SOCKET COMMUNICATIONS INC, DEF 14A, 1998-05-06

SOCKET COMMUNICATIONS INC
DEF 14A, 1998-05-06
RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT

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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 Section240.14a-11(c) or
Section240.14a-12

SOCKET COMMUNICATIONS, INC.
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(Name of Registrant as Specified In Its Charter)

SOCKET COMMUNICATIONS, INC.
- --------------------------------------------------------------------------------
(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)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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SOCKET COMMUNICATIONS, INC.

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 10, 1998

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DEAR STOCKHOLDERS:

You are cordially invited to attend the Annual Meeting of Stockholders of
SOCKET COMMUNICATIONS, INC., a Delaware corporation (the "Company"), to be held
Wednesday, June 10, 1998 at 9:00 a.m., local time, at the Company's headquarters
at 37400 Central Court, Newark, California 94560 for the following purposes:

(1) To elect six directors to serve until the next Annual Meeting of
Stockholders or until their successors are duly elected.

(2) To approve an amendment to the Company's 1995 Stock Plan to reserve
an additional 1,000,000 shares of Common Stock for issuance thereunder.

(3) To approve a one-for-three reverse split of the outstanding Common
Stock of the Company so that every three shares of the Company's Common
Stock shall thereafter be consolidated into one share of the Company's
Common Stock (the "Reverse Stock Split"), and to approve a related amendment
to the Company's Certificate of Incorporation.

(4) To ratify the appointment of Ernst & Young LLP as independent public
accountants of the Company for the fiscal year ending December 31, 1998.

(5) To transact such other business as may properly come before the
meeting or any adjournment thereof.

The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.

Only stockholders of record at the close of business on April 24, 1998 are
entitled to notice of and to vote at the meeting.

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

Sincerely,

Charlie Bass
CHAIRMAN OF THE BOARD AND CHIEF
EXECUTIVE OFFICER

Newark, California
May 8, 1998

YOUR VOTE IS IMPORTANT.
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING,
YOU ARE REQUESTED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY
AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE>
SOCKET COMMUNICATIONS, INC.

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PROXY STATEMENT FOR 1998
ANNUAL MEETING OF STOCKHOLDERS

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INFORMATION CONCERNING SOLICITATION AND VOTING

GENERAL

The enclosed Proxy is solicited on behalf of the Board of Directors of
SOCKET COMMUNICATIONS, INC., a Delaware corporation (the "Company"), for use at
the Annual Meeting of Stockholders (the "Annual Meeting") to be held Wednesday,
June 10, 1998 at 9:00 a.m., local time, or at any adjournment thereof, for the
purposes set forth herein and in the accompanying Notice of the Annual Meeting.
The Annual Meeting will be held at the Company's headquarters at 37400 Central
Court, Newark, California 94560. The Company's principal executive offices are
located at 37400 Central Court, Newark, California 94560, and the Company's
telephone number at that location is (510) 744-2700.

These proxy solicitation materials and the Annual Report on Form 10-KSB for
the year ended December 31, 1997, including financial statements, were first
mailed on or about May 8, 1998 to all stockholders entitled to vote at the
meeting.

RECORD DATE AND PRINCIPAL SHARE OWNERSHIP

Stockholders of record at the close of business on April 24, 1998 (the
"Record Date") are entitled to notice of and to vote at the meeting. The Company
has one series of Common Stock outstanding, designated Common Stock, $0.001 par
value. At the Record Date, 7,187,632 shares of the Company's authorized Common
Stock were issued and outstanding and held of record by approximately 1,100
stockholders. The Company has five series of Preferred Shares outstanding,
designated Series B Convertible Preferred Stock, $.001 par value, Series B-1
Convertible Preferred Stock, $.001 par value, Series B-2 Convertible Preferred
Stock, $.001 par value, Series C Convertible Preferred Stock, $.001 par value,
and Series C-1 Convertible Preferred Stock, $.001 par value. At the Record Date,
12,500 shares of the Company's Series B Convertible Preferred Stock were
outstanding and held of record by one stockholder, 8,850 shares of the Company's
Series B-1 Convertible Preferred Stock were outstanding and held of record by
one stockholder, 8,715 shares of Series B-2 Convertible Preferred Stock were
outstanding and held of record by one stockholder, 95,037 shares of Series C
Convertible Preferred Stock were outstanding and held of record by eleven
stockholders, and 51,574 shares of Series C-1 Preferred Stock were outstanding
and held of record by one stockholder. The shares of Series B Convertible
Preferred Stock, Series B-1 Convertible Preferred Stock, Series B-2 Convertible
Preferred Stock, Series C Convertible Preferred Stock and Series C-1 Convertible
Preferred Stock are convertible into 1,250,000, 885,000, 871,500, 2,014,778, and
546,684 shares of Common Stock, respectively. The holders of the Series B
Convertible Preferred Stock, Series B-1 Convertible Preferred Stock and Series
B-2 Convertible Preferred Stock (collectively, the "Series B Preferred") are
entitled to the number of votes each would be entitled to cast as if the Series
B Preferred were converted to Common Stock. The holders of the Series C
Convertible Preferred Stock and the Series C-1 Convertible Preferred Stock are
not entitled to vote on any matter submitted to the Stockholders of the Company
for approval.

Provided herein under the caption entitled "Management--Security Ownership
of Certain Beneficial Owners and Management" is a table which sets forth certain
information regarding the beneficial ownership of Common Stock of the Company as
of April 1, 1998 as to (i) each person who is known by the Company to own
beneficially more than 5% of the outstanding shares of Common Stock, (ii) each
director and each nominee for director of the Company, and (iii) all directors
and executive officers as a group.
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REVOCABILITY OF PROXIES

Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a later
date or by attending the meeting and voting in person.

VOTING AND SOLICITATION

Each holder of Common Stock is entitled to one vote for each share of stock
held in all matters to be voted on by the stockholders. Each holder of Series B
Convertible Preferred Stock, Series B-1 Convertible Preferred Stock and Series
B-2 Convertible Preferred Stock is entitled to the number of votes such holder
would be entitled to cast if such shares of Series B Preferred were converted
into Common Stock. As of April 1, 1998, each share of Series B Preferred was
convertible into 100 shares of Common Stock. Every stockholder voting for the
election of directors (Proposal One) may cumulate such stockholder's votes and
give one candidate a number of votes equal to the number of directors to be
elected multiplied by the number of shares that such stockholder is entitled to
vote, or distribute such stockholder's votes on the same principle among as many
candidates as the stockholder may select, provided that votes cannot be cast for
more than six candidates. However, no stockholder shall be entitled to cumulate
votes unless the candidate's name has been placed in nomination prior to the
voting and the stockholder, or any other stockholder, has given notice at the
meeting, prior to the voting, of the intention to cumulate the stockholder's
votes. On all other matters, stockholders may not cumulate votes.

This solicitation of proxies is made by the Company, and all related costs
will be borne by the Company. In addition, the Company may reimburse brokerage
firms and other persons representing beneficial owners of stock for their
expenses in forwarding solicitation material to such beneficial owners. Proxies
may also be solicited by certain of the Company's directors, officers and
regular employees, without additional compensation, personally or by telephone
or facsimile.

DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS

Proposals of stockholders of the Company that are intended to be presented
by such stockholders at the Company's 1999 Annual Meeting of Stockholders must
be received by the Company no later than January 28, 1999 in order that they may
be considered for inclusion in the proxy statement and form of proxy relating to
that meeting.

PROPOSAL ONE
ELECTION OF DIRECTORS

The Company's Bylaws provide that the Board of Directors shall be composed
of six directors. The Board currently consists of four directors with two
vacancies, and Gary Kalbach, currently a director of the Company, has indicated
his intent to resign from the Board upon the election of the nominees named
below who will fill the vacancies on the Board and the vacancy left by Mr.
Kalbach's resignation. A board of six directors is to be elected at the Annual
Meeting. Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the Company's six nominees named below. Three of the
nominees named below, Mr. Bass, Mr. Gifford, and Mr. Carsten, are presently
directors of the Company. In the event that any nominee of the Company is unable
or declines to serve as a director at the time of the Annual Meeting, the
proxies will be voted for any nominee who shall be designated by the present
Board of Directors to fill the vacancy. The Company is not aware of any nominee
who will be unable or will decline to serve, as a director. Different candidates
may be nominated by the proxy holders. The term of office for each person
elected as a director will continue until the next Annual Meeting or until a
successor has been elected and qualified.

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VOTE REQUIRED

If a quorum is present and voting, the six nominees receiving the highest
number of votes will be elected to the Board of Directors. Votes withheld from
any nominee are counted for purposes of determining the presence or absence of a
quorum. Abstentions and shares held by brokers that are present but not voted
because the brokers were prohibited from exercising discretionary authority
("broker non-votes") will be counted as present for the purposes of determining
if a quorum is present.

NOMINEES

The names of the nominees and certain information about them as of April 1,
1998 are set forth below:

<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE POSITION WITH THE COMPANY SINCE
- -------------------------------------- --- --------------------------------------------------------- -----------
<S> <C> <C> <C>
Charlie Bass.......................... 56 Chairman of the Board and Chief Executive Officer 1992
Micheal L. Gifford.................... 40 Executive Vice President and Director 1992
Jack C. Carsten....................... 56 Director 1993
Edward M. Esber, Jr................... 46 Director Nominee
Gianluca Rattazzi..................... 45 Director Nominee
Lars Lindgren......................... 42 Director Nominee
</TABLE>

All directors hold office until the next Annual Meeting of Stockholders of
the Company or until their successors have been elected. There are no family
relationships among any of the directors or executive officers of the Company.

CHARLIE BASS co-founded the Company in March 1992, and has been the Chairman
of the Board of Directors from such time to the present. Dr. Bass also served as
the Company's interim Chief Executive Officer during January and February 1996
and from April 1997 until January 1998, at which time Mr. Bass assumed the
position of Chief Executive Officer. Dr. Bass has been the General Partner of
Bass Associates, a venture capital firm, since September 1989. Dr. Bass
currently serves as a director of Meridian Data, Inc., SoloPoint, Inc. and
several private companies. Dr. Bass is also a consulting professor of electrical
engineering at Stanford University. Dr. Bass holds a Ph.D. in electrical
engineering from the University of Hawaii.

MICHEAL L. GIFFORD has been a director of the Company since its inception in
March 1992 and has served as Executive Vice President since October 1994. Mr.
Gifford served as President of the Company from its inception in March 1992 to
September 1994, and as the Company's Chief Executive Officer from March 1992 to
June 1994. From December 1986 to December 1991, Mr. Gifford served as a director
and as Director of Sales and Marketing for Tidewater Associates, a computer
consulting and computer product development company. Prior to working for
Tidewater Associates, Mr. Gifford co-founded and was President of Gifford
Computer Systems, a computer network integration company. Mr. Gifford received a
B.S. in Mechanical Engineering from the University of California at Berkeley.

JACK C. CARSTEN has been a director of the Company since May 1993. He also
served in a consulting capacity as the interim Chief Executive Officer of the
Company from July 1994 to September 1994. Mr. Carsten owns and operates
Technology Investments, a venture capital firm. Prior to founding Technology
Investments, Mr. Carsten was a general partner of U.S. Venture Partners, a
venture capital firm. Prior to U.S. Venture Partners, he held senior management
positions at Intel Corporation, most recently serving as Senior Vice President
and General Manager of the Component Group, Microcomputer Group and ASIC
Components Group. He received an A.B. in Physics from Duke University.

EDWARD M. ESBER, JR. is not presently serving as a director of the Company.
Mr. Esber has served as a director and as Chairman of SoloPoint, Inc., a
publicly-held communications management products company, since October 1995.
From October 1995 to March 1998, Mr. Esber also served as Chief

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Executive Officer of SoloPoint, Inc. From May 1994 to June 1995, Mr. Esber was
Chairman, Chief Executive Officer and President of Creative Insights, Inc., a
computer toys company. From May 1993 to June 1994, Mr. Esber was President and
Chief Operating Officer of Creative Labs, Inc., the US subsidiary of Creative
Technology Ltd. Mr. Esber has served as a director of Quantum Corp. since 1988,
Integrated Circuit Systems Technology since 1997 and Borealis Corporation since
1996. Mr. Esber holds a bachelor's degree in computer engineering from Case
Western Reserve University, a master's degree in electrical engineering from
Syracuse University and an M.B.A. in general management from Harvard Business
School.

GIANLUCA RATTAZZI is not presently a director of the Company. Dr. Rattazzi
co-founded Meridian Data, Inc. ("Meridian"), a provider of CD ROM networking
software and systems, in July 1988. He has served as President and a director of
Meridian since inception and was appointed Chief Executive Officer of Meridian
in October 1992. From 1985 to 1988, Dr. Rattazzi held various executive level
positions at Virtual Microsystems, Inc., a computer peripheral networking
company, most recently as President. Dr. Rattazzi holds an M.S. degree in
Electrical Engineering and Computer Science from the University of California,
Berkeley, and a Ph.D. in Physics from the University of Rome, Italy.

LARS LINDGREN is not presently a director of the Company. Mr. Lindgren
currently serves as the Managing Director of ForetagsByggarna
("ForetagsByggarna"), a private venture capital firm which Mr. Lindgren founded
in 1991. Mr. Lindgren has been actively involved in the venture capital industry
in Sweden and to a lesser extent throughout Europe since 1984, and has founded a
number of companies including Campanius Venture, a venture capital concern of
which Mr. Lindgren continues to serve as the managing partner, ForetagsByggarna,
MiniDoc, a publicly traded company in Sweden that develops information
technology system for the pharmaceutical industry, and Nykoping Strand, a real
estate company, and also founded the Swedish Venture Capital Association. Mr.
Lindgren has served on the board of directors for numerous companies and is
presently on the boards of JKL, a Swedish public relations firm, Campanius
Venture, ForetagsByggarna and MiniDoc. Mr. Lindgren received an M.B.A. from the
Stockholm School of Economics in 1984 and has also studied at the Sloan School
of Management at M.I.T.

BOARD MEETING AND COMMITTEES

The Board of Directors of the Company held a total of 8 regular meetings and
5 telephonic meetings during fiscal 1997. No director attended fewer than 75% of
the meetings of the Board of Directors and committees thereof, if any, upon
which such director served. The Board of Directors has a Compensation Committee
and an Audit Committee. The Board of Directors has no nominating committee or
any committee performing such functions.

The Compensation Committee, which consisted of Gary Kalbach and Jack Carsten
during fiscal 1997, did not meet or act by written consent during the fiscal
year. This Committee is responsible for determining salaries, incentives and
other forms of compensation for directors and officers of the Company and
administers various incentive compensation and benefit plans. During fiscal
1997, the Board, as a whole (excluding any interested parties), acted with
respect to such decisions. Mr. Kalbach will resign from the Company's
Compensation Committee effective upon his resignation from the Board of
Directors, and his vacancy on the Compensation Committee will be filled by Mr.
Rattazzi.

The Audit Committee, which consisted of Messrs. Kalbach and Carsten at the
end of fiscal 1997, did not meet during the fiscal year. This Committee is
responsible for overseeing actions taken by the Company's independent auditors
and reviews the Company's internal financial controls. During fiscal 1997, the
Board, as a whole, also acted with respect to such responsibilities delegated to
the Audit Committee. Mr. Kalbach will resign from the Company's Audit Committee
effective upon his resignation from the Board, and his vacancy on the Audit
Committee will be filled by Mr. Lindgren.

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COMPENSATION COMMITTEE INTERLOCKS

None of the members of the Compensation Committee of the Board was at any
time during fiscal 1997 an officer or employee of the Company. No member of the
Compensation Committee or executive officer of the Company has a relationship
that would constitute an interlocking relationship with executive officers or
directors of another entity.

DIRECTOR COMPENSATION

Directors have not received any cash compensation for their service as
Directors of the Company, but are reimbursed for expenses incurred in connection
with attending Board or Committee meetings. Beginning in 1998, each director who
is not a salaried officer or employee of the Company will receive a fee of
$1,500 for attendance at each meeting of the Board of Directors. Furthermore,
the Company's Directors are entitled to participate in the Company's 1995 Stock
Option Plan, and during fiscal 1997 Messrs. Bass, Gifford, Kalbach and Carsten
were granted options to purchase 30,000, 32,500, 15,000 and 30,000,
respectively, shares of the Company's Common Stock, each at an option exercise
price of $0.56 per share, the fair market value of the Company's Common Stock on
the date of grant. In January 1998, options to purchase 30,767, 35,745, 5,767
and 5,767 shares, respectively, at $1.55 per share, held by Messrs. Bass,
Gifford, Kalbach and Carsten were canceled and exchanged for new options with an
exercise price of $0.46 per share. The new option continues the vesting schedule
of the old option except that vested options on the date of the exchange vest in
equal monthly increments over the six months following the exchange. See
"Executive Compensation and Other Matters--Executive Compensation."

PROPOSAL TWO
APPROVAL OF AMENDMENT TO THE 1995 STOCK PLAN

At the Annual Meeting, stockholders are being asked to approve an amendment
to the Company's 1995 Stock Plan (the "1995 Plan") which would increase the
number of shares of Common Stock ("Shares") reserved for issuance thereunder by
1,000,000 shares to 1,735,000 shares.

The foregoing amendment was approved by the Board of Directors in March,
1998. The adoption of the 1995 Plan was approved by the Board of Directors in
April 1995 and by the stockholders in May 1995. As of April 1, 1998, no shares
of Common Stock had been issued pursuant to option exercises under the 1995
Plan, options to purchase an aggregate of 716,112 shares were outstanding and
18,888 shares (exclusive of the 1,000,000 shares subject to stockholder approval
at the Annual Meeting) were available for future grant under the 1995 Plan.

The purpose of the 1995 Plan is to retain, motivate and reward employees and
executives by providing them with long-term equity participation in the Company
relating directly to the financial performance and long-term growth of the
Company. The purpose of the amendment to the 1995 Plan is to ensure the
availability of Common Stock for options to existing key executives, employees
and consultants and to attract and retain qualified personnel necessary for the
growth of the Company. In this regard, it is anticipated that, if the amendment
is approved by the stockholders, a significant portion of the 1,000,000
additional shares available for options under the 1995 Plan will be allocated to
options to be granted to the Company's Chairman and Chief Executive Officer,
Charlie Bass, and to a lesser extent to the other executive officers of the
Company. The Board believes that such an allocation is in the best interests of
the Company to retain and motivate its executive officers, particularly Charlie
Bass, who has received no cash compensation for his services as Chief Executive
Officer since April 1997. Since each of the Company's executive officers and
directors is eligible to receive options under the 1995 Plan, each such officer
and director has a material financial interest in the proposed amendment to the
1995 Plan.

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SUMMARY OF THE 1995 PLAN

GENERAL. The purpose of the 1995 Plan is to attract and retain the best
available personnel for positions of substantial responsibility with the
Company, to provide additional incentive to the employees, directors and
consultants of the Company and to promote the success of the Company's business.
Options and stock purchase rights may be granted under the 1995 Plan. Options
granted under the 1995 Plan may be either "incentive stock options," as defined
in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
nonstatutory stock options.

ADMINISTRATION. The Plan may generally be administered by the Board or the
Committee appointed by the Board (as applicable, the "Administrator"). The
Administrator may make any determinations deemed necessary or advisable for the
1995 Plan.

ELIGIBILITY. Nonstatutory stock options and stock purchase rights may be
granted under the 1995 Plan to employees, directors and consultants of the
Company and any parent or subsidiary of the Company. Incentive stock options may
be granted only to employees. The Administrator, in its discretion, selects the
employees, directors and consultants to whom options and stock purchase rights
may be granted, the time or times at which such options and stock purchase
rights shall be granted, and the number of shares subject to each such grant.

LIMITATIONS. Section 162(m) of the Code places limits on the deductibility
for federal income tax purposes of compensation paid to certain executive
officers of the Company. In order to preserve the Company's ability to deduct
the compensation income associated with options and stock purchase rights
granted to such persons, the 1995 Plan provides that no employee, director or
consultant may be granted, in any fiscal year of the Company, options and stock
purchase rights to purchase more than 750,000 shares of Common Stock.

TERMS AND CONDITIONS OF OPTIONS. Each option is evidenced by a stock option
agreement between the Company and the optionee, and is subject to the following
additional terms and conditions:

(a) EXERCISE PRICE. The Administrator determines the exercise price of
options at the time the options are granted. The exercise price of an incentive
stock option may not be less than 100% of the fair market value of the Common
Stock on the date such option is granted; provided, however, the exercise price
of an incentive stock option granted to a 10% stockholder may not be less than
110% of the fair market value of the Common Stock on the date such option is
granted. The fair market value of the Common Stock is generally determined with
reference to the closing sale price for the Common Stock (or the closing bid if
no sales were reported) on the last market trading day prior to the date the
option is granted.

(b) EXERCISE OF OPTION; FORM OF CONSIDERATION. The Administrator
determines when options become exercisable, and may in its discretion,
accelerate the vesting of any outstanding option. The means of payment for
shares issued upon exercise of an option is specified in each option agreement.
The Plan permits payment to be made by cash, check, promissory note, other
shares of Common Stock of the Company (with some restrictions), cashless
exercises, a reduction in the amount of any Company liability to the optionee,
any other form of consideration permitted by applicable law, or any combination
thereof.

(c) TERM OF OPTION. The term of an incentive stock option may be no more
than ten (10) years from the date of grant; provided that in the case of an
incentive stock option granted to a 10% stockholder, the term of the option may
be no more than five (5) years from the date of grant. No option may be
exercised after the expiration of its term.

(d) TERMINATION OF EMPLOYMENT. If an optionee's employment or consulting
relationship terminates for any reason (including death or disability), then all
options held by the optionee under the 1995 Plan expire on the earlier of (i)
the date set forth in his or her notice of grant or (ii) the expiration date of
such option. The Plan and the option agreement may provide for a longer period
of time for the option to be

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exercised after the optionee's death or disability than for other terminations.
To the extent the option is exercisable at the time of such termination, the
optionee (or the optionee's estate or the person who acquires the right to
exercise the option by bequest or inheritance) may exercise all or part of his
or her option at any time before termination.

(e) NONTRANSFERABILITY OF OPTIONS: Unless otherwise determined by the
Administrator, options granted under the 1995 Plan are not transferable other
than by will or the laws of descent and distribution, and may be exercised
during the optionee's lifetime only by the optionee.

(f) OTHER PROVISIONS: The stock option agreement may contain other terms,
provisions and conditions not inconsistent with the 1995 Plan as may be
determined by the Administrator.

STOCK PURCHASE RIGHTS. In the case of SPRs, unless the Administrator
determines otherwise, the Restricted Stock Purchase Agreement shall grant the
Company a repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's employment with the Company for any reason
(including death or disability). The purchase price for Shares repurchased
pursuant to the Restricted Stock Purchase Agreement shall be the original price
paid by the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at a rate determined
by the Administrator.

ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event that the stock of
the Company changes by reason of any stock split, reverse stock split, stock
dividend, combination, reclassification or other similar change in the capital
structure of the Company effected without the receipt of consideration,
appropriate adjustments shall be made in the number and class of shares of stock
subject to the 1995 Plan, the number and class of shares of stock subject to any
option or stock purchase right outstanding under the 1995 Plan, and the exercise
price of any such outstanding option or stock purchase right.

In the event of a liquidation or dissolution, any unexercised options or
stock purchase rights will terminate.

RIGHTS UPON A CHANGE OF CONTROL. Upon a change of control, all optionees'
rights to purchase stock shall be immediately vested and be fully exercisable on
the earlier of: (i) the date immediately preceding such change in control in the
event that the 1995 Plan is terminated or canceled, or in the event any
successor to the Company fails to assume the 1995 Plan upon becoming a successor
to the Company; (ii) the date immediately preceding an involuntary termination
of the optionee occurring upon or after the change in control; or (iii) as of
the date one year following the change in control, provided that the optionee
shall continuously remain an employee of the Company throughout such one-year
period.

AMENDMENT AND TERMINATION OF THE 1995 PLAN. The Board may amend, alter,
suspend or terminate the 1995 Plan, or any part thereof, at any time and for any
reason. However, the Company shall obtain stockholder approval for any amendment
to the 1995 Plan to the extent necessary and desirable to comply with applicable
law. No such action by the Board or stockholders may alter or impair any option
or stock purchase right previously granted under the 1995 Plan without the
written consent of the optionee. Unless terminated earlier, the 1995 Plan shall
terminate ten years from the date of its approval by the stockholders or the
Board of the Company, whichever is earlier.

FEDERAL INCOME TAX CONSEQUENCES

INCENTIVE STOCK OPTIONS. An optionee who is granted an incentive stock
option does not recognize taxable income at the time the option is granted or
upon its exercise, although the exercise is an adjustment item for alternative
minimum tax purposes and may subject the optionee to the alternative minimum
tax. Upon a disposition of the shares more than two years after grant of the
option and one year after exercise of the option, any gain or loss is treated as
long-term capital gain or loss. Net capital gains on shares held between 12 and
18 months may be taxed at a maximum federal rate of 28%, while net capital

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gains on shares held for more than 18 months may be taxed at a maximum federal
rate of 20%. Capital losses are allowed in full against capital gains and up to
$3,000 against other income. If these holding periods are not satisfied, the
optionee recognizes ordinary income at the time of disposition equal to the
difference between the exercise price and the lower of (i) the fair market value
of the shares at the date of the option exercise or (ii) the sale price of the
shares. Any gain or loss recognized on such a premature disposition of the
shares in excess of the amount treated as ordinary income is treated as
long-term or short-term capital gain or loss, depending on the holding period. A
different rule for measuring ordinary income upon such a premature disposition
may apply if the optionee is also an officer, director, or 10% stockholder of
the Company. Unless limited by Section 162(m) of the Code, the Company is
entitled to a deduction in the same amount as the ordinary income recognized by
the optionee.

NONSTATUTORY STOCK OPTIONS. An optionee does not recognize any taxable
income at the time he or she is granted a nonstatutory stock option. Upon
exercise, the optionee recognizes taxable income generally measured by the
excess of the then fair market value of the shares over the exercise price. Any
taxable income recognized in connection with an option exercise by an employee
of the Company is subject to tax withholding by the Company. Unless limited by
Section 162(m) of the Code, the Company is entitled to a deduction in the same
amount as the ordinary income recognized by the optionee. Upon a disposition of
such shares by the optionee, any difference between the sale price and the
optionee's exercise price, to the extent not recognized as taxable income as
provided above, is treated as long-term or short-term capital gain or loss,
depending on the holding period. Net capital gains on shares held between 12 and
18 months may be taxed at a maximum federal rate of 28%, while net capital gains
on shares held for more than 18 months may be taxed at a maximum federal rate of
20%. Capital losses are allowed in full against capital gains and up to $3,000
against other income.

STOCK PURCHASE RIGHTS. Stock purchase rights will generally be taxed in the
same manner as nonstatutory stock options. However, restricted stock is
generally purchased upon the exercise of a stock purchase right. At the time of
purchase, restricted stock is subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code, because the Company may repurchase
the stock when the purchaser ceases to provide services to the Company. As a
result of this substantial risk of forfeiture, the purchaser will not recognize
ordinary income at the time of purchase. Instead, the purchaser will recognize
ordinary income on the dates when the stock is no longer subject to a
substantial risk of forfeiture (i.e., when the Company's right of repurchase
lapses). The purchaser's ordinary income is measured as the difference between
the purchase price and the fair market value of the stock on the date the stock
is no longer subject to right of repurchase.

The purchaser may accelerate to the date of purchase his or her recognition
of ordinary income, if any, and begin his or her capital gains holding period by
timely filing, (i.e, within thirty days of the purchase), an election pursuant
to Section 83(b) of the Code. In such event, the ordinary income recognized, if
any, is measured as the difference between the purchase price and the fair
market value of the stock on the date of purchase, and the capital gain holding
period commences on such date. The ordinary income recognized by a purchaser who
is an employee will be subject to tax withholding by the Company. Different
rules may apply if the purchaser is also an officer, director, or 10%
stockholder of the Company.

THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION
UPON OPTIONEES, HOLDERS OF STOCK PURCHASE RIGHTS, AND THE COMPANY WITH RESPECT
TO THE GRANT AND EXERCISE OF OPTIONS AND STOCK PURCHASE RIGHTS UNDER THE 1995
PLAN. IT DOES NOT PURPORT TO BE COMPLETE, AND DOES NOT DISCUSS THE TAX
CONSEQUENCES OF THE EMPLOYEE'S OR CONSULTANT'S DEATH OR THE PROVISIONS OF THE
INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE
EMPLOYEE OR CONSULTANT MAY RESIDE.

8
<PAGE>
VOTE REQUIRED AND RECOMMENDATION

At the Annual Meeting, the stockholders are being asked to approve the
amendment to the 1995 Plan. The affirmative vote of the holders of a majority of
the shares entitled to vote at the Annual Meeting will be required to approve
the amendment to the 1995 Plan.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
AMENDMENT TO THE COMPANY'S 1995 PLAN.

9
<PAGE>
PROPOSAL THREE
APPROVAL TO EFFECT A REVERSE STOCK SPLIT

The Board of Directors believes that it is in the best interests of the
Company and its stockholders to effect a reverse stock split (the "Reverse Stock
Split") of one share of reconstituted Common Stock for every three shares of
Common Stock that are currently issued and outstanding (the "Split Factor") in
the near future. The precise timing of the Reverse Stock Split will be
determined by the Board of Directors upon its consideration of when the Reverse
Stock Split serves the best interests of the Company and the stockholders.
Accordingly, the Board of Directors must reserve the right to decide at a later
date to effect the Reverse Stock Split by amending the Company's Amended and
Restated Certificate of Incorporation.

In order to effect the Reverse Stock Split, the stockholders are being asked
to approve an Amendment to the Company's Amended and Restated Certificate of
Incorporation (the "Certificate Amendment"). The Board of Directors of the
Company believes that the Reverse Stock Split is in the best interests of both
the Company and its stockholders, and has unanimously approved the Certificate
Amendment. The Board of Directors reserves the right, notwithstanding
stockholder approval and without further action by the stockholders, to decide
not to proceed with the Reverse Stock Split, if, at any time prior to their
effectiveness it determines, in its sole discretion, that it is no longer in the
best interests of the Company and its stockholders.

EFFECT OF REVERSE STOCK SPLIT

The Company is currently authorized to issue 15,000,000 shares of Common
Stock, of which 7,187,632 shares were issued and outstanding as of the Record
Date. The Company is further authorized to issue 3,000,000 shares of Preferred
Stock, of which 12,500 shares of Series B Convertible Preferred Stock
(convertible into 1,250,000 shares of Common Stock) are outstanding, 8,850
shares of Series B-1 Convertible Preferred Stock (convertible into 885,000
shares of Common Stock) are outstanding, 8,715 shares of Series B-2 Convertible
Preferred Stock (convertible into 871,500 shares of Common Stock) are
outstanding, 95,037 shares of Series C Convertible Preferred Stock (convertible
into 2,014,778 shares of Common Stock) are outstanding, and 51,574 shares of
Series C-1 Convertible Preferred Stock (convertible into 546,684 shares of
Common Stock) are outstanding as of the Record Date. In addition, the Company
has issued outstanding warrants, after giving effect to anti-dilution
adjustments, to purchase an aggregate of 3,079,169 shares of Common Stock and
stock options under the Company's stock plans to purchase an aggregate of
793,883 shares of Common Stock and has reserved an additional 1,096,950 shares
of Common Stock for the conversion of the balance of subordinated notes
outstanding and accrued interest, the payment of preferred stock dividends and
the exercise of future option grants. Accordingly, the Company's authorized
Common Stock of 15,000,000 is not sufficient to provide for the issuance of all
of the shares of Common Stock reserved for issuance upon exercise or conversion
of outstanding options and warrants and convertible preferred stock. If
effected, the Reverse Stock Split would reduce the number of outstanding shares
of Common Stock to approximately 2,395,877 based on the Split Factor and will
reduce the number of shares reserved for issuance upon exercise or conversion of
outstanding options, warrants and Preferred Stock to approximately 3,512,654,
but will not affect the number of authorized shares of Common Stock though the
number of shares outstanding will decrease. Therefore, the Company, as a result
of the Reverse Stock Split, will have more shares authorized for issuance than
is currently available. IN ADDITION, THE PROPOSED REVERSE STOCK SPLIT WOULD NOT
AFFECT ANY STOCKHOLDER'S PROPORTIONATE EQUITY INTEREST IN THE COMPANY. The
Reverse Stock Split will not affect the number of shares of Preferred Stock
authorized, though the number of shares of Common Stock into which such shares
of Preferred Stock is convertible will be proportionately decreased. None of the
rights currently accruing to holders of Common Stock or Preferred Stock will be
affected by the Reverse Stock Split.

10
<PAGE>
The following table illustrates the principal effects of the Reverse Stock
Split of the Company's Common Stock (without giving effect to any adjustments
for fractional shares):

<TABLE>
<CAPTION>
NUMBER OF SHARES
AS OF THE RECORD DATE
-----------------------------
PRIOR TO AFTER
REVERSE REVERSE
STOCK SPLIT STOCK SPLIT
--------------- ------------
<S> <C> <C>
AUTHORIZED
Preferred Stock............................................. 3,000,000 3,000,000
Common Stock................................................ 15,000,000 15,000,000

OUTSTANDING
Preferred Stock............................................. 176,676 176,676
Common Stock................................................ 7,187,632 2,395,877*
Shares of Common Stock Reserved for Issuance Upon Exercise
or Conversion of Outstanding Preferred Stock, Options and
Warrants.................................................. 10,537,964 3,512,654*
</TABLE>

- ------------------------

* Actual numbers may vary slightly as a result of the payment of cash for
fractional shares outstanding after the Reverse Stock Split. See "Execution
and Consequences of Reverse Stock Split--Payment for Fractional Shares."

BACKGROUND REASONS FOR THE PROPOSAL

The Board of Directors believes it to be in the Company's interest to effect
the Reverse Stock Split primarily because the potential increase in the price
per share of the Common Stock resulting therefrom will have a positive effect on
the liquidity of the Common Stock. The Pacific Exchange, which is the primary
trading market for the Company's Common Stock, requires that listed securities
maintain a bid price of at least $1 per share for a majority of business days
for six months. The price per share of the Common Stock has recently been
trading at levels that satisfy the minimum required by the Pacific Exchange (the
"Minimum Listed Share Price Standards"); however, the price per share has been
below the Minimum Listed Share Price Standards at various times during the last
year. The Board of Directors believes that the potential increase in the price
per share of the Common Stock resulting from the Reverse Stock Split will render
the Company in compliance with the Minimum Listed Share Price Standards of the
Pacific Exchange. Notwithstanding the Company's compliance with the minimum
listing share price standards of the Pacific Exchange, the Company has not been
in compliance with the net tangible asset or net work requirements of the
Pacific Exchange since fiscal 1996 and has, therefore, been subject to possible
delisting procedures since that time. In March 1998, the Pacific Exchange
granted the Company an extension to bring itself into compliance with the
continued listing criteria and advise Socket that it would next review Socket's
continued qualification for listing in June 1998. Although the Board believes
that the reverse stock split would render the Company in compliance with the
minimum listed share price standards of the Pacific Exchange, the Company will
need to raise additional equity capital in the quarter ended June 30, 1998 in
order to comply with the Pacific Exchange net tangible asset or net worth
requirements, and there can be no assurance that the Company will be successful
in doing so. In that case, there can be no assurance that the Pacific Exchange
will not decide to initiate delisting proceedings against the Company. If the
Company's stock becomes delisted from the Pacific Exchange, the Company will be
subject to the "penny stock" rules of the Securities and Exchange Commission and
therefore an investor will find it more difficult to dispose of, or obtain
accurate quotations as to the price of the Company securities.

The Board of Directors further believes that this action may increase the
market value of the Company's Common Stock, thus enhancing the marketability of
the Company's Common Stock to the financial community and the investing public
at large. The Board of Directors believes that the relatively

11
<PAGE>
low per share fair market value of the Common Stock, when compared with the
market prices of the common stock of publicly-held companies in the same or
comparable industries, impairs the marketability of the Common Stock and creates
a negative impression with respect to the Company. These factors adversely
affect not only the liquidity of the Common Stock, but also the Company's
ability to raise capital through further sales of equity securities.

Additionally, the Board of Directors believes that this action may improve
the liquidity of the Company's Common Stock. The policies and practices of many
brokerage houses tend to discourage brokers within those firms from dealing in
lower-priced stocks. Some of such policies and practices pertain to the payment
of broker's commissions and to time-consuming procedures that make handling of
lower-priced stocks economically unattractive to brokers. The structure of
trading commissions also tends to have an adverse impact upon holders of
lower-priced stock because the brokerage commission payable on its sale
generally represents a higher percentage of the sales price than on
higher-priced stock.

The Board is hopeful that the Reverse Stock Split will result in a trading
price for the Company's Common Stock that will better suit the preferences of
institutional investors and brokerage firms described above and mitigate the
adverse impact of trading commissions on the potential market for the Company's
shares. HOWEVER, THERE CAN BE NO ASSURANCE THAT THE INCREASED MARKET PRICE OF
THE COMMON STOCK AFTER THE REVERSE STOCK SPLIT WILL ENHANCE THE AGGREGATE
CAPITALIZATION OF THE COMPANY OR IMPROVE THE LIQUIDITY OF THE COMPANY'S STOCK.

The Company is not aware of any current efforts to accumulate Common Stock
or obtain control of the Company, and the Reverse Stock Split is not intended to
be an anti-takeover device. The Reverse Stock Split is being proposed with a
view toward enhancing marketability of the Company's Common Stock by obtaining a
Common Stock price in a range more acceptable to the investment community.

EXECUTION AND CONSEQUENCES OF REVERSE STOCK SPLIT

EXCHANGE OF STOCK CERTIFICATES

Each stock certificate representing issued and outstanding shares of Common
Stock prior to the effective date of the Reverse Stock Split will, after such
effective date, represent the appropriate number of shares of Common Stock
reflecting the Reverse Stock Split. IT WILL NOT BE NECESSARY FOR STOCKHOLDERS TO
EXCHANGE THEIR EXISTING STOCK CERTIFICATES. However, stockholders may exchange
their certificates if they so choose.

PAYMENT FOR FRACTIONAL SHARES

No scrip or fractional certificates will be issued in the Reverse Stock
Split. Instead, stockholders who would be entitled to receive fractional shares
because they hold a number of shares not evenly divisible by the Split Factor
will be entitled to receive a cash payment in lieu thereof at a price equal to
the fair market value of the stock as determined by the Board on the effective
date of the Reverse Stock Split. The ownership of a fractional interest will not
give the holder thereof any voting, dividend or other rights except to receive
payment therefor as described herein.

Stockholders should be aware that, under the escheat laws of the various
jurisdictions where stockholders reside, where the Company is domiciled and
where funds will be deposited, sums due for fractional interests that are not
timely claimed after the effective date of the Reverse Stock Split may be
required to be paid to the designated agent for each such jurisdiction, unless
correspondence has been received by the Company or its transfer agent, as the
case may be, concerning ownership of such funds within the time permitted in
such jurisdictions. Thereafter, stockholders otherwise entitled to receive such
funds will have to seek to obtain them directly from the state to which they are
paid.

12
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following description of federal income tax consequences of the Reverse
Stock Split is based on the Internal Revenue Code, the applicable Treasury
Regulations promulgated thereunder, judicial authority and current
administrative rulings and practices as in effect on the date of this Proxy
Statement. This discussion is for general information only and does not address
all the tax consequences that may be relevant to a particular stockholder (such
as non-resident aliens, broker-dealers or insurance companies). Furthermore, no
foreign, state or local tax consequences are discussed herein. ACCORDINGLY,
STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE
SPECIFIC TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT TO THEM.

The exchange of shares of stock for shares of post-split stock will not
result in recognition of gain or loss (except in the case of cash received for
fractional shares as described below). The holding period of the shares of
post-split stock will include the stockholder's holding period for the shares of
stock exchanged therefor, reduced by the tax basis allocable to the receipt of
cash in lieu of fractional shares.

A stockholder who receives cash in lieu of fractional shares will be treated
as if the Company has issued fractional shares to him or her and then
immediately redeemed them for cash. Such stockholder should generally recognize
gain or loss, as the case may be, measured by the difference between the amount
of cash received and the basis of such stockholder's pre-split stock allocable
to such fractional shares, had such fractional shares actually been issued. Such
gain or loss will be capital gain or loss (if such stock was held as a capital
asset), and any such capital gain or loss will generally be long-term capital
gain or loss to the extent such stockholder's holding period for his or her
stock exceeds 18 months.

VOTE REQUIRED

Approval of the Reverse Stock Split and adoption of the Certificate
Amendment require the affirmative vote of the holders of not less than a
majority of the outstanding shares of the Company's Common Stock. Abstentions
and broker non-votes will be counted as votes against adoption of the
Certificate Amendment. Any stockholder entitled to vote may vote part of his or
her shares in favor of the proposed Certificate Amendment and refrain from
voting shares against the proposed Certificate Amendment. In such a case, the
stockholder must specify the number of shares which he or she is voting
affirmatively or else it will be conclusively presumed that such stockholder
intended to vote all of his or her shares in favor the proposed Certificate
Amendment.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" ADOPTION OF THE PROPOSAL TO EFFECT A
REVERSE STOCK SPLIT OF THE COMPANY'S COMMON STOCK.

PROPOSAL FOUR
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors has selected Ernst & Young LLP, independent public
accountants, to audit the financial statements of the Company for the fiscal
year ending December 31, 1998, and recommends that stockholders vote for
ratification of such appointment. In the event of a negative vote on
ratification, the Board of Directors will reconsider its selection.

Ernst & Young LLP has audited the Company's financial statements annually
since 1992. Representatives of Ernst & Young LLP are expected to be present at
the meeting with the opportunity to make a statement if they desire to do so and
are expected to be available to respond to appropriate questions.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE
COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS

13
<PAGE>
MANAGEMENT

The current executive officers of the Company are as follows:

<TABLE>
<CAPTION>
NAME OF OFFICER AGE POSITION WITH THE COMPANY
- ----------------------------------------- --- ---------------------------------------------
<S> <C> <C>
Charlie Bass............................. 56 Chairman of the Board of Directors and Chief
Executive Officer
Micheal L. Gifford....................... 40 Executive Vice President and Director
David W. Dunlap.......................... 55 Vice President of Finance and Administration,
Chief Financial Officer and Secretary
Kevin J. Mills........................... 37 Vice President of Operations
</TABLE>

CHARLIE BASS co-founded the Company in March 1992, and has been the Chairman
of the Board of Directors from such time to the present. Dr. Bass also served as
the Company's interim Chief Executive Officer during January and February 1996
and from April 1997 until February 1998, at which time Mr. Bass assumed the
position of Chief Executive Officer. Dr. Bass has been the General Partner of
Bass Associates, a venture capital firm, since September 1989. Dr. Bass
currently serves as a director of Meridian Data, Inc., SoloPoint, Inc. and
several private companies. Dr. Bass is also a consulting professor of electrical
engineering at Stanford University. Dr. Bass holds a Ph.D. in electrical
engineering from the University of Hawaii.

DAVID W. DUNLAP has served as the Company's Vice President of Finance and
Administration and Chief Financial Officer since February 1995. Prior to joining
the Company, Mr. Dunlap served as Vice President of Finance and Administration
at Appian Technology Inc. ("Appian"), a semiconductor company, from September
1993 to February 1995. Appian filed a voluntary petition for bankruptcy under
Chapter 11 of the United States Bankruptcy Code in August 1994 in connection
with the sale of substantially all of its assets to Cirrus Logic, Inc. Mr.
Dunlap served as Vice President of Finance and Administration and Chief
Financial Officer at Mountain Network Solutions, Inc., a computer peripherals
manufacturing company, from March 1992 to September 1993. He is a certified
public accountant, and received an M.B.A. and a B.A. in Business Administration
from the University of California at Berkeley.

KEVIN J. MILLS has served as the Company's Vice President of Operations
since September 1993. Prior to joining the Company, Mr. Mills worked from
September 1987 to August 1993 at Logitech, Inc., a computer peripherals company,
serving most recently as Director of Operations. He received a B.E. in
Electronic Engineering from the University of Limerick, Ireland.

14
<PAGE>
EXECUTIVE COMPENSATION AND OTHER MATTERS

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth the compensation paid by the Company during the
fiscal years ended December 31, 1997, 1996 and 1995 to the Company's Chief
Executive Officer, and the two other executive officers whose total 1997 salary
and bonus exceeded $100,000 (collectively, the "Named Executive Officers"):

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
-------------
ANNUAL COMPENSATION SECURITIES
---------------------- UNDERLYING OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) OPTIONS COMPENSATION($) COMPENSATION($)
- --------------------------------- --------- --------- ----------- ------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Charlie Bass(2) ................. 1997 -- -- 30,000 -- --
Chief Executive Officer and 1996 -- -- 55,767(3) -- --
Director 1995 -- -- 3,367(3) -- --

Micheal L. Gifford .............. 1997 120,000 21,829 32,500 -- --
Executive Vice President 1996 120,000 22,211 35,745(3) -- --
and Director 1995 111,378 26,602 22,445(3) -- --

David W. Dunlap(4) .............. 1997 120,000 20,696 32,500 -- --
Vice President of Finance and 1996 120,000 18,775 15,914(3) -- --
Administration, Chief Financial 1995 100,008 21,232 21,341(3) 13,500 --
Officer and Secretary

1997 115,000 20,930 32,500 -- --
Kevin Mills ..................... 1996 99,999 22,291 15,914(3) -- --
Vice President of Operations 1995 91,042 19,111 7,014(3) -- --

Martin Levetin(5) ............... 1997 51,324 12,871 0 -- 116,183(5)
Former President, Chief 1996 134,333 62,197 126,600(3) 36,006(6) --
Executive Officer 1995 -- -- -- -- --

1997 86,250 28,339 20,000 -- 47,842(7)
John E. O'Leary(7) .............. 1996 50,750 22,969 -- -- --
Former Vice President of Sales 1995 -- -- -- -- --
</TABLE>

- ------------------------

(1) Represents cash bonuses earned for work performed during fiscal 1997.
Bonuses earned during the first three fiscal quarters of fiscal 1997 were
paid in fiscal 1997 whereas bonuses earned during the fourth fiscal quarter
of 1997 were paid in the first quarter of fiscal 1998.

(2) Dr. Bass served as Acting Chief Executive Officer from April 24, 1997
through January 1998, at which time Dr. Bass assumed the role of Chief
Executive Officer. In addition, Dr. Bass served in a consulting capacity as
Acting Chief Executive Officer of the Company from January 1, 1996 through
February 28, 1996. Bass Associates, of which Dr. Bass is General Partner, is
the record owner of the New Option. Dr. Bass disclaims beneficial ownership
of shares owned by Bass Associates except to the extent of his pecuniary
interest therein.

(3) Includes options granted pursuant to the Compensation Committee's decision
on December 18, 1996 to reprice certain outstanding options by exchanging
outstanding options for new options priced to reflect the market price of
the Company's Common Stock on the date of the exchange (the "1996

15
<PAGE>

Repricing"). The options were subsequently repriced on January 14, 1998
pursuant to a decision by the Board of Directors to exchange outstanding
options for new options priced to reflect the market price of the Company's
Common Stock on the date of the exchange (the "1998 Repricing"). The new
options continue the vesting schedule of the old options except with respect
to options vested as of the 1998 Repricing, which vest in equal monthly
increments over the six months following the 1998 Repricing.

(4) Mr. Dunlap joined the Company as Vice President of Finance and
Administration and Chief Financial Officer and Secretary on February 16,
1995. "Other Annual Compensation" for Mr. Dunlap consists of consulting fees
paid by the Company to Mr. Dunlap prior to his joining the Company as an
employee.

(5) Mr. Levetin resigned as the Company's President, Chief Executive Officer and
Director on April 24, 1997. Pursuant to his employment contract, Mr. Levetin
was paid $80,600 in severance salary, $24,375 in severance bonus and $5,207
for accrued vacation time. In addition, Mr. Levetin served in a consulting
capacity for which the Company paid Mr. Levetin $6,000.

(6) Consists of moving expenses incurred by Mr. Levetin (and reimbursed by the
Company) in connection with his relocation in order to begin work at the
Company.

(7) Mr. O'Leary resigned as the Company's Vice President of Sales on August 29,
1997. Mr. O'Leary was paid $32,500 in severance salary, $12,500 in severance
bonus and $2,842 for accrued vacation time.

OPTION GRANTS IN FISCAL 1997

The following table sets forth certain information for the fiscal year ended
December 31, 1997 with respect to each grant of stock options to the Named
Executive Officers. No stock appreciation rights were granted during such year.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS EXCERCISE
UNDERLYING GRANTED TO PRICE PER
OPTIONS EMPLOYEES IN SHARE EXPIRATION
NAME GRANTED FISCAL 1997(1) ($)(2) DATE
- ------------------------------------------- ----------- ----------------- ----------- -----------
<S> <C> <C> <C> <C>
Charlie Bass(3)............................ 30,000 7.9 0.56 07/01/07
Martin Levetin............................. -- -- -- --
Micheal L. Gifford......................... 32,500 8.5 0.56 07/01/07
John E. O'Leary(4)......................... 20,000 5.2 0.56 07/01/07
David W. Dunlap............................ 32,500 8.5 0.56 07/01/07
Kevin Mills................................ 32,500 8.5 0.56 07/01/07
</TABLE>

- ------------------------

(1) Based on options granted to employees, consultants and directors during
fiscal 1997 to purchase 381,620 shares of Common Stock.

(2) All options were granted at an exercise price equal to the fair market value
of the Company's Common Stock, as determined by the Board of Directors on
the date of grant.

(3) Dr. Bass assumed the position of Chairman and Acting Chief Executive Officer
effective April 24, 1997 and assumed the position Chief Executive Officer in
January 1998. Bass Associates, of which Dr. Bass is General Partner, is the
record owner of the stock options. However, Dr. Bass disclaims beneficial
ownership by Bass Associates except to the extent of his pecuniary interest
therein.

(4) Mr. O'Leary's employment with the Company was terminated on August 29, 1997.

16
<PAGE>
AGGREGATED OPTION EXERCISES IN FISCAL 1997
AND FISCAL YEAR-END OPTION VALUES

None of the Named Executive Officers exercised any stock options during
fiscal 1997. The following table provides information on the value of such
officers' unexercised options at December 31, 1997.

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1997 (1) DECEMBER 31, 1997 ($)(2)
-------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Charlie Bass.......................... 27,444 37,812 -- --
Martin Levetin........................ -- -- -- --
Micheal L. Gifford.................... 42,516 25,729 -- --
David W. Dunlap....................... 33,212 29,529 -- --
Kevin Mills........................... 36,246 28,535 -- --
</TABLE>

- ------------------------

(1) No Named Executive Officer exercised stock options during fiscal 1997.

(2) Based upon a final bid price, as of December 31, 1997, of $0.36 per share.

EMPLOYMENT CONTRACTS AND TERMINATION OF
EMPLOYMENT AND CHANGE-IN CONTROL ARRANGEMENTS

In February, 1998, the Company initiated a bonus plan pursuant to which the
Company will create a bonus pool in the amount of 10% of any consideration
payable by a buyer in a change of control transaction to be allocated to the
executive officers and such other employees the Board of Directors determine in
its discretion to include in such bonuses.

In October 1997, the Company entered into separate employment agreements
with Micheal Gifford, Kevin Mills and David Dunlap (each an "Executive" and
collectively the "Executives"). Pursuant to these agreements, which expire on
December 31, 2000, the employment of the Executives is terminable at will by
each Executive, respectively. If the Company terminates the Executive's
employment without cause, the Company shall pay the Executive (i) six months'
base salary regardless of whether he secures other employment during those six
months, (ii) health insurance until the earlier of the date of the Executive's
eligibility for the health insurance benefits provided by another employer or
the expiration of six months, (iii) the full bonus amount to which he would have
been entitled for the first quarter following termination and one-half of such
bonus amount for the second quarter following termination, and (iv) certain
other benefits including the ability to purchase at book value certain items of
Company property purchased by the Company for the Executive's use, which may
include a personal computer, a cellular phone, and other similar items.

John O'Leary's employment with the Company terminated in August 1997. In
July 1996, the Company entered into an employment agreement with Mr. O'Leary
(the "O'Leary Employment Agreement"). Pursuant to the O'Leary Employment
Agreement, the Company was obligated, upon the involuntary termination of Mr.
O'Leary's employment, to pay Mr. O'Leary (i) three months' salary, (ii) health
insurance until the earlier of the date of Mr. O'Leary's eligibility for the
health insurance benefits provided by another employer or the expiration of
three months, (iii) the full bonus amount on a pro rata basis to which Mr.
O'Leary would have been entitled to for the quarter in which Mr. O'Leary's
employment terminated plus one additional quarter's full target bonus amount.
Accordingly, the Company paid Mr. O'Leary $32,500 to cover its obligation to pay
three months' salary and $12,500 to cover its obligation to pay bonuses for the
quarter subsequent to Mr. O'Leary's termination.

Mr. Levetin resigned as the Company's President and Chief Executive Officer
on April 24, 1997. In February 1996, the Company entered into an employment
agreement with Mr. Levetin (the "Levetin

17
<PAGE>
Employment Agreement"). Pursuant to the Levetin Employment Agreement, the
Company was obligated, upon termination of Mr. Levetin's employment without
cause, to pay Mr. Levetin (i) six months' base salary regardless of whether he
secures other employment during those six months, (ii) health insurance until
the earlier of the date of Mr. Levetin's eligibility for the health insurance
benefits provided by another employer or the expiration of six months, (iii) the
full bonus amount to which he would have been entitled for the first quarter
following termination and one-half of such bonus amount for the second quarter
following termination, and (iv) certain other benefits including outplacement
services and the ability to purchase at book value certain items of Company
property purchased by the Company for Mr. Levetin's use, which included a
personal computer, a cellular phone, and other similar items. Accordingly, the
Company paid Mr. Levetin $80,000 to cover its obligation to pay six months'
salary and $24,375 to cover its obligation to pay bonuses for quarters
subsequent to Mr. Levetin's termination. In addition, Mr. Levetin availed
himself of the health insurance benefits set forth in the Levetin Employment
Agreement.

Additionally, under the 1995 Plan, all optionees' rights to purchase stock
shall, upon a change of control of the Company, be immediately vested and be
fully exercisable under certain circumstances. See "Proposal Two--Approval of
Amendment to the 1995 Plan--Summary of the 1995 Plan--Rights Upon a Change of
Control."

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

Pursuant to the Delaware General Corporation Law ("Delaware Law"), the
Company has adopted provisions in its Amended and Restated Certificate of
Incorporation which eliminate the personal liability of its directors and
officers to the Company and its stockholders for monetary damages for breach of
the directors' fiduciary duties in certain circumstances. The Company's Bylaws
require the Company to indemnify its directors, officers, employees and other
agents to the fullest extent permitted by law.

The Company has entered into indemnification agreements with each of its
current directors and officers which provide for indemnification to the fullest
extent permitted by Delaware Law, including in circumstances in which
indemnification and the advancement of expenses are discretionary under Delaware
Law. The Company believes that the limitation of liability provisions in its
Amended and Restated Certificate of Incorporation and the indemnification
agreements will enhance the Company's ability to continue to attract and retain
qualified individuals to serve as directors and officers.

There is no pending litigation or proceeding involving a director, officer
or employee of the Company to which the indemnification agreements would apply.

COMPENSATION OF DIRECTORS

See the information set forth above under "Proposal One--Election of
Directors--Nominees."

CERTAIN TRANSACTIONS

On various dates during 1997, the Company issued convertible subordinated
promissory notes to the Company's directors and certain significant
stockholders. The interest rate on the notes was 8% and all or part of the
principal and accrued interest was convertible into common shares of the Company
at the option of the holder anytime prior to their due date. No shares had been
converted as of December 31, 1997. A note to Cetronic for $500,000 due December
12, 1998 was secured by certain marketing and manufacturing rights for the FLEX
(a high speed paging protocol) and ERMES/POCSAG (a worldwide standard for
transmitting alphanumeric messages to paging receivers) products being developed
jointly by Socket and Cetronic. All other notes were unsecured. The notes were
subordinated to certain of the Company's bank financing arrangements. The due
dates on certain notes were extended and the conversion rates repriced during or
at the end of their original note terms. The following table summarizes the
notes, original issue dates, maturity dates, principal amounts and conversion
rates prior to the Note

18
<PAGE>
Conversion (as defined below) for each note held by a director or significant
stockholder exceeding $60,000:

<TABLE>
<CAPTION>
ORIGINAL PRINCIPAL CONVERSION
NOTE HOLDER ISSUE DATE MATURITY DATE AMOUNT RATE
- -------------------------------------- ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Cetronic Aktiebolag [Publ](1)......... 01/29/97 12/12/98 $ 500,000.00 $ 1.00
ForetagsByggarna BV(2)................ 02/14/97 08/14/98 140,000.00 0.50
Telenor Venture AS.................... 02/14/97 08/14/98 300,000.00 0.50
Bass Trust(3)......................... 06/12/97 12/12/98 60,000.00 0.53
Cetronic Aktiebolag [Publ](1)......... 06/12/97 12/12/98 500,000.00 0.50
Bass Trust(3)......................... 11/07/97 12/12/98 100,000.00 0.53
ForetagsByggarna BV(2)................ 11/07/97 11/07/98 75,000.00 0.50
Cetronic Aktiebolag [Publ](1)......... 11/24/97 12/12/98 100,000.00 0.50
</TABLE>

- ------------------------

(1) At the time of the issuance of this note, Lars Lindgren, a nominee for
Director of the Company, was Chairman of Cetronic Aktiebolag [Publ], a
position from which he has since resigned.

(2) Lars Lindgren, a nominee for Director of the Company, is a partner of
ForetagsByggarna BV.

(3) Charlie Bass, the Company's Chief Executive Officer and Chairman of the
Board of Directors, is the trustee of the Bass Trust.

Effective March 31, 1998, all of such notes listed above except for those
held by Bass Trust, converted into an aggregate of 81,576 shares of Series C
Convertible Preferred Stock, 51,574 shares of Series C-1 Convertible Preferred
Stock and 671,803 shares of Common Stock pursuant to an offer from the Company
(the "Note Conversion"). The Series C Convertible Preferred Stock and Series C-1
Convertible Preferred Stock presently held by the note holders above will
convert into 2,561,462 shares of Common Stock any time over a two year period at
the option of the holder. The Series C Convertible Preferred Stock and Series
C-1 Convertible Preferred Stock do not have voting rights. Dividends accrue at
an annual rate of 8%, and will also convert into Common Stock at the time the
Series C shares are converted.

Pursuant to the resignation of Martin Levetin on April 24, 1997 as the
Company's President and Chief Executive Officer, the Company paid Mr. Levetin
$80,600 to cover its obligation under the Levetin Employment Agreement to pay
Mr. Levetin six months' salary and $24,375 to cover its obligation to pay
bonuses for quarters subsequent to Mr. Levetin's termination.

Dr. Bass served in a consulting capacity as acting Chief Executive Officer
of the Company from January 1, 1996 through February 28, 1996. In consideration
for such consulting services, the Company granted Dr. Bass an option to purchase
25,000 shares of Common Stock at an exercise price of $4.25 and vesting over a
four-year period (the "Old Option"). In connection with the 1996 Repricing, Dr.
Bass received an option to purchase 25,000 shares (the "New Option") in exchange
for the cancellation of the Old Option. The New Option has an exercise price of
$1.55. The New Option continues the vesting schedule of the Old Option except
with respect to options vested as of the 1996 Repricing, which vest in equal
monthly increments over the 12 months following the 1996 Repricing. Bass
Associates, of which Dr. Bass is General Partner, is the record owner of the New
Option. The New Option was further repriced in the 1998 Repricing to an exercise
price of $0.46. Dr. Bass disclaims beneficial ownership of shares owned by Bass
Associates except to the extent of his pecuniary interest therein.

19
<PAGE>
All future affiliated transactions and/or loans between the Company and its
officers, directors and/or 5% stockholders will be on terms no less favorable
than could be obtained from unaffiliated third parties and will be approved by a
majority of the independent, disinterested directors of the Company.

SECURITY OWNERS OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth as of April 1, 1998, certain information with
respect to the beneficial ownership of the Common Stock of the Company on an
as-converted basis and of the Series B Preferred of the Company as to (i) each
person known by the Company to own beneficially more than 5% of the outstanding
shares of Common Stock, (ii) each director of the Company, (iii) each Named
Executive Officer, and (iv) all directors and officers of the Company as a
group. Except as otherwise noted, the named beneficial owner has sole voting and
investment power with respect to the shares shown.

<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
SHARES SHARES
BENEFICIALLY BENEFICIALLY
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1) OWNED(%)(2)
- -------------------------------------------------------------------------------------- ----------- ---------------
<S> <C> <C>
Explorer Partners and affiliated entities............................................. 3,472,029(3) 32.6
444 North Michigan Avenue, Suite 2910
Chicago, IL 60611
Cetronic Aktiebolag [Publ]............................................................ 1,816,224(4) 20.2
Box 153
SE - 864 22
Matfors, Sweden
ForetagsByggarna BV................................................................... 729,869(5) 9.5
A.J. Ernststraat 595H
1082 LD Amsterdam, The Netherlands
Telenor Venture AS.................................................................... 671,803 9.3
Post Boks 6701
St. Olavs Plass
0130 Oslo, Norway
El Dorado Ventures and affiliated entities............................................ 386,116(6) 5.3
2400 Sand Hill Road, Suite 100
Menlo Park, CA 94025
Lars Lindgren......................................................................... 729,869(7) 7.5
Charlie Bass.......................................................................... 691,705(8) 9.2
Martin Levetin........................................................................ -- *
Micheal L. Gifford.................................................................... 177,984(10) 2.5
Jack C. Carsten....................................................................... 154,267(11) 2.1
Edward M. Esber, Jr................................................................... -- *
Gianluca Rattazzi..................................................................... -- *
Kevin J. Mills........................................................................ 47,917(12) *
David W. Dunlap....................................................................... 45,078(13) *
All directors, nominees and officers as a group (10 persons).......................... 2,232,963(14) 27.0
</TABLE>

- ------------------------

* Less than 1%

20
<PAGE>
(1) To the Company's knowledge, the persons named in the table have sole voting
and investment power with respect to all shares of Common Stock shown as
beneficially owned by them, subject to community property laws where
applicable and the information contained in the footnotes to this table.

(2) Percentage ownership is based on 7,187,632 shares of Common Stock
outstanding on April 1, 1998 and any shares issuable pursuant to securities
convertible into or exercisable for shares of Common Stock by the person or
group in question on April 1, 1998 or within 60 days thereafter.

(3) Consists of 2,148,153 shares owned by Explorer Partners, L.L.C. ("Explorer
Partners") (including 1,250,000 shares of Common Stock issuable upon
conversion of the Series B Convertible Preferred Stock and 885,000 shares
of Common Stock issuable upon conversion of the Series B-1 Convertible
Preferred Stock); 872,901 shares owned by Explorer Partners II, L.L.C.
("Explorer Partners II") (including 871,500 shares of Common Stock issuable
upon conversion of Series B-2 Convertible Preferred Stock); and 450,975
shares of Common Stock owned by Explorer Fund Management, L.L.C. ("Explorer
Fund Management", and together with Explorer Partners and Explorer Partners
II, the "Explorer Entities") subject to warrants exercisable within 60 days
of April 1, 1998. Together, the Explorer Entities hold 100% of the shares
of Series B, B-1 and B-2 Convertible Preferred Stock outstanding. Explorer
Fund Management, as investment advisor to Explorer Partners has voting and
investment power of the shares directly owned by Explorer Partners.
Explorer Fund Management, as investment advisor to Explorer Partners II,
also has voting and investment power of the shares directly owned by
Explorer Partners II. Robert Holz, as Managing Director, and Timothy
Keating, as a member, of Explorer Fund Management, exercise shared voting
and investment control with respect to the shares held by Explorer Fund
Management. In addition, Messrs. Holz and Keating, in their respective
roles with Explorer Fund Management, exercise shared voting and investment
control with respect to the shares held by Explorer Partners and Explorer
Partners II. Messrs. Keating and Holz disclaim beneficial ownership of the
shares held by the Explorer Entities except to the extent of their
respective pecuniary interests therein.

(4) Represents 1,269,540 shares of Common Stock issuable upon conversion of
Series C Convertible Preferred Stock and 546,684 shares of Common Stock
issuable upon conversion of Series C-1 Convertible Preferred Stock within
60 days of April 1, 1998. Cetronic Aktiebolag [Publ] holds 63.0% and 100%
of the Series C and C-1 Convertible Preferred Stock outstanding.

(5) Includes 459,869 shares of Common Stock issuable upon conversion of Series
C Convertible Preferred Stock within 60 days of April 1, 1998.
ForetagsByggarna BV holds 22.8% of the Series C Convertible Preferred Stock
outstanding.

(6) Consists of 6,812 shares owned by El Dorado C&L Fund (including 178 shares
of Common Stock subject to warrants exercisable within 60 days of April 1,
1998, 268 shares of Common Stock subject to options exercisable within 60
days of April 1, 1998 and 364 shares of Common Stock subject to notes
convertible within 60 days of April 1, 1998); 367,932 shares owned by El
Dorado Ventures III (including 9,616 shares of Common Stock subject to
warrants exercisable within 60 days of April 1, 1998, 14,482 shares of
Common Stock subject to options exercisable within 60 days of April 1, 1998
and 19,641 shares of Common Stock subject to notes convertible within 60
days of April 1, 1998); and 11,372 shares owned by El Dorado Technology IV,
L.P. (including 206 shares of Common Stock subject to warrants exercisable
within 60 days of April 1, 1998, 459 shares of Common Stock subject to
options exercisable within 60 days of April 1, 1998 and 430 shares of
Common Stock subject to notes convertible within 60 days of April 1, 1998).

(7) Consists of the 729,869 shares owned by ForetagsByggarna BV set forth in
Note (5) above. Mr. Lindgren is a partner of ForetagsByggarna and may be
deemed to share voting and investment power with respect to those shares.
However, Mr. Lindgren disclaims beneficial ownership except to the extent
of his pecuniary interest therein.

21
<PAGE>
(8) Consists of 334,340 shares owned by Bass Associates (including 32,328
shares of Common Stock subject to options exercisable within 60 days of
April 1, 1998) and 357,365 shares owned by Bass Trust (including 326,964
shares of Common Stock subject to notes convertible within 60 days of April
1, 1998 and 5,000 shares of Common Stock subject to warrants exercisable
within 60 days of April 1, 1998). Dr. Bass is the General Partner of Bass
Associates and may be deemed to share voting and investment power with
respect to these shares. However, Dr. Bass disclaims beneficial ownership
of shares owned by Bass Associates except to the extent of his pecuniary
interest therein.

(9) Consists of the 386,116 shares owned by entitles affiliated with El Dorado
Ventures set forth in Note (6) above (the "El Dorado Entities"). Mr.
Kalbach is a General Partner of El Dorado Ventures and may be deemed to
share voting and investment power with respect to those shares. However,
Mr. Kalbach disclaims beneficial ownership of shares, warrants, options and
notes owned by the El Dorado Entities except to the extent of his pecuniary
interest therein.

(10) Includes 6,000 shares of Common Stock subject to warrants exercisable
within 60 days of April 1, 1998 and 46,018 shares of Common Stock subject
to options exercisable within 60 days of April 1, 1998.

(11) Includes 17,595 shares of Common Stock subject to options exercisable
within 60 days of April 1, 1998 and 60,227 shares of Common Stock subject
to notes convertible within 60 days of April 1, 1998.

(12) Represents shares of Common Stock subject to options exercisable within 60
days of April 1, 1998.

(13) Represents shares of Common Stock subject to options exercisable within 60
days of April 1, 1998.

(14) Includes 21,000 shares of Common Stock subject to warrants exercisable
within 60 days of April 1, 1998; 204,145 shares of Common Stock subject to
options exercisable within 60 days of April 1, 1998; 407,626 shares of
Common Stock subject to notes convertible within 60 days of April 1, 1998
and 459,896 shares of Common Stock issuable upon conversion of Series C
Convertible Preferred Stock within 60 days of April 1, 1998.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act ("Section 16(a)") requires the Company's
executive officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities to file reports of ownership
and changes in ownership with the Securities and Exchange Commission ("SEC") and
the National Association of Securities Dealers, Inc. Executive officers,
directors and greater than ten percent stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file. Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that, during fiscal 1997, all filing requirements applicable to its executive
officers and directors were complied with, except that one report on Form 4 was
filed late for each of Charlie Bass, Jack Carsten and Gary Kalbach.

OTHER MATTERS

The Company knows of no other matters to be submitted at the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of Proxy to vote the stock they represent as
the Board of Directors may recommend.

THE BOARD OF DIRECTORS

Dated: May 8, 1998

22
<PAGE>

APPENDIX A

SOCKET COMMUNICATIONS, INC.

1995 STOCK PLAN
(AS AMENDED, MARCH 18, 1998)

1. PURPOSES OF THE PLAN. The purposes of this Stock Plan are to attract
and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and
Consultants and to promote the success of the Company's business. Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant. Stock
Purchase Rights may also be granted under the Plan.

2. DEFINITIONS. As used herein, the following definitions shall apply:

(a) "ADMINISTRATOR" means the Board or any of its Committees, as
shall be administering the Plan, in accordance with Section 4 of the Plan.

(b) "APPLICABLE LAWS" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.

(d) "CODE" means the Internal Revenue Code of 1986, as amended.

(e) "COMMITTEE" means a committee of Directors appointed by the
Board in accordance with Section 4 of the Plan.

(f) "COMMON STOCK" means the common stock of the Company.

(g) "COMPANY" means Socket Communications, Inc., a Delaware
corporation.

(h) "CONSULTANT" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.

(i) "DIRECTOR" means a member of the Board.

(j) "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment

<PAGE>

upon expiration of a leave of absence approved by the Company is not so
guaranteed, on the 181st day of such leave any Incentive Stock Option held by
the Optionee shall cease to be treated as an Incentive Stock Option and shall
be treated for tax purposes as a Nonstatutory Stock Option. Neither service
as a Director nor the payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.

(k) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

(l) "FAIR MARKET VALUE" means, as of any date, the value of Common
Stock determined as follows:

(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or the Nasdaq SmallCap Market of the Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination as reported in
THE WALL STREET JOURNAL or such other source as the Administrator deems
reliable;

(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination; or, as reported in the WALL STREET JOURNAL or such other source
as the Administrator deems reliable.

(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.

(m) "INCENTIVE STOCK OPTION" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

(n) "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option.

(o) "NOTICE OF GRANT" means a written or electronic notice evidencing
certain terms and conditions of an individual Option or Stock Purchase Right
grant. The Notice of Grant is part of the Option Agreement.

(p) "OFFICER" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

(q) "OPTION" means a stock option granted pursuant to the Plan.

-2-
<PAGE>

(r) "OPTION AGREEMENT" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

(s) "OPTION EXCHANGE PROGRAM" means a program whereby outstanding
Options are surrendered in exchange for Options with a lower exercise price.

(t) "OPTIONED STOCK" means the Common Stock subject to an Option or a
Stock Purchase Right.

(u) "OPTIONEE" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.

(v) "PARENT" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

(w) "PLAN" means this 1995 Stock Plan, as amended.

(x) "RESTRICTED STOCK" means shares of Common Stock acquired pursuant
to a grant of Stock Purchase Rights under Section 11 below.

(y) "RESTRICTED STOCK PURCHASE AGREEMENT" means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted Stock
Purchase Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.

(z) "RULE 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

(aa) "SERVICE PROVIDER" means an Employee, Director or Consultant.

(bb) "SECTION 16(b)" means Section 16(b) of the Exchange Act.

(cc) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.

(dd) "STOCK PURCHASE RIGHT" means the right to purchase Common Stock
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.

(ee) "SUBSIDIARY" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.

-3-
<PAGE>

3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 13
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 1,735,000 Shares. The Shares may be authorized but
unissued, or reacquired Common Stock.

If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated). However, Shares that have actually been issued under the Plan,
upon exercise of either an Option or Stock Purchase Right, shall not be returned
to the Plan and shall not become available for future distribution under the
Plan, except that if Shares of Restricted Stock are repurchased by the Company
at their original purchase price, such Shares shall become available for future
grant under the Plan.

4. ADMINISTRATION OF THE PLAN.

(a) PROCEDURE.

(i) MULTIPLE ADMINISTRATIVE BODIES. The Plan may be
administered by different Committees with respect to different groups of Service
Providers.

(ii) SECTION 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

(iii) RULE 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions
contemplated hereunder shall be structured to satisfy the requirements for
exemption under Rule 16b-3.

(iv) OTHER ADMINISTRATION. Other than as provided above, the
Plan shall be administered by (A) the Board or (B) a Committee, which committee
shall be constituted to satisfy Applicable Laws.

(b) POWERS OF THE ADMINISTRATOR. Subject to the provisions of the
Plan and, in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority in
its discretion:

(i) to determine the Fair Market Value;

(ii) to select the Service Providers to whom Options and Stock
Purchase Rights may be granted hereunder;

(iii) to determine the number of Shares of Common Stock to be
covered by each Options and Stock Purchase Rights granted hereunder;

-4-
<PAGE>

(iv) to determine the number of Shares of Common Stock to be
covered by each such award granted hereunder;

(v) to approve forms of agreement for use under the Plan;

(vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any Option or Stock Purchase Right granted hereunder;

(vii) to reduce the exercise price of any Option or Stock
Purchase Right to the then current Fair Market Value if the Fair Market Value
of the Common Stock covered by such Option of Stock Purchase Right has
declined since the date the Option was granted;

(viii) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

(ix) to modify or amend each Option or Stock Purchase Right
(subject to Section 15(c) of the Plan), including the discretionary authority
to extend the post-termination exercisability period of Options longer than
is otherwise provided for in the Plan;

(x) to allow Optionees to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares to be issued upon
exercise of an Option or Stock Purchase Right that number of Shares having a
Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date
that the amount of tax to be withheld is to be determined. All elections by
an Optionee to have Shares withheld for this purpose shall be made in such
form and under such conditions as the Administrator may deem necessary or
advisable;

(xi) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator; and

(xii) to make all other determinations deemed necessary or
advisable for administering the Plan.

(c) EFFECT OF ADMINISTRATOR'S DECISION. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of Options or Stock Purchase
Rights.

-5-
<PAGE>

5. ELIGIBILITY.

(a) Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Service Providers. Incentive Stock Options may be granted only to
Employees.

6. LIMITATIONS.

(a) Each Option shall be designated in the Option Agreement as either
an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of Shares with respect to which Incentive Stock Options are exercisable
for the first time by the Optionee during any calendar year (under all plans of
the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall
be treated as Nonstatutory Stock Options. For purposes of this Section 6(a),
Incentive Stock Options shall be taken into account in the order in which they
were granted. The Fair Market Value of the Shares shall be determined as of the
time the Option with respect to such Shares is granted.

(b) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon any Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they interfere in
any way with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.

(i) No Service Provider shall be granted, in any fiscal year of
the Company, Options to purchase more than 750,000 Shares.

(ii) The foregoing limitation shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.

(iii) If an Option is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 13), the cancelled Option will be counted against the
limit set forth in Subsections (i) above. For this purpose, if the exercise
price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.

7. TERM OF PLAN. Subject to Section 18 of the Plan, the Plan shall
become effective upon its adoption by the Board. It shall continue in effect
for a term of ten (10) years unless earlier terminated under Section 15 of the
Plan.

8. TERM OF OPTION. The term of each Option shall be stated in the Option
Agreement; provided, however, that the term shall be no more than ten (10) years
from the date of grant thereof. In the case of an Incentive Stock Option
granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Incentive
Stock Option shall be

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<PAGE>

five (5) years from the date of grant or such shorter term as may be provided
in the Option Agreement.

9. OPTION EXERCISE PRICE AND CONSIDERATION.

(a) The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be determined by the Administrator, subject to
the following:

(i) In the case of an Incentive Stock Option

(A) granted to an Employee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.

(B) granted to any other Employee, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date
of grant.

(ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant;

(iii) Notwithstanding the foregoing, Options may be granted
with a per Share exercise price of less than 100% of the Fair Market Value
per Share on the date of grant pursuant to a merger or other corporate
transaction.

(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of (1) cash,
(2) check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six months on the date of surrender, and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which such Option shall be exercised, (5) delivery of a properly executed
exercise notice together with such other documentation as the Administrator and
a broker, if applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the
exercise price, (6) a reduction in the amount of Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement, or
(7) any combination of the foregoing methods of payment. In making its
determination as to the type of consideration to accept, the Administrator shall
consider if acceptance of such consideration may be reasonably expected to
benefit the Company.

-7-
<PAGE>

10. EXERCISE OF OPTION.

(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement, including performance criteria with respect to
the Company and/or the Optionee.

An Option may not be exercised for a fraction of a Share.

An Option shall be deemed exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option Agreement by the person entitled to exercise the Option and full payment
for the Shares with respect to which the Option is exercised has been received
by the Company. Full payment may, as authorized by the Administrator, consist
of any consideration and method of payment allowable under Section 8(b) hereof.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote, receive dividends or any other rights as a shareholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such Shares promptly upon exercise
of the Option. No adjustment shall be made for a dividend or other right for
which the record date is prior to the date the Shares are issued, except as
provided in Section 13 hereof.

Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

(b) TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER. If an
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence
of a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

(c) DISABILITY OF OPTIONEE. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the

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<PAGE>

unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.

(d) DEATH OF OPTIONEE. If an Optionee dies while a Service Provider,
the Option may be exercised within such period of time as is specified in the
Option Agreement (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. If, at
the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately
revert to the Plan. The Option may be exercised by the executor or
administrator of the Optionee's estate or, if none, by the person(s) entitled to
exercise the Option under the Optionee's will or the laws of descent or
distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

(e) BUYOUT PROVISIONS. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

11. STOCK PURCHASE RIGHTS.

(a) RIGHTS TO PURCHASE. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically, by means of a Notice of Grant, of the
terms, conditions and restrictions related to the offer, including the number of
Shares that such person shall be entitled to purchase, the price to be paid, and
the time within which such person must accept such offer, which shall in no
event exceed thirty (30) days from the date upon which the Administrator makes
the determination to grant the Stock Purchase Right. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the form
determined by the Administrator.

(b) REPURCHASE OPTION. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.

-9-
<PAGE>

(c) OTHER PROVISIONS. The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.

(d) RIGHTS AS A SHAREHOLDER. Once the Stock Purchase Right is
exercised, the purchaser shall have rights equivalent to those of a shareholder
and shall be a shareholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company. No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 13 of
the Plan.

12. NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.

13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.

(a) CHANGES IN CAPITALIZATION. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company. The conversion of any convertible securities
of the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or Stock Purchase Right.

(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify the
Optionee at least fifteen (15) days prior to such proposed action. To the
extent it has not been previously exercised, the Option or Stock Purchase Right
shall terminate immediately prior to the consummation of such proposed action.

(c) MERGER. In the event of a merger of the Company with or into
another corporation, each outstanding Option or Stock Purchase Right may be
assumed or an equivalent

-10-
<PAGE>

option or right may be substituted by such successor corporation or a parent
or subsidiary of such successor corporation. If, in such event, an Option or
Stock Purchase Right is not assumed or substituted, the Option or Stock
Purchase Right shall terminate as of the date of the closing of the merger.
For the purposes of this paragraph, the Option or Stock Purchase Right shall
be considered assumed if, following the merger, the Option or Stock Purchase
Right confers the right to purchase or receive, for each Share of Optioned
Stock subject to the Option or Stock Purchase Right immediately prior to the
merger, the consideration (whether stock, cash, or other securities or
property) received in the merger by holders of Common Stock for each Share
held on the effective date of the transaction (and if the holders are offered
a choice of consideration, the type of consideration chosen by the holders of
a majority of the outstanding Shares). If such consideration received in the
merger is not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option or Stock
Purchase Right, for each Share of Optioned Stock subject to the Option or
Stock Purchase Right, to be solely common stock of the successor corporation
or its Parent equal in fair market value to the per share consideration
received by holders of Common Stock in the merger.

14. TIME OF GRANTING OPTIONS AND STOCK PURCHASE RIGHTS. The date of grant
of an Option or Stock Purchase Right shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.

15. AMENDMENT AND TERMINATION OF THE PLAN.

(a) AMENDMENT AND TERMINATION. The Board may at any time amend,
alter, suspend or terminate the Plan.

(b) SHAREHOLDER APPROVAL. The Company shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

(c) EFFECT OF AMENDMENT OR TERMINATION. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.

16. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
such Shares shall comply with Applicable Laws, and shall be further subject to
the approval of counsel for the Company with respect to such compliance.

-11-
<PAGE>

As a condition to the exercise of an Option or Stock Purchase Right,
the Company may require the person exercising such Option or Stock Purchase
Right to represent and warrant at the time of any such exercise that the Shares
are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required.

17. RESERVATION OF SHARES. The Company, during the term of this Plan,
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.

18. SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under Applicable Laws.

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<PAGE>

SOCKET COMMUNICATIONS, INC.

1995 STOCK PLAN

STOCK OPTION AGREEMENT

Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Option Agreement.

I. NOTICE OF STOCK OPTION GRANT

[Name of person]

You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:

Date of Grant [fill in date]

Vesting Commencement Date [fill in date]

Exercise Price per Share &[fill in dollar amount]

Total Number of Shares Granted [fill in total number]

Total Exercise Price $[price x shares = total exercise price]

Type of Option: ____ Incentive Stock Option

____ Nonstatutory Stock Option

Term/Expiration Date: [fill in date, either 18, 24 or 48 mos.]

VESTING SCHEDULE:

This Option may be exercised, in whole or in part, in accordance with the
following schedule:

[Depending upon the term of the grant, modify the following: 25% of the
Shares subject to the Option shall vest 12 months after the Vesting
Commencement Date and 1/48 of the Shares subject to the Option shall vest
each month thereafter.]

TERMINATION PERIOD:
<PAGE>

This Option may be exercised for ____ (months/days) after termination
of your employment or consulting relationship, or such longer period as may be
applicable upon death or disability of Optionee as provided in the Plan. In the
event of the Optionee's change in status from Employee to Consultant or
Consultant to Employee, this Option Agreement shall remain in effect. In no
event shall this Option be exercised later than the Term/Expiration Date as
provided above.

II. AGREEMENT

1. GRANT OF OPTION. Socket Communications, Inc., a Delaware
corporation (the"Company"), hereby grants to the Optionee named in the Notice of
Grant (the "Optionee"), an option (the "Option") to purchase the total number of
shares of Common Stock (the "Shares") set forth in the Notice of Grant, at the
exercise price per share set forth in the Notice of Grant (the "Exercise Price")
subject to the terms, definitions and provisions of the 1995 Stock Plan (the
"Plan") adopted by the Company, which is incorporated herein by reference.
Unless otherwise defined herein, the terms defined in the Plan shall have the
same defined meanings in this Option Agreement.

If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option as
defined in Section 422 of the Code. Nevertheless, to the extent that it exceeds
the $100,000 rule of Code Section 422(d), this Option shall be treated as a
Nonstatutory Stock Option ("NSO").

2. EXERCISE OF OPTION.

a. RIGHT TO EXERCISE. This Option shall be exercisable during its
term in accordance with the Vesting Schedule set out in the Notice of Grant and
with the applicable provisions of the Plan and this Option Agreement. In the
event of Optionee's death, disability or other termination of the employment or
consulting relationship, this Option shall be exercisable in accordance with the
applicable provisions of the Plan and this Option Agreement.

b. METHOD OF EXERCISE. This Option shall be exercisable by written
notice (in the form attached as Exhibit A) which shall state the election to
exercise the Option, the number of Shares in respect of which the Option is
being exercised, and such other representations and agreements as to the
holder's investment intent with respect to such shares of Common Stock as may be
required by the Company pursuant to the provisions of the Plan. Such written
notice shall be signed by the Optionee and shall be delivered in person or by
certified mail to the Secretary of the Company. The written notice shall be
accompanied by payment of the Exercise Plan. This Option shall be deemed to be
exercised upon receipt by the Company of such written notice accompanied by the
Exercise Price.

No shares will be issued pursuant to the exercise of an Option unless
such issuance and such exercise shall comply with all relevant provisions of law
and the requirements of any stock exchange upon which the Shares may then be
listed. Assuming such compliance, for income tax

<PAGE>

purposes the Shares shall be considered transferred to the Optionee on the
date on which the Option is exercised with respect to such Shares.

3. OPTIONEE'S REPRESENTATIONS. In the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, if required by the Company, concurrently with the exercise of
all or any portion of this Option, deliver to the Company his or her Investment
Representation Statement in the form attached hereto as Exhibit B, and shall
read the applicable rules of the Commissioner of Corporations attached to such
Investment Representation Statement.

4. METHOD OF PAYMENT. Payment of the Exercise Price shall be by any of
the following, or a combination thereof, at the election of the Optionee:

a. cash;

b. check;

c. surrender of other shares of Common Stock of the Company which
(A) in the case of Shares acquired pursuant to the exercise of a Company option,
have been owned by the Optionee for more than six (6) months on the date of
surrender, and (B) have a Fair Market Value on the date of surrender equal to
the Exercise Price of the Shares as to which the Option is being exercised; or

d. delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the Company of
the sale or loan proceeds required to pay the Exercise Price.

5. RESTRICTIONS ON EXERCISE. This Option may not be exercised until such
time as the Plan has been approved by the shareholders of the Company, or if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as
promulgated by the Federal Reserve Board.

6. TERMINATION OF RELATIONSHIP. In the event of Optionee's Continuous
Status as an Employee or Consultant terminates, Optionee may, to the extent
otherwise so entitled at the date of such termination (the "Termination Date"),
exercise this Option during the Termination Period set out in the Notice of
Grant. To the extent that Optionee was not entitled to exercise this Option at
the date of such termination, or if Optionee does not exercise this Option
within the time specified herein, the Option shall terminate.

7. DISABILITY OF OPTIONEE. Notwithstanding the provisions of Section 6
above, in the event of termination of an Optionee's consulting relationship or
Continuous Status as an Employee as

<PAGE>

a result of his or her disability, Optionee may, but only within twelve (12)
months from the date of such termination (and in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent otherwise entitled to exercise
it at the date of such termination; provided, however, that if such
disability is not a "disability" as such term is defined in Section 22(e)(3)
of the Code, in the case of an Incentive Stock Option such Incentive Stock
Option shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option on the day three
months and one day following such termination. To the extent that Optionee
was not entitled to exercise the Option at the date of termination, or if
Optionee does not exercise such Option to the extent so entitled within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

8. DEATH OF OPTIONEE. In the event of termination of Optionee's
Continuous Status as an Employee or Consultant as a result of the death of
Optionee, the Option may be exercised at any time within twelve (12) months
following the date of death (but in no event later than the date of expiration
of the term of this Option as set forth in Section 10 below), by Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent the Optionee could exercise the Option at
the date of death.

9. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee. The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.

10. TERM OF OPTION. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option. The limitations set out
in Section 7 of the Plan regarding Options designated as Incentive Stock Options
and Options granted to more than ten percent (10%) shareholders shall apply to
this Option.

11. TAX CONSEQUENCES. Set forth below is a brief summary as of the date
of this Option of some of the federal and California tax consequences of
exercise of this Option and disposition of the Shares. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING
OF THE SHARES.

a. EXERCISE OF ISO. If this Option qualifies as an ISO, there will
be no regular federal income tax liability or California income tax liability
upon the exercise of the Option, although the excess, if any, of the Fair Market
Value of the Shares on the date of exercise over the Exercise Price will be
treated as an adjustment to the alternative minimum tax for federal tax purposes
and may subject the Optionee to the alternative minimum tax in the year of
exercise.

<PAGE>

b. EXERCISE OF ISO FOLLOWING DISABILITY. If the Optionee's
Continuous Status as an Employee or Consultant terminates as a result of
disability that is not total and permanent disability as defined in Section
22(e)(3) of the Code, to the extent permitted on the date of termination, the
Optionee must exercise an ISO within 90 days of such termination for the ISO to
be qualified as an ISO.

c. EXERCISE OF NONSTATUTORY STOCK OPTION. There may be a regular
federal income tax liability and California income tax liability upon the
exercise of a Nonstatutory Stock Option. The Optionee will be treated as having
received compensation income (taxable at ordinary income tax rates) equal to the
excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price. If Optionee is an Employee or a former Employee, the
Company will be required to withhold from Optionee's compensation or collect
from Optionee and pay to the applicable taxing authorities an amount in cash
equal to a percentage of this compensation income at the time of exercise, and
may refuse to honor the exercise and refuse to deliver Shares if such
withholding amounts are not delivered at the time of exercise.

d. DISPOSITION OF SHARES. In the case of an NSO, if Shares are
held for at least one year, any gain realized on disposition of the Shares
will be treated as long-term capital gain for federal and California income
tax purposes. In the case of an ISO, if Shares transferred pursuant to the
Option are held for at least one year after exercise and are disposed of at
least two years after the Date of Grant, any gain realized on disposition of
the Shares will also be treated as long-term capital gain for federal and
California income tax purposes. If Shares purchased under an ISO are
disposed of within such one-year period or within two years after the Date of
Grant, any gain realized on such disposition will be treated as compensation
income (taxable at ordinary income rates) to the extent of the difference
between the Exercise Price and the lesser of (1) the Fair Market Value of the
Shares on the date of exercise, or (2) the sale price of the Shares.

e. NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If the Option
granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (1) the date two years after the Date of Grant, or (2) the date one
year after the date of exercise, the Optionee shall immediately notify the
Company in writing of such disposition. Optionee agrees that Optionee may be
subject to income tax withholding by the Company on the compensation income
recognized by the Optionee.

12. ENTIRE AGREEMENT; GOVERNING LAW. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter thereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by California law except for that body of
law pertaining to conflict of laws.

<PAGE>

SOCKET COMMUNICATIONS, INC.
a Delaware corporation

By:
------------------------------
David W. Dunlap
Chief Financial Officer
<PAGE>

OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL
OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR
ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT
NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY'S STOCK OPTION PLAN WHICH IS
INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH
RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL
IT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT
CAUSE.

Optionee acknowledges receipt of a copy of the Plan and represents that he
is familiar with the terms and provisions thereof, and hereby accepts this
Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee hereby agrees to accept as
binding, conclusive and final all decisions of interpretations of the
Administrator upon any questions arising under the Plan or this Option.
Optionee further agrees to notify the Company upon any change in the residence
address indicated below.

Dated:
-------------------------- -----------------------------------
Optionee

Residence Address:

-----------------------------------

-----------------------------------
<PAGE>

SOCKET COMMUNICATIONS, INC.

AMENDMENT NO. 1 TO STOCK OPTION AGREEMENT

WHEREAS: The Company believes it is in the best interests of the Company
and the Optionee to amend Optionee's Stock Option Agreement attached hereto to
provide for a Change of Control provision; now therefore,

In consideration of the continued services of the Optionee to the Company,
the Company and the Optionee hereby agree that the following Sections 12 and 13
shall be added to the Stock Option Agreement entered into between the Company
and the Optionee:

12. VESTING ACCELERATION ON CHANGE OF CONTROL.

(a) VESTING ACCELERATION. In the event of a "Change of
Control," all of the Optionee's rights to purchase stock under this Agreement
with the Company shall be automatically vested in their entirety on an
accelerated basis and be fully exercisable:

(A) as of the date immediately preceding such "Change of Control" in
the event this stock option agreement is or will be terminated or
canceled (except by mutual consent) or any successor to the Company
fails to assume and agree to perform such stock option agreement as
provided in Section 2(a) hereof at or prior to such time as any such
person becomes a successor to the Company; or

(B) as of the date immediately preceding such "Change of Control" in
the event the Optionee does not or will not receive upon exercise of
the Optionee's stock purchase rights under such stock option agreement
the same identical securities and/or other consideration as is
received by all other shareholders in any merger, consolidation, sale,
exchange or similar transaction occurring upon or after such "Change
of Control"; or

(C) as of the date immediately preceding any "Involuntary
Termination" of the Optionee occurring upon or after any such "Change
of Control"; or

(D) as of the date one (1) year following the first such "Change of
Control," provided that the Optionee shall have remained an employee
of the Company continuously throughout such one-year period, other
than a termination as a result of death or disability;

whichever shall first occur (all quoted terms as defined below); provided,
however, that if it is determined by the Company's independent public
accountants that the accelerated vesting and exercisability provided in this
Section 12(a) would preclude accounting for the "Change of Control" as a pooling
of interests for financial accounting purposes, and it is a condition to the
closing of the

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"Change of Control" that the transaction be accounted for as a pooling of
interests, then the vesting and exercisability shall not be accelerated
pursuant to this Section 12(a).

(b) CHANGE OF CONTROL. "Change of Control" means the occurrence
of any of the following events:

(i) Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company's then
outstanding voting securities; or

(ii) A change in the composition of the Board of
Directors of the Company occurring within a two-year period as a result of which
fewer than a majority of the directors are "Incumbent Directors." "Incumbent
Directors" shall mean directors who either (A) are directors of the Company as
of the date hereof, or (B) are elected, or nominated for election, to the Board
of Directors with the affirmative votes (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as
a nominee for election as a director without objection to such nomination) of at
least a majority of the Incumbent Directors at the time of such election or
nomination; or

(iii) The consummation of (A) a merger or
consolidation of the Company with any other entity, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or the entity that controls the Company or such surviving
entity) at least fifty percent (50%) of the total voting power represented by
the voting securities of the Company or such surviving entity or the entity that
controls the Company or such surviving entity outstanding immediately after such
merger or consolidation, or (B) the sale or disposition by the Company of all or
substantially all the Company's assets; or

(iv) The shareholders approve a plan of complete
liquidation of the Company.

(c) INVOLUNTARY TERMINATION. "Involuntary Termination" shall
mean without the Optionee's written consent: (i) a termination by the Company
of the Optionee's employment with the Company other than for Cause; (ii) a
material reduction of or variation in the Optionee's duties, authority or
responsibilities, relative to the Optionee's duties, authority or
responsibilities as in effect immediately prior to such reduction or variation;
(iii) a reduction by the Company in the base salary of the Optionee as in effect
immediately prior to such reduction; (iv) a material reduction by the Company in
the kind or level of employee benefits, including bonuses, to which the Optionee
was entitled immediately prior to such reduction, with the result that the
Optionee's overall benefits package is materially reduced; (v) the relocation of
the Optionee to a facility or a location more than thirty (30) miles from the
Optionee's then present location; (vi) the

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failure of the Company to obtain the assumption of this Agreement by any
successor as required in Section 13, or (vii) any act or set of facts that
would under applicable law constitute a constructive termination of Optionee.

(d) CAUSE. "Cause" shall mean (i) any willful act of personal
dishonesty, fraud or misrepresentation taken by the Optionee in connection with
his or her responsibilities as an employee which was intended to result in
substantial gain or personal enrichment of the Optionee at the expense of the
Company and was materially and demonstrably injurious to the Company; (ii) the
Optionee's conviction of a felony on account of any act which was materially and
demonstrably injurious to the Company; or (iii) the Optionee's willful and
continued failure to substantially perform his or her principal duties and
obligations of employment including under any written agreements (other than any
such failure resulting from incapacity due to physical or mental illness), which
failure is not remedied in a reasonable period of time after receipt of written
notice from the Company. For the purposes of this Section 12(d), no act or
failure to act shall be considered "willful" unless done or omitted to be done
in bad faith and without reasonable belief that the act or omission was in or
not opposed to the best interests of the Company. Any act or failure to act
based upon authority given pursuant to a resolution duly adopted by the Board of
Directors of the Company or based upon the advice of counsel for the Company
shall be conclusively presumed to be done or omitted to be done in good faith
and in the best interests of the Company.

(e) VOLUNTARY RESIGNATION; TERMINATION FOR CAUSE. If the
Optionee terminates employment as a result of an Involuntary Termination, the
Optionee shall be entitled to receive accelerated vesting under Section 12(a)
hereof. If the Optionee's continuous status as an employee of the Company
terminates by reason of the Optionee's voluntary resignation (and not
Involuntary Termination) or if the Optionee's continuous status as an employee
of the Company is terminated for Cause, in either case prior to such time as
accelerated vesting occurs as provided in Section 12(a) hereof, then the
Optionee shall not be entitled to receive accelerated vesting under
Section 12(a) hereof.

13. SUCCESSORS. Any successor to the Company (whether direct or
indirect and whether by purchase, merger or consolidation) shall assume the
obligations under this Agreement and agree expressly to perform the obligations
under this Agreement in the same manner and to the same extent as the Company
would be required to perform such obligations in the absence of a succession.
The terms of this Agreement and all rights of the Optionee hereunder shall inure
to the benefit of, and be enforceable by, the Optionee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

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<PAGE>

IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement on the _____ day of ____________, 1998.

SOCKET COMMUNICATIONS, INC. OPTIONEE

By:
--------------------------- ----------------------------------

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APPENDIX B

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF SOCKET COMMUNICATIONS, INC.
1998 ANNUAL MEETING OF STOCKHOLDERS

The undersigned stockholder of SOCKET COMMUNICATIONS, INC., a Delaware
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated May 8, 1998, and hereby
appoints Charlie Bass and David Dunlap, and each of them, proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in
the name of the undersigned, to represent the undersigned at the 1998 Annual
Meeting of Stockholders of SOCKET COMMUNICATIONS, INC. to be held on June 10,
1998 at 10:00 a.m., local time, at the Company's headquarters at 37400 Central
Court, Newark, California 94560, and at any adjournment or adjournments
thereof, and to vote all shares of Common Stock which the undersigned would
be entitled to vote if then and there personally present, on the matters set
forth below.

(Continued, and to be dated and signed on the other side)

<PAGE>

/X/ PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE USING DARK INK ONLY.

FOR all Withhold Authority
Nominees to vote for ALL
Listed Nominees Listed
1. ELECTION OF DIRECTORS / / / /

NOMINEES: Charlie Bass, Micheal Gifford, Jack Carsten, Edward Esber,
Gianluca Rattazzi, Lars Lindgren

If you wish to withhold authority to vote for any individual nominee,
strike a line through that nominee's name in the list below:

Charlie Bass, Micheal Gifford, Jack Carsten, Edward Esber,
Gianluca Rattazzi, Lars Lindgren

FOR AGAINST ABSTAIN
2. PROPOSAL TO APPROVE AN AMENDMENT TO THE / / / / / /
COMPANY'S 1995 STOCK PLAN TO RESERVE AN
ADDITIONAL 1,000,000 SHARES OF COMMON STOCK
FOR ISSUANCE THEREUNDER.

FOR AGAINST ABSTAIN
3. PROPOSAL TO APPROVE A ONE-FOR-THREE REVERSE / / / / / /
SPLIT OF THE OUTSTANDING COMMON STOCK OF THE
COMPANY SO THAT EVERY THREE SHARES OF THE
COMPANY'S COMMON STOCK SHALL THEREAFTER BE
CONSOLIDATED INTO ONE SHARE OF THE COMPANY'S
COMMON STOCK AND TO APPROVE A RELATED AMENDMENT
TO THE COMPANY'S CERTIFICATE OF INCORPORATION.

FOR AGAINST ABSTAIN
4. PROPOSAL TO RATIFY THE APPOINTMENT OF / / / / / /
ERNST & YOUNG LLP AS INDEPENDENT PUBLIC
ACCOUNTANTS OF THE COMPANY FOR THE FISCAL
YEAR ENDING DECEMBER 31, 1998.

and, in their discretion, upon such other matter or matters which may
properly come before the meeting or any adjournment or adjournments thereof.

THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR THE AMENDMENT OF
THE 1995 STOCK PLAN, FOR THE ONE-FOR-THREE REVERSE STOCK SPLIT, AND FOR THE
RATIFICATION OF ERNST & YOUNG LLP AS INDEPENDENT PUBLIC ACCOUNTANTS AND AS
SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.

_______________________ _______________________ Date: ______________, 1998
Signature Signature
(This Proxy should be marked, dated and signed by the stockholder(s) exactly
as his or her name appears hereon, and returned promptly in the enclosed
envelope. Persons signing in a fiduciary capacity should so indicate. If
shares are held by joint tenants or as community property, both should sign.)