<PAGE> 1
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 (AMENDMENT NO. __)
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MOBINETIX SYSTEMS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
MOBINETIX SYSTEMS, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $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 0-11:1
-----------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------
[ ] 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:
------------------------------------------------------
1 Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
MOBINETIX SYSTEMS, INC.
---------------------
Notice of Annual Meeting of Stockholders
To Be Held on December 4, 1997
TO THE STOCKHOLDERS;
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
MobiNetix Systems, Inc., a Delaware corporation (the "Company"), will be held on
December 4, 1997 at 9:00 a.m., local time, at the Sunnyvale Hilton Hotel,
located at 1250 Lakeside Drive, Sunnyvale California 94086 for the following
purposes:
1. To elect five directors to serve until the next Annual Meeting of
Stockholders and until their successors are elected.
2. To ratify the appointment of Arthur Andersen LLP as independent
accountants of the Company for the fiscal year ending June 30, 1998.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on October 20,
1997 are entitled to notice of and to vote at the Annual Meeting and any
adjournment thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, to ensure 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 stockholder
attending the Annual Meeting may vote in person even if such stockholder has
returned a proxy.
FOR THE BOARD OF DIRECTORS
Aziz Valliani
President and Chief Executive Officer
Sunnyvale, California
October 27, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN, DATE AND RETURN
THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE
<PAGE> 3
MOBINETIX SYSTEMS, INC.
----------
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors of
MobiNetix Systems, Inc., a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders (the "Annual Meeting") to be held December 4,
1997 at 9:00 a.m., local time, or at any adjournment thereof, for the purposes
set forth herein and in the accompanying Notice of Annual Meeting of
Stockholders. The Annual Meeting will be held at the Sunnyvale Hilton Hotel,
located at 1250 Lakeside Drive, Sunnyvale, California 94806.
The principal executive offices of the Company are located at 500
Oakmead Parkway, Sunnyvale, California 94806.
These proxy solicitation materials and the Company's Annual Report to
Stockholders for the year ended June 30, 1997, including financial statements,
were mailed on or about October 27, 1997 to all stockholders entitled to vote at
the meeting.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Company
(Attention: David M. Licurse, Sr., Chief Financial Officer and Vice President of
Operations) a written notice of revocation or a duly executed proxy bearing a
later date or by attending the Annual Meeting and voting in person.
VOTING AND SOLICITATION
Each stockholder voting for the election of directors may cumulate such
stockholder's votes and give one candidate a number of votes equal to the number
of directors to be elected multiplied by the number of shares held by such
stockholder, or may distribute such stockholder's votes on the same principle
among as many candidates as the stockholder may select, provided that votes
cannot be cast for more than five directors. However, no stockholder will be
entitled to cumulate votes unless the candidate's name has been placed in
nomination prior to the voting, and the stockholder, or any other stockholder,
has given notice at the meeting prior to the voting of the intention to cumulate
votes. If any stockholder gives such notice, all stockholders may cumulate their
votes for the candidates in nomination. In the event that cumulative voting is
invoked, the proxy holders will have the discretionary authority to vote all
proxies received by them in such a manner as to ensure the election of as many
of the Board of Directors' nominees as possible. See "Proposal 1--Election of
Directors." On all other matters, each share has one vote.
<PAGE> 4
The Company will bear the cost of soliciting proxies. In addition, the
Company may reimburse brokerage firms and other persons representing beneficial
owners of shares for their expenses in forwarding solicitation material to such
beneficial owners. Solicitation of proxies by mail may be supplemented by one or
more of telephone, telegram, facsimile or personal solicitation by directors,
officers or regular employees of the Company. No additional compensation will be
paid to such persons for such services.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company which are intended to be
presented by such stockholders at the Company's 1998 Annual Meeting must be
received by the Company no later than June 15, 1998 in order that they may be
included in the proxy statement and form of proxy relating to that meeting.
RECORD DATE AND VOTING SECURITIES
Stockholders of record at the close of business on October 20, 1997 are
entitled to notice of and to vote at the meeting. At the record date, 1,358,457
shares of the Company's Common Stock, par value $0.001, were issued and
outstanding, no shares of the Company's Series A Preferred Stock were
outstanding, 883,453 shares of the Company's Series B Preferred Stock were
issued and outstanding and 28,125 shares of the Company's Series C Preferred
Stock were issued and outstanding. Based on the average of the bid and ask price
on the OTC Bulletin Board on October 20, 1997, the market value of one share of
the Company's Common Stock was $3.03. Each share of Common Stock is entitled to
one vote, each share of Series B Preferred Stock is entitled to two votes, and
each share of Series C Preferred Stock is entitled to forty votes.
PROPOSAL 1 -- ELECTION OF DIRECTORS
NOMINEES
The Company's Bylaws currently provide for a board of five directors.
Unless otherwise instructed, the proxy holders will vote the proxies received by
them for the Company's five nominees named below, all of whom are currently
directors of the Company. 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 substitute nominee who shall be designated by the
current Board of Directors to fill the vacancy. It is not expected that any
nominee listed below will be unable or will decline to serve as a director. 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 ensure 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 proxy holders. In any event, the proxy
holders cannot vote for more than five persons. The term of office
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<PAGE> 5
of each person elected as a director will continue until the next Annual Meeting
of Stockholders or until his successor has been elected and qualified.
The names of the nominees, and certain information about them, are set
forth below.
<TABLE>
<CAPTION>
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
--------------- --- -------------------- --------------
<S> <C> <C> <C>
Paul C. Dali 54 Chairman of the Board of the 1992
Company; Managing Partner of
Convergence Partners
Aziz Valliani 43 President and CEO of the 1996
Company
Nazim Kareemi 49 Executive Vice President of the 1992
Company
William L. Powar 51 Management Consultant 1997
Vivian M. Stephenson 60 Senior Vice President and CIO 1997
of Dayton Hudson Corporation
</TABLE>
There are no family relationships among the Company's directors and
executive officers.
BUSINESS EXPERIENCE OF THE NOMINEES
PAUL DALI is the Chairman of the Company's Board. Paul is the Managing
Partner of Convergence Partners, a venture capital firm. Before joining
Convergence Partners in 1997, he was a General Partner of Nazem & Company,
responsible for managing the firm's California office. Prior to joining Nazem
and Company in 1991, he was a General Partner with the venture capital firm of
3i Ventures from 1988 until 1991. Before joining 3i, Mr. Dali served as
President and CEO of Regis McKenna Inc. from 1983 until 1988, one of the largest
and most well-known electronics industry marketing and communications firms in
the U.S. Prior to joining Regis McKenna, Mr. Dali was the General Manager of the
Personal Computer Systems Division at Apple where he was responsible for all
phases of the Apple II and Apple III product lines. Mr. Dali received a B.S.
degree from the University of California at Northridge. Mr. Dali has been a
director of the Company since May 1992.
Mr. Dali is also a director of Graphixzone, Inc.
AZIZ VALLIANI is the President and CEO of the Company and one of its
directors. Mr. Valliani, a 19 year veteran in the industry, served as President
and CEO of Inforite Corporation, before joining the Company in January 1996.
Prior to Inforite, Mr. Valliani was COO and executive vice president at Wyse
Technology. Before Wyse, Mr. Valliani served as Vice President and General
Manager for the Altos business unit of Acer America Corporation. Mr. Valliani
was with Intel before
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<PAGE> 6
joining Altos Computer Systems and earned his BSEE from Pratt Institute,
Brooklyn, NY. Mr. Valliani has been a director of the Company since January
1996.
NAZIM KAREEMI is the Executive Vice President of the Company, and
previously served as President of the Company. Mr. Kareemi also founded PenWare,
the predecessor of the Company. Mr. Kareemi has more than twenty years of
experience in the computer industry. Mr. Kareemi worked with or consulted for
leading technology and computer companies including Intel, Zilog and Xerox. He
has a B.S. from MIT and M.S. and Engineer's degrees from Stanford University.
Mr. Kareemi has been a director of the Company since May 1992.
WILLIAM POWAR is Principal and Founder of Venture Architects, a
management consulting firm specializing in electronic commerce, transaction
processing and retail banking. Mr. Powar has more than twenty years of
experience in the electronic payment systems industry. Prior to starting his
consultant practice in January 1997, Mr. Powar was a senior executive for 22
years at Visa USA and Visa International, where he played key roles in marketing
and technology development, most recently as Senior Vice President for emerging
markets and technology. He has a B.A. in Economics from Amherst College and an
M.A. and ABD in Economics from Stanford University. Mr. Powar has been a
director of the Company since January 1997.
VIVIAN STEPHENSON has served as Senior Vice President and Chief
Information Officer at the Dayton Hudson Corporation since 1995. Dayton Hudson
is one of the largest general merchandise retailers in the U.S., operating over
1,000 discount stores and department stores, including the Target and Mervyn's
chains. Previously, Ms. Stephenson held the positions of Vice President and
Senior Vice President of Information Services for Mervyn's. Prior to joining
Mervyn's in 1989, she was Director of Systems Development and Maintenance for
Tenneco Gas. Ms. Stephenson currently serves on the Board of Directors for the
National Retail Federation Information Systems and the California Chamber of
Commerce. She has a B.S. in Mathematics from New York University and an MBA from
the University of Havana. Ms. Stephenson has been a director of the Company
since January 1997.
VOTE REQUIRED AND RECOMMENDATION OF BOARD OF DIRECTORS
The nominees receiving the highest number of affirmative votes of the
shares entitled to be voted, up to the number of directors to be elected, shall
be elected as directors. Votes withheld will be counted for purposes of
determining the presence or absence of a quorum for the transaction of business
at the meeting, but have no other legal effect upon election of directors under
California law.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR"
THE NOMINEES SET FORTH HEREIN.
PROPOSAL TWO -- RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
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<PAGE> 7
The Board of Directors has selected Arthur Andersen LLP, independent
accountants, to audit the financial statements of the Company for the year
ending June 30, 1998, and recommends that the stockholders vote for ratification
of such appointment. In the event of a negative vote on such ratification, the
Board of Directors will reconsider its selection. Arthur Andersen LLP has
audited the Company's financial statements since the fiscal year ended June 30,
1994. Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting of Stockholders and will have the opportunity to make a statement
if they so desire. The representatives also are expected to be available to
respond to appropriate questions from stockholders.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR"
THE RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING JUNE 30, 1998.
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<PAGE> 8
OTHER INFORMATION
REGARDING SECURITY OWNERSHIP,
DIRECTORS AND OFFICERS
EXECUTIVE OFFICERS
The following table lists the Company's executive officers as of the date of
this Proxy Statement and certain information concerning them.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Aziz Valliani............................ 43 President, Chief Executive Officer and Director
Nazim Kareemi............................ 49 Executive Vice President and Director
David M. Licurse, Sr. ................... 59 Chief Financial Officer and Vice President of Operations
Llavanya Fernando........................ 45 Vice President, Hardware Development
Thomas A. Dorosewicz..................... 42 Vice President, Sales and Marketing
Abbas Rafii.............................. 50 Vice President, Software Development
</TABLE>
- ---------------------------
EXECUTIVE PROFILES
AZIZ VALLIANI is the President and CEO of the Company and one of its
directors. Mr. Valliani, a 19 year veteran in the industry, served as President
and CEO of Inforite Corporation, before joining the Company in January 1996.
Prior to Inforite, Mr. Valliani was COO and executive vice president at Wyse
Technology. Before Wyse, Mr. Valliani served as Vice President and General
Manager for the Altos business unit of Acer America Corporation. Mr. Valliani
was with Intel before joining Altos and earned his BSEE from Pratt Institute,
Brooklyn, NY. Mr. Valliani has been a director of the Company since January 1996
NAZIM KAREEMI is the Executive Vice President of the Company, and
previously served as President of the Company. Mr. Kareemi also founded PenWare,
the predecessor of the Company. Mr. Kareemi has more than twenty years of
experience in the computer industry. Mr. Kareemi worked with or consulted for
leading technology and computer companies including Intel, Zilog and Xerox. He
has a B.S. from MIT and M.S. and Engineer's degrees from Stanford University.
Mr. Kareemi has been a director of the Company since May 1992.
DAVID M. LICURSE, SR. is the CFO and Vice President of Operations.
Before joining the Company, he served as CFO and Vice President of Operations at
Inforite Corporation. Mr. Licurse held various senior level managerial positions
with Xerox Corporation. These positions ranged from Financial Planning and
Analysis Manager for Xerox's manufacturing division and Controller for its
computer business unit, to Manager of Finance and Operations for a high
technology software division in Palo Alto. Mr. Licurse earned an MBA from the
University of Rochester.
LLAVANYA FERNANDO is the Vice President of Hardware Development. Mr.
Fernando served as vice president of R & D at Inforite Corporation. Mr. Fernando
has over 21 years of direct R&D,
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<PAGE> 9
mobile computing and management experience. From 1993 until 1995, he held a
senior management position at Wyse. From 1982 until 1993, Mr. Fernando was the
General Manager at a business unit of TeleSensory Systems, Inc. in Mountain
View, California. He has also worked at Data Products, Graviner Ltd. and H.
Tinsley & Co. Qualified in England, he obtained M.S. and B.S. degrees in the
field of electronics and systems engineering.
ABBAS RAFII is the Vice President of Software Development. At PenWare
he managed the development and release of five commercial software products.
Before joining the Company, he was project lead and a senior software engineer
at Hewlett-Packard Laboratories from 1979 until 1992. He has more than fifteen
years of experience in design and development of applications, operating systems
components, and object oriented database systems. His credentials include an
M.S. and a Ph.D. degree from Stanford University.
THOMAS A. DOROSEWICZ is the Vice President of Sales and Marketing. Mr.
Dorosewicz, who joined the Company in August 1996, has spent the last 15 years
in sales and marketing positions within the data capture field. Prior to joining
the Company, Mr. Dorosewicz ran the New England Division of Symbol Technologies
from 1990 until 1996. Mr. Dorosewicz's earlier positions included head of the
Business Development activities at Symbol from 1990 until 1994 and Business Unit
Director for Scanning at Fujitsu Systems of America from 1987 until 1990. He
obtained an economics degree from the University of Maryland.
None of the directors or officers of the Company have been
involved in any proceedings described in Item 401(d) of Regulation S-B
promulgated under the Exchange Act of 1934, as amended.
SECURITY OWNERSHIP
The following table sets forth certain information known to the Company
regarding the beneficial ownership of each class of the Company's voting
securities as of October 20, 1997, by (a) each beneficial owner of more than 5%
of the Company's Common Stock, (b) the Named Officers, (c) each director of the
Company and (d) all directors and executive officers of the Company as a group.
Except as otherwise indicated, each person has sole voting and investment power
with respect to all shares shown as beneficially owned, subject to community
property laws where applicable.
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<PAGE> 10
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of
Title of Class Beneficial Owner Beneficial Ownership Percent of Class
-------------- ---------------- -------------------- ----------------
<S> <C> <C> <C>
Series B Preferred Life Investors Insurance 352,941 shares 40.0%
Stock* Company of America directly owned
4333 Edgewood Rd NE
Cedar Rapids, IA 52499
Series B Preferred SF Sentry Investment 92,372 10.5%
Stock* Group
1 Bush St., Suite 1350
San Francisco, CA
94104
Series B Preferred Rainbow Technologies, 90,993 10.3%
Stock* Inc.
50 Technology Drive
Irvine, CA 92618
Series B Preferred Associated Capital, L.P. 88,235 10.0%
Stock* 477 Madison Ave.
14th Floor
New York, NY 10022
Series B Preferred Cruttenden Roth 60,000 6.8%
Stock* 18301 Von Karman Ave.
Suite 100
Irvine, CA 92612
Series B Preferred JDN Capital 58,823 6.7%
Stock* Management, L.P.
2682 Bishop Drive
Suite 112
San Ramon, CA 94583
Common Stock Aziz Valliani 253,933 18.7%
MobiNetix Systems, Inc.
500 Oakmead Parkway
Sunnyvale, CA 94086
</TABLE>
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<PAGE> 11
<TABLE>
<S> <C> <C> <C>
Common Stock Nazim Kareemi 253,933 18.7%
MobiNetix Systems, Inc.
500 Oakmead Parkway
Sunnyvale, CA 94086
Common Stock Abbas Rafii 167,938 12.4%
MobiNetix Systems, Inc.
500 Oakmead Parkway
Sunnyvale, CA 94086
Common Stock Llavan Fernando 167,938 12.4%
MobiNetix Systems, Inc.
500 Oakmead Parkway
Sunnyvale, CA 94806
Common Stock David M. Licurse, Sr. 162,428 12.0%
MobiNetix Systems, Inc.
500 Oakmead Parkway
Sunnyvale, CA 94806
Series C Preferred Paul C. Dali 28,125** 100%
Stock* Nazem & Company
3000 Sand Hill Road
Building 2, Suite 205
Menlo Park, CA 94025
Common Stock and All Directors and Officers 1,034,295 74.6% of the
Series C Preferred as a group aggregate of the
Stock Common Stock and
the Series C
Preferred
</TABLE>
- ---------------------------
* The Company effected a reverse stock split in October 1996, converting each
share of Series B Preferred into one-half share and increasing the conversion
ratio of Series B Preferred into Common Stock from 1:1 to 1:2 and converting
each share of Series C Preferred into one-fourth share and increasing the
conversion ratio of Series C Preferred into Common Stock from 1:10 to 1:40.
** Mr. Dali is a general partner of Nazem & Associates IV, L.P., the General
Partner of Nazem & Company IV, L.P., which is the owner of record of the Series
C Preferred. Mr. Dali disclaims beneficial ownership of such Series C Preferred,
except to the extent of his proportional interest therein.
-9-
<PAGE> 12
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of ten meetings
during the fiscal year ended June 30, 1997. No director attended fewer than 75%
of the meetings of the Board of Directors and its committees upon which such
director served.
The Board of Directors of the Company has a Compensation Committee, the
membership of which is formed by Paul Dali, Vivian Stephenson and William Powar.
The Compensation Committee determines annual cash compensation of officers, and
deals with issues relating to stock options and other incentive compensation.
The Compensation Committee held two meetings during the last fiscal year.
The Board of Directors of the Company also has an Audit Committee, the
membership of which is formed by Paul Dali, Vivian Stephenson and William Powar.
The Audit Committee reviews and monitors the corporate financial reporting and
the internal and external audits of the Company. The Audit Committee held one
meeting during the last fiscal year.
DIRECTOR COMPENSATION
On December 2, 1996 the Company granted a nonstatutory stock option to
purchase 25,000 shares of the Company's common stock to Paul Dali, as
compensation for his services as Chairman of the Board of Directors in the
upcoming year. The option vests over four years and has an exercise price of
$1.3750.
On January 6, 1997 the Company granted a nonstatutory stock option to
purchase 10,000 shares of the Company's common stock to William Powar, as
compensation for his services as Director in the upcoming year. The option vests
over one year and has an exercise price of $2.8750.
On January 6, 1997 the Company granted a nonstatutory stock option to
purchase 10,000 shares of the Company's common stock to Vivian Stephenson, as
compensation for her services as Director in the upcoming year. The option vests
over one year and has an exercise price of $2.8750.
Other then the above-mentioned option grants, the Company has not paid
any annual retainer, per-meeting fee, or any other compensation to any director.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and directors, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file reports of ownership on Form 3 and changes in ownership on Forms 4 or 5
with the Securities and Exchange Commission. Such executive officers, directors
and 10% stockholders are also required by the Securities and Exchange Commission
rules to furnish the Company with copies of all Section 16(a) forms they file.
Based solely upon its review of copies of such forms received by it, or
written representations from certain reporting persons that no filings were
required for such persons, the Company believes
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<PAGE> 13
that during the year ended June 30, 1997, Aziz Valliani, Nazim Kareemi, Llavanya
Fernando, David Licurse, Sr. and Abbas Rafii, did not report statements of
changes in beneficial ownership on Form 4 in a timely manner.
EXECUTIVE COMPENSATION
The following table sets forth all compensation received for services
rendered to the Company in all capacities, for the last three fiscal years ended
June 30, 1997, by the Named Officers, as named below:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION
--------------------------- ---- ------ ----- ------- ------------
<S> <C> <C> <C> <C> <C>
Aziz Valliani 1997 $ 250,000 --- --- ---
President and Chief 1996 124,042 --- --- ---
Executive Officer 1995 --- --- --- ---
Nazim Kareemi 1997 168,000 --- --- ---
Executive Vice President 1996 136,101 --- --- ---
1995 107,756 --- --- ---
David M. Licurse, Sr. 1997 135,000 --- --- ---
Chief Financial Officer 1996 58,037 --- --- ---
and Vice President of 1995 --- --- --- ---
Operations
Llavanya Fernando 1997 144,000 --- --- ---
Vice President, 1996 68,440 --- --- ---
Hardware Development 1995 --- --- --- ---
Abbas Rafii 1997 144,000 --- --- ---
Vice President, 1996 106,352 --- --- ---
Software Development 1995 94,156 --- --- ---
</TABLE>
- ---------------------------
The Company has not entered into any employment contracts with any Named
Officer.
OPTION GRANTS IN LAST FISCAL YEAR
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<PAGE> 14
The Option/SAR Grant Table sets forth hypothetical gains or "option
spreads" for the options at the end of their respective four-year terms, as
calculated in accordance with the rules of the Securities and Exchange
Commission. Each gain is based on an arbitrarily assumed annualized rate of
compound appreciation of the market price at the date of grant of five percent
(5%) and ten percent (10%) from the date the option was granted to the end of
the option term. Actual gains, if any, on option exercises are dependent on the
future performance of the Company's Common Stock and overall market conditions.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
--------------------------------------------------------- VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF STOCK
TOTAL OPTIONS PRICE APPRECIATION FOR
GRANTED TO EXERCISE OR OPTION TERM
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ---------------------------
GRANTED(1) FISCAL YEAR ($/SHARE) DATE 5% 10%
------------ -------------- ------------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Aziz Valliani 175,000 20.63% $1.3750 12/02/06 $151,327.77 $383,494.28
Nazim Kareemi 45,000 5.30% $1.3750 12/02/06 $38,912.86 $98,612.81
David M. Licurse, Sr. 37,500 4.42% $1.3750 12/02/06 $32,427.38 $82,177.35
14,000 1.65% $5.7500 3/18/07 $50,626.02 $128,296.27
Llavanya Fernando 50,000 5.89% $1.3750 12/02/06 $43,236.51 $109,569.79
Abbas Rafii 37,500 4.42% $1.3750 12/02/06 $32,427.38 $82,177.35
</TABLE>
- ---------------------------
(1) Represents number of shares granted under stock options. The Company
did not grant stock appreciation rights or restricted stock awards in
fiscal 1997.
OPTION EXERCISES AND HOLDINGS
The following table sets forth for each of the Named Officers certain
information concerning the number of shares subject to both exercisable and
unexercisable stock options at June 30,1997. Also reported are values for
"in-the-money" options that represent the positive spread between the respective
exercise prices of outstanding stock options and the fair market value of the
Company's Common Stock as of June 30, 1997, as determined by the Company Board
of Directors. There were no option exercises by the Named Officers during fiscal
1997.
AGGREGATED OPTION EXERCISES IN FISCAL 1997 AND FISCAL 1997 YEAR-END VALUES
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<PAGE> 15
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT 6/30/97 AT-6/30/97(1)
----------------------------- ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Aziz Valliani 61,979 113,021 $162,694.87 $296,680.12
Nazim Kareemi 17,812 27,188 $46,756.50 $71,368.50
David M. Licurse, Sr. 19,921 31,579 $52,292.62 $46,144.87
Llavanya Fernando 17,968 32,032 $47,166.00 $84,084.00
Abbas Rafii 14,843 22,657 $38,962.87 $59,474.62
</TABLE>
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(1) Calculated by determining the difference between the fair market value
of the securities underlying the option at 6/30/97 ($4.0000 per share
as determined by the Board of Directors on 6/30/97) and the exercise
price of the options.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting.
If any other matters properly come before the meeting or any adjournment or
postponement thereof, it is the intention of the persons named in the enclosed
form of Proxy to vote the shares they represent as the Board of Directors may
recommend.
FORM 10-K
STOCKHOLDERS ENTITLED TO VOTE AT THE ANNUAL MEETING MAY
OBTAIN, WITHOUT CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR
THE FISCAL YEAR ENDED JUNE 30, 1997 UPON WRITTEN REQUEST TO DAVID M. LICURSE,
SR., CHIEF FINANCIAL OFFICER AND VICE PRESIDENT OF OPERATIONS, MOBINETIX
SYSTEMS, INC., 500 OAKMEAD PARKWAY, SUNNYVALE, CALIFORNIA 94086.
BY ORDER OF THE BOARD OF DIRECTORS
Dated: October 27, 1997
-13-
<PAGE> 16
This Proxy is Solicited on Behalf of the Board of Directors
MOBINETIX SYSTEMS, INC.
Annual Meeting of Stockholders
The undersigned stockholder of MobiNetix Systems, Inc., a Delaware
corporation (the "Company"), hereby appoints Aziz Valliani and David M. Licurse,
Sr., and each of them, with full power of substitution to represent the
undersigned and to vote all the shares of the Company which the undersigned is
entitled to vote, at the Annual Meeting of Stockholders of the Company to be
held on December 4, 1997, at 9:00 a.m., local time, at the Sunnyvale Hilton
Hotel, located at 1250 Lakeside Drive, Sunnyvale, California 94086, or any
adjournment thereof (1) as hereinafter specified upon the proposals listed on
the reverse side and as more particularly described in Company's Proxy
Statement, receipt of which is hereby acknowledged, and (2) in their discretion
upon such other matters as may properly come before the meeting.
(Continued, and to be signed, on reverse side).
<PAGE> 17
(Continued from other side)
1. ELECTION OF DIRECTORS:
NOMINEES: Paul C. Dali, Aziz Valliani, Nazim Kareemi,
William L. Powar and Vivian M. Stephenson
[ ] FOR [ ] WITHHELD
[ ]
-------------------------------------------
For all nominees except as noted above
2. Proposal to confirm the appointment of Arthur Andersen, LLP as the
Company's independent accountants for the 1998 fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, upon such other business as may properly come before
the meeting or any adjournment thereof.
This Proxy will be voted as directed or, if no contrary direction is
indicated, will be voted FOR the election of the nominees indicated above, FOR
ratification of the appointment of Arthur Andersen, LLP, and in the discretion
of the proxyholders, on such other business as may properly come before the
meeting or any adjournment thereof.
(This Proxy should be marked, dated and signed by the stockholder(s) exactly as
his or her name appears hereon, and returned promptly in the enclosed envelope.
Persons signing as officers or in a fiduciary capacity should so indicate. If
shares are held by joint tenants or as community property, both should sign.)
Signature Date
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Signature Date
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[ ] CHECK HERE FOR ADDRESS CHANGE
[ ] CHECK HERE IF YOU PLAN TO ATTEND THE ANNUAL MEETING
