering Corp. (a producer of factory-built gas fireplaces) from
1991 to 1993, Proxim, Inc. (wireless data communications) from 1989 to 1991,
Maxitron Corp. (a manufacturer of computer products) from 1986 to 1989 and Exide
Electronics (producer of computer power conditioning products) from 1983 to
1986. From 1966 to 1983, Mr. DiGregorio was employed by General Electric in
various management positions, rising to the position of General Manager of an
industrial automation business.
Jess M. Ravich was elected as a director of the Company in June 1998. Mr.
Ravich has been the Chairman of the Board and Chief Executive Officer of the
U.S. Bancorp Libra division of U.S. Bancorp Investments, Inc. ("USBI"), a
securities broker dealer, since January 1999. From June 1991 to January 1999, he
was the Chairman and Chief Executive Officer of Libra Investments, Inc.
("Libra"), a securities broker dealer he founded, which merged with USBI in
January 1999. Mr. Ravich is also a director of Cherokee, Inc., a licensor and
marketer of trademarks and tradenames.
Philip S. Sassower has been Chairman of the Board and Secretary of the
Company since 1998, Chairman of the Company's Executive Committee since 1997,
and Chairman of the Finance Committee since 1995. From 1997 to 1998, Mr.
Sassower served as Co-Chief Executive Officer of the Company. Mr. Sassower
joined the Company's Board of Directors in 1994. Since its founding in 1996, Mr.
Sassower has been the CEO of Phoenix Enterprises LLC, a company that assists in
restructuring and providing long-term capital to business enterprises. Mr.
Sassower was Chairman of the Board of Newpark Resources, Inc. (an oil field and
environmental services company) from 1987 to 1996 and was Chairman of the
Executive Committee from 1996 to 1997. Mr. Sassower is also a general partner of
CIC Standby Ventures, L.P. and Phoenix SeaRex Associates L.P., and was general
partner of S&S Newpark Ventures, L.P. and S&S Investments until 1995. Since
1993, he has been the CEO of BP Acquisition, LLC and the individual General
Partner or President of the corporate general partner of BP Restaurants L.P. In
July 1998, BP Acquisition LLC and BP Restaurants LP filed petitions under
Chapter 11 of the United States Bankruptcy Code, and in July 1999 the petitions
were dismissed. Since 1997, Mr. Sassower has been a director of SeaRex, Inc. (a
developer and operator of lift boats used for drilling in offshore waters), and,
since 1999, has served as a director of SeaRex Energy Services, Inc., the parent
of SeaRex, Inc. In January 2000, SeaRex, Inc. and SeaRex Energy Services, Inc.
filed petitions under Chapter 11 of the United States Bankruptcy Code. After the
filing of these petitions, Mr. Sassower became Chairman of the Board and CEO of
each of these entities.
Jeffrey Steiner was elected as a director of the Company in June 1998. He
has been Chairman of the Board, Chief Executive Officer and a director of The
Fairchild Corporation (a company in the fields of aerospace and high technology)
since 1985 and has been President since 1991. He has also served as Chairman of
the Board, Chief Executive Officer and President of Banner Aerospace (a
distributor and lessor of aircraft parts and engines) since September 1993 and
as Chairman, Chief Executive Officer and President of RHI Holdings, Inc. (a
holding company of The Fairchild Corporation) since 1988. From July 1992 through
December 1993, Mr. Steiner was a Vice Chairman of the Board of Rexnord
Corporation. Mr. Steiner was also Vice Chairman of Shared Technologies Fairchild
until January 1998, when the Company was acquired by Intermedia Communications,
Inc. He currently serves as a director of the Franklin Corporation and the
Copley Fund.
C.B. Sung became a director of the Company in 1986. Mr. Sung has been the
Chairman and Chief Executive Officer of Unison Group, Inc. (a multi-national
corporation involved in manufacturing, computer systems, international
investment and trade) since 1986 and Unison Pacific Corporation since 1976. He
has been a member of the Board of Directors of Capital Investment of Hawaii,
Inc. (real estate and security investing) since 1985, and serves on the Board of
Directors of several private companies.
Other Director Information
The Company's affairs are managed under the direction of the Board of
Directors. Members of the Board receive information concerning the Company's
affairs through oral and written reports by management, Board and committee
meetings and other means. The Company's directors generally attend Board of
Directors meetings, committee meetings and informal meetings with management and
others, participate in telephone conversations and have other communications
with management and others regarding the Company's affairs.
Directors of the Company serve until their successors are duly elected
and qualified or until their earlier resignation, removal or disqualification.
There are no family relationships between the Company's directors and executive
officers. For certain relationships between the Company and its directors, see
"Certain Relationships and Related Transactions."
Board Committees
The Company's Board of Directors has five committees as set forth
below. The members of each committee are appointed by the Board of Directors.
4
<PAGE>
Executive Committee. In March 1997, the Board of Directors formed an
Executive Committee to provide management with advice on significant matters and
to act at times when the full Board of Directors is not immediately available.
The members of the Executive Committee are Guido DiGregorio, Philip S. Sassower
and C.B.
Sung.
Audit Committee. The Audit Committee generally reviews the scope and
results of the audit by the Company's independent auditors and reviews the
Company's procedures for establishing and monitoring internal accounting
controls. The Audit Committee does not have a charter. The members of the Audit
Committee are Philip S. Sassower, C. B. Sung and Jeffrey Steiner. According to
the National Association of Securities Dealers' listing standards definition of
"independence", Messrs. Steiner and Sung are independent members of the Audit
Committee. Mr. Sassower, who is a part-time employee of the Company, is not
considered independent, but the Board believes that his participation on the
Audit Committee is in the best interest of the Company.
Finance Committee. The Finance Committee develops strategies for the
financing and development of the Company and monitors and evaluates progress
toward established objectives. The members of the Finance Committee are Jess
Ravich, Philip S. Sassower and Jeffrey Steiner.
Compensation Committee. The Compensation Committee generally reviews
compensation matters with respect to executive and senior management
arrangements. The members of the Compensation Committee are Philip S. Sassower
and Jeffrey Steiner.
Stock Option Committee. The Stock Option Committee administers the
Company's stock option plans. The members of the Stock Option Committee are
Philip S. Sassower and Jeffrey Steiner.
The Board of Directors does not have a standing nominating committee.
Board and Committee Meetings
During 1999, the Board of Directors held four formal meetings and also
acted by unanimous written consent on six occasions. The Committees held
meetings jointly with the formal Board meetings. For the year ended December 31,
1999, each incumbent director participated in at least 75% of the total number
of formal meetings of the Board and each Committee on which he served, except
Jeffrey Steiner who attended approximately 25% of the formal meetings.
Director Compensation
For their services as directors of the Company, all non-employee
directors receive a fee of $1,000 for each Board of Directors meeting attended
and all directors are reimbursed for all reasonable out-of-pocket expenses
incurred in connection with attending such meetings. Directors are also eligible
to receive stock options. In January 1999, Philip Sassower, and Guido DiGregorio
were granted options to purchase 1,602,000 and 1,800,000 shares of Common Stock
at an exercise price of $0.75, which options will expire on January 12, 2006. In
January 1999, Jess M. Ravich, Jeffrey Steiner and C. B. Sung were granted
options to purchase 20,000, 20,000 and 10,000 shares of Common Stock at an
exercise price of $1.03, which options expire on January 27, 2006. In June 1999,
Jess M. Ravich, Jeffrey Steiner and C. B. Sung were each granted options to
purchase 25,000 shares of Common Stock at an exercise price of $1.19, which
options expire on June 7, 2006.
Required Affirmative Vote
APPROVAL OF PROPOSAL 1 TO ELECT FIVE DIRECTORS REQUIRES THE AFFIRMATIVE
VOTE OF A PLURALITY OF THE SHARES REPRESENTED IN PERSON OR BY PROXY AT THE
ANNUAL MEETING. THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH OF THE
NOMINEES NAMED HEREIN.
EXECUTIVE OFFICERS
The following table sets forth, as of April 19, 2000, the name and age
of each executive officer of the Company, and all positions and offices of the
Company presently held by each of them.
<TABLE>
<CAPTION>
Year First
Elected
Name Age Positions Currently Held or Appointed
- ---- --- ------------------------ ------------
<S> <C> <C> <C>
Guido D. DiGregorio 61 President, Chief Executive Officer 1999
President, Chief Operating Officer 1997
Philip S. Sassower 60 Chairman of the Board, Secretary 1998
Chairman of the Executive Committee 1997
Chairman of the Finance Committee 1995
Marjorie Bailey 42 Chief Financial Officer 1999
</TABLE>
5
<PAGE>
The business experience of each of the executive officers for at least the
past five years includes the following:
Guido DiGregorio was appointed Chief Executive Officer in June 1999 and
President in November 1997. From November 1997 to June 1999 he was also the
Company's Chief Operating Office. He was a partner in DH Partners, Inc. (a
management consultant) from 1996 to 1997. Prior to that, Mr. DiGregorio was
recruited by a number of companies to reverse a trend of financial losses,
serving as President and CEO of each of the following companies: Display
Technologies, Inc. (a manufacturer of video data monitors) from 1994 to 1996,
Superior Engineering Corp. (a producer of factory-built gas fireplaces) from
1991 to 1993, Proxim, Inc. (wireless data communications) from 1989 to 1991,
Maxitron Corp. (a manufacturer of computer products) from 1986 to 1989 and Exide
Electronics (producer of computer power conditioning products) from 1983 to
1986. From 1966 to 1983, Mr. DiGregorio was employed by General Electric in
various management positions, rising to the position of General Manager of an
industrial automation business.
Philip S. Sassower has been Chairman of the Board and Secretary of the
Company since 1998, Chairman of the Company's Executive Committee since 1997,
and Chairman of the Finance Committee since 1995. From 1997 to 1998, Mr.
Sassower served as Co-Chief Executive Officer of the Company. Mr. Sassower
joined the Company's Board of Directors in 1994. Since its founding in 1996, Mr.
Sassower has been the CEO of Phoenix Enterprises LLC, a company that assists in
restructuring and providing long-term capital to business enterprises. Mr.
Sassower was Chairman of the Board of Newpark Resources, Inc. (an oil field and
environmental services company) from 1987 to 1996 and was Chairman of the
Executive Committee from 1996 to 1997. Mr. Sassower is also a general partner of
CIC Standby Ventures, L.P. and Phoenix SeaRex Associates L.P., and was general
partner of S&S Newpark Ventures, L.P. and S&S Investments until 1995. Since
1993, he has been the CEO of BP Acquisition, LLC and the individual General
Partner or President of the corporate general partner of BP Restaurants L.P. In
July 1998, BP Acquisition LLC and BP Restaurants LP filed petitions under
Chapter 11 of the United States Bankruptcy Code, and in July 1999 the petitions
were dismissed. Since 1997, Mr. Sassower has been a director of SeaRex, Inc. (a
developer and operator of lift boats used for drilling in offshore waters), and,
since 1999, has served as a director of SeaRex Energy Services, Inc., the parent
of SeaRex, Inc. In January 2000, SeaRex, Inc. and SeaRex Energy Services, Inc.
filed petitions under Chapter 11 of the United States Bankruptcy Code. After the
filing of these petitions, Mr. Sassower became Chairman of the Board and CEO of
each of these entities.
Marjorie L. Bailey has been Chief Financial Officer of the Company since
December 1999. Prior to joining CIC, Ms. Bailey served as Chief Financial
Officer of J. J's Mae, Inc. an apparel manufacturer from 1997 to 1999. Prior to
that, Ms. Bailey was with the accounting firm of Stonefield Josephson, Inc. from
1990 to 1997 most recently as an audit manager. Ms. Bailey is an instructor in
the graduate program at Dominican College of San Rafel since 1997 and Ms. Bailey
also served as the Co-President of the League of Women Voters of San Francisco
from 1997 to 1999. Ms. Bailey is a graduate of San Jose State University and a
Certified Public Accountant in the State of California.
EXECUTIVE COMPENSATION
The following table sets forth compensation awarded to, earned by or
paid to the Company's President, regardless of the amount of compensation, and
each executive officer of the Company serving as of December 31, 1999 whose
total annual salary and bonus for 1999 exceeded $100,000 (collectively, the
"Named Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------
Securities
Other Annual Underlying
Name and Principal Position Year Salary Compensation Options
- --------------------------- ---- ------ ------------ -------
<S> <C> <C> <C> <C>
Guido DiGregorio............ 1999 $ 180,000 - 1,800,000
President and
Chief Executive Officer 1998 180,000 - 600,000(2)
1997 22,375(1) - -
Philip S. Sassower.......... 1999 $ 150,000(3) - 1,600,000
Chairman of the Board
and Secretary 1998 150,000(3) - 15,000(4)
1997 150,000(3) - -
</TABLE>
- -----------
6
<PAGE>
(1) Mr. DiGregorio was appointed as the Company's President and Chief Operating
Officer in November 1997.
(2) Mr. DiGregorio surrendered these options on January 12, 1999 when he
received a new grant of 1,800,000 options.
(3) Represents the amount paid to Phoenix Enterprises, LLC ("Phoenix"), which
is 100% owned by Mr. Sassower, or Mr. Sassower individually. For the year
ending December 31, 1999, $75,000 was paid to Phoenix and $75,000 to Mr.
Sassower for services rendered to the Company.
(4) Mr. Sassower received these options in his capacity as a director of the
Company.
Option Grants in 1999
The following table sets forth certain information concerning the grant of
stock options in 1999 to the Named Executive Officers.
<TABLE>
<CAPTION>
Percentage
of Potential Realizable
Total Value at Assumed
Options Annual Rates of Stock Price
Granted to Appreciation for Option
Options Employees Exer. Expir. Term (1)
Name Granted in 1999 Price Date 5% 10%
---- ------- ------- ----- ---- --- ---
<S> <C> <C> <C> <C> <C> <C>
Guido DiGregorio....1,800,000 17% $ .75 01/12/06 $1,755,000 $2,160,000
Philip S. Sassower..1,602,000 15% $ .75 01/12/06 $1,561,950 $1,922,400
</TABLE>
- -----------
(1) On January 12, 1999 (the date of grant), the closing sale price of the
Common Stock on the Nasdaq SmallCap Market was $.75 per share. Assumes that such
closing price of the Common Stock appreciates in value from the date of grant to
the end of the option term at the annualized rates of 5% and 10%, respectively.
Aggregate Option Exercises in 1999 and Year-End Option Values
The following table sets forth certain information concerning the Named
Executive Officers with respect to the exercise of options in 1999, the number
of shares covered by exercisable and unexercisable stock options at December 31,
1999 and the aggregate value of exercisable and unexercisable "in-the-money"
options at December 31, 1999.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-The-Money
Options at Options
Shares Fiscal at Fiscal
Acquired Year-End Year-End(1)
On Value Exercisable(E)/ Exercisable(E)/
Name Exercise Realized Unexercisable(U) Unexercisable(U)
- ---- -------- -------- ---------------- ----------------
<S> <C> <C> <C> <C>
Guido DiGregorio.... - - 450,540(E) $ 3,379,050(E)
1,349,460(U) 10,120,950(U)
Philip S. Sassower.. - - 590,980(E) $ 4,443,705(E)
1,201,020(U)(2) 9,007,650(U)(2)
</TABLE>
- -----------
7
<PAGE>
(1) Determined by using the difference between the closing sale price of
the Common Stock on the Nasdaq SmallCap Market as of December 31, 1999
($ ) and the exercise price of such options.
(2) On March 27, 1999, Mr. Sassower exercised options to purchase an
aggregate of 724,427 shares, and on April 17, 2000, Mr. Sassower
exercised options to purchase an aggregate of 133, 446 shares.
1999 Stock Option Plan
The Company's 1999 Plan provides for the granting to the Company's
directors and employees of non-transferable incentive stock options ("Incentive
Options") within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), and non-transferable non-statutory stock options
("Non-Qualified Options"). A total of 2,000,000 shares of Common Stock are
authorized for issuance under the 1999 Plan. As of April 19, 2000, options to
purchase an aggregate 520,000 shares of Common Stock were outstanding and
1,480,000 shares remain available for future grants. Unless terminated sooner,
the 1999 Plan will terminate in June 2009.
The 1999 Plan may be administered by the Board of Directors or a stock
option committee of the Board (the "Committee"). The Board or any such Committee
has the authority to determine the terms of the options granted, including the
exercise price, number of shares subject to each option, vesting provisions, if
any, and the form of consideration payable upon exercise. The exercise price of
Incentive Options must be the fair market value of the Common Stock valued at
the date of grant and the exercise price on Non-Qualified Options must be at
least 85% of the fair market value of the Common Stock valued at the date of
grant. The expiration date of Options is determined by the Committee, but
Options cannot expire later than ten years from the date of grant, and in the
case of Incentive Options granted to 10% stockholders, cannot expire later than
five years from the date of grant. Options have typically been granted with an
expiration date seven years after the date of grant.
If an employee to whom an award has been granted under the 1999 Option
Plan dies while providing services to the Company, retires from employment with
the Company after attaining his retirement date, or terminates employment with
the Company as a result of permanent and total disability, the restrictions then
applicable to such award shall continue as if the employee had not terminated
employment and such award shall thereafter be exercisable, in whole or in part
by the person to whom it was granted (or by his duly appointed, qualified, and
acting personal representative, his estate, or by a person who acquired the
right to exercise such option by bequest or inheritance from the grantee), in
the manner set forth in the award, at any time within the remaining term of such
award. Except as provided in the preceding paragraph, generally if a person to
whom an option has been granted under the 1999 Plan ceases to be an employee of
the Company, such option shall continue to be exercisable to the same extent
that it was exercisable on the last day on which such person was an employee for
a period of 90 days thereafter, or for such longer period as may be determined
by the Committee, whereupon such option shall terminate and shall not thereafter
be exercisable.
The Board has the authority to amend or terminate the 1999 Plan,
provided that such action does not impair the rights of any optionee under any
option previously granted under the 1999 Option Plan, without the consent of
such optionee.
1994 Stock Option Plan
The Company's 1994 Plan provides for the granting to the Company's
directors and employees of non-transferable incentive stock options ("Incentive
Options") within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), and non-transferable nonstatutory stock options
("Non-Qualified Options"). A total of 6,000,000 shares of Common Stock are
authorized for issuance under the 1994 Plan. As of April 19, 2000, options to
purchase an aggregate 2,301,423 shares of Common Stock were outstanding and
25,593 shares remain available for future grants. Unless terminated sooner, the
1994 Plan will terminate in November 2004.
The 1994 Plan may be administered by the Board of Directors or a stock
option committee of the Board (the "Committee"). The Board or any such Committee
has the authority to determine the terms of the options granted, including the
exercise price, number of shares subject to each option, vesting provisions, if
any, and the form of consideration payable upon exercise. The exercise price of
Incentive Options must be the fair market value of the Common Stock valued at
the date of grant and the exercise price on Non-Qualified Options must be at
least 85% of the fair market value of the Common Stock valued at the date of
grant. The expiration date of Options is determined by the Committee, but
Options cannot expire later than ten years from the date of grant, and in the
case of Incentive Options granted to 10% stockholders, cannot expire later than
five years from the date of grant. Options have typically been granted with an
expiration date seven years after the date of grant.
8
<PAGE>
If an employee to whom an award has been granted under the 1994 Option
Plan dies while providing services to the Company, retires from employment with
the Company after attaining his retirement date, or terminates employment with
the Company as a result of permanent and total disability, the restrictions then
applicable to such award shall continue as if the employee had not terminated
employment and such award shall thereafter be exercisable, in whole or in part
by the person to whom it was granted (or by his duly appointed, qualified, and
acting personal representative, his estate, or by a person who acquired the
right to exercise such option by bequest or inheritance from the grantee), in
the manner set forth in the award, at any time within the remaining term of such
award. Except as provided in the preceding paragraph, generally if a person to
whom an option has been granted under the 1994 Plan ceases to be an employee of
the Company, such option shall continue to be exercisable to the same extent
that it was exercisable on the last day on which such person was an employee for
a period of 30 days thereafter, or for such longer period as may be determined
by the Committee, whereupon such option shall terminate and shall not thereafter
be exercisable.
The Board has the authority to amend or terminate the 1994 Plan,
provided that such action does not impair the rights of any optionee under any
option previously granted under the 1994 Option Plan, without the consent of
such optionee.
1991 Option Plans
The Company has two other stock option plans (the 1991 Stock Option
Plan and the 1991 Nondiscretionary Plan (the "1991 Options Plans")). Incentive
and nonqualified options under the 1991 Option Plans may be granted to
employees, officers, and consultants of the Company. As amended, there are
2,050,000 shares of Common Stock authorized for issuance under these plans. For
the year ended December 31, 1999, the Company granted options to purchase
297,000 shares of Common Stock under the 1991 Stock Option Plan.
COMPENSATION AND STOCK OPTION COMMITTEE REPORT
The Compensation Committee and Stock Option Committee have provided the
following Report.
Compensation Philosophy and Objectives. The Committees' compensation
philosophy is based upon the belief that the success of the Company results from
the coordinated efforts of all employees working as a team to achieve objectives
of providing superior products and services to the Company's customers and
maximizing the Company's value for the benefit of its stockholders.
The Company's compensation programs are designed to attract, retain and
reward personnel whose individual and team performance contributes significantly
to the short and long-term objectives of the Company. The Company's executive
compensation programs are guided by the following principles, which may also be
considered in making compensation decisions for employees:
To ensure competitiveness, the Company monitors industry
standards and considers this information when it makes
compensation decisions.
The compensation of executive officers is affected by individual,
team and overall Company performance. Overall Company performance
is based upon achievement of strategic and operating goals. Such
factors include revenues generated, technology validations,
timely product introductions, capturing market share and
preservation of and increases in stockholder value. Individual
and team performance is considered to the extent of whether
departmental goals are achieved within the time and budget
constraints of Company operating plans. Additionally, individual
performance is measured, in part, against the extent to which an
individual executive officer is able to foster team spirit and
loyalty and minimize employee turnover.
Methods of Compensation. The key elements of the Company's executive
compensation program consist primarily of base salary and stock options. Base
salary for the Company's executive officers is generally determined by
performance, the combined base salary and annual bonus for competitive positions
in the industry and general market and Company conditions. Currently, the
Company does not have an annual bonus plan. The Committees believe that the use
of stock options as a means of compensation provide an incentive for executives
and align their interests with those of the stockholders. All employees are
eligible to receive stock options under the Company's stock option plans.
Options are granted upon recommendations by management.
9
<PAGE>
President and Chief Executive Officer's Compensation. Mr. Guido
DiGregorio, the Chief Executive Officer and President of the Company, was
appointed to the Presidency by the Board of Directors in November 1997 and to
the office of Chief Executive Officer in June 1999. His 1999 compensation was
determined after consideration of, among other things, the principles and
factors used in the determination of compensation for other executive officers
of the Company and objectives established by the Board. Mr. DiGregorio currently
receives an annual salary of $180,000. In January 1999, Mr. DiGregorio received
options to purchase 1,800,000 shares of Common Stock at an exercise price of
$.75 per share in connection with a Company wide grant of options. The Company
does not currently have an employment agreement with Mr. DiGregorio.
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
Philip S. Sassower Philip S. Sassower
Jeffrey Steiner Jeffrey Steiner
Compensation Committee Interlocks and Insider Participation
In June 1998, Philip S. Sassower, who serves as a member of the
Company's Compensation and Stock Option Committees, was appointed as the
Company's Chairman of the Board and Secretary. For the year ended December 31,
1999, Phoenix, which is 100% owned by Mr. Sassower, received $75,000 in fees and
was reimbursed for office expenses from the Company for consulting services and
Mr. Sassower received $75,000 in compensation from the Company. See "Certain
Relationships and Related Transactions." No other executive officer is a member
of the Compensation or Stock Option Committees.
Audit Committee Report
In the past year, the Audit Committee has, among other activities:
1. Reviewed and discussed the Company's 1999 audited financial statements with
the Company's management;
2. Discussed with the independent auditors, Stonefield Josephson, Inc., the
matters required to be discussed by the American Institute of Certified
Public Accountants Auditing Standards Board Statement on Auditing Standards
No. 61 ("Communication with Audit Committees") which includes, among other
items, matters related to the conduct of the audit of the Company's
financial statement; and
3. Received written disclosures and the letter from the independent auditors
required by International Standards Board Standard No.1 ("Independent
Discussions with Audit Committees") and has discussed with the auditors the
auditors' independence from the Company.
Based on review and discussion of the Company's 1999 audited financial
statements with management and the independent auditors, the Audit Committee
recommended to the Board of Directors that the Company's audited financial
statements for the fiscal year ended December 31, 1999 be included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999.
The Audit Committee
Of the Board of Directors
Philip S. Sassower
C. B. Sung
Jeffrey Steiner
PERFORMANCE GRAPH
The Securities and Exchange Commission requires the Company to include
in this Proxy Statement a graph comparing the Company's cumulative five-year
return on its Common Stock with a broad-based stock index and either a
nationally recognized industry index or an index of peer companies selected by
the Company. This performance graph compares the cumulative five-year returns on
the Common Stock with the Nasdaq Computer and Data Processing Index and the
Nasdaq Index. In September 1991, the Common Stock was first listed on the Nasdaq
SmallCap Market and in June 1993 it was listed on the Nasdaq National Market. In
July 1994, the Common Stock was delisted from Nasdaq and from July 1994 to July
1996, the Common Stock was quoted on the OTC Bulletin Board. In July 1996, the
Common Stock was relisted on the Nasdaq SmallCap Market.
10
<PAGE>
Comparison of Five-Year Total Return
The following table was represented as a line graph in the printed proxy.
Total Return To Shareholder's
(Dividends reinvested monthly)
<TABLE>
<CAPTION>
ANNUAL RETURN PERCENTAGE
Years Ending
Company / Index Dec95 Dec96 Dec97 Dec98 Dec99
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
COMMUN INTELLIGENCE.... 380.00 14.58 -52.29 -42.84 1000.00
NASDAQ US/FOREIGN...... 40.36 22.43 22.12 38.28 83.25
NASDAQ COMPUTER &
DATA PROCESSING....... 52.28 23.42 22.85 78.53 111.36
</TABLE>
<TABLE>
<CAPTION>
INDEXED RETURNS
Base Years Ending
Period
Company / Index Dec94 Dec95 Dec96 Dec97 Dec98 Dec99
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
COMMUN INTELLIGENCE...100 480.00 550.00 262.40 150.00 1650.00
NASDAQ US/FOREIGN.....100 140.36 171.84 209.85 290.17 531.74
NASDAQ COMPUTER &
DATA PROCESSING.....100 152.28 187.95 230.90 412.23 871.27
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January 1996, the Company retained Mr. Philip Sassower, then a member of
the Board of Directors and Chairman of the Finance Committee, as a financial
consultant for financial and investor relations matters. Pursuant to such
consulting arrangement, Phoenix, a company wholly-owned by Mr. Sassower, was
paid an aggregate of $100,000 in 1996 by the Company. In 1997, Mr. Sassower
became Chairman of the Company's Executive Committee and Co-Chief Executive
Officer of the Company and increased his time commitments to the Company. To
compensate Mr. Sassower for his additional time commitments and to reimburse him
for certain office expenses, the Company increased the consulting fees to be
paid to Phoenix for 1997 to $150,000. In 1998, the office of Co-Chief Executive
Officer was abolished and Mr. Sassower became Chairman of the Board of Directors
and Secretary. Phoenix was paid a consulting fee of $150,000 during that year.
In 1999, $75,000 of the consulting fee was paid to Phoenix and $75,000 was paid
to Mr. Sassower, individually.
11
<PAGE>
On January 12, 1999, for services rendered, the Board of Directors
approved non-qualified stock option grants to Mr. Guido DiGregorio and Mr.
Philip Sassower to purchase 1,800,000 and 1,602,000 shares of Common Stock,
respectively. The option exercise price per share is $0.75 and the options will
vest over three years pro rata on a quarterly basis commencing from the date of
grant. In connection with this issuance Mr. DiGregorio surrendered the 600,000
options granted to him in 1997.
On January 27, 1999, the Board of Directors approved non-qualified stock
option grants to purchase 20,000 shares of Common Stock to each of Mr. Ravich
and Mr. Steiner. In addition, Mr. Sung was granted options to purchase 10,000
shares of Common Stock. These options vest immediately (however, the Company
retains a repurchase option) and have a seven-year life. The option price per
share is $1.03.
PROPOSAL 2
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
On December 8, 1999, the Company dismissed PricewaterhouseCoopers LLP
as its independent auditors. In connection with the audits for the years ended
December 31, 1997 and 1998, and during subsequent periods during 1999, there
were no disagreements with PricewaterhouseCoopers LLP on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which disagreements, if not resolved to their satisfaction,
would have caused them to make reference in connection with their opinion to the
subject matter of the disagreement. The audit reports of PricewaterhouseCoopers
LLP on the consolidated financial statements of the Company as of and for the
years ended December 31, 1997 and 1998 did not contain any adverse opinion or
disclaimer of opinion.
On December 13, 1999, the Company retained Stonefield Josephson Inc. as
its new independent auditors. Prior to the retention of Stonefield Josephson,
Inc., neither the Company nor any person on its behalf consulted with Stonefield
Josephson, Inc. regarding the application of accounting principles to any
transaction or the types of audit opinion that might be rendered on the
Company's financial statements.
The dismissal of PricewaterhouseCoopers LLP and the retention of
Stonefield Josephson Inc. were approved by the Board of Directors of the
Company. Stockholders are being asked to ratify the retention of Stonefield
Josephson as independent accountants for the year ended December 31, 2000..
Representatives of Stonefield Josephson, Inc. are expected to be present at the
Annual Meeting and will be given the opportunity to make statements if they so
desire and will be available to respond to appropriate questions.
Required Affirmative Vote
Ratification of the appointment of Stonefield Josephson, Inc. as the
Company's independent accountants for the year ending December 31, 2000 requires
the affirmative vote of a majority of the Shares represented in person or by
proxy at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF STONEFIELD JOSEPHSON, INC. AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS FOR THE YEAR ENDING DECEMBER 31, 2000.
PROPOSALS OF SECURITY HOLDERS
A stockholder proposal requested to be presented at the Company's next
Annual Meeting of Stockholders must be received by the Company at its principal
executive offices, 275 Shoreline Drive, Suite 500, Redwood Shores, California
94065, no later than December 31, 2000. The Board of Directors will review any
stockholder proposal received in accordance herewith and will determine whether
such proposal is appropriate and satisfies the applicable requirements for
inclusion in the Company's proxy statement for its next Annual Meeting of
Stockholders.
SOLICITATION OF PROXIES
The Company will bear the cost of the Annual Meeting and the
solicitation of proxies related thereto, including the costs relating to
printing and mailing the proxy materials. The Company has retained Skinner &
Co., a firm specializing in the solicitation of proxies, to assist the Company
in the solicitation of proxies at a fee estimated to be approximately $8,000 in
the aggregate, including expenses. Directors, officers and employees of the
Company may make additional solicitations in person or by telephone in respect
to the Meeting without additional expenses to the Company.
12
<PAGE>
OTHER MATTERS
The Board of Directors knows of no other matter that may be presented
for action at the Annual Meeting. However, if any other matter properly comes
before the Annual Meeting, the persons named as proxies will vote in accordance
with their judgment in respect to any such matter.
Copies of the Company's Annual Report on Form 10-K, its Quarterly
Reports on Form 10-Q, including any amendments thereto, and the notice of annual
meeting of stockholders, proxy statement and proxies, are available upon written
request, without cost, from the Company's principal executive offices at 275
Shoreline Drive, Suite 500, Redwood Shores, California 94065 (Attention:
Corporate Secretary), Telephone (650) 802-7888.
Stockholders are urged to complete, sign, date and return the enclosed
proxy promptly in the envelope provided, regardless of whether or not they
expect to attend the Annual Meeting. The prompt return of such proxy or proxies,
as the case may be, will assist the Company in preparing for the Annual Meeting.
Your cooperation is greatly appreciated.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Guido DiGregorio
Guido DiGregorio, President and Chief Executive Office
May 1, 2000
13
<PAGE>
PROXY
COMMUNICATION INTELLIGENCE CORPORATION
275 SHORELIND DRIVE, SUITE 500
REDWOOD SHORES, CALIFORNIA 94065
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS ON JUNE 12, 2000.
The undersigned does hereby appoint Guido DiGregorio and Philip Sassower
and each of them as agents and proxies of the undersigned, with full power of
substitution, to represent and to vote, as designated below, all the shares of
Common Stock of Communication Intelligence Corporation (the Company) held of
record by the undersigned on April 19, 2000 (the "Record Date")in connection
with the proposals presented at the Company's Annual Meeting of Stockholders to
be held on June 12, 2000 at the Hotel Sofitel, 223 Twin Dolphin Drive, Redwood
Shores, California 94065, or any adjournment or postponement thereof, all as
more fully described in the attached Notice of Annual Meeting of Stockholders
and Proxy Statement dated May 1, 2000, hereby revoking all proxies heretofore
given with respect to such shares.
1.ELECTION OF DIRECTORS:FOR all nominees listed below ___ WITHHOLD AUTHORITY__
EXCEPT AS MARKED TO THE CON-TRARY BELOW)TO VOTE FOR ALL NOMINEES LISTED BELOW
(Instructions: To withhold authority to vote for any individual nominee strike a
line through the nominee's name in the list below.)
GUIDO DiGREGORIO PHILIP SASSOWER CHIEN BOR (C.B.) SUNG
JESS M. RAVICH JEFFREY STEINER
2. PROPOSAL TO RATIFY THE APPOINTMENT OF STONEFIELD JOSEPHSON,INC. AS THE
COMPANY'S INDEPENDENT ACCOUNTANTS FOR THE YEAR ENDING DECEMBER 31, 2000.
________ FOR ________ AGAINST ________ ABSTAIN
In their discretion, the proxy holders are authorized to vote upon such other
matters as may properly come before the Annual Meeting.
<PAGE>
The undersigned hereby revokes any proxy hertofore given with respect to
such shares and confirms all that said proxy, or any of them, or any substitute
or substitutes, may lawfully do or cause to be done by virtue hereof. This Proxy
when properly executed will be voted in the manner directed herein by the
undersigned stockholder. If no direction is made, this Proxy will be voted FOR
Proposals 1 and 2. The undersigned hereby acknowledges receipt of the Company,s
Notice of Annual Meeting of Stockholders to be held on June 12, 2000, the
Company's Proxy Statement dated April 30, 2000 (and the accompanying proxy), and
the Company's 1999 Annual Report to Stockholders.
Dated ___________________, 2000
_______________________________
(Signature)
_______________________________
(Additional signature, if
held jointly)
_______________________________
(Title, if applicable)
Please date and sign exactly as your name appears hereon. If your shares
are held as joint tenants, both must sign. When signing as attorney, executor,
administrator, trustee or guardian or in any similar capacity, please give full
title as such. If a corporation, please sign in full corporate name by president
or other authorized officer, giving title. If a partnership, please sign in
partnership name by an authorized person
PLEASE COMPLETE, DATE, SIGN AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
