SCHEDULE 14A
(Rule 14a-101)
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
[ ] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant
to Rule 14a-11(c) or Rule 14a-12
StarBase Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(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:
(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):
<PAGE>
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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<PAGE>
StarBase Corporation
4 Hutton Centre Drive, Suite 800
Santa Ana, CA 92707-8713
(714) 445-4400
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 14, 1999
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Stockholders
(the "Meeting") of StarBase Corporation, a Delaware corporation ("StarBase" or
the "Company"), will be held in the offices of Parker Chapin Flattau & Klimpl,
LLP, 1211 Avenue of the Americas, 18th Floor, New York, NY 10036 at 10 a.m. on
Tuesday, September 14, 1999, to consider and act on the following proposals:
1. The election of eight (8) persons named in the accompanying
Proxy Statement to serve as directors of the Company until the
next annual meeting of stockholders of the Company and until
their successors are duly elected and qualified;
2. Amending the Company's Certificate of Incorporation to
increase the number of authorized shares of Common Stock, par
value $.01 per share ("Common Stock"), from 50,000,000 to
80,000,000 shares;
3. To ratify the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the Company's fiscal year
ended March 31, 2000; and
4. To consider and transact such other business as may properly
come before the Meeting or any adjournment thereof.
A Proxy Statement, form of Proxy and the Annual Report to Stockholders
of the Company for the fiscal year ended March 31, 1999 are enclosed herewith.
Only holders of record of Common Stock at the close of business on July 16, 1999
are entitled to receive notice of and to attend the Meeting and any adjournments
thereof. At least 10 days prior to the Meeting, a complete list of the
stockholders entitled to vote will be available for inspection by any
<PAGE>
stockholder, for any purpose germane to the Meeting, during ordinary business
hours, at the offices of the Company. If you do not expect to be present at the
Meeting, you are requested to fill in, date and sign the enclosed Proxy, which
is solicited by the Board of Directors of the Company, and to mail it promptly
in the enclosed envelope. In the event you attend the Meeting in person, you
may, if you desire, revoke your Proxy and vote your shares in person.
By Order of the Board of Directors
William R. Stow III
Chairman of the Board, President
and Chief Executive Officer
Santa Ana, California
August __, 1999
IMPORTANT
TO ENSURE THAT YOUR SHARES ARE VOTED AT THE MEETING, PLEASE VOTE, SIGN, DATE AND
PROMPTLY RETURN THE ENCLOSED PROXY 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 ASSISTANT SECRETARY, BY GIVING A LATER DATED PROXY, OR BY
ATTENDING THE MEETING AND VOTING IN PERSON.
- --------------------------------------------------------------------------------
<PAGE>
STARBASE CORPORATION
--------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 14, 1999
---------------------------
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 (the "Meeting") to be held at 10 a.m. on Tuesday,
September 14, 1999, and any adjournment or adjournments thereof, for the
purposes set forth in the accompanying Notice of Annual Meeting of Stockholders
and in this Proxy Statement.
The principal executive offices of the Company are located at 4 Hutton
Centre Drive, Suite 800, Santa Ana, California 92707-8713. The Company maintains
a website on the Internet at http://www.starbase.com. The approximate date on
which this Proxy Statement and accompanying Proxy will first be sent or given to
stockholders is August __, 1999. Stockholders should review the information
provided herein in conjunction with the Annual Report to Stockholders of the
Company for the fiscal year ended March 31, 1999 enclosed herewith.
A Proxy, in the enclosed form, which is properly executed, duly
returned to the Company and not revoked will be voted in accordance with the
instructions contained therein and, in the absence of specific instructions,
will be voted in favor of the proposals and in accordance with the judgment of
the person or persons voting the Proxy on any other matter that may be brought
before the Meeting. Each such Proxy granted may be revoked at any time
thereafter by writing to the Assistant Secretary of the Company prior to the
Meeting, by execution and delivery of a subsequent proxy or by attendance and
voting in person at the Meeting, except as to any matter or matters upon which,
prior to such revocation, a vote shall have been cast pursuant to the authority
conferred by such Proxy. The cost of soliciting proxies will be borne by the
Company. Following the mailing of the proxy materials, solicitation of proxies
may be made by officers and employees of the Company, or anyone acting on their
behalf, by mail, telephone, telegram or personal interview.
VOTING SECURITIES
Stockholders of record as of the close of business on July 16, 1999
(the "Record Date") will be entitled to notice of, and to vote at, the Meeting
and any adjournments thereof. The Company has one class of voting securities
outstanding consisting of shares of Common Stock, $.01 par value ("Common
Stock"). On the Record Date, there were 31,205,228 outstanding shares of 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.
<PAGE>
PROXIES AND VOTING
Unless a contrary direction is indicated, a properly executed Proxy
form will be voted "FOR" the adoption of proposals 1, 2 and 3. 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. The attendance, in person or by proxy,
of the holders of a majority of the outstanding shares of Common Stock entitled
to vote at the Meeting is necessary to constitute a quorum. Proxies submitted
which contain abstentions and broker non-votes will be deemed present at the
Meeting in determining the presence of a quorum. For purposes of determining
approval of a matter presented at the meeting, abstentions will be deemed
present and entitled to vote and will, therefore, have the same legal effect as
a vote "against" a matter presented at the meeting. Broker non-votes will be
deemed not entitled to vote on the subject matter as to which the non-vote is
indicated and will, therefore, have no legal effect on the vote on that
particular matter. Proxies submitted that are voted to abstain with respect to
any matter will be considered cast with respect to that matter. Proxies subject
to broker non-votes with respect to any matter will not be considered cast with
respect to that matter.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of July 16, 1999 certain information
regarding the ownership of voting securities of the Company by each stockholder
known to the management of the Company to be (i) the beneficial owner of more
than 5% of the Company's outstanding Common Stock, (ii) each of the directors
and nominees for director of the Company, (iii) the executive officers named in
the Summary Compensation Table herein under "Executive Compensation" and (iv)
all named executive officers and directors as a group. Except as otherwise
noted, the Company believes that the beneficial owners of the Common Stock
listed below, based on information furnished by such owners, have sole
investment and voting power with respect to such shares.
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<PAGE>
<TABLE>
<CAPTION>
Number of Shares of Percentage of
Name (1) Common Stock Common Stock
- -------- ------------ --------------
<S> <C> <C>
William R. Stow III................................. 878,706 (2) 2.8%
Carlos H. Caballero................................. 74,861 (3) *
Frank R. Caccamo.................................... 52,082 (4) *
Donald R. Farrow.................................... 298,451 (5) *
Daniel P. Ginns..................................... 247,866 (6) *
Alan D. Kucheck..................................... 195,788 (7) *
William T. McManes.................................. 115,067 (8) *
Douglas S. Norman................................... 92,492 (9) *
Phillip E. Pearce................................... 104,166 (4) *
John R. Snedegar.................................... 213,443 (10) *
Barry W. Sullivan................................... 53,124 (4) *
Anders B. Vinberg................................... 53,124 (4) *
Total: All Directors and Named Executive Officers..
(12 Persons)........................................ 2,379,170 (11) 7.3%
- --------------------
</TABLE>
* Less than 1%.
(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. The address of each person named in the above table is in
care of StarBase Corporation, 4 Hutton Centre Drive, Suite 800 Santa
Ana, CA 92707-8713.
(2) Includes 33,882 shares of Common Stock held by Mr. Stow. Also 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 son. Also includes
252,065 shares of Common Stock and 17,891 shares of Common Stock
issuable upon the exercise of currently exercisable stock options by
Mr. Stow and Mrs. Stow, respectively. Mr. Stow disclaims beneficial
ownership of the shares exercisable by Mrs. Stow.
(3) Includes 9,434 shares of Common Stock held by Mr. Caballero. Also
includes 63,540 shares of Common Stock issuable upon the exercise of
currently exercisable stock options and 1,887 shares of Common Stock
issuable upon the exercise of warrants.
(4) Represents shares of Common Stock issuable upon the exercise of
currently exercisable stock options.
(5) Includes 15,000 shares of Common Stock held by Mr. Farrow. Also
includes 283,451 shares of Common Stock issuable upon the exercise of
currently exercisable stock options.
(6) Includes 163,200 shares of Common Stock held by Mr. Ginns and 5,500
shares of Common Stock held by Mrs. Ginns. Also includes 79,166 shares
of Common Stock issuable upon the
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<PAGE>
exercise of currently exercisable stock options. Mr. Ginns disclaims
beneficial ownership of the shares held by Mrs. Ginns.
(7) Includes 9,434 shares of Common Stock held by Mr. Kucheck. Also
includes 184,467 shares of Common Stock issuable upon the exercise of
currently exercisable stock options and 1,887 shares of Common Stock
issuable upon the exercise of warrants.
(8) Includes 9,434 shares of Common Stock held by Mr. McManes. Also
includes 1,887 shares of Common Stock issuable upon the exercise of
warrants and includes 69,790 shares of Common Stock and 33,956 shares
of Common Stock issuable upon the exercise of currently exercisable
stock options by Mr. and Mrs. McManes, respectively. Mr. McManes
disclaims beneficial ownership of shares exercisable by Mrs. McManes.
(9) Includes 24,220 shares of Common Stock held by Mr. Norman of which
13,786 shares are subject to a Performance Escrow Agreement. Also
includes 66,385 shares of Common Stock issuable upon the exercise of
currently exercisable stock options and 1,887 shares of Common Stock
issuable upon the exercise of warrants.
(10) Includes 13,753 shares of Common Stock held by Mr. Snedegar; 1,191
shares of Common Stock held by Mr. Snedegar as trustee for the Snedegar
Revocable Living Trust; 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. Also includes
113,331 shares of Common Stock issuable upon the exercise of currently
exercisable stock options.
(11) Includes a total of 945,084 shares of Common Stock, 7,548 shares of
Common Stock issuable upon the exercise of warrants and 1,426,538
shares of Common Stock issuable upon exercise of stock options held by
all directors and named executive officers of the Company as a group
that are currently exercisable.
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<PAGE>
ACTIONS TO BE TAKEN AT THE MEETING
-----------------------------------------------
PROPOSAL 1
ELECTION OF DIRECTORS
------------------------------------------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS NOMINATED EIGHT DIRECTORS FOR
ELECTION TO HOLD OFFICE UNTIL THE NEXT ANNUAL MEETING AND UNTIL THEIR SUCCESSORS
ARE ELECTED AND QUALIFIED. UNLESS OTHERWISE INDICATED, THE SHARES REPRESENTED BY
ALL PROXIES RECEIVED BY THE BOARD OF DIRECTORS WILL BE VOTED AT THE MEETING IN
ACCORDANCE WITH THEIR TERMS AND, IN THE ABSENCE OF CONTRARY INSTRUCTIONS, "FOR"
THE ELECTION OF ALL NOMINEES AS DIRECTORS.
THE BOARD OF DIRECTORS HAS NO REASON TO EXPECT THAT ANY OF THE NOMINEES
WILL BE UNABLE TO STAND FOR ELECTION AT THE DATE OF THE MEETING. IN THE EVENT
THAT A VACANCY AMONG THE ORIGINAL NOMINEES OCCURS PRIOR TO THE MEETING, THE
PROXIES WILL BE VOTED FOR A SUBSTITUTE NOMINEE OR NOMINEES NAMED BY THE BOARD OF
DIRECTORS AND FOR THE REMAINING NOMINEES. DIRECTORS ARE ELECTED BY A PLURALITY
OF THE VOTES CAST. NO PROXY MAY BE VOTED FOR MORE THAN EIGHT NOMINEES.
THE FOLLOWING TABLE SETS FORTH INFORMATION ABOUT EACH NAMED EXECUTIVE
OFFICER, DIRECTOR AND NOMINEE FOR DIRECTOR OF THE COMPANY.
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED OR PRESENT POSITION
NAME AGE APPOINTED WITH THE COMPANY
- ---- --- ---------- -----------------
<S> <C> <C> <C>
William R. Stow III (2)............ 55 1991 Chief Executive Officer,
President and Chairman of
the Board of Directors
Frank R. Caccamo (1)(3)............ 59 1998 Director
Donald R. Farrow (2)(4)............ 53 1997 Vice Chairman, Director
Daniel P. Ginns (1)(4)............. 49 1997 Director
Phillip E. Pearce (4).............. 70 1996 Director
John R. Snedegar (2)(3)............ 50 1991 Director
Barry W. Sullivan (1).............. 58 1998 Director
Anders B. Vinberg.................. 50 1998 Director
Carlos H. Caballero................ 47 n/a Vice President, Marketing
Alan D. Kucheck.................... 47 n/a Vice President, Engineering
William T. McManes................. 49 n/a Vice President, Sales
Douglas S. Norman.................. 35 n/a Chief Accounting Officer and
Director of Finance
</TABLE>
(1) Member of the Compensation Committee.
(2) Member of the Nominating Committee.
(3) Member of the Audit Committee.
(4) Member of the Merger and Acquisitions Committee.
-5-
<PAGE>
NOMINEES FOR DIRECTOR
The nominees for election as a director are William R. Stow III, Frank
R. Caccamo, Donald R. Farrow, Daniel P. Ginns, Phillip E. Pearce, John R.
Snedegar, Barry W. Sullivan and Anders B. Vinberg.
Executive officers of the Company are appointed by the Board of
Directors to serve until their removal by the Board of Directors or resignation.
The following biographical information has been furnished by the
nominees.
WILLIAM R. STOW III founded the company in September 1991. Mr. Stow has
served as Chief Executive Officer of the Company since September 1991 (exclusive
of the period from August 1996 to January 1997) and has served as President of
the Company since July 1998. This is a position he also held 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.
FRANK R. CACCAMO has served as a Director of the Company since November
1998. Mr. Caccamo is the Vice President and Chief Information Officer of The
Reynolds and Reynolds Company, a position he has held since January 1997. Prior
to joining Reynolds and Reynolds, Mr. Caccamo was Vice President of Information
Systems at Procter & Gamble from 1990 to January 1997. Mr. Caccamo is a director
of the Agency Services Division of the Cincinnati Community Chest, the
Cincinnati Community Chest, the Cincinnati Eye Bank for Sight Restoration, and
the Health Alliance Information Systems and Technology Governance Board.
DONALD R. FARROW has served as the Vice Chairman of the Company since
July 1998. Mr. Farrow has been with the Company since March 1996. His various
positions within the company include: (1) President (January 1997 to July 1998);
(2) Chief Operating Officer and Director (February 1997 to July 1998); (3) Vice
President, Sales and Marketing (August 1996 to January 1997); Vice President,
Sales (May 1996 to August 1996); and (4) consultant (March 1996 to May 1996).
From January 1995 to May 1996, Mr. Farrow was an independent consultant in the
area of sales and marketing of software technology. Prior to January 1995, Mr.
Farrow served as Vice President, Sales and Marketing for Comm Vision, a leading
provider of server solutions, from December 1993 through December 1994;
Vice-President of Sales of Image Online from February 1993 through November
1993; and Director - Western Area of Novell, a provider of network software,
from 1987 to February, 1993.
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<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 three other reporting companies, China
Peregrine, Mustang Software and Xybernaut Corporation.
JOHN R. SNEDEGAR has served as a Director of the Company since December
1991. Mr. Snedegar is President/CEO and a director of Micro General Corporation,
a full service telecommunications and electronic commerce company. From May 1990
through April 1999, Mr. Snedegar 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 Communications, Inc., an international long
distance wholesale provider, ShopNow.com, an electronic commerce shopping portal
and TeleHub Communications Corporation, a long distance technology company.
BARRY W. SULLIVAN has served as a Director of the Company since
September 1998. Mr. Sullivan has served the Electronic Data Systems (EDS) from
1971 through 1998, most recently as Corporate Vice President in charge of
managing their Internet, New Media and Electronic Business. Mr. Sullivan was a
member of (1) the Stanford University Computer Industry Project form 1992 to
1997 and (2) the New Marketing Imperatives Roundtable. He has served on the
Board and as Chairman of the Information Technology Association of America
(ITAA) from 1993 through 1998, and on the Board of CommerceNet, a not-for-profit
market and business development organization from 1996 to 1998.
ANDERS B. VINBERG has served as a Director of the Company since
September 1998. Mr. Vinberg has served since December 1986 as Senior Vice
President of Research and Development at Computer Associates International,
Inc., a world leader in mission-critical business software and a leading
provider of high-end software Configuration Management tools.
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<PAGE>
The following biographical information has been submitted by the
non-Director Executive Officers.
CARLOS H. CABALLERO served the Company as Vice President of Marketing
from December 1997 through June 1999. Prior to that, Mr. Caballero had been
President of Digital Graffiti, Inc., a provider of marketing communications
products and services for emerging business-to-business vendors, since July
1996. Mr. Caballero was Director of Marketing Communications for True Software,
a software configuration management vendor from December 1996 to August 1997 and
Director of Marketing at Quest Software from July 1993 through July 1996.
ALAN D. KUCHECK has served the Company as the Vice President of
Engineering since January 1995. From July 1993 to January 1995, Mr. Kucheck
served as a Project Director for the Company.
WILLIAM T. MCMANES served the Company as Vice President of Sales from
September 1997 through June 1999. Prior to that, Mr. McManes had been Vice
President of Sales at Magic Software Enterprise, Inc. since October 1996,
Director - West Region and consultant for Amdahl Corporation from December 1993
through October 1996, and owner of Glencoe Consulting from January 1996 through
October 1996, which was operated exclusively for 2 clients - Amdahl Corporation
and Select Software.
DOUGLAS S. NORMAN founded the Company in September 1991. He has served
as Chief Accounting Officer since September 1997, Assistant Secretary of the
Company since February 1997, Director of Finance since June 1996, and as
Financial Manager from 1991 to 1996. Douglas S.
Norman is the son-in-law of William R. Stow III.
REQUIRED VOTE
The eight 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.
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<PAGE>
BOARD COMPENSATION
Prior to January 1998, directors who are not employees of the Company
were not compensated, except for reimbursement of travel expenses. Starting in
January 1998, directors who are not employees receive $1,000 per month in
addition to reimbursement of travel expenses. In addition, directors 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 at
least equal to the market price of the Common Stock on the date of grant. The
options have a 10-year term.
In addition, Mr. Sullivan performed certain consulting services for the
Company for which he was compensated $3,030 during fiscal 1999.
BOARD OF DIRECTORS
The Board of Directors is responsible for the management of the
Company. During fiscal 1999, the Board of Directors held 12 meetings and took
action by unanimous written consent on four occasions. Each incumbent director
attended at least 93% of the aggregate of the total number of meetings of the
Board and of the committees on which he served during fiscal 1999.
COMMITTEES OF THE BOARD
The Board of Directors has established four standing committees: (1)
Compensation, (2) Nominating, (3) Audit and (4) Merger and Acquisitions
Committee.
The principal function of the Compensation Committee was to review and
establish compensation for executive officers and to consider incentive
compensation alternatives for the Company's employees. This committee was
comprised of Messrs. Ginns, Sullivan and Caccamo. The Compensation Committee
acted by unanimous written consent on one occasion and all other functions of
the Compensation Committee were completed by the Board of Directors in the
regularly scheduled meetings during the fiscal year ended March 31, 1999.
The principal function of the Nominating Committee was to select and
recommend to the Board of Directors appropriate candidates for executive
officers. The Nominating Committee was comprised of Messrs. Farrow, Snedegar,
and Stow. The functions of the Nominating Committee were completed by the Board
of Directors in the regularly scheduled meetings during the fiscal year ended
March 31, 1999.
Stockholders of the Company who wish to nominate individuals for
directors for election at the next annual meeting should submit such nominations
to the Secretary of the Company at the Company's executive offices by March 31,
2000. The proposal should contain certain information about the proposed
nominee, including name, age, business and residence addresses, principal
occupation, the class and number of shares of Common Stock or other capital
stock of the Company beneficially owned, the consent of such person to be
nominated and such other information as would be required to be included in a
proxy statement soliciting proxies for the election of the proposed
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<PAGE>
nominee. The proposal should also include the name, business and residence
addresses, occupation, the class of number of shares of Common Stock or other
capital stock of the Company beneficially owned by the person or entity making
such nomination, and the relationship or affiliation, if any, to the nominee.
The functions of the Audit Committee included the nomination of
independent auditors for appointment by the Board; meeting with the independent
auditors to review and approve the scope of their audit engagement; meeting with
the Company's financial management and the independent auditors to review
matters relating to internal accounting controls, the Company's accounting
practices and procedures and other matters relating to the financial condition
of the Company; and to report to the Board periodically with respect to such
matters. The Audit Committee consisted of Messrs. Caccamo and Snedegar. The
Audit Committee did not meet formally during the fiscal year ended March 31,
1999 but acted by unanimous written consent on one occasion.
The principal function of the Merger and Acquisitions Committee was to
investigate potential opportunities for merger and/or acquisition activity. This
committee was comprised of Messrs. Pearce, Ginns, and Farrow. All functions of
the Merger and Acquisition Committee were completed by the Board of Directors in
a regularly scheduled meeting during the fiscal year ended March 31, 1999.
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 Common Stock, to file
with the Securities and Exchange Commission (the "SEC") initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. To the Company's knowledge, based solely upon a
review of copies of such reports furnished to the Company during the one-year
period ended March 31, 1999, and written representations from its directors and
executive officers, there were no late or delinquent filings except the
following: one Form 4 for Mr. Snedegar, which has been filed as of the current
date.
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, 1997, 1998,
1999. Except as otherwise noted, no Named Executive Officer received any
restricted stock award, stock appreciation right or payment under any long-term
incentive plan. No other officer of the Company received annual salary and bonus
exceeding $100,000 during the relevant periods.
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<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Awards
----------------
Securities All Other
Annual Compensation Underlying Compensation
Name and ------------------------------- Options (1) -----------------
Principal Position Year Salary Bonus (Shares) (6)
- ------------------ -------- -------------- ---------- ---------------- -----------------
<S> <C> <C> <C> <C> <C>
William R. Stow III (2)............. 1999 $150,000 $ - 0 - 152,000 $ - 0 -
Chief Executive Officer, 1998 $150,000 $ - 0 - 249,790 $ - 0 -
Chairman of the Board and 1997 $137,818 $ - 0 - 175,000 $ - 0 -
Director
Carlos H. Caballero................. 1999 $147,500 $ 27,793 100,000 $ - 0 -
Vice President, Marketing 1998 $ 40,000 $ - 0 - 150,000 $ - 0 -
1997 $ -- $ - 0 - -- $ - 0 -
Donald R. Farrow (3)................ 1999 $141,538 $ - 0 - 60,000 $ - 0 -
President and Director 1998 $150,000 $ - 0 - 297,447 $ - 0 -
1997 $101,031 $ - 0 - 231,250 $62,942
Alan D. Kucheck (4)................. 1999 $130,000 $37,824 25,000 $ - 0 -
Vice President, Engineering 1998 $120,833 $ - 0 - 245,075 $ - 0 -
1997 $110,000 $ - 0 - 65,667 $ - 0 -
00
William T. McManes.................. 1999 $137,170 $65,022 100,000 $68,736
Vice President, Sales 1998 $ 70,096 $ - 0 - 150,000 $18,990
1997 $ -- $ - 0 - -- $ - 0 -
Douglas S. Norman (5)............... 1999 $ 92,850 $28,587 30,000 $ - 0 -
Director of Finance 1998 $ 72,100 $ - 0 - 91,700 $ - 0 -
Chief Accounting Officer 1997 $ 66,326 $ - 0 - 37,924 $ - 0 -
Assistant Secretary
- ------------
</TABLE>
(1) Amounts represent stock options granted and/or repriced for the period
shown.
(2) Options granted during fiscal year 1998 include options to purchase
156,666 shares of the Company's Common Stock, originally granted in prior
years, that were repriced.
(3) Options granted during fiscal year 1998 include options to purchase
206,250 shares of the Company's Common Stock, originally granted in prior
years, that were repriced.
(4) Options granted during fiscal year 1998 include options to purchase
175,667 shares of the Company's common stock, originally granted in prior
years, that were repriced.
(5) Option granted during fiscal year 1998 include options to purchase 54,590
shares of the Company's common originally granted in prior years, that
were repriced.
(6) Amounts listed as All Other Compensation represent commissions earned or
consulting fees.
-11-
<PAGE>
STOCK OPTIONS
The following table sets forth information concerning stock option grants
made during the fiscal year ended March 31, 1999 under the Company's Stock
Option Plan (the "Plan") to Named Executive Officers. No stock appreciation
rights were granted to such individuals during the fiscal year.
OPTION/SAR GRANTS IN THE FISCAL YEAR ENDED MARCH 31, 1999
Individual Grants
-----------------
<TABLE>
<CAPTION>
Number of
Securities Percent of Total
Underlying Options/SARS Exercise
Options/ SARS Granted to or Base
Granted Employees Price Expiration
Name (# of Shares) (1) In Fiscal Year (2) ($/Sh) (3) Date
- --------------------- ------------------- --------------------- ------------- ------------
<S> <C> <C> <C> <C>
William R. Stow III 60,000 1.6% $0.625 1/4/09
92,000 2.4% 0.625 1/4/09
Carlos H. Caballero 100,000 2.6% 0.625 1/4/09
Donald R. Farrow 35,000 * 0.625 1/4/09
25,000 * 0.625 1/4/09
Alan D. Kucheck 25,000 * 0.625 1/4/09
William T. McManes 100,000 2.6% 0.625 1/4/09
Douglas S. Norman 30,000 * 0.625 1/4/09
- ------------------
*Less than 1%.
</TABLE>
(1) Options granted to purchase common stock. Generally, twenty-five percent
of the options granted vest one year from the date of grant with the
remaining options vesting in equal monthly increments over the following
thirty-six months. Fifty percent of both the 60,000 options granted to
Mr. Stow and the 35,000 options granted to Mr. Farrow vest immediately
upon grant with the remaining shares vesting in equal monthly increments
over the following twelve months. All of the options shown have a maximum
term of ten years, subject to earlier termination following the
optionee's cessation of service with the Company.
(2) The Company granted options to purchase a total of 3,873,160 shares of
Common Stock to employees, consultants and Board members during the year
ended March 31, 1999.
(3) The exercise price may be paid in cash or in shares of Common Stock
valued at fair market value on the exercise date.
-12-
<PAGE>
OPTION EXERCISES, HOLDINGS AND FISCAL YEAR-END VALUES
The following table sets forth information concerning the number of
shares covered by both exercisable and unexercisable options held by each of the
Named Executive Officers as of March 31, 1999. No options were exercised during
the fiscal year ended March 31, 1999 by any of the Named Executive Officers.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1999
AND OPTION VALUES AS OF MARCH 31, 1999
Number of Securities
Shares Underlying Unexercised
Acquired Options at Value of Unexercised
on Value March 31, 1999 in-the-money Options at
Exercise Realized (# of shares) March 31, 1999 (1)
--------------------------------- ---------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- -------------------- ----------- ----------- -------------- --------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
William R. Stow III -- -- 210,907 215,883 $90,473 $156,607
Carlos H. Caballero -- -- 45,832 204,168 11,385 131,490
Donald R. Farrow -- -- 241,595 140,852 99,595 78,676
Alan D. Kucheck -- -- 162,413 107,662 65,310 48,773
William T.McManes -- -- 54,165 195,835 8,271 120,354
Douglas S. Norman -- -- 55,880 65,820 26,446 47,608
</TABLE>
- ------------
(1) Calculated based on the closing price of the Company's Common Stock as
reported on the NASDAQ SmallCap Market on March 31, 1999 of $1.6875 per
share, less the applicable exercise price.
CHANGE IN CONTROL AGREEMENTS
The Company has change in control agreements with Messrs. William R. Stow
III, Alan D. Kucheck and Douglas S. Norman. In the event of termination, as a
result of change of control, the executive shall be entitled to receive his
salary and any benefits for a period of twelve months. Furthermore, all vested
options will remain exercisable through the twelve month period following the
date of termination. Should a conflict exist, the terms and conditions of the
Plan shall govern. For purposes of the agreement, "Change in control" means: (i)
the direct or indirect sale or exchange in a single series of related
transactions by the stockholders of the Company of more than fifty percent
-13-
<PAGE>
of the voting stock of the Company; (ii) a merger or consolidation in which the
Company is a party and is not the surviving entity; (iii) the sale, exchange, or
transfer of all or substantially all of the assets of the Company; or (iv) a
liquidation or dissolution of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee participate in all
deliberations concerning executive compensation. The Compensation Committee
consists of Messrs. Frank R. Caccamo, Daniel P. Ginns and Barry W. Sullivan. No
executive officer of the Company serves as a member of the board of directors or
compensation committee of any entity which has one or more executive officers
serving as a member of the Company's Board of Directors.
REPORT OF THE COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY
The Compensation Committee of the Board of Directors is composed
entirely of non-employee directors and is responsible for developing and making
recommendations to the Board of Directors with respect to the Company's
executive compensation policies. In addition, the Compensation Committee,
pursuant to authority delegated by the Board of Directors, determines the
compensation to be paid to the Chief Executive Officer and each of the other
executive officers of the Company.
The objectives of the Company's executive compensation program are to:
* Support the achievement of desired Company performance
* Provide compensation that will attract and retain superior
talent and reward performance
The executive compensation program provides an overall level of
compensation opportunity that is competitive within the technology and software
industries, as well as with a broader group of companies of comparable size and
complexity.
EXECUTIVE OFFICER COMPENSATION PROGRAM
The Company's executive officer compensation program is comprised of
base salary, long-term incentive compensation in the form of stock options,
specific performance-based bonuses and various benefits, including medical and
pension plans generally available to employees of the Company.
-14-
<PAGE>
BASE SALARY
Base salary levels for the Company's executive officers are
competitively set relative to companies in the software industry. In determining
salaries, the Committee also takes into account individual experience and
performance and specific issues particular to the Company.
STOCK OPTION PROGRAM
The stock option program is the Company's long-term incentive plan for
providing an incentive to officers, directors, employees and others.
The 1996 Stock Option Plan authorizes the Compensation Committee to
award officers, directors, employees and others stock options. Options granted
under the Plan may be granted containing terms determined by the Committee,
including exercise period and price; provided, however, that the Plan requires
that exercise price may not be less than the fair market value of the Common
Stock on the date of the grant and the exercise period may not exceed ten years,
subject to further limitations.
In addition, the Company issues non-qualified stock options outside the
1996 Stock Option Plan. These are issued to a broad-based group in which most of
the options are granted to non-officer employees.
BENEFITS
The Company provides to executive officers, medical and pension
benefits that are generally available to Company employees.
BONUS
The Company may provide to certain executive officers bonuses based on
performance.
CHIEF EXECUTIVE OFFICER COMPENSATION
See Summary Compensation Table.
Frank R. Caccamo
Daniel P. Ginns
Barry W. Sullivan
Members of the Compensation Committee
-15-
<PAGE>
CERTAIN TRANSACTIONS
In fiscal 1995, the Board of Directors authorized the Company to loan
the sum of $126,000 to William R. Stow III . At March 31, 1999, the principal
and accrued interest amounts were $76,154 and $18,105, 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, 2000 and
bears interest at a rate of 6.34% per annum, payable at maturity.
PROPOSAL 2
AMENDING TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK
-----------------------------------------------------------------
On July 26, 1999, the Board of Directors unanimously adopted a
resolution approving a proposal to amend the Company's Certificate of
Incorporation to increase the number of shares of Common Stock which the Company
is authorized to issue from 50,000,000 to 80,000,000 shares. If the proposed
amendment is approved, the second sentence of Article 4 of the Company's
Certificate of Incorporation would be amended to read as follows: "The number of
shares of Common Stock authorized to be issued is 80,000,000, with a par value
of $.01 per share, and the number of shares of Preferred Stock authorized to be
issued is 10,000,000, with a par value of $.01 per share." The number of shares
of Preferred Stock authorized to be issued will not change as a result of this
proposed amendment. The Board of Directors determined that such amendment is
advisable and directed that the proposed amendment be considered at the Meeting.
The additional 30,000,000 shares of Common Stock, if and when issued, will have
the same rights and privileges as the shares of Common Stock presently issued
and outstanding. Each holder of Common Stock is entitled to one vote per share
on all matters submitted to a vote of stockholders. The Common Stock does not
have cumulative voting rights. The holders of Common Stock share ratably on a
per share basis in any dividends when, as and if declared by the Board of
Directors out of funds legally available therefor and in all assets remaining
after the payment of liabilities in the event of the liquidation, dissolution or
winding up of the Company. There are no preemptive or other subscription rights,
conversion rights or redemption or sinking fund provisions with respect to the
Common Stock.
PURPOSES AND CERTAIN POSSIBLE EFFECTS OF INCREASING THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
The Company's Certificate of Incorporation, as amended to date,
authorizes the Company to issue 50,000,000 shares of Common Stock, $.01 par
value per share, and 10,000,000 shares of Preferred Stock, $.01 par value per
share. Of these authorized shares, as of July 16, 1999, 31,205,228 shares of
Common Stock, 441,208 shares of Series E Preferred Stock, 2,549 shares of Series
H Preferred Stock, and 1,000 shares of Series I Preferred Stock were
outstanding. In addition
-16-
<PAGE>
to the 31,205,228 shares of Common Stock outstanding, as of July 16, 1999,
13,848,600 shares of Common Stock were reserved for possible future issuance
upon conversion of outstanding preferred stock or exercise of outstanding
options and warrants. Accordingly, only 4,946,172 shares of the Company's Common
Stock are currently available for future issuance by the Company.
The Company has historically either publicly offered or privately
placed its capital stock to raise funds to finance its operations, including
research and development and product development activities, and has issued
shares and options to consultants, employees and members of the Board of
Directors. The Company expects to continue to make substantial expenditures for
research and product development and in the marketing of products. The Company
continues to periodically explore and negotiate the additional financing that it
will require. The Company may also seek acquisitions of other companies,
products and assets. These activities are likely to require the Company to sell
shares of Common Stock or securities convertible into or exchangeable for Common
Stock. The Company has, at times in the past, sold shares below the market price
of its Common Stock at the date of issuance and may be required to do so in the
future in order to raise financing.
The Board of Directors believes that the increase in the number of
authorized shares of Common Stock at this time will provide the Company with the
flexibility of having an adequate number of authorized but unissued shares of
Common Stock available for future financing requirements, including for funding
research and product development, acquisitions and other corporate purposes,
without the expense or delay attendant in seeking stockholder approval at any
special or annual meeting. The proposed amendment would provide additional
authorized shares of Common Stock that could be used from time to time, without
further action or authorization by the stockholders (except as may be required
by law or by any stock exchange or over-the-counter market on which the
Company's securities may then be listed).
Although it is not the purpose of the proposed amendment and the Board
of Directors is not aware of any pending or proposed effort to acquire control
of the Company, the authorized but unissued share of Common Stock also could be
used by the Board of Directors to discourage, delay or make more difficult a
change in control of the Company (for example, by permitting issuances which
would dilute the stock ownership of a person seeking to effect a change in the
composition of the Board of Directors or contemplating a tender offer or other
transaction for the combination of the Company with another company). Other than
the amendment to Article 4 of the Certificate of Incorporation, the Board does
not currently contemplate recommending the adoption of any other amendments to
the Certificate of Incorporation that could be construed to affect the ability
of third parties to take over or change control of the Company.
The proposed amendment will not affect the rights of existing holders
of Common Stock except to the extent that further issuance of Common Stock will
reduce each existing stockholder's proportionate ownership in the Company. If
the proposed amendment is adopted, there would be 34,946,172 authorized shares
of Common Stock that are not outstanding or reserved for issuance.
-17-
<PAGE>
DELAWARE TAKEOVER STATUTE AND CERTAIN CHARTER PROVISIONS
The Company is subject to Section 203 of the Delaware General
Corporation Law which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any business combination with any interested
stockholder for a period of three years following the date that such stockholder
became an interested stockholder, unless: (i) prior to such date, the Board of
Directors of the corporation approved either the business combination or the
transaction which resulted in the stockholder becoming an interested
stockholder; (ii) upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested stockholder owned
at least 85% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding for purposes of determining the number of
shares outstanding those shares owned (x) by persons who are directors and also
officers and (y) by employee stock plans in which employee participants do not
have the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer; or (iii) on or subsequent
to such date, the business combination is approved by the Board of Directors and
authorized at an annual or special meeting of stockholders, and not by written
consent, by the affirmative vote of at least 66 2/3% of the outstanding voting
stock which is not owned by the interested stockholder. Generally, an
"interested stockholder" is any person that (i) is the owner of 15% or more of
the outstanding voting stock of a corporation or (ii) is an affiliate or
associate of the corporation and was the owner of 15% or more of the outstanding
voting stock of such corporation at any time within the 3-year period
immediately prior to the date on which it is sought to be determined whether
such person is an interested stockholder.
These provisions are likely to impose significant restrictions on
stockholders unaffiliated with the Company and accordingly are likely to
discourage potential acquirors of the Company.
EFFECTIVE DATE
If approved by the stockholders, the proposed amendment will become
effective upon the filing of a Certificate of Amendment to the Certificate of
Incorporation with the Secretary of State of Delaware amending the Certificate
of Incorporation as set forth above, which filing will be made as soon as
reasonably practicable following stockholder approval.
REQUIRED VOTE
Approval of the proposed amendment to the Certificate of Incorporation
requires the affirmative vote of a majority of the shares of Common Stock
outstanding at the Meeting and entitled to vote at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE "FOR" THE APPROVAL OF PROPOSAL 2
-18-
<PAGE>
PROPOSAL 3
RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT AUDITORS
-----------------------------------------------------------------
CHANGES IN THE COMPANY'S CERTIFYING ACCOUNTANT
On March 17, 1999, the Company dismissed PricewaterhouseCoopers LLP as
its independent accountants. The reports of PricewaterhouseCoopers LLP on the
financial statements for the past two fiscal years contained no adverse opinion
or disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principle, except for going concern uncertainty. The
Company's Audit Committee participated in and approved the decision to change
independent accountants. In connection with its audits for the two fiscal years
ended March 31, 1997 and March 31, 1998, respectively, and through March 17,
1999, there have been no disagreements with PricewaterhouseCoopers LLP on any
matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedure, which disagreements if not resolved to the
satisfaction of PricewaterhouseCoopers LLP, would have caused them to make
reference thereto in their report on the financial statements for such years.
During the two fiscal years ended March 31, 1997 and March 31, 1998,
respectively, and through March 17, 1999, there have been no reportable events
(as defined in Item 304(a)(1)(v) of Regulation S-K). PricewaterhouseCoopers LLP
furnished the Company with a letter addressed to the SEC stating that it agreed
with the above statements. A copy of such letter, dated March 23, 1999, was
filed as Exhibit 16.1 to the Company's Current Report on Form 8-K filed with the
SEC on March 23, 1999.
The Company engaged Deloitte & Touche LLP as its new independent
accountants as of March 17, 1999. During the two fiscal years ended March 31,
1997 and March 31, 1998, respectively, and through March 17, 1999, the Company
has not consulted Deloitte & Touche LLP regarding either (i) the application of
accounting principles to a specified transaction, either completed or proposed;
or the type of audit opinion that might be rendered on the Company's financial
statements, and either a written report was provided to the Company or oral
advice was provided that Deloitte & Touche LLP concluded was an important factor
considered by the Company in reaching a decision as to the accounting, auditing
or financial reporting issue; or (ii) any matter that was either the subject of
a disagreement (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K
and the related instructions to Item 304 of Regulation S-K) or a reportable
event (as that term is defined in Item 304(a)(1)(v) of Regulation S-K).
The accounting firm of Deloitte & Touche LLP served as the Company's
independent auditors for fiscal year 1999. Representatives of that firm are not
expected to attend the Annual Meeting. However, if one or more representatives
of that firm attend the Annual Meeting they will be given the opportunity to
comment, if they desire, and to respond to appropriate questions that may be
asked by stockholders.
-19-
<PAGE>
Approval by the stockholders of the appointment of independent auditors
is not required but the Board deems it desirable to submit this matter to the
stockholders. If a majority of the Common Stock present and entitled to vote at
the meeting should not approve the selection of Deloitte & Touche LLP, the
selection of independent auditors will be reconsidered by the Board of
Directors.
THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT
OF DELOITTE & TOUCHE LLP AS
INDEPENDENT AUDITORS OF THE COMPANY
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Stockholder proposals for the 2000 Annual Meeting of Stockholders must
be received in writing by the Secretary of the Company at the Company's
executive offices by July 1, 2000 to be considered for inclusion in the proxy
materials.
OTHER MATTERS
Management does not intend to bring before the Meeting any matters
other than those specifically described above and knows of no matters other than
the foregoing to come before the Meeting. If any other matters or motions
properly come before the Meeting, it is the intention of the persons named in
the accompanying Proxy to vote such Proxy in accordance with their judgment on
such matters or motions, including any matters dealing with the conduct of the
Meeting.
By Order of the Board of Directors,
William R. Stow III
Chairman of the Board, President
and Chief Executive Officer
Santa Ana, California
August __, 1999
-20-
<PAGE>
STARBASE CORPORATION
PROXY
ANNUAL MEETING OF STOCKHOLDERS - SEPTEMBER 14, 1999
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby (a) acknowledges receipt of the Notice of Annual
Meeting of Stockholders of StarBase Corporation (the "Company") to be held on
September 14, 1999 and the related Proxy Statement; (b) appoints William R. Stow
III and Martin E. Weisberg, Esq. 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 July
16, 1999 at the Annual Meeting and at any adjournments or postponements thereof;
and (d) revokes any proxies previously given.
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 Proposals 2 and 3.
The proxies will use their discretion with regard to any matter referred to in
item 4.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
Please mark boxes |X| in blue or black ink.
1. Election of Directors:
(INSTRUCTION: TO WITHHOLD AUTHORITY FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE
THROUGH THE NOMINEE'S NAME IN THE LIST BELOW)
FOR ALL NOMINEES |_| WITHHOLD AUTHORITY |_|
(except as marked to to vote for all nominees
the contrary below)
(William R. Stow III, Frank R. Caccamo,
Donald R. Farrow, Daniel P. Ginns,
Phillip E. Pearce, John R. Snedegar,
Barry W. Sullivan and Anders B.
Vinberg)
2. To amend the Company's Certificate of Incorporation to increase the
number of authorized shares of Common Stock from 50,000,000 to
80,000,000 shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditor's for the Company's fiscal year ended March 31,
2000.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. 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.
Dated: , 1999
-----------------------------------
Signature of Stockholder(s)
-----------------------------------
Signature of Stockholder(s)
Title (if applicable):__________________
(Signature should conform to names
printed on this Proxy. For jointly owned
shares, each owner should sign. When
signing as attorney, executor,
administrator, trustee, guardian or
officer of a corporation, please give
full title.)
Number of Shares Owned: ________________
PLEASE MARK, SIGN ABOVE AND RETURN THE PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
