<PAGE> 1
INVIVO CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 10, 1998
------------------------
TO THE STOCKHOLDERS OF
INVIVO CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Invivo
Corporation (the "Company"), a Delaware corporation, will be held on December
10, 1998 at 10:00 a.m. at the Company's offices located at 4900 Hopyard Rd.,
Suite 210, Pleasanton, California, 94588 for the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To ratify the selection of KPMG Peat Marwick LLP as independent
public auditors of the Company.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on November 6, 1998
as the record date for the determination of stockholders entitled to notice of
and to vote at this Annual Meeting and at any adjournment thereof.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTPAID ENVELOPE. IF YOU
ARE ABLE TO ATTEND THE MEETING AND WISH TO VOTE YOUR SHARES PERSONALLY, YOU MAY
DO SO AT ANY TIME BEFORE THE PROXY IS EXERCISED.
By Order of the Board of Directors
James B. Hawkins
Secretary
November 12, 1998
<PAGE> 2
INVIVO CORPORATION
------------------------
PROXY STATEMENT
------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Invivo Corporation (the "Company") for use at the Annual Meeting of Stockholders
to be held on December 10, 1998 at 10:00 a.m. at the Company's offices located
at 4900 Hopyard Rd., Suite 210, Pleasanton, California, 94588.
VOTING
The record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting or any adjournment thereof has been fixed as
November 6, 1998. As of that date, there were outstanding 3,273,668 shares of
Common Stock of the Company. Each stockholder will be entitled to one vote for
each share of common stock held on all matters to be voted upon. Abstentions are
considered as shares present and entitled to vote and therefore will have the
same effect as a vote against a matter presented at the meeting. Broker
non-votes are considered as shares not entitled to vote with respect to such
matters, but are counted toward the establishment of a quorum. Subject to prior
revocation, all shares represented at the meeting by properly executed proxies
will be voted in accordance with specifications on the proxy. If no
specification is made, the shares will be voted in favor of: (i) the election of
nominees provided for herein as directors; and (ii) the ratification of KPMG
Peat Marwick LLP as independent public auditors of the Company.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of the Company at the Company's principal executive office, 4900
Hopyard Rd., Suite 210, Pleasanton, California, 94588, a written notice of
revocation or duly executed proxy bearing a later date, or by attending the
Annual Meeting and voting in person.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the
enclosed proxy and any additional information furnished to stockholders. Copies
of solicitation material will be furnished to stockholders, and to brokerage
houses, fiduciaries and custodians holding in their names shares of Common Stock
beneficially owned by others to forward to such beneficial owners. The Company
may reimburse persons representing beneficial owners of shares for their
expenses in forwarding solicitation material to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by telephone, telegram or
personal solicitation by directors, officers or other regular employees of the
Company. No additional compensation will be paid for any such services.
This proxy statement and the accompanying proxy card are being mailed to
all stockholders on or about November 12, 1998.
PROPOSAL 1
NOMINATION AND ELECTION OF DIRECTORS
Each director to be elected will hold office until the next annual meeting
of stockholders and until his successor is elected and has qualified, or until
his death, resignation or removal. Mr. Goggio, Mr. Hawkins,
<PAGE> 3
Mr. Sarlo and Ms. DeBuono are currently directors of the Company. There are no
family relationships among executive officers or directors of the Company,
except that Mr. Hawkins, the President, Chief Executive Officer, Secretary and a
director, and Mr. Glenn, the Chief Financial Officer, are brothers-in-law.
MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE
Shares of Common Stock represented by executed proxies will be voted, if
authority to do so is not withheld, for the election of the five nominees named
below. In the event that any nominee should become unavailable for election as a
result of an unexpected occurrence, such shares will be voted for the election
of such substitute nominee as management may propose. Each person nominated for
election has agreed to serve if elected, and management has no reason to believe
that any nominee will be unavailable to serve. The five candidates receiving the
highest number of the affirmative votes cast at the Annual Meeting will be
elected directors of the Company.
NOMINEES:
The names, ages and periods of service on the Company's Board of Directors
of the nominees, and certain other information about them, is set forth below:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE
---- --- --------
<S> <C> <C>
James B. Hawkins(1)......................................... 43 1985
Ernest C. Goggio(2)......................................... 75 1986
George S. Sarlo(1,2)........................................ 60 1991
Laureen DeBuono(1,2)........................................ 41 1998
Roger Susi.................................................. 45 --
</TABLE>
- ---------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
Mr. Hawkins has been President, Chief Executive Officer and a director of
the Company, and its predecessor, since August 1985. He has served as Secretary
of the Company since September 1986. Mr. Hawkins has served as a director of
Pillar Corporation, a major stockholder of the Company, since August 1987.
Mr. Goggio has served as Chairman of the Board of Directors of the Company
since November 1986. He has been President and Chairman of the Board of
Directors of Pillar Corporation since 1966. Pillar Corporation, based in
Milwaukee, Wisconsin, manufactures corona treater equipment for the plastics
industry and heat induction and melting equipment for the metals industry.
Mr. Sarlo has been a director of the Company since January 1991. He has
been a general partner of the Walden Group of venture capital funds since 1974.
Mr. Sarlo also founded and has served as Chairman of the Board of Directors of
Ashfield and Co. Inc., an investment management company, since 1973.
Ms. DeBuono has been a director of the Company since February 1998.
Effective October, 1998, Ms. DeBuono became Chief Operating Officer and Chief
Financial Officer of ReSound Corporation, a hearing health care company that
manufactures and markets advanced hearing devices. Ms. DeBuono also serves as a
Managing Principal of CEO Management Advisors. From 1992 to mid-1998, Ms.
DeBuono was Executive Vice President and General Counsel of Nellcor Puritan
Bennett Inc., a medical device company.
Mr. Susi founded and served as President of Invivo Research Inc., a wholly
owned subsidiary of Invivo Corporation, from 1986 to November 1998. Invivo
Research Inc. is a manufacturer of vital signs monitoring equipment for the
healthcare market. Effective November 1, 1998, Mr. Susi became Chairman of the
Board of Directors of Invivo Research Inc. In connection with the sale of Invivo
Research Inc. to the Company in 1992, Mr. Susi has certain rights to receive
installment payments at times selected by him or the Company. In fiscal 1998, he
elected to receive a payment totaling $465,000. For further information
regarding these payments see Note 2 in the Fiscal 1998 consolidated financial
statements.
2
<PAGE> 4
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of September 30, 1998 by
(i) each person known by the Company to beneficially own more than 5% of the
Company's Common Stock, (ii) each director and nominee to the Board of
Directors, (iii) the Chief Executive Officer and each other executive officer of
the Company as of June 30, 1998 whose salary and bonus for the year ended June
30, 1998 exceeded $100,000, and (iv) all officers and directors of the Company
as a group.
<TABLE>
<CAPTION>
AMOUNT OF
BENEFICIAL PERCENTAGE
NAME* OWNERSHIP(1)(2) OF SHARES
----- --------------- ----------
<S> <C> <C>
Pillar Corporation............................ 639,986 19.6%
330 E. Kilbourn Ave. Suite 710
Milwaukee, WI 53202
Ernest C. Goggio.............................. 706,986(3) 21.5%
Botti Brown Asset Management.................. 274,480 8.4%
655 Montgomery Street, Suite 600
San Francisco, CA 94111
James B. Hawkins.............................. 277,416(4) 8.1%
State Street Research & Management Co......... 196,500 6.0%
One Financial Center
Boston, MA 02111
Willow Creek Management....................... 179,300 5.5%
17 East Sir Francis Drake Blvd
Larkspur, CA 94939
George S. Sarlo............................... 110,300(5) 3.3%
Roger Susi.................................... 40,250(6) 1.2%
Laureen DeBuono............................... -- --
John F. Glenn................................. 21,500(7) 0.7%
F. Larry Young................................ 17,500(8) 0.5%
All executive officers and directors as a
group (7 persons)........................... 1,173,952(3)(9) 32.8%
</TABLE>
- ---------------
* The address of each of the directors or executive officers is c/o Invivo
Corporation, 4900 Hopyard Rd. Suite 210, Pleasanton, CA 94588
(1) Each of the individuals included in the table has sole voting and investment
power over the shares listed, subject to the right of his spouse, if any,
under applicable community property laws.
(2) Except as indicated, amounts do not reflect shares reserved for issuance for
options granted under the Company's Stock Option Plan or non-qualified stock
option agreements.
(3) Includes the shares of Common Stock owned of record by Pillar Corporation,
of which Mr. Goggio is the President and majority stockholder and 14,000
shares of Common Stock issuable upon exercise of stock options exercisable
within 60 days.
(4) Includes 167,500 shares of Common Stock issuable upon exercise of stock
options exercisable within 60 days.
(5) Includes 64,000 shares of Common Stock issuable upon exercise of stock
options exercisable within 60 days.
(6) Includes 20,000 shares of Common Stock issuable upon exercise of stock
options exercisable within 60 days.
(7) Includes 21,500 shares of Common Stock issuable upon exercise of stock
options exercisable within 60 days.
3
<PAGE> 5
(8) Includes 17,500 shares of Common Stock issuable upon exercise of stock
options exercisable within 60 days.
(9) Includes 304,500 shares of Common stock issuable upon exercise of stock
options exercisable within 60 days.
BOARD AND BOARD COMMITTEE MEETINGS
During the year ended June 30, 1998, the Board of Directors held six
meetings. All of the directors attended all of the Board meetings that occurred
on or after the date they joined the Board of Directors.
During the year ended June 30, 1998, the Audit Committee of the Board of
Directors held one meeting. Each Committee member attended the meeting. The
Audit Committee recommends engagement of the Company's independent auditors,
reviews and approves services performed by such auditors, reviews and evaluates
the Company's accounting system and its system of internal controls and performs
other related duties delegated to such Committee by the Board.
During the year ended June 30, 1998, the Compensation Committee held one
meeting. Each Committee member attended the meeting. The Compensation Committee
determines the overall compensation policy for senior management of the Company,
and recommends to the Board of Directors new compensation programs or changes in
existing programs which the Committee finds appropriate.
The Board has not established a nominating committee.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation of
the Chief Executive Officer of the Company and the other most highly compensated
executive officers of the Company as of June 30, 1998 whose total salary and
bonus for the fiscal year ended June 30, 1998 exceeded $100,000 for services in
all capacities to the Company and its subsidiaries during such fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION AWARDS
ANNUAL COMPENSATION --------------------------------
------------------------------- SECURITIES
FISCAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)(1)
--------------------------- ------ --------- -------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
James Hawkins..................... 1998 231,000 40,000 -- 2,075
President and 1997 231,000 -- 35,000 1,500
Chief Executive Officer 1996 220,000 45,000 -- 1,500
John F. Glenn..................... 1998 125,000 30,000 -- 969
Vice President of Finance/ 1997 121,000 -- 15,000 1,069
Chief Financial Officer 1996 115,000 15,000 -- 1,444
F. Larry Young.................... 1998 115,000 25,000 -- 1,150
Vice President of Operations 1997 111,000 -- 15,000 1,224
1996 105,000 14,000 -- 1,326
</TABLE>
- ---------------
(1) The amounts shown represent Company contributions to the Company's 401(k)
Savings Plan.
4
<PAGE> 6
STOCK OPTIONS
The following table sets forth the number of options exercised and the
value realized upon exercise by the named executive officers during the fiscal
year ended June 30, 1998 and the value of outstanding options held by such
executive officers as of June 30, 1998.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END(#) AT FY-END($)
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) ($) UNEXERCISABLE UNEXERCISABLE(1)
---- --------------- -------------- --------------- ----------------
<S> <C> <C> <C> <C>
James Hawkins.............. -- -- 167,500/17,500 1,443,125/30,625
John F. Glenn.............. 2,000 9,250 21,500/ 7,500 100,625/13,125
F. Larry Young............. 17,500/ 7,500 75,625/13,125
</TABLE>
- ---------------
(1) The value of unexercised options is calculated by multiplying the number of
options outstanding by the difference between the option exercise price and
the June 30, 1998 closing price of $13.25 per share of the Company's common
stock as reported on The Nasdaq National Market.
DIRECTOR COMPENSATION
Members of the Board of Directors who are not officers of the Company are
entitled to receive fees of $600 for, and reimbursement for travel expenses
incurred in connection with, each Board of Directors meeting attended, except
for Ms. DeBuono who receives $1,500 for each board meeting attended. Ms. DeBuono
also receives an annual retainer fee for consulting services of $10,000.
Mr. Goggio and Mr. Sarlo each received options to purchase 4,000 shares of
the Company's Common Stock in fiscal 1998 pursuant to the automatic grant
provisions of the 1994 Stock Option Plan. In February, 1998, Ms. DeBuono and Mr.
Goggio each received options to purchase 20,000 shares of the Company's Common
Stock under the 1994 Stock Option Plan. In a separate agreement dated February,
1998, the Walden Management Corporation Pension Fund for the Benefit of George
Sarlo received options to purchase 20,000 shares of the Company's Common Stock.
All of the options granted to directors in fiscal 1998 are exercisable at an
exercise price equal to the fair market value of the Common Stock on the date of
grant and become exercisable on a cumulative basis as to one-half of the total
number of shares covered on each of the first and second anniversary dates of
the date of grant of the option. All elected directors will be entitled to
receive additional annual grants of options to purchase 4,000 shares of Common
Stock under the 1994 Stock Option Plan on the anniversary date of the annual
meeting of stockholders and each year for as long as they serve as independent
directors of the Company.
During fiscal years 1996, 1997 and 1998, the Company provided an automobile
and paid annual fees of $64,700 to Mr. Goggio for business consulting services
to the Company.
The Company has entered into indemnification agreements with each of its
directors and executive officers. Such agreements require the Company to
indemnify such individuals to the full extent permitted by law.
5
<PAGE> 7
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Goggio, Mr. Sarlo and Ms. DeBuono serve as the Compensation Committee
of the Board of Directors. None of the members of the Compensation Committee are
an employee of the Company. Mr. Hawkins, the Company's President and CEO, served
as a director of Pillar Corporation in fiscal 1998. Mr. Goggio is the President
and Chairman of the Board of Pillar Corporation. See "Director Compensation"
above for a description of options granted to, and consulting fees paid to,
Messrs. Goggio and Sarlo and Ms. DeBuono.
COMPENSATION COMMITTEE REPORT
COMPENSATION COMMITTEE
The Compensation Committee currently consists of Mr. Goggio and Mr. Sarlo
and Ms. DeBuono. The Compensation Committee determines on an annual basis the
compensation to be paid to the Chief Executive Officer and the senior executive
officers of the Company.
The Compensation Committee believes that in order for the Company to
succeed it must be able to attract and retain qualified executive officers. In
determining the type and amount of executive officer compensation, the
objectives of the Compensation Committee are to provide levels of base
compensation and bonuses that will attract and retain talented executive
officers and align their interests with the success of the Company. The
Company's executive officer compensation program is comprised of base salary, an
annual cash bonus, and stock options. The Company has developed and implemented
compensation policies, plans and programs which seek to enhance the
profitability of the Company and increase stockholder value.
BASE SALARIES
The Company's policy is to maintain base salaries competitive with salaries
paid to similarly situated executive officers in other middle market companies
(i.e. those with sales of $100 million or less) that are believed to be
comparable for compensation purposes by the Compensation Committee. Adjustments
to base compensation will generally be made based upon competitive market
conditions as well as assigned responsibility and performance as measured
against specific goals and objectives of the Company and individual employees.
The Compensation Committee has not established a particular group or listing of
generally comparable companies for this purpose and may evaluate different
companies on a year to year basis.
BONUSES
An integral part of the Company's compensation of senior executive officers
has been the annual payment of cash bonuses. The amount of these bonuses is
based in part on the review of compensation practices of comparable size
companies referred to in the above paragraph. Further, the amount of bonuses in
any year is significantly dependent on the Company's operating performance
relative to its goals, as well as to other considerations that may be deemed
relevant in any given year or instance by the Compensation Committee.
CHIEF EXECUTIVE OFFICER COMPENSATION
In determining the compensation of Mr. Hawkins, the Compensation Committee
evaluated Mr. Hawkins' responsibilities and performance and the overall results
of the Company to determine the total compensation paid. Mr. Hawkins' base
compensation level remained the same at $231,000 for fiscal 1998 as compared to
fiscal 1997. For fiscal 1998, Mr. Hawkins received a bonus of $40,000 under the
executive bonus plan. The bonus in fiscal 1998 was due to the increase in
profitability in fiscal 1998 as compared to fiscal 1997.
Ernest C. Goggio, Chairman George Sarlo Laureen DeBuono
6
<PAGE> 8
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who beneficially own more than ten percent
of the Company's Common Stock to file reports of their initial ownership of the
Company's Common Stock and subsequent changes in such ownership with the
Securities and Exchange Commission (the "SEC") within prescribed time periods.
Officers, directors and greater than ten percent shareholders are required by
SEC regulations to furnish the Company copies of all Section 16(a) forms filed.
Based solely on review of copies of SEC Forms 3, 4, and 5, and any
amendments to such forms furnished to the Company, the Company believes that
with respect to the Company's most recent fiscal year all Section 16(a) filing
obligations were met on a timely basis.
7
<PAGE> 9
PERFORMANCE GRAPH
The following performance graph compares the performance of the Company's
Common Stock to the NASDAQ Stock Market (U.S.) Index and to the NASDAQ
Non-Financial Index. Given the large number of the Company's product lines, the
Company was unable to identify a peer group of companies based on a common
business. The graph assumes that the value of the investment in the Company's
common stock and each index was $100 at June 30, 1993 and that all dividends
were reinvested.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG INVIVO CORPORATION,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE NASDAQ NON-FINANCIAL INDEX
<TABLE>
<CAPTION>
INVIVO NASDAQ STOCK NASDAQ NON-
CORPORATION MARKET (U.S.) FINANCIAL
<S> <C> <C> <C>
6/93 100.00 100.00 100.00
6/94 162.00 100.96 97.54
6/95 184.00 134.77 134.02
6/96 168.00 173.03 170.17
6/97 124.00 210.38 200.00
6/98 212.00 277.61 262.27
</TABLE>
- ---------------
* $100 invested on June 30, 1993 in stock or index, including reinvestment of
dividends, fiscal year ending June 30.
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP as the Company's
independent public auditors for the year ended June 30, 1999, and has further
directed that management submit the selection of independent public auditors for
ratification by the stockholders at the Annual Meeting. KPMG Peat Marwick LLP
has audited the Company's financial statements since 1985. Representatives of
KPMG Peat Marwick
8
<PAGE> 10
LLP are expected to be present at the Annual Meeting, and will have an
opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.
Stockholder ratification of the selection of KPMG Peat Marwick LLP as the
Company's independent public auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of KPMG Peat Marwick
LLP to the stockholders for ratification as a matter of good corporate practice.
In the event the stockholders fail to ratify the selection, the Board will
reconsider whether or not to retain that firm.
Even if the selection is ratified, the Board in its discretion may direct
the appointment of a different independent accounting firm at any time during
the year if the Board feels that such a change would be in the best interests of
the Company and its stockholders. The affirmative vote of the holders of a
majority of the votes attributable to outstanding shares present or represented
at the Annual Meeting will be required to ratify the selection of KPMG Peat
Marwick LLP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE PROPOSAL.
STOCKHOLDER PROPOSALS
Proposals of stockholders that are intended to be presented by such
stockholders at the Company's next Annual Meeting of stockholders must be
received by the Company no later than July 15, 1999 in order to be included in
the proxy statement and proxy relating to that meeting.
If a stockholder intends to present a proposal at the Company's next Annual
Meeting of stockholders which is not to be included in the Company's proxy
statement for such meeting, the proxy holders named by the Company's Board of
Directors for such meeting may be able to use their discretionary power to vote
on such proposal. The proxy holders will be able to exercise their discretionary
voting power on such a proposal unless the stockholder gives notice to the
Company in accordance with rules adopted by the Securities and Exchange
Commission no later than September 28, 1999. The proxy holders named by the
Company's Board of Directors for the 1998 Annual Meeting may exercise their
discretionary voting power on stockholder proposals brought before the 1998
Annual Meeting as to which notice was not given to the Company prior to
September 28, 1998.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting.
However, if any other matters are properly presented to the Annual Meeting it is
the intention of the persons named in the accompanying proxy to vote in respect
thereof in accordance with their best judgment.
The Board of Directors hopes that stockholders will attend the meeting.
Whether or not you plan to attend, you are urged to complete, sign and return
the enclosed proxy in the accompanying envelope. A prompt response will greatly
facilitate arrangements for the meeting, and your cooperation will be
appreciated. Stockholders who attend the meeting may vote their shares
personally even though they have sent in their proxies.
By Order of the Board of Directors
James B. Hawkins
Secretary
November 12, 1998
9
<PAGE> 11
INVIVO CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Ernest C. Goggio and James B. Hawkins, or either
of them, each with power of substitution and revocation, as the proxy or proxies
of the undersigned to represent the undersigned and vote all shares of the
Common Stock, $.0008 par value, of INVIVO CORPORATION, which the undersigned
would be entitled to vote if personally present at the Annual Meeting of
Stockholders of Invivo Corporation, to be held on December 10, 1998 at 10:00
a.m. at the Company's offices located at 4900 Hopyard Drive, Suite 210,
Pleasanton, California, and any adjournments thereof, upon the following
matters:
1. To elect directors. [ ]
For ALL Nominees Listed Below
For All Nominees Except as Crossed Out Below [ ]
INSTRUCTION: To withhold authority for any individual nominee, cross out the
nominee's name in the following list:
Ernest C. Goggio, James B. Hawkins, George Sarlo, Laureen DeBuono, Roger Susi
WITHHOLD AUTHORITY -do not vote for any nominees [ ]
<PAGE> 12
(Continued from other side)
2. To ratify the selection of KPMG Peat Marwick LLP as independent public
auditors of the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. With discretionary authority on such matters as may properly come before
the meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The shares covered by this proxy will be voted in accordance with the choices
made. WHEN NO CHOICE IS MADE, THIS PROXY WILL BE VOTED FOR ALL LISTED NOMINEES
FOR DIRECTOR AND FOR PROPOSALS 2 AND 3.
The Annual Meeting may be held as scheduled only if a majority of the shares
outstanding are represented at the meeting by attendance or proxy. Accordingly,
please complete this proxy and return it promptly in the enclosed envelope.
Please date and sign exactly as your name(s)
appear on your shares. If signing for estates,
trusts or corporations, title or capacity should
be stated. If shares are held jointly, each
holder should sign.
----------------------------------------
----------------------------------------
Signature of Stockholder(s)
Dated , 1998
------------------
