<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
---------------------------------------------
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, For Use
/X/ Definitive Proxy Statement of Commission Only
/ / Definitive Additional Materials (as permitted by
/ / Soliciting Material Pursuant to Rule 14a-6(e)(2))
Rule 14a-11(c) or Rule 14a-12
ALTRIS SOFTWARE, INC.
- - --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
- - --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee:
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
--------------------------------------------------------------------------
(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:
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<PAGE>
ALTRIS SOFTWARE, INC.
9339 CARROLL PARK DRIVE
SAN DIEGO, CALIFORNIA 92121
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 27, 1998
The Annual Meeting of Shareholders of Altris Software, Inc., a California
corporation (the "Company"), will be held at the Company's headquarters at 9339
Carroll Park Drive, San Diego, California, at 1:30 p.m. on Thursday, August 27,
1998 for the following purposes:
1. To elect five directors to hold office until the next succeeding
Annual Meeting and until their successors have been elected and
qualified.
2. To amend the Company's 1996 Stock Incentive Plan to approve an
increase in the aggregate number of shares of Common Stock reserved
for issuance under such plan from 625,000 to 925,000 shares.
3. To transact such other business as may properly come before the Annual
Meeting and any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on June 30, 1998 as
the record date for the determination of shareholders entitled to receive notice
of, and to vote at, the Annual Meeting and any adjournments or postponements
thereof, and only holders of record of the Company's Common Stock at the close
of business on that date will be entitled to receive notice of, and to vote at,
the Annual Meeting.
WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING OR NOT, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE. THIS WILL
ENSURE THAT YOUR SHARES ARE VOTED IN ACCORDANCE WITH YOUR WISHES AND THAT A
QUORUM WILL BE PRESENT. YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING, AND YOU
MAY VOTE IN PERSON EVEN THOUGH YOU HAVE RETURNED YOUR PROXY.
By Order of the Board of Directors,
/s/ John W. Low
Secretary
July 27, 1998
<PAGE>
ALTRIS SOFTWARE, INC.
9339 CARROLL PARK DRIVE
SAN DIEGO, CALIFORNIA 92121
----------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 27, 1998
----------------------------------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Altris Software, Inc. (the "Company") for
use at the Annual Meeting of Shareholders to be held at the Company's
headquarters at 9339 Carroll Park Drive, San Diego, California, on Thursday,
August 27, 1998 at 1:30 p.m., or at any adjournments or postponements thereof,
for the purposes set forth herein and in the foregoing Notice. This Proxy
Statement and the accompanying proxy were first sent to shareholders on or about
July 27, 1998.
PROXY INFORMATION
Shares represented by properly executed proxies, if received in time and
not revoked or suspended, will be voted in accordance with the instructions
indicated thereon or, if no instructions are given for any or all of the
proposals, will be voted in favor of the election of all persons named in, or
otherwise nominated as set forth in, this Proxy Statement to serve as directors
and in favor of the proposal to amend the Company's 1996 Stock Incentive Plan in
order to increase the number of shares of the Company's common stock, no par
value (the "Common Stock"), reserved for issuance thereunder from 625,000 to
925,000 shares. A shareholder giving a proxy has the power to revoke it at any
time before it is exercised by attending and voting at the Annual Meeting or by
filing with the Secretary of the Company either a written notice of revocation
or a duly executed proxy bearing a later date.
RECORD DATE AND VOTING
Each shareholder of record of the Common Stock at the close of business on
June 30, 1998 is entitled to vote on all matters submitted to a vote of the
shareholders at the Annual Meeting. At the close of business on June 30, 1998,
there were 9,614,663 shares of Common Stock outstanding held of record by
approximately 300 shareholders. Directors will be elected by a plurality of the
votes of the shares of Common Stock represented and voting on the election of
directors. In all matters other than the election of directors, the affirmative
vote of a majority of shares of Common Stock represented and voting on a
particular matter (assuming such
1
<PAGE>
affirmative votes constitute a majority of the votes required for a quorum of
the shareholders) shall be the act of the shareholders. In general, abstentions
will have no effect on the outcome of the voting with respect to any matter. As
to certain matters other than the election of directors, New York Stock Exchange
and American Stock Exchange rules generally require when shares are registered
in street or nominee name that their member brokers receive specific
instructions from the beneficial owners in order to vote on such a proposal. If
a member broker indicates on the proxy that such broker does not have
discretionary authority as to certain shares to vote on a particular matter,
those shares will not be considered as present and entitled to vote with respect
to that matter.
Holders of Common Stock have one vote for each share on all matters
submitted to the shareholders at the Annual Meeting, except that shareholders
may cumulate votes in the election of directors if any shareholder gives notice
to the Secretary prior to the voting of his or her intention to cumulate votes.
Under cumulative voting, each shareholder may give any one candidate whose name
was placed in nomination prior to the commencement of voting a number of votes
equal to the number of directors to be elected, multiplied by the number of
votes to which the shareholder's shares are normally entitled, or distribute
such number of votes on the same principle among as many candidates as the
shareholder sees fit. The proxy holders will have authority, in their
discretion, to vote cumulatively for less than all of the nominees.
2
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to shares of the Common Stock
owned as of June 30, 1998 by (i) each current director and nominee for director,
(ii) each Named Executive Officer (as defined below) who is presently an
employee of the Company, (iii) all current directors and executive officers as a
group and (iv) each person who, to the extent known to the Company, beneficially
owned more than 5% of the outstanding shares of Common Stock as of such date.
Unless otherwise indicated in the footnotes following the table, the persons as
to whom the information is given have sole voting and investment power over the
shares shown as beneficially owned, subject to community property laws where
applicable.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NAME SHARES (1) CLASS (1)
- - ---- ---------- ----------
<S> <C> <C>
Roger H. Erickson . . . . . . . . . . . . . . . 81,000 *
Steven D. Clark . . . . . . . . . . . . . . . . 35,000 *
John W. Low . . . . . . . . . . . . . . . . . . 92,000 *
D. Ross Hamilton . . . . . . . . . . . . . . . 194,000 2.0%
Michael J. McGovern . . . . . . . . . . . . . . 350,751 3.6%
Larry D. Unruh . . . . . . . . . . . . . . . . 9,297 *
Norwood H. Davis, Jr. . . . . . . . . . . . . . 26,500 *
Martin P. Atkinson . . . . . . . . . . . . . . 5,000 *
Sirrom Capital Corporation . . . . . . . . . . 800,000(2) 7.7%
All Current Directors and Executive
Officers as a Group (9 persons) . . . . . . 803,548 8.2%
</TABLE>
- - --------------------
*Less than one percent.
(1) Amounts and percentages include shares of Common Stock that may be acquired
within 60 days of June 30, 1998 through the exercise of stock options.
Such stock included in the computation of beneficial ownership is 30,000
shares for Mr. Erickson, 45,000 shares for Mr. Low, 22,500 shares for Mr.
Hamilton, 5,000 shares for Mr. McGovern, 5,000 shares for Mr. Unruh, 5,000
shares for Mr. Davis, 5,000 shares for Mr. Atkinson, and 162,500 shares for
all current directors and executive officers as a group.
(2) Amount consists of (i) 500,000 shares of Common Stock issuable upon
conversion of Series D Convertible Preferred Stock having a conversion
price of $6.00 per share and (ii) 300,000 shares of Common Stock issuable
upon exercise of a warrant having an exercise price of $6.00 per share.
3
<PAGE>
ITEM 1
ELECTION OF DIRECTORS
Five directors are to be elected at the Annual Meeting to hold office until
the next Annual Meeting and until their successors are elected and qualified.
In the election of directors, the proxy holders intend to vote for the election
of the nominees named below. Should any nominee decline or become unavailable
to serve as a director or should any vacancy occur before the election (which
events are not anticipated), the proxies will be voted, in the absence of
instructions to the contrary, for the election of the remaining nominees named
in this Proxy Statement.
The following table sets forth certain information concerning each person
nominated for election as a director:
<TABLE>
<CAPTION>
Name Age Position
- - ---------------------------- ----- ----------------------------------------
<S> <C> <C>
Roger H. Erickson. . . . 42 Chief Executive Officer, Director
D. Ross Hamilton . . . . 60 Director
Michael J. McGovern. . . 68 Director
Larry D. Unruh . . . . . 47 Director
Martin P. Atkinson . . . 52 Director
</TABLE>
MR. ERICKSON was appointed the Company's Chief Executive Officer in April
1998, a position which he previously held from October 1991 to August 1993. In
addition, Mr. Erickson was appointed as a Director of the Company in 1998, a
position which he previously held from July 1990 to June 1995. Mr. Erickson has
served the Company in various other capacities, including as (i) Vice President,
Strategic Partners, from July 1997 to April 1998, (ii) Vice President,
Operations, from June 1996 to July 1997, (iii) Vice President, Worldwide Channel
Sales, from April 1995 to February 1996, (iv) Vice President, Alliances and
General Manager, PDM Business Unit, from February 1996 to June 1996, (v)
Executive Vice President, Marketing and Sales, from September 1993 to March 1995
and (vi) Vice President, Engineering, from June 1990 to October 1991. From 1984
until March 1990, Mr. Erickson served the Company in several positions including
Senior Systems Engineer and Director of Technical Projects. Mr. Erickson earned
a M.S. degree in Computer Science from the University of California, Santa
Barbara in 1982 and a B.A. degree in Mathematics from Westmont College in 1978.
MR. HAMILTON has been a Director of the Company since June 1994. He served
as Chairman of the Board of the Company from January 1997 through June 1997.
Since 1983 Mr. Hamilton has served as President of Hamilton Research, Inc., an
investment banking firm. Mr. Hamilton currently serves as a director of Luther
Medical Products, Inc., a medical device manufacturer. Mr. Hamilton received a
B.S. degree in Economics from Auburn University in 1961.
4
<PAGE>
MR. MCGOVERN has served as a Director of the Company since he founded the
Company in February 1981, and served as the Company's Chairman and Chief
Executive Officer from its inception until December 1987. Mr. McGovern was a
founder of Autologic, Inc. in 1968, where he was Vice President of Engineering
in charge of developing computer driven photo typesetters for the newspaper and
painting industries. Mr. McGovern also serves as a director of Qtel, Inc. (since
March 1997) and as a director of Alpha Data Tech. (since April 1997). He
received a B.S.E.E. degree from City University of New York in 1952 and an
M.S.E.E. degree from Arizona State University in 1959.
MR. UNRUH has served as a Director of the Company since May 1988. He is a
partner of Hein & Associates LLP, certified public accountants, and has been its
Managing Tax Partner since 1982. Mr. Unruh currently serves as a director of
Basin Exploration, Inc., an oil exploration and development company. Mr. Unruh
received a B.S. degree in Accounting from the University of Denver in 1973.
MR. ATKINSON has served as a Director of the Company since 1997. Mr.
Atkinson presently runs a consulting firm based in Kent, England that advises
middle-market companies on banking and corporate finance matters. Prior to
establishing his consulting firm, Mr. Atkinson was employed by Lloyds Bank for
28 years until his retirement from there (at the senior executive level) in
December 1996. While at Lloyds, Mr. Atkinson was the Head of Risk Control of
Lloyds Merchant Bank Limited, a Director of Lloyds' Capital Markets Group, where
he was responsible for arranging several multi-million pound syndicated loans,
and from 1992 to 1996, he was responsible for Lloyds' middle-market activities
in certain counties in England. Mr. Atkinson is an Associate of the Institute
of Bankers, England. He received a law degree from Nottingham University in
England in 1968.
All directors are elected annually and serve until the next annual meeting
of shareholders and until their successors have been elected and qualified.
5
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS
The following table and discussion set forth certain information with
regard to the Company's executive officers.
<TABLE>
<CAPTION>
Name Age Position
- - ---------------------------- ----- ----------------------------------------
<S> <C> <C>
Roger H. Erickson. . . . 42 Chief Executive Officer
John W. Low. . . . . . . 41 Chief Financial Officer and Secretary
David Chu. . . . . . . . 42 Vice President, Engineering
Steven D. Clark. . . . . 46 Vice President, Sales
</TABLE>
The biography for MR. ERICKSON is set forth above under the table listing
the nominated directors.
MR. LOW has served as Chief Financial Officer and Secretary since June
1990. Previously, Mr. Low had served as Corporate Controller since joining the
Company in August 1987. From 1980 until joining the Company, Mr. Low was with
Price Waterhouse LLP, most recently as a Manager working with middle-market and
growing companies. Mr. Low, who is a certified public accountant, earned a B.A.
degree in Economics from the University of California, Los Angeles in 1978.
MR. CHU was appointed Vice President, Engineering in April 1998. Since
joining the Company in February 1997, Mr. Chu served as Director U.S. Software
Engineering until April 1998. From 1995 to 1997, Mr. Chu was an independent
consultant for Performance Solutions Group, a technical consulting organization.
From 1984 to 1995, Mr. Chu was with Computer Associates International most
recently as Assistant Vice President of Research and Development. Mr. Chu holds
triple certifications as a Microsoft Certified Systems Engineer, Solutions
Developer and Trainer.
MR. CLARK was appointed Vice President, Sales in October 1997. Previously,
Mr. Clark had served as Vice President North American Sales since January 1997.
From 1994 through the end of 1996, Mr. Clark was Director of U.S. Sales. From
1992 to 1994, Mr. Clark served as the Vice President of West Coast Operations at
PRC, a systems integration firm. From 1987 to 1992, Mr. Clark was Director of
Marketing for Optigraphics Corporation. From 1983 to 1987, he was Vice
President of Sales and Marketing at Energy Images in Boulder, Colorado. From
1975 to 1983, Mr. Clark held several positions with Dun & Bradstreet Petroleum
Information. Mr. Clark earned a B.A. degree in Geography from the University of
Colorado in 1974.
6
<PAGE>
EXECUTIVE OFFICERS' COMPENSATION
The following table sets forth certain information concerning the annual
and long-term compensation for services rendered in all capacities to the
Company for the three years ended December 31, 1997 of (i) the Company's Chief
Executive Officer during 1997 and (ii) the four other most highly compensated
executive officers of the Company having compensation of $100,000 or more during
1997 (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
------------------------------------------------------- --------------
LONG-TERM
OTHER COMPENSATION
ANNUAL AWARDS--
COMPENSATION STOCK OPTIONS
NAME AND POSITION YEAR SALARY($) BONUS($) ($)(1) (# SHARES)
- - ------------------------------- ---- --------- -------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Roger H. Erickson 1997 $174,708 $9,000 - -
Chief Executive Officer(2) 1996 185,427 - - 25,000
1995 138,252 - - -
Jay V. Tanna
Former President and Chief 1997 $215,000 - - 75,000
Executive Officer(3) 1996 205,865 - - 112,500
1995 - - - -
Steven D. Clark 1997 $168,462 $25,000 - 40,000
Vice President Sales(4) 1996 136,355 - $66,719(5) -
1995 83,923 - - 5,000
John W. Low 1997 $149,639 - - -
Chief Financial Officer 1996 142,535 - - 25,000
and Secretary 1995 131,904 - - 10,000
Tim A. Wright 1997 $134,666 $13,494 - 30,000
Former Managing Director, 1996 83,026 - - 2,500
UK Operations(6) 1995 - - - -
</TABLE>
- - --------------------
(1) Excludes compensation in the form of other personal benefits, which for
each of the executive officers other than Mr. Clark in 1996 did not exceed
the lesser of $50,000 or 10% of the total annual salary and bonus reported
for each year.
(2) Mr. Erickson became President and Chief Executive Officer of the Company
effective April 1998. During 1997 Mr. Erickson served as Vice President,
Operations and Vice President Strategic Partners.
(3) Mr. Tanna became President and Chief Executive Officer of the Company in
April 1996 and resigned from that position effective April 16, 1998. The
75,000 options granted to Mr. Tanna in 1997 were subsequently returned to
the Company and canceled.
(4) Mr. Clark was appointed an executive officer in January 1997. The bonus
paid in 1997 related to services provided in 1996 as Director of U.S.
Sales.
(5) Represents sales commissions earned by Mr. Clark in 1996.
(6) Mr. Wright resigned his employment with the Company in February 1998. The
bonuses paid in 1997 related to services provided for Mr. Wright in 1996 as
Deputy Managing Director of U.K. Operations. No information is presented
for 1995 as Mr. Wright commenced employment with the Company in 1996.
7
<PAGE>
OPTION GRANTS IN 1997
Shown below is information concerning grants of options issued by the
Company to the Named Executive Officers during 1997:
<TABLE>
<CAPTION> POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM (2)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
- - ------------------------------- -------------- ------------ --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Roger H. Erickson. . . . . . . - - - - - -
Jay V. Tanna . . . . . . . . . 75,000 14% $6.13 2/11/07 $288,523 $731,750
Steven D. Clark. . . . . . . . 30,000 6% $6.38 1/2/07 $120,126 $304,653
10,000 2% $4.13 5/7/07 $25,942 $65,742
John W. Low. . . . . . . . . . - - - - - -
Tim A. Wright. . . . . . . . . 30,000 6% $6.38 1/2/07 $120,126 $304,653
</TABLE>
- - --------------------
(1) Options were granted to Mr. Tanna in February 1997, Mr. Clark in January
and May 1997 and Mr. Wright in January 1997. All such options reflected
above were granted with an exercise price equal to the closing sale price
of the Common Stock as reported on the Nasdaq National Market on the date
of grant. All grants vest 25% 90 days from the date of grant and in
additional annual installments of 25% commencing on the first anniversary
of the date of grant. The options granted to Mr. Tanna were voluntarily
returned to the Company and canceled in December 1997.
(2) The 5% and 10% assumed rates of appreciation are specified under the rules
of the Securities and Exchange Commission and do not represent the
Company's estimate or projection of the future price of its Common Stock.
The actual value, if any, which a Named Executive Officer may realize upon
the exercise of stock options will be based upon the difference between the
market price of the Company's Common Stock on the date of exercise and the
exercise price.
AGGREGATED OPTION EXERCISES IN 1997 AND 1997 YEAR-END OPTION VALUES
The following table sets forth for the Named Executive Officers information
with respect to unexercised options and year-end option values, in each case
with respect to options to purchase shares of the Company's Common Stock. The
Named Executive Officers did not exercise any options in 1997.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
HELD AS OF DECEMBER 31, 1997 AT DECEMBER 31, 1997(1)
------------------------------- -------------------------------
NAME EXERCISABLE NONEXERCISABLE EXERCISABLE NONEXERCISABLE
- - -------------------------- ----------- -------------- ----------- --------------
<S> <C> <C> <C> <C>
Roger H. Erickson. . . . 30,000 12,500 - -
Jay V. Tanna . . . . . . 56,250 56,250 - -
Steven D. Clark. . . . . 23,750 31,250 $2,710 -
John W. Low. . . . . . . 42,500 15,000 - -
Tim A. Wright. . . . . . 8,750 23,750 - -
</TABLE>
- - --------------------
(1) Based on the closing sale price of the Common Stock on the Nasdaq National
Market on December 31, 1997 ($3.03 per share).
8
<PAGE>
BOARD COMMITTEES AND ATTENDANCE AT MEETINGS
The Board of Directors has an Audit Committee which makes recommendations
regarding the selection of independent public accountants and reviews with them
the scope and results of the audit engagement. In 1997, the Audit Committee was
comprised of Messrs. McGovern and Unruh and Robert H. Smith. The Audit
Committee held two meetings during 1997. Mr. Smith, who was elected to the
Board of Directors and the Audit Committee in February 1997, resigned from the
Board of Directors in February 1998.
The Board of Directors also has a Compensation Committee which reviews
compensation of officers. In 1997, the Compensation Committee was comprised of
Messrs. McGovern, Hamilton and Unruh and Michael Comegna. The Compensation
Committee held one meeting in 1997. Mr. Comegna resigned from the Board of
Directors in April 1998.
In addition, the Board of Directors has a Stock Option Committee which
generally administers the Company's Amended and Restated 1996 Stock Incentive
Plan and 1987 Stock Option Plan. The Stock Option Committee was comprised of
Messrs. McGovern, Unruh Comegna and Norwood H. Davis, Jr. in 1997. The Stock
Option Committee held one meeting in 1997. Mr. Davis, who was elected to the
Board of Directors in February 1997, has decided not to stand for re-election to
the Board of Directors at the 1998 Annual Meeting.
The Board of Directors does not have a standing Nominating Committee or any
other committee which performs a similar function.
In 1997, the Board of Directors held 12 meetings. Each director attended
at least 75% of the aggregate of (i) the total number of meetings of the Board
held during the period for which he was a director and (ii) the total number of
meetings held by all committees of the Board on which he served during the
period he served.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors and persons who own more than 10% of the
Company's common stock to file reports of ownership and changes in ownership on
Forms 3, 4 and 5 with the Securities and Exchange Commission (the "SEC").
Executive officers, directors and 10% shareholders are required by the SEC to
furnish the Company with copies of all Forms 3, 4 and 5 that they file.
Based solely on the Company's review of the copies of such forms it has
received and written representations from certain reporting persons that they
were not required to file a Form 5 for specified fiscal years, and other than
with respect to D. Ross Hamilton, a member of the Board of Directors who did not
timely file a Form 4 for an acquisition of the Company's Common Stock on
December 31, 1997, the Company believes that all of its executive officers,
directors and greater than 10% shareholders have complied with all of the filing
requirements applicable to them with respect to transactions during 1997.
9
<PAGE>
COMPENSATION OF DIRECTORS
Each director, other than directors who are also employees of the Company
or are precluded from accepting a fee by their employers, receives a $5,000
annual fee plus a $1,000 meeting fee for four paid meetings a year. In addition,
each director is reimbursed for all reasonable expenses incurred in connection
with attendance at such meetings. Directors who are employees of the Company
are not compensated for serving as directors.
During 1997, Mr. Hamilton assisted the Company in raising capital through a
$6 million private placement of both equity and debt securities. The
transaction was completed in June 1997 and the Company paid Mr. Hamilton
$120,000 for his consulting services.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1997, the Compensation Committee of the Board of Directors was comprised
of four members, Messrs. McGovern, Hamilton and Unruh and Michael Comegna (who
resigned as a Director in April 1998), none of whom is or was an employee or
officer of the Company in 1997. No executive officer of the Company has served
as a member of the Board of Directors or Compensation Committee of any company
in which Messrs. McGovern, Hamilton, Unruh or Comegna is an executive officer.
ITEM 2
APPROVAL OF INCREASE IN NUMBER OF SHARES OF COMMON STOCK RESERVED UNDER THE
COMPANY'S 1996 STOCK INCENTIVE PLAN
Effective April 1, 1996, the Board of Directors adopted, and the
shareholders subsequently approved, the Company's 1996 Stock Incentive Plan (the
"1996 Plan"). There are presently 625,000 shares of the Company's Common Stock
authorized for issuance under the 1996 Plan. At June 30, 1998, 1,250 shares of
Common Stock had been issued pursuant to the exercise of options previously
granted under the 1996 Plan and the Company had outstanding options to purchase
537,500 shares of Common Stock.
In July 1998, the Board approved an amendment to the 1996 Plan, subject to
shareholder approval, to increase the number of shares authorized for issuance
under the 1996 Plan from an aggregate of 625,000 shares to an aggregate of
925,000 shares. The Board adopted this amendment to ensure that the Company can
continue to grant stock options to employees, directors and consultants at
levels determined appropriate by the Board and the Compensation Committee. The
ability to offer options in order to attract and retain talented employees is
particularly important to the Company's competitive position in its industry.
The essential features of the 1996 Plan are outlined below.
10
<PAGE>
GENERAL
The purpose of the 1996 Plan is to enable the Company and its subsidiaries
to attract, retain and motivate its employees, directors and consultants by
providing for or increasing the proprietary interests of such persons in the
Company. Every director, employee and consultant of the Company and its
subsidiaries is eligible to be considered for the grant of awards under the 1996
Plan. As of June 30, 1998, the Company and its subsidiaries had a total of 111
employees.
The 1996 Plan is administered by the Stock Option Committee, each member of
which must be a "disinterested person" as defined in Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended. The members of the Stock
Option Committee will not be eligible for the grant of awards under the 1996
Plan. The Stock Option Committee has full and final authority to select the
individuals to receive awards and to grant such awards and has a wide degree of
flexibility in determining the terms and conditions of awards. Subject to
limitations imposed by law, the Board of Directors of the Company may amend or
terminate the Plan at any time and in any manner. However, no such amendment or
termination may deprive the recipient of an award previously granted under the
Plan of any rights thereunder without his or her consent.
Awards under the 1996 Plan are not restricted to any specified form or
structure and may include, without limitation, sales or bonuses of stock,
restricted stock, stock options, reload stock options, stock purchase warrants,
other rights to acquire stock, securities convertible into or redeemable for
stock, stock appreciation rights, phantom stock, dividend equivalents,
performance units or performance shares. An award to an employee may consist of
one such security or benefit or two or more of them in tandem or in the
alternative. The 1996 Plan does not specify a minimum exercise price or other
consideration that a recipient of an award must pay to obtain the benefit of an
award, and therefore the maximum compensation payable to employees pursuant to
the 1996 Plan, during the term of the 1996 Plan and awards granted thereunder,
is equal to the number of shares of Common Stock with respect to which awards
may be issued thereunder, multiplied by the value of such shares on the date
such compensation is measured. An award granted under the 1996 Plan to an
employee will generally include a provision conditioning or accelerating the
receipt of benefits upon the occurrence of specified events, such as a change of
control of the Company or a dissolution, liquidation, sale of substantially all
of the property and assets of the Company or other significant corporate
transaction.
The maximum number of shares of Common Stock that may be issued pursuant to
awards granted under the 1996 Plan is 625,000 (giving effect to a one-for-two
reverse stock split with respect to the Common Stock effected by the Company and
approved by the shareholders in October 1996). The 1996 Plan generally provides
that no single employee may be granted options or other awards with respect to
more than 625,000 shares of Common Stock in any one calendar year. The 1996
Plan also contains customary anti-dilution provisions; provided, however, that
no adjustment will be made pursuant to such provisions to the extent such
adjustment would cause incentive stock
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options (as discussed below under "Certain Income Tax Consequences") issued or
issuable under the 1996 Plan to be treated as other than incentive stock
options, or to the extent that the Stock Option Committee determines that such
adjustment would result in the disallowance of a federal income tax deduction
for compensation attributable to such awards by causing such compensation to be
treated as other than "performance-based compensation" within the meaning of the
1996 Plan.
Awards may not be granted under the 1996 Plan on or after the tenth
anniversary of the adoption of the 1996 Plan. Although any award that was duly
granted prior to such date may thereafter be exercised or settled in accordance
with its terms, no shares of Common Stock may be issued pursuant to any award on
or after the twentieth anniversary of the adoption of the Plan.
SECTION 16(b) OF THE SECURITIES EXCHANGE ACT OF 1934
Pursuant to Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), directors, executive officers and 10% shareholders
of the Company are generally liable to the Company for repayment of any profits
realized from any non-exempt purchase and sale of Common Stock occurring within
a six-month period. Rule 16b-3 promulgated under the Exchange Act provides an
exemption from Section 16(b) liability for certain transactions by an officer or
director pursuant to an employee benefit plan that complies with such Rule. The
1996 Plan is designed to comply with Rule 16b-3.
CERTAIN INCOME TAX CONSEQUENCES
The following is a brief description of the federal income tax treatment
that will generally apply to awards made under the 1996 Plan, based on federal
income tax laws in effect on the date hereof. The exact federal income tax
treatment of awards will depend on the specific nature of any such award.
Pursuant to the 1996 Plan, participants that are employees may be granted
options that are intended to qualify as incentive stock options ("ISOs") under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
Generally, the optionee is not taxed, and the Company is not entitled to a
deduction, on the grant or exercise of an ISO. However, if the optionee sells
the shares acquired upon the exercise of an ISO ("ISO Shares") at any time
within (i) one year after the transfer of ISO Shares to the optionee pursuant to
the exercise of the ISO or (ii) two years from the date of grant of the ISO,
then the optionee will recognize ordinary income in an amount equal to the
excess, if any, of the lesser of the sale price or the fair market value of the
ISO Shares on the date of exercise, over the exercise price of the ISO. The
Company will generally be entitled to a deduction equal to the amount of
ordinary income recognized by the optionee. If the optionee sells the ISO
Shares at any time after the optionee has held the ISO Shares for at least (i)
one year after the date of transfer of the ISO Shares to the optionee pursuant
to the exercise of the ISO and (ii) two years from the date of grant of the ISO,
then the optionee will recognize capital gain or loss equal to the difference
between the sales price and the exercise price of such ISO, and the Company will
not be entitled to any deduction.
The amount by which the fair market value of the ISO Shares received upon
exercise of an ISO exceeds the exercise price will be included as a positive
adjustment in the calculation of an optionee's "alternative minimum taxable
income" ("AMTI") in the year of exercise. The
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"alternative minimum tax" imposed on individual taxpayers is generally equal
to the amount by which 28% (26% of AMTI below certain amounts) of the
individual's AMTI (reduced by certain exemption amounts) exceeds his or her
regular income tax liability for the year.
The grant of an option or other similar right to acquire stock that does
not qualify for treatment as an ISO (a "non-qualified stock option") is
generally not a taxable event for the optionee. Upon exercise of the option,
the optionee will generally recognize ordinary income in an amount equal to the
excess of the fair market value of the stock acquired upon exercise (determined
as of the date of exercise) over the exercise price of such option, and the
Company will be entitled to a deduction equal to such amount. Nonemployees may
only be awarded non-qualified stock options.
If an optionee is a director, officer or shareholder subject to Section 16
of the Exchange Act (an "Insider") and exercises an option within six months
of the date of grant, the timing of the recognition of any ordinary income
should be deferred until (and the amount of ordinary income should be determined
based on the fair market value (or sales price in the case of a disposition) of
the shares of Common Stock upon) the earlier of the following two dates (the
"16(b) Date"): (i) six months after the date of grant or (ii) a disposition of
the shares of Common Stock, unless the Insider makes an election under Section
83(b) of the Code (an "83(b) Election") within 30 days after exercise to
recognize ordinary income based on the value of the Common Stock on the date of
exercise. In addition, special rules apply to an Insider who exercises an
option having an exercise price greater than the fair market value of the
underlying shares on the date of exercise.
Awards under the 1996 Plan may also include stock sales, stock bonuses or
other grants of stock that include provisions for the delayed vesting of the
recipient's rights to the stock. Unless the recipient makes an 83(b) Election as
discussed above within 30 days after the receipt of the restricted shares, the
recipient generally will not be taxed on the receipt of restricted shares until
the restrictions on such shares expire or are removed. When the restrictions
expire or are removed, the recipient will recognize ordinary income (and the
Company will be entitled to a deduction) in an amount equal to the excess of the
fair market value of the shares at that time over the purchase price. However,
if the recipient makes an 83(b) Election within 30 days of the receipt of
restricted shares, he or she will recognize ordinary income (and the Company
will be entitled to a deduction) equal to the excess of the fair market value of
the shares on the date of receipt (determined without regard to vesting
restrictions) over the purchase price. In the case of an Insider (as defined
above), the timing of income recognition (including the date used to compute the
fair market value of shares) with respect to restricted shares may be deferred
until the 16(b) Date, as described above, unless the Insider makes a valid 83(b)
Election.
Awards may be granted under the 1996 Plan which do not fall clearly into
the categories described above. The federal income tax treatment of these awards
will depend upon the specific terms of such awards. Generally, the Company will
be required to make arrangements for withholding applicable taxes with respect
to any ordinary income recognized by a recipient in connection with awards made
under the 1996 Plan.
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Special rules will apply in cases where a recipient of an award pays the
exercise or purchase price of the award or applicable withholding tax
obligations under the 1996 Plan by delivering previously owned shares of Common
Stock or by reducing the amount of shares otherwise issuable pursuant to the
award. The surrender or withholding of such shares will in certain circumstances
result in the recognition of income with respect to such shares or a carryover
basis in the shares acquired.
The terms of the agreements pursuant to which specific awards are made
under the 1996 Plan may provide for accelerated vesting or payment of an award
in connection with a change in ownership or control of the Company. In that
event and depending upon the individual circumstances of the recipient, certain
amounts with respect to such award may constitute "excess parachute payments"
under the "golden parachute" provisions of the Code. Pursuant to these
provisions, a recipient will be subject to a 20% excise tax on any "excess
parachute payments" and the Company will be denied any deduction with respect
to such payment.
In certain circumstances, the Company may be denied a deduction for
compensation (including compensation attributable to the ordinary income
recognized with respect to awards made under the 1996 Plan) to certain officers
of the Company to the extent that the compensation exceeds $1,000,000 (per
person) annually.
CONCLUSION
The Board of Directors has directed that the proposed amendment to the 1996
Plan be submitted for shareholder approval. The affirmative vote of a majority
of the shares of Common Stock represented at the Annual Meeting will be required
for approval. In the absence of approval, the amendment to the 1996 Plan will
be without effect, and the maximum number of shares of Common Stock issuable
under the 1996 Plan will remain 625,000.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR APPROVAL OF THE AMENDMENT TO THE 1996 PLAN.
When a proxy in the form of the proxy enclosed with this Proxy Statement is
returned properly executed, unless marked to the contrary, such proxy will be
voted in favor of adoption of the amendment to the 1996 Plan.
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PERFORMANCE GRAPH
The stock performance graph shall not be deemed to be incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933, as amended, or
under the Securities Exchange Act of 1934, except to the extent that the
Company specifically incorporates this information by reference, and shall
not otherwise be deemed filed under such Acts. The following graph shows the
Company's total return to shareholders compared to the NASDAQ Market Value
Index (1) and a Peer Group Index(2) over the period from January 1, 1993 to
December 31, 1997.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN AMONG
ALTRIS SOFTWARE, INC., NASDAQ MARKET INDEX AND PEER GROUP INDEX
[GRAPH]
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------------------------------------------
1/1/93 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
- - -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALTRIS SOFTWARE, INC. $100.00 92.73 112.72 283.63 189.09 88.18
- - -------------------------------------------------------------------------------------------------------------------
NASDAQ MARKET INDEX $100.00 119.95 125.94 163.35 202.99 248.30
- - -------------------------------------------------------------------------------------------------------------------
PEER GROUP INDEX $100.00 106.77 130.65 194.37 241.59 299.34
- - -------------------------------------------------------------------------------------------------------------------
</TABLE>
- - --------------------
(1) Includes all issues trading over the Nasdaq National Market and
Over-the-Counter Markets during the period from January 1, 1993 through
December 31, 1997, weighted annually by market capitalization (shares
outstanding multiplied by stock price).
(2) A Peer Group Index compiled and published by Media General Financial
Services, Inc. comprised of all computer software and data processing
companies that were publicly traded in the United States at December 31,
1997, weighted annually by market capitalization (shares outstanding
multiplied by stock price). Copies of this index can be obtained by
ordering MG Industry Group 03 from Media General Financial Services, Inc.,
P.O. Box 85333, Richmond, VA, 23293, telephone number (804) 649-6097,
and paying their standard fee.
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The cumulative total return on the stock performance graph indicates
historical results only and is not necessarily indicative of future results.
Each line on the stock performance graph assumes that $100 was invested in
the Company's Common Stock and the respective indices on January 1, 1993. The
graph then tracks the value of these investments, assuming reinvestment of
dividends, through the five years ended December 31, 1997.
On March 11, 1998, as a result of the Company's announcement of the likely
restatement of its results of operations for 1996 and the nine months ended
September 30, 1997, The Nasdaq Stock Market suspended trading in the Company's
Common Stock. The Nasdaq Stock Market subsequently delisted the Common Stock
from trading on the Nasdaq National Market, effective June 1, 1998. The Common
Stock is presently trading through the facilities of the National Quotation
Bureau, Inc. (with quotes published in the "pink sheets") and is also quoted on
the OTC Bulletin Board.
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COMPENSATION COMMITTEE REPORT TO SHAREHOLDERS ON EXECUTIVE COMPENSATION
The report of the Compensation Committee given below shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933, as
amended, or under the Securities Exchange Act of 1934, except to the extent that
the Company specifically incorporates this information by reference, and shall
not otherwise be deemed filed under such acts.
The Compensation Committee of the Board of Directors, which was comprised
of four non-employee directors at year-end 1997, is responsible for establishing
the base salary of the Chief Executive Officer and for approving and monitoring
the criteria used in establishing the base salaries and other compensation of
the Company's other executive officers. Michael Comegna, a member of
Compensation Committee in 1997, resigned from the Board of Directors in April
1998. Set forth below is a report, submitted by Messrs. McGovern, Hamilton and
Unruh, in their capacity as current members of the Compensation Committee,
addressing the Company's compensation policies for 1997 as they affected Mr.
Tanna (the Company's Chief Executive Officer in 1997) and the other executive
officers named in the Summary Compensation Table appearing elsewhere herein
(collectively, the "Executive Officers").
COMPENSATION POLICIES TOWARDS EXECUTIVE OFFICERS
The compensation programs of the Company historically have been comprised
of only a cash component, awarded primarily based on individual performance.
However, the Compensation Committee believes that the most effective executive
compensation program is one that provides incentives to achieve both current and
long-term strategic management goals of the Company, with the ultimate objective
of enhancing shareholder value. In this regard, the Compensation Committee
believes executive compensation should be comprised of cash as well as
equity-based and other incentive programs. With respect to equity-based
compensation, the Compensation Committee believes that an integral part of the
Company's compensation program is the ownership and retention of the Company's
Common Stock by its Executive Officers. By providing Executive Officers with a
meaningful stake in the Company, the value of which is dependent on the
Company's long-term success, a commonality of interests between the Company's
Executive Officers and its shareholders is fostered. The Compensation Committee
intends to further increase the orientation of executive compensation policies
toward long-term performance and to increase the utilization of objective
performance criteria.
SALARIES AWARDED TO THE CHIEF EXECUTIVE OFFICER AND OTHER EXECUTIVE
OFFICERS
The Board of Directors has delegated to the Compensation Committee the
authority to establish compensation levels for the Company's Executive Officers.
The Compensation Committee has established a policy of setting the salary of the
Chief Executive Officer (Mr. Tanna in 1997) while reviewing the base salaries of
the other Executive Officers as determined and proposed by the Chief Executive
Officer. The Compensation Committee based Mr. Tanna's salary on the salary of
his predecessor and on the salaries of chief executive officers at comparable
companies. For Executive Officers other than Mr. Tanna, individual salary
levels take into account the knowledge required for the position, the
problem-solving abilities necessary
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to satisfactorily achieve the assigned duties and responsibilities, the
accountability of the positions and their impact on the operations and
profitability of the Company.
In 1997, Mr. Tanna determined and proposed salary ranges and increases for
each of the other Executive Officers based, in part, on his understanding of
competitive conditions. As the current Chief Executive Officer of the Company,
Mr. Erickson will perform this function in 1998 and for any subsequent years in
which he serves as Chief Executive Officer. The Compensation Committee reviews
such proposals by the Chief Executive Officer and ultimately authorizes salaries
for such other Executive Officers. Small annual percentage increases in base
salaries have been awarded to the Executive Officers within the range of
percentage increases given to all of the Company's personnel. Increases to each
Executive Officer have been determined by, among other things, a subjective
evaluation of such Executive Officer's performance.
BONUSES
As evidenced in the Summary Compensation Table contained herein, bonuses
were earned by Messrs. Erickson, Clark and Wright for their performance in 1996
and paid in 1997. No other bonuses were earned by the Named Executive Officers
during the last three years. The Compensation Committee will consider the
payment of bonuses to executive officers in the future based on both an
evaluation of individual performance and overall corporate performance.
LONG-TERM INCENTIVE COMPENSATION
In 1997, the Stock Option Committee and the Board of Directors, in
consultation with the Compensation Committee, authorized long-term incentive
grants to senior executives of the Company (through the issuance of stock
options) in order to promote the Company's long-term performance.
THE COMPENSATION COMMITTEE
D. Ross Hamilton
Michael J. McGovern
Larry D. Unruh
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CERTAIN TRANSACTIONS
In April 1998, the Company and Mr. Tanna entered into a Separation
Agreement whereby Mr. Tanna resigned his positions as Chairman of the Board,
President and Chief Executive Officer and as Director. Under the Agreement, Mr.
Tanna will act as an on-call consultant for any matters the Company may refer to
him for his input and participation. His annual compensation for such services
is $215,000 plus medical, dental and car allowance benefits. The Separation
Agreement terminates on March 31, 1999.
In March 1997, Mr. Tanna loaned the Company $300,000 at 12% on an unsecured
basis. The Company repaid the loan balance with accrued interest in July 1997.
In October 1996, the Company loaned (i) Roger H. Erickson, then Vice
President, Operations, $92,812 and (ii) John W. Low, Chief Financial Officer and
Secretary, $61,875. Each loan is at a simple interest rate of 9.25% with a
maturity date of March 31, 1997. The loans were made to Messrs. Erickson and
Low in connection with their exercise of stock options that were due to expire.
On May 15, 1998, the Company agreed, as additional compensation to Messrs.
Erickson and Low, to forgive the promissory notes of such officers. The
outstanding principal and interest payable by Messrs. Erickson and Low under
such notes were $106,196 and $70,797, respectively.
In 1997, Mr. Hamilton assisted the Company in raising capital through a
private placement. The transaction was completed in June 1997 and the Company
paid to Mr. Hamilton $120,000 for his consulting services.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP has audited the Company's 1997 financial statements.
The selection of independent accountants to audit the Company's 1999 financial
statements will be made in the second half of 1998 after an evaluation of the
audit fee proposal.
ANNUAL REPORT
The Company's Annual Report on Form 10-K including financial statements and
related schedules for the year ended December 31, 1997 filed with the Securities
and Exchange Commission is being mailed to all shareholders. Any shareholder
who has not received a copy may obtain one by writing to the Company at 9339
Carroll Park Drive, San Diego, California 92121, Attention: Shareholder
Relations.
SHAREHOLDER PROPOSALS
A proposal of a shareholder intended to be presented at the 1999 Annual
Meeting of Shareholders and to be included in the Proxy Statement for that
meeting must be received on or before March 1, 1999 at the Company's principal
offices, 9339 Carroll Park Drive, San Diego, California 92121.
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OTHER MATTERS
The Company knows of no other matters to be brought before the Annual
Meeting. However, if any other matters are properly presented for action, the
persons named in the accompanying proxy intend to vote on such matters in their
discretion.
SOLICITATION OF PROXIES
The cost of this solicitation of proxies will be borne by the Company.
Solicitation will be made by mail, telephone or telegram and personally by
directors, officers and other employees of the Company, but such persons will
not receive compensation for such services over and above their regular
salaries. The Company will reimburse brokers, banks, custodians, nominees and
fiduciaries holding stock in their names or in the names of their nominees for
their reasonable charges and expenses in forwarding proxy material to the
beneficial owners of such stock.
20
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PROXY
ALTRIS SOFTWARE, INC.
9339 CARROLL PARK DRIVE
SAN DIEGO, CALIFORNIA 92121
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ALTRIS SOFTWARE, INC.
The undersigned hereby appoints Roger H. Erickson and John W. Low, and
each of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes each of them to represent and vote as designated below, all
the shares of Common Stock of Altris Software, Inc., a California corporation
(the "Company") held of record by the undersigned on June 30, 1998, at the
Annual Meeting of Shareholders to be held on August 27, 1998 and any
postponements or adjournments thereof.
1. Election of Directors:
/ / FOR all nominees listed below (except as marked to the contrary below).
/ / WITHHOLD AUTHORITY to vote for all nominees listed below.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
ROGER H. ERICKSON LARRY D. UNRUH
D. ROSS HAMILTON MARTIN P. ATKINSON
MICHAEL J. McGOVERN
2. To amend the Company's 1996 Stock Incentive Plan to approve an
increase in the aggregate number of shares of Common Stock reserved
for issuance under such plan from 625,000 to 925,000 shares.
/ / FOR
/ / AGAINST
/ / ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before such meeting and any and
all postponements or adjournments thereof.
PLEASE DATE, SIGN ON REVERSE SIDE AND RETURN IN THE ACCOMPANYING ENVELOPE.
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[Reverse Side of Proxy]
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS INDICATED; HOWEVER, IF NO INSTRUCTIONS ARE GIVEN, THE PROXIES WILL
VOTE THE SHARES FOR EACH OF THE NOMINEES FOR DIRECTOR, FOR AMENDMENT OF THE 1996
STOCK INCENTIVE PLAN AND IN THEIR DISCRETION ON THE MATTERS DESCRIBED IN ITEM 3.
Do you plan to attend the meeting? / / YES / / NO
Please sign exactly as your name appears
on the stock certificate(s). When shares
are held by joint tenants, both should
sign. When signing as attorney, executor,
administrator, trustee or guardian,
please give your full title as such. If
a corporation, please sign in full
corporate name by the president or other
authorized officer. If a partnership or
limited liability company, please sign in
the partnership's or limited liability
company's name by an authorized person.
DATED: , 1998
-----------------------
------------------------------------------
Signature
------------------------------------------
Signature if held jointly
Please mark, sign, date and return the Proxy Card promptly using the enclosed
envelope.
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