HARBINGER CORP, DEF 14A, 1999-03-31

HARBINGER CORP
DEF 14A, 1999-03-31
COMPUTER PROGRAMMING, DATA PROCESSING, ETC.

Previous: HARBINGER CORP, 10-K405, 1999-03-31

Next: SEVEN SEAS PETROLEUM INC, 10-K, 1999-03-31

<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>

HARBINGER CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[ ] Fee paid previously with preliminary materials:

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:
<PAGE> 2

HARBINGER CORPORATION
1277 Lenox Park Boulevard
Atlanta, Georgia 30319
(404) 467-3000

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 30, 1999

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Harbinger
Corporation (the "Company") will be held at the J.W. Marriott, 3300 Lenox Road
N.E., Atlanta, Georgia 30326, at 9:00 a.m., Atlanta, Georgia time, on Friday,
April 30, 1999 (the "Meeting"), to consider and act upon:

1. the election of four persons to serve as members of the Company's Board
of Directors;

2. a proposal to amend the Harbinger Corporation 1996 Stock Option Plan to
limit the number of options to purchase shares of the Company's common
stock that can be granted to any individual grantee in any one calendar
year;

3. a proposal to ratify the selection of independent public accountants for
the Company's current fiscal year; and

4. such other business as may properly come before the Annual Meeting or
any adjournment thereof.

The Board of Directors has fixed the close of business on March 12, 1999,
as the record date for the determination of shareholders entitled to notice of,
and to vote at, the Meeting.

By Order of the Board of Directors,
/s/ LOREN B. WIMPFHEIMER
Loren B. Wimpfheimer,
Secretary

April 1, 1999
Atlanta, Georgia

IMPORTANT

WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE MARK, DATE
AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE WHICH HAS BEEN
PROVIDED. NO POSTAGE IS REQUIRED FOR MAILING IN THE UNITED STATES. IN THE EVENT
YOU ARE ABLE TO ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR
SHARES IN PERSON.
<PAGE> 3

HARBINGER CORPORATION
1277 LENOX PARK BOULEVARD
ATLANTA, GEORGIA 30319
-------------------------

PROXY STATEMENT
-------------------------

APRIL 30, 1999
---------------------------------------

SOLICITATION AND VOTING

SHAREHOLDERS MEETING

This Proxy Statement and the enclosed proxy ("Proxy") are furnished on
behalf of the Board of Directors of Harbinger Corporation, a Georgia corporation
(the "Company"), for use at the Annual Meeting of Shareholders to be held on
April 30, 1999 at 9:00 a.m., Atlanta, Georgia time (the "Annual Meeting"), or at
any adjournment or postponement thereof, for the purposes set forth herein and
in the accompanying Notice of Annual Meeting. The Annual Meeting will be held at
the J.W. Marriott, 3300 Lenox Road N.E., Atlanta, Georgia 30326. The Company
intends to mail this Proxy Statement and the accompanying Proxy card on or about
April 1, 1999, to all shareholders entitled to vote at the Annual Meeting.

SHAREHOLDERS ENTITLED TO VOTE

Only holders of record of Common Stock at the close of business on March
12, 1999 will be entitled to notice of and to vote at the Annual Meeting. At the
close of business on March 12, 1999, the Company had outstanding and entitled to
vote 40,375,160 shares of common stock, par value $.0001 per share ("Common
Stock"). Each holder of record of Common Stock on such date will be entitled to
one vote for each share held on all matters to be voted upon at the Annual
Meeting. Any shareholder who signs and returns a Proxy has the power to revoke
it at any time before it is exercised by providing written notice of revocation
to the Secretary of the Company or by filing with the Secretary of the Company a
Proxy bearing a later date. The holders of a majority of the total shares of
Common Stock outstanding on the record date, whether present at the Annual
Meeting in person or represented by Proxy, will constitute a quorum for the
transaction of business at the Annual Meeting. The shares held by each
shareholder who signs and returns the enclosed form of Proxy will be counted for
the purposes of determining the existence of a quorum at the Annual Meeting,
whether or not the shareholder abstains on all or any matter to be acted on at
the Annual Meeting. Abstentions and broker non-votes both will be counted toward
fulfillment of quorum requirements. A broker non-vote occurs when a nominee
holding shares for a beneficial owner does not vote on a particular proposal
because the nominee does not have discretionary voting power with respect to
that proposal and has not received instructions from the beneficial owner.

COUNTING OF VOTES

The purpose of the Annual Meeting is to consider and act upon the matters
which are listed in the accompanying Notice of Annual Meeting and set forth in
this Proxy Statement. The enclosed form of Proxy provides a means for a
shareholder to vote on all of the matters listed in the accompanying Notice of
Annual Meeting and described in the Proxy Statement. The enclosed form of Proxy
also provides a means for a shareholder to vote for all of the nominees for
Director listed thereon or to withhold authority to vote for one or more of such
nominees. The Company's Bylaws provide that Directors are elected by a plurality
of the votes cast. Plurality means that more votes must be cast in favor of the
election of a Director than those cast against election of such Director.
Accordingly, the withholding of authority by a shareholder (including broker
non-votes) will not be counted in computing a plurality and thus will have no
effect on the results of the election of such nominees.

1
<PAGE> 4

The accompanying form of Proxy also provides a means for a shareholder to
vote for, against or abstain from voting on each of the other matters to be
acted upon at the Annual Meeting. Each Proxy will be voted in accordance with
the shareholder's directions. The affirmative vote of a majority of the shares
of Common Stock voting in person or represented by a Proxy and entitled to vote
on proposals two and three set forth in the accompanying Notice of Annual
Meeting is required for the approval of each such proposal. Abstentions with
respect to proposals two and three will have the same effect as a vote against
these proposals. With respect to broker non-votes, the shares will not be
considered present at the meeting for the proposal to which authority was
withheld. Consequently, broker non-votes will not be counted with regard to the
proposal, but they will have the effect of reducing the number of affirmative
votes required to approve the proposal, because they reduce the number of shares
present or represented from which a majority is calculated. There are no
dissenter's rights with respect to any matter to be acted upon pursuant to this
Proxy Statement.

PROXIES AND SOLICITATION

When the enclosed Proxy is properly signed and returned, the shares that it
represents will be voted at the Annual Meeting in accordance with the
instructions noted thereon. In the absence of such instructions, the shares
represented by a signed Proxy will be voted in favor of the nominees for
election to the Board of Directors, in favor of the approval of proposals two
and three and in a manner deemed by the proxy representatives named therein to
be in the best interests of the Company and its shareholders with regard to any
other matters as may properly come before the Annual Meeting.

Proxies will be solicited from the Company's shareholders by mail. The
Company will pay all expenses in connection with the solicitation, including
postage, printing and handling, and the expenses incurred by brokers,
custodians, nominees and fiduciaries in forwarding proxy material to beneficial
owners. The Company may employ a proxy solicitation firm to solicit proxies in
connection with the Annual Meeting, and the Company estimates that the fee
payable for such services will be less than $10,000. It is possible that
directors, officers and other employees of the Company may make further
solicitation personally or by telephone, facsimile or mail. Directors, officers
and other employees of the Company will receive no additional compensation for
any such further solicitation.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the amount and percent of shares of Common
Stock which, as of March 12, 1999, are deemed under the rules of the Securities
and Exchange Commission (the "Commission") to be "beneficially owned" by each
member of the Board of Directors of the Company, by each nominee for election to
the Board of Directors, by the Company's Chief Executive Officer and each of the
four most highly compensated executive officers during 1998, by all directors,
nominees and executive officers of the Company as a group, and by any person or
"group" (as that term is used in the Securities Act of 1934, as amended) known
to the Company as of that date to be a "beneficial owner" of more than 5% of the
outstanding shares of Common Stock of the Company.

<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED(1)
----------------------------------
NUMBER OF SHARES OF PERCENTAGE
DIRECTORS AND MANAGEMENT COMMON STOCK OF CLASS
- ------------------------ ------------------- ----------
<S> <C> <C>
C. Tycho Howle(2)........................................ 1,846,609 4.5%
David T. Leach(3)........................................ 825,499 2.0
Stuart L. Bell(4)........................................ 86,687 *
David Hildes(5).......................................... 1,536,947 *
William B. King(6)....................................... 101,349 *
Benn R. Konsynski(7)..................................... 35,606 *
John D. Lowenberg(8)..................................... 154,942 *
Ad Nederlof(9)........................................... 55,000 *
Klaus Neugebauer(10)..................................... 48,000 *
William D. Savoy(11)..................................... 2,837,603 7.0
James M. Travers(12)..................................... 113,224 *
Joel G. Katz(13)......................................... 144,887 *
James Davis(14).......................................... 608,467 1.5
</TABLE>

2
<PAGE> 5

<TABLE>
<CAPTION>
NUMBER OF SHARES OF PERCENTAGE
5% SHAREHOLDERS COMMON STOCK OF CLASS
- --------------- ------------------- ----------
<S> <C> <C>
Vulcan Ventures, Inc./Paul G. Allen
110 110(th) Avenue, N.E., Suite 550, Bellevue, WA
98004.................................................. 2,740,854 6.8%
Equitable Companies (AXA)
787 Seventh Avenue, New York, NY 10019.................... 2,957,226 7.3
</TABLE>

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

* Less than 1% of the outstanding Common Stock.
(1) Information with respect to "beneficial ownership" shown in the table above
is based on information supplied by the directors and executive officers of
the Company and filings made with the Commission or furnished to the
Company by other shareholders. Beneficial ownership is determined in
accordance with the rules of the Securities and Exchange Commission and
generally includes voting or investment power with respect to securities.
Except as indicated by footnote, the persons named in the table above have
sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them. Percentage of beneficial ownership is
based on 40,375,160 shares of Common Stock outstanding as of March 12, 1999
and includes shares of Common Stock subject to options which may be
exercised within 60 days of March 12, 1999 by the named individual or
group. Such shares are deemed to be outstanding for the purposes of
computing the percentage ownership of the individual or group holding such
shares, but are not deemed outstanding for purposes of computing the
percentage of any other person shown in the table. Except as indicated by
footnotes, the street address of the named beneficial owner is c/o
Harbinger Corporation, 1277 Lenox Park Blvd., Atlanta, GA 30319.
(2) Includes 1,077,324 shares held of record by Mr. Howle, 67,450 shares held
of record by Mr. Howle's wife, an aggregate of 21,585 shares held by Mr.
Howle's children, 184,750 shares held in a family limited partnership for
the benefit of Mr. Howle, his wife and children, 112,500 shares held by a
charitable remainder unitrust for the benefit of Mr. Howle and his wife and
certain designated charities, 158,000 shares held by a family limited
partnership, and 225,000 shares subject to options exercisable within 60
days. Mr. Howle disclaims beneficial ownership of all such shares, other
than the shares held of record by Mr. Howle or for his benefit.
(3) Includes 389,975 shares held of record by Mr. Leach, 5,212 shares held of
record by Mr. Leach's wife, and 430,312 shares subject to options
exercisable within 60 days.
(4) Includes 35,437 shares subject to options exercisable within 60 days.
(5) Includes 1,444,217 shares held of record by Mr. Hildes, 55,530 shares held
by a charitable remainder trust of which Mr. Hildes and his wife are income
beneficiaries, and 37,200 shares subject to options exercisable within 60
days. Mr. Hildes disclaims beneficial ownership of all such shares, other
than shares of record by Mr. Hildes for his own benefit.
(6) Includes 72,000 shares subject to options exercisable within 60 days. Mr.
King's address is 9010 Overlook Court, Brentwood, TN 37027.
(7) Includes 30,656 shares subject to options exercisable within 60 days. Mr.
Konsynski's address is Emory University, Atlanta, GA 30322.
(8) Includes 120,442 shares held jointly by Mr. Lowenberg and his wife, 16,500
shares held by the Lowenberg Charitable Trust, the trustees of which are
Mr. Lowenberg and his wife, and as to which Mr. Lowenberg disclaims
beneficial ownership, and 18,000 shares subject to options exercisable
within 60 days. Mr. Lowenberg's address is 3801 Kennett Pike, Greenville,
DE 19807.
(9) Includes 55,000 shares subject to options exercisable within 60 days. Mr.
Nederlof's address is 3445 Peachtree Rd. NE, Atlanta, GA 30326.
(10) Includes 9,000 shares subject to options exercisable within 60 days. Mr.
Neugebauer's address is Widenmayerstrasse 38, 80538 Munchen, Germany.
(11) Includes 65,812 shares subject to options exercisable within 60 days. Also
includes 2,740,854 shares beneficially owned by Vulcan Ventures, Inc. and
Paul G. Allen, as to which Mr. Savoy disclaims beneficial ownership. Mr.
Savoy is the President of Vulcan Northwest, Inc., a company which is
beneficially owned by Mr. Allen. Mr. Savoy's address is 110 110th Avenue
N.E., Bellevue, WA 98004.
(12) Includes 105,224 shares subject to options exercisable within 60 days.
(13) Includes 9,575 shares held of record by Mr. Katz, 20,750 shares held of
record by Mr. Katz's wife, as to which Mr. Katz disclaims beneficial
ownership, and 114,562 shares subject to options exercisable in 60 days.
(14) Includes 216,593 shares held of record by Mr. Davis, 50,000 shares held of
record by Mr. Davis' wife, 100,000 shares held in a family limited
partnership and 241,874 shares subject to options exercisable within 60
days. Mr. Davis disclaims beneficial ownership of the shares held in the
family limited partnership.
(15) Includes 75,000 shares subject to options exercisable within 60 days.
(16) Includes 1,515,077 shares subject to options exercisable within 60 days and
2,740,854 shares beneficially owned by Vulcan Ventures, Inc. and Paul G.
Allen, as to which Mr. Savoy disclaims beneficial ownership.

3
<PAGE> 6

PROPOSAL 1

ELECTION OF DIRECTORS

INTRODUCTION

At the Annual Meeting, four directors are to be elected for the terms
described below. The Board of Directors of the Company is divided into three
classes that serve staggered three-year terms and are as nearly equal in number
as possible. C. Tycho Howle, William D. Savoy, John D. Lowenberg and Benn R.
Konsynski are nominees to serve as Class III directors for a term expiring at
the Company's Annual Meeting of Shareholders in 2002, and they currently are
Class III directors whose terms expire at the Annual Meeting.

The Board of Directors has adopted a policy statement that provides as
follows: "[i]t is the policy of Harbinger Corporation, in order to ensure full
representation of the Company's shareholders on the Board of Directors and to
enhance the Company's access to talented managerial advisors, that no
nonemployee director of the Company shall serve as a director for more than
eight consecutive years and that each nonemployee director when first elected to
the Board of Directors (including after a period of non-service) shall serve for
only a one year term unless renominated by the Board of Directors at that time,
in which case he or she shall be included in the Company's staggered board in a
manner determined by the Board of Directors."

Shares represented by executed proxies will be voted, if authority to do so
is not withheld, for the election of the four nominees named below. In the event
that any nominee should be unavailable for election as a result of an unexpected
occurrence, such shares will be voted for the election of such substitute
nominee as the Board of Directors may select. Each person nominated for election
has agreed to serve if elected, and management has no reason to believe that any
nominee will be unable to serve.

The Board of Directors recommends a vote FOR each named nominee.

NOMINEES TO SERVE UNTIL THE 2002 ANNUAL MEETING (CLASS III)

The name and age, principal occupation or employment, and other data
regarding each nominee, based on information received from the respective
nominees, are set forth below:

C. TYCHO HOWLE

Mr. Howle, age 49, has been Chairman of the Board of Directors of the
Company and its predecessors since 1983, and served as Chief Executive Officer
since September 1998 and from 1983 until March 1997.

WILLIAM D. SAVOY

Mr. Savoy, age 34, currently serves as a Class III director and has been a
director of the Company since May 1993. Under the Company's policy statement
regarding term limits for nonemployee directors, Mr. Savoy will be eligible to
serve as a director through the date of the Company's Annual Meeting to be held
in 2001. Mr. Savoy has served as President of Vulcan Northwest, Inc. since 1988.
Vulcan Ventures, Inc., a shareholder of the Company, and Vulcan Northwest, Inc.
are beneficially owned by Paul G. Allen. Mr. Savoy is also a director of
Telescan, Inc., C/NET, Inc., U.S. Satellite Broadcasting Co., Inc., Ticketmaster
Online - City Search, Inc., USA Networks, Inc. and Metricom, Inc.

JOHN D. LOWENBERG

Mr. Lowenberg, age 56, has been a director of the Company since December
1997. Under the Company's policy statement regarding term limits for nonemployee
directors, Mr. Lowenberg will be eligible to serve as a director through the
date of the Company's Annual Meeting to be held in 2005. Mr. Lowenberg is a
manager of the general partner of Anvil Investment Associates, L.P., an
investment fund. From 1970 to October 1997, he was employed by The
Robinson-Humphrey Company, an investment banking firm, in increasingly senior
capacities, serving as a Managing Director and a Director at the time of his
departure. Mr. Lowenberg previously served as a director of the Company and its
predecessors from 1983 to May 1995. Mr. Lowenberg
4
<PAGE> 7

has served as a Trustee since 1988 and the Chairman since 1990 of the Investment
Committee of Denison University.

BENN R. KONSYNSKI

Dr. Konsynski, age 48, has been a director of the Company since December
1996. Under the Company's policy statement regarding term limits for nonemployee
directors, Dr. Konsynski will be eligible to serve as a director through the
date of the Company's Annual Meeting to be held in 2004. Since 1993, Dr.
Konsynski has been the George S. Craft Professor of Business Administration at
the Goizueta Business School at Emory University. From 1987 to 1993, he was on
the faculty at Harvard Business School. Dr. Konsynski is also a director of
Tessco Technologies, Inc.

CURRENT DIRECTORS

The Directors of the Company continuing in office are Class II directors,
elected to serve until the 2001 Annual Meeting, and Class I directors, elected
to serve until the 2000 Annual Meeting, and are as follows:

DAVID T. LEACH

Mr. Leach, age 48, currently serves as a Class II director and has been a
director of the Company since February 1994. Under the Company's policy
statement regarding term limits for nonemployee directors, Mr. Leach will be
eligible to serve as a director through the date of the Company's Annual Meeting
to be held in 2006. He has served as Vice Chairman -- International since
September 1998. From March 1997 until September 1998, he served as Chief
Executive Officer of the Company, from February 1994 until March 1997, he served
as President and Chief Operating Officer of the Company, and from June 1992
until February 1994, he was Executive Vice President, Group Sales and
Operations.

AD NEDERLOF

Mr. Nederlof, age 52, currently serves as a Class II director and has been
a director of the Company since April 1997. Under the Company's policy statement
regarding term limits for nonemployee directors, Mr. Nederlof will be eligible
to serve as a director through the date of the Company's Annual Meeting to be
held in 2004. Mr. Nederlof has served as Senior Vice President -- International
of Genesys Telecommunications Laboratories, a provider of call center software,
since March 1999. He served as President and Chief Operating Officer of Richter
Systems, Inc., a provider of software applications for the retail industry, from
March 1998 until February 1999 and as Senior Vice President and Managing
Director -- EMEA. Mr. Nederlof was an independent software consultant from 1996
until March 1997. He served as Vice President of Oracle Northern Europe form
1994 to 1996, with responsibility for all Northern European subsidiaries. From
1991 to 1994, he served as Managing Director of Oracle Nederland BV, Oracle's
Dutch subsidiary.

DAVID HILDES

Mr. Hildes, age 48, currently serves as a Class II director and has been a
director of the Company since December 1997. Under the Company's policy
statement regarding term limits for nonemployee directors, Mr. Hildes will be
eligible to serve as a director through the date of the Company's Annual Meeting
to be held in 2004. Prior to the acquisition of Premenos Technology Corp.
("Premenos") in December 1997, Mr. Hildes was Vice Chairman, Secretary and a
Director of Premenos from its organization in July 1995 until its acquisition by
the Company in December 1997. Mr. Hildes was a director and the Treasurer of
Premenos Corp. from October 1989 until July 1998, and Vice Chairman, director
and Secretary from July 1995 until December 1997. In connection with the terms
of the Premenos acquisition, the Company nominated Mr. Hildes for election as
director at the 1998 Annual Meeting of Shareholders and recommended his election
to the shareholders of the Company.

5
<PAGE> 8

KLAUS NEUGEBAUER

Dr. Neugebauer, age 60, currently serves as a Class I director and has been
a director of the Company since March 1997. Under the Company's policy statement
regarding term limits for nonemployee directors, Dr. Neugebauer will be eligible
to serve as a director through the date of the Company's Annual Meeting to be
held in 2004. Mr. Neugebauer was a co-founder of Softlab GmbH, an international
software development company which was sold to BMW AG in 1991. Dr. Neugebauer is
a member of a number of German industrial boards and acts as a strategic
information technology advisor to the State of Bavaria and the German Federal
Government, and since 1991, has been a partner in NSE, Inc., an investment firm
specializing in the software industry.

STUART L. BELL

Mr. Bell, age 45, currently serves as a Class I director and has been a
director of the Company since April 1995. Under the Company's policy statement
regarding term limits for nonemployee directors, Mr. Bell will be eligible to
serve as a director through the date of the Company's Annual Meeting to be held
in 2003. Mr. Bell currently serves as the Chairman of Webloyalty.com, a
marketing firm, and as the Vice-Chairman of Interval International, a time share
exchange company. He served as Chairman of Innovative Medical Research, a
provider of clinical trials, from January 1995 until February 1998, and as
Executive Vice President and Chief Financial Officer of CUC International from
1983 to January 1995. Mr. Bell is also a director of International Telephone
Data Services.

WILLIAM B. KING

Mr. King, age 54, currently serves as a Class I director and has been a
director of the Company since January 1993. Under the Company's policy statement
regarding term limits for nonemployee directors, Mr. King will be eligible to
serve as a director through the Company's Annual Meeting to be held in 2001. Mr.
King has served as Chairman of Private Business, Inc., a banking software
provider, since 1991. From 1986 until February 1995, Mr. King served as Chairman
of FISI-Madison Financial Corporation, Chairman of CUC Europe, and served on the
Board of Directors of CUC International.

JAMES M. TRAVERS

Mr. Travers, age 47, currently serves as a Class I director. He has served
as President and Chief Operating Officer of the Company since October 1998. He
served as President and General Manager of the Company's Software Division from
June 1997 until October 1998, and from January 1994 until June 1997, he served
as President of Harbinger Enterprise Solutions Division. In this latter
capacity, Mr. Travers managed the business operations acquired from Texas
Instruments, Inc. ("TI"). From 1978 through 1994, Mr. Travers served in various
managerial positions with TI, including Vice President for North American Field
Operations and most recently as Director of Business Development for TI's
Worldwide Applications Software Business and General Manager of TI's EDI
business unit from June 1992 through December 1994.

BOARD OF DIRECTORS MEETINGS AND COMMITTEES

During 1998, the Board of Directors held twelve meetings. All of the
directors attended at least 75% of the aggregate total number of meetings of the
Board of Directors held during their tenure and meetings of committees of the
Board of Directors on which they served.

The Company's Board of Directors has established an Audit Committee and
Compensation Committee. John Lowenberg, Klaus Neugebauer, Ad Nederlof and Benn
Konsynski presently serve on the Audit Committee. The Audit Committee met one
time in 1998. The primary functions of the Audit Committee are to (i) review the
scope and timing of the audit and non-audit services to be rendered by the
Company's independent accountants, to review audit plans of the independent
accountants and to review the reports upon completion of their audits, (ii) to
review the appropriateness of the Company's accounting policies, the adequacy of
its financial controls and the reliability of the financial information reported
to the public, and (iii) to report to the Board of Directors on its activities.
Stuart Bell, William Savoy, William King and David
6
<PAGE> 9

Hildes presently serve on the Compensation Committee. The Compensation Committee
met six times in 1998. The primary functions of the Compensation Committee are
to review and approve, subject to ratification of the Board of Directors, the
Chief Executive Officer's compensation, to consult with the Chief Executive
Officer and approve compensation for executive officers and other key employees,
to administer the Company's stock option plans and employee stock purchase plan
including approval of all awards thereunder, to approve management incentive
plans for senior management, and to report to the Board of Directors on these
activities.

As compensation for serving on the Board of Directors, directors who are
not also employees of the Company ("Nonemployee Directors") receive $900 for
each meeting of the full Board and $250 for teleconference Board meetings of 90
minutes or less in which they participate. In the Company's discretion,
Nonemployee Directors may also be reimbursed for reasonable expenses incurred by
them in connection with their attendance at Board Meetings. Nonemployee
Directors are also eligible to receive options under the Company's Amended and
Restated 1993 Stock Option Plan for Nonemployee Directors. Under this plan,
Nonemployee Directors receive an option to purchase 9,000 shares of the
Company's common stock upon becoming a director and then each year immediately
following the Annual Shareholders meeting. These options vest ratably over the
succeeding year upon a director's attendance at each of the regular board
meetings.

EXECUTIVE OFFICERS

In addition to the individuals nominated for or serving as directors above
who are also executive officers of the Company, the following individuals serve
as executive officers of the Company as of April 2, 1999:

WILLEM VAN NIEUWENHUYZEN

Mr. van Nieuwenhuyzen, age 51, has served as General Manager, Europe,
Middle East and Africa since October 1997 and was appointed an officer of
Harbinger in November 1997. From September 1995 to October 1997 he served as
Manager of Global Accounts, Europe, Middle East and Africa, of Hewlett-Packard
EMEA SA, and from May 1991 to September 1995, as Director of Computer Systems
Organization of Hewlett-Packard Netherlands BV.

DAVE BURSIEK

Mr. Bursiek, age 61, has served as Executive Vice President and General
Manager of the Customer Solutions and Enhancements Division since February 1999.
From January 1997 through February 1999, he served as Senior Vice President of
Sales, with responsibility for mass deployment sales. From December 1996 until
January 1997, he served as the Executive Vice President of Sales of Supply Tech,
Inc., which was acquired by the Company in January 1997. From 1995 until
December 1996, he was a management consultant with Optimum Associates, a
consulting firm. In 1994, he served as Chief Executive Officer of Sapiens
International, a software and consulting firm.

DANIEL L. MANACK

Mr. Manack, age 41, has served as Senior Vice President and General
Manager, EC Solutions Division since February 1999. From February 1998 to
February 1999, he served as Vice President and General Manager -- Professional
Services & Outsourcing Practice and from January 1997 to February 1998 he served
as Vice President of Professional Services and Outsourcing. From September 1994
until December 1996, he was a principal with the Information Services unit of
Unisys Corporation and from June 1980 until August 1994, he was a Business
Manager with Texas Instruments.

JAMES K. MCCORMICK

Mr. McCormick, age 42, has served as Chief Financial Officer of the Company
since April 1, 1999. From September 1997 until February 1999, he served as Chief
Financial Officer, Treasurer and Secretary of Knology Holdings, Inc., a
telecommunications service provider. From 1992 until August 1997, he worked as
7
<PAGE> 10

Corporate Controller and Treasurer for United Dairy Farmers, Inc., a holding
company for dairy retail and manufacturing companies.

EXECUTIVE COMPENSATION

The following table presents certain summary information concerning
compensation earned for services rendered to the Company by the Company's Chief
Executive Officer and each of the other four most highly compensated executive
officers of the Company during 1998 (collectively the "Named Executive
Officers") for the fiscal years ended December 31, 1998, 1997 and 1996.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL ------------
COMPENSATION SECURITIES
--------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (#) COMPENSATION(1)
- --------------------------- ---- -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
C. Tycho Howle(2)............... 1998 $257,216 $ - - $ -
Chairman of the Board and 1997 213,977 81,000 225,000 -
Chief Executive Officer 1996 187,555 110,500 225,000 -
David T. Leach(2)............... 1998 $233,501 $ - 225,000 $850,000(3)
Vice
Chairman -- International; 1997 187,133 74,000 84,375 -
Director 1996 151,569 83,520 180,000 -
James M. Travers................ 1998 $184,833 $ 8,800 120,000 $ -
President and Chief Operating 1997 140,985 59,000 108,750 25,000(4)
Officer 1996 126,675 79,300 - -
James C. Davis(5)............... 1998 $198,333 $ - 180,000 $720,000(5)
Group Executive -- Business 1997 167,017 65,000 84,375 -
Development; Director 1996 141,758 105,465 236,250 -
Willem van Nieuwenhuyzen........ 1998 $212,657 $ 20,000 - $ -
Vice President and General 1997 50,670(6) 20,000 75,000 -
Manager -- Europe, Middle 1996 - - - -
East and Africa
Joel G. Katz(7)................. 1998 $171,417 $ 5,500 - $ -
Chief Financial Officer and 1997 110,106 32,000 105,000 -
Secretary 1996 95,000 24,880 56,250 -
</TABLE>

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

(1) In accordance with rules of the Securities and Exchange Commission, other
compensation in the form of perquisites and other personal benefits has been
omitted if such perquisites and other personal benefits constituted less
than the lesser of $50,000 or 10% of the total annual salary and bonus for
the Named Executive Officer for such year.
(2) Mr. Leach served as Chief Executive Officer until September 1998. In
September 1998, Mr. Howle assumed the additional title of Chief Executive
Officer and Mr. Leach became Vice Chairman -- International. Immediately
prior thereto, Mr. Howle served as the Chairman and Mr. Leach served as
Chief Executive Officer of the Company.
(3) In connection with his resignation from the Company as Chief Executive
Officer, Mr. Leach will receive certain severance payments in accordance
with the terms of his employment agreement.
(4) Mr. Travers was reimbursed $25,000 for certain expenses incurred in
connection with his relocation to Atlanta, Georgia from Dallas, Texas.
(5) Mr. Davis resigned from his position as Group Executive -- Business
Development in December 1998 and as a director effective March 15, 1999. In
connection with his resignation from the Company, Mr. Davis will receive
certain severance payment in accordance with the terms of his employment
agreement.
(6) Mr. van Nieuwenhuyzen joined the Company in October 1997.

8
<PAGE> 11

OPTION GRANTS IN LAST FISCAL YEAR

The following table contains information concerning options granted during
the year ended December 31, 1998 to the Named Executive Officers:

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
ASSUMED ANNUAL RATES
NUMBER OF OF STOCK PRICE
SECURITIES EXERCISE APPRECIATION
UNDERLYING % OF TOTAL OPTIONS OR BASE FOR OPTION TERM(2)
OPTIONS GRANTED TO EMPLOYEES PRICE EXPIRATION -----------------------
GRANTED(1) IN FISCAL YEAR ($/SH) DATE 5% 10%
----------- -------------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
C. Tycho Howle....... - - - - - -
David T. Leach....... 225,000 8.9% $21.75 06/05/05 $1,992,248 $4,642,784
James M. Travers..... 120,000 4.7 7.69 10/28/05 375,672 875,476
James C. Davis....... 180,000 7.1 21.75 06/05/05 1,593,798 3,714,227
Willem van
Nieuwenhuyzen...... - - - - - -
Joel G. Katz......... - - - - - -
</TABLE>

- -------------------
(1) The options granted to the named executive officers were awarded under the
Company's 1996 Stock Option Plan (the "1996 Plan"). The options granted
under the 1996 Plan are exercisable for a period not to exceed seven years
from the date of grant. Options generally vest over four years of continuous
employment with the Company. The exercise price of each option granted was
not less than 100% of the fair market value of a share of Common Stock on
the date of grant.
(2) Amounts represent the hypothetical gains that could be achieved for the
respective options at the end of the seven year option term. The assumed 5%
and 10% rates of stock appreciation are mandated by the rules of the
Securities and Exchange Commission and may not accurately reflect the
appreciation of the price of the Common Stock from the grant date until the
expiration of the option term. These assumptions are not intended to
represent a forecast of future stock appreciation of the Company's Common
Stock. No assurance can be given that the Company's Common Stock will
appreciate at all.

OPTIONS EXERCISED AND YEAR-END VALUES OF AN EXERCISED OPTION

The following table sets forth information, as of December 31, 1998,
regarding the number of shares received and the value realized upon exercise of
the stock options, and the number and value of exercisable and unexercisable
options to purchase Common Stock of the Company held by the Company's Named
Executive Officers.

AGGREGATED OPTION EXERCISES IN 1998 AND 1998 YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SHARES UNDER- VALUE OF UNEXERCISED
LYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT DECEMBER 31, 1998 AT DECEMBER 31, 1998(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
C. Tycho Howle....... - - 112,500 281,250 $ 12,375 $ 24,750
David T. Leach....... - - 390,937 374,063 1,531,069 107,044
James M. Travers..... 18,000 $ 92,880 49,912 229,761 117,261 182,802
James C. Davis....... 67,500 348,975 160,311 362,814 25,987 142,313
Willem van
Nieuwenhuyzen...... - - - - - -
Joel G. Katz......... 16,689 107,450 82,217 114,054 150,136 43,018
</TABLE>

- -------------------
(1) Calculated by multiplying the number of shares underlying options by the
difference between the closing sale price of the Common Stock as reported by
the Nasdaq Stock Market on the date of exercise and the exercise price of
the options.
(2) Calculated by multiplying the number of shares underlying options by the
difference between the closing sale price for the Common Stock of $8.00 as
reported by the Nasdaq Stock Market on December 31, 1998 and the exercise
price of the options.

9
<PAGE> 12

AGREEMENTS WITH EMPLOYEES

Employees of the Company, including executive officers, are required to
sign an agreement with the Company defining the employee's responsibilities,
restricting the ability of the employee to compete with the Company during his
or her employment and for a designated period thereafter, restricting
solicitation of customers and employees following employment with the Company,
and providing for ownership and assignment of intellectual property rights to
the Company. The agreements have an indefinite term, but the employee may
terminate employment with the Company at any time.

On March 4, 1997, the Company entered into an employment agreement with C.
Tycho Howle effective as of January 4, 1997 in order to insure Mr. Howle's
continued services as Chairman of the Board of the Company. The employment
agreement provides for a four year term with a current base salary of $275,000,
with bonus opportunity of 50% of base salary at target if certain performance
criteria are met. In addition to the terms of the Company's standard employment
agreement described above, Mr. Howle's employment agreement provides for: (i) an
option grant under the 1996 Plan to purchase 150,000 shares of Common Stock at a
price equal to the fair market value of the Company's stock on the date of the
grant (the "Option"), (ii) termination for cause by the Company without payment
of severance, (iii) voluntary departure by Mr. Howle without severance, and (iv)
termination without cause by the Company with payment of severance.

The Company may terminate Mr. Howle for cause if Mr. Howle: (i) knowingly
and willfully engages in misconduct with respect to the business and affairs of
the Company, (ii) violates any policy of the Company in a material way relating
to ethical business conduct, practices, or fiduciary duties of a senior
executive, (iii) knowingly and willfully breaches any material provision of his
employment agreement which is not remedied within thirty (30) days after receipt
of notice, (iv) commits a felony or an illegal act involving moral turpitude or
fraud or dishonesty which may reasonably be expected to have a material adverse
effect on the Company, or (v) fails to comply with reasonable directives of the
Board, if not remedied within 30 days after receipt of notice. If the Company
terminates Mr. Howle without cause, then the Company will be obligated to pay
Mr. Howle the net present value of the compensation that would be payable to Mr.
Howle during the remaining term of his employment agreement.

Mr. Howle's Option vests ratably over four years. In the event the Company
terminates Mr. Howle without cause, the Option will continue to vest as if he
were still employed by the Company. Further, in the event of a "Change in
Control" of the Company, Mr. Howle's Option shall immediately vest in its
entirety. A "Change in Control" shall be deemed to have occurred if (and only
if) any of the following shall have taken place: (i) a change in control is
reported by the Company in response to either Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"), or Item 1 of Form 8-K promulgated under the Exchange Act; (ii)
any person (as such term is used in Section 13(d) and 14(d)(2) of the Exchange
Act) is or becomes the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) directly or indirectly, of securities of the Company representing
forty percent (40%) or more of the combined voting power of the Company's then
outstanding securities; or (iii) following the election or removal of directors,
a majority of the Board consists of individuals who were not members of the
Board two years before such election or removal, unless the election of each
director who was not a director at the beginning of such two-year period has
been approved in advance by directors representing at least a majority of the
directors then in office who were directors at the beginning of the two-year
period.

On July 1, 1997, Harbinger entered into employment agreements with David T.
Leach and James C. Davis, effective as of January 2, 1997, in order to insure
their continued services as Chief Executive Officer and as President and Chief
Operating Officer of Harbinger, respectively, on substantially the same terms as
Mr. Howle's agreement (except that neither Mr. Leach nor Mr. Davis received a
stock option grant in connection with his employment agreement). The employment
agreements provided for a four-year term at a current base salary of $250,000
(as of April 1, 1998) for Mr. Leach and $210,000 (as of April 1, 1998) for Mr.
Davis, with a bonus opportunity of 50% of base salary at target if certain
performance criteria were met. The agreements provided that stock options
granted to Messrs. Leach and Davis vest immediately upon a Change of Control and
continue to vest if they are terminated without cause. Mr. Leach resigned as
Chief

10
<PAGE> 13

Executive Officer in September 1998, assumed the title of Vice
Chairman -- International and remained in an operational role until February
1999. Mr. Leach will continue to receive the salary and certain perquisites
described in his employment agreement. Mr. Davis resigned as President and Chief
Operating Officer of the Company in October 1998 and assumed the title Group
Executive, Business Development. Mr. Davis agreed to resign from this role
effective December 31, 1998 and will continue to receive the salary and certain
perquisites described in his employment agreement.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors and persons who
own more than ten percent of the Common Stock to file initial statements of
beneficial ownership (Form 3) and statements of changes in beneficial ownership
(Forms 4 and 5) of Common Stock and any other equity securities of the Company
with the Securities and Exchange Commission and The Nasdaq Stock Market.
Officers, directors and greater than ten percent shareholders are required by
regulations of the Securities and Exchange Commission to furnish the Company
with copies of all such forms they file.

Based solely on a review of the copies of the forms that it has received,
and on written representations from certain reporting persons that no additional
forms were required, the Company believes that its officers, directors and
greater than ten percent beneficial owners complied with all of these filing
requirements in 1998.

401(K) RETIREMENT PLAN

Effective April 1, 1998, the Company merged its previous three 401(k) plans
into one plan, now called the Harbinger Corporation 401(k) Retirement Plan (the
"401(k) Plan").

The 401(k) Plan is intended to be a profit sharing plan as defined for
purposes of Sections 401(a), 402, 412 and 417 of the Internal Revenue Code of
1986, as amended, contain a cash or deferred arrangement under Sections 401(F)
of the Internal Revenue Code, and comply with the requirements of the Employee
Retirement Income Security Act of 1974, as amended.

The 401(k) Plan allows eligible employees to participate beginning on the
first day of the first month following the employee's hire date. The employee
may contribute from 2% to 15% of salary to the 401(k) Plan up to a maximum of
$10,000 per year. The Company makes a discretionary matching contribution of 50%
of the employee's contribution, up to a maximum of 4% of annual compensation,
subject to a $2,200 limit per employee. The Company match is made each pay
period and vests 25% per year while the employee remains employed. Unvested
portions of the Company match are forfeited at termination of employment.

STOCK OPTION PLANS AND STOCK PURCHASE PLAN

Stock Option Plans. The Company's 1996 Stock Option Plan (the "1996 Plan")
was approved by the Company's shareholders and became effective on May 8, 1996.
The 1996 Plan replaced the Company's Amended and Restated 1989 Stock Option Plan
(the "1989 Plan"). Following approval of the 1996 Plan at the Annual
Shareholders Meeting in 1996, no further stock options were granted under the
1989 Plan. The 1989 Plan continues in effect only with respect to outstanding
stock options which were granted under that plan and will terminate and cease to
exist as of the date on which all outstanding stock options which were granted
under the 1989 Plan are exercised in full, expired or canceled. The 1996 Plan
was amended at the 1998 Annual Shareholder Meeting to increase the number of
shares available for issuance by 1,050,000. The purpose of the 1996 Plan is to
provide incentives for officers, directors, consultants and key employees to
promote the success of the Company, and to enhance the Company's ability to
attract and retain the services of such persons. The aggregate number of shares
of Common Stock reserved for issuance under the 1996 Plan is 8,737,500 shares,
plus an amount equal to the number of all shares that are either not subject to
options granted under the 1989 Plan or were subject to options granted under the
1989 Plan or were subject to Options granted thereunder that expire without
exercise to officers consultants and key employees. Options granted under the
1996 Plan may be either (i) options intended to qualify as "incentive stock
options" under Section 422 of the Code, or (ii) non-qualified stock options. The
1996 Plan permits the grant of stock
11
<PAGE> 14

appreciation rights in connection with the grant of stock options. Stock options
may be granted under the 1996 Plan for all employees and consultants of the
Company, or of any present or future subsidiary or parent of the Company, who
are considered "key employees" or "key consultants." The 1996 Plan is
administered by the Compensation Committee of the Board of Directors. The
Compensation Committee has the authority to determine exercise prices applicable
to the options, the eligible officers, directors, consultants or employees to
whom options may be granted, the number of shares of the Company's Common Stock
subject to each option, and the extent to which options may be exercisable. The
Compensation Committee is empowered to interpret the 1996 Plan and to prescribe,
amend and rescind the rules and regulations pertaining to the 1996 Plan. Options
granted under the 1996 Plan generally vest ratably over four years. No option is
transferable by the optionee other than by will or the laws of descent and
distribution, and each option is exercisable during the lifetime of the optionee
only by such optionee, unless otherwise approved by the Compensation Committee.

Any incentive stock option that is granted under the 1996 Plan may not be
granted at a price less than the fair market value of the Company's Common Stock
on the date of grant (or less than 110% of fair market value in the case of
holders of 10% or more of the total combined voting power of all classes of
stock of the Company or a subsidiary or parent of the Company). Non-qualified
stock options may be granted at the exercise price established by the
Compensation Committee, which may be less than the fair market value of the
Company's Common Stock on the date of grant.

Each option granted under the 1996 Plan is exercisable for a period
determined by the Compensation Committee, which period may not exceed ten years
from the date of grant (or five years in the case of a holder of more than 10%
of the total combined power of all classes of stock of the Company or of a
subsidiary or parent of the Company). Options terminate upon expiration of such
period, or earlier upon termination of the recipient's employment with the
Company, or as determined by the Compensation Committee.

The terms of the 1989 Plan are substantially similar to the terms of the
1996 Plan. The material difference between the plans is the manner of exercise
permitted by the 1996 Plan. Under the 1996 Plan, payment of the purchase price
for shares of Common Stock purchased upon exercise of an option may be made in
any of the following terms: (i) in cash; (ii) by delivery to the Company of a
number of shares of Common Stock which have been owned by the optionee for at
least six months prior to the date of exercise of the option having an aggregate
fair market value on the date of delivery of not less than the total purchase
price for the shares being purchased upon exercise of the option; (iii) by
delivery of a promissory note executed by the optionee to the Company which
shall include such terms and conditions as approved by the Board of Directors,
including without limitation, that: (a) the balance equal to the aggregate
purchase price for the shares being purchased shall be payable in equal
installments over such a period as approved by the Board of Directors; (b)
interest shall accrue at a per annum rate equal to the prime rate as announced
by the Wall Street Journal as the prevailing "prime rate" of interest per annum;
and (c) the optionee shall be personally liable for the repayment of the unpaid
principal balance of the loan and any and all accrued but unpaid interest on the
loan; (iv) by surrender of a number of shares of Common Stock otherwise issuable
upon exercise of the option having an aggregate fair market value on the date of
exercise of not less than the total purchase price for all shares being
purchased upon exercise of the option, including the shares being surrendered;
and (v) in any combination of the forms described above as approved by the Board
of Directors.

As of March 12, 1999, options to purchase 871,656 shares of Common Stock
were outstanding under the 1989 Plan and 2,284,690 shares of Common Stock had
been issued upon exercise of options granted under such plan. As of March 12,
1999, options to purchase 5,814,506 shares of Common Stock were outstanding
under the 1996 Stock Option Plan and 883,258 shares of Common Stock had been
issued upon exercise of options granted under such plan.

Nonemployee Directors Stock Option Plan. The Amended and Restated 1993
Stock Option Plan for Nonemployee Directors (the "Nonemployee Directors Plan")
became effective on April 30, 1993. A total of 525,000 shares of the Company's
Common Stock have been reserved for issuance under the Nonemployee Directors
Plan.

The terms of the options granted under the Nonemployee Directors Plan,
including the exercise price, dates and number of shares subject to the options
are specified in the Nonemployee Directors Plan. The
12
<PAGE> 15

Nonemployee Directors Plan provides for the automatic granting of non-qualified
stock options to Nonemployee Directors. Each Nonemployee Director receives an
option to purchase 9,000 shares of Common Stock on the date of, and at a time
immediately following every, annual meeting of the shareholders ("Annual
Grant"). Each Nonemployee Director who is first appointed or elected to the
Board and attends a regular quarterly meeting of the Board which occurs at any
time other than at an annual meeting of the shareholders is granted an option to
purchase a number of shares of Common Stock equal to the product of (i) 9,000
multiplied by (ii) a fraction, the numerator of which is the number of regular
quarterly directors meetings expected by the Chief Executive Officer of the
Company to occur between the date that such Nonemployee Director is appointed or
elected to the Board and the first annual meeting of shareholders following such
appointment or election, and the denominator of which is four (the "Interim
Grant"). Annual Grants and Interim Grants vest during the year based on the
attendance by the Nonemployee Director at the regular quarterly meetings of the
Board. No option is transferable by the optionee other than by will or laws of
descent and distribution, and each option is exercisable during the lifetime of
the optionee only by such optionee, unless otherwise approved by the
Compensation Committee. The exercise price of all options must be at least equal
to the fair market value of the shares on the date of grant, and the term of
each option may not exceed seven years. The Nonemployee Directors Plan will
continue in effect for a period of ten years unless sooner terminated by the
Board of Directors.

As of March 12, 1999, options to purchase an aggregate of 267,749 shares of
Common Stock were outstanding under the Nonemployee Directors Plan and
approximately 79,312 shares had been issued pursuant to the exercise of options
granted under the plan.

Amended and Restated Harbinger Corporation Employee Stock Purchase
Plan. On May 8, 1995, the shareholders of the Company approved the Harbinger
Corporation Amended and Restated Employee Stock Purchase Plan ("Stock Purchase
Plan") to be effective January 1, 1996. The purpose of the Stock Purchase Plan
is to encourage and enable employees of the Company and its subsidiaries to
acquire a proprietary interest in the Company through ownership of shares of the
Company's Common Stock. The Stock Purchase Plan authorizes the issuance of up to
487,500 shares of the Company's Common Stock (subject to adjustment for capital
changes) pursuant to the exercise of non-transferable options granted to
participating employees.

An employee who elects to participate in the Stock Purchase Plan must
authorize a stated dollar amount of the employee's regular pay to be deducted by
the Company from the employee's pay during each of four quarterly payroll
deduction periods (each a "Purchase Period"). The minimum deduction for a
participant is $10.00 per pay period. Purchase Periods begin on January 1, April
1, July 1, and October 1 of each calendar year. On the last day of each Purchase
Period, the Company is deemed to have granted a purchase right to each
participant as of the first day of the Purchase Period to purchase as many
shares of Common Stock as can be purchased with the participant's payroll
deductions. On the last business day prior to reporting of financial results for
the current fiscal period, the participant is deemed to have exercised this
option, at the option price, to the extent of such participant's accumulated
payroll deductions. The participant may not purchase Common Stock having a fair
market value (measured on the first business day of the Purchase Period) in
excess of $3,750 during a Purchase Period. The option price under the Stock
Purchase Plan is equal to 85% of the fair market value of the Common Stock on
the third business day after the reporting of financial results for either the
prior or current fiscal period, whichever is lower. Interest is not paid on
amounts deducted from an employee's pay and used to purchase Common Stock under
the Stock Purchase Plan. An employee may not sell shares purchased under the
Stock Purchase Plan for at least one Purchase Period following the Purchase
Period in which the option for such shares was granted.

An employee elects to participate by delivering to the Company a
participation form authorizing the stated dollar amount to be deducted each pay
period for the entire Purchase Period. If an employee does not file a
participation form at least 15 days before the start of a Purchase Period, the
employee's election or payroll deductions for the preceding Purchase Period
remains in effect. Employee's rights under the Stock Purchase Plan may not be
assigned, transferred, pledged or otherwise disposed of, except by will or the
laws of descent and distribution.

13
<PAGE> 16

Employees of the Company who have completed six full months of service with
the Company and whose customary employment is more than 20 hours per week and
five or more months per calendar year are eligible to participate in the Stock
Purchase Plan. An employee may not be granted an option under the Stock Purchase
Plan if after the granting of the option such employee would be deemed to own 5%
or more of the combined voting power of value of all classes of stock of the
Company. As of March 12, 1999, approximately 720 employees are eligible to
participate in the Stock Purchase Plan.

An employee's rights under the Stock Purchase Plan terminate upon
termination of his or her employment for any reason, including retirement. Upon
termination, the Company will refund the employee's payroll deductions made
during the Purchase Period. A participant may withdraw from the Stock Purchase
Plan at any time prior to the exercise of their option to buy shares under the
Stock Purchase Plan by delivering to the Company a participation withdrawal
form. The participant may elect on the withdrawal form to receive all of the
accumulated payroll deductions as a refund or to exercise the participant's
outstanding purchase rights to purchase Common Stock in the amount of payroll
deductions withheld during the Purchase Period. A participant who withdraws from
the Stock Purchase Plan is not eligible to rejoin the Stock Purchase Plan until
the second Purchase Period following the Purchase Period of withdrawal. In the
event a participant who is an officer who files reports under Section 16 of the
Securities Exchange Act of 1934, as amended, ceases participation in the Stock
Purchase Plan, such officer may not re-enroll in the Stock Purchase Plan under
the Purchase Period beginning coincident with or immediately following the
expiration of a six-month period beginning upon the effective date of such
officer's withdrawal from the Plan.

The Stock Purchase Plan is administered by the Compensation Committee. No
member of the Board of Directors is eligible to participate in the Stock
Purchase Plan during the period he serves as a member of the Compensation
Committee. The proceeds received by the Company from the sale of Common Stock
pursuant to the Stock Purchase Plan will be used for general corporate purposes.

The following discussion summarizes certain U.S. tax considerations for
employees participating in the Stock Purchase Plan and certain tax effects to
the Company. However, the summary does not address every situation that may
result in taxation. For example, it does not discuss the state taxes or the tax
implications arising from a participant's death. The Stock Purchase Plan is not
subject to the provisions of the Employee Retirement Income Security Act of
1974, and the provisions of Section 401(a) of the Code are not applicable to the
Stock Purchase Plan.

Amounts deducted from any employee's pay under the Stock Purchase Plan are
included in the employee's compensation subject to federal income and social
security taxes. The employee's employer will withhold taxes on these amounts. An
employee of the Company will not recognize any additional income at the time he
or she elects to participate in the Stock Purchase Plan, or purchase Common
Stock under the Stock Purchase Plan.

If an employee of the Company disposes of Common Stock purchased pursuant
to the Stock Purchase Plan within two years after the first business day of the
Purchase Period in which such stock was purchased, the employee will recognize
ordinary compensation income at the time of disposition in an amount equal to
the excess of the fair market value of the stock on the day the stock was
purchased over the purchase price the employee paid for the stock (i.e., the
amounts withheld from the employee's compensation used to purchase the stock).
This amount may be subject to withholding taxes, including social security
taxes. In addition, the employee generally will recognize a capital gain or loss
in an amount equal to the difference between the amount realized upon the sale
of the stock and his or her basis in the stock (that is, his or her purchase
price plus the amount taxed as compensation income). Generally, if the shares
have been held for more than twelve months, such gain or loss will be long-term
capital gain or loss.

If an employee of the Company disposes of Common Stock purchased pursuant
to the Stock Purchase Plan more than two years after the first business day of
the Purchase Period in which such stock was purchased, the employee will
recognize as ordinary compensation income at the time of such disposition an
amount equal to the lesser of (a) the excess of the fair market value of the
stock measured at the time of such disposition over the amount paid for the
stock, or (b) 15% of the fair market value of the stock measured as of the first
business day of the Purchase Period in which the stock was purchased. This
amount, however, is not
14
<PAGE> 17

subject to social security taxes or other withholding. In addition, the employee
generally will recognize a long-term capital gain or loss in an amount equal to
the difference between the amount realized upon the disposition of the stock and
his or her basis in the stock (that is, his or her purchase price plus the
amount, if any, taxed as compensation income).

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

GENERAL

The Compensation Committee of the Company's Board of Directors has
furnished the following report on Executive Compensation in accordance with the
rules and regulations of the Securities and Exchange Commission. This report
outlines the duties of the Committee with respect to executive compensation, the
various components of the Company's compensation program for executive officers
and other key employees, and the basis on which the 1998 compensation was
determined for the executive officers of the Company, with particular detail
given to the 1998 compensation for the Company's Chief Executive Officer.

During 1998, the Compensation Committee was comprised of Stuart L. Bell,
William D. Savoy, William B. King and David Hildes.

Duties of the Committee include establishing and approving compensation of
the Chief Executive Officer, consulting with the Chief Executive Officer for the
purpose of reviewing and approving compensation for other executive officers and
key employees, administering the Company's stock option and stock purchase plans
for employees, and approving management incentive bonuses. In performing the
duties described above, the Compensation Committee seeks to achieve the
following:

(i) to provide compensation opportunities that are based on the
performance of the Company,

(ii) to provide competitive compensation programs that enable the Company
to attract and retain highly qualified executive managers who are
focused on enhancing shareholder value, and

(iii) to coordinate compensation programs and practices so that they
promote the Company's annual and long-term business objectives and
strategies.

The Compensation Committee in all instances seeks to link compensation to
the value and level of the performance of the executive. The Compensation
Committee seeks to achieve this objective by implementing, as the principal
components of compensation, a program of base salary, incentive compensation and
equity-based incentives. The compensation decisions of the Committee relative to
the Company's executive officers and key employees are described below as to
each of the foregoing components.

COMPENSATION OF EXECUTIVE OFFICERS GENERALLY

Salary. The salary levels of the Company's executive officers and other
key employees are reviewed by the Committee annually. In determining appropriate
base-salary levels, the Committee considers factors such as duties and
responsibilities inherent in the position held, initiative, performance, tenure
and pay practices for other companies of similar size in the electronics
industry, as well as business conditions generally prevailing in the software
and technology industries on whole. The Company refers to external information
to determine base salaries paid by other companies for comparable positions. For
example, the Company refers to a survey by organizations such as the American
Electronics Association and Culpepper and Associates for both executives and
non-executives to determine market salaries for comparable positions paid by
other software and electronic companies of similar size, and awards salary
increases based on the number of years experience and performance, giving
consideration to the market salaries reflected by these surveys. Additionally,
for certain executive officers, compensation arrangements are often set forth in
employment contracts with specified terms.

Cash Bonuses. Annual cash bonuses are determined and paid to executives
and key employees pursuant to the Company's compensation plan for executive
officers and other key employees. For each executive and key employee, the cash
bonus is based in whole or in part upon the attainment of financial objectives,
either
15
<PAGE> 18

for the Company as a whole, or for the employee's area of responsibility. For
1998, these objectives were weighted 50% to the attainment of targeted operating
income and 50% to the attainment of targeted revenue. The Compensation Committee
believes that the equal weighting of revenue and operating income emphasized the
Company's perception of the importance of increasing the Company's market share
in the rapidly growing market for electronic commerce software and services
while maintaining overall profitability. Cash bonuses for executive officers and
other key employees are targeted at ranges from 25% of base salary to 50% of
base salary. The amount of the bonus payable to any executive officer or other
key employee ranges from zero percent of targeted bonus to a maximum of 200% of
targeted bonus depending on the level of financial performance and other goals
achieved. Since bonus payments are based in whole or in part on the degree in
which the Company achieves its overall operating income and revenue goals, the
compensation of executive officers and key employees is higher during years in
which the Company meets or exceeds its specified financial performance goals.
Operating income (excluding purchased in process product development, write-off
of software development costs, acquisition related and other one-time charges)
and revenues for the year ended December 31, 1998 were $20.1 million and $135.1
million, respectively, as compared to an operating income and revenues of $17.8
million and $118.2 million, respectively, for the year ended December 31, 1997.
Total cash bonuses of approximately $990,000 were paid to 80 members of senior
management participating in the incentive plan during 1998. Total cash bonuses
of approximately $1.1 million were paid to 47 members of senior management
participating in the plan during 1997.

Equity-based Incentives. The Company maintains stock option plans to
provide executive officers and other key employees and consultants with
additional incentive to promote the financial success of the Company which, in
turn, is intended to positively impact the value of the Company's Common Stock.
Options granted under the Company's Stock Option Plans have generally been
long-term (seven years) and options granted since July 1994 generally vest
ratably over the four years following the date of grant. All such options are
priced and exercisable at fair market value on the date of grant. With such
features, the Company considers stock options as an effective way of aligning
the interest of management with the interest of the Company's shareholders to
promote growth in the Company's stock price and inducing executive officers and
other key employees to remain with the Company on a long-term basis. The
Compensation Committee believes that the Company's long-term goals will best be
achieved by maintaining in place the core management team of executive officers
and other key employees. During 1998, options to purchase 650,047 shares of the
Company's Common Stock were awarded to executive officers. As of December 31,
1998, options to purchase an aggregate of 6,902,026 shares of the Company's
Common Stock were held by 783 employees under the Company's Stock Option Plans.
Included in this amount as of December 31, 1998 are options to purchase
approximately 2.3 million shares of the Company's Common Stock at an average
exercise price of $10.70 held by executive officers named in the Summary
Compensation Table.

COMPENSATION OF THE CHIEF EXECUTIVE OFFICER

C. Tycho Howle became the Chief Executive Officer of the Company in October
1998, succeeding David T. Leach. Mr. Leach became Vice Chairman -- International
of the Company. In establishing the 1998 cash bonus compensation for Mr. Leach,
the Company observed similar guidelines as set forth for executive officers
generally. The Company did not assign specific weighting to guidelines or
factors other than the weighting that is applied to the achievement of operating
income and revenue goals. During 1998, Mr. Leach's base salary was increased to
$250,000, as compared to $200,000 for the immediately preceding year. The
Compensation Committee determined not to award a bonus to Mr. Leach for 1998 in
his capacity as Chief Executive Officer, reflecting the fact that the Company
had not met its targeted goals for operating income and revenue for 1998. Mr.
Leach's bonus was targeted at 50% of base salary if the Company achieved
targeted operating income and revenue goals. In 1997, Mr. Leach received a bonus
of $74,000. Mr. Howle served as Chairman during 1998 and assumed the role of
Chief Executive Officer in October 1998. His base salary during 1998 was
$275,000 and was not increased when he assumed additional responsibilities. The
Compensation Committee determined not to award a bonus to Mr. Howle in 1998,
reflecting the fact that the Company had not met its targeted goals for
operating income and revenue. His bonus was targeted at 50% of base salary if
the Company achieved its financial goals.

16
<PAGE> 19

POLICY WITH RESPECT TO QUALIFYING COMPENSATION FOR DEDUCTIBILITY

Section 162(m) of the Internal Revenue Code of 1986, as amended, limits the
deduction allowable to the Company for compensation paid to the Chief Executive
Officer and each of the four other most highly compensated executive officers to
$1.0 million. Qualified performance-based compensation is excluded from this
limitation if certain requirements are met. The Company's policy is generally to
preserve the federal income tax deductibility of compensation paid, to the
extent feasible. The Compensation Committee believes that awards under the
Company's management incentive plan and its award of options made under stock
option plans for employees will qualify as performance-based compensation and
thereby be excluded from the $1.0 million limitation. Notwithstanding the
Company's policy to preserve the federal income tax deductibility of
compensation payments, under certain circumstances, the Compensation Committee,
in its discretion, may authorize payment, such as salary, bonuses or otherwise,
that may cause an executive officer's income to exceed the deductible limits.

Compensation Committee

Stuart L. Bell
William D. Savoy
William B. King
David Hildes

17
<PAGE> 20

STOCK PERFORMANCE GRAPH

The following line-graph provides a comparison of the cumulative total
shareholder return on the Company's Common Stock for the period from August 25,
1995, the date of the Company's initial public offering, against the cumulative
shareholder return during such period achieved by the Nasdaq Stock Market (U.S.
Companies) and the Index for Nasdaq Computer and Data Processing Stocks (the
"Nasdaq Computer Index"). All amounts have been calculated as if all dividends
were reinvested.

<TABLE>
<CAPTION>
Nasdaq
Computer
Nasdaq Stock and Data
Measurement Period HARBINGER Market (US Processing
(Fiscal Year Covered) CORPORATION Companies) Stocks
<S> <C> <C> <C>
12/31/93 74.5 55.7
12/31/94 72.8 67.7
12/30/95 152.1 103.0 103.0
12/29/96 173.6 126.7 127.2
12/31/97 278.9 155.2 156.2
12/31/98 119.0 218.7 280.0
</TABLE>

The Stock Performance Graph shall not be deemed incorporated by reference
by any general statement incorporating by reference this proxy statement into
any filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended (together, the "Acts"), except to the extent
that the Company specifically incorporates this information by reference, and
shall not otherwise be deemed filed under such Acts.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 1998, William Savoy, William King, David Hildes and Stuart Bell
served as members of the Compensation Committee of the Board of Directors. None
of these directors served as an officer or employee or was formerly an officer
of the Company or its subsidiaries other than Mr. Hildes, who served as
Secretary of Premenos Technology Corp. until its acquisition by the Company in
December 1997.

18
<PAGE> 21

CERTAIN TRANSACTIONS

OTHER TRANSACTIONS

The Company has purchased insurance on the lives of Messrs. Howle, Leach,
Davis and Travers. A portion of the proceeds payable on the death of Messrs.
Howle and Leach will be used, at the discretion of the deceased's estate, to
purchase shares of Common Stock owned by the deceased at the time of his death.

The Company earned $284,000 in revenue in 1998 for software development,
consulting and network services under contract with Lifeline Networks, B.V.
("Lifeline"), an entity in which Ad Nederlof is a minority shareholder. This
contract was terminated at year end. Mr. Nederlof has been a director of the
Company since April 1997 and is a Class II director. The Company also paid
$189,000 to Lifeline for expenses relating to office space shared by Lifeline
and the Company's Dutch subsidiary. This shared space arrangement was also
terminated.

PROPOSAL 2

AMENDMENT TO THE 1996 STOCK OPTION PLAN

In March 1999, the Board of Directors approved, and recommended to the
shareholders that they approve, a proposal to amend the Harbinger Corporation
1996 Stock Option Plan, as amended (the "1996 Plan") to ensure compliance with
the safe harbor provisions of Section 162(m) of the Internal Revenue Code of
1986, as amended, (the "Code") and the regulations promulgated thereunder. The
proposed amendment limits the number of options to purchase shares of Common
Stock that can be granted to any individual grantee in any one calendar year, so
that the maximum amount of Common Stock underlying such options is 1,000,000
shares. The proposed amendment also requires that each of the members of the
Board committee that administers the 1996 Plan must be "outside directors"
within the meaning of Section 162(m) of the Code. The proposed amendment would
not change the maximum number of shares that may be subject to options granted
under the 1996 Plan. The text of the proposed amendment to the 1996 Plan is set
forth in Annex A to this Proxy Statement. The 1996 Plan is described above under
"Proposal 1 -- Stock Option Plans and Stock Purchase Plan" and is qualified in
its entirety by reference to the text of the 1996 Plan.

The proposed amendment to the 1996 Plan will be adopted upon receiving the
affirmative vote of holders of a majority of the shares voting in person or
represented by proxy at the Annual Meeting. Proxies will be voted in accordance
with the specifications marked thereon, and if no specifications are made, will
be voted "FOR" adoption of the proposed amendment to the 1996 Plan. The Board
has determined that the amendment to the 1996 Plan is in the best interest of
the Company and its shareholders.

The Board of Directors recommends a vote FOR the approval of the Amendment
to the 1996 Plan.

PROPOSAL 3

RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

In January 1999, the Board of Directors appointed the accounting firm of
KPMG LLP to serve as its independent auditor for the year ending December 31,
1999. The appointment of this firm was recommended to the Board by its Audit
Committee. A proposal to ratify that appointment will be presented at the
Meeting. Representatives of KPMG LLP are expected to be present at the meeting.
They will have an opportunity to make a statement if they desire to do so and
will be available to respond to appropriate questions from shareholders.

The Board of Directors recommends that the shareholders vote FOR
ratification of selection of independent auditors.

19
<PAGE> 22

SHAREHOLDER PROPOSALS

Rules of the Securities and Exchange Commission require that any proposal
by a shareholder of the Company for consideration at the 2000 Annual Meeting of
Shareholders must be received by the Company no later than December 10, 1999, if
any such proposal is to be eligible for inclusion in the Company's proxy
materials for its 2000 Annual Meeting. Under such rules, the Company is not
required to include shareholder proposals in its proxy materials unless certain
other conditions specified in such rules are met.

In order for a shareholder to bring any business or nominations before the
1999 Annual Meeting of Shareholders, certain conditions set forth in Sections 16
and 17 of the Company's Bylaws must be complied with, including, but not limited
to, delivery of notice to the Company not less than 30 days prior to the meeting
as originally scheduled; provided, however, that in the event that less than 30
days notice of the date of the meeting is given or made to the shareholders,
notice by the shareholders to be timely must be received not later than the
close of business on the 10th day following the date on which such notice of the
date of meeting was mailed.

OTHER MATTERS

Management of the Company is not aware of any other matter to be presented
for action at the Annual Meeting other than those mentioned in the Notice of
Annual Meeting of Shareholders and referred to in this Proxy Statement.

By Order of the Board of Directors,
/s/ C. TYCHO HOWLE
C. Tycho Howle,
Chairman and Chief Executive Officer

20
<PAGE> 23

ANNEX A

FOURTH AMENDMENT TO THE HARBINGER CORPORATION
1996 STOCK OPTION PLAN

THIS FOURTH AMENDMENT TO THE HARBINGER CORPORATION 1996 STOCK OPTION PLAN
(the "Amendment") is made effective as of the day of May, 1999
(the "Effective Date"), by HARBINGER CORPORATION, a corporation organized and
doing business under the laws of the State of Georgia (the "Company"). All
capitalized terms in this Amendment have the meaning ascribed to such term as in
the Harbinger Corporation 1996 Stock Option Plan (the "Plan"), unless otherwise
stated herein.

WITNESSETH:

WHEREAS, the First Amendment to the Plan was approved by the shareholders
of the Company at the 1997 Annual Meeting of Shareholders;

WHEREAS, the Second Amendment to the Plan was approved by the shareholders
of the Company at the Special Meeting of Shareholders held on December 18, 1997;

WHEREAS, the Third Amendment to the Plan was approved by the shareholders
of the Company at the 1998 Annual Meeting of Shareholders; and

WHEREAS, the Board of Directors of the Company desires to amend the Plan to
add certain provisions to insure compliance with the safe harbor provisions of
Section 162(m) of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder;

NOW, THEREFORE, in consideration of the premises and mutual promises
contained herein, the Plan is hereby amended as follows:

SECTION 1. Section 3.1 of the Plan is hereby amended by deleting the
first sentence of Section 3.1 of the Plan in its entirety and substituting
in lieu thereof the following:

"3.1 SHARES RESERVED FOR ISSUANCE. Subject to any antidilution
adjustment pursuant to Section 3.2, the maximum number of Shares that
may be subject to Options granted hereunder shall not exceed 8,737,500,
plus the number of Prior Plan Shares; provided, however, the maximum
number of Shares with respect to which Options may be granted to any
individual grantee in any calendar year shall be 1,000,000."

SECTION 2. Section 5 of the Plan is hereby amended by deleting the
first sentence of Section 2 in its entirety and substituting in lieu
thereof the following:

"This Plan shall be administered by the Committee, which shall
consist of three (3) or more directors appointed by the Board, each of
whom is an "outside director" within the meaning of Section 162(m) of
the Code and is not while a member of the Committee, or was not during
the one (1) year prior to serving as a member of the Committee, eligible
to receive equity securities of the Company, or any affiliate of the
Company, pursuant to this Plan, the Prior Plan, or any other plan of the
Company or any affiliate of the Company, except as may be permitted
under Section 16(b)(3) of the Exchange Act."

SECTION 3. Except as specifically amended by this Fourth Amendment,
the Plan shall remain in full force and effect as prior to this Fourth
Amendment.

A-1
<PAGE> 24

IN WITNESS WHEREOF, the Company has caused this FOURTH AMENDMENT TO THE
HARBINGER CORPORATION 1996 STOCK OPTION PLAN to be executed on the Effective
Date.

HARBINGER CORPORATION

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

ATTEST:

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

A-2
<PAGE> 25

HARBINGER CORPORATION
1277 LENOX PARK BLVD.
ATLANTA, GA 30319
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints C. Tycho Howle, James Travers and Loren
Wimpfheimer, and each of them, with full power of substitution, as Proxy, to
represent and vote all the shares of Common Stock of Harbinger Corporation held
of record by the undersigned on March 12, 1999, at the annual meeting of
shareholders to be held on April 30, 1999 or any adjournment thereof, as
designated on the reverse side hereof and in their discretion as to other
matters.

Please sign exactly as name appears on the reverse side. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by an authorized
person.

The shares represented by this proxy will be voted as directed by the
stockholder. If no direction is given when the duly executed proxy is returned,
such shares will be voted "FOR" all nominees in Proposal 1 and "FOR" Proposals 2
and 3.

[ ] I PLAN TO ATTEND MEETING

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL NOMINEES" IN PROPOSAL 1 AND
"FOR" PROPOSALS 2 AND 3.

1. Election of the following Nominees as Director:

Howle, Savoy, Lowenberg, Konsynski

[ ] FOR all Nominees [ ] WITHHELD for all Nominees

INSTRUCTIONS: Withhold for the following only (Write the name of the nominee(s)
in the space below).

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

(continued on other side)

2. Approval of modification to the Company's 1996 Stock Option Plan.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. Ratification of Selection of KPMG LLP as Independent Auditors.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

PLEASE MARK YOUR CHOICE LIKE
THIS IN [X] BLUE OR BLACK INK,

Date
------------------------------

------------------------------
Signature

------------------------------
Signature if held jointly

PLEASE MARK, DATE AND SIGN AS YOUR NAME APPEARS ABOVE AND RETURN IN THE ENCLOSED
ENVELOPE.