<PAGE> 1
SCHEDULE 14A INFORMATION
AMENDED PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Boca Research, Inc.
(Name of Registrant as Specified In Its Charter)
Boca Research, Inc.
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] 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:
- --------------------------------------------------------------------------------
<PAGE> 2
BOCA RESEARCH, INC.
1377 CLINT MOORE ROAD
BOCA RATON, FLORIDA 33487
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AUGUST 16, 1999
To the Shareholders of
Boca Research, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Boca
Research, Inc. (the "Company") will be held on Monday, August 16, 1999, at 9:00
a.m., Local Time at the Embassy Suites Hotel, 661 Northwest 53rd Street, Boca
Raton, Florida, for the following purposes:
1. To elect nine (9) Directors of the Company to serve until the next
Annual Meeting of Shareholders as more fully described in the
accompanying Proxy Statement.
2. To consider and act upon a proposal to approve an amendment to the Boca
Research, Inc. 1992 Stock Option Plan to increase the number of shares
covered thereby from the fixed number of 1,700,000 to such number as
shall always be equal to 26% of the then issued and outstanding Common
Stock of the Company.
3. To consider and act upon a proposal to approve the granting of
Management Retention Options by Infomatec Integrated Information
Systems AG.
4. To transact such other business as may properly come before the meeting
or any adjournments thereof.
The close of business on June 30, 1999 has been fixed by the Board of
Directors as the record date for the determination of the Shareholders entitled
to notice of and to vote at the meeting or any adjournments thereof.
Shareholders are requested to date, sign and mail the enclosed proxy promptly in
the enclosed addressed envelope. If you should be present at the meeting and
desire to vote in person, you may withdraw your proxy.
By Order of the Board of Directors,
/s/ Robert W. Federspiel
Robert W. Federspiel, Secretary
Please note that light refreshments will be served at 8:30 a.m.
July , 1999
<PAGE> 3
BOCA RESEARCH, INC.
1377 CLINT MOORE ROAD
BOCA RATON, FLORIDA 33487
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
July , 1999
To the Shareholders of
Boca Research, Inc.:
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Boca Research, Inc. (the "Company") from
the holders of Company common stock, par value $0.01 per share ("Common Stock"),
as of the record date of June 30, 1999 (the "Shareholders") to be used at the
Annual Meeting of Shareholders (the "Annual Meeting") and at any adjournments
thereof. The Annual Meeting will be held at 9:00 a.m., Local Time, on Monday,
August 16, 1999, at the Embassy Suites Hotel, 661 Northwest 53rd Street, Boca
Raton, Florida. Light refreshments will be served at 8:30 a.m.
Any proxy given pursuant to this solicitation may be revoked by notice in
writing to the Secretary prior to the voting, by delivering a proxy bearing a
later date or by attending the Annual Meeting and voting his or her shares in
person. No such notice of revocation or later-dated proxy, however, will be
effective until received by the Company at or prior to the Annual Meeting.
Unless the proxy is revoked, the shares represented thereby will be voted at the
Annual Meeting or any adjournment thereof. The giving of the proxy does not
affect the right to vote in person should the Shareholder attend the meeting.
The entire cost of preparing and mailing the proxy material will be borne
by the Company. Solicitation of proxies will be made by mail, personally, or by
telephone or telegraph, by officers, directors and regular employees of the
Company. The Company will request brokerage houses and other custodians,
nominees and fiduciaries to forward soliciting material to the Shareholders and
the Company will reimburse such institutions for their out-of-pocket expenses
incurred thereby.
It is important that proxies be returned promptly to avoid unnecessary
expense. Therefore, whether you plan to attend or not, you are urged regardless
of the number of shares of stock owned, to date, sign and return the enclosed
proxy promptly.
The approximate date on which this proxy has been first mailed to
Shareholders is July , 1999.
Shares of Common Stock are the only outstanding voting securities of the
Company.
The Board of Directors in accordance with the By-Laws has fixed the close
of business on June 30, 1999, as the record date (the "Record Date") for
determining the Shareholders entitled to notice of and to vote at the Annual
Meeting and adjournments thereof. At the close of business on such date, the
outstanding number of voting securities of the Company was shares of
Common Stock, each of which is entitled to one vote. All votes will be tabulated
by employees of EquiServe, the Company's transfer agent for the Common Stock,
who will serve as inspectors of election. Abstentions and broker non-votes are
each included in the determination of the number of shares present but are not
counted on any matters brought before the meeting.
<PAGE> 4
SECURITY OWNERSHIP
The following table sets forth certain information regarding the beneficial
ownership of Company Common Stock as of the Record Date (i) by each person who
is known by the Company to be the beneficial owner of more than 5% of Company
Common Stock, (ii) by each director and each Named Executive Officer (as defined
elsewhere herein) who beneficially held shares of Company Common Stock as of
such date and (iii) by all executive officers and directors of the Company as a
group. Except as otherwise noted, each person has sole voting and investment
power over the shares shown as beneficially owned, except to the extent
authority is shared by spouses under applicable law.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT
NAME OF BENEFICIAL OWNER OWNERSHIP OF CLASS
------------------------ ----------------- --------
<S> <C> <C>
Infomatec Integrated Information Systems AG
Steinerne Furt 76
86167 Augsburg, Germany................................... 1,747,965 19.9%
Anthony F. Zalenski(1)...................................... 508,957 5.0%
Navroze S. Mehta............................................ 6,400 *
Alex S. Oprescu(2).......................................... 21,807 *
Michael A. Reale(3)......................................... 72,478 *
Martha A. Ritchason(4)...................................... 61,064 *
Larry L. Light(5)........................................... 74,418 *
Blaine E. Davis(6).......................................... 25,000 *
Robert W. Ferguson(7)....................................... 225,000 2.1%
H. Ric Luhrs(8)............................................. 28,000 *
Joseph M. O'Donnell(9)...................................... 23,000 *
Arthur R. Wyatt(12)......................................... 50,000 *
All directors and executive officers as a group (11 1,096,124 10.6%
persons)(11)..............................................
</TABLE>
- ---------------
* Less than 1%
(1) Includes 405,258 shares which Mr. Zalenski has the right to acquire within
sixty days pursuant to the 1992 Stock Option Plan.
(2) Includes 21,807 shares which Mr. Oprescu has the right to acquire within
sixty days pursuant to the 1992 Stock Option Plan.
(3) Includes 69,731 shares which Mr. Reale has the right to acquire within
sixty days pursuant to the 1992 Stock Option Plan.
(4) Includes 53,120 shares which Ms. Ritchason has the right to acquire within
sixty days pursuant to the 1992 Stock Option Plan.
(5) Includes 72,746 shares which Mr. Light has the right to acquire within
sixty days pursuant to the 1992 Stock Option Plan.
(6) Includes 25,000 shares which Mr. Davis has the right to acquire within
sixty days pursuant to the 1992 Non-Employee Director Stock Option Plan.
(7) Includes 85,000 shares of common stock owned by a trust of Mr. Ferguson and
140,000 shares of Common Stock which Mr. Ferguson has the right to acquire
within sixty days pursuant to the 1992 Non-Employee Director Stock Option
Plan and 1996 Non-Employee Director Stock Option Plan.
(8) Includes 10,000 shares of Common Stock which Mr. Luhrs has the right to
acquire within sixty days pursuant to the Company's 1996 Non-Employee
Director Stock Option Plan.
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<PAGE> 5
(9) Includes 20,000 shares which Mr. O'Donnell has the right to acquire within
sixty days pursuant to the 1996 Non-Employee Director Stock Option Plan.
(10) Includes 20,000 shares of Common Stock which Mr. Wyatt has the right to
acquire within sixty days pursuant to the Company's 1996 Non-Employee
Director Stock Option Plan.
(11) Includes 839,662 shares which certain individuals have the right to acquire
within sixty days pursuant to the Company's Non-Qualified Stock Option
Plan, 1992 Stock Option Plan, 1992 Non-Employee Director Stock Option Plan
and 1996 Non-Employee Director Stock Option Plan.
1. ELECTION OF DIRECTORS
Pursuant to a Stock Purchase Agreement by and between the Company and
Infomatec Integrated Information Systems AG ("Infomatec") whereby Infomatec
purchased shares of the Company's Common Stock on June 1, 1999 (the "Stock
Purchase Agreement"), the Board of Directors has agreed to fix the number of
directors at nine (9) for the coming year. At the Annual Meeting, the directors
will be elected to hold office until the next Annual Meeting and until their
successors are elected and qualified. Pursuant to the Stock Purchase Agreement,
the nominees are four individuals designated by Infomatec: Karl Gruns, Edward
Will, Gerhard R. Harlos and Alexander Haefele, and five individuals designated
by the Board members other than the designees of Infomatec: Blaine E. Davis,
Robert W. Ferguson, H. Ric Luhrs, Joseph M. O'Donnell and Arthur R. Wyatt. Each
designee has consented to serve if elected. Effective May 28, 1999, Douglas K.
Raborn, Gerald W. Stanley and Anthony F. Zalenski resigned from the Board. If
any nominee is unable to serve, proxies will be voted for such other candidate
as may be nominated by the Board of Directors and within the guidelines of the
Stock Purchase Agreement.
Directors will be elected by a plurality of the votes properly cast at the
Annual Meeting. Abstentions and broker non-votes will not be treated as votes
cast for this purpose.
NOMINEES
The nominees for election as directors, their ages, their positions with
the Company, the period during which they have served as directors and their
principal occupations and other directorships held by them are set forth below.
Blaine E. Davis, 63 years old, has been a director of the Company since
February 1998. Mr. Davis has served as Vice-Chairman of EastGate Services (Asia)
Ltd., an information services provider in China, since 1998. Mr. Davis has been
a Senior Partner of Telecom Associates, Ltd., a provider of business development
and management and advisory services, since 1995. From 1970 to 1995, Mr. Davis
was employed by AT&T Corporation, where he held a variety of senior management
positions.
Robert W. Ferguson, 75 years old, has been a director of the Company since
1993 and has served as Chairman since May 1997. Mr. Ferguson has been President
of Robert W. Ferguson and Associates, a consulting and investment firm, since
its formation in 1986. Prior thereto, Mr. Ferguson held senior management
positions with AT&T Corporation.
H. Ric Luhrs, 68 years old, has been a director of the Company since June
1998. Mr. Luhrs is the Chairman, President and Chief Executive Officer of the
Beistle Co., a manufacturer of paper novelties and party goods, and has served
in that capacity since 1960. He is President of the Lakeside Holding Co., Inc.
and a Director of Mellon Bank Commonwealth Region. He is the owner of Luhrs Gem
Testing Laboratory, Chairman of The Walking Quail Sporting Goods Store and
President of A-1 Holding, Inc.
Joseph M. O'Donnell, 51 years old, has been a director of the Company since
September 1996. Since December 1997, Mr. O'Donnell has served as Co-chairman of
Artesyn Technologies, Inc. (formerly Computer Products, Inc.), a leading
communications power conversion company, from February 1997 to
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<PAGE> 6
December 1997, as its Chairman, and, since July 1994, as its Chief Executive
Officer and President. From March 1994 to June 1994 and from October 1992 to
September 1993, Mr. O'Donnell was Managing Director of O'Donnell Associates, a
consulting firm. From October 1993 to February 1994, Mr. O'Donnell served as
Chief Executive Officer of Savin Corporation, an office products distributor
and, from June 1990 to September 1992, Mr. O'Donnell served as President and
Chief Executive Officer of Go/Dan Industries, a manufacturer of automotive
parts. Mr. O'Donnell is also a Director of V-Band Corporation, a manufacturer of
computer systems.
Arthur R. Wyatt, 71 years old, has been a director of the Company since May
1997. Mr. Wyatt has been a professor at the University of Illinois since 1992.
Mr. Wyatt is a member of the audit committee of the Farm Credit Bank System, a
director of First Busey Corporation and a member of the Board of Trustees of the
University of Illinois Foundation. Mr. Wyatt has previously served as a member
of the Financial Accounting Standards Board and as a member of the Accounting
Standards Executive Committee of the American Institute of Certified Public
Accountants. Mr. Wyatt was previously a Managing Director of Arthur Andersen &
Co.
Karl Gruns, 51 years old. Mr. Gruns is currently the Chief Financial
Officer of Infomatec Integrated Information Systems AG ("Infomatec") and has
served in that capacity since 1998. Prior to joining Infomatec, Mr. Gruns, a
Certified Public Accountant, operated his own accounting practice in Munich,
Germany. Prior to that, Mr. Gruns was employed by KPMG, LLP where he worked for
six years.
Gerhard R. Harlos, 38 years old. Mr. Harlos is currently the Co-Chief
Executive Officer of Infomatec, a producer of high-end, innovative e-commerce
systems and has served in that capacity since 1988. Mr. Harlos co-founded
Infomatec in 1988.
Alexander Haefele, 38 years old. Mr. Haefele is currently the Co-Chief
Executive Officer of Infomatec, a producer of high-end, innovative e-commerce
systems and has served in that capacity since 1988. Mr. Haefele co-founded
Infomatec in 1988. Prior to that date, Mr. Haefele was employed as chief of
software development with NCR Germany.
Edward Will, 57 years old. Mr. Will is currently the Chairman and Chief
Executive Officer of Infomatec AG International Inc. Prior to joining Infomatec
AG International Inc., Mr. Will served as Chairman and Chief Executive Officer
of Allmonde Investments Ltd., a Hong Kong-based investment banking and
consulting company. Mr. Will also serves as a Director of Grandetel
Telecommunications, Inc. of Vancouver, British Columbia.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE ABOVE
NOMINEES.
2. APPROVAL OF AMENDMENT OF THE BOCA RESEARCH, INC. 1992 STOCK OPTION PLAN
GENERAL.
The Boca Research, Inc. 1992 Stock Option Plan (the "1992 Plan") was
adopted by the Board of Directors and approved by the Company's shareholders on
December 22, 1992. The purpose of the 1992 Plan is to attract and retain key
employees and consultants of the Company, to provide an incentive for them to
achieve long-range performance goals, and to enable them to participate in the
long-term growth of the Company. Under the 1992 Plan, incentive stock options
may be granted to employees and officers of the Company or any subsidiary and
non-qualified stock options may be granted to consultants, employees and
officers of the Company or any subsidiary. On May 26, 1996, the 1992 Plan was
amended to increase the aggregate number of shares subject to grants thereunder
from 1,300,000 to 1,700,000.
4
<PAGE> 7
PROPOSED AMENDMENT TO THE 1992 PLAN.
The Board of Directors has adopted an amendment to the 1992 Plan, subject
to approval by the shareholders, to increase the aggregate number of shares that
may be subject to grants thereunder from the fixed number of 1,700,000 to such
number as shall always be equal to twenty-six percent (26%) of the then issued
and outstanding Common Stock of the Company in order to ensure that a sufficient
number of shares are available for issuance in the future. The Board of
Directors has adopted the amendment to the 1992 Plan to further the growth and
financial success of the Company by aligning the personal interests of employees
(through the ownership of Common Stock) with those of the shareholders of the
Company. The Board of Directors believes that the increase in the number of
shares that may be subject to option grants under the 1992 Plan will enhance the
ability of the Company to attract, retain, compensate and motivate key
employees, and that the adoption of the amendment will be important to the
future success of the Company. Based on market data developed by its independent
compensation consultant, the Company believes that the salary levels of its
executive officers are below the median level of the executive salaries for
comparably sized companies. The key philosophy in establishing the Company's
compensation policy for executive officers is to ensure that compensation is
closely tied to performance. Therefore, as described in the Report of the
Compensation Committee on page 15, executive officers derive a substantial
portion of their compensation from annual bonuses and stock options tied to the
Company's performance. The Board of Directors believes that the approval of the
amendment to the 1992 Plan is in the best interests of the Company and its
shareholders as the stock option program enables the Company to maintain
executive base salaries below the median level. Accordingly, the Board
recommends a vote in favor of this proposal.
Set forth below is a summary of the principal provisions of the 1992 Plan,
a copy of which may be obtained from the Secretary of the Company upon request.
The affirmative vote of the holders of at least a majority of the Common Stock
voting in person or by proxy at the meeting will be required for the approval of
the amendment to the 1992 Plan.
ADMINISTRATION
The 1992 Plan is administered by the Compensation Committee of the Board of
Directors consisting of two or more members of the Company's Board of Directors,
each of whom is a disinterested person as defined in Rule 16b-3 promulgated
under the Securities Exchange Act of 1934 (the "1934 Act"). The members of the
Compensation Committee are appointed by the Board of Directors and the Board may
from time to time appoint a member or members of the Compensation Committee in
substitution for or in addition to the member or members then in office and may
fill vacancies on the Compensation Committee however caused. The present members
of the Compensation Committee are Mssrs. Ferguson, Luhrs, O'Donnell and Wyatt.
ELIGIBILITY
Subject to the provisions of the 1992 Plan, the Compensation Committee has
the authority to select optionees and to determine the terms of the options
granted, including (i) the number of shares subject to each option, (ii) when
the option becomes exercisable, (iii) the exercise price of the option (which in
the case of an incentive stock option cannot be less than the fair market value
of the Common Stock on the date of grant, or less than 110% of the fair market
value in the case of employees or officers holding 10% or more of the voting
stock of the Company), (iv) the duration of the option (which in the case of an
incentive stock option granted to employees or officers holding 10% or more of
the voting stock of the Company cannot be in excess of five years), and (v) the
time, manner and form of payment upon exercise of an option. Options designated
as non-qualified options may be granted to officers, employees and other
individuals engaged to provide services to the Company or any of its
subsidiaries. Directors who are not otherwise employees of the Company or a
subsidiary are not eligible to be granted options pursuant to the 1992 Plan.
5
<PAGE> 8
In determining the eligibility of an individual to be granted an option, as
well as in determining the number of shares to be optioned to any individual,
the Compensation Committee takes into account the position and responsibilities
of the individual being considered, the nature and value to the Company or its
subsidiaries of the individual's service and accomplishments, his or her present
and potential contribution to the success of the Company or its subsidiaries,
and such other factors as the Compensation Committee deems relevant.
TERMS OF OPTIONS
Options granted under the 1992 Plan are exercisable at such times and
during such period as is set forth in the option agreement, but cannot have a
term in excess of ten years from the date of grant. The Compensation Committee
is entitled to accelerate the date of exercise of any installment of any option,
except that without the consent of the optionee, the Compensation Committee
shall not accelerate the exercise date of any installment of any incentive stock
option if such acceleration would violate the annual vesting limitation
contained in Section 422(d) of the Internal Revenue Code of 1986, as amended
(the "Code"). The option agreement may contain such provisions and conditions as
may be determined by the Compensation Committee. The option exercise price for
options designated as non-qualified stock options granted under the 1992 Plan is
determined by the Compensation Committee. The option exercise price for
incentive stock options granted under the 1992 Plan shall be no less than fair
market value of the Common Stock of the Company at the time the option is
granted. Options granted under the 1992 Plan may provide for the payment of the
exercise price by delivery of cash or a check payable to the Company or shares
of Common Stock of the Company owned by the optionee having a fair market value
equal in amount to the exercise price of the options being exercised, or any
combination thereof.
The right of any optionee to exercise an option granted under the 1992 Plan
is not assignable or transferable by such optionee otherwise than by will or the
laws of descent and distribution or (solely with respect to non-qualified stock
options) pursuant to a qualified domestic relations order, and any such option
is exercisable during the lifetime of such optionee only by him or her.
Generally, an option granted to any employee optionee who ceases to be an
employee of the Company or one of its subsidiaries shall terminate on the
thirtieth day after the date such optionee ceases to be an employee of the
Company or one of its subsidiaries. However, if such termination of employment
is because the optionee has become permanently disabled, the option shall
terminate on the last day of the sixth month from the date such optionee ceases
to be an employee, and in the event of the death of the optionee the option
shall terminate on the last day of the twelfth month from the date of death. In
no event shall an option be exercisable after the date upon which it expires by
its terms.
An option granted to an employee optionee who ceases to be an employee of
the Company or one of its subsidiaries shall be exercisable only to the extent
that the right to purchase shares under such option has accrued and is in effect
on the date such optionee ceases to be an employee of the Company or one of its
subsidiaries. In the event of the death of any optionee, the option granted to
such optionee may be exercised by the estate of such optionee, or by any person
or persons who acquired the right to exercise such option by bequest or
inheritance or by reason of the death of such optionee.
TERMINATION OR AMENDMENT OF THE 1992 PLAN
Unless sooner terminated, the 1992 Plan shall terminate on December 22,
2002, ten years from the date upon which the 1992 Plan was adopted by the Board
of Directors of the Company. The Board of Directors may at any time terminate
the 1992 Plan or make such modification or amendment as it deems advisable;
provided, however, that the Board of Directors may not, without shareholder
approval, increase the maximum number of shares for which options may be granted
or change the designation of the class of persons eligible to
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<PAGE> 9
receive options under the 1992 Plan or make any other change in the 1992 Plan
which requires shareholder approval under applicable law or regulations,
including any approval requirement which is a prerequisite for exemptive relief
under Section 16 of the 1934 Act. The Compensation Committee may terminate,
amend or modify any outstanding option without consent of the option holder,
provided, however that, without the consent of the optionee, the Compensation
Committee shall not change the number of shares subject to an option, or the
exercise price or term thereof.
RECAPITALIZATION; REORGANIZATION; CHANGE OF CONTROL
The 1992 Plan provides that the number and kind of shares as to which
options may be granted thereunder and as to which outstanding options then
unexercised shall be exercisable shall be adjusted to prevent dilution in the
event of any reorganization or recapitalization (other than as the result of an
Acquisition, as such term is hereinafter defined), reclassification, stock
subdivision, combination of shares or dividends payable in capital stock. If the
Company is to be consolidated with or acquired by another entity in a merger or
in a sale of all or substantially all of the Company's assets or otherwise (an
"Acquisition"), the Compensation Committee or the Board of Directors of any
entity assuming the obligations of the Company (the "Successor Board"), shall,
as to outstanding options, either (i) make appropriate provision for the
continuation of such options by substituting on an equitable basis for the
shares then subject to such options the consideration payable with respect to
the outstanding shares of Common Stock in connection with the Acquisition, (ii)
upon written notice to the optionees, provide that all options must be exercised
(to the extent then exercisable) within a specified number of days of the date
of such notice, at the end of which period the options shall terminate, or (iii)
terminate all options in exchange for a cash payment equal to the excess of the
fair market value of the shares subject to such options (to the extent then
exercisable) over the exercise price thereof.
Upon liquidation or dissolution of the Company, all options granted under
the 1992 Plan shall terminate.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT.
3. MANAGEMENT RETENTION OPTIONS
GENERAL.
In May, 1999, the Board of Directors approved the terms of the Stock
Purchase Agreement which provides for, among other things, a grant of Management
Retention Options by Infomatec if such grant is approved by the requisite
shareholder vote.
Pursuant to the Stock Purchase Agreement, Infomatec purchased 1,747,965
newly issued shares, or approximately 19.9% of the Company's currently
outstanding Common Stock at a purchase price of $4.58 per share. Under the Stock
Purchase Agreement, subject to shareholder approval, Infomatec agreed to grant
options to members of existing management to purchase from Infomatec a total of
270,000 shares of the Company's Common Stock pursuant to the terms of the Stock
Purchase Agreement.
All statements set forth in this Amended Proxy Statement relating to the
grant of Management Retention Options are qualified in their entirety by
reference to the text of the Stock Purchase Agreement which is set forth in
Exhibit 10.20 of the Form 8-K filed with the Commission May 5, 1999.
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<PAGE> 10
PARTICIPANTS.
The holders of the Management Retention Options and the number of shares
allocated thereunder are as follows:
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES
---- ----------------
<S> <C>
Anthony F. Zalenski.......................... 95,000
Navroze Mehta................................ 45,000
Larry L. Light............................... 45,000
Alex S. Oprescu.............................. 45,000
Martha A. Ritchason.......................... 20,000
Robert Heinlein.............................. 10,000
Debbie Feeney................................ 5,000
Dennis Gallinat.............................. 5,000
</TABLE>
OPERATION OF THE GRANT OF MANAGEMENT RETENTION OPTIONS
The grant of Management Retention Options to the above-referenced members
of management is subject to shareholder approval. The terms of the Management
Retention Options are as set forth in the Stock Purchase Agreement. Upon a
Change of Control, as defined in the Stock Purchase Agreement, all Management
Retention Options outstanding as of the Change of Control which are then not
exercisable and vested will become fully exercisable and vested.
FEDERAL INCOME TAX CONSEQUENCES
The Company has been advised that, based on the present provisions of the
Code and the regulations promulgated thereunder, the consequences of the grant,
vesting and exercise of the Management Retention Options and the subsequent
disposition of stock acquired thereby will be as described below. The following
discussion addresses only the general federal income tax consequences of stock
options and is not intended as tax advice to any individual. Holders of the
Management Retention Options are urged to consult their own tax advisors
regarding the impact of federal, state and local taxes, and the federal
alternative minimum tax, given their individual situations.
The Management Retention Options granted by Infomatec to the members of
existing management are deemed to have been granted in consideration for
services rendered by existing management to the Company. Upon exercise of a
Management Retention Option, the shares subject to the option will first be
deemed to have been transferred to the Company by Infomatec as a contribution to
capital, and the Company will then be treated as having transferred the option
shares to the optionee in exchange for the exercise price. Finally, the Company
will then be deemed to have distributed the exercise price to Infomatec as a
distribution in redemption of stock.
The Management Retention Options are non-statutory stock options ("NQSO").
Generally, NQSOs have the following tax consequences:
(a) Generally, an optionee will not recognize any taxable income, and
the Company will not be allowed a tax deduction, upon the
granting of a NQSO.
(b) Upon the exercise of a NQSO, the optionee realizes ordinary
income in an amount equal to the excess, if any, of the fair
market value of the shares acquired at the time the NQSO is
exercised over the exercise price for such shares.
(c) Generally, with respect to employees, the Company is required to
withhold from regular wages or supplemental wage payments an
amount based on the ordinary income recognized by the
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<PAGE> 11
employee. Subject to the requirement of reasonableness and the
satisfaction of a reporting obligation, the Company generally will
be entitled to a business expense deduction equal to the taxable
ordinary income recognized by the optionee.
(d) Upon subsequent disposition of shares acquired upon exercise of a
NQSO, the optionee will recognize a capital gain or loss equal to
the difference between the selling price and the sum of the amount
paid for such stock plus any amount recognized as ordinary income
upon exercise of the option. The difference between the amount
realized on the sale and the basis in the shares is treated as
long-term or short-term capital gain or loss depending on whether
the stock was held for more than one year (long-term) or one year or
less (short-term). The subsequent disposition of shares acquired by
exercise of a NQSO will not result in any additional tax
consequences to the Company.
Approval of the grant of Management Retention Options requires (assuming a
quorum is present) the affirmative vote of the holders of a majority of the
shares of Common Stock entitled to vote and represented in person or by proxy at
the meeting.
BOARD MEETINGS
The Company's Board of Directors met eighteen (18) times during the year
ended December 31, 1998. Each director of the Company attended at least 75% of
the aggregate of all board meetings and meetings of committees on which he
served.
COMMITTEES
The Company's Board of Directors has established an Audit Committee (the
"Audit Committee") a Compensation Committee (the "Compensation Committee") and a
Nominating Committee (the "Nominating Committee"). During the year ended
December 31, 1998, the Audit Committee met three (3) times, the Compensation
Committee met ten (10) times and the Nominating Committee met one (1) time.
The functions of the Audit Committee include reviewing the Company's
accounting policies, practices and controls and the results of the annual audits
of the Company's accounts conducted by the Company's independent auditors and
the recommendations of the auditors with respect to accounting systems and
controls. The members of the Audit Committee during 1998 were Messrs. Davis,
Ferguson, O'Donnell and Wyatt.
The functions of the Compensation Committee include reviewing and approving
the Company's compensation and benefit policies and administering the Company's
stock option and purchase plans. The members of the Compensation Committee
during 1998 were Messrs. Ferguson, Luhrs, O'Donnell and Wyatt.
The functions of the Nominating Committee include reviewing and making
recommendations with respect to senior management and board positions. The
members of the Nominating Committee during 1998 were Messrs. Ferguson, O'Donnell
and Price. The Nominating Committee would consider nominees recommended by
security holders. No formal procedures are in place for this process.
9
<PAGE> 12
EXECUTIVE COMPENSATION
The following table sets forth all cash compensation earned by or paid to
the Company's Chief Executive Officer, the Company's four most highly
compensated executive officers (other than the Chief Executive Officer) who
served in such capacities on December 31, 1998 from their positions during 1998
(the "Named Executive Officers") for all services rendered in all capacities to
the Company and its subsidiaries for the year ended December 31, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL -------------------------
COMPENSATION OTHER
NAME AND -------------------- ANNUAL OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION SARS(1) COMPENSATION
------------------ ---- ------ ----- ------------ -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Anthony F. Zalenski................ 1998 $330,583 -- -- 109,423 4,000(2)
President and CEO 1997 357,517 -- $41,538(3) 138,753(4) 4,000(2)
1996 354,862 -- -- 50,000 3,750(2)
R. Michael Brewer.................. 1998 112,029(5) -- -- 7,067 1,725(2)
Senior Vice President 1997 172,538 -- -- 60,895(4) 4,000(2)
1996 127,293 -- 59,510(6) 14,134 3,106(2)
Alex S. Oprescu.................... 1998 138,540 -- -- 29,807 --
Vice President/Gen. Manager 1997 87,500(7) -- -- 15,000 --
1996 -- -- -- -- --
Michael A. Reale................... 1998 154,423 -- -- 45,194 3,870(2)
Senior Vice President of 1997 173,910 -- -- 49,911(4) 4,000(2)
Manufacturing 1996 129,743 -- -- 11,496 2,571(2)
Martha A. Ritchason................ 1998 133,943 -- 2,354(3) 21,768 3,302(2)
Vice President of Human Resources 1997 145,387 -- 8,307(3) 70,046(4) 3,600(2)
1996 113,567 -- -- 29,736 2,654(2)
Larry L. Light..................... 1998 133,017 -- -- 22,107 3,021(2)
Vice President of Engineering 1997 130,868 -- 2,596(3) 28,680(4) 3,375(2)
1996 120,139 -- -- 10,553 3,000(2)
</TABLE>
- ---------------
(1) Represents shares of Common Stock issuable upon exercise of options granted
to the named executive officer under the Company's 1992 Stock Option Plan.
(2) Reflects cash compensation contributed by the Company pursuant to its 401(k)
Plan on behalf of the named executive officer.
(3) Represents the payment of accrued and unused vacation to the Named Executive
Officer.
(4) Includes the following shares subject to options which were granted in
exchange for the cancellation of certain options held by such persons: Mr.
Zalenski 38,753; Mr. Brewer 19,895; Mr. Reale 8,911; Ms. Ritchason 47,546;
and Mr. Light 8,180.
(5) Mr. Brewer resigned his position as Senior Vice President/CFO on August 14,
1998.
(6) Represents other compensation resulting from the exercise of options under
the Company's Non-Qualified Stock Option Plan and 1992 Stock Option Plan.
(7) Reflects compensation paid to Mr. Oprescu beginning on July 1, 1997, the
date that his employment with the Company commenced.
10
<PAGE> 13
GRANTS OF STOCK OPTIONS
The following table shows with respect to the Named Executive Officers
information with respect to options granted under the Company's Stock Option
Plans during 1998.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZED
% OF TOTAL VALUE AT ASSUMED
OPTIONS RATES OF STOCK PRICE
GRANTED TO APPRECIATION FOR
EMPLOYEES OPTION TERM(2)
OPTIONS IN FISCAL EXERCISE EXPIRATION ----------------------
NAME GRANTED YEAR PRICE(1) DATE 5% 10%
---- ------- ---------- -------- ---------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Anthony F. Zalenski........... 14,538 2% $3.9688 03/06/08 $ 36,286 $ 91,955
80,000 9% 6.6875 07/13/08 336,459 852,652
6,433 1% 3.0600 08/14/08 12,380 31,373
8,452 1% 2.0000 10/01/08 10,631 26,941
R. Michael Brewer(3).......... 7,067 1% 3.9688 03/06/08 17,639 44,700
Alex S. Oprescu............... 4,846 1% 3.9688 03/06/08 12,095 30,652
10,000 1% 5.0000 07/13/08 31,445 79,687
2,144 0% 3.0600 08/14/08 4,126 10,456
2,817 0% 2.0000 10/01/08 3,543 8,979
10,000 1% 2.2813 11/16/08 14,347 36,357
Michael A. Reale.............. 7,067 1% 3.9688 03/06/08 17,639 44,700
35,000 4% 4.3750 07/14/08 96,299 244,042
3,127 0% 3.0600 08/14/08 6,018 15,250
Martha A. Ritchason........... 5,815 1% 3.9688 03/06/08 14,514 36,781
2,573 0% 3.0600 08/14/08 4,952 12,548
3,380 0% 2.0000 10/01/08 4,251 10,774
10,000 1% 2.2813 11/16/08 14,347 36,357
Larry L. Light................ 5,815 1% 3.9688 03/06/08 14,514 36,781
2,573 0% 3.0600 08/14/08 4,952 12,548
3,719 0% 2.0000 10/01/08 4,678 11,854
10,000 1% 2.2813 11/16/08 14,347 36,357
</TABLE>
- ---------------
(1) The exercise price of the option represented the fair market value of the
Common Stock on the date of grant. The options become exercisable in three
equal annual installments, commencing on the first anniversary of the date
of grant.
(2) These amounts represent assumed rates of appreciation only. Actual gains, if
any, on stock option exercises are dependent on the future performance of
the Common Stock and overall stock market conditions. There can be no
assurance that the amounts reflected in this table will be achieved.
(3) Mr. Brewer resigned his employment with the Company in 1998 and the options
granted to Mr. Brewer in 1998 terminated following Mr. Brewer's resignation.
11
<PAGE> 14
STOCK OPTION EXERCISES AND FISCAL YEAR END STOCK OPTION VALUES
The following table shows, with respect to the Company's Chief Executive
Officer and the other Named Executive Officers named in the Summary Compensation
Table (i) the number of shares of Common Stock underlying options exercised
during 1998, (ii) the aggregate dollar value realized upon the exercise of such
options, (iii) the total number of exercisable and unexercisable options held on
December 31, 1998, and (iv) the aggregate dollar value of in-the-money options
on December 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND OPTION VALUES AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES NUMBER OF VALUE OF UNEXERCISED
ACQUIRED ON VALUE UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
---- ----------- -------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Anthony F. Zalenski.......... -- -- 391,136/107,040 $ 9,927/--
R. Michael Brewer(2)......... -- -- --/-- --/--
Alex S. Oprescu.............. -- -- 9,961/ 34,846 3,308/8,438
Michael A. Reale............. -- -- 58,396/ 21,029 203/--
Martha A. Ritchason.......... -- -- 39,302/ 65,512 3,970/8,438
Larry L. Light............... -- -- 65,853/ 34,934 4,351/8,438
</TABLE>
- ---------------
(1) This represents the excess of the fair market value of the Company's Common
Stock of $3.125 per share as of December 31, 1998 over the exercise price
of the options.
(2) Mr. Brewer resigned his position as Senior Vice President/CFO on August 14,
1998 and consequently all of the unexercisable options granted to him
terminated in 1997 pursuant to the Company's stock option plans.
DIRECTOR COMPENSATION
Directors of the Company who are not employees of the Company receive an
annual fee of $5,000 and $1,000 for each board or committee meeting attended,
except that such persons receive $500 for attendance at each committee meeting
held on the same day as a board meeting and for participation in each meeting by
telephone. The Chairman of the Board of Directors also received an annual fee of
$50,000 this past year due to his high level of involvement with the Company.
The fee for the Chairman is set annually, may range from $10,000 to $50,000 and
will depend on the level of involvement required of the Chairman as the needs of
the Company demand. The Chairmen of the Audit Committee (Mr. Wyatt) and
Compensation Committee (Mr. Ferguson) also receive an annual fee of $3,000. The
directors are entitled to reimbursement of out-of-pocket expenses incurred in
connection with attending board or committee meetings. Each non-employee
director becomes eligible to be granted options to purchase 10,000 shares of
Common Stock upon (i) his or her initial election to the Board of Directors; and
(ii) each meeting date of the Shareholders at which such director is reelected
to the Board of Directors. The Chairman of the Board of Directors becomes
eligible to be granted options to purchase an additional 5,000 shares of Common
Stock (i) his or her initial election to the Board of Directors and (ii) his or
her reelection as Chairman. The options vest in full on the date of grant.
EMPLOYMENT AGREEMENTS; CHANGE IN CONTROL AGREEMENTS
The Company has entered into an Employment Agreement with Anthony F.
Zalenski, which provides that for consecutive one-year terms, unless terminated
upon 60 days' prior notice by either the Company or Mr. Zalenski, Mr. Zalenski
will serve as President and Chief Executive Officer of the Company for an annual
base salary of $360,000. During each one-year term, Mr. Zalenski will be
entitled to be paid an incentive bonus equal to a percentage of the annual base
salary then in effect, subject to achieving such financial targets
12
<PAGE> 15
as the Company's Compensation Committee may determine. In the event that Mr.
Zalenski's employment is terminated without cause, Mr. Zalenski is entitled to
receive severance pay equal to one year's salary. In the event of a change of
control of the Company, the Compensation Committee is required to make
appropriate provisions for the continuation of the stock options held by Mr.
Zalenski (to the extent such options are not exercisable) by substituting, on an
equitable basis, options to purchase similar securities of the entity acquiring
or succeeding to the rights of the Company in such change of control.
The Company entered into an Employment Agreement with Robert W. Ferguson
pursuant to which Mr. Ferguson provided certain consulting advice and attended
Operations Committee meetings through the second quarter of 1999. Mr. Ferguson's
compensation for services provided under this Agreement was an option to
purchase an additional 100,000 shares of Company Common Stock.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during 1998 were Messrs.
Ferguson, Luhrs, O'Donnell and Wyatt.
13
<PAGE> 16
STOCK PRICE PERFORMANCE GRAPH
The Stock Price Performance Graph set forth below compares the cumulative
total shareholder return on the Common Stock of the Company for the period from
the Company's fiscal year ended December 30, 1994 through the Company's fiscal
year ended December 31, 1998, with the cumulative total return during the same
period on the Nasdaq Stock Market-U.S. Companies Index, the Nasdaq Computer
Manufacturers Index and the Nasdaq Non-Financial Stock Index (assuming the
investment of $100 in Company Common Stock, the Nasdaq Stock Market-U.S.
Companies Index, the Nasdaq Computer Manufacturers Index and the Nasdaq
Non-Financial Stock Index on January 1, 1994, and reinvestment of all
dividends).
[Performance Graph for Boca Research]
<TABLE>
<CAPTION>
BOCA RESEARCH, INC. NASDAQ STOCK
------------------- MARKET (US NASDAQ COMPUTER NASDAQ NON-
COMPANIES) MANUFACTURERS STOCKS FINANCIAL STOCKS
------------ -------------------- ----------------
<S> <C> <C> <C> <C>
12/31/93 100.0 100.0 100.0 100.0
12/30/94 128.6 97.8 109.8 96.2
12/29/95 378.6 138.3 173.0 134.0
12/31/96 148.2 170.0 231.9 162.8
12/31/97 75.0 208.5 280.5 190.9
12/31/98 44.6 293.8 607.8 279.8
</TABLE>
14
<PAGE> 17
REPORT OF THE COMPENSATION COMMITTEE
Overview
In 1998, the Compensation Committee was composed of four non-management
directors, Messrs. Ferguson, Luhrs, O'Donnell and Wyatt. The Committee is
responsible for setting the overall policies that govern the Company's executive
compensation plan and seeks to provide executive compensation that will attract
and retain talented executives.
Compensation Principles
The Company's earnings per share (EPS) is the focal point and performance
measure for the annual incentive plan. The executive compensation plan is
fundamentally a pay for performance program which is designed to stimulate a
sense of ownership, to reinforce the importance of teamwork and to provide
rewards that are commensurate with the profitability of the Company. In essence,
the plan is designed to reinforce the strategic goals of the Company and
therefore is critical in promoting long-term shareholder value.
To meet these objectives, the Company has a compensation program that
provides a base salary, an annual cash incentive opportunity and long-term
equity based compensation. Employees are eligible to receive the cash incentive
and long-term equity based compensation only upon the Company's achievement of a
significant increase in EPS growth. In determining executive compensation, the
Compensation Committee evaluates both the total compensation package and its
individual elements, and considers compensation data developed by independent
compensation consultants for companies in the computer manufacturing industry
which are the Company's competitors for executive talent.
Base Salaries
Base salary levels are targeted at levels sufficient to attract and retain
the highest quality executives, only when viewed in conjunction with the other
elements of the executive compensation program. The Company will continue in
1999 to link total management pay with company profitability. Increases in
compensation will be earned solely on business success through the incentive
bonus plan and stock option awards plan. Adjustments to base salaries will be
made only by exception to eliminate pay inequities.
Annual Incentives -- Cash Bonuses
All senior executives of the Company are eligible to participate in the
annual incentive bonus plan. This plan is designed to recognize and reward
senior executives for their contributions to the overall growth and
profitability of the Company. The plan offers a downside since bonuses are not
normally paid if the Company does not achieve the significant increase in EPS
growth required by the plan. The total compensation for each member of the
executive team, if the targets are not met, is then limited to the base salary.
Under this plan, members of senior management are eligible to earn significant
rewards, but only as the Company becomes increasingly profitable.
The plan is designed to offer higher than average rewards but only for
considerably better than average performance which results in a significant
increase in EPS growth. The executives have a predetermined payout as a
percentage of base salary if certain levels of EPS are achieved. If the
Company's actual EPS is below a threshold level, then awards, if any, may only
be granted at the sole discretion of the Compensation Committee. Once the
threshold level of performance is achieved, awards are earned up to a maximum
amount. The actual payout will be determined by the Chief Executive Officer, in
conjunction with the Compensation Committee, based on each executive's actual
performance. However, the individual executive will not have his or her eligible
incentive reduced to less than 50 percent of the award earned based on the level
of EPS achievement.
15
<PAGE> 18
In light of the Company's financial results in 1998, no bonuses were paid
to the Company's senior management since the Company did not achieve the EPS
targets established under the annual incentive bonus plan.
Long-term Equity Compensation -- Stock Options
The Company adopted the 1992 Stock Option Plan to attract, retain and
incentivize eligible key employees by encouraging and enabling them to obtain an
equity interest in the Company, thereby aligning their interest with the
long-term interest of the Company and its shareholders. The Stock Option Plan is
a vehicle for recognizing the key influence that today's planning and strategic
decision-making has on future profitability. The Compensation Committee supports
the granting of stock options as a significant proportion of the compensation
opportunity available to executives under the Company's compensation program.
Stock options are generally granted at prices equal to the fair market
value of the Common Stock on the date of grant. Therefore, any gain from the
exercise of stock options will occur only when the price of the Company Common
Stock increases above the option grant price, which in turn reflects the
creation of shareholder value. In 1998, the Compensation Committee granted stock
options to the Named Executive Officers as outlined in the Summary Compensation
Schedule.
Compensation -- Chief Executive Officer
The Compensation Committee considers competitive marketplace compensation
data paid to executives by other companies in setting the compensation of Mr.
Zalenski. The Compensation Committee's annual objective in setting Mr.
Zalenski's base salary is that it be close to the median of salaries paid to
chief executive officers in peer companies and other high technology companies
of approximately the same size as the Company. The annual incentive plan is
designed to permit Mr. Zalenski, in a similar fashion to other executive
officers, to earn substantial cash incentives, but only if targeted EPS goals
are achieved. The Compensation Committee determines the performance objectives,
specifically defining the significant EPS growth required and set forth in the
annual incentive bonus plan, as described herein. Finally, the Compensation
Committee believes that stock options are a significant part of Mr. Zalenski's
compensation package and has made grants of stock options to him to emphasize
the importance of long-term shareholder value. In 1998, Mr. Zalenski was paid a
base salary of $330,583. In addition Mr. Zalenski was granted options to
purchase 14,538 shares of Common Stock at an exercise price of $3.9688; 80,000
shares of Common Stock at an exercise price of 6.6875; 6,433 shares of Common
Stock at an exercise price of $3.0600; and 8,452 options at an exercise price of
$2.000; in each case the fair market value of the stock on the date of the
grant.
COMPENSATION COMMITTEE
Robert W. Ferguson
H. Ric Luhrs
Joseph M. O'Donnell
Arthur R. Wyatt
16
<PAGE> 19
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
ten percent of a registered class of the Company's equity securities, to file
with the United States Securities and Exchange Commission ("SEC") and the
National Association of Securities Dealers, Inc. initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Company. Officers, directors and greater than ten percent shareholders
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of such reports
furnished to the Company and written representations that no other reports were
required, during the fiscal year ended December 31, 1998, all Section 16(a)
filing requirements applicable to the Company's directors, executive officers
and greater than ten percent beneficial owners were complied with.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has selected the firm of Deloitte &
Touche LLP as the independent public accountants for the Company for the year
ended December 31, 1999. Deloitte & Touche LLP has acted in this capacity since
1991. A representative of Deloitte & Touche LLP is expected to be present at the
Annual Meeting for the purpose of making a statement if he so desires and to
respond to appropriate questions.
SHAREHOLDERS PROPOSALS
For the 2000 Annual Meeting of Shareholders, shareholder proposals must be
received by the Secretary of the Company not later than December 15, 1999.
OTHER MATTERS
At the date of this Proxy Statement, the only business which the Board of
Directors intends to present or knows that others will present at the meeting is
that which is set forth herein. If any other matter or matters are properly
brought before the Annual Meeting, or any adjournments thereof, it is the
intention of the persons named in the accompanying Proxy Card to vote proxies on
such matters in accordance with their judgment.
By Order of the Board of Directors
Robert W. Federspiel, Secretary
Boca Raton, Florida
July , 1999
17
<PAGE> 20
BRESH-PS-99
<PAGE> 21
<TABLE>
<S> <C>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
- ---------------------
BOCA RESEARCH, INC.
- ---------------------
1. Election of Directors. FOR ALL WITH- FOR ALL
NOMINEES HOLD EXCEPT
Mark box at right if an address change or comment [ ]
has been noted on the reverse side of this card BLAINE E. DAVIS
KARL GRUNS [ ] [ ] [ ]
ROBERT W. FERGUSON
H. RIC LUHRS
JOSEPH M. O'DONNELL
EDWARD WILL
ARTHUR R. WYATT
GERHARD R. HARLOS
ALEXANDER HAEFELE
CONTROL NUMBER: NOTE: IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" A PARTICULAR
RECORD DATE SHARES: NOMINEE, MARK THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE
NAME(S) OF THE NOMINEE(S). YOUR SHARES WILL BE VOTED FOR THE
REMAINING NOMINEE(S).
2. Proposal to amend the 1992 Stock Option FOR AGAINST ABSTAIN
Plan [ ] [ ] [ ]
3. Proposal to approve grant of Management FOR AGAINST ABSTAIN
Retention Options [ ] [ ] [ ]
4. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting or any
adjournments or postponements thereof.
-------- Receipt is hereby acknowledged of the Notice of Annual Meeting of
Please be sure to sign and date this Proxy. Date Shareholders and the Proxy Statement and Annual Report furnished
- --------------------------------------------- therewith.
- --Shareholder sign here---Co-owner sign here-
</TABLE>
DETACH CARD DETACH CARD
BOCA RESEARCH, INC.
Dear Shareholder,
Please take note of the important information enclosed with this Proxy Ballot
which is discussed in detail in the enclosed proxy material.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on this proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Shareholders,
August 16, 1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Boca Research, Inc.
17
<PAGE> 22
BOCA RESEARCH, INC.
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 16, 1999
The undersigned hereby appoints Anthony F. Zalenski and Robert W. Federspiel,
or either of them, with power of substitution, Proxies to vote at the Boca
Research, Inc. Annual Meeting of Shareholders on August 16, 1999, and any
adjournments or postponements thereof, all shares of Common Stock of Boca
Research, Inc. that the undersigned is entitled to vote at such meeting on
matters which may come before the Annual Meeting in accordance with and as more
fully described in the Notice of Annual Meeting of Shareholders and the Proxy
Statement.
THE PROXIES WILL VOTE YOUR SHARES IN ACCORDANCE WITH YOUR DIRECTIONS ON THIS
CARD. IF YOU DO NOT INDICATE YOUR CHOICES ON THIS CARD, THE PROXIES WILL VOTE
YOUR SHARES FOR THE PROPOSAL ON THE REVERSE SIDE.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE
Please sign exactly as your name(s) appear(s) on the books of the Company.
Joint owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
18
