Berkeley Systems was founded in 1987 by Wes Boyd, Joan Blades and Lawrence Boyd on a federal grant to develop software for the visually impaired. The privately held Company is more widely known for its After Dark screen saver franchise, which has sold over three million units since its inception in 1989, and the critically acclaimed and top-selling irreverent quiz show game You Don't Know Jack.

After Dark was the brainchild of a talented group of visionaries at Berkeley Systems, spearheaded by Jack Eastman, Nick Rush and Igor Gasowski. Together they created a lasting phenomenon that can be seen on computer screens from Australia to Zimbabwe.

The introduction of After Dark marked Berkeley Systems entry into the consumer market, where it quickly established a loyal customer base and a brand identity with both retailers and consumers. The success of After Dark in this high-growth market saw the Company's revenue soar from $4 million in fiscal year 1991 to $14 million in 1992. By 1995, the Company's revenue had hit $28 million.

In 1992, the Company leveraged its market position with retailers and consumers and began introducing licensed screen saver titles based upon such recognized cultural icons as Disney, Looney Tunes, Star Trek, The Simpsons and Marvel. To keep pace with its rapid growth and the exploding consumer software market, the Company acquired Venture Capital financing in '92, working with industry notables Hummer Winblad Venture Partners and Burr, Egan, Deliage.

What started out as a computer software utility, by preventing phosphor burn-in, has today quickly become a tool that prevents computer user burn-out. Offering humor and personality, screen savers have become entertainment with an adult sensibility. The whimsical images from After Dark have graced both the silver screen, in such films as The Net, Malice and Copy Cat, and the small screen, appearing in Seinfeld, The X-Files and Beverly Hills 90210, among others.

Having established itself as the screen saver market leader, Berkeley Systems in 1995 turned its talents to expanding the types of titles it produced, moving into such areas as CD-ROM games. To solidify its commitment to creating innovative gaming titles, Berkeley Systems brought industry veteran and former VP at Mindscape, Julie Wainwright, on-board. Integral to the Company's continued growth, Wainwright quickly moved from Vice President of Sales and Marketing to President and Chief Operating Officer.

Recognizing that the emerging core of the PC CD-ROM entertainment market is grown-ups, Berkeley Systems leveraged the brand recognition and consumer loyalty created by its strong position in the screen saver market to establish a second franchise with the irreverent pop-culture trivia game You Don't Know Jack. Having won numerous awards, You Don't Know Jack is a top-ten seller in major software retailer accounts.

Moving beyond the traditional "shoot 'em up" titles and creating interactive entertainment with intelligence, humor and attitude, the Company has established a strong foot-hold in the emerging "games for grown-ups" market. According to a February 1996 report by Fairfield, 82% of CD-ROMs are used by adults over the age of 20, for a total of 13.8 hours a week for average use. This time represents a 100% increase over last year, with 30% of that time being spent on pure entertainment titles alone.

To help meet the retail channel's increased demand for the Company's products, Berkeley Systems expanded its sales division with the introduction of Kevin Hunt as Vice President of Worldwide Sales. Also at this time, Gary Iwatani joined the executive team as Vice President of Finance and has since been promoted to Chief Financial Officer.

Following the critical and retail success of You Don't Know Jack and with the market clamoring for more "games for grown-ups," Berkeley Systems brought Douglas Kay on-board, as Vice President of Engineering, to guide the direction of the Company's research and development teams. An Academy Award winner, former CTO of LucasArts Entertainment and visual effects wizard, Kay brings more than 15 years of pioneering work in digital technology, including ground-breaking work in morphing, film scanning and digital compositing.

To further build on its market share and taking advantage of its diverse product portfolio, Berkeley Systems has entered into deals with Apple Computers, Inc., Compaq and IBM, supplying high-quality OEM titles for the personal computer market. Both the Expresso Calendar and Address Book, a beautifully designed personal information manager, and Launch Pad Kid-Safe Desktop, a fully animated, interactive computer desktop that protects parents' files while children use the computer, have been bundled with these market leaders. In addition, both Nanao USA Corp. and Sony Electronics, Inc. bundle an After Dark starter edition with certain Energy Star monitors.

Recognizing the creative power the comes from a synergistic mix of internal and external talent, Berkeley Systems launched an Affiliate Labels program in late 1995. The Company's search for partnerships, with a primary focus on entertainment titles, is not solely limited to affiliate labels, which primarily involve work in distribution and sales, but also extends to republishing. The Company has also entered into a licensing agreement providing Wemco, Inc., a New Orleans based neckwear marketer, with the rights to manufacture and market images from After Dark on ties and boxer shorts.

Intent upon creating new online experiences, Berkeley Systems launched its Web site Toasted, in August of 1995. The popular site, located at http://www.berksys.com, receives more than 1 million hits each month, offering a variety of online fare including a wacky advice columnist, a look at upcoming titles, a voyeuristic glimpse into life at the Company via a live camera feed, technical support and more.

Having established itself as a purveyor of unique, entertaining experiences, the Company aimed its creative inertia at the Internet with the introduction of the premiere online entertainment network, beZerk, in the fall of 1996. According to a recent biannual online survey by Georgia Tech, over 60% of people online were there for purely entertainment reasons. And, with nearly half of Berkeley's five million users already online, Berkeley heeded the demands of its users and the demands of those looking for engaging entertainment on the Internet. beZerk delivers original, irreverent entertain-ment for grown-ups, resulting in breakthrough experiences. The new destination site features regular programming, with You Don't Know Jack the netshow debuting as the anchor program. beZerk's pro-gramming will reflect various genres, such as episodic sitcoms, soap operas, games and brain teasers, movie reviews, and much more.

At this time, Berkeley also introduced After Dark Online, a stand-alone collection of free screen savers engineered specifically with the general consumer in mind. After Dark Online provides news and information from top national news, sports, financial, and computer industry sources along with stock quotes and sports scores from the Internet. This collection of consumer oriented screen savers does not require T1 lines to operate efficiently, allowing users with 14.4 or even 28.8 Baud modems to access the news they need.

Always a leading innovator in the marketplace, Berkeley Systems maintains a keen eye on the future of entertainment software development. Keeping pace with technological and online advancements, the company will continue to produce cutting-edge titles that offer truly unique experiences for the computer user.

Berkeley Systems, Inc. recently merged with CUC Int'l, a technology-driven, membership-services company that provides access to travel, shopping, auto, dining, home improvement, financial and other services to 66.3 million consumers worldwide. The company's common stock is traded on the NYSE under the symbol CU. Berkeley Systems, Inc. is part of CUC's entertainment software division, headed by Sierra On-Line. Sierra On-Line's corporate headquarters is located in Bellevue, WA.


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