RASTEROPS, PRE 14A, 1995-09-12

RASTEROPS
PRE 14A, 1995-09-12
ELECTRONIC COMPUTERS

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<PAGE>
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12

RASTEROPS
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
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[LOGO]
2500 WALSH AVENUE
SANTA CLARA, CA 95051

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------------------

OCTOBER 24, 1995

TO THE SHAREHOLDERS:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of RasterOps,
a California corporation (the "Company"), will be held on Tuesday, October 24,
1995, at 9:00 a.m. local time, at the Company's offices at 2500 Walsh Avenue,
Santa Clara, California 95051, for the following purposes:

1. To elect Directors to serve until the next annual meeting and until
their successors have been duly elected and qualified;

2. To approve an amendment to the Company's Articles of Incorporation to
change the name of the Company to Truevision, Inc.;

3. To approve an amendment to the Company's Articles of Incorporation to
increase the number of authorized shares of Common Stock to 50,000,000
shares;

4. To approve an amendment to the Amended 1988 Incentive Stock Plan to
increase the number of shares of Common Stock authorized for issuance
thereunder by 515,000;

5. To approve an amendment to the Company's Amended and Restated 1991
Director Option Plan to increase the number of shares of Common Stock
authorized for issuance thereunder by 100,000;

6. To approve an amendment to the Company's Amended and Restated 1991
Director Option Plan to provide for a one-time grant of an option to
purchase 25,000 shares of Common Stock to any non-employee who acts as
Chairman of the Board of Directors of the Company;

7. To ratify the Company's private placement of Common Stock and Warrants
to purchase Common Stock on June 19, 1995;

8. To ratify the appointment of Price Waterhouse LLP as independent
accountants of the Company for the fiscal year ending June 29, 1996; and

9. 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.

Only shareholders of record at the close of business on August 25, 1995 are
entitled to notice of and to vote at the meeting.

All shareholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any shareholder attending
the meeting may vote in person even if he or she returned a proxy.

Sincerely,

[SIG]

R. John Curson
SECRETARY
Santa Clara, California
September 22, 1995

IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO
COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED
<PAGE>
RASTEROPS

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PROXY STATEMENT

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SEPTEMBER 22, 1995

GENERAL

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of RasterOps, a California corporation (the
"Company"), for use at the Annual Meeting of Shareholders of the Company (the
"Annual Meeting") to be held on Tuesday, October 24, 1995, at 9:00 a.m. local
time, at the Company's offices at 2500 Walsh Avenue, Santa Clara, California
95051, and at any adjournment or adjournments thereof.

At the Annual Meeting, the Shareholders of the Company (the "Shareholders")
will be asked to elect seven (7) directors, to amend the Company's Articles of
Incorporation to change the name of the Company to Truevision, Inc., to amend
the Company's Articles of Incorporation to increase the number of authorized
shares of Common Stock (the "Common Stock") to 50,000,000, to amend the Amended
1988 Incentive Stock Plan to increase the number of shares reserved thereunder
by 515,000, to amend the Amended and Restated 1991 Director Option Plan to
increase the number of shares reserved thereunder by 100,000, to amend the
Company's Amended and Restated 1991 Director Option Plan to provide for a
one-time grant of an option to purchase 25,000 shares of Common Stock to any
non-employee who acts as the Chairman of the Board of Directors of the Company,
to ratify the June 19, 1995 private placement of the Company's securities, to
ratify the appointment of Price Waterhouse LLP as the Company's independent
accountants for the fiscal year ending June 29, 1996, and to transact such other
business as may properly come before the meeting. All proxies that are properly
completed, signed and returned to the Company prior to the Annual Meeting will
be voted.

Any proxy given by a Shareholder may be revoked at any time before it is
exercised by filing with the Secretary of the Company an instrument revoking it,
by duly executed proxy bearing a later date, or by such Shareholder attending
the Annual Meeting and expressing a desire to vote his or her shares in person.
This Proxy Statement and the accompanying form of Proxy are being mailed to the
Shareholders on or about September 22, 1995.

The Board of Directors has fixed the close of business on August 25, 1995,
as the record date for the determination of Shareholders entitled to vote at the
Annual Meeting and any adjournment or adjournments thereof. At the close of
business on the record date there were outstanding 12,395,545 shares of Common
Stock, no par value, of the Company held of record by 343 Shareholders. Holders
of shares of Common Stock on the record date are entitled to one vote for each
share held. The presence at the Annual Meeting, either in person or by proxy, of
the holders of a majority of the outstanding shares entitled to vote shall
constitute a quorum for the transaction of business. If a choice is specified in
the proxy as to the manner in which it is to be voted, the persons acting under
the proxy will vote the shares of Common Stock represented thereby in accordance
with such choice. If no choice is specified, the shares will be voted FOR the
Directors nominated, FOR the change in the name of the Company to Truevision,
Inc., FOR the increase in the authorized number of shares of Common Stock; FOR
the increase in the number of shares reserved under the Amended 1988 Incentive
Stock Plan, FOR the increase in the number of shares reserved for issuance under
the Amended and Restated 1991 Director Option Plan, FOR the amendment to the
Company's 1991 Director Option Plan, FOR the ratification of the June 19, 1995
private placement of the Company's securities, FOR the appointment of Price
Waterhouse LLP as independent accountants for the fiscal year ending June 29,
1996, and in the discretion of the proxy holders as to any other matter properly
to come before the meeting.
<PAGE>
In the event that sufficient votes in favor of proposals are not received by
the date of the Annual Meeting, persons named as proxies may propose one or more
adjournments of the Annual Meeting to permit further solicitation of proxies.
Any such adjournment will require the affirmative vote of the holders of a
majority of the outstanding shares present in person or by proxy at the Annual
Meeting.

The cost of preparing, assembling, printing and mailing the Proxy Statement,
the Notice of Annual Meeting of Shareholders and the enclosed form of Proxy, as
well as the cost of soliciting proxies relating to the Annual Meeting, will be
borne by the Company. The Company will request banks, brokers, dealers and
voting trustees or other nominees to solicit their customers who are owners of
shares listed of record and names of nominees, and will reimburse them for
reasonable out-of-pocket expenses of such solicitations. The original
solicitation of proxies by mail may be supplemented by telephone, telegram and
personal solicitation by officers and other regular employees of the Company.

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PROPOSAL ONE
ELECTION OF DIRECTORS

NOMINEES

The Bylaws of the Company presently provide that the authorized number of
Directors shall be between five and nine. At the Annual Meeting, seven (7)
Directors will be elected to serve until the next Annual Meeting and until their
successors are elected and qualified. The Company intends to nominate for
election as Directors the seven (7) persons named below, all of whom are
incumbent Directors. All of these nominees have indicated that they are able and
willing to serve as Directors. 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
proxies will be voted for any nominee who shall be designated by the present
Board of Directors to fill the vacancy. In the event that additional persons are
nominated for election as Directors, the proxy holders intend to vote all
proxies received by them in such a manner in accordance with cumulative voting
as will assure the election of as many of the nominees listed below as possible,
and, in such event, the specific nominees to be voted for will be determined by
the proxy holders.

Each of the seven (7) nominees for Director who receives the greatest number
of votes will be elected. A Shareholder may, prior to the vote being taken,
indicate his or her intention to cumulate votes. In such a case, each
Shareholder would be entitled to that number of votes as equals the number of
shares of Common Stock held by such Shareholder multiplied by seven (7) and
would be entitled to allocate those votes to any one or more nominees for
Director in the Shareholder's discretion. Each of the seven (7) nominees for
Director who received the greatest number of votes would be elected. In any
case, abstentions and broker non-votes are not considered in elections for
Director.

Unless otherwise instructed, the proxy holders intend to vote the shares of
Common Stock represented by the proxies in favor of the election of these
nominees.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ELECTION OF THE SEVEN NOMINEES FOR DIRECTOR.

INFORMATION CONCERNING NOMINEES

The Company's nominees are listed below together with their ages and
positions with the Company prior to the Annual Meeting:

<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
--------------------------- --- ---------------------------------------------
<S> <C> <C>
Walter W. Bregman (1)(2) 61 Chairman of the Board
Louis J. Doctor 37 President, Chief Executive Officer and
Director
Gordon E. Eubanks, Jr. (2) 50 Director
William H. McAleer (2) 44 Director
Kieth E. Sorenson 47 Director
Conrad J. Wredberg (1) 54 Director
Daniel D. Tompkins, Jr. (1) 54 Director
<FN>
------------------------

(1) Audit Committee member

(2) Compensation Committee member
</TABLE>

All Directors are elected at the Annual Meeting of Shareholders to serve
until the following Annual Meeting and until their successors are duly elected
and have been qualified. There is no family relationship among any officers or
Directors.

Mr. Bregman has been a Director of RasterOps since July 1991 and Chairman of
the Board since December 1994. He has been Chairman and Co-CEO of S&B
Enterprises, a consulting firm, since March 1988, and since December 1992 has
been President and CEO of Golf Scientific, Inc., a company

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<PAGE>
that produces and sells golf instructional equipment. From July 1985 until June
1987, he was President and owner of the Cormorant Beach Club. Prior to July
1985, he served as President of International Playtex Inc. He is also a director
of Symantec, Inc.

Mr. Doctor has been President and Chief Executive Officer since he joined
the Company in October 1994. Prior to joining RasterOps, he was President of The
Arbor Group since May 1994, a company that offers corporate clients strategic
services in the technology arena. He also held positions of Executive Vice
President and Vice President of Business Development at SuperMac Technology,
Inc. from June 1991 to April 1994. In March 1981, Mr. Doctor co-founded Raster
Technologies, a manufacturer of high-end graphics and imaging systems, and
served as its President until January 1989. Mr. Doctor was an independent
consultant from January 1989 to 1991.

Mr. Eubanks is currently President and CEO of Symantec Corporation, a
leading developer of application and utility software for PC and Macintosh
computers. Previously, he was Vice President of Digital Research, Inc.'s
commercial systems division. Mr. Eubanks then founded C&E Software, which merged
with Symantec in 1983. In 1985, he created Turner Hall Publishing, a division of
Symantec devoted to publishing third-party software. Mr. Eubanks is a former
President of the Software Publishers Association.

Mr. McAleer is currently President of Alliance Partners which provides
capital funding and transaction advisory services. Until October 1994, he was
Vice President of Finance, Chief Financial Officer and Secretary of Aldus
Corporation. At Aldus, Mr. McAleer was responsible for finance, legal and
business development activities, including the company's merger with Adobe
Systems. Prior to joining Aldus, he was Vice President of Finance and
Administration with Ecova Corporation until April 1988 and also served as Vice
President and Corporate Controller for Westin Hotels.

Mr. Sorenson, a founder of the Company, has served as a Director since June
1987. He also served as Chairman of the Board from June 1987 until December
1994, as Chief Executive Officer from June 1987 until September 1993 and as
President from June 1987 until April 1993. Mr. Sorenson has been a partner with
Sorenson, Thomas & Co., an investment management firm since February. From
September 1979 to June 1987, Mr. Sorenson was employed by Ramtek Corporation
("Ramtek"), a manufacturer of computer graphic systems, where he most recently
held the position of Vice President of Engineering and Product Development.

Mr. Wredberg has been a Director of RasterOps since October 1992. In April
1995, he became President of Transmission Systems Business Division of the Broad
Band Communications Group of Scientific Atlanta, Inc. Previously, he had been
President and General Manager of American Microsystems, Inc. ("AMI") for eight
years. He joined AMI in 1985 as Vice President of Manufacturing and became
Senior Vice President of Operations in 1986. Prior to his joining AMI, Mr.
Wredberg worked at Mostek Corporation, a subsidiary of United Technologies
Corporation, where he most recently held the position of Vice President of
Quality Assurance.

Mr. Tompkins has been a Director of RasterOps since October 1988. He is the
Managing General Partner of DT Associates, a venture capital management company,
which is the general partner of Novus Ventures, an SBIC venture capital fund.
From November 1981 to September 1993, he was employed by Dialogic Systems
Corporation which invested in information processing companies both directly and
as a former limited partner of DSC Ventures, a venture capital fund. In
addition, from April 1988 to September 1993, Mr. Tompkins served as a managing
general partner of DSC Associates, a general partnership that was a managing
general partner of DSC Ventures. He is also a director of Cornerstone Imaging.

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<PAGE>
PROPOSAL TWO
CHANGE IN CORPORATE NAME

The Company, which acquired Truevision, Inc., an Indiana corporation
("Truevision"), in August 1992, underwent a significant shift in its overall
corporate strategy and focus in the fall of 1994. The Company believed that its
RasterOps business was becoming less attractive while its Truevision business
was providing emerging market opportunities. The Board of Directors believes it
is in the best interest of the Company and its shareholders to amend the
Company's Articles of Incorporation (the "Articles") to change the Company's
name to Truevision, Inc. to avoid confusion and to enhance the Truevision brand
identity.

The affirmative vote of the holders of a majority of the shares represented,
in person or by proxy, and voting at the Annual Meeting (which shares voting
affirmatively also constitute at least a majority of the required quorum) will
be required to approve the amendment to the Company's Articles of Incorporation.
Abstentions will be counted toward the number of shares represented and voting
at the meeting. Broker non-votes will be disregarded.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR APPROVAL OF
THE CHANGE IN THE COMPANY'S NAME TO TRUEVISION, INC.

PROPOSAL THREE
INCREASE IN AUTHORIZED COMMON STOCK

The Board of Directors determined in September 1995 that it is in the best
interest of the Company and its Shareholders to amend the Articles to increase
the number of authorized shares of Common Stock to 50,000,000. The Articles
currently provide that the number of shares of Common Stock available for
issuance by the Company is 15,000,000.

The affirmative vote of the holders of a majority of shares represented, in
person or by proxy, and voting at the Annual Meeting (which shares voting
affirmatively also constitute at least a majority of the required quorum) will
be required to approve the above-proposed amendment to the Articles. Abstentions
will be counted toward the number of shares represented and voting at the
meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR APPROVAL OF
THE INCREASE IN THE AUTHORIZED SHARES OF COMMON STOCK.

PROPOSAL FOUR
AMENDMENT OF THE AMENDED 1988 INCENTIVE STOCK PLAN

The Company's Amended 1988 Incentive Stock Plan (the "Option Plan"), was
approved by the Board of Directors in February 1988 and by the Shareholders in
December 1988. Amendments increasing the number of shares reserved for issuance
under the Option Plan were adopted by the Board of Directors and ratified by the
Shareholders in each of 1989, 1990, 1991, 1992, 1993 and 1994, increasing the
number of shares reserved for issuance thereunder to a total of 2,526,300
shares.

In September 1995, the Board approved an amendment increasing the number of
shares reserved for issuance under the Option Plan by an additional 515,000
shares, for an aggregate of 3,041,300 shares reserved for issuance under the
Option Plan. The Shareholders are requested to approve this amendment to the
Option Plan.

As of August 25, 1995 options to purchase 577,043 shares had been exercised,
options to purchase 1,523,710 shares held by 161 optionees were outstanding at a
weighted average per share exercise price of $3.792 per share and 425,547 shares
remained available for future grants under the Option Plan (not including the
proposed additional shares).

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of the required quorum) will be required to approve the amendment to the Option
Plan. Abstentions will be counted toward the number of shares represented and
voting at the meeting. Broker non-votes will be disregarded.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
AMENDMENT TO THE AMENDED 1988 INCENTIVE STOCK PLAN.

SUMMARY OF THE AMENDED 1988 INCENTIVE STOCK PLAN

GENERAL. The Amended 1988 Incentive Stock Plan gives the Board, or a
committee which the Board appoints, authority to grant options to purchase
Common Stock and stock purchase rights. Options granted under the Option Plan
may be either "incentive stock options" as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or nonstatutory stock
options, at the discretion of the Board or its committee.

PURPOSES. The purposes of the Option Plan are to attract and retain the
best available personnel for the Company, to provide additional incentive to the
employees of the Company and to promote the success of the Company's business.

ADMINISTRATION. The Option Plan is administered by the Board or a committee
of the Board in compliance with Rule 16b-3 so as to qualify the Option Plan for
exemption from Section 16(b) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").

ELIGIBILITY. The Option Plan provides that stock options and stock purchase
rights may be granted to employees (including officers and directors who are
also employees) and consultants of the Company and its parent or subsidiaries.
Incentive stock options may be granted only to employees. The Board or a
committee of the Board selects the participants and determines the number of
shares to be subject to each stock option or stock purchase right.

EXERCISE PRICE. The per share exercise price for shares issued pursuant to
options or stock purchase rights granted under the Option Plan is determined by
the Board or its committee and must not be less than 100% of the fair market
value of the Common Stock, in the case of incentive stock options, and 85% of
the fair market value of the Common Stock, in the case of nonstatutory stock
options or stock purchase rights, on the date of the grant. Fair market value
per share is the closing price as reported on the Nasdaq National Market on the
date of grant. Incentive and nonstatutory stock options granted to Shareholders
owning more than 10% of the Company's outstanding stock are subject to the
additional restriction that the exercise price must be at least 110% of the fair
market value on the date of grant.

OPTIONS. Each option is evidenced by a written agreement between the
Company and the person to whom such option is granted. The Board or its
committee determines the terms of the options granted under the Option Plan.
Each option shall be designated either an incentive stock option or a
nonstatutory stock option except that, to the extent that the aggregate fair
market value of the shares with respect to which options designated as incentive
stock options are exercisable for the first time by an optionee during any
calendar year (under all plans of the Company) exceeds $100,000, such excess
options shall be treated as nonstatutory stock options. Options granted before
November 1988 typically vest ratably each month over a three-year period, and
options granted after November 1988 typically vest 25% after one year and
ratably each month over the next three years. Pursuant to the Option Plan,
options may be subject to the following additional terms and conditions.

(a) TERM OF OPTIONS. The term of each option granted under the Option
Plan is ten years from the date of grant in the case of incentive stock
options and ten years and one day in the case of nonstatutory options,
unless a shorter period is provided in the stock option agreement. However,
options granted to an optionee who, at the time of the grant, owns stock
representing more than ten percent (10%) of the Company's outstanding stock,
expire five years from the date of grant in the case of incentive stock
options and five years and one day from the date of grant in the case of
nonstatutory options.

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(b) EXERCISE OF OPTION. The Optionee must earn the right to exercise
the option by continuing to work for the Company. The Board or a committee
of the Board may determine when options are exercisable.

An option is exercised by giving written notice of exercise to the
Company specifying the number of full shares of Common Stock to be purchased
and tendering payment of the purchase price to the Company. The method of
payment of the exercise price of the shares purchased upon exercise of an
option is determined by the Board or its committee.

(c) TERMINATION OF EMPLOYMENT. If an optionee's employment or
consulting relationship with the Company is terminated for any reason other
than death or permanent disability, options outstanding under the Option
Plan may be exercised within 30 days (or such other period of time as
determined by the Board, not to exceed certain limits) after the date of
such termination to the extent the options were exercisable on the date of
termination.

(d) DISABILITY. If an optionee's employment by the Company terminates
because of total and permanent disability, options outstanding under the
Option Plan may be exercised within six months (or such other period of time
as determined by the Board not to exceed certain limits, but in no event
later than the date of expiration of the term of such option) after
termination to the extent such options were exercisable at the date of
termination.

(e) DEATH OF OPTIONEE. If an optionee should die while employed by the
Company, options may be exercised at any time within six months (or such
other period of time as determined by the Board not to exceed certain
limits, but in no event later than the date of expiration of the term of
such option) after death to the extent the options were exercisable at the
date of death.

STOCK PURCHASE RIGHTS. Each stock purchase right is evidenced by a written
agreement between the Company and the person to whom such right is granted. The
board or its committee determines the terms relating to the right, including the
time within which such person must accept the offer to purchase, which shall in
no event exceed six months from the date of grant. Unless the Board determines
otherwise, the Company will have a right to repurchase shares in the event of
termination of the purchaser's employment. Such repurchase right will lapse at a
rate determined by the Board.

OTHER PROVISIONS. The option or stock purchase right may contain other
terms, provisions and conditions not inconsistent with the Option Plan as may be
determined by the Board or its committee.

NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS. The options and
stock purchase rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
optionee or purchaser, only by such optionee or purchaser.

ADJUSTMENT UPON CHANGES IN CAPITALIZATION OR MERGER. In the event any
change is made in the Company's capitalization, such as a stock split or reverse
stock split, appropriate adjustment shall be made to the purchase price and to
the number of shares subject to the stock option or stock purchase right. In the
event of the proposed dissolution or liquidation of the Company, all options
will terminate immediately prior to the consummation of such action, unless
otherwise provided by the Board. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, the successor corporation shall assume all
outstanding options or substitute new options therefor. If the successor
corporation refuses to assume or substitute for outstanding options, the Board
shall provide for the exercisability of such options to accelerate in full.

AMENDMENT AND TERMINATION OF THE OPTION PLAN. The Board may amend or
terminate the Option Plan from time to time in such respects as the Board may
deem advisable without approval of the Shareholders; provided, however, that
Shareholder approval of amendments to the Option Plan shall only be required to
the extent necessary to comply with Rule 16b-3 or Section 422 of the Code (or
any other applicable law or regulation).

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In any event, the Option Plan shall terminate in 1998. Any options or stock
purchase rights outstanding under the Option Plan at the time of its termination
shall remain outstanding until they expire by their terms.

TAX INFORMATION

Options granted under the Option Plan may be either "incentive stock
options," as defined in Section 422 of the Code, or nonstatutory options.

An optionee who is granted an incentive stock option will not recognize
taxable income either at the time the option is granted or upon its exercise,
although the exercise may subject the optionee to the alternative minimum tax.
Upon the sale or exchange of the shares more than two years after grant of the
option and one year after exercising the option, any gain or loss will be
treated as long-term capital gain or loss. If these holding periods are not
satisfied, the optionee will recognize ordinary income at the time of sale or
exchange equal to the difference between the exercise price and the lower of (i)
the fair market value of the shares at the date of the option exercise or (ii)
the sale price of the shares. A different rule for measuring ordinary income
upon such a premature disposition may apply if the optionee is also an officer,
director, or 10% Shareholder of the Company. The Company will be entitled to a
deduction in the same amount as the ordinary income recognized by the optionee.
Any gain or loss recognized on such a premature disposition of the shares in
excess of the amount treated as ordinary income will be characterized as
long-term or short-term capital gain or loss, depending on the holding period.

All other options which do not qualify as incentive stock options are
referred to as nonstatutory options. An optionee will not recognize any taxable
income at the time he or she is granted a nonstatutory option. However, upon its
exercise, the optionee will recognize taxable income generally measured as the
excess of the then fair market value of the shares purchased over the purchase
price. Any taxable income recognized in connection with an option exercise by an
optionee who is also an employee of the Company will be subject to tax
withholding by the Company. Upon resale of such shares by the optionee, any
difference between the sales price and the optionee's purchase price, to the
extent not recognized as taxable income as described above, will be treated as
long-term or short-term capital gain or loss, depending on the holding period.

The Company will be entitled to a tax deduction in the same amount as the
ordinary income recognized by the optionee with respect to shares acquired upon
exercise of a nonstatutory option.

The foregoing summary of the effects of federal income taxation upon the
participant and the Company with respect to the purchase of shares under the
Option Plan does not purport to be complete, and reference should be made to the
applicable provisions of the Code. In addition, this summary does not discuss
the tax implications of an optionee's death or the provisions of the income tax
laws of any municipality, state or foreign country in which the participant may
reside.

PROPOSAL FIVE
APPROVAL OF THE AMENDMENT TO
THE AMENDED AND RESTATED 1991 DIRECTOR OPTION PLAN

In September 1995, the Board approved an amendment increasing the number of
shares reserved for issuance under the Amended and Restated 1991 Director Option
Plan (the "Director Option Plan") by an additional 100,000 shares, for an
aggregate of 250,000 shares reserved for issuance under the Director Option
Plan. The Shareholders are requested to approve this amendment to the Director
Option Plan.

As of August 25, 1995 no options to purchase shares had been exercised,
options to purchase 105,000 shares held by six (6) optionees were outstanding at
a weighted average per share exercise price of $5.37 per share and 45,000 shares
remained available for future grants under the Director Option Plan (not
including the proposed additional shares).

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<PAGE>
The affirmative vote of the holders of a majority of the shares represented
in person or by proxy and voting at the Annual Meeting (which shares voting
affirmatively also constitute at least a majority of the required quorum) will
be required to approve the amendment to the Director Option Plan. Abstentions
will be counted toward the number of shares represented and voting at the
meeting. Broker non-votes will be disregarded.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
AMENDMENT TO THE AMENDED AND RESTATED 1991 DIRECTOR OPTION PLAN.

SUMMARY OF THE DIRECTOR OPTION PLAN

The Director Option Plan was originally adopted by the Board of Directors in
July 1991 and was subsequently amended by the Board in October 1991 for the
purpose of granting new options to non-employee directors upon the surrender and
cancellation of options with higher exercise prices previously granted to such
non-employee directors in July 1991. The Director Option Plan was again amended
by the Board in July 1992 to provide for the automatic annual grant of an option
to purchase 2,500 shares on the date of the Company's Annual Meeting of
Shareholders (the "Annual Meeting") to each non-employee director who is a
member of the Board immediately before such Annual Meeting and remains a member
of the Board immediately after such Annual Meeting, for so long as such director
remains a member of the Board, in lieu of a prior quadrennial grant of an option
to purchase 10,000 shares, and an amendment for the purpose of granting new
options to non-employee directors with exercise prices of $11.25 per share upon
the surrender and cancellation of options with exercise prices of $13.50 per
share previously granted to such non-employee directors in October 1991.

The essential features of the Director Option Plan are outlined below.

PURPOSE. The purposes of the Director Option Plan are to attract and retain
the best available personnel for service as directors of the Company, to provide
additional incentive to the non-employee directors and to encourage their
continued service on the Board.

ADMINISTRATION. The Director Option Plan is designed to work automatically
and not to require administration. However, to the extent administration is
necessary, it will be provided by the board of Directors of the Company. The
interpretation and construction of any provision of the Director Option Plan by
the Board shall be final and conclusive.

ELIGIBILITY FOR AND EXERCISABILITY OF OPTIONS. The Director Option Plan
provides for the grant of nonstatutory stock options to non-employee directors
of the Company. Under the terms of the plan as amended by the Board in October
1991, (i) non-employee directors who were members of the Board on July 25, 1991
("Current Outside Directors") received an option on such date to purchase 10,000
shares of Common Stock, which options were to become exercisable at the rate of
25% per year for four years following July 1, 1991, (ii) each non-employee
director who becomes a member of the Board after July 25, 1991, will receive an
option on the date that such director first becomes a member of the Board to
purchase 10,000 shares of Common Stock, which option shall become exercisable at
the rate of 25% per year for four years following the date of grant and (iii)
each non-employee director who is a member of the Board immediately before the
Company's Annual Meeting (as defined above) and remains a member of the Board
immediately after such Annual Meeting, shall receive on the date of the Annual
Meeting, for so long as such non-employee director remains a member of the
Board, an additional option to purchase 2,500 shares of Common Stock subject to
four year vesting from the date of grant similar to the vesting provisions set
forth above.

In accordance with the terms of the plan as originally adopted by the Board
in July 1991, each of the Current Outside Directors (Messrs. Bregman, Kidd,
Sarlo and Tompkins) received an option (an

9
<PAGE>
"Initial Stock Option") on July 26, 1991, to purchase 10,000 shares of Common
Stock on July 26, 1991, as reported on the Nasdaq National Market). Following a
decline in the price of the Company's Common Stock that occurred soon after the
grants of the Initial Stock Options, the Board approved an amendment to the Plan
on October 14, 1991 (the "First Amendment") for the purpose of granting new
options to the Current Outside Directors with exercise prices equal to the fair
market value of the Company's Common Stock on such dates (which exercise prices
are less than the exercise prices of the Initial Stock Options). In accordance
with the terms of the First Amendment, each Current Outside Director received on
October 14, 1991, an option (a "Second Stock Option") to purchase 10,000 shares
of Common Stock, which option becomes exercisable at the rate of 25% per year
for four years following July 1, 1991, at an exercise price of $13.50 per share
(the closing price of the Company's Common Stock on October 14, 1991, as
reported on the Nasdaq National Market). Upon issuance of the Second Stock
Options, the Initial Stock Options were canceled. Except as set forth in this
paragraph, all provisions of the plan as adopted by the Board in July 1991
remained in full force and effect following the First Amendment. In July 1992,
the Board of Directors repriced certain options which had been previously
granted by the Company, including all options that had been granted under the
Director Option Plan at exercise prices above $11.25 such that the new exercise
price of such options is $11.25 (the closing price of the Company's Common Stock
on July 22, 1992, as reported on the Nasdaq National Market).

TERMS OF OPTIONS. Options granted under the Director Option Plan have a
term of ten years. Each option is evidenced by a director option agreement
between the Company and the director to whom such option is granted.

Rule 16b-3. Options granted to directors must comply with the applicable
provisions of Rule 16b-3 or any successor thereto and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Director Option Plan transactions.

CONSIDERATION. The consideration to be paid for shares to be issued upon
exercise of an option, including the method of payment, shall be determined by
the board and may consist entirely of (i) cash, (ii) check or (iii) such other
consideration and method of payment for the issuance of shares as approved by
the Board to the extent permitted under applicable law.

OPTION PRICE. The option price under the Director Option Plan is 100% of
the fair market value of the Company's Common Stock on the date of grant. Fair
market value per share is the closing price as reported on the Nasdaq National
Market System on the date of grant.

TERMINATION OF STATUS AS A DIRECTOR THROUGH DEATH, DISABILITY OR
OTHERWISE. Under the Director Option Plan, in the event an optionee ceases to
serve as a director of the Company for any reason other than death or total and
permanent disability, an option may thereafter be exercised, to the extent it
was exercisable at the date of such termination, for six months. If an
optionee's service as a director of the Company is terminated as a result of the
optionee's permanent and total disability, the option will be exercisable for 12
months following such termination, but only to the extent it was exercisable at
the date of termination. If an optionee's services as a director of the Company
is terminated by reason of the optionee's death, the option will be exercisable
by the optionee's estate or successor for twelve months following death, but
only to the extent it was exercisable at the date of death. However, in no event
may an option be exercised once its term has expired.

NONTRANSFERABILITY OF OPTIONS. Options granted pursuant to the Director
Option Plan are nontransferable by the optionee, other than by will or by the
laws of descent and distribution, and may be exercised, during the lifetime of
the optionee, only by the optionee.

ADJUSTMENT UPON CHANGES IN CAPITALIZATION OR MERGER. In the event any
change is made in the Company's capitalization, such as stock split or reverse
stock split, appropriate adjustment shall be made to the purchase price and to
the number of shares subject to the stock option. In the event of the proposed
dissolution or liquidation of the Company, all options will terminate
immediately prior to the

10
<PAGE>
consummation of such action. The Board shall declare that all stock options
shall terminate as of such date and give each optionee the right to exercise his
stock option as to all of the stock subject to the option, including shares as
to which the stock option would not otherwise be exercisable. Under the Director
Option Plan as currently in effect, in the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, the successor corporation shall assume all
outstanding options or substitute new options therefor. However, if such
successor corporation or a parent or subsidiary of such successor corporation
does not assume or substitute an equivalent option, then the optionee shall have
the right to exercise the option as to all stock subject to the option,
including shares as to which the option would not otherwise be exercisable. In
the event that the proposed amendment to the Director Option Plan that is being
submitted to the Shareholders hereby is approved, certain mergers or sales of
all or substantially all of the assets of the Company will result in
acceleration of the exercisability of the option, as more fully set forth above.

AMENDMENT AND TERMINATION. The Board may amend, alter, suspend or
discontinue the Director Option Plan at any time, but such amendment,
alteration, suspension or discontinuation shall not adversely affect any stock
option then outstanding under the Director Option Plan, without the consent of
the holder of such option. To the extent necessary and desirable to comply with
Rule 16b-3 (or any other applicable law or regulation), the Company shall obtain
Shareholder approval of any amendment to the Director Option Plan in such a
manner and to such a degree as required.

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS. The following is a brief summary
of the federal income tax consequences of transactions under the Director Option
Plan based on federal securities and income tax laws currently in effect. This
summary is not intended to be exhaustive and does not describe foreign, state or
local tax consequences.

Options granted under the Director Option Plan are nonstatutory options.
Because the optionee is a director of the Company, the date of taxation (and the
date of measurement of taxable ordinary income) may be deferred unless the
optionee files an election under Section 83(b) of the Code. Otherwise the
federal income taxation will be the same as described for nonstatutory stock
options in the Amended 1988 Incentive Stock Plan portion of this Proxy
Statement. See the discussion of nonstatutory stock options under "Proposal Four
-- Amendment of the Amended 1988 Incentive Stock Plan -- Tax Information."

DIRECTOR OPTION GRANTS IN FISCAL YEAR 1995. In fiscal year ended July 1,
1995, non-employee directors of the Company, as a group, received options to
purchase 62,500 shares of the Company's Common Stock (including 25,000 shares
subject to Shareholder approval of Proposal Six below).

PROPOSAL SIX
APPROVAL OF THE AMENDMENT TO THE
AMENDED AND RESTATED 1991 DIRECTOR OPTION PLAN

At the Annual Meeting, the Shareholders are being asked to approve an
amendment to the Company's Amended and Restated 1991 Director Option Plan (the
"Director Option Plan") to provide for a one-time automatic grant of an option
to purchase 25,000 shares of Common Stock to non-employee directors who become
the Chairman of the Board on or after December 16, 1994.

The proposed amendment was approved by the Board of Directors on January 26,
1995 (with Mr. Bregman, the current Chairman of the Board, abstaining). Mr.
Bregman became Chairman of the Board on December 16, 1994 and therefore received
an option to purchase 25,000 shares of Common Stock at an exercise price equal
to the fair market value of the Common Stock on December 16, 1994 ($2.25 per
share), which will become effective on Shareholder approval.

As of August 25, 1995, options to purchase 105,000 shares had been granted
with a weighted average per share exercise price of $5.37, and zero shares had
been exercised under the Director Option Plan.

11
<PAGE>
The affirmative vote of the holders of a majority of the shares represented
in person or by proxy and voting at the Annual Meeting (which shares voting
affirmatively also constitute at least a majority of the required quorum) will
be required to approve the amendment to the Director Option Plan. Abstentions
will be counted toward the number of shares represented and voting at the
meeting. Broker non-votes will be disregarded.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
AMENDMENT TO THE 1991 DIRECTOR OPTION PLAN.

Each of the non-employee Directors of the Company has a personal interest in
the approval by the Shareholders of the proposed amendment to the Director
Option Plan, as such amendment could result in such non-employee directors being
granted such option if such non-employee directors become the Chairman of the
Board of Directors. Mr. Bregman has a personal interest in the approval by the
Shareholders of the proposed amendment to the Director Option Plan, as such
amendment would result in Mr. Bregman receiving an Option as set forth above.

PROPOSAL SEVEN
RATIFICATION OF SALE OF SECURITIES BY THE COMPANY

On June 19, 1995, the Company sold to certain investors 500,000 units (the
"Units"), each consisting of four (4) shares of Common Stock and a warrant to
purchase one (1) share of Common Stock. The price of the Common Stock was
determined using the ten-day trailing average price of the Company's Common
Stock on the ten (10) trading days preceding the date on which the Company and
the purchasers entered into definitive agreements for the purchase and sale of
the Units (June 9, 1995). The Warrants were priced at a 10% premium to the
closing sale price on the Nasdaq National Market on the date the Units were
offered. The price per share of the Common Stock and the exercise price per
share of the Warrants sold in the private placement were $4.31 and $5.22,
respectively. The Purchasers of the Units also received certain registration
rights relating to the Common Stock and Common Stock issuable upon exercise of
the Warrants.

In connection with this private placement, the Company has received a
request from the National Association of Securities Dealers, Inc. (the "NASD"),
in which the Company is asked to verify that the placement was consistent with
the NASD's shareholder approval requirements. The Company believes that there
was no violation of such shareholder approval requirements. However, the Company
and the NASD have not reached a resolution of this matter at this time, and
there can be no assurance that the NASD will not take action against the Company
in connection with such matter, which could include removing the Company from
quotation on the Nasdaq National Market, or from quotation on the Nasdaq Stock
Market entirely. Accordingly, the Company has decided to seek ratification of
the sale of the Units by the Company. If it were determined by the NASD that
Shareholder approval was required, this ratification would not meet such
requirement. However, the Board of Directors believes that obtaining Shareholder
ratification of the private placement may be beneficial to the Company's
position with the NASD with respect to this matter.

No specific vote of Shareholders is required to ratify the private placement
as it has already occurred and cannot be rescinded.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
RATIFICATION OF THE SALE OF SECURITIES BY THE COMPANY IN THE JUNE 19, 1995
PRIVATE PLACEMENT.

12
<PAGE>
PROPOSAL EIGHT
RATIFICATION OF THE APPOINTMENT OF PRICE WATERHOUSE LLP
AS INDEPENDENT ACCOUNTANTS FOR THE
FISCAL YEAR ENDING JUNE 29, 1996

Price Waterhouse LLP has been the independent accountants for the Company
since 1988 and, upon recommendation of the Audit Committee, their appointment as
independent accountants for the 1996 fiscal year has been approved by the Board
of Directors, subject to ratification by the Shareholders.

Shareholder ratification of the selection of Price Waterhouse LLP as the
Company's independent accountants is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of Price Waterhouse
LLP to the Shareholders for ratification as a matter of good corporate practice.
If the Shareholders fail to ratify the selection, the Audit Committee and the
Board of Directors will reconsider whether or not to retain that firm. Even if
the selection is ratified, the Audit Committee and the Board in their discretion
may direct the appointment of different independent accountants at any time
during the year if they determine that such a change would be in the best
interests of the Company and its Shareholders.

The affirmative vote of the holders of a majority of the shares represented,
in person or by proxy, and voting at the Annual Meeting will be required to
ratify the appointment of Price Waterhouse LLP. Abstentions will be counted
toward the number of shares represented and voting at the meeting. Broker
non-votes will be disregarded.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT OF PRICE WATERHOUSE LLP AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING JUNE 29, 1995.

Representatives of Price Waterhouse LLP are expected to be present at the
meeting and will be given an opportunity to make a statement, if they so desire,
and to answer appropriate questions.

MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES

The Board of Directors of the Company held a total of eleven (11) meetings
during fiscal year 1995. No director attended fewer than 75% of the aggregate of
all meetings of the Board of Directors, or its committees on which he served,
during the time each director was a member of the Board of Directors. The Board
of Directors has an Audit Committee and a Compensation Committee. It does not
have a Nominating Committee or a committee performing the functions of a
Nominating Committee.

The Audit Committee consists of Walter W. Bregman, Daniel D. Tompkins, Jr.
and Conrad J. Wredberg. The Audit Committee met four (4) times during fiscal
year 1995. The Audit Committee approves the engagement of the Company's
independent accountants and services to be performed by such independent
accountants and reviews the Company's accounting principles and its system of
internal accounting controls.

The Compensation Committee currently consists of Walter W. Bregman, Gordon
Eubanks, Jr. and William H. McAleer. The members of the Compensation Committee
during fiscal year 1995 were Walter W. Bregman, Daniel D. Tompkins, Jr. and,
beginning January 1995, Kieth E. Sorenson. The Compensation Committee met five
(5) times during fiscal year 1995. The Compensation Committee reviews and
approves the Company's executive compensation policy, makes recommendations
concerning the Company's employee benefit policies and approves salaries of and
bonuses and option grants to employees, including officers and eligible
directors.

13
<PAGE>
COMPENSATION OF DIRECTORS

Directors who are not currently receiving compensation as officers or
employees of the Company or any of its affiliates are paid a fee of $1,500 per
meeting of the Board of Directors, plus reasonable expenses pertaining to their
service as directors. These fees are not paid for telephonic meetings of the
Board of Directors. In addition, all non-employee directors of the Company
participate in the 1991 Director Option Plan.

14
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of August 25, 1995 by (i) each person
who is known by the Company to be the beneficial owner of more than 5% of the
Company's Common Stock, (ii) each of the Company's Directors, the Chief
Executive Officer, three other highly compensated executive officers for fiscal
year 1995 and two highly paid former executive officers of the Company who
received compensation during fiscal year 1995, and (iii) all Directors and
executive officers as a group.

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENT
NAME OF BENEFICIAL OWNER OWNED (1) OF CLASS
--------------------------------------------- ------------ --------
<S> <C> <C>
Scitex Corporation Ltd. (2) 3,354,645 24.1%
P.O. Box 330
46103 Herzlia B, Israel
Louis J. Doctor (3) 192,622 1.5%
Carl C. Calabria (4) 162,188 1.3%
R. John Curson 0 *
Robert J. O'Brien (5) 20,000 *
Paul J. Smith (6) 75,863 *
Michael R. O'Leary (7) 0 *
Walter W. Bregman (8) 25,350 *
Gordon E. Eubanks, Jr. (9) 0 *
William H. McAleer (10) 3,500 *
Kieth E. Sorenson 5,588 *
Daniel D. Tompkins (11) 50,337 *
Conrad J. Wredberg (12) 8,125 *
All executive officers and directors as a
group
(19 persons) (3)(4)(6)(8)(11)(12)(13) 569,990 4.5%
<FN>
------------------------
* Less than one percent (1%).
(1) Except as indicated in other notes to this table, each Shareholder listed
has sole voting and dispositive power with respect to the shares
beneficially owned, subject to applicable community property laws. As
required by regulations adopted by the Securities and Exchange Commission,
the calculations assume that the shares of Common Stock subject to options
or warrants or convertible securities that are exercisable or convertible
within sixty (60) days of August 25, 1995 are outstanding with respect to
the Shareholder who owns such options or warrants or convertible
securities, but not with respect to any other Shareholder.
(2) Includes 1,534,645 shares of Common Stock reserved or to be reserved for
issuance upon the exercise of a warrant.
(3) Includes 140,000 shares of Common Stock issuable pursuant to warrant
exercisable within 60 days.
(4) Includes 42,188 shares of Common Stock issuable pursuant to options
exercisable within 60 days.
(5) Mr. O'Brien commenced employment on December 12, 1994.
(6) Includes 67,333 shares of Common Stock issuable pursuant to options
exercisable within 60 days.
(7) Mr. O'Leary commenced employment on July 1, 1994 and ceased on December 30,
1994.
(8) Includes 9,375 shares of Common Stock issuable pursuant to options
exercisable within 60 days.
(9) Mr. Eubanks, Jr. became a Director effective January 26, 1995.
(10) Mr. McAleer became a Director effective January 26, 1995.
(11) Includes 9,375 shares of Common Stock issuable pursuant to options
exercisable within 60 days.
(12) Includes 5,625 shares of Common Stock issuable pursuant to options
exercisable within 60 days.
(13) Includes 299,313 shares of Common Stock issuable pursuant to options
exercisable within 60 days.
</TABLE>

15
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Mr. Wredberg, a Director of the Company, also served during a portion of the
fiscal year ending July 1, 1995 as president of AMI, which is a vendor of
various parts used by the Company in the manufacture of its products. Aggregate
sales to the Company by AMI during the fiscal year ended July 1, 1995 were
approximately $605,000.

Scitex became a five (5) percent shareholder of the Company pursuant to the
terms of a Private Placement Agreement (the "Private Placement Agreement")
between the Company and Scitex dated as of June 7, 1993, pursuant to which the
Company (i) issued and sold to Scitex 1,250,000 shares of the Company's Common
Stock at a purchase price of $8.00 per share, and (ii) granted to Scitex a
warrant (the "Warrant") to purchase additional shares of the Company's Common
Stock at a purchase price of $9.00 per share. The Warrant has a three year term
and allows Scitex to purchase an amount of the Company's Common Stock which,
when aggregated with all other Common Stock of the Company purchased by Scitex
directly from the Company, does not exceed 19.99% of the issued and outstanding
Common Stock of the Company at the time of such exercise. Based on the Company's
capitalization on August 25, 1995, Scitex would be entitled to purchase up to
1,532,412 shares of the Company's Common Stock pursuant to the exercise of the
Warrant. Scitex was also a purchaser of certain products manufactured by the
Company during the last completed fiscal year. Pursuant to the Private Placement
Agreement, the Company has also agreed to negotiate in good faith toward a
program of strategic cooperation with Scitex. Aggregate sales to Scitex by the
Company during the fiscal year ended July 1, 1995 were approximately $1,244,000.

16
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE

The Summary Compensation Table is intended to provide an easily understood
overview of executive compensation. The three-year table is designed to enable
Shareholders to understand clearly compensation for the last fiscal year and to
identify trends in the Company's compensation of its top managers. The Summary
Compensation Table includes individual compensation information on the Chief
Executive Officer, three other highly paid executive officers for fiscal year
1995 and two highly paid former executive officers of the Company who received
compensation during fiscal year 1995.

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------------------- -------------------------------
OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($)(1) OPTIONS (#) COMPENSATION ($)
----------------------------------- --------- --------- ------------ ------------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Louis J. Doctor (2) 1995 124,052 0 1,000 400,000(3) 0
President & CEO 1994 0 0 0 0 0
1993 0 0 0 0 0
Carl C. Calabria 1995 157,250 0 1,000 150,000 39,369(5)
Sr. V.P. Engineering 1994 167,623 0 0 15,000 11,051(5)
1993 132,227 2,902(4) 0 50,000 0
R. John Curson 1995 140,000 0 4,000 140,000(6) 0
Sr. V.P. & CFO 1994 93,949 0 5,250 80,000 0
1993 0 0 0 0 0
Robert J. O'Brien (7) 1995 72,417 20,000(8) 19,750 100,000 0
Sr. V.P. Worldwide Sales 1994 0 0 0 0 0
1993 0 0 0 0 0
Inactive Former Executive
Officers:
Paul J. Smith 1995 55,000 0 2,250 0 178,913(9)
Former President & CEO 1994 220,000 0 9,000 30,000 0
1993 51,756 0 2,075 100,000 0
Michael R. O'Leary (10) 1995 70,833 0 3,000 50,000 36,223(11)
Former V.P. Sales 1994 0 0 0 0 0
1993 0 0 0 0 0
<FN>
------------------------
Footnotes:
(1) Represents in part an auto allowance for Mr. Curson, Mr. O'Brien, Mr. Smith
and Mr. O'Leary. Also represents 401(k) Company match for Mr. Doctor, Mr.
Calabria and Mr. O'Brien. The Company match began January 1, 1995 and is
$1,000.00 per individual.
(2) Mr. Doctor commenced employment with the Company on October 10, 1994.
(3) Issued warrant for 400,000 shares.
(4) Bonus amount is reported for the fiscal year in which earned and without
regard to when paid.
(5) Represents relocation allowance.
(6) Stock options of 80,000 shares were surrendered on November 10, 1994. A new
grant was issued for 140,000 shares on November 10, 1994.
(7) Mr. O'Brien commenced employment with the Company on December 12, 1994.
(8) Represents a bonus for accepting employment.
(9) Represents vacation payout of $13,913 and severance pay of $165,000.
(10) Mr. O'Leary commenced employment with the Company on July 1, 1994 and
terminated his employment relationship on December 31, 1994.
(11) Represents vacation payout of $2,890 and severance pay of $33,333.
</TABLE>

17
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR

All stock options granted in the last fiscal year to the Chief Executive
Officer, three other highly paid executive officers for fiscal year 1995 and two
highly paid former executive officers who received compensation during fiscal
year 1995 are disclosed in the following table. This table discloses, for each
named executive, the gain or "spread" that would be realized if the options were
exercised on the expiration date, assuming that the Company's stock had
appreciated at the level indicated, compounded annually over the life of the
options.

<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
INDIVIDUAL GRANTS RATES OF STOCK
---------------------------------------------------------- PRICE APPRECIATION
% OF TOTAL FOR OPTION
OPTIONS OPTIONS GRANTED TERMS (2)
GRANTED TO EMPLOYEES IN EXERCISE OR BASE EXPIRATION ------------------
NAME (#)(1) FISCAL YEAR PRICE ($/SH) DATE 5% ($) 10% ($)
--------------------- ------- ----------------- ---------------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Louis J. Doctor 400,000 23.7 $2.75 11/10/04 691,784 1,753,116
Carl C. Calabria 150,000 8.9 $2.75 11/10/04 259,419 657,419
R. John Curson 140,000 8.3 $2.75 11/10/04 242,124 613,591
Robert J. O'Brien 100,000 5.9 $2.75 11/10/04 172,946 438,279
Paul J. Smith 0 0 -- -- 0 0
Michael R. O'Leary 50,000 3.0 $3.75 08/02/04 117,918 298,827
<FN>
------------------------
Footnotes:

(1) Stock options are granted with an exercise price equal to the fair market
value of the Company's Common Stock on date of grant. Options under the
Company's 1988 Stock Option Plan generally become exercisable 25% one year
after issuance and 1/48th each month thereafter for 36 months. The term of
each option granted is the earlier of (i) ten years or (ii) 30 days after
termination of the holder. Mr. Doctor was granted a warrant to purchase
400,000 Shares of the Company's Common Stock. One hundred thousand of such
shares became exercisable on January 1, 1995. The remaining shares will
become exercisable at a rate of 6,666.67 per month, such that the warrant
will be fully exercisable on October 1, 1998.

(2) The 5% and 10% assumed rates of appreciation are derived from the rules of
the Securities and Exchange Commission and do not represent the Company's
estimate or projection of the future Common Stock price. In addition, the
price of the Company's Common Stock has to date appreciated significantly
beyond these levels, from $2.75 to $3.75 at the date the options were
granted to $9.50 on September 6, 1995. Current realizable value therefore
exceeds the amounts set forth above.
</TABLE>

18
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

This table discloses the aggregate dollar value realized upon exercise of
stock options in the last fiscal year by the Chief Executive Officer, three
other highly paid executive officers and two highly paid former executive
officers who received compensation during fiscal year 1995. For each named
executive, the table also includes the total number of unexercised options and
the aggregate dollar value of in-the-money unexercised options held at the end
of the last completed fiscal year, separately identifying the exercisable and
unexercisable options.

<TABLE>
<CAPTION>
NUMBER OF OPTIONS VALUE OF IN-THE-MONEY
OUTSTANDING OPTIONS AS OF JULY 31,
AS OF JULY 31, 1995 1995(1)
SHARES ACQUIRED -------------------------- --------------------------
NAME ON EXERCISE(#) VALUE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------------------- ----------------- ----------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Louis J. Doctor (2) 0 0 140,000 260,000 0 0
Carl C. Calabria 0 0 39,480 175,520 2,539 456,836
R. John Curson 0 0 0 140,000 0 420,000
Robert J. O'Brien 0 0 0 100,000 0 300,000
Paul J. Smith 0 0 62,167 10,333 52,396 8,541
Michael R. O'Leary 0 0 0 0 0 0
<FN>
------------------------
(1) Valuations above for unexercised in-the-money options are based on the
difference between the option price and fair market value at July 1, 1995
($5.75 per share). Accordingly, an option is reported as having zero value
if the exercise price of the option equaled or exceeded the fair market
value of the Company's Common Stock at July 1, 1995. Since July 1, 1995,
the price per share of the Company's Common Stock has appreciated further
(to $9.50 per share on September 6, 1995). The actual values of
in-the-money options are therefore greater than those reflected above.
(2) Mr. Doctor was granted a warrant to purchase 400,000 Shares of the
Company's Common Stock. One hundred thousand of such shares became
exercisable on January 1, 1995. The remaining shares will become
exercisable at a rate of 6,666.67 per month, such that the warrant will be
fully exercisable on October 1, 1998.
</TABLE>

EMPLOYMENT AGREEMENTS

MR. LOUIS J. DOCTOR

In connection with RasterOps' employment of Mr. Doctor, the Company has
agreed to pay Mr. Doctor $170,000 per year and has agreed to grant Mr. Doctor a
warrant to purchase 400,000 shares of the Company's Common Stock (the
"Warrant"). One hundred thousand shares subject to the Warrant became
exercisable on January 1, 1995 and the remaining shares will become exercisable
at a rate of 6,666.67 shares per month thereafter such that the Warrant will be
fully exercisable on October 1, 1998. Upon a change of control of the Company,
the vesting period will accelerate and the warrant will thereupon become fully
exercisable. In addition, the Company has agreed that upon the occurrence of
such event, if Mr. Doctor becomes subject to the "golden parachute" provisions
of the Code by virtue of such change in control, the Company will reimburse Mr.
Doctor for any additional taxes owed upon the exercise of the Warrant.

MR. PAUL J. SMITH

The Company has an agreement with Mr. Smith which provided for his
employment at will, for a period ending on the earlier of (i) April 7, 1996, or
(ii) the date on which a notice of termination was tendered by either Mr. Smith
or the Company. Such notice was tendered on October 10, 1994. The agreement
provides for an initial annual base salary of $220,000, such performance bonuses
as the Board of Directors shall authorize, and participation in the employee
benefit plans and executive

19
<PAGE>
compensation programs maintained by the Company which are applicable to other
key executives of the Company. In the event of a change in control of the
Company, the unvested portion of any stock option held by Mr. Smith under the
Company's stock option plans will automatically accelerate and Mr. Smith will
have the right to exercise all or any portion of such options, in addition to
any portion of the options exercisable prior to such event. For purposes of the
agreement, a change of control is defined in a substantially identical manner to
the definition of change of control included in the proposed amendment to the
Director Option Plan. Pursuant to the agreement, Mr. Smith has been retained as
a consultant at his base salary and benefits at the time of his departure until
the earlier of (a) the date on which Mr. Smith secures full-time employment, (b)
12 months from the date of termination, or (c) a breach by Mr. Smith of certain
obligations under the agreement.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

No current member of the Compensation Committee is an officer or employee of
the Company.

20
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

INTRODUCTION

During the fiscal year 1995, the Compensation Committee of the Board of
Directors consisted of Messrs. Bregman, Tompkins and, since January 1995,
Sorenson. All of the members of the Committee were outside Directors during
fiscal year 1995. The Compensation Committee establishes the general
compensation policies for the Company's executive officers.

PHILOSOPHY

The Compensation Committee believes that the Company must provide the
executive officers of the Company with compensation competitive with peer
companies to attract and retain experienced employees critical to the success of
the Company in meeting its performance and strategic objectives and to maximize
shareholder value. The Compensation Committee believes that the compensation of
the executive officers, including the Chief Executive Officer, should be related
to the Company's long-term performance. With respect to Section 162(m) of the
Code (which limits deductibility of executive compensation exceeding $1 million
per individual per year unless certain conditions are met), the Amended 1988
Incentive Stock Plan currently qualifies for a temporary exemption from Section
162(m), and the Company currently intends to take steps to secure a permanent
exemption. The Company has not taken any steps to qualify any other compensation
plans for exemptions from Section 162(m), although it has entered into an
agreement with its Chief Executive Officer to compensate him in the event he is
adversely affected by Section 162(m). See "Compensation of Chief Executive
Officer," below. The Compensation Committee will continue to evaluate its other
compensation plans in light of Section 162(m).

COMPENSATION PLANS

For executive officers, compensation is comprised of three elements: Base
Compensation, Cash Incentive Compensation and Long-term Incentive Compensation.

BASE COMPENSATION is established by reviewing the salaries of executive
officers of comparable-sized peer companies, the Company's financial performance
during the past year and individual performance of the executives during the
past year. The Company generally attempts to compensate its executive officers
at or above the amounts paid to employees with similar levels of responsibility
at comparably-sized peer companies. Factors relating to the Company's financial
performance that may be relevant to increasing or decreasing base salary include
revenues and earnings. Factors relating to individual performance that are
assessed in setting base compensation vary based on particular duties and areas
of responsibility of the individual officer. The establishment of base
compensation involves a subjective assessment and weighing of the foregoing
criteria and is not based on any specific formula.

To implement the Compensation Committee's philosophy of rewarding the
Company's executive officers based upon the long-term performance of the
Company, during fiscal year 1995, the Compensation Committee offered to award
additional incentive stock options to those executive officers who agreed to a
reduction in their base compensation. The Compensation Committee believes that
reorienting the compensation package received by the Company's executive
officers toward the long-term success of the Company is in the best interests of
the Company and its Shareholders.

CASH INCENTIVE COMPENSATION is directly related to the Company's achievement
of revenue and earnings goals. Early in each fiscal year, the Compensation
Committee establishes specified targets, generally with respect to revenues and
earnings and in certain cases with respect to the items based on a particular
executive officer's duties and areas of responsibility, and provides for bonuses
to be paid based on the Company's performance against such targets. During
fiscal 1995, because the Company did not meet a minimum established earnings
level, no cash incentive payments were made to executives.

LONG-TERM INCENTIVE COMPENSATION is comprised of stock options which is the
Company's only long-term compensation element. This program is intended to
provide additional incentives to the executive officers to maximize shareholder
value. All options are granted at the current market price

21
<PAGE>
and utilize vesting periods which encourage executive officers to remain with
the Company. Equity compensation is granted based on the Compensation
Committee's judgment in each case based on the individual circumstances of each
executive officer.

COMPENSATION OF THE CHIEF EXECUTIVE OFFICER

Mr. Doctor was hired as the Company's Chief Executive Officer ("CEO") during
fiscal 1995, and his compensation was established based on the above factors.
Mr. Doctor's base salary ($170,000 per year) was set approximately at the level
consistent with other Chief Executive Officers at comparatively-sized, peer
companies. In addition and consistent with the Compensation Committee's
philosophy, Mr. Doctor was granted a warrant to purchase 400,000 shares of
Common Stock in order to orient his compensation package toward the increase of
Shareholder value rather than predominantly base salary. In connection with the
grant of the warrant, the Compensation Committee approved a provision in Mr.
Doctor's employment agreement obligating the Company to reimburse Mr. Doctor for
any additional taxes owed by Mr. Doctor beyond ordinary income taxes.

THE MEMBERS OF THE COMPENSATION COMMITTEE FOR FISCAL YEAR 1995

Walter W. Bregman

Daniel D. Tompkins, Jr.

Kieth E. Sorenson
(From January 1995)

22
<PAGE>
PERFORMANCE GRAPH

The Securities and Exchange Commission requires a comparison on an indexed
basis of cumulative total shareholder return for the Company, a relevant broad
equity market index and a published industry or line-of-business index.
Cumulative total shareholder return represents share value appreciation assuming
dividend reinvestment. The Common Stock of the Company is traded on the Nasdaq
National Market. Set forth below is a graph comparing cumulative total
shareholder return for the last five (5) fiscal years (commencing June 30, 1990)
on the Company's Common Stock, the Nasdaq(US) Index and the Hambrecht & Quist
Technology Index.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
RASTEROPS H&Q TECHNOLOGY NASDAQ
<S> <C> <C> <C>
6/30/90 100 100 100
6/30/91 111.84 100.60 105.89
6/30/92 63.16 114.31 127.25
6/30/93 48.03 139.66 159.99
6/30/94 23.03 141.70 161.61
7/1/95 30.26 237.29 215.33
</TABLE>

23
<PAGE>
MISCELLANEOUS

SHAREHOLDER PROPOSALS

Shareholder proposals complying with the applicable rules under the
Securities and Exchange Act of 1934 intended to be presented at the 1996 Annual
Meeting of Shareholders of the Company must be received by the Company by May
25, 1996 to be eligible for inclusion in the Company's proxy materials for such
meeting. Such proposals should be directed to the attention of R. John Curson,
Chief Financial Officer, RasterOps, 2500 Walsh Avenue, Santa Clara, California
95051.

OTHER BUSINESS

The Board of Directors is not aware of any other business to be presented at
the Annual Meeting. If any other matters should properly come before the
meeting, it is intended that the persons named in the accompanying form of Proxy
will vote such proxy in accordance with their best judgment on such matters.

SECTION 16 FILINGS

The Company believes that its officers, directors and five percent
shareholders complied with all Section 16(a) filing requirements applicable to
such officers, directors and five percent shareholders during fiscal year 1995
with the exception that Mr. William Carter, who was hired on April 17, 1995,
filed his Form 3 on May 8, 1995 and Mr. William McAleer filed an amended Form 3
in September 1995 indicating he owned 3,500 shares of the Company's Common Stock
prior to joining the Board of Directors in March 1995.

1995 ANNUAL REPORT TO SHAREHOLDERS AND 1995 ANNUAL REPORT ON FORM 10-K

A copy of the 1995 Annual Report to Shareholders accompanies this Proxy
Statement. RasterOps' Annual Report on Form 10-K for the year ended July 1,
1995, as filed with the Securities and Exchange Commission, containing full
audited financial statements and financial statement schedules also accompanies
this Proxy Statement.

BY ORDER OF THE BOARD OF DIRECTORS.

Santa Clara, California
September 22, 1995

24
<PAGE>
The undersigned shareholder of RASTEROPS (the "Company") acknowledges
receipt of the Notice of Annual Meeting of Shareholders and the Proxy Statement
each dated September 22, 1995, and the undersigned revokes all prior proxies and
appoints Louis J. Doctor and R. John Curson or either of them, proxies for the
undersigned to vote all shares of Common Stock of the Company which the
undersigned would be entitled to vote at the Annual Meeting of Shareholders to
be held at the Company's offices at 2500 Walsh Avenue, Santa Clara, California
95051 at 9:00 a.m. on October 24, 1995, and at any postponement or adjournment
thereof, and instructs said proxies to vote as follows:

<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY TO VOTE FOR ALL NOMINEES LISTED
BELOW) / / BELOW / /
Walter W. Bregman, Louis J. Doctor, Gordon E. Eubanks, Jr., William H. McAlcer,
Keith E. Sorenson, Conrad J. Wredberg and Daniel D. Tompkins, Jr.
2. AMENDMENT TO ARTICLES OF INCORPORATION TO CHANGE CORPORATE NAME TO TRUEVISION, INC.
/ / FOR / / AGAINST / / ABSTAIN
3. AMENDMENT TO ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES TO 50,000,000.
/ / FOR / / AGAINST / / ABSTAIN
4. AMENDMENT TO THE 1988 STOCK INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES AVAILABLE THEREUNDER BY
515,000.
/ / FOR / / AGAINST / / ABSTAIN
5. AMENDMENT TO THE AMENDED AND RESTATED 1991 DIRECTOR OPTION PLAN TO INCREASE THE NUMBER OF SHARES
AVAILABLE THEREUNDER BY 100,000.
/ / FOR / / AGAINST / / ABSTAIN
6. AMENDMENT TO THE AMENDED AND RESTATED 1991 DIRECTOR OPTION PLAN TO PROVIDE FOR ONE-TIME GRANTS OF
OPTIONS TO PURCHASE 25,000 SHARES OF COMMON STOCK TO NON-EMPLOYEE DIRECTORS WHO ACT AS CHAIRMAN OF THE
BOARD OF DIRECTORS FOR THE COMPANY.
/ / FOR / / AGAINST / / ABSTAIN
7. RATIFICATION OF THE COMPANY'S PRIVATE PLACEMENT OF COMMON STOCK AND WARRANTS TO PURCHASE COMMON STOCK
ON JUNE 19, 1995.
/ / FOR / / AGAINST / / ABSTAIN
8. RATIFICATION OF THE APPOINTMENT OF PRICE WATERHOUSE LLP AS INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR
ENDING JUNE 29, 1996.
/ / FOR / / AGAINST / / ABSTAIN
9. In their discretion, the proxies are authorized to vote upon such other business as may properly come
before the meeting.
/ / GRANT / / WITHHOLD
</TABLE>

<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2, 3, 4, 5, 6, 7, AND 8 AND IN THE DISCRETION OF THE
PROXIES AS TO OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
Dated: __________________, 199_
_______________________________
Signature
_______________________________
Signature if held jointly

(This Proxy should be dated and
signed by the shareholder
exactly as his/her name is
printed at the left and
returned properly in the
enclosed envelope. A person
signing as an executor,
administrator, trustee or
guardian should so indicate and
specify his/her title. If a
corporation, please sign in
full corporate name by
President or other authorized
officer. If a partnership,
please sign in partnership name
by authorized person. Joint
owners each should sign.

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE