1
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- - - ------------------------------------------------------------------------
- - - ------------------------------------------------------------------------
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 [_] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
STARBASE CORPORATION
- - - ------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- - - ------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
N/A
- - - ------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
N/A
- - - ------------------------------------------------------------------------
(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):
N/A
- - - ------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- - - ------------------------------------------------------------------------
(5) Total fee paid:
N/A
- - - ------------------------------------------------------------------------
[_] 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:
N/A
- - - ------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
N/A
- - - ------------------------------------------------------------------------
(3) Filing Party:
N/A
- - - ------------------------------------------------------------------------
(4) Date Filed:
N/A
- - - ------------------------------------------------------------------------
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StarBase Corporation
18872 MacArthur Boulevard
Irvine, California 92612
(714) 442-4400
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 24, 1997
To Our Stockholders:
You are invited to attend the 1997 Annual Meeting of Stockholders of StarBase
Corporation ("StarBase" or the "Company"). The meeting will be held in the
Pacific Ballroom of the Sheraton Newport Beach Hotel at 4545 MacArthur
Boulevard, Newport Beach, CA 92660 at 10:00 a.m. on Wednesday, September 24,
1997, for the following purposes:
(1) To elect six directors to serve on the Board of Directors of the
Company; and
(2) To vote on the approval of the selection of Price Waterhouse
LLP as the Company's independent auditors; and
(3) To consider any other matters that may properly come before the
meeting or any adjournment of the meeting.
/s/ William R. Stow III
---------------------------
WILLIAM R. STOW III
CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
August 26, 1997
TO ENSURE THAT YOUR SHARES ARE VOTED AT THE MEETING, PLEASE VOTE, SIGN, DATE AND
PROMPTLY RETURN THE ENCLOSED PROXY FORM IN THE ENVELOPE PROVIDED. PROXIES MAY BE
REVOKED AT ANY TIME PRIOR TO THE MEETING BY GIVING WRITTEN NOTICE OF REVOCATION
TO THE COMPANY'S SECRETARY, BY GIVING A LATER DATED PROXY, OR BY ATTENDING THE
MEETING AND VOTING IN PERSON.
3
<PAGE>
STARBASE CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 24, 1997
PROXY STATEMENT
INTRODUCTION
This Proxy Statement is being furnished in connection with the solicitation of
proxies by the Board of Directors of StarBase Corporation, a Delaware
corporation ("StarBase" or the "Company") to be voted at the Annual Meeting of
Stockholders to be held at 10:00 a.m. on Wednesday, September 24, 1997, and any
adjournment of the meeting. This Proxy Statement, the proxy form and the
Company's 1997 Annual Report to Stockholders are being mailed to stockholders on
or about August 26, 1997. At the Annual Meeting, stockholders will be asked to
elect six directors to serve on the Board of Directors of the Company, to
approve the selection of Price Waterhouse LLP as the Company's independent
auditors and to transact any other business that may properly come before the
meeting.
VOTING AT THE MEETING
The enclosed proxy is solicited on behalf of the Board of Directors of the
Company for use at the annual meeting of stockholders to be held on Wednesday,
September 24, 1997. The Company will bear the cost of preparing and mailing the
proxy, proxy statement and any other material furnished to the stockholders by
the Company in connection with the annual meeting. Proxies will be solicited by
mail. Officers and employees of the Company may also solicit proxies by
telephone or personal contact. Copies of solicitation materials will be
furnished to fiduciaries, custodians and brokerage houses for forwarding to
beneficial owners of the stock held in their names.
Any person giving a proxy in the form accompanying this proxy statement has the
power to revoke it at any time before its exercise. The proxy may be revoked by
filing, with the Secretary of the Company, an instrument of revocation or a duly
executed proxy bearing a later date. The proxy may also be revoked by
affirmatively electing to vote in person while in attendance at the meeting.
However, a stockholder who attends the meeting need not revoke his proxy and
vote in person unless he or she wishes to do so. All valid, unrevoked proxies
will be voted at the annual meeting.
VOTING SECURITIES OUTSTANDING
As of August 22, 1997, the record date for determining stockholders entitled to
notice of and to vote at the meeting (the "Record Date"), the Company has one
class of voting securities outstanding consisting of 15,039,867 shares of Common
Stock, $.01 par value ("Common Stock"). A holder of Common Stock is entitled to
one vote on each matter submitted to the meeting for each share of Common Stock
held by such holder as of the Record Date.
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<PAGE>
PROXIES AND VOTING
Unless a contrary direction is indicated, a properly executed proxy form will be
voted "FOR": (1) the election of the nominees proposed by the Board of Directors
and (2) the approval of the selection of Price Waterhouse LLP as the Company's
independent auditors. The management of StarBase is not aware of any business to
be acted upon at this meeting other than as is described in this Proxy
Statement, but in the event any other business should properly come before the
meeting, the proxy holders (as indicated on the proxy form) will vote the
proxies according to their judgment as to the best interests of the Company.
PRINCIPAL STOCKHOLDERS
BENEFICIAL OWNERSHIP
The following table sets forth at June 30, 1997 certain information regarding
the ownership of each class of the Company's voting securities by each person
known by the Company to be the beneficial owner of more than five percent of
each class of the Company's outstanding voting securities.
Number of Percentage
Shares of of
NAME (1) COMMON STOCK COMMON STOCK
- - - -------------------------------------------- --------------- ---------------
Amerindo Technology Growth Fund, Ltd. II 934,728 6.2
c/o Amerindo Investment Advisers, Inc.
One Embarcadero, Suite 2300
San Francisco, California 94111-3162
The Board of Pension Commissioners of the 959,593 6.4
City of Los Angeles
c/o Amerindo Investment Advisers, Inc.
One Embarcadero, Suite 2300
San Francisco, California 94111-3162
- - - -------------
(1) Except as otherwise noted, the persons named in the above table have
sole voting and investment power with respect to all shares shown as
beneficially owned by them, subject to community property laws where applicable.
5
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth at June 30, 1997 certain information regarding
the ownership of each class of the Company's voting securities by (i) each of
the Company's Directors, (ii) each of the Named Executive Officers, and (iii)
all executive officers and Directors of the Company as a group.
Number of
Shares of Percentage of
NAME (1) COMMON STOCK COMMON STOCK
- - - ----------------------------------- -------------- --------------
Donald R. Farrow (2)(3)(4) 93,508 *%
Daniel P. Ginns (2)(5) 192,521 1.3
Alan D. Kucheck (3)(6) 80,750 *
Phillip E. Pearce (2)(6) 48,821 *
Kenneth A. Sexton (2)(7) 382,154 2.5
John R. Snedegar (2)(8) 158,378 1.1
William R. Stow III (2)(3)(9) 680,362 4.5
Alan M. Davis (3)(6)(10) 81,666 *
Robert W. Leimena (3)(6)(10) 53,125 *
All directors and executive officers 1,771,285 11.4
as a group (9 persons) (11)
- - - -------------
(1) Except as otherwise noted, the persons named in the above table have
sole voting and investment power with respect to all shares shown as
beneficially owned by them, subject to community property laws where applicable.
Unless otherwise indicated, the address of each person named in the above table
is in care of StarBase Corporation, 18872 MacArthur Boulevard, Irvine,
California 92612.
(2) Director.
(3) Named Executive Officer.
(4) Includes 78,508 shares of Common Stock issuable upon the exercise of
stock options that are exercisable or will be exercisable by August 29, 1997.
(5) Includes 23,821 shares of Common Stock issuable upon the exercise
of stock options that are exercisable or will be exercisable by August 29,
1997 and 5,500 shares of Common Stock held by Mrs. Ginns. Mr. Ginns disclaims
beneficial ownership of the shares held by Mrs. Ginns.
(6) Represents shares of Common Stock issuable upon the exercise of stock
options that are exercisable or will be exercisable by August 29, 1997.
(7) Includes 333,333 shares of Common Stock held by Intersolv, Inc.
of which Mr. Sexton is a corporate officer, as well as 48,821 shares of Common
Stock issuable upon the exercise of stock options by Mr. Sexton that are
exercisable or will be exercisable by August 29, 1997. Mr. Sexton disclaims
beneficial ownership of the shares held by Intersolv, Inc.
(8) Includes 36,180 shares of Common Stock issuable upon the exercise of
stock options by Mr. Snedegar that are exercisable or will be exercisable by
August 29, 1997. Also includes 14,944 shares held by Mr. Snedegar as trustee of
the Snedegar Revocable Living Trust; 8,333 shares held by Mr. Snedegar in trust
for his minor son and daughter; 1,667 shares held by Norexco Petroleum of which
Mr. Snedegar is President; and 83,501 shares held by Access Financial Limited of
which Mr. Snedegar is the general partner.
6
<PAGE>
(9) Includes 573,119 shares of Common Stock held by Mr. Stow as trustee of
the Stow Family Trust, of which, 568,124 shares are subject to a Performance
Escrow Agreement. Also includes an aggregate of 1,749 shares of Common Stock
held by Mr. Stow in trust for his daughter and minor son. Also includes 67,987
shares of Common Stock and 3,625 shares of Common Stock issuable upon the
exercise of stock options by Mr. Stow and Mrs. Stow, respectively, that are
exercisable or will be exercisable by August 29, 1997. Mr. Stow disclaims
beneficial ownership of the shares exercisable by Mrs. Stow.
(10)Resigned in January 1997.
(11)Includes a total of 523,304 shares of Common Stock issuable upon
exercise of stock options held by all directors and executive officers of the
Company as a group.
* Less than 1%.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors of the Company has nominated six directors for election
to hold office until the next Annual Meeting and until their successors are
elected and qualified. If any nominee should become unable to serve as a
director, the proxies will be voted for any substitute nominee designated by the
Board of Directors. No proxy may be voted for more than six nominees.
NOMINEES FOR DIRECTOR
The nominees for election as a director are William R. Stow III, Donald R.
Farrow, Daniel P. Ginns, Phillip E. Pearce, Kenneth A. Sexton and John R.
Snedegar.
The following biographical information has been furnished by the nominees.
WILLIAM R. STOW III has served as Chief Executive Officer of the Company since
September 1991, exclusive of the period from August 1996 to January 1997. Mr.
Stow also served as President of the Company from September 1991 to August 1996,
exclusive of the period from April 1994 through July 1995. Mr. Stow has served
as a Director of the Company since September 1991, Co-Chairman of the Board from
October 1994 to August 1996 and Chairman of the Board since August 1996. From
February 1986 to October 1991, Mr. Stow held various senior-level positions at
Ashton-Tate Corporation, including Vice President of Advanced Development.
DONALD R. FARROW has served as President of the Company since January 1997 and
Chief Operating Officer and Director of the Company since February 1997. Mr.
Farrow had been Vice President, Sales and Marketing since August 1996; Vice
President, Sales since May 1996; and a consultant to the Company since March
1996. Prior to that, Mr. Farrow had been an independent consultant as well as
being Vice President of Sales and Marketing from December 1993 to December 1994
at CommVision Corporation, a leading provider of server solutions and Regional
Sales Manager from 1987 to 1993 for Novell Corporation, a provider of network
software.
7
<PAGE>
DANIEL P. GINNS has served as a Director of the Company since January 1997.
Since October 1996, Mr. Ginns has been Chairman of the Board and Chief Executive
Officer of Datametrics Corporation, a reporting company which designs, develops
and manufactures printers and computers. From 1989 to 1996, Mr. Ginns was
President of Belmont Capital, Inc., a management and financial advisory firm.
PHILLIP E. PEARCE has served as a Director of the Company since January 1996.
Mr. Pearce is the owner of Phil Pearce & Associates since 1986. Prior to that,
he was Senior Vice President and a member of the Board of Directors of E.F.
Hutton & Co., from 1971 through 1983, a member of the Board of Governors of the
New York Stock Exchange, and Chairman of the Board of governors of the NASD. Mr.
Pearce is a member of the Board of RX Medical Services Corporation, a reporting
company.
KENNETH A. SEXTON has served as a Director of the Company since January
1996. Mr. Sexton is Vice President, Finance and Administration of Intersolv,
Inc., a leading provider of open client/server solutions. Prior to joining
Intersolv, Inc. in 1991, Mr. Sexton held several senior level positions at
Life Technologies Inc., a biotechnology company, and Coopers & Lybrand, a big
six accounting firm.
JOHN R. SNEDEGAR has served as a Director of the Company since December
1991. Since May 1990, Mr. Snedegar has served as President, Director and
Chief Executive Officer of United Digital Network Inc., a diversified
telecommunications provider based in Irving, Texas. From March 1981 to May 1992,
Mr. Snedegar served as President and Chief Executive Officer of AmeriTel
Management, Inc., currently known as WCT Communications, Inc. Mr. Snedegar
is also a member of the Board of Star Telecommunications, a reporting company.
REQUIRED VOTE
The six nominees receiving the highest number of votes will be elected as
directors. Abstentions (including instructions to withhold authority to vote for
one or more nominees) and broker non-votes will be counted for purposes of
determining a quorum but will not be counted as votes cast in the election of
directors. There is no provision for cumulative voting in the election of
directors.
THE BOARD OF DIRECTORS
During fiscal 1997, StarBase's Board of Directors held six meetings and took
action by unanimous written consent on three occasions. Each incumbent director
attended at least 83% of the aggregate of the total number of meetings of the
Board and of the committees on which he served during 1997.
8
<PAGE>
COMMITTEES OF THE BOARD
StarBase's Board of Directors has four standing committees: Compensation,
Nominating, Audit and Stock Option. The Compensation Committee's primary
function is to review and establish compensation for executive officers and to
consider incentive compensation alternatives for the Company's employees. This
committee held two meetings during the fiscal year and is comprised of Messrs.
Ginns, Pearce and Stow. The Nominating Committee's principal function is to
recommend appointments for executive officers and is comprised of Messrs.
Snedegar and Pearce. Messrs. Sexton and Snedegar are the members of the Audit
Committee which recommends selection of independent accountants to the Board
of Directors and reviews the scope and results of audits. An Audit Committee
meeting was held on July 26, 1996. The Stock Option Committee recommends
guidelines for the granting of stock options and is comprised of Messrs. Sexton,
Ginns and Stow.
BOARD COMPENSATION
Directors who are not employees of the Company are not compensated, except for
reimbursement of travel expenses. Pursuant to the Company's Stock Option Plan,
non-employee directors may receive non-qualified stock option grants for shares
of the Company's Common Stock. All options awarded to non-employee directors
have an exercise price per share equal to the market price of the Common Stock
on the date of grant. The options have a 10-year term.
The Company entered into a two year agreement with John Snedegar, a director,
which was terminated through mutual consent by the parties on March 31, 1996,
subject to payment of $280,000 to Mr. Snedegar for services performed by him.
The Company paid Mr. Snedegar in the first quarter of fiscal 1997. In addition,
Mr. Pearce performed certain consulting services for which he was compensated
$7,500 during fiscal 1997.
9
<PAGE>
EXECUTIVE OFFICERS
NAME AGE PRINCIPAL OCCUPATION FOR THE PAST FIVE YEARS
WILLIAM R. STOW III 52 Founder and Chief Executive Officer of the
Company since September 1991, exclusive of the
Chief Executive Officer period from August 1996 to January 1997. Mr.
Chairman of the Board Stow also served as President of the Company from
Director September 1991 to August 1996, exclusive of the
period from April 1994 through July 1995. Mr.
Stow has served as a Director of the Company
since September 1991, Co-Chairman of the Board
from October 1994 to August 1996 and Chairman of
the Board since August 1996.
DONALD R. FARROW 51 President of the Company since January 1997 and
Chief Operating Officer and Director of the
President Company since February 1997. Mr. Farrow had been
Chief Operating Officer Vice President, Sales and Marketing since August
Director 1996; Vice President, Sales since May 1996; and a
consultant to the Company since March 1996.
Prior to that, Mr. Farrow had been an independent
consultant as well as being Vice President of
Sales and Marketing from December 1993 to
December 1994 at CommVision Corporation, a
leading provider of server solutions and Regiona
Sales Manager from 1987 to 1993 for Novell
Corporation, a provider of network software.
ALAN D. KUCHECK 45 Vice President, Engineering of StarBase since
January 1995. From July 1993 to January 1995
Vice President, served as a Project Director for the Company.
Engineering From August 1990 to March 1993 was Manager,
Software Development for IMI, Inc.
Executive officers of the Company are appointed by the Board of Directors to
serve until their removal by the Board of Directors or resignation.
No director or officer of the Company has within the last five years prior to
the date hereof, been subject to any penalties or sanctions imposed by a court
or securities regulatory authority relating to trading in securities, promotion
or management of a publicly traded issuer, theft or fraud.
No director or officer of the Company has within the last five years prior to
the date hereof, been declared bankrupt or made a voluntary assignment in
bankruptcy, nor made a proposal or been subject to any proceedings under any
legislation relating to bankruptcy or insolvency, except for Alan D. Kucheck who
on February 18, 1993 filed for protection under Chapter 7 of the United States
Bankruptcy Code.
10
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY INFORMATION
The following table sets forth certain summary information regarding
compensation paid or accrued by the Company to, or on behalf of, the Company's
Chief Executive Officer and the other most highly compensated executive officers
of the Company (the "Named Executive Officers"), for services rendered in all
capacities to the Company during the fiscal years ended March 31, 1995, 1996,
and 1997. Except as otherwise noted, no Named Executive Officer received any
restricted stock award, stock appreciation right or payment under any long-term
incentive plan.
SUMMARY COMPENSATION TABLE (1)
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------- --------------------------
Other All Other
Annual Securities Compen-
Compen- Underlying sation
Name and Principal Position Year Salary Bonus sation Options (2) (5)
------------------------------------ ------- ------------ ----------- -------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
William R. Stow III 1997 $ 137,818 $ -- $ -- $ 175,000 $ --
Chief Executive Officer, 1996 115,000 -- -- -- --
Chairman of the Board and Director 1995 115,000 -- -- 6,666 --
Alan M. Davis (3) 1997 142,663 -- -- -- 86,500
Chief Executive Officer 1996 -- -- -- 185,000 24,000
President and Director 1995 -- -- -- -- --
Donald R. Farrow 1997 101,031 -- -- 231,250 62,942
President 1996 -- -- -- -- --
Chief Operating Officer and Director 1995 -- -- -- -- --
Alan D. Kucheck (4) 1997 110,000 -- -- 65,667 --
Vice President, Engineering 1996 110,000 6,358 -- 110,000 --
1995 110,000 -- -- -- --
Robert W. Leimena (3) 1997 122,490 -- -- -- 76,500
Chief Financial Officer 1996 -- -- -- 150,000 20,400
1995 -- -- -- -- --
- - - -------------
<FN>
(1) Certain columns have been omitted if they do not apply to any of the
Named Executive Officers.
(2) Amounts represent stock options granted and/or repriced for the period
shown.
(3) Resigned in January 1997.
(4) Options granted during fiscal year 1996 includes options to purchase
59,000 shares of the Company's common stock, originally granted in a prior year,
that were repriced.
(5) Amounts listed as All Other Compensation represent commissions earned
or consulting fees.
</FN>
</TABLE>
11
<PAGE>
STOCK OPTIONS
The following table sets forth information concerning stock option grants made
during the fiscal year ended March 31, 1997 under the Company's Stock Option
Plan to Named Executive Officers. No stock appreciation rights were granted to
such individuals during the fiscal year.
OPTION/SAR GRANTS IN YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
Individual Grants
- - - ---------------------------------------------------------------------------------------------
Number of
Securities Underlying Percent of Total
Options/ SARS Options/SARS Exercise
Granted Granted to Employees or Base Price Expiration
Name (# of Shares) (1) In Fiscal Year (2) ($/Sh) (3) Date
- - - ------------------ --------------------- ---------------------- --------------- ------------
<S> <C> <C> <C> <C>
William R. Stow 150,000 13 $ 3.07 08/07/06
25,000 2 1.74 02/12/07
Alan M. Davis 0 -- -- --
Donald R. Farrow 31,250 3 2.60 11/08/06
75,000 7 1.74 02/12/07
125,000 11 3.50 05/03/06
Alan D. Kucheck 65,667 6 2.60 11/08/06
Robert W. Leimena 0 -- -- --
- - - -------------
<FN>
(1) Options granted to purchase common stock. Generally, twenty-five
percent of the shares granted vest one year from the date of grant with the
remaining shares vesting equally over the following thirty-six months. All of
the options shown have a maximum term of ten years, subject to earlier
termination following the optionee's cessation of service with the Company.
(2) The Company granted options to purchase a total of 1,114,134 shares of
Common Stock to employees during the year ended March 31, 1997.
(3) The exercise price may be paid in cash or in shares of Common Stock
valued at fair market value on the exercise date.
</FN>
</TABLE>
12
<PAGE>
OPTION EXERCISES, HOLDINGS AND FISCAL YEAR-END VALUES
The following table sets forth information concerning the number of shares
covered by both exercisable and unexercisable options held by each of the Named
Executive Officers as of March 31, 1997. No options were exercised during the
fiscal year ended March 31, 1997 by any of the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1997
AND OPTION VALUES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options at in-the-Money Options at
Acquired on Value March 31, 1997 (# of shares) March 31, 1997 (1)
Exercise Realized ----------------------------- --------------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- - - ----------------------- ----------- ------------ -------------- -------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
William R. Stow III -- -- 24,594 157,072 $ -- $ --
Alan M. Davis -- -- 81,666 -- -- --
Donald R. Farrow -- -- 59,594 171,656 -- --
Alan D. Kucheck -- -- 74,206 101,461 -- --
Robert W. Leimena -- -- 53,125 -- -- --
- - - ------------
<FN>
(1) Calculated based on the closing price of the Company's Common Stock as
reported on the NASDAQ SmallCap on March 31, 1997 of $1.39 per share, less the
applicable exercise price.
</FN>
</TABLE>
CERTAIN TRANSACTIONS
During fiscal 1996, the Company borrowed 58,333 unrestricted shares of its
common stock from three directors. Of the total shares borrowed, 33,333 shares
were sold in the open market by the Company and the proceeds were used for
general corporate purposes and 25,000 shares were used as remuneration for a
consultant. The three directors agreed to accept restricted shares in repayment,
which were issued September 5, 1996.
In fiscal 1995, the Board of Directors authorized the Company to loan William
Stow III, then President and CEO of StarBase, the sum of $126,000. At March 31,
1997, the principal and accrued interest amounts were $76,153 and $8,466,
respectively. The loan is evidenced by a promissory note and is secured by
shares of the Company's common stock, which are owned by Mr. Stow. The note is
payable on November 4, 1998 and bears interest at a rate of 6.34% per annum,
payable at maturity.
The Company entered into a two year agreement with John Snedegar, a director,
which was terminated through mutual consent by the parties on March 31, 1996,
subject to payment of $280,000 to Mr. Snedegar for services performed by him.
The Company paid Mr. Snedegar in the first quarter of fiscal 1997.
13
<PAGE>
On January 11, 1997, the Company entered into consulting agreements with Mr.
Alan M. Davis, former President and CEO, and Mr. Robert W. Leimena, former Chief
Financial Officer of the Company. Amounts paid were $86,500 and $76,500,
respectively.
PROPOSAL 2
INDEPENDENT AUDITORS
The accounting firm of Price Waterhouse LLP served as the Company's independent
auditors for 1997. One or more representatives of that firm will attend the
Annual Meeting and will be given the opportunity to comment, if they desire, and
to respond to appropriate questions that may be asked by stockholders. No
auditor has yet been selected for the current year, since it is StarBase's
practice not to select independent auditors prior to the Annual Meeting.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's executive officers and directors, and persons who beneficially own
more than ten percent of the Company's equity securities, to file reports of
security ownership and changes in such ownership with the Securities and
Exchange Commission ("SEC"). Officers, directors and beneficial owners of more
than ten percent also 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 upon a review of copies of such forms
and written representations from its executive officers and directors, all
Section 16(a) filing requirements were complied with during and for fiscal 1997,
except the following: one Form 4 each for Messrs. Lyons, Gratny and Sexton
(current or former Directors) covering the automatic conversion of Series B
Preferred stock to Common Stock; and one Form 3 for Mr. Farrow. All forms have
been filed.
SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by the Company. In addition, the
Company will reimburse brokers, custodians, nominees and fiduciaries for their
charges and expenses in forwarding proxies and proxy material to the beneficial
owners of shares held of record by such persons. Solicitation of proxies will be
made by management of the Company, without additional compensation, through the
mail, in person, or by telephone, or facsimile.
ANNUAL REPORT
The Company's annual report on Form 10-KSB, including financial statements, for
the fiscal year ended March 31, 1997 is being mailed with this Proxy Statement.
14
<PAGE>
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Stockholder proposals for the 1998 Annual Meeting of Stockholders must be
received in writing by the Secretary of the Company at the Company's executive
offices by March 31, 1998 in order to be considered for inclusion in the proxy
materials.
MISCELLANEOUS
The Company will send, without charge, a copy of the Company's current annual
report on Form 10-KSB to any holder of Common Stock who makes a request in
writing to Stockholders' Relations, StarBase Corporation, 18872 MacArthur
Boulevard, Irvine, CA 92612.
By order of the Board of Directors,
/s/ William R. Stow III
----------------------------
William R. Stow III
Assistant Secretary
Irvine, California
August 26, 1997
15
<PAGE>
APPENDIX A
STARBASE CORPORATION
PROXY
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON SEPTEMBER 24, 1997
AND ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF STARBASE
CORPORATION
The undersigned hereby (a) acknowledges receipt of the Notice of Annual Meeting
of Stockholders of StarBase Corporation (the "Company") to be held on September
24, 1997 and the related Proxy Statement; (b) appoints William R. Stow III and
Martin E. Weisberg or either of them, as Proxies, each with the power to appoint
a substitute; (c) authorizes the Proxies to represent and vote, as designated
below, all the shares of the Company's common stock, par value $.01 per share
(the "Common Stock"), held of record by the undersigned on August 22, 1997 at
such Annual Meeting and any adjournments or postponements thereof; and (d)
revokes any proxies previously given.
[X] Please mark votes as in this example.
1. Election of directors. Nominees are: Donald R. Farrow, Daniel P.Ginns,
Phillip E. Pearce, Kenneth A. Sexton, John R. Snedegar, and William R. Stow III.
[ ] FOR ALL NOMINEES [ ] WITHHOLD AUTHORITY TO VOTE
FOR ALL NOMINEES
To vote for fewer than all nominees, print the names of the nominees
you wish to vote FOR in the following space:
- - - --------------------------------------------------------------------------------
2. A proposal to ratify the selection of Price Waterhouse LLP as the Company's
Independent Accountants for fiscal 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote on such other
business as may properly come before the meeting or any adjournment(s) thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES FOR DIRECTORS AND FOR THE RATIFICATION OF THE SELECTION
OF INDEPENDENT ACCOUNTANTS. THE PROXIES WILL USE THEIR DISCRETION WITH REGARD TO
ANY MATTER REFERRED TO IN ITEM 3 ABOVE.
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Please sign, date and return this proxy as promptly as possible in the envelope
provided.
_____________________________________ ______________________________________
Date Signature(s) of Stockholder(s)
______________________________________
Name:________________________________ Signature(s) of Stockholder(s)
Addess: _____________________________ EACH JOINT OWNER SHOULD SIGN. SIGNATURES
SHOULD CORRESPOND WITH THE NAMES PRINTED
_____________________________________ ON THIS PROXY. ATTORNEYS, EXECUTORS,
GUARDIAN, ADMINISTRATORS, TRUSTEES,
Number of shares held: ___________ CORPORATE OFFICERS OR OTHERS SIGNING IN
REPRESENTATIVE CAPACITY SHOULD GIVE FULL
TITLE.
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