DIVICOM INC.
          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
      FOR THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY   , 1996
 
    The   undersigned  stockholder  of  DIVICOM  INC.  ("Divicom"),  a  Delaware
corporation, hereby acknowledges  receipt of  the Notice of  Special Meeting  of
Stockholders  and accompanying Prospectus/Proxy  Statement, each dated  July   ,
1996, and hereby appoints  Nolan Daines and Thomas  Lookabaugh and each of  them
acting  individually, as proxies and attorneys-in-fact,  with full power to each
of substitution, on behalf and in the name of the undersigned, to represent  the
undersigned  at the Special  Meeting of Stockholders  of Divicom, to  be held on
         , July   , 1996 at 9:00 a.m., local time at Divicom's facility at  1585
Barber  Lane, Milpitas, California 95035 and  any adjournment(s) thereof, and to
vote all shares of Common Stock and Preferred Stock which the undersigned  would
be entitled to vote if then and there personally present, as follows:
 
1.   To approve and adopt the Agreement  and Plan of Reorganization, dated as of
    May 28, 1996, among C-Cube  Microsystems Inc., its wholly-owned  subsidiary,
    C-Cube  Acquisition  Corp.  ("Merger Sub"),  Divicom  and  certain principal
    stockholders of Divicom, providing for the merger of Divicom with Merger Sub
    (the "Merger"),
 
             / / FOR                / / AGAINST              / / ABSTAIN
 
2.  To approve  and adopt an  amendment of the  Certificate of Incorporation  of
    Divicom to provide that the Merger is not to be treated as a liquidation for
    which  the  holders  of  the  Preferred  Stock  of  Divicom  will  receive a
    liquidation preference and to remove any rights of the holders of the Series
    A Preferred Stock  of Divicom to  buy certain Divicom  technology for  $1.00
    upon a dissolution of Divicom,
 
             / / FOR                / / AGAINST              / / ABSTAIN
 
    THIS PROXY WILL BE VOTED AS DIRECTED AND AS TO OTHER MATTERS THE UNDERSIGNED
HEREBY  CONFERS DISCRETIONARY  AUTHORITY UPON SAID  PROXIES. IF  NO DIRECTION IS
INDICATED, IT WILL BE VOTED FOR THE  APPROVAL AND ADOPTION OF THE AGREEMENT  AND
PLAN OF REORGANIZATION AND THE TRANSACTIONS CONTEMPLATED THEREIN, AS WELL AS FOR
THE  APPROVAL AND ADOPTION OF THE  AMENDMENT TO THE CERTIFICATE OF INCORPORATION
OF DIVICOM.

    Both of  such attorneys-in-fact  or  substitutes (if  both are  present  and
acting  at said meeting or any adjournment(s)  thereof, or, if only one shall be
present and acting, then that one) shall have and may exercise all of the powers
of said attorneys-in-fact hereunder.
 
    The  undersigned  hereby  revokes  any  prior  proxy  to  vote  said  shares
heretofore given.
 
                           Dated:  ----------------------------------  , 1996
 
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                                               Signature
 
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                                               Signature
 
                           NOTE:  This Proxy should  be marked, dated, signed
                           by the stockholder(s) exactly  as his or her  name
                           appears  hereon,  and  returned  promptly  in  the
                           enclosed envelope. Persons signing in a  fiduciary
                           capacity should so indicate. If shares are held by
                           joint  tenants  or  as  community  property,  both
                           should sign.
 
             PLEASE VOTE, SIGN, DATE AND PROMPTLY RETURN THIS PROXY
                          USING THE ENCLOSED ENVELOPE.